Take-Two Interactive Software, Inc. Announces Estimated Fourth Quarter 2001 and First Quarter 2002 Net Sales And EPS
Company to Revise Fiscal 2000 and Interim Quarters for Fiscal 2001
biz.yahoo.com
NEW YORK--(BUSINESS WIRE)--Dec. 17, 2001-- Fourth Quarter 2001 Net Sales Estimated At Between
$138 and $140 Million - EPS At Between $0.01 and $0.04
First Quarter 2002 Net Sales Expected to be in Excess of
$200 Million - EPS In Excess of $0.70
Take-Two Interactive Software, Inc. (NASDAQ:TTWO) today announced the following:
Historical Financial Statement Revisions
Based on the Company's detailed continuing review of its product returns and information known to date, the Company intends to revise its financial results for the fiscal year ended October 31, 2000 and each of the first three quarters of fiscal 2001 to eliminate sales of products to certain independent third-party distributors that were recognized as revenue and later returned or purchased by the Company in subsequent periods. Based on the foregoing, the Company is reassessing its method of recognizing revenue with respect to sales to certain third-party distributors.
Fiscal Year Ended October 31, 2000
The Company intends to revise its financial results for the fiscal year ended October 31, 2000 to reflect an aggregate decrease in net sales of between $12.0 million and $15.0 million and an aggregate decrease in net income of between $3.1 million and $3.7 million, resulting in a decrease of between $0.11 and $0.13 in fully diluted earnings per share. As previously reported, net sales, net income and fully diluted earnings per share for the fiscal year ended October 31, 2000 were $387.0 million, $25.0 million and $0.88, respectively. Although the quarterly results may vary, as a result of the revisions, for the fiscal year ended October 31, 2000, net sales are expected to be between $372.0 million and $375.0 million, net income is expected to be between $21.3 million and $21.9 million and fully diluted earnings per share is expected to be between $0.75 and $0.77.
First Three Quarters and Nine Months Ended July 31, 2001
The Company also intends to revise its financial results for the first three quarters and nine months ended July 31, 2001 to reflect an aggregate decrease in net sales of approximately $9.5 million and an aggregate increase in net income of approximately $0.3 million, or approximately $0.01 in fully diluted earnings per share. As previously reported, net sales, net income (excluding extraordinary items, impairment charges and non-operating gain) and fully diluted earnings per share (excluding extraordinary items, impairment charges and non-operating gain) for the nine months ended July 31, 2001 were $309.0 million, $12.9 million and $0.38, respectively. Although the quarterly results may vary, as a result of the revision, for the nine months ended July 31, 2001, net sales are expected to be approximately $299.5 million, net income is expected to be approximately $13.2 million (excluding extraordinary items, impairment charges and non-operating gain) and fully diluted earnings per share (excluding extraordinary items, impairment charges and non-operating gain) is expected to be approximately $0.39. Including the effect of the extraordinary items, impairment charges and non-operating gain, the Company previously reported a net loss of $3.8 million and a net loss per share of $0.11 for the nine months ended July 31, 2001, and as a result of the revision, expects to incur a net loss of approximately $3.5 million and a net loss per share of approximately $0.11.
Fourth Quarter Ended October 31, 2001
The Company estimates that for the three months ended October 31, 2001, net sales were between $138 and $140 million, while fully diluted earnings per share were between $0.01 and $0.04. The Company attributes the shortfall from previous guidance to higher than anticipated expenses and certain timing differences.
First Quarter Ending January 31, 2002
Based on the capture of revenue and net income which shifted from the fourth quarter and strong sell-through for the Company's Sony PlayStation®2 versions of Grand Theft Auto 3 and Max Payne, the Company expects that for the three months ending January 31, 2002, it will generate net sales in excess of $200 million and fully diluted earnings per share of at least $0.70.
Full Year Fiscal 2000 and 2001 Results and Fiscal 2002 Guidance
The Company expects to announce its complete fiscal year 2000 and 2001 results and give updated guidance for fiscal 2002 on or about January 15, 2002. Due to stronger than expected first quarter results, the Company is currently reviewing its financial guidance for fiscal 2002, which was previously set at $1.20 to $1.25 in fully diluted earnings per share and $590 to $610 million in net sales.
The revision for the fiscal year ended October 31, 2000 will be made in the Company's Annual Report on Form 10-K for the year ended October 31, 2000 and the revisions of the quarters ended January 31, 2001, April 30, 2001 and July 31, 2001 will be made in the Company's Quarterly Reports on Form 10-Q for those periods. The Company expects to make the foregoing changes in filings with the Securities and Exchange Commission at the same time it files its Annual Report for the year ended October 31, 2001, which it expects to file on a timely basis.
Liquidity - Selected Balance Sheet Items
The Company operated on a cash flow positive basis for the year ended October 31, 2001, generating approximately $24 million in positive cash flow from operations, as adjusted, with approximately $2 million in operating cash flow generated during the fourth quarter ended October 31, 2001. The Company expects to continue to generate increased levels of positive cash flow in fiscal 2002.
The Company's total debt level at October 31, 2001 was approximately $49 million, net of cash, a significant decrease from historical levels during the peak October selling season. The Company expects total indebtedness at January 31, 2002 to be at or below $10 million, as compared to approximately $97 million at January 31, 2001.
As a result of the Company's focus on days sales outstanding (``DSO's''), the Company successfully decreased its DSO's at October 31, 2001 to no greater than 79 days. The Company expects DSO's to be significantly further reduced at January 31, 2002.
Paul Eibeler, President, said, ``Take-Two is experiencing tremendous strength in its operations, with first quarter fiscal 2002 cash flow and revenues running well ahead of expected levels. This will allow us to dramatically decrease our dependence on debt as a means of financing our growth. Our improved performance is a direct result of the significant investments we have made in our publishing program and in the overall strength of our distribution business.''
Published Products
During the fourth quarter ended October 31, 2001, the Company successfully launched Grand Theft Auto 3 for Sony's PlayStation®2. Grand Theft Auto 3 was ranked the number one selling PlayStation 2 title for the week ended October 27th according to NPD and has remained in the top four best-selling PlayStation 2 products during the seven weeks ended December 8th. It was again ranked number one for the two weeks ended December 1st and 8th.
In December, the Company shipped Max Payne for the PlayStation 2 and Microsoft's Xbox in North America. Max Payne, which has demonstrated strong sell-through as a PC product, is expected to continue to perform well on these next-generation video game platforms.
Management Changes and Comments
Separately, the Company announced that it has hired Albert G. Pastino as its Chief Financial Officer. Mr. Pastino, who is a CPA and holds an MBA, has served in a variety of senior financial and operating positions over the last 35 years, including as a Senior Partner with Deloitte & Touche.
Kelly Sumner, Chief Executive Officer, stated, ``Fiscal 2001 has been a transition period for Take-Two. It is unfortunate that our need to revise recent financial results has temporarily overshadowed the Company's underlying strengths. We are extremely encouraged by the significant balance sheet and cash flow improvements our company continues to make, and our strong prospects for the first quarter and balance of fiscal 2002. Furthermore, we have established ourselves as a top tier entertainment software publisher, which should result in continued improvements in our operating results and financial condition.'' |
