PRESS RELEASE: Mad Catz Interactive Reports 4Q Earnings
Mad Catz Interactive, Inc. Reports; Record Sales of $83 Million for FY 2002 and EPS of $0.03; FY 2002 Sales Up 49%; Fourth Quarter Sales Up 123%
TORONTO--(BUSINESS WIRE)--June 4, 2002--Mad Catz Interactive, Inc., (TSE/AMEX: MCZ), a leading manufacturer of video game accessories, today announced record
sales results for the fourth quarter and fiscal year ended March 31, 2002.
Financial Highlights
(All amounts are in U.S. dollars) Fourth Quarter Results
For the fourth quarter ended March 31, 2002, net sales from continuing operations increased 123% to $15.8 million, as compared to net sales of $7.1 million for the same
period last year.
Gross profit from continuing operations for the quarter was $3.3 million, or 20.8% of net sales, as compared to $1.3 million, or 18.5% of net sales, for the same period a
year ago.
SG&A from continuing operations for the quarter ended March 31, 2002 was $2.2 million as compared to $2.9 million for the same period last year. Selling expenses as a
percentage of net sales decreased to 8.2% as compared to 14.8% for the same period last year. Administrative expenses as a percentage of net sales were 6.0% as
compared to 26.0% for the same period last year, representing the third straight year-on-year quarterly decline.
EBITDA from continuing operations increased to $1.1 million for the quarter as compared to a loss of $1.6 million for the same period a year ago. Income before taxes and
goodwill for the quarter ended March 31, 2002 was $0.1 million, or $0.00 per share, as compared to a loss of $2.6 million, or $0.10 per share, for the same period in fiscal
2001. Net loss after taxes and goodwill charges from continuing operations for the quarter was $0.2 million, or $0.00 per share, as compared to a loss of $5.1 million, or
$0.11 per share, for the same period last year. Fiscal Year 2002 Results
For the year ended March 31, 2002, net sales from continuing operations were $83.3 million as compared to $55.8 million for fiscal 2001, an increase of more than 49%.
Gross profit for the year increased 48.3% to $18.4 million, or 22.1% of net sales, as compared to $12.4 million, or 22.3% of net sales, for fiscal 2001.
For the year ended March 31, 2002, SG&A from continuing operations was $12.2 million as compared to $10.7 million last year. Selling expenses as a percentage of net
sales decreased to 8.7% as compared to 8.9% last year. Administrative expenses as a percentage of net sales decreased to 5.9% as compared to 10.3% for fiscal 2001.
EBITDA from continuing operations for the year ended March 31, 2002, was $6.2 million as compared to $1.7 million, a 257% increase, last year. Income before taxes and
goodwill for the year ended March 31, 2002 was $4.0 million, as compared to a loss of $0.6 million, for fiscal 2001. Net income for the year was $1.5 million, or $0.03 per
share, as compared to a loss of $22.9 million, or a loss of $0.51 per share last year. Management Perspective and Analysis
Commenting on Mad Catz' year-end results, Morris Perlis, President and CEO of Mad Catz Interactive, Inc. said, "I am very pleased with these strong sales results which
clearly indicate that we have entered the "sweet spot" of the current industry cycle. The 123% sales increase for the quarter reflects our success at expanding our retail
penetration of SKUs into existing accounts as well as adding new customers. Most notably, we will be placing a substantial number of SKUs in two additional national chains
in the coming quarter. Also reflected in our numbers is the initial success we have experienced in the European market.
"Achieving our goal of a profit of $0.03 per share on sales of $83 million for the year is particularly satisfying and demonstrates that we can continue to grow profitably. It
is important to note that reserves for price protection related to fiscal 2002 sales, in response to the recent first party price cuts, are already reflected in our year-end
results. We continue to implement an active program of cost reductions through which we expect our bottom line to improve," he stated.
Mr. Perlis added, "I am also pleased with the strength of our balance sheet. Inventory levels were also kept in check during the quarter in spite of additional inventory
necessary for Game Boy Advance, Xbox and GameCube, plus inventory necessary to support European sales. Mad Catz ended the year utilizing only $4.3 million of our
line of credit as compared to $8.7 million the previous year end, even in the face of stronger sales."
"Within the last few weeks all the major console manufacturers announced console price reductions which are traditionally very positive for our peripheral sales. In
addition, they announced price reductions on specific peripherals, some of which compete with Mad Catz. As a reaction to this, we have reduced prices on those items,
representing 18% of our total volume. Historically, the decrease in console costs have driven increases in volume which could more than offset these price reductions.
While it is too early to determine the precise impact, we are hopeful that the net effect will be positive. We anticipate that the picture will be much clearer by mid-June at
which time we will make an announcement regarding the anticipated impact on our sales and earnings for the year," he added.
"The recently concluded Electronics Entertainment Expo (E3) was once again a great success for us. At the show we debuted the Company's Fall 2002 line of peripherals
for PlayStation 2, Xbox, GameCube and Game Boy Advance - more than 23 products in all. We are particularly excited by the upcoming launch of the new Lynx wireless
controllers that we have designed for PlayStation 2 and Xbox, which utilize radio frequency technology comparable to high-end cordless phones. The MicroCON controllers
for PlayStation 2, Xbox and GameCube, smaller versions of Mad Catz' standard controllers, created to provide greater comfort and control for gamers, were also a huge hit
with attendees. Also shown was the Dual Force 2 Skin Controller, which allows players to change different design skins on the controller featuring lifestyle, sports and
artwork for more customized game play," Mr. Perlis said.
"We believe that these products offer a unique value proposition to our customers. They are distinctive and priced competitively and we expect these new products to be
extremely well received by the market as the installed base of these new consoles continues to grow," he added.
"During the show, we met with many analysts, investors and press who are familiar with Mad Catz as well as several who are new to the story. We are looking forward to
continuing a dialogue with them," Mr. Perlis added.
"We believe that we are rapidly becoming the leader in the accessories business through our design and delivery of high quality products that meet the demands of the
gaming public. Concurrently, we are becoming a favored vendor to the large high volume retailers in this sector, in part due to our effective category management
program," Mr. Perlis concluded.
Darren Richardson, President and COO of Mad Catz stated, "The key drivers during the year were sales of our existing line-up of products for PS2 and Game Boy
Advance coupled with the highly successful launch of our full line of accessories for Microsoft's Xbox and Nintendo's GameCube in North America."
"Retail sell through of our new products for the Xbox and GameCube consoles continue to exceed our expectations in the North American market leading to strong
replenishment orders during the fourth quarter of fiscal 2002. Moreover, as the price of consoles has been significantly reduced, early indications from our retailers are that
this has led to very strong sales. Therefore we anticipate increasing sales of our accessories through 2003," he said. |
