EGAM .21/.25:
B: eGames Announces First Quarter Fiscal 2003 Financial Results
B: eGames Announces First Quarter Fiscal 2003 Financial Results
LANGHORNE, Pa., Oct 23, 2002 /PRNewswire-FirstCall via COMTEX/ -- eGames, Inc.
(OTC Bulletin Board: EGAM), a publisher and developer of Family Friendly(TM),
value-priced consumer entertainment PC software games, today announced its
financial results for the three months ended September 30, 2002.
Financial Results:
For the three months ended September 30, 2002, net sales increased by $303,000,
or 20%, to $1,859,000 compared to $1,556,000 for the same quarter a year
earlier. This $303,000 increase in net sales resulted from a $782,000 increase
in net sales to North American traditional software customers and a $51,000
increase in net sales to North American OEM and licensing customers, which
increases were partially offset by net sales decreases to North American
non-traditional software customers and international customers of $489,000 and
$41,000, respectively.
For the three months ended September 30, 2002, net income was $213,000, or $0.02
per diluted share, compared to a net loss of ($383,000), or ($0.04) per diluted
share, for the same quarter last year. During this same period, the Company's
gross profit improved to $979,000 compared to $598,000 for the same quarter a
year ago. The $596,000 increase in net income resulted primarily from the 20%
increase in net sales, combined with a 14% improvement in gross profit margin,
as a percentage of net sales, and a 21% reduction in operating expenses.
Additionally, net sales and net income both benefited by approximately $81,000
from agreements the Company entered into during the quarter with two customers
to finalize their respective sales return allowances. For the three months ended
September 30, 2002, the Company's gross profit margin improved to 53% compared
to 39% for the same quarter a year earlier, resulting in a $381,000 improvement
in gross profit. The primary factors contributing to this 14% gross profit
margin improvement, include:
-- increased distribution of higher-priced consumer entertainment gaming
software titles,
-- product and royalty cost savings resulting from the discontinuation of
direct sales of lower margin third-party publisher software titles to
drug store retailers,
-- reduced low margin inventory closeout sales, and
-- reclamation, freight and inventory obsolescence cost savings resulting
from the termination of the Company's direct distribution to drug store
retailers, from which the Company had previously experienced high
product return rates.
These factors were partially offset by an increase in royalty payments to
third-party software developers as the cost to license new consumer
entertainment PC software game content continued to increase.
Additionally, for the three months ended September 30, 2002, the Company reduced
operating expenses by $202,000 or 21%, to $748,000, down from $950,000 during
the same quarter last year. The largest savings in operating expenses occurred
in marketing promotions, bad debt provisions and cash discounts. These cost
savings were substantially related to the Company's strategic decision to
transition its direct distribution to drug store retailers to a licensing
relationship with a third-party distributor, and to redirect the Company's
operational focus towards increasing product distribution with mass- merchant
retailers and distributors serving those retailers.
Comments:
Jerry Klein, President and CEO of eGames, stated "Our first quarter fiscal 2003
financial results represent the continuing successful execution of our focused
business plan that we implemented as a result of the liquidity crisis we
addressed this time last year.
In particular, we've made significant progress in strengthening our balance
sheet by: converting accounts receivable balances and slow-moving inventory into
cash, reducing debt, achieving operational profitability, and returning both our
working capital and our stockholders' equity to positive levels. For example, as
of September 30, 2002, we had working capital of $301,000 and stockholders'
equity of $346,000, compared to September 30, 2001, when we had a working
capital deficiency of ($1,986,000), and a stockholders' deficit of ($2,498,000).
Continued strengthening of our balance sheet remains our dominant, focused
objective going forward."
Mr. Klein further commented, "We accomplished a number of operational objectives
in this year's fiscal first quarter that bode well for the remainder of fiscal
2003 such as significantly expanding our North American retail distribution to
more than three times the number of retail facings we enjoyed this same time
last year and our initial launch of higher-end PC software games retail priced
at $19.99 or $29.99. Our business plan is focused to serve our core value-priced
consumer and the retailers serving them and to gradually increase our product
offering to include titles that appeal to the higher-end game player that is
looking for a high-value gaming experience at an affordable price."
About the Company:
eGames, Inc., headquartered in Langhorne, PA, develops, publishes and markets a
diversified line of Family Friendly(TM), value-priced consumer entertainment PC
software games. The Company promotes the eGames(TM), Game Master Series(TM), and
Outerbound(TM) brands in order to generate customer loyalty, encourage repeat
purchases and differentiate eGames software products to retailers and consumers.
eGames - Where the "e" is for Everybody! Additional information regarding
eGames, Inc. can be found on the Company's Web site at www.egames.com.
B: eGames Announces Fiscal 2002 Financial Results Fiscal 2002 R
B: eGames Announces Fiscal 2002 Financial Results Fiscal 2002 Results Benefit
from the Company's Strategic Decision to End Sales And Distribution
Relationships With National Drug Store Retailers
LANGHORNE, Penn., Jul 29, 2002 /PRNewswire-FirstCall via COMTEX/ -- eGames,
Inc. (OTC Bulletin Board: EGAM), a publisher and developer of Family
Friendly(TM), value-priced consumer entertainment PC software games, today
announced its financial results for the three and twelve months ended June 30,
2002.
Financial Results:
For the three months ended June 30, 2002, net sales increased by $2,228,000, or
309%, to $2,950,000 compared to $722,000 for the same quarter a year earlier.
For the twelve months ended June 30, 2002, the Company's net sales increased by
$4,023,000, or 59%, to $10,879,000 compared to $6,856,000 for the same period a
year ago.
For the three months ended June 30, 2002, the Company reported net income of
$1,171,000, or $0.12 per diluted share, compared to a net loss of ($3,439,000),
or ($0.35) per diluted share, for the same period last year. For the twelve
months ended June 30, 2002, the Company reported net income of $2,181,000, or
$0.22 per diluted share, compared to a net loss of ($5,933,000), or ($0.61) per
diluted share, for the same period last year.
Net sales, net income, and net income per diluted share for the three and twelve
month periods ended June 30, 2002 benefited significantly from the Company's
strategic decision at the outset of fiscal 2002 to end its sales and
distribution relationships with national drug store retailers and from
agreements reached with two national drug store retailers during fiscal 2002.
These agreements, among other things, modified the terms relating to previous
product shipments, which made all prior sales to these retailers final and
eliminated any further right of product return. As a result of these agreements,
the Company recognized net sales of $1,119,000 and net income of $983,000 during
the three months ended June 30, 2002 and net sales of $3,234,000 and net income
of $2,105,000 for the twelve months ended June 30, 2002. These amounts had been
deferred in accordance with the Company's revenue recognition policy requiring
the Company to recognize sales relating to product shipments to drug store
retailers based on reported product sell- through.
The following table presents the net sales, net income (loss), and net income
(loss) per diluted share for the three and twelve month periods ended June 30,
2002 and 2001, as reported and then excluding the benefit recognized as a result
of the agreements with the two national drug store retailers discussed above: |
