GT Interactive Reports 40 Percent Increase in Third
Quarter Revenues
NEW YORK--(BUSINESS WIRE)--Nov. 3, 1997--
Internally Developed Products Drive Strong Product Revenues
Sales Increase in all Business Segments
GT Interactive Software Corp. (NASDAQ:GTIS) today reported third quarter net revenues of
$121 million for the period ended September 30, a 40 percent increase over the same period in the
prior year. Operating income before goodwill amortization was $15 million for the quarter, an
increase of 19 percent. Net income was $8.5 million, a 2.3 percent decrease from the prior year.
Net income declined despite the 19 percent growth in operating income due to the significant
increase in interest expense and higher federal tax rates in the current quarter. Earnings per share
were $0.13 for both the quarter and the prior year quarter.
For the quarter, the company reported interest expense of $612,000 as compared to interest
income of $575,000 in the prior year third quarter. Income tax expense increased 33 percent as
compared to the same period last year, during which time the company experienced a benefit from
its acquisition of Humongous Entertainment.
For the nine months ended September 30, 1997, GT Interactive reported net revenues of $317
million, a 38 percent increase over the same period last year. Operating income before goodwill
amortization for the nine months increased 20 percent to $32 million and net income was $17.4
million, representing a five percent increase. Earnings per share were $0.26, an eight percent
increase.
''A significant 42 percent of our publishing revenues this quarter were driven by sales of internally
developed products, including Cavedog Entertainment's Total Annihilation and Oddworld
Inhabitants' Oddworld: Abe's Oddysee, a testimony to strength of these new titles in the global
marketplace, as well as GT Interactive's ability to create compelling, original brands for both PC and
console systems,'' said Ron Chaimowitz, president and chief executive officer of GT Interactive.
''This continues to be a pivotal growth year for the company, as we have truly transformed
ourselves into a major publisher with proven internal and external development, strengthened global
distribution and a broad portfolio of both console and PC entertainment products.''
GT Interactive also reported the following results during its third quarter:
GT Interactive's publishing business accounted for 68 percent of revenues as compared to 63
percent in its second quarter. Front-line publishing revenues increased 56 percent, while
value-price publishing revenues increased 36 percent;
Sales of console titles comprised 38 percent of the company's front-line software revenues,
which represents a 28 percent increase over the same period last year;
More than 500,000 units of Oddworld: Abe's Oddysee for PlayStation and more than
250,000 units of Total Annihilation for PC shipped worldwide. Internally developed software,
including these two titles, comprised 42 percent of publishing revenues;
International revenues, which increased 92 percent over last year, comprised 58 percent of
publishing revenues. International console revenues increased 312 percent over the prior year
third quarter;
Revenues from GT Interactive's mass merchant distribution business increased 22 percent
over last year.
''The acquisition in the fourth quarter of developer SingleTrac and our announced acquisition of
MicroProse, which is expected to be completed by year-end, further solidifies our strength. We
anticipate that in 1998 more than 75 percent of our revenues will be derived from publishing, and
approximately 30 percent of publishing revenues will come from our internal studios,'' Chaimowitz
continued.
''We believe the approaching holiday season will be especially significant for the global console
market, and GT Interactive is well-positioned with a diverse, award-winning lineup,'' Chaimowitz
said. ''For PlayStation, the underwater combat game, Critical Depth, will debut from SingleTrac,
our newest studio, and new Duke Nukem games will appear for the first time on PlayStation and
Nintendo 64. We expect strong reorders for Oddworld: Abe's Oddysee for PlayStation -- which
will also be released on PC -- and reorders for Cavedog Entertainment's Total Annihilation, our
top-selling, internally developed, real-time strategy game.''
Headquartered in NY, GT Interactive Software Corp. is a leading global publisher of interactive
entertainment and edutainment under the GT Interactive, Humongous Entertainment, Cavedog
Entertainment, SingleTrac and MacSoft brands, for personal computers as well as game consoles
from Sony and Nintendo. A leader in value-priced software under the WizardWorks, CompuWorks
and Slash brands, GT Interactive operates development studios in Seattle, Salt Lake City and San
Luis Obispo, CA. Located at gtinteractive.com on the World Wide Web, GT
Interactive is publicly traded on the NASDAQ market under the symbol GTIS.
Certain statements contained in this press release may be deemed forward-looking statements that
involve a number of risks and uncertainties. The company's actual results may differ materially from
the expectations expressed in such forward-looking statements. Among the factors that could cause
actual results to differ materially are worldwide business and industry conditions, including consumer
buying and retailer ordering patterns, product delays, company customer relations, retail acceptance
of the company's published and third-party titles, competitive conditions, failure to consummate the
announced merger agreement with MicroProse or failure to successfully integrate the operations of
the two companies if the merger is consummated, and other risks detailed, from time to time, in the
company's SEC filings, including, but not limited to, the company's form 10-K for the year ended
December 31, 1996. |
