Acclaim Entertainment Reports Second Quarter Results Revenues Increase 33%
Year to Year
BusinessWire, Monday, April 06, 1998 at 17:15
GLEN COVE, N.Y.--(BUSINESS WIRE)--April 6, 1998--
Operating Expenses Reduced by $6 Million in Same Period
Acclaim Entertainment, Inc. (NASDAQ:AKLM) today reported its
results for the second quarter of fiscal 1998, ended February 28,
1998.
Net revenues for the quarter were $69.3 million, an increase of
33% compared with $52.3 million in the second quarter of the prior
year. The net loss for the quarter of $1.2 million, or a diluted loss
per share of $0.02, compared to a net loss of $16.8 million, or a
diluted loss per share of $0.34.
For the six month period, net revenues were $161.6 million, an
increase of 53% compared with $105.6 million in the same period in the
prior fiscal year. Net earnings for the six month period were $6.8
million, or $0.13 per diluted share compared with a net loss of $35.8
million for the same period in the prior year, or a diluted loss per
share of $0.72.
Revenue for the quarter was impacted by the continued success of
NFL Quarterback Club '98, the #1 selling football title on the
Nintendo 64 platform and Turok: Dinosaur Hunter, the #1 selling
third-party N64 Title of 1997, according to TRSTS industry data. New
releases in the quarter included NHL Breakaway '98 for the N64 ;
Riven: The Sequel to Myst, the first PlayStation title to feature 5
discs; X-Men: Children of the Atom for PlayStation, based on the
popular arcade game; the coin-op hit Bust-A-Move 2 for GameBoy and PC;
Turok: Battle of the Dinosaurs for GameBoy and the retail demo version
of the highly-praised Forsaken PC game.
"The loss in Q2 and the continued profitability for the year was
in line with our guidance to the financial community," said Gregory
Fischbach, co-chairman and CEO of Acclaim. "Our key milestones were
the reduction of operating expenses by approximately $6 million versus
the previous year, the continued improvement of product quality and
the closing of our coin-op division, which allowed us to shift
development resources to Acclaim Studios and heighten our focus on the
home interactive entertainment market.
Gross revenues by platform for the quarter consisted of 60% for
N64, 26% for PlayStation, 8% for PC and the balance in portables and
all other. On a geographic basis, North American operations generated
58% of net revenues and international operations 42%.
Fischbach indicated the third fiscal quarter will feature the
release of titles capitalizing on the company's brand strategy and
emphasis on games developed by the wholly-owned Acclaim Studios group.
Key titles planned for the quarter include All-Star Baseball '99 for
N64, previewed as "the most graphically impressive baseball game yet
seen on a console system" by Next Generation OnLine; Forsaken for N64,
PlayStation and PC, a benchmark title for the rapidly-growing 3D
accelerated market; Batman and Robin and Supercross '98 Featuring
Jeremy McGrath for PlayStation. McGrath, the 7-time AMA champion,
designed bikes and tracks for the game.
"We see continued opportunity for the balance of fiscal 1998,"
said Fischbach. "Hardware sales are up considerably from the previous
year and we are maintaining our focus on high quality titles and
strong brands supported by targeted marketing efforts."
Acclaim Entertainment Background Information Based in Glen Cove,
N.Y., Acclaim Entertainment, Inc., is a leading worldwide publisher of
software for Nintendo, Sony, Sega and personal computer hardware
systems. Acclaim also publishes comic books, operates motion capture
studios, and distributes a variety of entertainment software from
other publishers worldwide. Visit Acclaim's Web site,
www.acclaimnation.com.
This press release contains forward looking statements. There are
certain important factors that could cause results to differ
materially from those anticipated by the statements made above. Such
risks and uncertainties include, among other things, the growth of the
installed base of 32-bit and 64-bit gaming and PC systems, the timely
availability and acceptance of Acclaim's future products for such
systems, the competitive environment in the consumer software and
related industries, the management of inventories and operating
overheads and the related impact upon liquidity should any of these
risks occur. These and other risks and uncertainties are detailed from
time to time in Acclaim's reports filed with the Securities and
Exchange Commission.
*T
ACCLAIM ENTERTAINMENT, INC.
AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(in 000s, except per share data)
February 28, August 31,
1998 1997
ASSETS
CURRENT ASSETS
Cash and cash equivalents $ 40,417 $ 26,254
Accounts receivable - net 31,076 18,729
Inventories 1,856 3,546
Other current assets 14,570 20,250
TOTAL CURRENT ASSETS 87,919 68,779
Other assets 58,915 64,396
TOTAL ASSETS $ 146,834 $ 133,175
LIABILITIES AND STOCKHOLDERS' DEFICIENCY
CURRENT LIABILITIES
Trade accounts payable $ 25,707 $ 17,007
Short-term borrowings 21 643
Other current liabilities 106,915 115,285
TOTAL CURRENT LIABILITIES 132,643 132,935
LONG-TERM LIABILITIES
Other long-term liabilities 61,545 59,472
TOTAL LIABILITIES 194,188 192,407
MINORITY INTEREST (157) (186)
STOCKHOLDERS' DEFICIENCY
Common stock 1,015 1,002
Additional paid in capital 178,597 173,373
Accumulated deficit (223,084) (229,870)
Treasury stock (3,103) (2,904)
Foreign currency translation adjustment (622) (647)
TOTAL STOCKHOLDERS' DEFICIENCY (47,197) (59,046)
TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIENCY $ 146,834 $ 133,175
ACCLAIM ENTERTAINMENT, INC
AND SUBSIDIARIES
CONDENSED STATEMENTS OF CONSOLIDATED OPERATIONS
(in 000s, except per share data)
Three Months Ended Six Months Ended
February 28, February 28,
1998 1997 1998 1997
NET REVENUES $ 69,343 $ 52,310 $ 161,620 $ 105,648
COST OF REVENUES 33,227 27,761 77,228 52,552
GROSS PROFIT 36,116 24,549 84,392 53,096
OPERATING EXPENSES
Marketing and Sales 14,162 11,530 31,260 31,443
General and Administration 12,672 18,220 26,753 34,873
Research and Development 9,273 12,184 17,617 22,276
TOTAL OPERATING EXPENSES 36,107 41,934 75,630 88,592
INCOME (LOSS) FROM
OPERATIONS 9 (17,385) 8,762 (35,496)
OTHER INCOME (EXPENSE) (1,229) (173) (1,865) (1,292)
INCOME (LOSS) BEFORE
INCOME TAXES (1,220) (17,558) 6,897 (36,788)
PROVISION (BENEFIT)
FOR INCOME TAXES 15 (380) 121 (380)
NET INCOME (LOSS) BEFORE
MINORITY INTEREST (1,235) (17,178) 6,776 (36,408)
MINORITY INTEREST (5) (336) (10) (566)
NET INCOME (LOSS) $ (1,230) $ (16,842) $ 6,786 $ (35,842)
BASIC AND DILUTED
EARNINGS (LOSS)
PER SHARE $ (0.02) $ (0.34) $ 0.13 $ (0.72)
CONTACT: Acclaim Entertainment
Mike Meyers/Sandy De Gennaro, 516/656-5000
KEYWORD: NEW YORK
INDUSTRY KEYWORD: COMPUTERS/ELECTRONICS COMED ENTERTAINMENT
INTERACTIVE/MULTIMEDIA/INTERNET EARNINGS
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