GT Interactive reports record revenues up 56 percent for fiscal year
BusinessWire, Monday, February 10, 1997 at 16:39
NEW YORK--(BUSINESS WIRE)--Feb. 10, 1997--GT Interactive
Software Corp. (NASDAQ: GTIS) today reported record revenues for the
fiscal year ended December 31, 1996 of $365 million, a 56 percent
increase over the previous year. Operating income in 1996 before
merger and other one-time costs and goodwill amortization rose 35
percent to $46 million. Net income for the full year was $25 million
or $.38 per share. (Because GT Interactive was a sub-chapter S
corporation for part of 1995 and not a public company for the full
year, net income and per share full year comparisons are
unavailable.)
"We are very pleased with our achievements during our first full
year as a public company," said Ron Chaimowitz, president and chief
executive officer of GT Interactive. "Unlike most of our
competitors, we were profitable in all four calendar quarters. We
also accomplished what we set out to do at our initial public
offering by achieving strong revenue growth, in particular a 63
percent increase in overall publishing revenues; market share
leadership in interactive games; four strategic acquisitions; entry
into the video games market; and a fast-emerging international
business."
Revenues for the fourth quarter of 1996 were $135 million, a 30
percent increase over the comparable 1995 quarter. Net income for
the quarter was $8.5 million, a 16.8 percent decrease from the fourth
quarter of 1995. Earnings per share for the quarter were $.13 versus
$.16 in the prior year.
The decline in net income for the quarter was primarily the
result of video game product delays which reduced the company's
higher-margin publishing revenue relative to its lower-margin mass
merchant distribution sales, which exhibited significant growth. The
strong growth in mass merchant sales during the fourth quarter was a
reflection of seasonal trends as well as the continuing shift of
sales to this channel. GT Interactive's higher-margin publishing
sales were 48 percent of net revenue during the fourth quarter
compared with 60 percent in the 1995 quarter, and 54 percent for 1996
as a whole.
In 1996 GT Interactive had the number two market share in
front-line games and the number one share in value-priced software,
according to PC Data. Two GT Interactive games - - Duke Nukem 3D and
Quake -- performed among the year's top 10 best-sellers.
Publishing revenue rose from $121 million in 1995 to $197 million
in 1996. Front-line publishing revenues grew approximately 95
percent, and revenues of value-priced software rose approximately 20
percent. At $40 million, international revenues increased in excess
of 275 percent, comprising the fastest-growing segment of GT
Interactive's business.
"Looking to the balance of 1997, we believe GT Interactive has
the industry's strongest games lineup for PC as well as N64, Sony
Playstation and Sega Saturn," Chaimowitz added. "We expect
international sales to continue to be the fastest growing component
of our business, augmented by our acquisitions of Time Warner
Interactive and One Stop in Europe, as well as our agreement with
Midway Games. In addition, we intend to continue to acquire, invest
in and form alliances with the most creative and innovative
independent design groups in the industry."
GT Interactive's 1997 lineup includes Unreal, from Epic
Megagames; OddWorld: Abe's Oddysee, from OddWorld Inhabitants, (of
which GT Interactive owns 50 percent); Total Annihilation(TM), the
first title from GT Interactive's recently announced internal studio,
Cavedog Entertainment; Shadow Warrior, from Apogee/3D Realms,
creators of Duke Nukem 3D; as well as a host of titles from its
children's subsidiary, Humongous Entertainment. GT Interactive will
also offer one of the largest console lineups overseas as a result of
its agreement with Midway Games.
During 1996, GT Interactive:
-- Released 47 new titles globally for PC, Macintosh, Sony
Playstation and Sega Saturn including industry best-sellers
Duke Nukem 3D, Quake and Final Doom;
-- Acquired The WizardWorks Group, a top-ten value-priced
software developer and publisher;
-- Acquired FormGen Corporation, publishers of the number
one PC hit, Duke Nukem 3D;
-- Acquired Humongous Entertainment, premier developer and
publisher of award-winning children's software featuring
original characters Pajama Sam, Freddi Fish and Putt-Putt;
-- Acquired 50 percent of OffWorld Entertainment, Inc.
(known as Oddworld Inhabitants), obtaining exclusive global
publishing rights to Oddworld software titles for all media,
including PC, console, print, merchandising and online
vehicles;
-- Acquired Warner Interactive Entertainment, a European
subsidiary of Warner Music Group, in a cash transaction;
-- Acquired 10 percent of UK-based software developer Mirage;
-- Entered into an agreement with Target Stores whereby GT
Interactive became Target's primary national supplier of
entertainment software;
-- Obtained an exclusive option from WMS Industries to
publish Atari titles for PC worldwide and next-generation
video game systems in Europe and other foreign territories;
-- Entered into an exclusive broad-based publishing
agreement with children's author Mercer Mayer for rights to
publish Mayer's catalog, including Little Critter, L.C. and
the Critter Kids, Little Monster and Critters of the Night
across all interactive media;
-- Launched full version of id Software's Quake globally;
-- Struck exclusive global publishing agreement with Epic
Megagames Inc. whereby GT Interactive obtained exclusive
rights to publish Unreal and a sequel for PC, and an option
for Sony PlayStation, Sega Saturn and Nintendo 64 systems on
a worldwide basis. In addition, GT Interactive obtained
rights to Epics' UnrealEd, a proprietary 3D authoring tool
for publishing associated game "level sets."
Headquartered in NY, with offices in London, Paris, Hamburg, San
Francisco, Seattle, Phoenix and Minneapolis, GT Interactive Software
Corp. is a leading global publisher of entertainment, edutainment
and value-priced software under the GT Interactive, Humongous
Entertainment, Cavedog Entertainment and WizardWorks brands, for
IBM-compatible and Macintosh computers as well as game systems from
Nintendo, Sony and Sega. Among GT Interactive's best-selling titles
are Duke Nukem 3D and QUAKE. Located at gtinteractive.com
on the World Wide Web, GT Interactive is publicly traded on the
NASDAQ National Market System under the symbol GTIS.
NOTE: 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 and other
risks detailed, from time to time, in the company's SEC filings
including, but not limited to, the registration statement on Form
S-1, SEC file no. 333-14441.
*T
GT Interactive Software Corp. and Subsidiaries
Condensed Consolidated Balance Sheets
(unaudited)
December December
31, 31, 1996
1995(a)
(in thousands)
Cash and short-term investments $ 93,694 $ 76,584
Receivables, net 84,810 95,941
Inventories, net 49,145 60,457
Other current assets 45,587 90,995
Total current assets 273,236 323,977
Property and equipment, net 6,087 10,082
Other assets 22,318 33,052
Total assets $ 301,641 $ 367,111
Accounts payable $ 87,518 $ 107,842
Accrued liabilities 45,306 52,812
Other current liabilities 34,664 49,671
Total current liabilities 167,488 210,325
Long-term liabilities 8,113 4,648
Total liabilities 175,601 214,973
Stockholders' equity 126,040 152,138
Total liabilities and
stockholders' equity $ 301,641 $ 367,111
(a) The above information has been restated for the acquisition of
WizardWorks Group, Inc., Candel, Inc. and Humongous Entertainment.
GT Interactive Software Corp. And Subsidiaries
Condensed Consolidated Statements Of Operations
(unaudited)
For The Quarter
Ended December 31,
1995(a) 1996
(in thousands)
Net sales $ 104,060 $ 135,015
Cost of goods sold 60,830 84,348
Selling, general and
administrative expenses 25,553 36,826
Income before merger and other
costs, amortization of goodwill
and income taxes 17,677 13,841
Merger and other costs 1,024
Amortization of goodwill 277 273
Provision for income taxes 7,166 4,029
Net income $ 10,234 $ 8,515
Net income per share $ 0.13
Weighted average number of
shares outstanding 66,391
For The Year
Ended December 31,
1995(a) 1996
(in thousands)
Net sales 234,461 365,490
Cost of goods sold 138,662 214,580
Selling, general and
administrative expenses 62,146 105,333
Income before merger and other costs,
amortization of goodwill and
income taxes 33,653 45,577
Merger and other costs 3,718
Amortization of goodwill 567 1,092
Provision for income taxes 10,482 15,628
Net income $ 22,604 $ 25,139
Pro forma adjustment to income
tax provision(b) 4,616
Pro forma net income $ 17,988
Net income per share $ 0.38
Weighted average number of
shares outstanding 66,391
(a) The above information has been restated for the acquisition of
WizardWorks Group, Inc., Candel, Inc. and Humongous Entertainment.
(b) Reflects the income tax provision that would have been provided
had the Company been a C Corporation for the entire period ended
December 31, 1995.
*T
CONTACT: (investors) (media)
Dawn Berrie Allyne Mills
212/726-4235 212/726-4202
dberrie@gtinteractive.com amills@gtinteractive.com
KEYWORD: NEW YORK
INDUSTRY KEYWORD: COMPUTERS/ELECTRONICS COMED
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Name
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