These columns probably won't line up and I'm running out the door for breakfast, but anyway---
PR NewsWire
Eidos plc Announces Financial Results for the Three Months and
Year Ended March 31, 1999
March 31, 1999
Fourth Quarter Revenues Increase 67% To 57.2 Million Pounds Sterling
($92.0 Million) Fourth Quarter Profit Before Tax and Goodwill Increases 130%
to 8.1 Million Pounds
($13.0 Million)
Full Year Revenues Increase 65% to 226.3 Million Pounds ($364.3 Million)
Full Year Profit Before Tax and Goodwill Increases 154% To 42.0 Million Pounds
($67.6 Million)
LONDON, May 27 /PRNewswire/ -- Eidos plc (Nasdaq: EIDSY), one of the
world's leading publishers and developers of entertainment software, announced
today results for the quarter and year ended March 31, 1999. Revenues were
57.2 million pounds($92.0m) for the quarter and 226.3 million pounds($364.3m)
for the full year, an increase of 65% on the previous year. On a US GAAP
basis the Company's profit before tax for the quarter ended March 31, 1999 was
#2.1 million ($3.3m) bringing the total for the year to 31.2 million
pounds($50.3m) compared to 0.1 million poundsin 1998. This resulted in
earnings per share of 9.1p (14.7c) for the quarter and 102.5p (165.0c) for the
full year compared to a loss of 32.6p last year.
Commenting on Eidos' current trading and future prospects, Ian
Livingstone, Chairman, stated, "Closing the year we are delighted with the
publishing achievements that have enabled us to post our most impressive
trading results to date. The past year has seen the continued successful
development of existing franchise properties such as Tomb Raider, Gex and
Championship Manager. Launched on March 26, Championship Manager 3 became the
UK's fastest ever selling PC CD title. We have also been very pleased with the
performance of other new titles such as Thief: The Dark Project, Gangsters and
Commandos, all of which we believe have the strong potential to develop as
valuable franchises into the future.
We enter what are traditionally the quieter trading months of the year
with a robust release schedule and a heavy, but carefully targeted, program of
investment. Releases for the current quarter include the PSX version of
Warzone 2100, Official Formula 1 Racing, FA Manager, Legacy of Kain: Soul
Reaver from Crystal Dynamics and Braveheart, based on the award winning film
starring Mel Gibson. Future releases for this year include Daikatana, Omikron,
Urban Chaos, Deus Ex, Commandos 2, Resident Evil III, UEFA 2000, Championship
Manager 2000 and a new episode in the Tomb Raider series.
Building on the exceptional progress of recent years, we continue to
pursue aggressively the best new content deals. We are delighted to have
signed recently publishing agreements with Free Radical Design and TimeLine
Studios; the latter will develop titles based on original material by the
company's co-founder Michael Crichton.
We also extended our agreement with Looking Glass Studios concerning the
Thief franchise. In addition, a long term publishing deal with Capcom secured
the European and Australian rights for the Resident Evil series of games.
Our unwavering commitment to product investment is the cornerstone of our
future plans and the means by which we will continue to bring titles with
outstanding gameplay and lasting appeal to the mass market and so drive our
growth."
Charles Cornwall, Chief Executive Officer, added, "A strong fourth quarter
rounds off our best full year results to date, with revenues for the year up
from 137.2m pounds to 226.3m pounds and operating profits up from 19.5m pounds
to 39.2m pounds. We believe the strength of the results reflect our
disciplined approach to publishing coupled with a broad portfolio of high
quality releases. We set ourselves the highest standards of publishing
excellence and content acquisition in the firm belief that this will translate
into continued long-term growth and profitability for the Group."
US GAAP US GAAP
Quarter Ended March 31 Year Ended March 31
1999 1998 1999 1998
$000* 000 000 $000* 000 000
pounds pounds pounds pounds
Net Sales 92,049 57,173 34,165 364,317 226,284 137,234
EBITDA 10,600 6,584 7,086 71,740 44,559 12,158
Profit before tax 3,331 2,069 3,322 50,285 31,233 122
Net Income 2,508 1,558 2,162 28,276 17,563 (5,520)
Earnings Per Share 14.7c 9.1p 12.7p 165.0c 102.5p (32.6p)
Earnings Per Share
before Goodwill 42.5c 26.4p 24.5p 245.2c 152.3p 15.0p
Diluted Earnings
Per Share 13.8c 8.6p 12.3p 148.8c 92.4p (32.6p)
Diluted Earnings Per
Share before
Goodwill 37.5c 23.3p 22.2p 216.1c 134.2p 14.8p
Weighted Average
Shares 17,205,200 16,962,187 17,137,829 16,943,461
Weighted Average
Diluted Shares 18,018,785 20,176,299 20,435,056 19,810,741
* The Company's financial statements are expressed in Pounds Sterling.
References to 'Pounds Sterling' or pounds are to the currency of the United
Kingdom and references to '$', 'US dollars' or 'US$' are to United States
currency. Solely for convenience this press release contains translations of
certain Pounds Sterling amounts into US dollars at specified rates. These
translations should not be construed as representations that the Pounds
Sterling amounts actually represent such US dollar amounts or could be
converted into US dollars at the rate indicated or any other rate. Unless
otherwise indicated, the translations of Pounds Sterling amounts into US
dollars have been made at the rate of $1.61 to 1.00 pounds, the exchange rate
published by Datastream for March 31, 1999.
Recent developments
-- Fourth quarter turnover up 67% to #57.2 million ($92.0 million) from
34.2 million pounds
-- Full year turnover up 65% to #226.3 million ($364.3 million) from
137.2 million pounds
-- Nineteen new titles launched in the year
-- Eight titles including catalogue achieved sales in excess of 350,000
units
-- Championship Manager 3 launched on March 26, to become the UK's fastest
ever selling PC CD title
-- Fourth quarter profit before tax and goodwill up 130% to #8.1 million
($13.0 million) from 3.5 million pounds
-- Full year profit before tax and goodwill up 154% to #42.0 million
($67.6 million) from 16.5 million pounds
-- Publishing deals signed with Free Radical Design and Michael Crichton's
Timeline Studios
-- Sequel rights to Thief: The Dark Project signed with Looking Glass
Studios
-- Long term publishing deal signed with Capcom for European and
Australian rights to the Resident Evil series of games
Investments
Eidos holds approximately 15% of the share capital of Opticom ASA, a
Norwegian listed company and a leader in the research and development of
polymer based storage and processing devices and internet technologies.
Following the recovery of the share price of Opticom ASA, the market value of
Eidos' holding in the company at March 31, 1999 was #24.2 million, which was
significantly above cost. Consequently the #3.0 million non operating charge
taken at December 31, 1998 in respect of this holding has been reversed in the
three months ended March 31, 1999, and the investment is shown at cost at the
year end.
Under US GAAP both the original charge and the subsequent write back were
taken directly to equity in the year.
UK GAAP Financial Summary
Eidos made a profit after tax of 5.0 million pounds for the three months
ended March 31, 1999 compared to 2.4 million pounds in the corresponding
period last year. Turnover increased 67% from 34.2 million pounds to
57.2 million pounds. This gives an earnings per share of 29.2p compared to
13.9p in the same period last year based on a weighted average number of
shares outstanding in the period of 17,205,200 (1998:16,962,187). The diluted
earnings per share was 25.7p (1998: 13.3p).
Eidos reported a profit after tax of 24.3 million pounds for the year
ended March 31, 1999 compared to 10.9 million pounds for the corresponding
period last year. Turnover increased 65% from 137.2 million pounds to
226.3 million pounds. The earnings per share was 141.5p compared to 64.1p
last year. The diluted earnings per share was 125.2p compared to 61.2p for
the corresponding period last year (this number has been restated in
accordance with Financial Reporting Standard No.14).
Net cash inflow from operating activities was #30.1 million
(1998: 15.9 million pounds) for the year ended March 31, 1999. The second and
final instalment of the consideration payable for Crystal Dynamics of
14.3m pounds was paid on April 1, 1999 and consequently is not reflected in
the cash flow for the year ended March 31, 1999.
Six new titles were launched in the final quarter, being Akuji: The
Heartless, Championship Manager 3, Commandos: Beyond the Call of Duty, Gex
III: Deep Cover Gecko, UEFA Champions League and Warzone 2100 on PC CD. There
were nineteen (1998: nineteen) new games released in the year ended March 31,
1999.
Gross margin for the fourth quarter was 61.8% compared to 69.4% last year.
The decrease is mainly due to a higher proportion of catalogue and budget
sales in the quarter compared to last year. Gross margin for the full year
was 63.9% compared to 65.6% last year. Cost of sales includes royalties paid
to developers in excess of development advances paid. A successful game can
earn considerable excess royalties. Royalty costs in the year were
15.7 million pounds compared to 6.2 million pounds last year, reflecting the
increasing success of titles from associate and external studios.
Selling and Marketing
Advertising costs for the three months ended March 31, 1999 were
5.7 million pounds(10.0% of revenues) compared to 3.2 million pounds
(9.4% of revenues) in the corresponding period. Advertising costs for the
year were 20.7 million pounds(9.2% of revenues) compared to 13.8 million
pounds (10.1% of revenues) in 1998. The increase in expenditure reflects the
growing use of TV, print and on-line advertising to promote Eidos' existing
and emerging franchises.
The fixed element of selling and marketing costs was 5.5 million
pounds(1998: 3.0 million pounds) and 16.4 million pounds
(1998: 9.9 million pounds) for the three months and year ended March 31, 1999
respectively. The increase is a result of both the increased costs of
licensing and additional headcount in new and existing offices.
Research and Development
Research and development spend represents the Company's investment in
product development of 9.0 million pounds for the three months ended
March 31, 1999 (1998: 6.0 million pounds) and 36.8 million pounds for the full
year (1998: 28.1 million pounds). Also included in the category is pure
research and development of 0.7 million pounds(1998: 0.8 million pounds) and
2.8 million pounds(1998: 1.8 million pounds) for the three months and year to
March 31, 1999 respectively. The product development charge for the year
includes 20.7 million pounds invested in a pipeline of 38 titles which have
yet to be released.
General and Administrative
General and administrative costs were 11.4 million pounds or 20% of
revenues (1998: 4 and 28.8 million pounds or
12.7% of revenues (1998: 16.9 million pounds or 12.3%) for the three months
and year ended March 31, 1999 respectively. The total excluding goodwill was
8.9 million pounds(15.5%) and 24.7 million pounds(10.9%) for the quarter and
full year respectively. The full year's charge includes 3.8m pounds
attributable to abortive acquisitions with related funding costs. Excluding
this one off charge and goodwill, general and administrative costs represented
9.2% of revenue compared to 12.3% last year.
Taxation
The effective tax rate for the full year is 36% which is marginally lower
than the rate used in the period to December 31, 1998. The principal cause of
the rate being in excess of the UK standard rate is the overseas profits being
taxed at higher rates. These overseas profits represented a higher proportion
of total Group profit this year and hence the effective tax rate is higher
than the 34% reported last year. Significant tax losses (6.7 million pounds)
have been utilised during the year, leaving tax losses of up to 17.5 million
pounds available in the future.
Eidos plc is one of the world's leading publishers and developers of
entertainment software. The Company develops and publishes a diverse mix of
titles for the Sony PlayStation and multimedia PC markets in the US, the UK,
Europe and Asia. The Company's shares are traded on the Nasdaq Stock Market
under the symbol EIDSY.
Certain statements contained in this press release may be deemed
forward-looking, and 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 world-wide business and industry conditions,
including consumer buying and retailer ordering patterns, product delays,
changes in research and development spending, company consumer relations, in
particular, levels of sales to mass merchants, 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 Company's form 20-F for the period ended March 31,
1998.
EIDOS plc
Consolidated Statements of Operations Reconciled to US GAAP for the quarter
and year ended March 31, 1999
Quarter ended March 31, Year ended March 31,
UK GAAP 1999 1999 1998 1999 1999 1998
$000 000 000 $000 000 000
Pounds Pounds Pounds Pounds
Turnover ..
continuing
operations 92,049 57,173 34,165 364,317 226,284 137,234
Cost of goods
sold (35,201) (21,864)(10,461)(131,421) (81,628)(47,263)
Gross profit 56,848 35,309 23,704 232,896 144,656 89,971
Selling and
marketing (18,022) (11,194) (6,268) (59,725) (37,096)(23,697)
Research and
development (15,582) (9,678) (6,826) (63,787) (39,619)(29,898)
General and
administrative
Goodwill
amortisation (4,117) (2,557) -- (6,552) (4,070) --
Other (14,271) (8,864) (4,410) (39,769) (24,701)(16,923)
Operating
expenses (51,992) (32,293)(17,504)(169,833) (105,486)(70,518)
Operating profit 4,856 3,016 6,200 63,063 39,170 19,453
Amounts written
off investments 4,830 3,000 -- -- -- --
Loss on sale of
operations -- -- (2,352) -- -- (1,852)
Net interest and
similar charges (773) (480) (327) (2,012) (1,250) (1,094)
Profit on ordinary
activities before
tax 8,913 5,536 3,521 61,051 37,920 16,507
Taxation (823) (511) (1,160) (22,009) (13,670) (5,642)
Net profit
after tax
(prepared under
UK GAAP) 8,090 5,025 2,361 39,042 24,250 10,865
Earnings per
share 47.0c 29.2p 13.9p 227.8c 141.5p 64.1p
Diluted earnings
per share 41.4c 25.7p 13.3p 201.6c 125.2p 61.2p
Reconciliation to US GAAP
Net profit after
tax (prepared
under UK GAAP) 8,090 5,025 2,361 39,042 24,250 10,865
Amortisation of
goodwill (40) (25) (1,999) (6,556) (4,072) (8,060)
In process research
and development (314) (195) -- (3,812) (2,368) --
Amounts written off
investments (4,830) (3,000) -- -- -- --
Stock compensation
expense (398) (247) -- (398) (247) --
Computer games
software -- -- -- -- -- (10,125)
Loss on sale of
operations -- -- 1,800 -- -- 1,800
Net income/(loss) in
accordance with
US GAAP 2,508 1,558 2,162 28,276 17,563 (5,520)
Earnings/(loss) per
share in accordance
with US GAAP
Basic 14.7c 9.1p 12.7p 165.0c 102.5p (32.6p)
Diluted 13.8c 8.6p 12.3p 148.8c 92.4p (32.6p)
Notes:
1. The UK GAAP fully diluted earnings per share for the quarter and year
ended March 31, 1998 has been restated in accordance with Financial Reporting
Standard No.14.
2. The Company's financial statements are expressed in Pounds Sterling.
References to 'Pounds Sterling' or pounds are to the currency of the United
Kingdom and references to '$', 'US dollars' or 'US$' are to United States
currency. Solely for convenience this press release contains translations of
certain Pounds Sterling amounts into US dollars at specified rates. These
translations should not be construed as representations that the Pounds
Sterling amounts actually represent such US dollar amounts or could be
converted into US dollars at the rate indicated or any other rate. Unless
otherwise indicated, the translations of Pounds Sterling amounts into US
dollars have been made at the rate of $1.61 to 1.00 pounds, the exchange rate
published by Datastream for March 31, 1999.
EIDOS plc
Consolidated Balance Sheets Reconciled to US GAAP
UK GAAP
March 31, 1999 March 31, 1998
(restated)
$000 000 000
Pounds Pounds
Fixed assets
Intangible assets
(net of amortisation
of 4,070,000 pounds) 41,762 25,939 --
Tangible assets 9,125 5,668 6,734
Investments 19,584 12,164 11,582
Total fixed assets 70,471 43,771 18,316
Current assets
Stocks 9,122 5,666 5,118
Debtors 92,957 57,737 30,770
Cash at bank and in hand 77,634 48,220 42,513
Total current assets 179,713 111,623 78,401
Creditors: amount falling
due within one year (93,459) (58,049) (26,327)
Net current assets 86,254 53,574 52,074
Total assets less current
liabilities 156,725 97,345 70,390
Creditors due after more
than one year:
US $50 million convertible
bonds (48,836) (30,333) (28,995)
Other creditors (773) (480) (459)
(49,609) (30,813) (29,454)
Net assets 107,116 66,532 40,936
Capital and reserves
Called up share capital 2,782 1,728 1,711
Share premium account 80,766 50,165 49,349
Other rese |
