Rande
TTWO
Our little game maker did it again..
Beat the street
Banchee
Wednesday August 25, 8:03 am Eastern Time
Company Press Release
Take-Two Interactive Software, Inc. Reports Record
Third Quarter 1999 Net Sales and Net Income
65% Growth in Net Sales and 91% Growth in Gross Margins Fuels 215% Increase in Net Income
From the Same Period a Year Ago
NEW YORK--(BUSINESS WIRE)--August 25, 1999-- Fourth Quarter Expected to be Strongest Quarter in Company
History
Take-Two Interactive Software, Inc. (NASDAQ: TTWO - news), today announced financial results for its third quarter ended
July 31, 1999.
Net sales for the quarter were $63,562,470, a $25,136,325, or 65% increase from net sales of $38,426,145 for the quarter
ended July 31, 1998. Net income for the period was $2,707,824 compared to net income of $860,084 for the same period a
year ago, a 215% increase. Diluted earnings per share was $0.12 for the three months ended July 31, 1999 as compared with
$0.05 for the same period a year ago, a 140% increase. Net income for the period is presented on a fully taxed basis as
compared with 1998 results, which were non-taxed due to the use of a prior net operating loss carryforward.
For the nine months ended July 31, 1999 net sales were $184,008,455, a $54,228,579, or 42% increase from net sales of
$129,779,876 for the nine months ended July 31, 1998. Net income for the nine months ended July 31, 1999 was $7,163,832,
a 125% increase over net income of $3,177,670 for the same period a year ago. Diluted earnings per share for the nine months
ended July 31, 1999 was $0.34 as compared to $0.19 for the nine months ended July 31, 1998.
For the trailing twelve months ended July 31, 1999 net sales were $248,280,145, net income was $11,167,256 and diluted
earnings per share was $0.57. The Company's working capital position as of July 31, 1999 was $50,782,230 as compared
with $27,590,386 on April 30, 1999.
Gross margins continued to improve during the third quarter, reaching 31%, as compared with 26% for the first six months of
the 1999 fiscal year, and 24% for the year ended October 31, 1998. The Company attributes this trend to growth in its
publishing business. During the third quarter publishing sales represented 67% of total net sales, compared to 46% for the first
six months of this year and 47% for the 1998 fiscal year.
During the quarter, the Company achieved increased net sales in all areas of its business. In particular, during the third quarter of
1999 the Company's domestic publishing division saw sales expand more than 100% over the same period a year ago to
$25,775,162. Domestically, the Company benefited from several strong-selling new releases, including: Monster Truck
Madness 64 and In-Fisherman's Bass Hunter 64 from the Company's Rockstar Games division, Hidden & Dangerous and
Jagged Alliance 2 from the Company's TalonSoft division, and Darkstone, a co-production between the Company and
Gathering of Developers.
International revenues also increased more than 100% from the same period a year ago. The Company attributes this increase
to the continued growth of its international publishing business (particularly the release of Fly! and Hidden & Dangerous), the
establishment of Jack of All Games divisions in several locations in Europe and Australia, and a growing market share garnered
by its Joytech accessory line.
Ryan Brant, Chief Executive Officer, said, ''The third quarter of 1999 was another excellent quarter for Take-Two. The
Company continues to demonstrate its ability to internally grow its business, and execute its operating plan. The quarter was
highlighted by significantly higher than expected domestic published product sell-in and subsequent sell-through, which resulted
in better than expected gross margin performance. For the fourth quarter of 1999 the Company looks forward to the release of
Grand Theft Auto 2, the continued global expansion of its Jack of All Games value added distribution business, and a
traditionally favorable holiday selling season.''
Take-Two Interactive Software, Inc. is an integrated global developer, marketer, distributor, and publisher of interactive
entertainment software games and accessories for the PC, Sony PlayStation, Nintendo 64, Nintendo Game Boy Color and the
Sega Dreamcast. Take-Two is headquartered in New York City, with publishing, marketing, and sales offices in the United
Kingdom, Germany, France, Australia, and Japan. The Company publishes products under the Rockstar Games, TalonSoft,
Joytech and Take-Two labels. The Company maintains a broad reaching partnership with, and 19.9% equity interest in, both
Gathering of Developers and Bungie Software. The Company's Jack of All Games subsidiary is a global value added distributor
of entertainment software with distribution offices in Cincinnati, New York, London, Paris, Munich, Oslo, Stockholm,
Copenhagen and Sydney.
All trademarks and copyrights contained herein are the property of their respective holders.
Safe Harbor Statement under the Private Securities Reform Act of 1995: The statements contained herein which are not
historical facts are forward-looking statements that involve risks and uncertainties including, but not limited to, risks associated
with the Company's future growth and operating results, the ability of the Company to successfully integrate the business and
personnel of newly acquired entities into its operations, credit risks, product returns, inventory obsolescence, technological
change, competitive factors, and unfavorable general economic conditions. Actual results may vary significantly from such
forward-looking statements. Take-Two undertakes no obligation to update forward-looking statements contained within this
press release.
TAKE-TWO INTERACTIVE SOFTWARE, INC. and SUBSIDIARIES
Condensed Consolidated Statements of Operations
For the three months ended July 31, 1998 (unaudited)
and 1999 (unaudited) and the nine months ended
July 31, 1998 (unaudited) and 1999 (unaudited)
Three months Nine months
ended July 31, ended July 31,
----------------------------------------------------
1999 1998 1999 1998
----------------------------------------------------
(Unaudited) (Unaudited)
Net sales $63,562,470 $38,426,145 $184,008,455 $129,779,876
Cost of sales 43,931,101 28,170,283 133,553,958 98,815,293
----------- ----------- ------------ ------------
Gross profit 19,631,369 10,255,862 50,454,497 30,964,583
----------- ----------- ------------ ------------
Operating expenses:
Research and
development costs 986,845 546,429 2,210,994 1,551,800
Selling and
marketing 6,925,874 4,439,687 16,415,343 12,483,124
General and
administrative 6,779,560 3,430,843 17,359,437 9,102,708
Depreciation and
amortization 730,146 438,474 1,743,567 1,218,273
Loss on disposal
of fixed assets - - 57,504 -
----------- ----------- ------------ ------------
Total operating
expenses 15,422,425 8,855,433 37,786,845 24,355,905
Income from
operations 4,208,944 1,400,429 12,667,652 6,608,678
Interest expense 453,825 579,743 2,053,295 3,100,596
----------- ----------- ------------ ------------
Income before
equity in
earnings of
affiliate and
income taxes 3,755,119 820,686 10,614,357 3,508,082
Equity in earnings
of affiliate 110,973 - 110,973 -
----------- ----------- ------------ ------------
Income before
income taxes 3,866,092 820,686 10,725,330 3,508,082
Provision for
income taxes 1,158,268 23,249 3,561,498 167,664
----------- ----------- ------------ ------------
Net income before
extraordinary
item 2,707,824 797,437 7,163,832 3,340,418
----------- ----------- ------------ ------------
Extraordinary net
(gain) loss on
early extinguishment
of debt - (62,647) - 162,748
Net income $ 2,707,824 $ 860,084 $ 7,163,832 $ 3,177,670
Net income
attributable
to common
stockholders'
- Diluted $ 2,707,824 $ 860,084 $ 7,163,832 $ 3,177,670
=========== ========= =========== ===========
Per share data:
Diluted:
Weighted average
common shares
outstanding 23,292,541 17,944,299 21,205,200 16,419,237
=========== ========== =========== ===========
Net income
per share $ 0.12 $ 0.05 $ 0.34 $ 0.19
=========== ========= =========== ===========
Supplemental
net income
attributable
to common
stockholders
after giving
effect to S
corporation
distributions $ 0.12 $ 0.04 $ 0.34 $ 0.16
=========== ========= =========== ===========
OTHER INFORMATION
Three months Nine months
ended July 31, ended July 31,
----------------------------------------------
1999 1998 1999 1998
----------------------------------------------
Total revenue mix
Distribution 33% 41% 47% 54%
Publishing 67% 59% 53% 46%
Geographic revenue mix
Domestic 66% 74% 70% 82%
International 34% 26% 30% 18%
Publishing platform
revenue mix
Video Game Consoles 50% 86% 47% 76%
Nintendo Color Gameboy 2% 0% 7% 0%
PC 43% 14% 40% 24%
Accessories 5% 0% 6% 0%
Contact:
TAKE-TWO INTERACTIVE SOFTWARE, INC.
Larry Muller, CFO (financial)
Jeff Castaneda (media)
212-334-6633; 212-334-6644 fax
or
WOLFE AXELROD ASSOCIATES
Stephen D. Axelrod, CFA
Donald C. Weinberger
212-370-4500; 212-370-4505 fax
E-mail: don@wolfeaxelrod.com |
