THQ ready to rock and roll!!
THQ today announced blow out earnings for Q3, smashing through analysts' estimates. Earnings came in at $.37 a share versus a predicted $.31. This makes the 10th straight quarter of rising earnings. Of even more significance, this was the first quarter that THQ, since the introduction of the WCW wrestling games, made its numbers without a wrestling title. When THQ declined to renew its WCW license last year, many wrote THQ off as dead. Seems the reports of THQ's demise were premature.
THQ also announced a 3 for 2 stock split.
Tuesday October 26, 8:31 am Eastern Time
Company Press Release
THQ Third Quarter Net Earnings More Than Double to a Record $0.37 Per Diluted Share on a 69% Increase in Revenue to a Record $44.3 Million
THQ Also Announces Three-For-Two Stock Split And Revised Terms of Joint Venture With JAKKS Pacific
CALABASAS, Calif.--(BUSINESS WIRE)--Oct. 26, 1999-- THQ Inc. (NASDAQ:THQI - news) today announced record results for the third quarter of 1999, the 10th consecutive quarter of record revenue and earnings.
For the three months ended September 30, 1999, net income more than doubled to a third-quarter record $4,941,000, or $0.37 per diluted share, on a 69% increase in revenue to a third-quarter record $44,289,000. For the third quarter of 1998, net income was $2,246,000, or $0.18 per diluted share and revenue was $26,230,000. All amounts reflect the impact of the pooling of interest transaction with Pacific Coast Power & Light Co. in May, 1999.
For the nine months ended September 30, 1999, net income increased to a record $18,608,000, or $1.42 per diluted share, on a 67% increase in revenue to a record $174,606,000. For the first nine months of 1998, net income, excluding a one-time acquisition charge of $7.2 million, was $11,252,000, or $0.94 per diluted share. Including the acquisition-related charge, net income for the comparable period last year was $4,020,000 or $0.34 per diluted share. Revenue for the nine months ended September 30, 1998 was $104,406,000. All amounts reflect the impact of the pooling of interest transaction with Pacific Coast Power & Light Co. in May, 1999.
Brian Farrell, president and chief executive officer of THQ, said that third quarter results reflected strong performance both domestically and internationally. He said that growth in the domestic market was driven by the release of ''Championship Motocross(TM) featuring Ricky Carmichael'' for PlayStation(TM), ''Road Rash(TM) 64'' for Nintendo® 64 and ''Destruction Derby(TM) 64'' for Nintendo 64. THQ's ''Rugrats'' franchise continued to demonstrate strong global consumer appeal across all platforms, accounting for 28% of sales in the quarter.
Farrell added that foreign revenue also grew significantly, representing 48% of total third quarter revenue as compared to 10% in the third quarter of 1998 and 26% in the second quarter of 1999. He said that this performance reflected the release of ''Star Wars Episode One: The Phantom Menace'' for PlayStation in Germany, ''Castrol Honda Super Bike'' for PlayStation, and ''Michael Owen's World League Soccer'' for Nintendo 64. Farrell noted that ''Championship Motocross featuring Ricky Carmichael'', ''Road Rash 64'' and ''Destruction Derby 64'' are all scheduled for release in foreign markets in the fourth quarter.
''These results confirm that THQ's strategy to build a diversified portfolio of products with high consumer appeal across all platforms is working to build value for shareholders. We are especially pleased that revenue increased 69% compared to last year even though we had no sales of wrestling products for the first time since 1996. With the scheduled release in the fourth quarter of the new World Wrestling Federation (WWF) titles, we certainly expect wrestling games to contribute to our results again in the future,'' Farrell said.
Farrell added that THQ anticipates a strong product lineup for the upcoming holiday selling season, including two new Rugrats titles (''Rugrats: Studio Tour(TM)'' for PlayStation and ''Rugrats: Time Travellers(TM)'' for Game Boy Color), the first WWF wrestling products (''WWF WrestleMania(TM) 2000'' for Nintendo 64 and Game Boy Color pursuant to the THQ/JAKKS joint venture), the first MTV action sports title (''MTV Sports(TM): Snowboarding(TM)'' for PlayStation), plus additional Nintendo 64 and Game Boy Color titles based on popular sports.
''Based upon our performance to date and this impressive fourth quarter product line up, we anticipate that 1999 will be another record year for THQ. So it is with great pleasure that the Company also announced today that its Board of Directors has approved a three-for-two stock split,'' Farrell said. The stock split will be effected in the form of a 50% stock dividend. The dividend shares will be distributed on or about December 1, 1999 to stockholders of record on November 15, 1999. The accompanying financial information has not been adjusted to reflect the effect of the stock split.
Farrell also announced that THQ has reached an agreement with JAKKS Pacific, Inc. concerning the terms of the joint venture between THQ and JAKKS relating to sales of video games based on the WWF license. Under the agreement, THQ will record revenue from the sale of WWF video games, and JAKKS will receive a guaranteed preferred return from the joint venture based upon video game sales, with the balance of profits allocated to THQ.
THQ will continue to be responsible for development, sales, and distribution of the WWF products, while JAKKS will continue to be responsible for maintaining the integrity of the WWF brand and the approval process and other relationship matters with WWF. THQ and JAKKS will continue to co-market the products. The first WWF products on Nintendo 64 and Game Boy Color will be released in the next thirty days.
About THQ
THQ Inc. is a leading developer, publisher and distributor of interactive entertainment software worldwide for a variety of hardware platforms including PC CD-ROM and those manufactured by Sega, Nintendo and Sony. The THQ web site is located at .
The statements contained in this release that are not historical facts may be deemed to constitute forward-looking statements. Actual results may differ materially from those projected in such statements due to a number of risks and uncertainties, including, without limitation, demand and competition for the Company's products, and other risks and uncertainties detailed in the Company's filings with the Securities and Exchange Commission. |
