Acclaim Entertainment Reports 1998 Results; Company Reports Revenues of $327 Million and a $21 Million Profit
GLEN COVE, NY--(BUSINESS WIRE)--Oct. 22, 1998-- Acclaim
Entertainment, Inc. (NASDAQ: AKLM) today reported its results for
the 1998 fiscal year ended August 31, 1998. The company reported that
it achieved net revenues of $326.6 million for the 1998 fiscal year
ended August 31, 1998 compared with $165.4 million in the prior year.
The company recorded a profit of $20.7 million and diluted earnings
per share of $0.37 in the 1998 year.
"We are pleased to report significant revenues and profit for the
1998 fiscal year," said Gregory Fischbach, chairman and CEO of
Acclaim. "As a company, we remain focused on our product strategy of
developing high quality titles and key brands. Our two-year
restructuring effort is now complete. Acclaim has the financial
resources to manage its business and grow the company. We have an
attainable operating plan and are beginning the next phase of the
company's evolution. Our focus now is on expanding our development
capabilities and improving shareholder value."
In the 1998 fiscal year, Acclaim successfully delivered ten
titles that achieved sales during the fiscal year of over $10 million
each including: NFL Quarterback Club 98, All-Star Baseball 99,
Extreme-G, Forsaken, Jeremy McGrath Supercross 98, Turok: Dinosaur
Hunter, Riven: The Sequel to Myst, WWF: War Zone, Bust-a-Move 2, and
NHL Breakaway 98. Of these titles, three sold over $20 million and
four sold over $40 million. Seven of these brands have become
established franchise titles for the company that it anticipates will
deliver predictable revenue in the 1999 fiscal year. Acclaim will
release sequels of these brands or franchises in fiscal 1999 which
will include: NFL Quarterback Club 99, Extreme-G 2, All-Star Baseball
2000, NHL Breakaway 99, Bust-a-Move 3, WWF Attitude, and Turok 2:
Seeds of Evil.
The most recent TRSTS data from the NPD Group reflects that for
the first 9 months of the calendar year the company achieved a
combined Nintendo 64 and PlayStation market share of 7.2% based on
dollars. The company's combined fourth fiscal quarter market share was
12.5% based on dollars.
Gross revenues by platform for the year consisted of 57% for N64,
30% for PlayStation, 10% for PC and the balance in portables and other
categories. On a geographic basis, North American operations generated
63% of net revenues and international operations 37% for the year.
"For the fiscal year, approximately 68% of our gross revenues
were derived from internally developed product," said Fischbach. "It
is our plan to expand our studios and R&D by approximately 20% during
the 1999 fiscal year. This expansion will allow us to maintain our
goal of the highest quality products and to continue to broaden our
product line."
The fourth quarter was highlighted by the success of WWF War
Zone, which is expected to sell over 2.5 million units by the end of
the year. In the quarter, the company released 5 new SKUs including
WWF War Zone for PlayStation, Nintendo 64 and Game Boy, Iggy's Reckin'
Balls for Nintendo 64, and Batman and Robin for PlayStation. The
company also experienced strong sales of catalog titles including
All-Star Baseball 99, Jeremy McGrath Supercross 98, and Turok:
Dinosaur Hunter. A licensed follow-up to WWF War Zone is expected to
ship in 1999. Acclaim's World Wrestling Federation license will not be
renewed after its expiration on November 15, 1999. The company plans
to utilize the proprietary game engine developed for its previous
wrestling product for future wrestling, fighting or boxing games to be
announced.
Fischbach indicated the company is well positioned to capitalize
on the upcoming holiday selling season with 10 new SKUs shipping in
the first quarter and re-orders of catalog product. New titles
include: Turok 2: Seeds of Evil, No One Can Stop Mr. Domino, NFL
Quarterback Club 99, NBA Jam 99, and NHL Breakaway 99.
Additionally, South Park, based on Comedy Central's popular adult
animated series, is expected to ship in the second quarter in time for
the holidays. The company expects to ship 9 SKUs in the second quarter
including Turok 2: Seeds of Evil for the PC, Machines, and South Park
for Nintendo 64, PC and Game Boy.
All titles will be supported by major marketing campaigns with TV
advertising in excess of $15 million and have been previewed
enthusiastically in major gaming publications and web sites. Acclaim
Publishing will be releasing strategy guides based on key product
launches including Turok 2: Seeds of Evil.
Acclaim Entertainment Background Information
Based in Glen Cove, N.Y., Acclaim Entertainment, Inc. is a
leading worldwide publisher and developer 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 website at www.acclaim.net.
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.
ACCLAIM ENTERTAINMENT, INC.
AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(in 000s, except per share data)
August 31,
1998 1997
ASSETS
CURRENT ASSETS
Cash and cash equivalents $47,273 $26,254
Accounts receivable - net 39,177 18,729
Inventories 3,430 3,546
Prepaid expenses 16,571 20,250
------ ------
TOTAL CURRENT ASSETS 106,451 68,779
------- ------
OTHER ASSETS 53,956 64,396
------ ------
TOTAL ASSETS $160,407 $133,175
-------- --------
LIABILITIES AND STOCKHOLDERS'
DEFICIENCY
CURRENT LIABILITIES
Trade accounts payable $24,218 $17,007
Short-term borrowings 16 643
Other current liabilities 101,317 115,285
------- -------
TOTAL CURRENT LIABILITIES 125,551 132,935
------- -------
LONG-TERM LIABILITIES
Other long-term liabilities 56,629 59,472
------ ------
TOTAL LIABILITIES 182,180 192,407
------- -------
MINORITY INTEREST -- (186)
STOCKHOLDERS' (DEFICIENCY)
Common Stock 1,053 1,002
Additional paid in capital 189,645 173,373
Accumulated deficit (209,180) (229,870)
Treasury stock (3,103) (2,904)
Foreign currency translation
adjustment (188) (647)
----- -----
TOTAL STOCKHOLDERS'
DEFICIENCY (21,773) (59,046)
-------- --------
TOTAL LIABILITIES AND
STOCKHOLDERS'
DEFICIENCY $160,407 $133,175
-------- --------
ACCLAIM ENTERTAINMENT, INC.
AND SUBSIDIARIES
CONDENSED STATEMENTS OF CONSOLIDATED OPERATIONS
(in 000s, except per share data)
(Unaudited)
Three Months Ended Fiscal Year Ended
August 31, August 31,
1998 1997 1998 1997
---- ---- ---- ----
NET REVENUES $91,787 $18,147 $326,561 $165,411
COST OF REVENUES 40,062 11,799 148,660 89,818
------ ------ ------- ------
GROSS PROFIT 51,725 6,348 177,901 75,593
------ ----- ------- ------
OPERATING EXPENSES
Marketing and Sales 17,824 13,560 61,691 57,266
General and
Administrative 14,729 15,802 54,149 68,831
Research and
Development 9,344 9,924 37,367 41,689
Goodwill Writedown ----- ----- ----- 25,200
Litigation Settlements ----- 15,250 ----- 23,550
Downsizing Charge ----- ----- ----- 10,000
--------- --------- --------- ------
TOTAL OPERATING
EXPENSES 41,897 54,536 153,207 226,536
------ ------ ------- -------
EARNINGS (LOSS) FROM
OPERATIONS 9,828 (48,188) 24,694 (150,943)
----- -------- ------ ---------
OTHER EXPENSE (954) (4,509) (3,240) (8,117)
----- ------- ------- -------
EARNINGS (LOSS) BEFORE
INCOME TAXES 8,874 (52,697) 21,454 (159,060)
----- -------- ------ ---------
PROVISION FOR INCOME
TAXES 638 457 764 882
--- --- --- ---
EARNINGS (LOSS) BEFORE
MINORITY INTEREST 8,236 (53,154) 20,690 (159,942)
----- -------- ------ ---------
MINORITY INTEREST ----- (528) ----- 714
--------- ----- -------- ------
NET EARNINGS (LOSS) $8,236 $(53,682) $20,690 $(159,228)
-------- --------- ------- --------
BASIC EARNINGS (LOSS)
PER SHARE $0.16 $(1.08) $0.40 $(3.21)
----- ------- ----- -------
DILUTED EARNINGS(LOSS)
PER SHARE $0.14 $(1.08) $0.37 $(3.21)
----- ------- ----- -------
CONTACT:
Bob Picunko
Sandy De Gennaro
Acclaim Entertainment
(516) 650-5000 |
