EDISON, NJ — (Marketwire) — 03/12/13 — Majesco Entertainment Company (NASDAQ: COOL), an innovative provider of video games for the mass market, today reported financial results for the first quarter of fiscal 2013 ended January 31, 2013.
For the first quarter ended January 31, 2013, Majesco-s net revenues were $23.5 million, down 65 percent versus $66.2 million in the same period a year ago. During the first quarter of fiscal 2013, the Company reported an operating loss of $2.0 million, compared to operating income of $7.6 million in the first quarter of fiscal 2012. Included in first quarter fiscal 2013 operating results is a charge of $0.8 million for severance expenses from the strategic realignment implemented in January 2013.
Net loss for the first quarter was $2.1 million compared to net income of $7.7 million in the first quarter of fiscal 2012. On a non-GAAP basis, the net loss for the quarter was $1.1 million compared to non-GAAP net income of $7.3 million in the first quarter last year. Please refer to the Reconciliation of GAAP to Non-GAAP Financial Measures table included later in this release for additional information and details on non-GAAP items.
The Company-s basic and diluted net loss per share for the quarter ended January 31, 2013 was $(0.05), compared to basic and diluted net income per share of $0.19 in the same period last year. The non-GAAP diluted net loss per share for the quarter ended January 31, 2013 was $(0.02) compared to net income per share of $0.18 in the same period last year. Please refer to the Reconciliation of GAAP to Non-GAAP Financial Measures table included later in this release for additional information and details on non-GAAP items.
“As we expected, sales patterns during the holiday period reflected declining demand for products on the Nintendo Wii game platform, including our Zumba Fitness titles,” said Jesse Sutton, Chief Executive Officer of Majesco. “As the industry transitions to next generation consoles, we are managing the business conservatively with an eye on cash preservation and relying on our past experience in weathering industry transitions. Already we have taken the necessary steps to lower our fixed cost base and we plan to introduce a smaller slate of high-profile branded console and mobile games during fiscal 2013.”
“With cash of approximately $27 million and no debt, we have the financial flexibility to prepare the company for a resumption of growth as the market for next generation consoles develops,” concluded Mr. Sutton.
Given the decline in the Company-s fiscal first quarter revenue, which encompasses the important holiday selling period, and the light product release slate for the next two quarters, management anticipates revenue for fiscal 2013 will be significantly below fiscal 2012. Management continues to expect to report a loss for the full year of fiscal 2013. The Company is currently compiling its release slate for the 2013 holiday selling period and will provide further product details as the year progresses.
To date, the Company has announced the following titles that were, or are expected to be, released during its fiscal second quarter 2013:
on Nintendo 3DS is being released as part of a distribution agreement with Little Orbit that includes the Nintendo DS and Wii skus released in the Company-s fiscal Q1. Players can pick their favorite Monster High character and form a team of friends as they skate through the crypts of Monster High. Collect power-ups, avoid monstrous obstacles, scream past the competition and use each character-s special ability and ghoul power to win the race.
To date, the Company has announced the following titles that are expected to be released during the balance of fiscal 2013:
on Xbox 360®, PlayStation®3 and Wii U launches this holiday as part of the Company-s distribution agreement with Little Orbit. Based on WB-s hit animated series airing on Cartoon Network, the game lets players assemble their Young Justice team from 12 heroes including NightWing, Kid Flash, Robin and more. Track down notorious villains and be mentored by powerful superheroes as you explore, customize and battle in this action-packed, RPG styled game.
(working title) for retail consoles and gaming handhelds, including smartphones and tablets, is based on the animated hit Disney television series. Additional details will be announced shortly.
The next iteration of the best-selling franchise that offers players a fun and effective at home workout solution. Specific product details to be announced.
The Company expects to announce additional details of its 2013 lineup in the coming months.
At 4:30 p.m. (EDT) today, management will host an earnings conference call. To access the call in the U.S., please dial 1-800-860-2442. Please dial in approximately 10 minutes prior to the start of the conference call. The conference call will also be broadcast live over the Internet and available for replay for 90 days from the “Investor Info” section of the Company-s website at . In addition, a replay of the call will be available via telephone for seven days beginning approximately two hours after the call. To listen to the telephone replay in the U.S., please dial 1-877-344-7529 and for international callers, dial 1-412-317-0088. Enter access code #10026095.
To facilitate a comparison between the three months ended January 31, 2013 and 2012, the Company has presented both GAAP and non-GAAP financial results. GAAP financial measures, including operating income, net income, and basic and diluted earnings per share, have been adjusted to report certain non-GAAP financial measures.
These non-GAAP financial measures exclude the following items from the Company-s consolidated statements of operations:
Expenses related to non-cash compensation
Expenses related to workforce reduction
Change in fair value of warrants
These non-GAAP measures are provided to enhance investors- overall understanding of the Company-s current financial performance and the Company-s prospects for the future. These measures should be considered in addition to results prepared in accordance with GAAP, but should not be considered a substitute for, or superior to, GAAP results.
For more information on these non-GAAP financial measures, please see the tables in this release captioned “Reconciliation of GAAP and Non-GAAP Financial Measures.”
Majesco Entertainment Company is a provider of video games for the mass market. Building on more than 20 years of operating history, the company is focused on developing and publishing a wide range of casual and family oriented video games on all leading console and handheld platforms as well as mobile devices. Product highlights include Zumba® Fitness, Cooking Mama and NBA Baller Beats. The company-s shares are traded on the Nasdaq Stock Market under the symbol: COOL. Majesco is headquartered in Edison, NJ and has an office in Brockhampton, UK. More info can be found online at or on Twitter at .
Some statements set forth in this release, including the estimates under the headings “Fiscal 2013 Outlook” contain forward-looking statements that are subject to change. Examples of forward-looking statements include statements relating to industry prospects, our future economic performance including anticipated revenues and expenditures, results of operations or financial position, and other financial items, our business plans and objectives, including our intended product releases, and may include certain assumptions that underlie forward-looking statements. Statements including words such as “anticipate,” “believe,” “estimate” or “expect” and statements in the future tense are forward-looking statements. These statements are subject to business and economic risk and reflect management-s current expectations, and involve subjects that are inherently uncertain and difficult to predict. Some of the risks and uncertainties which could cause our results to differ materially from our expectations include the following: consumer demand for our products, the availability of an adequate supply of current-generation and next-generation gaming hardware; our ability to predict consumer preferences among competing hardware platforms; consumer spending trends; the seasonal and cyclical nature of the interactive game segment; timely development and release of our products; competition in the interactive entertainment industry; developments in the law regarding protection of our products; our ability to secure licenses to valuable entertainment properties on favorable terms; our ability to manage expenses; our ability to attract and retain key personnel; adoption of new accounting regulations and standards; adverse changes in the securities markets; our ability to comply with continued listing requirements of the Nasdaq stock exchange; the availability of and costs associated with sources of liquidity; and other factors described in our filings with the SEC, including our Annual Report on Form 10-K for the year ended October 31, 2012. The Company does not undertake, and specifically disclaims any obligation, to release publicly the results of any revisions that may be made to any forward-looking statements to reflect the occurrence of anticipated or unanticipated events or circumstances after the date of such statements.
For additional information, please contact:
Michael Vesey
Chief Financial Officer
732.476.1956
Stephanie Prince/Jody Burfening
LHA
212.838.3777
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