EDISON, NJ — (Marketwired) — 06/10/13 — Majesco Entertainment Company (NASDAQ: COOL), an innovative provider of video games for the mass market, today reported financial results for the second quarter of fiscal 2013 ended April 30, 2013.
For the second quarter ended April 30, 2013, Majesco-s net revenues were $9.7 million, down 68 percent versus $30.4 million in the same period a year ago. During the second quarter of fiscal 2013, the Company reported an operating loss of $2.2 million, compared to operating income of $2.8 million in the second quarter of fiscal 2012. Net loss for the second quarter was $2.3 million compared to net income of $2.7 million in the second quarter of fiscal 2012. The Company-s basic and diluted net loss per share for the quarter ended April 30, 2013 was $(0.06), compared to basic and diluted net income per share of $0.07 in the same period last year.
On a non-GAAP basis, the net loss for the second quarter ended April 30, 2013 was $1.9 million compared to non-GAAP net income of $3.0 million in the second quarter of last year. The non-GAAP diluted net loss per share for the quarter ended April 30, 2013 was $(0.05) compared to diluted net income per share of $0.07 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.
For the six months ended April 30, 2013, the Company-s net revenues were $33.2 million versus $96.6 million in the year ago period, a decline of 66 percent. The Company reported an operating loss of $4.2 million compared to operating income of $10.3 million in the same period of 2012. For the six months ended April 30, 2013, net loss was $4.4 million compared to net income of $10.4 million for the six months ended April 30, 2012. Included in six month fiscal 2013 operating results is a charge of $0.8 million for severance expenses from the strategic realignment implemented in January 2013. The Company-s basic and diluted net loss per share for the six months ended April 30, 2013 was $(0.11), compared to basic and diluted net income per share of $0.26 and $0.25, respectively, for the corresponding period in 2012.
Non-GAAP operating loss for the six month period was $2.7 million compared to non-GAAP net income of $11.2 million for the comparable period in 2012. For the same period, non-GAAP net loss was $3.0 million in 2013 compared to non-GAAP net income of $10.3 million in 2012. The Company-s non-GAAP basic and diluted net loss per share for the six months ended April 30, 2013 was $(0.07) compared to diluted net income per share of $0.25 in the corresponding period of 2012. 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.
“In line with our expectations, Majesco-s second quarter results reflect the ongoing industry transition to next generation consoles,” said Jesse Sutton, Chief Executive Officer of Majesco. “During the second quarter we worked on, and recently announced, a substantial portion of our holiday release slate of new console and mobile games that we are very excited about, including games based on well-known brands like Disney-s Phineas and Ferb and Zumba Fitness that will be available on a variety of platforms including next gen consoles and mobile devices. As we announced earlier today, we-re also excited to have extended our relationship with Zumba Fitness through 2016. We believe that there are ample opportunities to broaden the leadership of this interactive fitness franchise. With $25.5 million in cash and no debt on our balance sheet, we remain well positioned to weather this industry transition as we continue to implement our fiscal 2014 strategy of releasing a smaller slate of higher profile, branded titles.”
Given the decline in revenue in the Company-s first six months of fiscal 2013, management continues to expect that revenue for fiscal 2013 will be significantly below fiscal 2012, and that this will result in a loss for the full year of fiscal 2013.
To date, the Company has announced the following titles that are expected to be released during the balance of fiscal 2013:
is the first ever motion-based fitness experience for mobile tablets based on the global lifestyle brand lets you take the dance-fitness party with you, anywhere you go. (Launches in July)
on 3DS rewards players for causing mayhem on the rubber-burned roads of Crash City. Players can unlock 15 different vehicles, from monster trucks to F1 racers, as they progress through 36 action-packed missions that challenge their skill behind the wheel. (Launches in July)
on the Xbox 360® games and entertainment system from Microsoft, Wii U, Wii, Nintendo 3DS and DS, is based on the top-rated Emmy Award-winning hit series from Disney. Join Phineas and Ferb as they travel to out-of-this-world places in their newest invention, the All-Terrain Transformatron, an upgradeable, customizable, ultra-cool amphibious ride that lets the boys collect treasures to display in their backyard Museum of Cool. (Launches in August)
on iOS and Android, focuses on Perry the Platypus, the breakout star from Disney-s Phineas and Ferb. Play as Agent P and his fellow O.W.C.A. agents as they battle Dr. Doofenshmirtz, stop his evil plot, and save the town of Danville. Players will experience unique gameplay every time they play and can challenge friends for the top secret agent score. (Launches in September)
(distributed by Majesco, published by Little Orbit) on PlayStation®3, Xbox 360 and Wii U is based on the acclaimed Cartoon Network animated series inspired by the DC Comics characters. 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. (Launches in September)
(distributed by Majesco, published by Little Orbit) on Wii U, Wii, Nintendo 3DS and DS whisks fans away on an amazing adventure with their favorite freaky-fab ghouls who jump, climb and swing through multiple magical levels to save Monster High. (Launches in October)
on Xbox One®, the all-in-one games and entertainment system from Microsoft, Kinect for Xbox 360®, Wii U and Wii is the latest game in the successful dance fitness franchise that has sold more than 9 million units worldwide. This fun, freeing fitness journey embodies Zumba-s global reach of over 185 countries by taking your work out to exotic locations around the world. Burn up to 1,000 calories per hour with new modes, dance styles and 40 high-energy new routines set to a world-class soundtrack featuring Lady Gaga, Daddy Yankee and Pitbull. (Launches in October and later this year on Xbox One)
(distributed by Majesco, published by Little Orbit) on Wii U, Wii, Nintendo 3DS and DS takes fans behind the pink doors into the fantastic world of the Barbie® Dreamhouse® mansion. (Launches in November during first quarter of fiscal 2014)
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 #10029659.
To facilitate a comparison between the three and six months ended April 30, 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 to 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 and Cooking Mama. Majesco is headquartered in Edison, NJ and the company-s shares are traded on the Nasdaq Stock Market under the symbol: COOL. 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.
(1) Represents expenses recorded for stock compensation expense. The Company does not consider stock-based compensation charges when evaluating business performance and management does not consider stock-based compensation expense in evaluating its short and long-term operating plans.
(2) Represents one time severance costs related to a workforce reduction. During January 2013, Company management initiated a plan of restructuring to better align its workforce to its revised operating plans. As part of the plan, the Company reduced its personnel count by approximately 40 employees.
(3) Represents the change in the fair value of warrants classified as a liability. The fair value of the warrants is calculated at each balance sheet date with a corresponding charge or credit to earnings for the amount of the change in fair value.
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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