EDISON, NJ — (Marketwired) — 01/29/15 — Majesco Entertainment Company (NASDAQ: COOL), an innovative provider of video games for the mass market, today reported financial results for the fourth quarter and full year fiscal 2014 ended October 31, 2014.
For the fourth quarter ended October 31, 2014, Majesco–s net revenues were $6.3 million compared to $10.1 million in the same period a year ago. During the fourth quarter of fiscal 2014, the Company reported an operating loss of $3.5 million, compared to an operating loss of $4.5 million in the fourth quarter of fiscal 2013. Net loss for the fourth quarter was $5.4 million compared to net loss of $4.6 million in the fourth quarter of fiscal 2013. Included in the net loss for the fourth quarter of fiscal 2014 is $1.9 million of impairment and operating losses related to the Company–s investment in GMS Entertainment. The Company–s net loss per share for the quarter ended October 31, 2014 was $(0.83), compared to net loss per share of $(0.72) in the same period last year.
On a non-GAAP basis, the net loss for the fourth quarter ended October 31, 2014 was $5.0 million compared to non-GAAP net loss of $4.2 million in the fourth quarter of last year. The non-GAAP net loss per share for the quarter ended October 31, 2014 was $(0.77) compared to net loss per share of $(0.66) 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 noted in the Company–s Report on Form 10-K filed with the Securities and Exchange Commission on January 29, 2015, the Company–s financial statements for the fiscal year ended October 31, 2014 contain a going concern modification in the report of its independent accountings, EisnerAmper LLP. Further information regarding the going concern modification can be found in such filing.
For the twelve months ended October 31, 2014, the Company–s net revenues were $34.4 million compared to $47.3 million in the prior twelve month period. The Company reported an operating loss of $13.3 million compared to operating loss of $12.2 million in the same period of 2013. For the twelve months ended October 31, 2014, net loss was $16.2 million compared to net loss of $12.6 million for the twelve months ended October 31, 2013. Included in the net loss for the twelve months ended October 31, 2014 is $3.8 million of impairment and operating losses related to the Company–s investment in GMS Entertainment and a $1.3 million gain on the extinguishment of liabilities. The Company–s net loss per share for the twelve months ended October 31, 2014 was $(2.52), compared to net loss per share of $(2.13) for the twelve months ended October 31, 2013.
Non-GAAP operating loss for the twelve month period ended October 31, 2014 was $11.9 million compared to non-GAAP operating loss of $10.0 million for the comparable period ended October 31, 2013. For the same period, non-GAAP net loss was $16.0 million in 2014 compared to non-GAAP net loss of $10.5 million in 2013. The Company–s non-GAAP net loss per share for the twelve months ended October 31, 2014 was $(2.50) compared to net loss per share of $(1.76) in the corresponding period of 2013. 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.
To facilitate a comparison between the three and twelve months ended October 31, 2014 and 2013, 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
Income related to the extinguishment of liabilities
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 an innovative developer, marketer, publisher and distributor of interactive entertainment for consumers around the world. Building on more than 25 years of operating history, the company develops and publishes a wide range of video games on console, handheld and mobile platforms, as well as digital networks through its Midnight City label. Majesco is headquartered in Plainfield, 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 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. The risks and uncertainties which could cause our results to differ materially from our expectations and plans are included in our risk factors described in our filings with the SEC, including our Annual Report on Form 10-K for the year ended October 31, 2014. 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 accounts payable balances and claims for which applicable statutes of limitations expired.
(3) Represents severance costs related to workforce reductions. 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. In October 2014, the Company incurred additional severance costs in connection with the termination of development, marketing and other operating personnel.
(4) 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.
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