Disastrous first quarter sees Atari facing financial trouble
Publisher Atari has recorded a loss of $32.8 million in the quarter ended June 30th, with year on year revenues tumbling as the firm failed to find a blockbuster to match the performance of Driv3r in the same period last year.
Publisher Atari has recorded a loss of $32.8 million in the quarter ended June 30th, with year on year revenues tumbling as the firm failed to find a blockbuster to match the performance of Driv3r in the same period last year.
With little more than catalogue sales to support its revenue figure, Atari saw turnover of just $24.2 million - down 77 per cent on last year's figures - of which nearly 90 per cent came from catalogue products.
Atari, whose shares took a tumble back in June when president and CEO James Caparro resigned unexpectedly from his position after only seven months in the job, now faces difficulty in meeting some of its financial commitments.
The company has been forced to ask its bank, HSBC, for "waivers of certain financial covenants," according to CFO Diane Baker, and has turned to its parent company, French firm Infogrames, for financial assistance.
Infogrames will "provide financial backing to Atari's operations and cash requirements," according to Baker. No details of how much money infogrames will be providing have been announced.
"As a result of the support of Infogrames, we believe Atari will have the financial flexibility necessary to meet the current demands of the market place, and be better positioned for future growth and the worldwide exploitation of owned and licensed IPs," commented Atari's interim CEO, Bruno Bonnell - who is also in charge of Infogrames.
Atari also recently faced a delisting notice from the NASDAQ, but this was over an issue of technical compliance rather than a financial problem, and the firm's NASDAQ listing is thought to be secure for now.