Mad Catz posts record profits for 2005

Gaming peripherals manufacturer Mad Catz Interactive has posted record financial results for 2005, forecasting continued growth as the company maximises the potential of new licenses and expands into Europe.

Sales in the US were up 4 per cent during the fourth quarter to $21.8 million, while net income rose 78 per cent from $0.5 million to $0.9 million. In Canada sales were up 10 per cent, while in Europe they rose by 25 per cent.

During the same period, research and development and sales and marketing costs were reduced to $1 million. Total company expenses were down from 16 per cent of fourth quarter revenues in the previous year to 14 per cent.

For fiscal year ending March 2005, sales rose by 10 per cent to $112.1 million. Overall operating costs were down to $18.8 million - a reduction of $0.7 million from 2004. As a result, net income was up more than 300 per cent from $1.1 million to $4.6 million.

"By executing on our previously announced strategy, Mad Catz delivered record financial results for the 2005 fiscal year and fourth quarter," said Mad Catz CEO Darren Richardson.

"We believe this performance is particularly noteworthy in light of the hardware shortages that plagued the industry this past fiscal year."

Richardson went on to predict that Mad Catz' success will continue as the industry gears up for the launch of next-generation consoles: "Importantly, over the last four quarters, we met our goals of differentiating ourselves from other video game accessory providers and we are well positioned to extend our market leadership during the upcoming console transition.

"Historically, a console transition is characterised by uncertain demand, and we are currently seeing some softness in the North American market in our fiscal 2006 first quarter.

"However, we are optimistic that our strategy of expanding our European distribution and adding new revenue streams to leverage our existing infrastructure will generate long-term growth and profitability improvements in fiscal 2006."

Richardson also predicted that the acquisition of licenses such as Batman, Fantastic 4, the National Football League, National Basketball Association and Major League Baseball are likely to encourage growth.

The company did not offer guidance for the current financial year, but Richardson stated: "We enter fiscal 2006 on excellent footing to achieve continued strong growth and improved shareholder value."