Mad Catz reports $26.9m loss
Increased development and shipping costs, as well as higher royalty expenses, blamed for shortfall
Mad Catz Interactive, the third-party peripherals manufacturer, has announced its financial results for the fiscal 2009 third quarter, ended December 31, with a net loss of USD 26.9 million
The company saw net sales of USD 40.8 million, a 19 per cent increase from the same period the previous year, while gross profit for the quarter declined 16.7 per cent to USD 10.5 million. The USD 26.9 million loss came in stark contrast to the net income of USD 3.3 million for the same quarter of 2008, with blame placed at the feet of development, shipping and royalty costs.
"While Mad Catz generated healthy top line growth, the quarterly gross margin declined to 25.8 per cent from a record level a year ago," commented Darren Richardson, president and CEO.
"The decline was largely related to provisions for increased inventory reserves, higher royalty expenses, increased costs due to added product development staff and higher shipment costs. The inventory reserve provisions were necessary due to the uncertain state of the economy and the retail industry.
"Going forward, we expect gross profit margins to be no lower than the range of those experienced in our latest three and nine month periods," he added.