Mad Catz sees Q4 profits slide

Mad Catz Interactive has announced its fourth quarter and full fiscal year financial results, showing a marked decline in sales and a Q4 loss of USD 3.3 million as a result of the console hardware transition.

Net sales for the fourth quarter ended March 31st were posted at USD 17.2 million, a 21 per cent drop from the same period a year prior. Gross profit dropped to USD 0.4 million from USD 5.2 million in 2005, with gross profit margins plummeting to 2.2 per cent compared to 24 per cent for the previous year.

For the full fiscal year 2006, Mad Catz reported net sales of USD 100.8 million compared to USD 112.1 million for the previous year. Gross profit decreased by 51.4 per cent to USD 13.4 million, resulting in a net loss of USD 6.7 million compared to a net income of USD 4.6 million in fiscal 2005.

Darren Richardson, Mad Catz's president and CEO, commented: "Fiscal 2006 was a difficult year for Mad Catz and the interactive gaming industry as the console transition significantly reduced consumer spending on video game hardware, software and accessories."

"Consistent with industry trends, during the fourth quarter, Mad Catz experienced a decline in overall product sales for current generation platforms though we generated impressive sales levels and contributions to the total net sales mix from our Xbox 360 offerings," Richardson added.

Looking forward, the company is expecting a positive shift in sales as the next-generation of hardware hits market later in the year, Richardson concluding: "With a focus by console manufacturers on the potential of the controller to play an important role in the interactivity of the next generation of gaming platforms and our long-term position as a leading third party supplier of control pads, wheels and other accessories, we are looking forward to the latter half of fiscal 2007 and the launch of new consoles from Sony and Nintendo "

In a separate announcement, the company has confirmed the appointment of two new board members, Robert Molyneux and William Woodward, both of whom are expected to bring "a diverse range of relevant experience to the Mad Catz board" as the company moves forward.