Majesco Reports First Quarter 2006 Financial Results
EDISON, N.J., March 13, 2006 - Majesco Entertainment Company (NASDAQ: COOL) today announced results for its first quarter ended January 31, 2006.
The Company reported first quarter net revenues of $24.1 million, compared to $30.7 million reported for the same period in 2005. Gross profit was $10.4 million or 43.2 percent of net revenues for the first quarter, compared to $11.0 million, or 35.7 percent of net revenues for the same period in 2005.
The lower net revenues are attributable to a shift in the product mix from premium console games to value and handheld games which were partially offset by an increase in international net revenue. This is the Company's first quarter of meaningful sales under its international distribution agreement. The decrease in gross profit dollars and the increase in gross margin are reflective of the lower sales volume of video products in the current period, which generally contribute
a lower margin.
The operating loss was $2.1 million for the 2005 quarter versus operating income of $2.0 million for the same period one year ago. Included in the operating loss are impairment charges of $2.4 million related to anticipated non-recoverable development costs related to the Company's recent shift in strategy.
For the quarter, the Company reported a net loss of $2.6 million or $0.12 per share compared to a net loss of $400,000 or $0.02 per share for the first quarter of last year. The 2005 loss included a one-time charge of $1.1 million related to an incentive granted to certain holders for the exercise of warrants.
Morris Sutton, Majesco's newly appointed Chairman and Interim Chief Executive Officer, commented, "We are pleased with our results for the quarter and the progress we are making towards implementing our new product strategy. For the first time, international contributed a meaningful portion of our overall revenues and we have successfully re-positioned the Company to focus on providing high-quality handheld and value products during this time of industry transition. Going forward, our focus will be on enhancing our software product line up for the remainder of 2006 and 2007, continuing to reduce costs, streamlining our business, and actively seeking incremental revenue opportunities related to emerging technologies and peripherals."
About Majesco Entertainment Company
Headquartered in Edison, NJ, Majesco Entertainment Company (NASDAQ: COOL)
is an innovative provider of digital entertainment products and content, with a focus
on publishing videogames for leading portable systems such as the PSPTM (PlayStation ® Portable) system, Nintendo DSTM and Game Boy® Advance.
Current product line highlights include Age of Empires: The Age of Kings® for
the Nintendo DSTM, Guilty Gear Judgment for the PSPTM (PlayStation® Portable) system and JAWSTM Unleashed; as well as digital entertainment products like Frogger® TV Arcade. Majesco now offers Game Boy® Advance Video versions
of the beloved DreamWorks Animation movies Shrek, Shrek 2 and Shark Tale.
More information about Majesco can be found online at www.majescoentertainment.com.
Safe Harbor
Certain statements contained herein are "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. These forward-looking statements may be identified by reference to a future period(s) or by the use of forward-looking terminology, such as "may," "will," "intend," "should," "expect," "anticipate," "estimate" or "continue" or the negatives thereof or other comparable terminology. The Company's actual results could differ materially from those anticipated in such forward-looking statements due to a variety of factors. These factors include but are not limited to, the demand for our products; timely development and release of our products; the ability to secure licenses to valuable entertainment properties on favorable terms; continued consumer acceptance of the gaming platforms on which our products operate and our products; competitive factors in the businesses in which we compete; fulfillment of orders preliminarily made by customers; the ability to attract and retain key personnel; adverse changes in the securities markets; and the availability of and costs associated with sources of liquidity. 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.