Majesco Reports Third Quarter 2006 Financial Results
EDISON, N.J, September 11, 2006 -- Majesco Entertainment Company (NASDAQ: COOL), an innovative provider of digital entertainment products and content, announced financial results for its third quarter ended July 31, 2006.
The Company reported third quarter net revenues of $12.6 million, compared to $4.6 million for the same period in 2005. For the nine months ended July 31, 2006, the Company reported net revenues of $48.3 million versus $55.1 million in the same period during 2005. Gross profit for the third quarter was $4.4 million, compared to a loss of $16.2 million for the comparable period in 2005. Gross profit was $18.7 million in the nine month period ended July 31, 2006, versus $3.2 million in the same period during 2005.
The operating loss was $332,000 for the third quarter of 2006, versus an operating loss of $38.6 million for the same period one year ago. Included in the operating loss for the 2006 quarter is the benefit of gains from negotiated reductions in certain payables of $1.4 million.
For the nine months ended July 31, 2006, the Company reported an operating loss of $1.1 million versus a loss of $35.8 million in the comparable 2005 period. Included in the operating loss for the nine month period of 2006 is the benefit of gains of $4.5 million from negotiated reductions in certain royalties and payables and $2.4 million of impairment charges related to projects which were canceled as a result of the Company's shift in strategy away from the development of premium console games.
Included in the operating loss for the first nine months of 2005 are: a provision for a loss of $1.4 million in connection with a proposed settlement with one of our distributors, $1.4 million of expense related to severance agreements and $6.1 million of write-offs related to the development of video games which were canceled as a result of the Company's strategy shift, which were all recorded in the third quarter of 2005.
For the quarter, the Company generated a net loss of $724,000 or $0.03 per share compared to a net loss of $37.5 million or $1.69 per share for the third quarter of last year. For the nine months ended July 31, 2006, the Company generated a net loss of $2.5 million or $0.11 per share compared to a net loss of $37.8 million or $1.87 per share for the first nine months of last year.
Jesse Sutton, Majesco's Interim Chief Executive Officer, commented, "We are pleased with our third quarter performance and the progress we've made refocusing Majesco's game publishing business. This quarter we achieved a substantial improvement in our results over the third quarter of 2005 due to a more conservative approach to game development, an improved cost structure and strong sales of JAWS Unleashed."
Sutton continued saying, "We remain focused on our strategy to publish value products and lower-cost games for handheld systems and make products with mass market appeal. Looking forward, we believe that Nintendo's new Wii console has excellent potential to capture the mass market gamer while remaining within our more conservative cost structure. As such, we are expanding our strategic focus to capitalize on the potential of this system, and currently have two Wii games in development. Going into the last quarter of fiscal 2006, we are looking to our holiday lineup to build momentum for 2007."
Key Announced Upcoming Products
Nacho Libre, for the Nintendo DS. Based on Paramount Pictures'/Nickelodeon Movies' film starring Jack Black, Majesco's Nacho Libre video game offers fans comedic wrestling mayhem - exaggerated moves, wacky props and lots of pratfalls, all delivered in a unique 'photo puppetry' visual style. Teen Titans 2, for the Nintendo Game Boy® Advance. Gamers will be able to re-enter the DC Comics' Teen Titans world from the Warner Bros. Animation television series and play as all five Teen Titans: Robin, Cyborg, Raven, Beast Boy and Starfire. Developed by Artificial Mind & Movement, Teen Titans 2 is a follow up to last year's successful title and is expected to ship this fall. Strawberry Shortcake Sweet Dreams, for the Nintendo Game Boy Advance, isbased on the October 1st premiere of the theatrical "Sweet Dreams" movie from DIC Entertainment and American Greetings,andallows fans to play as Strawberry Shortcake, Raspberry Torte, Angel Cake, Ginger Snap and Sleepbug as they work together to save Strawberryland and beat the Purple Pieman. MechAssault®: Phantom War, for the Nintendo DS is the first handheld installment of the critically acclaimed series. MechAssault: Phantom War features popular franchise elements while utilizing the Nintendo DS Touch Screen to deliver a new level of control and maneuverability. Cooking Mama, for the Nintendo DS. Featuring 76 different recipes, Cooking Mama challenges players to use the stylus as their master kitchen tool to chop, slice, pan fry, knead, grate, mash, peel and more. Cooking Mama has been awarded several honors including: "Most Innovative DS Design of E3 2006" from leading video game website IGN; and GameDaily's "Nod Award," which called Cooking Mama "a fun DS game that uses the stylus to near perfection." Cake Mania, for the Nintendo DS. Based on the #1 runaway hit original online game from one of the leading casual games publishers, Sandlot Games, Cake Mania combines a new Touch Screen element with the same fast-paced cake-baking fun that has captivated millions of online players worldwide. Bust-A-Move Revolution, is Majesco's inaugural Nintendo Wii product scheduled for early 2007. An iconic property within interactive entertainment, the Bust-A-Move video game franchise has been a worldwide favorite of puzzle fans, as well as hardcore and casual gamers for years.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 PSP® (PlayStation®Portable) system, Nintendo DS and Game Boy® Advance. Current product line highlights include Cooking Mama for the Nintendo DS, Guilty Gear Judgment for the PSP® (PlayStation®Portable) system and JAWS Unleashed, as well as digital entertainment products like Frogger® TV Arcade. Majesco also 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.