Take-Two Interactive Software, Inc. Provides Financial Update
New York, NY - October 31, 2005 - Take-Two Interactive Software, Inc. (NASDAQ: TTWO), today announced revised revenue and earnings guidance for fiscal 2005 and fiscal 2006.
Take-Two is reducing its fiscal 2005 guidance to reflect several factors, including the movement of the launch of Grand Theft Auto: Liberty City Stories for the PSPTM handheld entertainment system in certain European territories from the fourth quarter of fiscal 2005 to the first quarter of fiscal 2006, due to unexpected delays in final product testing and submission. Shipments of the title have been made to the UK in the fourth quarter, with the title expected to ship in the remaining European territories in late November. Additionally, the revised fiscal 2005 guidance reflects reduced sales of catalog products and lower than anticipated initial retailer orders of new releases, which have resulted in lower than expected sales in October of Take-Two's published titles and in the Company's Jack of All Games distribution business.
Based on preliminary estimates, the Company now expects $1.180 to $1.185 billion in net sales and $0.53 to $0.56 in diluted net income per share for the fiscal year ending October 31, 2005.
In view of the Company's expectations of a continued cautious U.S. retail environment through the holiday season, and the inherent uncertainty in forecasting the pace of manufacturer shipments and consumer adoption of new hardware platforms, the Company has also reduced its fiscal 2006 guidance as follows:
- For the fiscal year ending October 31, 2006, $1.35 to $1.45 billion in net sales and $1.15 to $1.45 in diluted net income per share.
- For the first quarter ending January 31, 2006, $300 to $350 million in net sales and $0.04 to $0.10 in diluted net income per share. In addition to the factors mentioned above, the reduction in first quarter guidance also reflects the movement of The Elder Scrolls IV: Oblivion for PC and Xbox 360 from the first quarter to the second quarter and the movement of the Japanese launch of Grand Theft Auto: San Andreas for PlayStation 2 out of the first quarter and the fiscal year.
The Company's diluted earnings per share for the periods above do not include the impact of adopting FASB 123®, requiring the expensing of employee stock options. With the adoption of FASB 123® beginning on November 1, 2005, the Company's estimated diluted net income per share guidance will be $0.95 to $1.20 for the fiscal year ending October 31, 2006 and $0.00 to $0.05 for the first quarter ending January 31, 2006.
"It is disappointing to reduce our financial guidance. However, we remain optimistic about Take-Two's overall prospects and the favorable dynamics of our industry," said Paul Eibeler, President and Chief Executive Officer. "We continue to create compelling content, supported by strong creative and financial resources. For Fiscal 2006, we are well positioned for the opportunities to extend our brands across the large installed base of current generation platforms, as well as next generation hardware including the two previously announced Rockstar Games titles for the PSP, one of which is a new Grand Theft Auto title. We are pleased with the strong initial gamer and trade press response to our recently released Grand Theft Auto: Liberty City Stories for the PSP, as well as The Warriors and Sid Meier's Civilization IV."
Take-Two will host a 20-minute conference call today at 4:45 pm Eastern Time to discuss this news. The call can be accessed by dialing (877) 407-0984 or (201) 689-8577. A live listen-only webcast of the call is available by visiting http://ir.take2games.com and a replay will be available following the call at the same location.
About Take-Two Interactive Software
Headquartered in New York City, Take-Two Interactive Software, Inc. is an integrated global developer, marketer, distributor and publisher of interactive entertainment software games and accessories for the PC, PlayStation® game console, PlayStation® 2 computer entertainment system, PSPTM (PlayStation® Portable) system, the Xbox® video game and entertainment system from Microsoft, the Xbox 360TM video game and entertainment system from Microsoft, Nintendo GameCubeTM, Nintendo DSTM and Game Boy® Advance. The Company publishes and develops products through its wholly owned labels Rockstar Games, 2K Games, 2K Sports and Global Star Software; and distributes products in North America through its Jack of All Games subsidiary. Take-Two also manufactures and markets video game accessories in Europe, North America and the Asia Pacific region through its Joytech subsidiary. The Company maintains sales and marketing offices in Cincinnati, New York, Toronto, London, Paris, Munich, Madrid, Vienna, Milan, Sydney, Breda (Netherlands) and Auckland. Take-Two's common stock is publicly traded on NASDAQ under the symbol TTWO. For more corporate and product information please visit our website at www.take2games.com.
Safe Harbor Statement under the Private Securities Reform Act of 1995: This press release contains forward-looking statements made in reliance upon the safe harbor provisions of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. The statements contained herein which are not historical facts are considered forward-looking statements under federal securities laws. Such forward-looking statements are based on the beliefs of our management as well as assumptions made by and information currently available to them. The Company has no obligation to update such forward-looking statements. Actual results may vary significantly from these forward-looking statements based on a variety of factors. These important factors are described in the Company's Form 10-Q for the quarter ended July 31, 2005 in the section entitled "Cautionary Statement and Risk Factors".
Safe Harbor Statement
Safe Harbor Statement under the Private Securities Reform Act of 1995: This press release contains forward-looking statements made in reliance upon the safe harbor provisions of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. The statements contained herein which are not historical facts are considered forward-looking statements under federal securities laws. Such forward-looking statements are based on the beliefs of our management as well as assumptions made by and information currently available to them. The Company has no obligation to update such forward-looking statements. Actual results may vary significantly from these forward-looking statements based on a variety of factors. These important factors are described in the Company's Form 10-Q for the quarter ended July 31, 2005 in the section entitled "Cautionary Statement and Risk Factors".