Take-Two Interactive Software, Inc. Reports First Quarter Fiscal 2005 Financial Results
Company Reports Record Quarterly Revenue Of $502.5 Million
Grand Theft Auto: San Andreas Sales Exceed 12 Million Units Since Launch
New York, NY - March 3, 2005 - Take-Two Interactive Software, Inc. (NASDAQ:TTWO) today announced financial results for its first quarter ended January 31, 2005.
Net sales for the first quarter were $502.5 million compared to $375.5 million for the first quarter of fiscal 2004, an increase of 34%. Net income for the quarter rose to $55.2 million, a 74% increase from net income of $31.8 million during the same period last year. Diluted earnings per share of $1.19 increased 70% from $0.70 per diluted share in the prior year's first quarter.
Take-Two generated approximately $185 million in cash flow from operations in the quarter, bringing the Company's cash position to approximately $303 million as of January 31, 2005.
Take-Two attributed the sharply higher first quarter results primarily to continued strong consumer demand for its Grand Theft Auto: San Andreas title, as well as robust sales of the 2K Sports line of products and improved performance of the Company's Jack of All Games distribution business.
Guidance
Take-Two is updating its guidance for fiscal 2005 as follows:
- For the fiscal year ending October 31, 2005, $1.3 to $1.35 billion in net sales and $2.10 to $2.20 in diluted earnings per share.
- For the second quarter ending April 30, 2005, $200 to $210 million in net sales and a net loss per share of $(0.20).
Take-Two is issuing initial guidance for its third quarter of fiscal 2005 as follows:
- For the third quarter ending July 31, 2005, $220 to $240 million in net sales and $0.05 to $0.15 in diluted earnings per share.
The Company's diluted earnings/(loss) per share for all periods above do not include the impact of adopting FASB 123®, which requires the expensing of employee stock options.
Rockstar Games
Rockstar's Grand Theft Auto: San Andreas, released in late October for the PlayStation®2 computer entertainment system, was a significant contributor to the first quarter results. Created by the world-class developers Rockstar North, Grand Theft Auto: San Andreas was the top performing product in Take-Two's publishing business in the quarter. According to NPDFunworldSM, Grand Theft Auto: San Andreas was the top selling PlayStation 2 title in the United States in each of the four months since its release. The Company's life to date sales of Grand Theft Auto: San Andreas through the end of the first quarter have exceeded 12 million units.
Rockstar has a strong product lineup planned for the balance of fiscal 2005, beginning with Midnight Club 3: DUB Edition, the third installment in the multi-million unit selling, genre-defining Midnight Club street racing franchise developed by Rockstar San Diego. The title is slated for release in April for PlayStation 2, Xbox® and the PSPTM handheld entertainment system.
Rockstar is introducing Grand Theft Auto: San Andreas for Xbox and PC in the third quarter of fiscal 2005. Also planned for release in the third quarter is an all new Grand Theft Auto title, set in Liberty City, for the highly anticipated PSP handheld entertainment system.
The WarriorsTM, a new Rockstar title based on the Paramount Pictures feature film, is now planned for release on both PlayStation 2 and Xbox in the fourth quarter. Rockstar also expects to publish a new console title from their internal studios in the fourth quarter, as well as introduce Grand Theft Auto: San Andreas for the PlayStation 2 in Japan.
2K Games
During the quarter, Take-Two established the 2K Games publishing label and its sports division, 2K Sports, following the Company's acquisition of Visual Concepts and Kush Games, developers of the highly successful and critically acclaimed 2K series of simulation team sports games. Since the launch of the label in January, 2K Games has announced the following:
- Acquisition of rights to the multi-million unit selling Civilization PC strategy franchise and a long-term partnership with Civilization creator Sid Meier and his development studio FIRAXIS Games® beginning with the publishing rights to Civilization IV;
- A co-publishing agreement with Bethesda Softworks for The Elder Scrolls® IV: Oblivion, the fourth title in the best-selling Elder Scroll series, along with Call of Cthulhu: Dark Corners of the EarthTM;
- An agreement with SCi Games for North American publishing rights to Conflict: Global Terror, Carmageddon and Reservoir Dogs;
- A licensing agreement with WPT Enterprises for games based on their hit television show World Poker Tour®; and
- The exclusive third-party publishing rights for officially licensed Major League Baseball games.
2K Sports released College Hoops in the first quarter, followed by the second quarter release of Major League Baseball 2K5, both for PlayStation 2 and Xbox. Other titles planned for second quarter release from 2K Games include Close Combat: First to Fight for Xbox and PC; Stronghold 2 for PC; and Ford Racing 3 for PlayStation 2, Xbox and PC. Third quarter releases include Charlie and the Chocolate Factory on multiple platforms.
Jack of All Games
Jack of All Games' distribution business benefited in the quarter from holiday demand for value priced software products and newly released frontline software titles, although console hardware availability continued to be constrained.
Management Comments
Paul Eibeler, President and Chief Executive Officer, stated, "Fiscal 2005 is off to a great start. We are extremely pleased with the continued success of Grand Theft Auto: San Andreas and Rockstar's plans to extend the reach of this blockbuster title to multiple platforms and the Asian market later this year. Additionally, we have made significant progress in diversifying our business, building our product pipeline and adding to our sports game development capabilities. We will continue to leverage our internal resources and invest in new opportunities, including extending our content to new hardware platforms. With our strong performance in the first quarter and our rapidly expanding portfolio of proven franchises, new brands and licensed properties, Take-Two is positioned for significant annual growth."
Conference Call
Take-Two will host a conference call today at 4:30 pm Eastern Time to review its first quarter results and to discuss its outlook. A live 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 handheld entertainment system, Xbox®, Nintendo GameCubeTM and Game Boy® Advance. The Company publishes and develops products through its wholly owned labels Rockstar Games, 2K Games 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.
All trademarks and copyrights contained herein are the property of their respective holders.
Microsoft, Xbox, and the Xbox logos are either registered trademarks or trademarks of Microsoft Corporation in the United States and/or other countries.
PSP and "UMD" are trademarks of Sony Computer Entertainment Inc. "PlayStation" and the "PS" Family logo are registered trademarks of Sony Computer Entertainment Inc.
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 Annual Report on Form 10-K for the fiscal year ended October 31, 2004 in the section entitled "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 Annual Report on Form 10-K for the fiscal year ended October 31, 2004 in the section entitled "Risk Factors".