Majesco Entertainment Company Reports Second Quarter 2009 Financial Results
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June 15, 2009 Majesco Entertainment Company Reports Second Quarter 2009 Financial Results - Second Quarter Net Revenues Increased Over 60% to $20.5M - - Increases Fiscal 2009 Revenue Guidance - EDISON, N.J., June 15 /PRNewswire-FirstCall/ -- Majesco Entertainment Company (Nasdaq: COOL), an innovative provider of video games for the mass market, today reported financial results for the second quarter and six months ended April 30, 2009. For the second quarter ended April 30, 2009, Majesco's net revenues increased 60.8 percent to $20.5 million versus $12.8 million in the same period a year ago. During this same period, the Company reported an operating loss of $0.6 million, compared to a $0.3 million loss in the second quarter of 2008. Non-GAAP operating income was $0.5 million versus non-GAAP operating income of $0.2 million in 2008. Net loss for the quarter was $1.7 million versus a net loss of $0.3 million in 2008. On a non-GAAP basis, net income for the quarter was $0.3 million compared to non-GAAP net income of $0.1 million last year. The Company's basic and diluted net loss per share for the quarter ended April 30, 2009 was $0.06 compared to a net loss per basic and diluted share of $0.01 in the same period last year. Non-GAAP basic and diluted net income per share was $0.01 compared to $0.0 last year. For the six months ended April 30, 2009, the Company's net revenues increased 69.8 percent to $53.4 million versus the year ago period. During this same period, the Company reported operating income of $3.1 million compared to operating income of $2.1 million in the same 2008 period. Non-GAAP operating income for the six month period was $5.3 million compared to $2.9 million for the comparable 2008 period. Net income through the first six months of fiscal 2009 was $2.5 million versus net income of $2.4 million in the comparable 2008 period. Non-GAAP net income was $4.5 million for the first six months of fiscal 2009 compared to $2.6 million in the same 2008 period. The Company's basic and diluted earnings per share for the six months ended April 30, 2009 and the six months ended April 30, 2008 was $0.09. The Company's non-GAAP basic and diluted earnings per share for the six months ended April 30, 2009 was $0.16 compared to $0.09 in the comparable 2008 period. Jesse Sutton, Chief Executive Officer of Majesco, said, "We delivered another impressive quarter as we continued to successfully execute on our business plan and capitalize on the strength of the family friendly, casual game market. Our revenue growth was driven by the continued strength of Jillian Michaels' Fitness Ultimatum 2009 and our Cooking Mama franchise. During the quarter we launched Gardening Mama, our first brand extension of the Mama franchise, which delivered a solid performance and demonstrated the power of the Mama brand and its ability to extend beyond cooking. As expected, profitability in the quarter was dampened by our strategic marketing campaigns as we made investments to support the growth of our franchises and most promising titles. We believe the benefits of these investments will continue beyond the first half of 2009 and help drive future growth. Despite these investments, for the first six months of fiscal 2009 we delivered improved operating and net income on both a GAAP and non-GAAP basis. For the first six months, our non- GAAP operating income grew $2.4 million or 83 percent to $5.3 million, while our non-GAAP net income reached $4.5 million, an increase of $1.9 million or 75 percent. "As a result of our success to date this year, and the strength of our release schedule for the rest of the fiscal year we have increased our revenue guidance for fiscal 2009 to $80 to $85 million. We remain focused on prudently managing our costs and are committed to delivering profitable growth. We have a proven strategy, are executing operationally and believe we have the right team in place to continue creating value for our shareholders over the long- term." Financial Highlights -- Second quarter 2009 net revenues for the U.S. were $20.3 million, an increase of $8.9 million or 78 percent compared to the same quarter last year. Second quarter 2009 international sales were $0.3 million, a decline of $1.1 million or 81 percent compared to the same period of 2008. -- For the six months year-to-date, net revenues for the U.S. were $52.0 million, an increase of $22.2 million or 74 percent compared to the same period last year. International sales for the same period declined $0.3 million or 17 percent compared to the same period last year. -- Net Sales for the Wii increased $7.5 million, or 235 percent, to $10.7 million for the second quarter of fiscal 2009. DS sales for the same period increased 3 percent, from $9.0 million to $9.3 million. -- For the six months year-to-date, Wii sales increased $24.8 million, or 359 percent, to $31.7 million. DS sales for the same period declined 12 percent from $23.2 million to $20.5 million. -- The second quarter of 2009 also includes $1.0 million in advertising expense (included in selling and marketing) in support of the Company's strategic marketing initiatives and a loss on impairment of development costs of $0.3 million (included in general and administrative) due to cancellation of titles in development. -- The six months ended April 30, 2009 also includes $2.3 million in advertising expense (included in selling and marketing) in support of the Company's strategic marketing initiatives and a loss on impairment of development costs of $0.3 million (included in general and administrative) due to cancellation of titles in development. Generally Accepted Accounting Principles (GAAP) and Non-GAAP Metrics To facilitate a comparison between the three and six months ended April 30, 2009 and 2008, the Company has presented both GAAP and Non-GAAP financial results. GAAP financial measures, including operating income, net income, and basic and diluted earnings per share, have been adjusted to report certain Non-GAAP financial measures. These Non-GAAP financial measures exclude the following items from the Company's unaudited condensed consolidated statements of operations: -- Expenses related to non-cash compensation -- Net proceeds from sale of income tax net operating loss carryforwards -- Settlement charges related to the settlement of class action litigation -- Change in fair value of warrants -- Expenses for the California studio which will be closed in the third quarter fiscal 2009 These Non-GAAP measures are provided to enhance investors' overall understanding of the Company's current financial performance and the Company's prospects for the future. These measures should be considered in addition to results prepared in accordance with GAAP, but should not be considered a substitute for, or superior to, GAAP results. For more information on these Non-GAAP financial measures, please see the tables in this release captioned "Reconciliation of GAAP and Non-GAAP Financial Measures" which includes a reconciliation of the Non-GAAP to the GAAP results. Announced Product Line-up Third Quarter 2009 ending July 31, 2009: All of the following titles have been or are expected to be released in North America during the Company's third quarter: -- Go Play Lumberjacks for Wii is the first game in Majesco's recently announced Go Play line of motion-based, family friendly Wii titles that lets players use the Wii Remote to chop, climb, saw and logroll to victory in 5 entertaining events that include support for the Wii Balance Board accessory. -- Go Play Circus Star for Wii is the second game in Majesco's recently announced Go Play line that includes a full collection of all-time favorite circus attractions. Featuring support for the Wii Balance Board accessory, the game lets players wow the crowd with death-defying stunts, animal tricks and sleight of hand in 15 different events. -- Night at the Museum: Battle of the Smithsonian for Wii/DS/360/PC follows the storyline of Twentieth Century Fox's highly anticipated theatrical release of the same name which debuted in theaters May 22nd. Featuring the voice and likeness of the film's star, Ben Stiller, the game brings the movie experience directly into the home with all of the excitement and humor from the feature film. -- Drama Queens for DS tasks players with juggling their love life, career and friendships as they compete in a popularity contest set within a virtual 3D board game. -- Math Blaster in the Prime Adventure for DS is inspired by the original hit PC game from Knowledge Adventure that makes learning fun by combining a variety of adventure-based learning games with challenging mathematic puzzles and the unique capabilities of Nintendo DS. -- Rollin' Rascals for DS is an addictive puzzler that challenges players to roll adorable pets around obstacles and into identical pairs to clear them from the game board. -- Powerbike for DS is an intense motorcycle racer that features death-defying stunts, intense police chases and competitive multiplayer modes. -- Ultimate Game Room for DS is a compilation of 3 classic recreational sports--Pool, Darts and Bowling -- that lets players compete against friends on the go. -- Puffins Island Adventure for DS lets players experience life as part of a Puffin flock as they fly, dive, swim, explore and start a family in this fun and educational experience focused on one of nature's more unusual and endearing sea birds.