- Published: 18 December 2008
- Written by Editor
Take-Two Interactive Software, Inc. Reports Fourth Quarter Fiscal 2008 Financial Results
Company achieves record revenue and net income for fiscal year 2008
--Signs new long-term agreements with Rockstar Games' senior creative talent
--Provides initial guidance for first quarter and fiscal 2009
Take-Two Interactive Software, Inc. (NASDAQ:TTWO) today announced financial results for its fourth quarter and fiscal year ended October 31, 2008.
Net revenue for the fourth quarter was $323.4 million, compared to $292.6 million for the same period of fiscal 2007. Fourth quarter sales were led by Midnight Club: Los Angeles, NBA 2K9, Grand Theft Auto IV and Carnival Games titles. Distribution revenue rose year over year, as current generation hardware sales were fueled by the strength of new frontline titles, along with robust demand for Wii software.
Net loss for the fourth quarter was $15.0 million or $0.20 per share, compared to a net loss of $7.1 million or $0.10 per share in the fourth quarter of fiscal 2007.
The fourth quarter 2008 results include $9.3 million in stock-based compensation expense ($0.12 per share); $5.6 million in professional fees and expenses related to unusual legal matters ($0.07 per share); and $1.6 million in business reorganization costs ($0.02 per share). Results for the fourth quarter of 2007 included $4.8 million in stock-based compensation expense ($0.06 per share); $4.5 million in business reorganization costs ($0.06 per share); and $1.5 million in professional fees and expenses related to unusual legal matters ($0.02 per share).
Non-GAAP net income was $1.6 million or $0.02 per share in the fourth quarter of 2008, compared to $3.4 million or $0.05 per share in the fourth quarter of 2007. (Please refer to Non-GAAP Financial Measures and reconciliation tables included later in this release for additional information and details on Non-GAAP items.)
Fiscal Year 2008 Results
Net revenues were a record $1,537.5 million for the fiscal year ended October 31, 2008, compared to $981.8 million in fiscal 2007. Net income for fiscal 2008 was a record $97.1 million or $1.28 per share, compared to a net loss of $138.4 million or $1.93 per share in fiscal 2007.
Fiscal 2008 results include $40.4 million in stock-based compensation expense ($0.53 per share); $16.2 million in professional fees and expenses related to unusual legal matters ($0.21 per share); and $4.5 million in business reorganization costs ($0.06 per share). Results for fiscal 2007 included $17.3 million in stock-based compensation expense ($0.24 per share); $23.6 million in business reorganization costs ($0.32 per share); and $16.7 million in professional fees and expenses related to unusual legal matters ($0.23 per share).
Non-GAAP net income was a record $158.2 million or $2.08 per share in fiscal 2008, versus a net loss of $81.0 million or $1.13 per share in the comparable period of 2007. (Please refer to Non-GAAP Financial Measures and reconciliation tables included later in this release for additional information and details on Non-GAAP items.)
Business Highlights
Among the significant recent business developments, Take-Two noted the following:
-- The Company entered into new long-term agreements with Rockstar Games' senior creative talent which extend to January 31, 2012.
-- Grand Theft Auto IV won Game of the Year and Best Action Adventure Game at the 2008 Spike TV Video Game Awards on December 14.
-- 2K Play's wholly owned Carnival Games(TM) franchise, including Carnival Games for Nintendo's Wii(TM) and DS(TM), and Carnival Games(TM) MiniGolf for Wii, has shipped over three million units worldwide.
-- The Company entered into an outsourcing agreement with Ditan Distribution for the pick, pack, ship and warehousing functions for Take-Two's U.S. publishing and distribution businesses previously handled by Take-Two's Jack of All Games subsidiary.
"Take-Two's record results for the 2008 fiscal year reflect the fundamental strength of our business model," said Strauss Zelnick, Chairman of Take-Two. "Our performance has benefited from the strategies we've implemented during the past 18 months to unlock the potential of our creative talent, sharpen our focus on the core business, and take costs out of our operations. We've also signed new agreements with the senior members of the Rockstar Games label, a team that has produced some of the industry's most extraordinary hits. These actions were taken in the interest of creating long-term shareholder value, and we believe they have also better positioned the Company to weather an increasingly challenging economic climate."
Ben Feder, Chief Executive Officer of Take-Two, commented, "While our initial guidance provided today is a prudent response to the difficult current and possible future business conditions, we continue to maintain our strategy of developing a select portfolio of AAA titles. We believe one of the keys to long-term success in our industry is to offer truly outstanding products and a great entertainment experience. We're excited about our 2009 pipeline, which will include the introduction of Grand Theft Auto: Chinatown Wars on the Nintendo DS, episodic content for Grand Theft Auto IV on the Xbox 360 and downloadable content for Midnight Club: Los Angeles, as well as new offerings from such powerful franchises as BioShock, Mafia and the 2K Sports roster. We'll also continue to invest in initiatives to achieve scale and create new revenue opportunities, while running a disciplined and cost-effective operation."
Financial Guidance
The Company is providing initial guidance for the first quarter ending January 31, 2009, and for the fiscal year ending October 31, 2009 as follows:
Revenue* Non-GAAP EPS (a)(b)
First quarter ending $175 to $225 $(0.70) to $(0.85)
1/31/2009
Fiscal year ending $1,100 to $1,250 $0.00 to $0.20
10/31/2009
* Dollars in millions
(a) The Company's non-GAAP EPS estimates for the first quarter
ending January 31, 2009 and fiscal year ending October 31, 2009
exclude approximately $0.14 and $0.52 per share, respectively, of
stock-based compensation expense; and approximately $0.01 and $0.05
per share, respectively, of expenses related to unusual legal
matters. The Company's stock-based compensation expense for the
first quarter and fiscal 2009 reflects the cost of approximately 2
million stock options and 1.5 million shares issued to ZelnickMedia
that are subject to variable accounting. Actual expense to be
recorded in connection with these options and shares is dependent
upon several factors, including future changes in Take-Two's stock
price.
(b) Q1 and fiscal year 2009 EPS estimates reflect tax expense
primarily due to international operations.
Key assumptions and dependencies underlying the Company's guidance include continued consumer acceptance of the Xbox 360(R) video game and entertainment system from Microsoft, PLAYSTATION(R)3 computer entertainment system and Wii(TM) home video game system from Nintendo; the ability to develop and publish products that capture market share for these current generation systems while continuing to leverage opportunities on certain prior generation platforms; as well as the timely delivery of titles.
Product Pipeline
The following titles shipped during the first quarter of 2009:
Title Platform Dora the Explorer: Dora Saves the Snow Princess DS Grand Theft Auto IV PC MLB(R) Superstars Wii
Take-Two's lineup announced to date for the remainder of fiscal 2009 includes the following announced titles:
Title Platform
BioShock(R) 2 TBA
Borderlands(TM) Xbox 360, PS3, Games for Windows(R)
Don King Boxing Wii, DS
Grand Theft Auto: Chinatown Wars DS
Grand Theft Auto IV: The Lost and Damned Xbox 360
Grand Theft Auto IV Episodic Content Xbox 360
Mafia II Xbox 360, PS3, Games for Windows
Major League Baseball(R) 2K9 Multiple platforms
Midnight Club: Los Angeles Downloadable
Content - South Central Content Pack Xbox 360, PS3
MLB(R) Front Office Manager Xbox 360, PS3, Games for Windows
NBA(R) 2K10 Multiple platforms
NHL(R) 2K10 Multiple platforms
Conference Call
Take-Two will host a conference call today at 4:30 p.m. Eastern Time to review these results and discuss other topics. The call can be accessed by dialing (877) 407-0984 or (201) 689-8577. A live listen-only webcast of the call will be available by visiting http://ir.take2games.com and a replay will be available following the call at the same location.
Non-GAAP Financial Measures
In addition to reporting financial results in accordance with U.S. generally accepted accounting principles (GAAP), the Company uses non-GAAP measures of financial performance that exclude certain non-recurring or non-cash items. Non-GAAP gross profit, income (loss) from operations, net income (loss) and earnings (loss) per share are measures that exclude certain non-recurring or non-cash items and should be considered in addition to results prepared in accordance with GAAP. They are not intended to be considered in isolation from, as a substitute for, or superior to, GAAP results. These non-GAAP financial measures may be different from similarly titled measures used by other companies.
The non-GAAP measures exclude the following items from the Company's statements of operations:
-- Business reorganization, restructuring and related expenses
-- Stock-based compensation
-- Professional fees and expenses associated with unusual legal and other matters, including the Company's recently completed strategic review process
-- Income tax effects of the items listed above
In addition, the Company may consider whether other significant non-recurring items that arise in the future should also be excluded from the non-GAAP financial measures it uses.
The Company believes that these non-GAAP financial measures, when taken into consideration with the corresponding GAAP financial measures, are important in gaining an understanding of the Company's ongoing business. These non-GAAP financial measures also provide for comparative results from period to period. Therefore, the Company believes it is appropriate to exclude certain items as follows:
Business reorganization, restructuring and related expenses
In March 2007, the Company's stockholders elected a new slate of members to Take-Two's Board of Directors, who immediately removed the Company's former President and Chief Executive Officer. Subsequently, the Company's former Chief Financial Officer resigned. As a result of these actions and the implementation of a business reorganization plan, the Company incurred significant costs in the fiscal years ended October 31, 2007 and October 31, 2008 to reduce headcount, relocate employees and consolidate sales and operational functions. These costs were related to severance, asset write-offs and associated professional fees. As of October 31, 2008, the Company had substantially concluded the reorganization plan.
The Company does not engage in reorganization activities on a regular basis and therefore believes it is appropriate to exclude business reorganization expenses from its non-GAAP financial measures.
Stock-based compensation
The Company does not consider stock-based compensation charges when evaluating business performance and management does not contemplate stock-based compensation expense in its short and long-term operating plans. The Company places greater emphasis on stockholder dilution than accounting charges when assessing the impact of stock-based equity awards.
Professional fees and expenses associated with unusual legal and other matters, including the Company's recently concluded strategic review process
The Company incurred significant legal, consulting and investment banking expenses in the fiscal year ended October 31, 2008 related to the tender offer by Electronic Arts Inc. to acquire all of the Company's outstanding shares, which was launched in March 2008 and expired in August 2008, and the Company's related strategic review process which was completed in October 2008. Additionally, the Company has realized significant legal and other professional fees associated with both the investigation of its historical stock option granting process and the Company's responses to related governmental inquiries and civil lawsuits. One of management's primary objectives is to bring conclusion to its outstanding legal matters. The Company continues to incur expenses for professional fees and has accrued for legal settlements that are outside its ordinary course of business. As a result, the Company has excluded such expenses from its non-GAAP financial measures.
EBITDA and Adjusted EBITDA
Earnings (loss) before interest, taxes, depreciation and amortization ("EBITDA") is a financial measure not calculated and presented in accordance with U.S. GAAP. Management uses EBITDA adjusted for business reorganization and related expenses ("Adjusted EBITDA"), among other measures, in evaluating the performance of the Company's business units. Adjusted EBITDA is also a significant component of the Company's incentive compensation plans. Adjusted EBITDA should not be considered in isolation from, or as a substitute for, net income/(loss) prepared in accordance with GAAP.
Reclassifications
Certain prior year amounts have been reclassified to conform to current year presentation.
About Take-Two Interactive Software
Headquartered in New York City, Take-Two Interactive Software, Inc. is a global developer, marketer, distributor and publisher of interactive entertainment software games for the PC, PLAYSTATION(R)3 and PlayStation(R)2 computer entertainment systems, PSP(R) (PlayStation(R)Portable) system, Xbox 360(R) video game and entertainment system from Microsoft, Wii(TM) and Nintendo DS(TM). The Company publishes and develops products through its wholly owned labels Rockstar Games, 2K Games, 2K Sports and 2K Play; and distributes software, hardware and accessories in North America through its Jack of All Games subsidiary. 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, Xbox 360, Xbox LIVE and the Xbox logos are trademarks of the Microsoft group of companies and are used under license from Microsoft.
"PlayStation", "PLAYSTATION", "PSP" and the "PS" Family logo are registered trademarks of Sony Computer Entertainment Inc. Memory Stick Duo(TM) may be required (sold separately).
Wii and Nintendo DS are trademarks of Nintendo.
Important Legal Information
This press release may contain 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 current beliefs of our management as well as assumptions made by and information currently available to them. The Company undertakes no obligation to update any forward-looking statement, whether as a result of new information, future events or otherwise. Actual results may vary significantly from these forward-looking statements based on a variety of factors. These risks and uncertainties include our dependence on key management and product development personnel, our dependence on Grand Theft Auto and our ability to develop other hit titles for current generation platforms, the timely release and significant market acceptance of our games, the realization of the anticipated benefits from our recent business reorganization, our ability to raise capital if needed, risks associated with international operations, the matters relating to the Special Committee's investigation of the Company's stock option grants and the claims and proceedings relating thereto (including stockholder and derivative litigation, actions by the SEC and/or other governmental agencies and negative tax or other implications for the Company resulting from any accounting adjustments or other factors) and risks associated with the Company's concluded process to evaluate its strategic alternatives including stockholder litigation arising therefrom. Other important factors are described in the Company's Annual Report on Form 10-K for the fiscal year ended October 31, 2007, in the section entitled "Risk Factors," as updated in the Company's Quarterly Report on Form 10-Q for the fiscal quarter ended July 31, 2008, in the section entitled "Risk Factors," and can be accessed at www.take2games.com. All forward-looking statements are qualified by these cautionary statements and apply only as of the date they are made. This communication does not constitute an offer to sell or invitation to purchase any securities or the solicitation of an offer to buy any securities.
TAKE-TWO INTERACTIVE SOFTWARE, INC. and SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share amounts)
Three months ended October 31, For the Years Ended October 31,
2008 2007 2008 2007
Net revenue $ 323,442 $ 292,600 $ 1,537,530 $ 981,791
Cost of goods sold:
Product costs 146,422 133,808 633,979 511,088
Software development costs and royalties 43,276 42,695 169,398 136,485
Internal royalties 18,003 11,002 128,772 28,892
Licenses 17,071 15,443 56,546 58,569
Total cost of goods sold 224,772 202,948 988,695 735,034
Gross profit 98,670 89,652 548,835 246,757
Selling and marketing 44,846 32,246 167,380 130,652
General and administrative 44,524 36,223 171,440 150,432
Research and development 16,052 11,159 63,929 48,455
Business reorganization and related 1,601 1,405 4,478 17,467
Depreciation and amortization 5,629 6,706 25,755 27,449
Total operating expenses 112,652 87,739 432,982 374,455
Income (loss) from operations (13,982 ) 1,913 115,853 (127,698 )
Loss on sale and deconsolidation (1) - (4,469 ) - (4,469 )
Interest and other income (expense), net (2,845 ) 899 (3,710 ) 3,952
Income (loss) before income taxes (16,827 ) (1,657 ) 112,143 (128,215 )
Income taxes (1,873 ) 5,406 15,046 10,191
Net income (loss) $ (14,954 ) $ (7,063 ) $ 97,097 $ (138,406 )
Earnings (loss) per share:
Basic $ (0.20 ) $ (0.10 ) $ 1.29 $ (1.93 )
Diluted $ (0.20 ) $ (0.10 ) $ 1.28 $ (1.93 )
Weighted average shares outstanding:
Basic 76,046 72,321 75,039 71,860
Diluted 76,046 72,321 75,943 71,860
Three months ended October 31, For the Years Ended October 31,
OTHER INFORMATION 2008 2007 2008 2007
Total revenue mix
Publishing 75% 75% 80% 70%
Distribution 25% 25% 20% 30%
Geographic revenue mix
North America 65% 74% 65% 75%
International 35% 26% 35% 25%
Publishing revenue platform mix
Sony PLAYSTATION 3 35% 5% 34% 10%
Microsoft Xbox 360 28% 44% 39% 30%
Nintendo Wii 13% 11% 9% 5%
Sony PlayStation 2 8% 14% 8% 26%
Sony PSP 7% 4% 5% 10%
PC 5% 19% 3% 14%
Nintendo Handhelds 4% 1% 2% 1%
Other 0% 2% 0% 4%
(1) Reflects $3,080 loss on the sale of Joytech, a video game
accessories company; and $1,389 loss on the deconsolidation of Blue
Castle Games, Inc., which previously was accounted for as a wholly
owned subsidiary in accordance with FIN 46(R).
TAKE-TWO INTERACTIVE SOFTWARE, INC. and SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(in thousands, except per share amounts)
October 31,
2008 2007
ASSETS
Current assets:
Cash and cash equivalents $ 280,277 $ 77,757
Accounts receivable, net of allowances of $68,448 and $63,324 at
October 31, 2008 and
October 31, 2007, respectively 157,458 104,937
Inventory 104,235 99,331
Software development costs and licenses 113,436 141,441
Prepaid taxes and taxes receivable 23,763 40,316
Prepaid expenses and other 44,605 34,741
Total current assets 723,774 498,523
Fixed assets, net 32,361 44,986
Software development costs and licenses, net of current portion 61,991 34,465
Goodwill 230,809 204,845
Other intangibles, net 26,123 31,264
Other assets 8,294 17,060
Total assets $ 1,083,352 $ 831,143
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 156,167 $ 128,782
Accrued expenses and other current liabilities 153,089 146,835
Deferred revenue 56,163 36,544
Total current liabilities 365,419 312,161
Deferred revenue - 25,000
Line of credit 70,000 18,000
Income taxes payable 26,399 -
Other long-term liabilities 6,416 4,828
Total liabilities 468,234 359,989
Commitments and contingencies
Stockholders' equity:
Common stock, $.01 par value, 100,000 shares authorized; 77,694 and
74,273 shares issued
and outstanding at October 31, 2008 and October 31, 2007, 777 743
respectively
Additional paid-in capital 603,579 513,297
Retained earnings (accumulated deficit) 18,275 (77,747 )
Accumulated other comprehensive (loss) income (7,513 ) 34,861
Total stockholders' equity 615,118 471,154
Total liabilities and stockholders' equity $ 1,083,352 $ 831,143
TAKE-TWO INTERACTIVE SOFTWARE, INC. and SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
For the Years Ended October 31,
2008 2007
Operating activities:
Net income (loss) $ 97,097 $ (138,406 )
Adjustments to reconcile net income (loss) to net cash provided by
(used for) operating activities:
Amortization and write-off of software development costs and licenses 146,102 106,675
Depreciation and amortization of long-lived assets 25,755 27,449
Amortization and write-off of intellectual property 2,350 8,626
Stock-based compensation 40,387 17,329
Benefit for deferred income taxes (391 ) (1,718 )
Loss on disposal of fixed assets 1,306 -
Foreign currency transaction loss (gain) and other 5,659 (1,656 )
(Gain) loss on sale and deconsolidation (277 ) 4,469
Changes in assets and liabilities, net of effect from purchases and
disposal of businesses:
Accounts receivable, net (52,421 ) 39,159
Inventory (4,904 ) (10,203 )
Software development costs and licenses (157,076 ) (160,643 )
Prepaid expenses, other current and other non-current assets 16,831 18,270
Accounts payable, accrued expenses, deferred revenue and other 31,008 26,604
liabilities
Total adjustments 54,329 74,361
Net cash provided by (used for) operating activities 151,426 (64,045 )
Investing activities:
Purchase of fixed assets (12,277 ) (21,594 )
Cash received from sale of business 3,000 2,778
Payments for purchases of businesses, net of cash acquired (7,503 ) (5,795 )
Net cash used for investing activities (16,780 ) (24,611 )
Financing activities:
Proceeds from exercise of options 25,962 9,503
Borrowings on line of credit 135,000 18,000
Payments on line of credit (83,000 ) -
Payment of debt issuance costs (962 ) (1,809 )
Net cash provided by financing activities 77,000 25,694
Effects of exchange rates on cash and cash equivalents (9,126 ) 8,239
Net increase (decrease) in cash and cash equivalents 202,520 (54,723 )
Cash and cash equivalents, beginning of year 77,757 132,480
Cash and cash equivalents, end of year $ 280,277 $ 77,757
TAKE-TWO INTERACTIVE SOFTWARE, INC. and SUBSIDIARIES
CONSOLIDATED STATEMENT OF OPERATIONS
(in thousands, except per share amounts)
Non-GAAP Reconciling Items
Three months Business Professional Non-GAAP three
ended October 31, reorganization fees and Stock-based months ended October 31,
2008 and related legal matters compensation 2008
Net revenue $ 323,442 $ - $ - $ - $ 323,442
Cost of goods sold:
Product costs 146,422 - - - 146,422
Software development costs and royalties 43,276 - - (2,863 ) 40,413
Internal royalties 18,003 - - - 18,003
Licenses 17,071 - - - 17,071
Total cost of goods sold 224,772 - - (2,863 ) 221,909
Gross profit 98,670 - - 2,863 101,533
Selling and marketing 44,846 - - (444 ) 44,402
General and administrative 44,524 - (5,589 ) (4,804 ) 34,131
Research and development 16,052 - - (1,214 ) 14,838
Business reorganization and related 1,601 (1,601 ) - - -
Depreciation and amortization 5,629 - - - 5,629
Total operating expenses 112,652 (1,601 ) (5,589 ) (6,462 ) 99,000
Income (loss) from operations (13,982 ) 1,601 5,589 9,325 2,533
Interest and other expense, net (2,845 ) - - - (2,845 )
Loss before income taxes (16,827 ) 1,601 5,589 9,325 (312 )
Income taxes (1,873 ) - - - (1,873 )
Net income (loss) $ (14,954 ) $ 1,601 $ 5,589 $ 9,325 $ 1,561
Earnings (loss) per share:*
Basic $ (0.20 ) $ 0.02 $ 0.07 $ 0.12 $ 0.02
Diluted $ (0.20 ) $ 0.02 $ 0.07 $ 0.12 $ 0.02
Weighted average shares outstanding
Basic 76,046 76,046
Diluted 76,046 76,903
EBITDA:
Loss before income taxes $ (16,827 ) $ (312 )
Interest (1,159 ) (1,159 )
Depreciation and amortization 5,629 5,629
EBITDA $ (12,357 ) $ 4,158
Add: Business reorganization and related 1,601 -
Adjusted EBITDA $ (10,756 ) $ 4,158
*Basic and diluted earnings (loss) per share may not add due to
rounding
TAKE-TWO INTERACTIVE SOFTWARE, INC. and SUBSIDIARIES
CONSOLIDATED STATEMENT OF OPERATIONS
(in thousands, except per share amounts)
Non-GAAP Reconciling Items
Three months Business Professional Non-GAAP three
ended October 31, reorganization fees and Stock-based months ended October 31,
2007 and related legal matters compensation 2007
Net revenue $ 292,600 $ - $ - $ - $ 292,600
Cost of goods sold:
Product costs 133,808 - - - 133,808
Software development costs and royalties 42,695 - - (1,008 ) 41,687
Internal royalties 11,002 - - - 11,002
Licenses 15,443 - - - 15,443
Total cost of goods sold 202,948 - - (1,008 ) 201,940
Gross profit 89,652 - - 1,008 90,660
Selling and marketing 32,246 - - (353 ) 31,893
General and administrative 36,223 - (1,546 ) (2,636 ) 32,041
Research and development 11,159 - - (757 ) 10,402
Business reorganization and related 1,405 (1,405 ) - - -
Depreciation and amortization 6,706 - - - 6,706
Total operating expenses 87,739 (1,405 ) (1,546 ) (3,746 ) 81,042
Income from operations 1,913 1,405 1,546 4,754 9,618
Loss on sale and deconsolidation (4,469 ) 3,080 - - (1,389 )
Interest and other income, net 899 - - - 899
Income (loss) before income taxes (1,657 ) 4,485 1,546 4,754 9,128
Income taxes 5,406 322 - - 5,728
Net income (loss) $ (7,063 ) $ 4,163 $ 1,546 $ 4,754 $ 3,400
Earnings (loss) per share:*
Basic $ (0.10 ) $ 0.06 $ 0.02 $ 0.07 $ 0.05
Diluted $ (0.10 ) $ 0.06 $ 0.02 $ 0.06 $ 0.05
Weighted average shares outstanding
Basic 72,321 72,321
Diluted 72,321 73,527
EBITDA:
Income (loss) before income taxes $ (1,657 ) $ 9,128
Interest 324 324
Depreciation and amortization 6,706 6,706
EBITDA $ 5,373 $ 16,158
Add: Business reorganization and related 1,405 -
Loss on sale and deconsolidation 4,469 1,389
Adjusted EBITDA $ 11,247 $ 17,547
*Basic and diluted earnings (loss) per share may not add due to
rounding
TAKE-TWO INTERACTIVE SOFTWARE, INC. and SUBSIDIARIES
CONSOLIDATED STATEMENT OF OPERATIONS
(in thousands, except per share amounts)
Non-GAAP Reconciling Items
For the year Business Professional Non-GAAP for the year
ended October 31, reorganization fees and Stock-based ended October 31,
2008 and related legal matters compensation 2008
Net revenue $ 1,537,530 $ - $ - $ - $ 1,537,530
Cost of goods sold:
Product costs 633,979 - - - 633,979
Software development costs and royalties 169,398 - - (13,461 ) 155,937
Internal royalties 128,772 - - - 128,772
Licenses 56,546 - - - 56,546
Total cost of goods sold 988,695 - - (13,461 ) 975,234
Gross profit 548,835 - - 13,461 562,296
Selling and marketing 167,380 - - (2,370 ) 165,010
General and administrative 171,440 - (16,243 ) (19,678 ) 135,519
Research and development 63,929 - - (4,878 ) 59,051
Business reorganization and related 4,478 (4,478 ) - - -
Depreciation and amortization 25,755 - - - 25,755
Total operating expenses 432,982 (4,478 ) (16,243 ) (26,926 ) 385,335
Income from operations 115,853 4,478 16,243 40,387 176,961
Interest and other expense, net (3,710 ) - - - (3,710 )
Income before income taxes 112,143 4,478 16,243 40,387 173,251
Income taxes 15,046 - - - 15,046
Net income $ 97,097 $ 4,478 $ 16,243 $ 40,387 $ 158,205
Earnings per share:*
Basic $ 1.29 $ 0.06 $ 0.22 $ 0.54 $ 2.11
Diluted $ 1.28 $ 0.06 $ 0.21 $ 0.53 $ 2.08
Weighted average shares outstanding
Basic 75,039 75,039
Diluted 75,943 75,943
EBITDA:
Income before income taxes $ 112,143 $ 173,251
Interest (695 ) (695 )
Depreciation and amortization 25,755 25,755
EBITDA 137,203 198,311
Add: Business reorganization and related 4,478 -
Adjusted EBITDA $ 141,681 $ 198,311
*Basic and diluted earnings per share may not add due to rounding
TAKE-TWO INTERACTIVE SOFTWARE, INC. and SUBSIDIARIES
CONSOLIDATED STATEMENT OF OPERATIONS
(in thousands, except per share amounts)
Non-GAAP Reconciling Items
For the year Business Professional Non-GAAP for the year
ended October 31, reorganization fees and Stock-based ended October 31,
2007 and related legal matters compensation 2007
Net revenue $ 981,791 $ - $ - $ - $ 981,791
Cost of goods sold:
Product costs 511,088 (5,164 ) - - 505,924
Software development costs and royalties 136,485 - - (3,216 ) 133,269
Internal royalties 28,892 - - - 28,892
Licenses 58,569 - - - 58,569
Total cost of goods sold 735,034 (5,164 ) - (3,216 ) 726,654
Gross profit 246,757 5,164 - 3,216 255,137
Selling and marketing 130,652 - - (1,232 ) 129,420
General and administrative 150,432 - (16,726 ) (7,080 ) 126,626
Research and development 48,455 - - (3,735 ) 44,720
Business reorganization and related 17,467 (15,401 ) - (2,066 ) -
Depreciation and amortization 27,449 - - - 27,449
Total operating expenses 374,455 (15,401 ) (16,726 ) (14,113 ) 328,215
Loss from operations (127,698 ) 20,565 16,726 17,329 (73,078 )
Loss on sale and deconsolidation (4,469 ) 3,080 - - (1,389 )
Interest and other income, net 3,952 - - - 3,952
Loss before income taxes (128,215 ) 23,645 16,726 17,329 (70,515 )
Income taxes 10,191 322 - - 10,513
Net loss $ (138,406 ) $ 23,323 $ 16,726 $ 17,329 $ (81,028 )
Loss per share:*
Basic $ (1.93 ) $ 0.32 $ 0.23 $ 0.24 $ (1.13 )
Diluted $ (1.93 ) $ 0.32 $ 0.23 $ 0.24 $ (1.13 )
Weighted average shares outstanding
Basic 71,860 71,860
Diluted 71,860 71,860
EBITDA:
Loss before income taxes $ (128,215 ) $ (70,515 )
Interest (2,570 ) (2,570 )
Depreciation and amortization 27,449 27,449
EBITDA (103,336 ) (45,636 )
Add: Business reorganization and related 22,631 -
Loss on sale and deconsolidation 4,469 1,389
Adjusted EBITDA $ (76,236 ) $ (44,247 )
*Basic and diluted loss per share may not add due to rounding
SOURCE: Take-Two Interactive Software, Inc.
Take-Two Interactive Software, Inc. Corporate Press/Investor Relations: Meg Maise, 646-536-2932 This email address is being protected from spambots. You need JavaScript enabled to view it.
