The second quarter of 2005 has been a good one for Majesco.MAJESCO REPORTS RECORD SECOND QUARTER 2005 FINANCIAL RESULTS
Launch of Psychonauts for the Xbox and PC, Continued Strong Sales of Value Games and TV Arcade Products Drive Second Quarter Sales of $20 Million
EDISON, N.J, June 7, 2005 - Majesco Entertainment Company (NASDAQ: COOL), an innovative provider of digital entertainment products and content , today announced results for its second quarter ended April 30, 2005.
The Company reported record second quarter net revenues of $19.9 million, compared to $17.0 million for the same period in 2004. Gross profit increased to $8.4 million, or 42.4% of net revenues for the second quarter, compared to $5.4 million, or 31.9% of net revenues for the same period in 2004. Operating income was $821,000 for the 2005 quarter, versus $1.1 million for the same period one year ago. The decrease in operating income is attributable to infrastructure to support the Company's growth, as well as fulfilling obligations as a NASDAQ-listed company.
For the quarter, the Company generated net income of $189,000 compared to a net loss of $49.0 million for the second quarter of last year. The 2004 net loss was principally the result of a non-cash charge related to the issuance of warrants in connection with the Company's private placement in February 2004 (see tables for further explanation). Excluding the non-cash charge the Company would have generated net income of $208,000 for the 2004 period. Net income applicable to common stockholders for the 2005 quarter was $0.01 per share compared to a net loss applicable to common stockholders of ($8.35) per share for the same period last year.
For the six-month period ended April 30, 2005, the Company reported net revenues of $50.6 million, an increase of 21.4% versus $41.7 million in the same period during 2004. Gross profit increased to $19.4 million during the six-month period, versus $12.9 million in the comparable period during 2004. For the 2005 period, operating income was $2.8 million versus $3.5 million in the comparable 2004 period. Net loss applicable to common stockholders for the 2005 six-month period was ($0.01) per share, compared to net loss applicable to common stockholders of ($9.59) per share for the same period of last year.
The Company completed the second quarter with working capital of $62.1 million, representing a current ratio of 4.3, versus working capital of $8.9 million or a current ratio of 1.3 at year end October 31, 2004. Stockholders' equity as of April 30, 2005 was $76.1 million compared to $13.8 million as of October 31, 2004. The increase in the Company's working and capital stockholders' equity was principally due to the completion of its public stock offering in January 2005 and the related warrant exercises, which provided $60.5 million in net proceeds.
Jan E. Chason, Majesco's Chief Financial Officer commented, "Our record second quarter net revenues were driven by the introduction of Psychonauts for the Xbox and PC, double game packs (2 games in 1) value games, and continued strong sales of TV Arcade. Our gross margin increased to 42.4% for the quarter, underscoring the strength of our diversified product offerings. The increased expenses for the quarter were directly related to infrastructure growth to better position the Company for the future. We expect this level of expenditures to continue as we prepare to release key products in the coming quarters, implement new support functions and compliance and testing related Sarbanes-Oxley."
Carl Yankowski, Majesco's Chairman and Chief Executive Officer, commented, "During the second quarter we announced several new premium game titles aimed at expanding our market share, as well as positioning Majesco to benefit from the upcoming hardware transition. We are proud of the reception our diverse new products received at E3. We are entering the important second half of our fiscal year with confidence that we are well positioned to achieve our objectives for full year 2005. We remain focused on global growth, both organic and otherwise."
Key Products
Advent Rising , the first title in a planned trilogy of games, has been developed in collaboration with award-winning science fiction author Orson Scott Card. This title shipped on May 31 st for the Xbox and PC.
Psychonauts , the critically acclaimed title developed by award-winning game designer Tim Schafer, will ship for the PlayStation®2 computer entertainment system this June. Psychonauts also shipped for the Xbox ® video game system from Microsoft and PC on April 19, 2005.
JAWS TM Unleashed, based on one of the most enduring action-suspense films of all time, is being developed by Appaloosa Interactive. The game features an innovative twist where players assume the role of the shark. JAWSUnleashed is planned for release late this summer for the PlayStation ® 2, Xbox ® and PC.
Infected, a thrilling new run-and-gun shooter that allows players' avatars to invade opponents' PSP TM systems via multiplayer victories. Infected is scheduled to ship for the 2005 holiday season and is the first release in an exclusive three-game PSP deal between Majesco and Planet Moon Studios.
Aeon Flux, scheduled to coincide with the theatrical release starring Oscar®-winning actress Charlize Theron as Aeon Flux, is based on Peter Chung's popular futuristic MTV animated series and features a palpitating blend of stealth, speed and acrobatic combat.
Demonik , developed by Terminal Reality in conjunction with Tiger Hill Entertainment, is a next-generation, third-person action game that allows players to control the ultimate bad guy-wreaking havoc scenario with a variety of innovative and spectacular powers and abilities. The game is being produced in collaboration with acclaimed writer/director Clive Barker and is scheduled to launch in 2006.
The Darkness , based on the best-selling Top Cow comic book, is a seamless and unique blend of modern crime drama and supernatural horror through first and third person, non linear game play. The Darkness is being developed for the next generation consoles by Starbreeze Studios.
Taxi Driver TM based on the classic Martin Scorsese directed film from Columbia Pictures, is being developed by Papaya Studio and is scheduled to ship in spring 2006.
Paintball, Texas Hold'em, Strawberry Shortcake and Frogger highlight our Wireless Plug and Play TV Arcade product line-up for Holiday 2005.
2005 Outlook
Management reiterated its expectations for fiscal 2005 of net revenues of $175 - $185 million and operating income of approximately $16 to $18 million. This guidance includes consideration for planned increased investment in marketing as well as increased infrastructure to support the Company's anticipated growth and to meet the requirements of being a NASDAQ traded company and to comply with Sarbanes-Oxley requirements.
Topic: Majesco Announces Financial Results (Read 2036 times)
