|
Net Revenue was $226.1 Million
Non-GAAP Net Loss Per Diluted Share was $1.16
Company Now Expects Non-GAAP Net Income Per Diluted Share of
$1.75 to $2.00
For Fiscal Year 2013
NEW YORK--(BUSINESS WIRE)--Jul. 31, 2012-- Take-Two Interactive
Software, Inc. (NASDAQ:TTWO) today reported financial results for
the first quarter of its fiscal year 2013, ended June 30, 2012. In
addition, the Company updated its financial outlook for the fiscal
year 2013, ending March 31, 2013, and provided its initial
financial outlook for the fiscal second quarter ending September
30, 2012.
For the first quarter of fiscal 2013, net revenue was $226.1
million, as compared to $334.4 million for the first quarter of
fiscal 2012. GAAP loss from continuing operations was $110.8
million, or $1.30 per diluted share, as compared to $8.6 million,
or $0.11 per diluted share, for the year-ago period. Non-GAAP net
loss was $98.8 million, or $1.16 per diluted share, as compared to
Non-GAAP net income of $2.0 million, or $0.02 per diluted share,
for the year-ago period. Both GAAP loss from continuing operations
and Non-GAAP net loss for the first quarter of fiscal 2013 include
the negative impact from a one-time contractual obligation of $15
million, or $0.18 per diluted share.
The strongest contributors to net revenue in the first quarter
were the release of
Max Payne 3, catalog sales led by the
Grand Theft Auto franchise and
Red Dead Redemption, the release of
Spec Ops: The Line, and continuing sales of
NBA 2K12. Catalog sales grew 50% year-over-year and
accounted for 26% of net revenue. Revenue from digitally delivered
content grew 33% year-over-year and accounted for 14% of net
revenue, driven by offerings for the
Sid Meier's Civilization franchise, the
Grand Theft Auto franchise, the
Max Payne franchise,
NBA 2K12, and
Red Dead Redemption.
Management Comments
"Although our first quarter results were below expectations due
to lower-than-anticipated sales of
Spec Ops: The Line and
Max Payne 3, the outlook for our slate of upcoming releases
is stronger than ever," said Strauss Zelnick, Chairman and CEO of
Take-Two. "Early consumer enthusiasm suggests robust demand for our
extraordinary lineup of upcoming releases, particularly
Borderlands 2,
NBA 2K13 and
BioShock Infinite. We continue to expect fiscal 2013 to be
one of the best years in Take-Two's history.
"Our long-term strategy is to continue to grow our revenues and
reduce the volatility of our results by complementing our core
console business with digitally delivered content for mobile and
online platforms. During the current fiscal year we have made
substantial progress, including launching an open beta for
NBA 2K Online in China; expanding our lineup of core titles
for tablets and smartphones with
Max Payne Mobile; releasing our first domestic mobile social
game -
COMEDY CENTRAL'S Indecision Game; and delivering our first
mobile social game for Japan -
NBA 2K All Stars. While our core console business has faced
short-term cyclical headwinds, we remain exceedingly optimistic
about our Company's long-term prospects for growth and
profitability."
Business and Product Highlights
Since April 1, 2012:
Rockstar Games:
- Launched
Max Payne 3 on Xbox 360, PS3 and PC. The title received
excellent reviews and has sold-in over 3 million units to date.
Max Payne 3 is being supported by a comprehensive
downloadable content plan, with new releases starting in July and
extending through the fall.
- Released
Max Payne Mobile, enabling fans to experience the classic
2001 release,
Max Payne, optimized for the iPad, iPhone, iPod touch and
select Android enabled devices.
- Announced that it is expanding its Toronto development studio
with the support of the Ontario government. In conjunction with the
expansion, Rockstar Games is moving its Vancouver development team
to the new Toronto facility and expects to grow staff over
time.
2K:
- 2K Games launched
Spec Ops: The Line, a heart-pounding military shooter that
explores the dark realities of war, on Xbox 360, PS3 and PC.
- 2K Games released
Sid Meier's Civilization V: Gods & Kings, the expansion
pack for the award-winning PC strategy title,
Civilization V.
- 2K Sports announced the "no data wipe" open beta launch of its
free-to-play
NBA 2K Online MMO game on the Tencent Games portal in
China.
- 2K Play launched our first mobile social game,
COMEDY CENTRAL's Indecision Game for iPhone, iPad, iPod
touch and Android, including Amazon's Kindle Fire.
- 2K Games released our first mobile social game for Japan,
NBA 2K All Stars on GREE, and also announced a partnership
with GREE to bring additional games to select global mobile social
gaming markets, including
Pirates! Legends and
Civilization (working title).
- 2K Sports announced that the Oklahoma City Thunder's Kevin
Durant, Los Angeles Clippers' Blake Griffin and the Chicago Bulls'
Derrick Rose will be the cover athletes for
NBA 2K13, the next installment of the top-selling and
top-rated NBA video game simulation franchise*, which is planned
for release on October 2, 2012 in North America and October 5, 2012
internationally. In addition, the title will be our first offering
for WiiU, available during the holiday season.
- 2K Play announced that it plans to release
Nickelodeon Dance 2 for console systems and
Bubble Guppies and
Dora & Team Umizoomi's Fantastic Flight for the Nintendo
DS in November.
- 2K Play unveiled their slate of new, casual mobile games at E3
2012, including
House Pest™ Starring Fiasco the Cat™,
GridBlock™,
Herd, Herd, Herd™, and
Carnival Games® MiniGolf, which will be available
beginning this summer.
- 2K Games announced that
XCOM: Enemy Unknown is planned for release on October 9,
2012 in North America and October 12, 2012 internationally.
- 2K Games announced that
BioShock Infinite is now planned for launch on February 26,
2013.
*According to 2008 - 2012 Gamerankings.com and The NPD Group
estimates of U.S. retail video game sales through June 2012.
Financial Outlook for Fiscal 2013
Take-Two is providing its financial outlook for the second
quarter ending September 30, 2012 and updating its financial
outlook for the fiscal year ending March 31, 2013 as follows:
| |
|
|
Fiscal Year
|
| |
|
|
Ending 3/31/2013
|
| |
|
|
|
|
|
|
|
$200 to $250 Million
|
|
|
Non-GAAP net income (loss) per diluted share (1)
|
|
|
$1.75 to $2.00
|
| |
|
|
|
|
|
|
|
$0.09
|
|
|
Non-cash amortization of discount on convertible notes per
share
|
|
|
$0.16
|
| |
|
|
|
|
|
|
|
$0.01
|
|
|
Non-cash tax expense per share
|
|
|
$0.01
|
|
1)
|
|
2)
|
|
The following titles were released since April 1, 2012:
|
| |
|
|
|
|
|
|
|
|
|
|
Title
|
|
|
Release Date
|
|
Max Payne Mobile
|
|
|
April 12, 2012
|
|
Sid Meier's Pirates!
|
|
|
April 19, 2012
|
|
Max Payne 3
|
|
|
May 15, 2012*
|
|
Max Payne 3
|
|
|
June 1, 2012
|
|
Max Payne Mobile
|
|
|
June 14, 2012
|
|
Sid Meier's Civilization V: Gods and Kings (Expansion Pack)
|
|
|
June 19, 2012*
|
|
Spec Ops: The Line
|
|
|
June 26, 2012*
|
|
Max Payne 3: Local Justice Map Pack (DLC)
|
|
|
July 3, 2012
|
|
COMEDY CENTRAL'S Indecision Game
|
|
|
July 10, 2012
|
|
NBA 2K All Stars
|
|
|
July 19, 2012
|
| |
|
|
|
|
|
|
|
|
|
|
Take-Two's lineup of future titles announced to date
includes:
|
| |
|
|
|
|
|
|
|
|
|
|
|
Title
|
|
|
|
Planned Release
|
|
Max Payne 3: Local Justice Map Pack (DLC)
|
|
|
|
August 9, 2012
|
|
Max Payne 3: Disorganized Crime Pack (DLC)
|
|
|
|
August 2012
|
|
House Pest Starring Fiasco the Cat
|
|
|
|
Summer 2012
|
|
GridBlock
|
|
|
|
Summer 2012
|
|
Herd, Herd, Herd
|
|
|
|
Summer 2012
|
|
Carnival Games MiniGolf
|
|
|
|
Summer 2012
|
|
Borderlands 2
|
|
|
|
September 18, 2012*
|
|
Max Payne 3: Hostage Negotiation Map Pack (DLC)
|
|
|
|
September 2012
|
|
NBA 2K13
|
|
|
|
October 2, 2012*
|
|
XCOM: Enemy Unknown
|
|
|
|
October 9, 2012*
|
|
Max Payne 3: Painful Memories Map Pack (DLC)
|
|
|
|
October 2012
|
|
Max Payne 3: Deathmatch Made In Heaven Mode Pack (DLC)
|
|
|
|
October 2012
|
|
Nickelodeon Dance 2
|
|
|
|
November 2012
|
|
Bubble Guppies
|
|
|
|
November 2012
|
|
Dora & Team Umizoomi's Fantastic Flight
|
|
|
|
November 2012
|
|
NBA 2K13
|
|
|
|
Holiday 2012
|
|
BioShock Infinite
|
|
|
|
February 26, 2013
|
|
Grand Theft Auto V
|
|
|
|
TBA
|
|
XCOM
|
|
|
|
Fiscal Year 2014
|
| |
|
|
|
|
|
|
|
|
|
|
|
TAKE-TWO INTERACTIVE SOFTWARE, INC. and SUBSIDIARIES
|
|
(in thousands, except per share amounts)
|
| |
|
|
|
|
|
|
| |
|
|
2012
|
|
|
Net revenue |
|
|
226,139
|
|
|
|
334,380 |
|
| |
|
|
|
|
|
|
| Product costs |
|
|
|
98,451 |
|
|
105,004
|
|
|
|
|
Internal royalties |
|
|
|
16,512 |
|
|
8,520
|
|
|
|
|
Total cost of goods sold |
|
|
|
211,219 |
|
| |
|
|
|
|
|
|
|
39,408
|
|
|
|
|
Selling and marketing |
|
|
|
74,683 |
|
|
43,202
|
|
|
|
|
Research and development |
|
|
|
16,519 |
|
|
2,769
|
|
|
|
|
Total operating expenses |
|
|
|
125,024 |
|
|
(100,882
|
(1,863 |
Interest and other, net |
|
|
|
)
|
|
|
|
) |
|
(108,931
|
(5,543 |
Provision for income taxes |
|
|
|
3,076 |
|
|
(110,772
|
(8,619 |
Loss from discontinued operations, net of
taxes |
|
|
|
)
|
|
|
|
) |
|
$
|
)
|
|
|
(8,713 |
Earnings (loss) per share: |
|
|
|
|
|
|
|
$
|
)
|
|
|
(0.11 |
Discontinued operations |
|
|
|
- |
|
|
$
|
)
|
|
|
(0.11 |
Continuing operations |
|
|
(1.30
|
$ |
) |
|
-
|
|
|
|
|
Diluted earnings (loss) per share |
|
|
(1.30
|
$ |
) |
| |
|
|
|
|
|
|
| Basic |
|
|
|
82,505 |
|
|
85,010
|
|
|
|
|
Three months ended June 30,
|
|
2012
|
|
|
Geographic revenue mix |
|
|
|
|
|
|
|
47
|
45 |
International |
|
|
|
%
|
|
|
|
% |
| |
|
|
|
|
|
|
| Microsoft Xbox 360 |
|
|
|
%
|
|
|
|
% |
|
40
|
41 |
PC
and other |
|
|
|
%
|
|
|
|
% |
|
1
|
1 |
Nintendo Wii |
|
|
|
%
|
|
|
|
% |
|
1
|
1 |
Sony PlayStation 2 |
|
|
|
%
|
|
|
|
% |
| |
|
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
CONSOLIDATED BALANCE SHEETS
|
|
June 30,
|
|
|
2012
|
|
|
ASSETS
|
|
|
Current assets: |
|
|
|
|
|
|
|
$
|
|
420,279 |
|
| and March 31, 2012,
respectively |
|
|
|
45,035 |
|
|
27,987
|
|
|
22,477 |
|
|
209,662
|
|
|
211,224 |
|
|
42,695
|
|
|
44,602 |
|
|
719,107
|
|
|
743,617 |
|
| |
|
|
|
|
|
|
|
19,354
|
|
|
18,949 |
|
|
60,685
|
|
|
104,755 |
|
|
225,118
|
|
|
228,169 |
|
|
11,931
|
|
|
16,266 |
|
|
36,942
|
|
|
37,671 |
|
|
$
|
|
1,149,427 |
|
| |
|
|
|
|
|
|
| Current
liabilities: |
|
|
|
|
|
|
|
$
|
|
46,681 |
|
|
162,983
|
|
|
156,768 |
|
|
14,348
|
|
|
13,864 |
|
|
1,438
|
|
|
|
|
Total current liabilities |
|
|
|
218,725 |
|
| |
|
|
|
|
|
|
|
320,883
|
|
|
|
|
Income taxes payable |
|
|
|
15,621 |
|
|
679
|
|
|
|
|
Liabilities of discontinued operations, net
of current portion |
|
|
|
|
|
Total liabilities |
|
|
|
553,700 |
|
| Stockholders' equity: |
|
|
|
|
|
|
|
-
|
|
|
|
|
Common stock, $.01 par value, 150,000 shares authorized; 91,071 and
90,215 |
|
|
|
|
|
|
|
911
|
|
|
902 |
|
|
803,007
|
|
|
799,431 |
|
|
(322,177
|
|
|
) |
|
(4,706
|
|
|
Total stockholders' equity |
|
|
|
595,727 |
|
|
$
|
|
1,149,427 |
|
| |
|
|
|
|
|
|
|
|
|
|
| |
|
CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)
|
|
Three months ended June 30,
|
| |
|
|
|
2011
|
| |
|
|
|
|
|
|
|
| Net loss |
|
|
(110,838
|
$ |
) |
| |
|
|
|
|
|
|
|
| |
Amortization and impairment of software development
costs and licenses |
|
|
|
72,466 |
|
| |
2,769
|
|
|
|
|
Loss from discontinued operations |
|
|
|
94 |
|
| |
4,209
|
|
|
|
|
Stock-based compensation |
|
|
|
8,048 |
|
| |
4,543
|
|
|
|
|
Amortization of debt issuance costs |
|
|
|
313 |
|
| |
581
|
|
|
|
|
) |
| |
Accounts receivable |
|
|
|
)
|
|
|
|
) |
| |
(5,510
|
(1,363 |
Software development costs and licenses |
|
|
|
)
|
|
|
|
) |
| |
2,105
|
|
|
|
|
) |
| |
484
|
|
|
|
|
Accounts payable, accrued expenses, income taxes payable and other
liabilities |
|
|
|
28,162 |
|
| |
(410
|
(420 |
Net cash used in operating activities |
|
|
|
)
|
|
|
|
) |
| |
|
|
|
|
|
|
|
| Purchase of
fixed assets |
|
|
|
)
|
|
|
|
) |
| |
-
|
|
|
|
|
) |
| |
(3,290
|
(3,875 |
Financing activities:
|
|
|
|
|
|
|
| |
-
|
|
|
|
|
Net cash provided by financing
activities |
|
|
|
162 |
|
| |
|
|
|
|
|
|
|
| |
2,583
|
|
|
|
|
Net decrease in cash and cash
equivalents |
|
|
|
)
|
|
|
|
) |
| |
420,279
|
|
|
|
|
Cash and cash equivalents, end of period |
|
|
367,056
|
|
|
|
248,759 |
|
| |
|
|
|
|
|
|
|
| |
|
|
RECONCILIATION OF GAAP TO Non-GAAP MEASURES (Unaudited)
|
|
Three months ended June 30,
|
| |
|
|
|
|
|
2011
|
|
GAAP Gross Profit
|
|
|
39,408
|
|
|
|
123,161 |
|
|
4,948
|
|
|
|
|
Non-GAAP Gross Profit
|
|
|
44,356
|
|
|
|
126,365 |
|
| |
|
|
|
|
|
|
|
|
|
|
GAAP Loss from Operations
|
|
|
(100,882
|
$ |
) |
|
7,006
|
|
|
|
|
Professional fees and legal
matters |
|
|
|
176 |
|
|
$
|
)
|
|
|
6,361 |
|
| |
|
|
|
|
|
|
|
|
|
|
GAAP Net Loss
|
|
|
(110,838
|
$ |
) |
|
66
|
|
|
|
|
Stock-based compensation |
|
|
|
8,048 |
|
|
-
|
|
|
|
|
Non-cash amortization of discount on Convertible
Notes |
|
|
|
1,997 |
|
|
473
|
|
|
|
|
Non-GAAP Net Income (Loss)
|
|
|
(98,750
|
$ |
Diluted Earnings (Loss) Per Share
|
|
|
|
|
|
|
|
$
|
)
|
|
|
(0.11 |
Non-GAAP earnings (loss) per share |
|
|
(1.16
|
$ |
Number of diluted shares used in computation |
|
|
|
|
|
|
|
85,010
|
|
|
|
|
Non-GAAP
(1) |
|
|
|
88,778 |
|
| |
|
|
|
For the three months ended June 30, 2011, the diluted shares
used in the computation of Non-GAAP diluted EPS include
participating shares of 5,326.
|
Source: Take-Two Interactive
|
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