After market share prices down nearly 20%.
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
New York, NY - December 17, 2008 - 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:
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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™ franchise, including Carnival Games for Nintendo's Wii™ and DS™, and Carnival Games™ 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:
Key assumptions and dependencies underlying the Company's guidance include continued consumer acceptance of the Xbox 360® video game and entertainment system from Microsoft, PLAYSTATION®3 computer entertainment system and Wii™ 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:
Take-Two's lineup announced to date for the remainder of fiscal 2009 includes the following announced titles:
