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--(BUSINESS WIRE)--Dec. 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:
-- 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
Gamesfor 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 $0.2010/31/2009
* 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 43,276 42,695 169,398 136,485
costs and
royalties
Internal 18,003 11,002 128,772 28,892
royalties
Licenses 17,071 15,443 56,546 58,569
Total cost of 224,772 202,948 988,695 735,034
goods sold
Gross profit 98,670 89,652 548,835 246,757
Selling and 44,846 32,246 167,380 130,652
marketing
General and 44,524 36,223 171,440 150,432
administrative
Research and 16,052 11,159 63,929 48,455
development
Business
reorganization 1,601 1,405 4,478 17,467
and related
Depreciation
and 5,629 6,706 25,755 27,449
amortization
Total operating 112,652 87,739 432,982 374,455
expenses
Income (loss) (13,982 ) 1,913 115,853 (127,698 )
from operations
Loss on sale
and - (4,469 ) - (4,469 )
deconsolidation
(1)
Interest and
other income (2,845 ) 899 (3,710 ) 3,952
(expense), net
Income (loss)
before income (16,827 ) (1,657 ) 112,143 (128,215 )
taxes
Income taxes (1,873 ) 5,406 15,046 10,191
Net income $ (14,954 ) $ (7,063 ) $ 97,097 $ (138,406 )
(loss)
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 For the Years Ended October
31, 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 61,991 34,465
current portion
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, 777 743
2007, 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 146,102 106,675
development costs and licenses
Depreciation and amortization of long-lived 25,755 27,449
assets
Amortization and write-off of intellectual 2,350 8,626
property
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 5,659 (1,656 )
other
(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 16,831 18,270
non-current assets
Accounts payable, accrued expenses, deferred 31,008 26,604
revenue and other liabilities
Total adjustments 54,329 74,361
Net cash provided by (used for) operating 151,426 (64,045 )
activities
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 (7,503 ) (5,795 )
cash acquired
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 (9,126 ) 8,239
equivalents
Net increase (decrease) in cash and cash 202,520 (54,723 )
equivalents
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 Business Professional Non-GAAP
months three
ended months
October 31, reorganization fees and Stock-based ended
October 31,
2008 and related legal compensation 2008
matters
Net revenue $ 323,442 $ - $ - $ - $ 323,442
Cost of goods
sold:
Product costs 146,422 - - - 146,422
Software
development 43,276 - - (2,863 ) 40,413
costs and
royalties
Internal 18,003 - - - 18,003
royalties
Licenses 17,071 - - - 17,071
Total cost of 224,772 - - (2,863 ) 221,909
goods sold
Gross profit 98,670 - - 2,863 101,533
Selling and 44,846 - - (444 ) 44,402
marketing
General and 44,524 - (5,589 ) (4,804 ) 34,131
administrative
Research and 16,052 - - (1,214 ) 14,838
development
Business
reorganization 1,601 (1,601 ) - - -
and related
Depreciation
and 5,629 - - - 5,629
amortization
Total
operating 112,652 (1,601 ) (5,589 ) (6,462 ) 99,000
expenses
Income (loss)
from (13,982 ) 1,601 5,589 9,325 2,533
operations
Interest and
other expense, (2,845 ) - - - (2,845 )
net
Loss before (16,827 ) 1,601 5,589 9,325 (312 )
income taxes
Income taxes (1,873 ) - - - (1,873 )
Net income $ (14,954 ) $ 1,601 $ 5,589 $ 9,325 $ 1,561
(loss)
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 $ (16,827 ) $ (312 )
income taxes
Interest (1,159 ) (1,159 )
Depreciation
and 5,629 5,629
amortization
EBITDA $ (12,357 ) $ 4,158
Add: Business
reorganization 1,601 -
and related
Adjusted $ (10,756 ) $ 4,158
EBITDA
*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 Business Professional Non-GAAP
months three
ended months
October 31, reorganization fees and Stock-based ended
October 31,
2007 and related legal compensation 2007
matters
Net revenue $ 292,600 $ - $ - $ - $ 292,600
Cost of goods
sold:
Product costs 133,808 - - - 133,808
Software
development 42,695 - - (1,008 ) 41,687
costs and
royalties
Internal 11,002 - - - 11,002
royalties
Licenses 15,443 - - - 15,443
Total cost of 202,948 - - (1,008 ) 201,940
goods sold
Gross profit 89,652 - - 1,008 90,660
Selling and 32,246 - - (353 ) 31,893
marketing
General and 36,223 - (1,546 ) (2,636 ) 32,041
administrative
Research and 11,159 - - (757 ) 10,402
development
Business
reorganization 1,405 (1,405 ) - - -
and related
Depreciation
and 6,706 - - - 6,706
amortization
Total operating 87,739 (1,405 ) (1,546 ) (3,746 ) 81,042
expenses
Income from 1,913 1,405 1,546 4,754 9,618
operations
Loss on sale
and (4,469 ) 3,080 - - (1,389 )
deconsolidation
Interest and
other income, 899 - - - 899
net
Income (loss)
before income (1,657 ) 4,485 1,546 4,754 9,128
taxes
Income taxes 5,406 322 - - 5,728
Net income $ (7,063 ) $ 4,163 $ 1,546 $ 4,754 $ 3,400
(loss)
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 $ (1,657 ) $ 9,128
taxes
Interest 324 324
Depreciation
and 6,706 6,706
amortization
EBITDA $ 5,373 $ 16,158
Add: Business
reorganization 1,405 -
and related
Loss on sale
and 4,469 1,389
deconsolidation
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 reorganization fees and Stock-based ended October
31, 31,
2008 and related legal compensation 2008
matters
Net revenue $ 1,537,530 $ - $ - $ - $ 1,537,530
Cost of goods
sold:
Product costs 633,979 - - - 633,979
Software
development 169,398 - - (13,461 ) 155,937
costs and
royalties
Internal 128,772 - - - 128,772
royalties
Licenses 56,546 - - - 56,546
Total cost of 988,695 - - (13,461 ) 975,234
goods sold
Gross profit 548,835 - - 13,461 562,296
Selling and 167,380 - - (2,370 ) 165,010
marketing
General and 171,440 - (16,243 ) (19,678 ) 135,519
administrative
Research and 63,929 - - (4,878 ) 59,051
development
Business
reorganization 4,478 (4,478 ) - - -
and related
Depreciation
and 25,755 - - - 25,755
amortization
Total
operating 432,982 (4,478 ) (16,243 ) (26,926 ) 385,335
expenses
Income from 115,853 4,478 16,243 40,387 176,961
operations
Interest and
other expense, (3,710 ) - - - (3,710 )
net
Income before 112,143 4,478 16,243 40,387 173,251
income taxes
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 $ 112,143 $ 173,251
income taxes
Interest (695 ) (695 )
Depreciation
and 25,755 25,755
amortization
EBITDA 137,203 198,311
Add: Business
reorganization 4,478 -
and related
Adjusted $ 141,681 $ 198,311
EBITDA
*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
Non-GAAP
For the year Business Professional for the
year
ended reorganization fees and Stock-based ended
October 31, October 31,
2007 and related legal compensation 2007
matters
Net revenue $ 981,791 $ - $ - $ - $ 981,791
Cost of goods
sold:
Product costs 511,088 (5,164 ) - - 505,924
Software
development 136,485 - - (3,216 ) 133,269
costs and
royalties
Internal 28,892 - - - 28,892
royalties
Licenses 58,569 - - - 58,569
Total cost of 735,034 (5,164 ) - (3,216 ) 726,654
goods sold
Gross profit 246,757 5,164 - 3,216 255,137
Selling and 130,652 - - (1,232 ) 129,420
marketing
General and 150,432 - (16,726 ) (7,080 ) 126,626
administrative
Research and 48,455 - - (3,735 ) 44,720
development
Business
reorganization 17,467 (15,401 ) - (2,066 ) -
and related
Depreciation
and 27,449 - - - 27,449
amortization
Total operating 374,455 (15,401 ) (16,726 ) (14,113 ) 328,215
expenses
Loss from (127,698 ) 20,565 16,726 17,329 (73,078 )
operations
Loss on sale
and (4,469 ) 3,080 - - (1,389 )
deconsolidation
Interest and
other income, 3,952 - - - 3,952
net
Loss before (128,215 ) 23,645 16,726 17,329 (70,515 )
income taxes
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 $ (128,215 ) $ (70,515 )
income taxes
Interest (2,570 ) (2,570 )
Depreciation
and 27,449 27,449
amortization
EBITDA (103,336 ) (45,636 )
Add: Business
reorganization 22,631 -
and related
Loss on sale
and 4,469 1,389
deconsolidation
Adjusted EBITDA $ (76,236 ) $ (44,247 )
*Basic and diluted loss per share may not add due to rounding
CONTACT: Take-Two Interactive Software, Inc.Corporate Press/Investor Relations:
Meg Maise, 646-536-2932
meg.maise@take2games.com
Source: Take-Two Interactive Software, Inc.
