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For the fourth quarter ended
The Company's basic and diluted net loss per share for the quarter ended
For the twelve months ended
The Company's basic and diluted earnings per share for the twelve months ended
Fiscal 2011 Highlights
Other Highlights
Announced Product Line-up
First Quarter Fiscal 2012 Ending
To date, the Company has announced the following titles that were, or are expected to be, released during its fiscal first quarter 2012, which includes the recent holiday sales period:
Fiscal 2012
To date, the Company has announced the following titles that are expected to be released during the rest of fiscal 2012:
Fiscal 2012 Outlook
The Company expects fiscal 2012 full year net revenue in a range of
Conference Call
At
Generally Accepted Accounting Principles (GAAP) and Non-GAAP Metrics
To facilitate a comparison between the three and twelve months ended
These non-GAAP financial measures exclude the following items from the Company's consolidated statements of operations:
These non-GAAP measures are provided to enhance investors' overall understanding of the Company's current financial performance and the Company's prospects for the future. These measures should be considered in addition to results prepared in accordance with GAAP, but should not be considered a substitute for, or superior to, GAAP results.
For more information on these non-GAAP financial measures, please see the tables in this release captioned "Reconciliation of GAAP and Non-GAAP Financial Measures."
About
Safe Harbor
Some statements set forth in this release, including the estimates under the headings "Fiscal 2012 Outlook" contain forward-looking statements that are subject to change. Statements including words such as "anticipate," "believe," "estimate" or "expect" and statements in the future tense are forward-looking statements. These forward-looking statements are subject to risks and uncertainties that could cause actual events or actual future results to differ materially from the expectations set forth in the forward-looking statements. Some of the factors which could cause our results to differ materially from our expectations include the following: consumer demand for our products, the consumer demand for videogame consoles and related hardware; our ability to predict consumer preferences among competing hardware platforms; consumer spending trends; the seasonal and cyclical nature of
the interactive game segment; timely development and release of our products; competition in the interactive entertainment industry; developments in the law regarding protection of our products; our ability to secure licenses to valuable entertainment properties on favorable terms; our ability to manage expenses; our ability to attract and retain key personnel; adoption of new accounting regulations and standards; adverse changes in the securities markets; our ability to comply with continued listing requirements of the
MAJESCO ENTERTAINMENT COMPANY AND SUBSIDIARY
UNAUDITED SUPPLEMENTARY PRODUCT DATA
NET SALES BY PLATFORM FOR THREE AND TWELVE MONTHS
(Unaudited, in thousands)
Three Months Ended Twelve Months Ended
October 31, October 31,
------------------------ -------------------------
2011 % 2010 % 2011 % 2010 %
------- --- ------- --- -------- --- ------- ---
Nintendo Wii $13,415 53% $ 8,358 36% $ 73,441 59% $23,633 31%
Nintendo DS 7,569 30% 13,383 58% 22,179 18% 48,779 65%
Microsoft Xbox 360 2,901 12% 1,250 5% 23,166 18% 1,645 2%
Sony PlayStation 3 232 1% - -% 4,479 3% - -%
Other 1,020 4% 292 1% 2,025 2% 1,491 2%
------- --- ------- --- -------- --- ------- ---
TOTAL $25,137 100% $23,283 100% $125,291 100% $75,548 100%
======= === ======= === ======== === ======= ===
MAJESCO ENTERTAINMENT COMPANY AND SUBSIDIARY
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands, except share amounts)
October 31, October 31,
2011 2010
------------ ------------
(unaudited)
ASSETS
Current assets:
Cash and cash equivalents $ 13,689 $ 8,004
Due from factor 937 1,015
Accounts and other receivables, net 3,143 725
Inventory, net 11,605 8,418
Advance payments for inventory 5,975 5,454
Capitalized software development costs and
license fees 12,564 4,903
Prepaid expenses and other current assets 3,071 921
------------ ------------
Total current assets 50,984 29,440
Property and equipment, net 1,184 520
Other assets 209 69
------------ ------------
Total assets $ 52,377 $ 30,029
============ ============
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable and accrued expenses $ 20,313 $ 11,375
Inventory financing payables 1,238 5,557
Advances from customers and deferred revenue 5,642 945
------------ ------------
Total current liabilities 27,193 17,877
Warrant liability 1,949 144
Commitments and contingencies
Stockholders' equity:
Common stock -- $.001 par value; 250,000,000
shares authorized; 41,307,349 and 39,326,376
shares issued and outstanding at October 31,
2011 and October 31, 2010, respectively 41 39
Additional paid-in capital 119,222 114,824
Accumulated deficit (95,501) (102,333)
Accumulated other comprehensive loss (527) (522)
------------ ------------
Net stockholders' equity 23,235 12,008
------------ ------------
Total liabilities and stockholders' equity $ 52,377 $ 30,029
============ ============
MAJESCO ENTERTAINMENT COMPANY AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except share data)
Three Months Ended Year Ended
October 31, October 31,
------------------------ -----------------------
2011 2010 2011 2010
----------- ----------- ----------- -----------
Net revenues $ 25,138 $ 23,383 $ 125,291 $ 75,648
----------- ----------- ----------- -----------
Cost of sales
Product costs 12,259 14,146 54,939 38,718
Software development
costs and license fees 5,914 5,450 22,151 17,524
Loss on impairment of
software development
costs and license fees
- future releases 2,726 - 2,726 1,021
----------- ----------- ----------- -----------
20,899 19,596 79,816 57,263
----------- ----------- ----------- -----------
Gross profit 4,239 3,787 45,475 18,385
----------- ----------- ----------- -----------
Operating costs and
expenses
Product research and
development 1,843 986 6,992 3,347
Selling and marketing 2,755 2,207 14,707 8,432
General and
administrative 2,418 1,733 10,506 8,127
Depreciation and
amortization 175 42 398 183
Loss on impairment of
software development
costs and license fees
- cancelled games - 131 1,512 407
----------- ----------- ----------- -----------
7,191 5,099 34,115 20,496
----------- ----------- ----------- -----------
Operating income (loss) (2,952) (1,312) 11,360 (2,111)
Other expenses (income)
Interest and financing
costs, net 177 296 1,255 999
Change in fair value of
warrant liability 761 (70) 2,847 (482)
----------- ----------- ----------- -----------
Income (loss) before
income taxes (3,889) (1,538) 7,258 (2,628)
Income taxes 5 (9) 426 (1,656)
----------- ----------- ----------- -----------
Net income (loss) $ (3,894) $ (1,529) $ 6,832 $ (972)
=========== =========== =========== ===========
Net income (loss) per
share:
Basic $ (0.10) $ (0.04) $ 0.18 $ (0.03)
=========== =========== =========== ===========
Diluted $ (0.10) $ (0.04) $ 0.17 $ (0.03)
=========== =========== =========== ===========
Weighted average shares
outstanding:
Basic 39,601,781 37,556,634 38,527,589 37,019,750
=========== =========== =========== ===========
Diluted 39,601,781 37,556,634 40,123,968 37,019,750
=========== =========== =========== ===========
MAJESCO ENTERTAINMENT COMPANY AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
Year Ended October 31
--------------------------
2011 2010
------------ ------------
CASH FLOWS FROM OPERATING ACTIVITIES
Net income (loss) $ 6,832 $ (972)
Adjustments to reconcile net income (loss) to
net cash provided by (used in) operating
activities:
Depreciation and amortization 398 183
Change in fair value of warrant liability 2,847 (482)
Non-cash compensation expense 1,468 1,340
Loss on disposal of assets -- 27
Provision for price protection and customer
allowances 3,928 3,226
Amortization of capitalized software
development costs and license fees 6,204 6,543
Loss on impairment of software development
costs and license fees 4,238 1,428
Inventory write downs 1,794 180
Changes in operating assets and liabilities,
net of acquisition:
Due from factor (2,997) (3,325)
Accounts and other receivables (3,223) 618
Inventory (4,981) (2,423)
Capitalized software development costs and
license fees (18,064) (9,197)
Advance payments for inventory (521) (2,328)
Prepaid expenses and other assets (1,918) (66)
Accounts payable and accrued expenses 8,752 2,041
Customer billings due to distribution
partner -- (230)
Advances from customers 4,660 402
------------ ------------
Net cash provided by (used in) operating
activities 9,417 (3,035)
------------ ------------
CASH FLOWS FROM INVESTING ACTIVITIES
Purchases of property and equipment (465) (283)
Purchase of assets of Quick Hit, Inc. , net of
acquired cash (779) --
------------ ------------
Net cash used in investing activities (1,244) (283)
------------ ------------
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from exercise of options and warrants 1,830 --
Inventory financing (4,319) (496)
------------ ------------
Net cash (used in) provided by financing
activities (2,489) (496)
------------ ------------
Effect of exchange rates on cash and cash
equivalents 1 (21)
------------ ------------
Net increase (decrease) in cash and cash
equivalents 5,685 (3,835)
Cash and cash equivalents -- beginning of year 8,004 11,839
------------ ------------
Cash and cash equivalents -- end of year $ 13,689 $ 8,004
============ ============
SUPPLEMENTAL CASH FLOW INFORMATION
Cash paid during the year for interest and
financing costs $ 1,255 $ 1,006
============ ============
Cash paid during the year for income taxes $ 3 $ --
============ ============
SUPPLEMENTAL SCHEDULE OF NON CASH INVESTING AND
FINANCING ACTIVITIES
Landlord-provided leasehold improvements $ 163 $ --
============ ============
Warrant liability reclassified to additional
paid-in capital upon exercise $ 1,042 $ --
============ ============
Issuance of warrants for license fees $ 58 $ --
============ ============
MAJESCO ENTERTAINMENT COMPANY AND SUBSIDIARY
RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES
(Unaudited, in thousands, except share amounts)
Three Months Ended Year Ended
October 31, October 31,
------------------------ -----------------------
2011 2010 2011 2010
----------- ----------- ----------- -----------
GAAP operating income
(loss) $ (2,952) $ (1,312) $ 11,360 $ (2,111)
Non-cash compensation (1) 405 69 1,468 1,395
Severance (2) - - - 403
----------- ----------- ----------- -----------
Non-GAAP operating income
(loss) $ (2,547) $ (1,243) $ 12,828 $ (313)
=========== =========== =========== ===========
GAAP net income (loss) $ (3,894) $ (1,529) $ 6,832 $ (972)
Non-cash compensation (1) 405 69 1,468 1,395
Severance (2) - - - 403
Change in fair value of
warrants (3) 761 (70) 2,847 (482)
Sale of NJ state
operating loss
carryforwards (4) - - - (1,656)
----------- ----------- ----------- -----------
Non-GAAP net income
(loss) $ (2,728) $ (1,530) $ 11,147 $ (1,312)
=========== =========== =========== ===========
GAAP net income (loss)
per diluted share $ (0.10) $ (0.04) $ 0.17 $ (0.03)
Non-cash compensation (1) 0.01 - 0.04 0.04
Severance (2) - - - 0.01
Change in fair value of
warrants (3) 0.02 - 0.07 (0.01)
Sale of NJ state
operating loss
carryforwards (4) - - - (0.05)
----------- ----------- ----------- -----------
Non-GAAP net income per
diluted share $ (0.07) $ (0.04) $ 0.28 $ (0.04)
=========== =========== =========== ===========
Shares used in GAAP and
Non-GAAP per diluted
share amounts 39,601,781 37,556,634 40,123,968 37,019,750
=========== =========== =========== ===========
(1) Represents expenses recorded for stock compensation expense. The Company
does not consider stock-based compensation charges when evaluating business
performance and management does not consider stock-based compensation
expense in evaluating its short and long-term operating plans.
(2) Represents one time severance costs related to a workforce reduction.
During January 2010 , Company management initiated a plan of restructuring to
better align its workforce to its revised operating plans. As part of the
plan, the Company reduced its personnel count by 16 employees, then
representing 17% of its workforce.
(3) Represents the change in the fair value of warrants classified as a
liability. The fair value of the warrants is calculated at each balance
sheet date with a corresponding charge or credit to earnings for the amount
of the change in fair value.
(4) In December 2009 , we received proceeds of approximately $1.6 million
from the sale of the rights to approximately $21.2 million of New Jersey
state income tax operating loss carryforwards, under the Technology Business
Tax Certificate Program administered by the New Jersey Economic Development
Authority . Net proceeds were recorded as an income tax benefit during the
year ended October 31, 2010 .
For additional information, please contact:Todd Greenwald , CFA Director of Investor Relations & Strategic Planning 732-476-1938 tgreenwald@majescoentertainment.com
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