3DO Reports Profitable Second Quarter Results; Revenues Up To $26.8 Million.REDWOOD CITY Redwood City, city (1990 pop. 66,072), seat of San Mateo co., W Calif., on San Francisco Bay; inc. 1868. Manufactures include commmunications, electrical, electronic, and medical equipment. , Calif.--(BUSINESS WIRE)--Oct. 30, 1996--The 3DO Company (NASDAQ NASDAQ in full National Association of Securities Dealers Automated Quotations U.S. market for over-the-counter securities. Established in 1971 by the National Association of Securities Dealers (NASD), NASDAQ is an automated quotation system that reports on : THDO) today announced financial results for its second fiscal quarter, reporting its third consecutive quarter of operating profits (excluding one-time acquisition related charges) and a strong cash position of approximately $60 million. Revenues of $26.8 million were reported for the quarter ended Sept. 30, 1996, compared to revenues of $7.1 million for the same quarter in the prior fiscal year. The company's net income totaled $6.8 million or $0.23 per share compared to a loss of $8.8 million or a loss of $0.34 per share for the comparable period in the previous fiscal year. The second quarter revenue increase was primarily due to the recognition of $19.5 million in revenue from the 64-bit M2 licensing agreement with Matsushita Electric Industrial Co., Ltd., signed in Dec. 1995. Matsushita paid the full amount due under the license agreement in June 1996, and revenue is being recognized using the percentage-of-completion method percentage-of-completion method A method of recognizing revenues and costs from a long-term project in relation to the percentage completed during the course of the project. . Prior year revenue of $7.1 million was entirely related to 3DO's 32-bit format. In addition to the M2 license noted above, the company achieved $7.3 million in revenue from other sources in the second quarter of fiscal year 1997, including its first PC software sales. Operating expenses Operating expenses The amount paid for asset maintenance or the cost of doing business, excluding depreciation. Earnings are distributed after operating expenses are deducted. for the second quarter were $17.9 million compared to $13.4 million in the same period for the prior year. Increases in operating expenses included the company's first marketing expenses for the launch of its debut Internet and PC CD-ROM CD-ROM: see compact disc. CD-ROM in full compact disc read-only memory Type of computer storage medium that is read optically (e.g., by a laser). software products; development expenses associated with New World Computing New World Computing, Inc. was an American computer game developer and publisher founded in 1984 by Jon Van Caneghem and Mark Caldwell. It was best known for its work on the Might and Magic RPG series and its spin-offs, especially Heroes of Might and Magic. , Archetype archetype (är`kĭtīp') [Gr. arch=first, typos=mold], term whose earlier meaning, "original model," or "prototype," has been enlarged by C. G. Jung and by several contemporary literary critics. Interactive, and Cyclone Studios; increased reserves against receivables and the amortization of goodwill associated with the New World Computing acquisition; and growth of the Internet and studio software development organizations. "Our first Internet and PC software shipped the last week of the quarter, so we've only just dipped our first oar in the water," said Trip Hawkins William M. 'Trip' Hawkins III (born December 28[1], 1953) is a Silicon Valley American entrepreneur and founder of Electronic Arts, The 3DO Company and Digital Chocolate. , Chairman and CEO (1) (Chief Executive Officer) The highest individual in command of an organization. Typically the president of the company, the CEO reports to the Chairman of the Board. , The 3DO Company. "We have a very talented studio, and our software product flow has expanded. In 1997, our strong cash position and command of 64-bit and Internet technologies will make us a strong competitor." During the second quarter, the company shipped its first Internet and PC entertainment titles. Meridian(TM)59, the world's first 3-D graphical MUD (multi-user dimension (games) Multi-User Dimension - (MUD) (Or Multi-User Domain, originally "Multi-User Dungeon") A class of multi-player interactive game, accessible via the Internet or a modem. ) game on the Internet, has received accolades from consumers and critics since it shipped in September. NEXT Generation magazine recently reported that Meridian 59 is "One of the most ambitious software projects we've ever seen." The company also released Game Guru Not to be confused with Game Gurus, a Canadian game show. Perhaps the most popular and famous of all Game Network UK's video gaming shows, Game GuruTM was launched in December 2002, by Sem Mioli, Jonathan French & Craig Gardiner of Cellcast. (TM): Game Enhancer, the ultimate code breaker Code Breaker is a cheat device developed by Pelican Accessories, currently available for PlayStation 2 and Nintendo DS. Along with competing product Action Replay, it is one of the few currently supported video game cheat devices. , giving users access to cheat codes for more than 150 of the hottest PC games on the market today. In addition, Game Guru gives players the ability to generate new cheat codes for their favorite games. Other titles shipped during the quarter for the PC were Star Fighter Star Fighter or Star Fighter 3000 is a 3D shoot-em-up. The gameplay is mission based and involves elements of strategy and planning. Plot : "The year is 3037, and peak-time TV has acquired its most successful audience participation show ever. (TM), Captain Quazar Captain Quazar is a science fiction third-person action game by developer 3DO, first published in 1995 by Panasonic. Though initially released as an exclusive for 3DO's Interactive Multiplayer console, when the system met with little public success, Captain Quazar (TM), and Spaceward space·ward adv. & adj. Toward, to, or in outer space. Adv. 1. spaceward - towards outer space spacewards Ho! IV. 3DO plans to ship additional PC games for the 1996 holiday selling season, including Heroes of Might and Magic Heroes of Might and Magic (sometimes called simply Heroes or HoMM) is a series of turn-based computer games developed by New World Computing, a division of The 3DO Company. (TM) II the sequel to the award-winning Heroes of Might and Magic from the company's New World Computing division. Heroes of Might and Magic, a fantasy role-playing and strategy war game was named Best Strategy Game by Computer Gaming World Computer Gaming World (CGW) was the first magazine devoted exclusively to computer games. CGW was founded in 1981 by Russell Sipe as a semi-monthly publication. and Strategy Game of the Year by Computer Games Strategy Plus for 1995. Additional titles scheduled to ship before calendar year end include 3DO Games: Decathlon decathlon (dĭkăth`lŏn), in modern Olympic games, a contest for men held over two days and composed of 10 track-and-field events. (TM) from Studio 3DO and Wages of War: The Business of Battle(TM) from New World Computing. 3DO recently organized the company into five software production groups to develop and publish Internet, PC, and 32-bit and 64-bit game console See video game console. entertainment titles. As part of the company's focus on software, 3DO is progressing in its plan to create a joint venture for its hardware technology division by calendar year end. 3DO is currently in discussions with several potential joint venture partner companies in an effort to reduce expenses and preserve the company's upside via a significant ownership interest in the joint venture. This release contains forward looking statements, including statements relating to relating to relate prep → concernant relating to relate prep → bezüglich +gen, mit Bezug auf +acc marketability of recently released software titles and the development and release of software titles under development, and the company's ability to complete a joint venture transaction for the hardware business within calendar 1996. The forward looking statements are subject to risks and uncertainties. Early acceptance of software entertainment products, particularly multi-player games on the Internet, may not be indicative of future market demand. Transactions such as a joint venture are subject to a range of contingencies, including a limited number of potential partners, the price and structure of a transaction, competitive conditions in the industry, and the company's ability to retain its technical personnel pending completion of the transaction. The particular transaction or the absence of a transaction could cause the company to recognize significant write-offs or incur other costs which could produce operating losses. Further information on potential factors which could affect these forward looking statements and the company's financial results are included in the company's filings with the Securities and Exchange Commission, including the company's Report on Form 10-K Form 10-K A report required by the SEC from exchange-listed companies that provides for annual disclosure of certain financial information. Form 10-K See 10-K. for the fiscal year ended March 31, 1996, its quarterly reports on Form 10-Q Form 10-Q See 10-Q. and current reports on Form 8-K Form 8-K The form required by the SEC when a publicly held company incurs any event that might affect its financial situation or the share value of its stock. Form 8-K See 8-K. . The 3DO Company is headquartered in Redwood City, Calif. With offices in North America and Europe, the company creates and publishes advanced entertainment software titles for personal computers, the Internet, and 32-bit and 64-bit video game platforms. Additional company and product information is available on the World Wide Web at http://www.3do.com and on America Online (keyword: 3DO). -0- Note to Editors: 3DO, New World Computing, the 3DO and New World Computing logos, Star Fighter, Captain Quazar, Game Guru, Meridian 59, Killing Time, 3DO Games: Decathlon, Heroes of Might and Magic, and Wages of War: The Business of Battle are trademarks and/or registered trademarks of The 3DO Company. All other product names are trademarks and/or registered trademarks of their respective owners. 3DO and Interactive Multiplayer are trademarks of The 3DO Company. -0-
THE 3DO COMPANY
Consolidated Condensed Statements of Operations
(In thousands, except per share amounts)
Three Months ended Six Months ended
Sept. 30, Sept. 30,
(Unaudited) (Unaudited)
1996 1995 1996 1995
Revenues $26,750 $7,109 $42,079 $14,294
Cost of revenues 2,845 2,093 3,977 3,298
Gross profit 23,905 5,016 38,102 10,996
Operating expenses:
Research and development 12,127 9,591 21,417 18,953
Sales and marketing 2,583 1,843 3,727 4,195
General and administrative 3,173 2,007 5,953 4,040
In-process R&D -- -- 7,700 --
Total operating expenses 17,883 13,441 38,797 27,188
Operating income (loss) 6,022 (8,425) (695) (16,192)
Net interest and other income 785 93 1,111 67
Income (loss) before
provision for income and
foreign withholding taxes 6,807 (8,332) 416 (16,125)
Provision for income and
withholding taxes -- 427 4,000 562
Net income (loss) $6,807 $(8,759) $(3,584) $(16,687)
Net income (loss) per share $0.23 $(0.34) $(0.13) ($0.67)
Common and common
equivalent shares 30,243 25,622 27,260 25,051
Consolidated Condensed Balance Sheets
(In thousands)
Sept. 30, 1996 March 31, 1996
(Unaudited)
Assets
Cash, cash equivalents and
short-term investments $59,784 $50,145
Accounts receivable, net 2,770 2,060
Other current assets 3,206 2,212
Total current assets 65,760 54,417
Property and equipment, net 9,679 8,642
Other assets 2,753 271
Total assets $78,192 $63,330
Liabilities & Stockholders' Equity
Accounts payable and other
accrued expenses $8,996 $5,719
Deferred revenue 47,285 47,818
Current portion of capital lease
obligations 1,000 1,424
Hardware incentive 2,944 4,620
Other current liabilities 1,323 1,787
Total current liabilities 61,548 61,368
Deferred revenue 6,454 44
Capital lease obligations, net
of current portion 872 1,287
Other liabilities 698 500
Total liabilities 69,572 63,199
Stockholders' equity 8,620 131
Total liabilities and
stockholders' equity $78,192 $63,330
CONTACT: The 3DO Company, Redwood City Diane Hunt, 415/261-3214 Tuesday Uhland, 415/261-3142 |
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