Acclaim Entertainment, Inc. Reports Net Loss for Fiscal Year 2000; Company Anticipates Profitable First Quarter.Business Editors GLEN COVE Glen Cove, city (1990 pop. 24,149), Nassau co., SE N.Y., on the north shore of Long Island, at the entrance to Hempstead Harbor; settled 1668, inc. as a city 1918. , N.Y.--(BUSINESS WIRE)--Nov. 29, 2000 Acclaim Entertainment, Inc. (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 :AKLM AKLM Acclaim Entertainment, Inc. (stock symbol) ), a leading video entertainment software developer, today reported a net loss for the fiscal year ended August 31, 2000. "Fiscal 2000 was a difficult, transition year for Acclaim", the Company said. "However, expenses have been sharply reduced and we have an exciting product line-up for fiscal 2001. As the key post-Thanksgiving sell-through reports appear to indicate, our new products are being positively accepted, especially Mary Kate and Ashley's Magical Mystery Mall for Playstation, and Dave Mirra's Freestyle BMX Freestyle BMX is a creative way of using bicycles originally designed for bicycle motocross racing. It can be split into several disciplines, although riders will generally participate in more than one discipline. . Reflecting as well the benefits of a more tightly focused marketing effort, we anticipate a profitable first quarter and based on the plan that we have put in place, expect fiscal 2001 as a whole to be a turnaround year. Revenues for fiscal 2000 were $188.6 million compared to $431.0 million for the fiscal year ended August 31, 1999. For the fiscal year ended 2000 , the Company reported a net loss of $(131.7) million, or $(2.36) per fully diluted di·lute tr.v. di·lut·ed, di·lut·ing, di·lutes 1. To make thinner or less concentrated by adding a liquid such as water. 2. To lessen the force, strength, purity, or brilliance of, especially by admixture. share, compared to net earnings of $36.0 million or $0.57 per fully diluted share for the fiscal year ended August 31, 1999. The lower net revenues for fiscal year 2000 were predominantly pre·dom·i·nant adj. 1. Having greatest ascendancy, importance, influence, authority, or force. See Synonyms at dominant. 2. caused by delays in the introduction of new titles, lower than anticipated sales of certain of the Company's titles, a decline in the market for N64 software, which had been the Company's focus, and a significant slowdown For articles with similar titles, see Slow Down (disambiguation). A slowdown is an industrial action in which employees perform their duties but seek to reduce productivity or efficiency in their performance of these duties. in the rate of growth for 32-bit and 64-bit hardware systems. In addition, net revenues were further impacted during this platform transition period by increased sales allowances to retailers for returns, price protection and price concessions. 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. were also negatively impacted by increased research and development expenses, a necessary expenditure during the industry's shift from 64-bit to 128-bit game platforms. As a video entertainment software developer, Acclaim in fiscal 2000 was producing games for sale on both the older 32-bit and 64-bit platforms while simultaneously investing in the development of software for the new 128-bit systems from Sony, Nintendo, and Microsoft. For fiscal 2001 and beyond, Acclaim is focusing its internal development resources exclusively upon 128-bit platforms. Also in fiscal 2000, the Company recorded a charge of $17.9 million to write-off the remaining goodwill associated with its comic book comic book Bound collection of comic strips, usually in chronological sequence, typically telling a single story or a series of different stories. The first true comic books were marketed in 1933 as giveaway advertising premiums. and strategy guide publishing business. This operation is not projected to generate sufficient operating cash flows Operating cash flow Earnings before depreciation minus taxes. Measures the cash generated from operations, not counting capital spending or working capital requirements. to support recoverability of the goodwill. The Company will continue to publish strategy guides, but not comic book magazines. Based on its current available cash resources, including the new additional collateral funding being provided by the Company's third party domestic and international lender, and assuming the Company achieves its sales forecast Sales forecast A key input to a firm's financial planning process. External sales forecasts are based on historical experience, statistical analysis, and consideration of various macroeconomic factors. , and giving effect to the savings from the implemented expense reductions, the Company expects to have sufficient resources to meet projected cash and operating requirements through fiscal 2001. The Company has implemented certain cost reduction measures, which it believes should reduce aggregate operating expenses by approximately 30% in fiscal 2001 compared to fiscal 2000. These cost reduction measures include cancellation of certain development projects, selected staff reductions, reduced selling and marketing expenses, and strict expenditure controls. Fiscal 2001 Outlook Indications are that the sell-through of Acclaim's video products following Thanksgiving Day Thanksgiving Day, national holiday in the United States commemorating the Pilgrims' celebration of the harvest reaped by the Plymouth Colony in 1621, after a winter of great starvation and privation. The celebration was probably held in October. last week was highly satisfactory, the Company reported. Acclaim added that it anticipates achieving profitability in the first quarter of fiscal year 2001. With the timely release and expected sell through of its scheduled titles, additional receivables financing from its lead domestic and international lender, and giving effect to the savings from implemented expense reductions, the Company expects that according to according to prep. 1. As stated or indicated by; on the authority of: according to historians. 2. In keeping with: according to instructions. 3. its plan it should be profitable in fiscal 2001. Release Schedule The Company said that its product release schedule for fiscal 2001 will be highlighted by sequels and expansions of already successful franchises, as well as the introduction of exciting new titles for the strong Playstation and burgeoning PS2 platform. Mary Kate and Ashley's Pony Club Pony Club is an international youth organization devoted to the educating youths about horses and horseback riding. Pony Club organizations exist in over 30 countries worldwide. , Full Blast Lacrosse Blast Lacrosse is an indoor lacrosse video game released in May 2001 for Sony's PlayStation. It is officially licensed by and based on the National Lacrosse League and includes all nine teams of their 14th season, including mascots. and Dave Mirra Dave Mirra (born April 4, 1974 in Chittenango, New York) is an American BMX athlete and business owner. Dave Mirra is known as BMX's most dominant athlete and arguably the most dominant extreme athlete of all-time. Platinum Edition will head a list of games especially suited for the original Playstation system. Headlining Acclaim's offerings for the PS2's 128-bit system will be All-Star Baseball All-Star Baseball is a baseball video game series developed and published by Acclaim Entertainment. The series began in 1998 with the release of All-Star Baseball '99. featuring Derek Jeter  Editing of this page by unregistered or newly registered users is currently disabled until (UTC) due to vandalism. , NFL Quarterback Club NFL Quarterback Club is a Super Nintendo Entertainment System game to feature quarterbacks from the NFL. Troy Aikman and Warren Moon are two examples of what players can use during the game. , Acclaim's own ShadowMan, the Second
Coming, a soon to be announced To be announced (TBA)A contract for the purchase or sale of an MBS to be delivered at an agreed-upon future date but does not include a specified pool number and number of pools or precise amount to be delivered. hit arcade conversion and a promising new title for the Company's already successful Max Sports division Sports Division was one of the biggest sports retailers in the United Kingdom during the 1990s. In 1998 it was sold to its main competitor, JJB Sports for approximately £295 Million. It was set up by Sir Tom Hunter in 1984, to sell trainers, see article about him for more information. . Current plans call for the release of 43 SKU's during fiscal 2001, namely: 12 titles for PS2, 12 titles for PS1, 4 PC titles, 5 Dreamcast titles, 7 titles for the Game Boy Color The Game Boy Color (ゲームボーイカラー , and 3 titles for Game Boy Advanced. Safe Harbor Safe Harbor 1. A legal provision to reduce or eliminate liability as long as good faith is demonstrated. 2. A form of shark repellent implemented by a target company acquiring a business that is so poorly regulated that the target itself is less attractive. Statement This press release contains forward-looking statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. . The forward-looking statements included here are based on current expectations that involve a number of risks and uncertainties, as well as on certain assumptions. Such statements regarding future events and/or the future financial performance of the Company are subject to certain risks and uncertainties, such as delays in the completion or release of products, the possible lack of consumer appeal and acceptance of products released by the Company, fluctuations in demand, that competitive conditions within the Company's markets will not change materially or adversely, that the Company's forecasts will accurately anticipate market demand and the related impact upon liquidity should any of these risks occur. Assumptions relating to relating to relate prep → concernant relating to relate prep → bezüglich +gen, mit Bezug auf +acc the foregoing involve judgments with respect to, among other things, future economic, competitive and market conditions, and future business decisions, all of which are difficult or impossible to predict accurately and many of which are beyond the control of the Company. Although the Company believes that the assumptions underlying the forward-looking statements are reasonable, the business and operations of the Company are subject to substantial risks that increase the uncertainty inherent in the forward-looking statements. These and other risks and uncertainties are detailed from time to time in Acclaim's reports filed with the Securities and Exchange Commission. About Acclaim Entertainment Acclaim Entertainment, Inc., is a leading worldwide developer, publisher and mass marketer of software for use with interactive entertainment platforms including Nintendo, Sony Computer Entertainment and Sega hardware systems, and PCs. Acclaim owns and operates four studios located in the United States United States, officially United States of America, republic (2005 est. pop. 295,734,000), 3,539,227 sq mi (9,166,598 sq km), North America. The United States is the world's third largest country in population and the fourth largest country in area. and the United Kingdom, and publishes and distributes its software directly in North America North America, third largest continent (1990 est. pop. 365,000,000), c.9,400,000 sq mi (24,346,000 sq km), the northern of the two continents of the Western Hemisphere. , the United Kingdom, Germany, France, Spain and Australia. Acclaim also distributes entertainment software for other publishers worldwide and publishes software strategy guides. Acclaim's headquarters are in Glen Cove, New York Glen Cove is a city in Nassau County, New York on the North Shore of Long Island. As of the United States 2000 Census, the city population was 26,622. Part of the early 20th century Gold Coast of the North Shore, Glen Cove has a diverse population. , and Acclaim's common stock is publicly traded on NASDAQ under the symbol AKLM. For more information, please visit our website at http://www.acclaim.com. Notice of Conference Call We have scheduled a teleconference with the financial community for Thursday, November 30, at 1 p.m. (ET), to discuss last year's results and our program for fiscal 2001, now underway. To listen, the telephone number is 1-800-388-8975 (from overseas it can be accessed via 973-694-2225). The teleconference also will be rebroadcast until midnight Friday, December 1, 2000, and can be accessed by dialing 1-800-938-1593, or 402-220-0895 for those outside the U.S. If you are calling for the replay, use the PIN number 15957. Our teleconference will be carried live via the Internet at http://www.vcall.com, and will be available on the Vcall website all of the following week.
ACCLAIM ENTERTAINMENT, INC
AND SUBSIDIARIES
CONDENSED STATEMENTS OF CONSOLIDATED OPERATIONS
(In thousands of dollars, except per share data)
Fiscal Years Ended August 31,
2000 1999
NET REVENUES $ 188,626 $ 430,974
COST OF REVENUES 105,396 200,980
------------ --------------
GROSS PROFIT 83,230 229,994
OPERATING EXPENSES
Marketing and sales 71,632 72,245
General and administrative 56,378 64,322
Research and development 57,410 50,452
Goodwill writedown 17,870 -
Litigation recovery - (1,753)
------------ --------------
TOTAL OPERATING EXPENSES 203,290 185,266
------------ --------------
EARNINGS (LOSS) FROM OPERATIONS (120,060) 44,728
OTHER (EXPENSE) INCOME, net (11,593) (5,698)
------------ --------------
EARNINGS (LOSS) BEFORE INCOME TAXES (131,653) 39,030
PROVISION FOR INCOME TAXES 91 2,972
------------ --------------
NET EARNINGS (LOSS) $ (131,744) $ 36,058
============= =============
BASIC EARNINGS (LOSS) PER SHARE $ (2.36) $ 0.66
============= =============
DILUTED EARNINGS (LOSS) PER SHARE $ (2.36) $ 0.57
============= =============
ACCLAIM ENTERTAINMENT, INC.
AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands of dollars, except per share data)
August 31,
2000 1999
ASSETS
CURRENT ASSETS
Cash and cash equivalents $ 6,738 $ 74,421
Accounts receivable, net 3,958 84,430
Inventories 4,708 15,565
Prepaid expenses 7,263 14,870
--------------- ---------------
TOTAL CURRENT ASSETS 22,667 189,286
OTHER ASSETS 42,353 55,552
--------------- ---------------
TOTAL ASSETS $ 65,020 $ 244,838
=============== ===============
LIABILITIES AND STOCKHOLDERS' (DEFICIENCY) EQUITY
CURRENT LIABILITIES
Trade accounts payable $ 31,121 $ 47,298
Other current liabilities 68,315 112,597
--------------- ---------------
TOTAL CURRENT LIABILITIES 99,436 159,895
LONG-TERM LIABILITIES 59,564 53,584
--------------- ---------------
TOTAL LIABILITIES 159,000 213,479
STOCKHOLDERS' EQUITY (DEFICIENCY)
Common stock 1,133 1,121
Additional paid in capital 213,940 207,273
Accumulated deficit (304,866) (173,122)
Treasury stock (3,338) (3,262)
Accumulated other comprehensive income (849) (651)
--------------- ---------------
TOTAL STOCKHOLDERS' (DEFICIENCY)
EQUITY (93,980) 31,359
TOTAL LIABILITIES AND STOCKHOLDERS'
(DEFICIENCY) EQUITY $ 65,020 $ 244,838
=============== ===============
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