Acclaim Entertainment, Inc. Reports Profitable Results for Fiscal Year 2001; Increases Fiscal Year 2002 First and Second Quarter Guidance.Entertainment 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)--Oct. 24, 2001 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 .SC: AKLM AKLM Acclaim Entertainment, Inc. (stock symbol) ), a leading global video entertainment software developer and publisher, today reported profitable results of $14.5 million, or $0.22 per diluted share, in earnings before an extraordinary net gain, on net revenue of $197.6 million for its fiscal year ended August 31, 2001 compared to a net loss of $131.7 million or $2.36 per diluted share for fiscal 2000 on net revenue of $188.6 million. These profits were achieved before an extraordinary net gain of $2.8 million, or $0.04 per diluted share, from the early retirement of $20.5 million principal amount of the 10% convertible subordinated notes. The Company achieved operating profitability during fiscal 2001 due to significant reductions in its 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. , increased gross profit and to a lesser extent on higher net revenue. Operating expenses for fiscal 2001 of $112.3 million decreased 45% or $91.0 million from $203.3 million for the prior year. Net revenue for the twelve months ended August 31, 2001 was $197.6 million, compared to $188.6 million in the prior year, an increase of $9.0 million. Approximately 87% of the Company's fiscal 2001 revenue was derived from CD-based product compared to 60% for the prior year. As CD-based product yields higher margins due to lower manufacturing costs, gross profit for fiscal 2001 increased $52.3 million or 63% to $135.5 million (69% of net revenue) over the $83.2 million (44% of net revenue) for fiscal 2000. Net earnings were $17.3 million or $0.26 per diluted share for fiscal year ended August 31, 2001 after giving effect to the extraordinary net gain as compared to a net loss of $131.7 million or $2.36 per diluted share for fiscal year 2000. For the fourth quarter of fiscal 2001, the Company reported profitable results for the fourth consecutive quarter of $2.9 million or $0.04 per diluted share in earnings before an extraordinary net loss, on net revenue of $46.5 million compared to the prior year's fourth quarter loss of $63.5 million, or $1.14 per diluted share on net revenue of $16.7 million. The Company's fourth quarter 2001 diluted per share results were $0.02 ahead of the consensus of analyst expectations as reported by First Call and $0.01 ahead of expectations for the full fiscal year at $0.22 per diluted share. "Fiscal 2001 represents a successful turnaround year for the Company, as we achieved four consecutive profitable quarters, significantly reduced our operating expenses and debt, and focused our world-class development studios on creating the proprietary tools and engines necessary to take full advantage of an emerging next-generation marketplace," said Gregory Fischbach Gregory Fischbach (known to many as Greg Fischbach) founded video game publisher Acclaim Entertainment, Inc. in 1987 and was its CEO until its bankruptcy in 2004. Mr. Fischbach addressed the United States Senate regarding Internet privacy and ESRB ratings. , Chief Executive Officer of Acclaim. "We launched 35 SKU's, highlighted by an award-winning PlayStation(R)2 lineup, including 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. 2002, Crazy Taxi Crazy Taxi is a video game developed by Hitmaker and published by Sega. The game was first released in arcades in 1999 and was ported to the Sega Dreamcast in 2000. , Dave Mirra Freestyle BMX Dave Mirra Freestyle BMX is a video game released in 2000 featuring Dave Mirra and other professional BMX riders. It was developed by Z-Axis Ltd. and published by Acclaim, and was released on the PlayStation, Dreamcast, Game Boy Color and the Windows PC. 2 and XG3 Extreme G Racing, and strengthened our position within the industry." Fiscal 2001 Gross Revenue By Platform Gross revenue by platform for fiscal 2001, primarily consisted of 128-bit software (42%); 32-bit software (41%); portable cartridges (13%) and personal computer games This article is about the 80's magazine. For games in general, see Personal computer game. Personal Computer Games was a multi-format UK computer games mag of the early/mid eighties. and other (4%). On a geographic basis, North American North American named after North America. North American blastomycosis see North American blastomycosis. North American cattle tick see boophilusannulatus. and International operations Internal Operations (I.O., IO or I/O) is a fictional American Intelligence Agency in Wildstorm comics. It was originally called International Operations. I.O. first appeared in WildC.A.T.S. volume 1 #1 (August, 1992) and was created by Brandon Choi and Jim Lee. generated 74% and 26% of gross revenue, respectively. In addition, Acclaim's four internal studios generated 24% of the Company's gross revenue during fiscal 2001, of which Crazy Taxi and All-Star Baseball 2002 accounted for approximately 15% of total revenue. For fiscal 2001, Dave Mirra Freestyle BMX (for multiple platforms Refers to two or more operating environments, which typically include the CPU family and operating system. For example, if versions of a program run on Windows and the Macintosh, the software is said to support multiple platforms. ) Crazy Taxi, Dave Mirra Freestyle BMX 2 and All-Star Baseball 2002 for the PlayStation(R)2 computer entertainment system, accounted for approximately 19%, 10%, 6% and 5%, respectively, of the Company's gross revenue. Profitable performance for the fourth quarter of fiscal 2001 was highlighted by the releases of Dave Mirra Freestyle BMX 2, XG3 Extreme G Racing, NFL NFL abbr. National Football League NFL (US) n abbr (= National Football League) → Fußball-Nationalliga QB Club 2002 and Fur Fighters Fur Fighters is a video game developed by Bizarre Creations and published by Acclaim for the Sega Dreamcast in 2000, then later for the PC. The game was designed very much as a standard third person shooter, but used a world populated by cute little animals as its : Viggo's Revenge for the PlayStation(R)2 computer entertainment system, and Mary-KateandAshley: Crush Course and Power Shovel Power shovel A power-operated digging machine consisting of a lower frame and crawlers, a machinery frame, and a gantry supporting a boom which in turn supports a dipper handle and dipper. for PlayStation(R) game console See video game console. . Furthermore, the continued sale of catalogue products and the ongoing success of Dave Mirra Freestyle BMX, Crazy Taxi, ATV (1) (Advanced TV) An early name for the digital TV standard proposed by the Advisory Committee on Advanced Television Service (ACATS). See ACATS. See also ATV Forum. (2) (Analog TV) Refers to the NTSC, PAL and SECAM analog TV standads. : Quad Power Racing and the Mary-KateandAshley brands across multiple formats, continued to contribute to a profitable fourth quarter. Fiscal 2002 First and Second Quarter Net Revenue and Earnings Guidance The Company is increasing its fiscal 2002 first quarter net revenue guidance to $86.0 million, a 19% increase over the prior year first quarter net revenue of $72.0 million and increasing net earnings to $17.0 million, a 57% increase over the prior year net earnings of $10.8 million. The Company is also increasing its fiscal 2002 second quarter net revenue to $60.0 million, a 49% increase over the net revenue of the prior year second quarter net revenue of $40.4 million and increasing net earnings to $4.0 million, a 700% increase over the prior year second quarter net earnings of $0.5 million. For the first half of fiscal year 2002, the Company is increasing its net revenue guidance to $146.0 million, which is a 30% increase over the $112.4 million net revenue reported for the first half of fiscal 2001, and is increasing its net earnings guidance for the first half of fiscal 2002 to $21.0 million, an 86% increase over the first six months of the prior fiscal year. Based on its fiscal 2002 operating plan projections, the Company expects to generate sufficient positive cash flow from operations Cash flow from operations A firm's net cash inflow resulting directly from its regular operations (disregarding extraordinary items such as the sale of fixed assets or transaction costs associated with issuing securities), calculated as the sum of net income plus noncash expenses to meet its currently projected cash and operating requirements for the next twelve months. The projections include the repayment of the remaining $29.2 million of 10% convertible subordinated notes due at maturity on March 1, 2002 and assume the Company meets 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. by successfully achieving its planned product release schedule, continues to realize savings from its previously implemented expense reductions and continues to enjoy the support of its lead lender and vendors. Holiday Outlook "We anticipate a strong holiday season for the interactive entertainment industry, fueled by the continued success of Sony's PlayStation(R)2 and the introduction of Nintendo's GameCube(TM) and Microsoft's Xbox(TM) video game console A specialized desktop computer used to play video games. The three most popular game consoles are Sony's PlayStation 3 (PS3), Nintendo's GameCube and Microsoft's Xbox. Game software is available on CDs or DVDs, although earlier game machines used cartridges containing read only memory ," added Fischbach. "We are very well positioned to take advantage of this hardware transition, via a diverse brand-driven lineup that will be highly visible across all of the platforms." During the first quarter of its fiscal year 2002, the Company plans to release 11 SKU's: PlayStation(R)2 computer entertainment system: - 18 Wheeler - ESRB Rated "E" - Burnout - ESRB Rated "E" - Jeremy McGrath Supercross World - ESRB Rated "T" - Legends of Wrestling - ESRB Rating Pending - Paris-Dakar Rally - ESRB Rated "E" Nintendo GameCube The Nintendo GameCube (GCN) is Nintendo's fourth home video game console, belonging to the sixth generation era. The system itself is the most compact and least expensive, next to the Dreamcast, of the sixth generation era consoles. (TM): - All Star Baseball All Star Baseball is one of the two most popular baseball board games of the last sixty years, and has been honored as one of the fifty most influential American board games of all time. It was manufactured by Cadaco-Ellis and designed by baseball player Ethan Allen (1904-1993). 2002 - ESRB ESRB Entertainment Software Rating Board ESRB Estrogen Receptor Beta ESRB Explosive Safety Review Board Rated "E" - Crazy Taxi- - ESRB Rated "T" - Dave Mirra Freestyle BMX 2 - ESRB Rated "T" Microsoft's Xbox(TM) video game console: - Dave Mirra Freestyle BMX 2 - ESRB Rated "T" Nintendo Game Boy(R) Advance: - Dave Mirra Freestyle BMX 2 - ESRB Rated "E" Nintendo Game Boy(R) Color: - Mary-KateandAshley Crush Course - ESRB Rated "E" Acclaim will support each of its key holiday releases with integrated marketing campaigns, including print, PR, TV and the Internet and to that end, will spend approximately $5 million throughout the holiday season. Fiscal 2002 and Second Quarter Release Schedule In fiscal 2002, the Company expects to release nearly 50 SKU's, including 12 for PlayStation(R)2; 13 for Nintendo's GameCube(TM); 12 for Microsoft's Xbox; 8 for Nintendo's Game Boy(R) Advance; and 4 for PC; representing a 40% increase in its schedule over fiscal year 2001. Acclaim will introduce five new brands during the year, as well as Turok Evolution, the highly anticipated next-generation title from the Company's smash franchise, which has sold nearly 5 million units worldwide. During the second quarter of its fiscal year 2002, Acclaim intends to release 8 SKU's: PlayStation(R)2 computer entertainment system: - All-Star Baseball 2003 - ESRB Rating Pending - Shadow Man: 2econd Coming - ESRB Rated "M" Nintendo GameCube(TM): - All Star Baseball 2003 - ESRB Rating Pending - Jeremy McGrath Supercross World Jeremy McGrath Supercross World is a video game of the supercross genre released in 2002 by Acclaim Entertainment. The game is endorsed by supercross star Jeremy McGrath and is the sequel to Jeremy McGrath Supercross 2000. - ESRB Rating Pending - NFL QB Club 2002 - ESRB Rated "E" - XG3 Extreme G Racing - ESRB Rated "E" Microsoft's Xbox(TM) video game console: - All-Star Baseball 2003 - ESRB Rating Pending Nintendo Game Boy(R) Advance: - NBA Jam NBA Jam is a basketball arcade game created by Midway in 1993. It is the first entry in the NBA Jam series, and was written entirely in assembly language. The main designer and programmer for this game was Mark Turmell. 2002 - ESRB Rated "E" "Through the advent of this next generation of hardware, we concur with analysts' estimates that the interactive entertainment industry is poised to grow 25% per annum Per annum Yearly. over the next five years and provide an unprecedented opportunity for Acclaim to capitalize during this explosive period of growth," concluded Fischbach. 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 the timing of console transitions, delays in the completion or release of products, the continued support of the Company's lead lender and vendors, the availability of financing, the achievement of sales assumptions as projected, the continuation of savings from expense reductions, the risk of war, terrorism and similar hostilities, 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 and its ability to service its debt obligations 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 and uncertainties 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 and should be referred to. About Acclaim Entertainment Based in Glen Cove, N.Y., Acclaim Entertainment, Inc., is a leading worldwide developer, publisher and mass marketer of software for use with interactive entertainment game consoles including those manufactured by Nintendo, Sony Computer Entertainment and Microsoft Corporation (company) Microsoft Corporation - The biggest supplier of operating systems and other software for IBM PC compatibles. Software products include MS-DOS, Microsoft Windows, Windows NT, Microsoft Access, LAN Manager, MS Client, SQL Server, Open Data Base Connectivity (ODBC), MS Mail, as well as personal computer hardware systems. 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, Australia and the Pacific Rim Pacific Rim, term used to describe the nations bordering the Pacific Ocean and the island countries situated in it. In the post–World War II era, the Pacific Rim has become an increasingly important and interconnected economic region. . Acclaim also distributes entertainment software for other publishers worldwide, publishes software gaming strategy guides and issues "special edition" comic magazines from time to time to support its time valued brands, Turok and Shadow Man. Acclaim's corporate 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.SC under the symbol AKLM. For more information please visit our website at www.acclaim.com. Notice of Conference Call The Company has scheduled a conference call to discuss its operating results for the fourth quarter and full fiscal year ended August 31, 2001 following the market close on Wednesday, October 24, 2001, at 5:00 PM Eastern Daylight Time (EDT EDT abbr. Eastern Daylight Time EDT Eastern Daylight Time EDT n abbr (US) (= Eastern Daylight Time) → hora de verano de Nueva York EDT ). Individuals in the U.S. who want to listen to the conference call can dial (800) 388-8975. Overseas callers need to dial (973) 694-2225. All parties should dial in five to ten minutes prior to the scheduled teleconference time. A rebroadcast of the call will be available starting at 7:00 PM EDT on Wednesday, October 24, 2001, through 5:00 PM on Wednesday, October 31, 2001. The replay of the conference call can be accessed by dialing (800) 428-6051, and when prompted, enter the PIN number 212433. Overseas callers should dial (973) 709-2089 to hear the rebroadcast and use the same PIN number 212433. Acclaim's conference call is being webcast by CCBN CCBN Central Coast Bancorp CCBN Charles County Business Network and can be accessed at Acclaim's web site at http://www.acclaim.com. In addition, it will be distributed over CCBN's Investor Distribution Network to both institutional and individual investors. Individual investors can listen to the call at or by visiting any of the investor sites in CCBN's Individual Investor Network such as America Online's Personal Finance Channel, Fidelity Investments Fidelity Investments is a group of privately held companies in the financial services industry. It is made up by two independent but closely cooperating companies, Fidelity Management and Research Corporation (FMR Co. (R) (Fidelity.com) and others. Institutional investors Institutional Investor A non-bank person or organization that trades securities in large enough share quantities or dollar amounts that they qualify for preferential treatment and lower commissions. can access the call via CCBN's password protected event management site, StreetEvents (www.streetevents.com). To listen to the live call, please go to the web site at least 15 minutes before the scheduled time In rallying, the Scheduled Time of any crew is the time, calculated at the beginning of the event, that they should arrive at any given control. It is different from Due Time in that Due Time is dynamic, ie it can change throughout the event as competitors drop time; whereas to register, and download and/or install any necessary audio software. A replay on the CCBN site will be available until Wednesday, October 31, 2001. "PlayStation"' and the "PS"' Family logo are registered trademarks of Sony Computer Entertainment Inc. NINTENDO GAMECUBE AND THE NINTENDO GAMECUBE LOGO ARE TRADEMARKS OF NINTENDO.(c)2001 NINTENDO. Xbox and Microsoft are trademarks of Microsoft Corp.
ACCLAIM ENTERTAINMENT, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(In thousands)
August 31,
-----------------
2001 2000
---- ----
Assets
Current Assets
Cash and cash equivalents $ 26,797 $ 6,738
Accounts receivable, net 35,452 18,958
Inventories 4,043 4,708
Prepaid expenses 4,816 7,263
Total Current Assets 71,108 37,667
Other Assets 40,900 42,353
Total Assets $ 112,008 $ 80,020
Liabilities and Stockholders' Deficit
Current Liabilities
Trade accounts payable 33,630 31,121
Accrued selling expenses 7,284 31,093
Other current liabilities 73,307 52,222
Total Current Liabilities 114,221 114,436
Long-Term Liabilities 18,142 59,564
Total Liabilities 132,363 174,000
Stockholders' Deficit
Common stock 1,546 1,133
Additional paid-in capital 267,436 213,940
Accumulated deficit (287,573) (304,866)
Treasury stock - (3,338)
Accumulated other comprehensive loss (1,764) (849)
Total Stockholders' Deficit (20,355) (93,980)
Total Liabilities and Stockholders'
Deficit $112,008 $ 80,020
ACCLAIM ENTERTAINMENT, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share data)
Fiscal Years Ended August 31,
-----------------------------
2001 2000 1999
----- ----- ----
Net revenues $ 197,568 $ 188,626 $ 430,974
Cost of revenues 62,023 105,396 200,980
Gross profit 135,545 83,230 229,994
Operating expenses
Marketing and selling 31,631 71,632 72,245
General and administrative 40,839 56,378 64,322
Research and development 39,860 57,410 50,452
Goodwill writedown - 17,870 -
Litigation recovery - - (1,753)
Total operating expenses 112,330 203,290 185,266
Earnings (loss) from
operations 23,215 (120,060) 44,728
Total other expense, net (8,823) (11,593) (5,698)
Earnings (loss) before
income taxes 14,392 (131,653) 39,030
Income tax provision
(benefit) (106) 91 2,972
Earnings (loss) before
extraordinary gain 14,498 (131,744) 36,058
Extraordinary gain 2,795 - -
Net earnings (loss) $ 17,293 $ (131,744) $ 36,058
Earnings (loss) before
extraordinary gain per
share:
Basic $ 0.24 $ (2.36) $ 0.66
Diluted $ 0.22 $ (2.36) $ 0.57
Net earnings (loss) per
share:
Basic $ 0.29 $ (2.36) $ 0.66
Diluted $ 0.26 $ (2.36) $ 0.57
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