Acclaim Entertainment, Inc. Revises Its Fourth Quarter and Fiscal Year 2002 Revenue and Earnings Guidance; Updates Guidance for Fiscal Year 2003.
Entertainment Editors/High-Tech Writers
GLEN COVE, N.Y.--(ENTERTAINMENT WIRE)--Sept. 19, 2002--Acclaim
Entertainment, Inc. (NASDAQ.SC: AKLM) today announced it expects lower
than anticipated revenue and earnings for its fourth quarter and 2002
fiscal year, ended August 31, 2002. In addition, the Company has
updated its guidance for the first and second quarters of its 2003
fiscal year, as well as for the 2003 fiscal year.
Fourth Quarter and Fiscal Year 2002
The Company is revising its revenue and earnings guidance due to
the following:
- Revenue Shortfall: Overall sales of Turok: Evolution did not
meet the Company's initial launch expectations, and sales of
Aggressive Inline continued to be lower than originally
anticipated, therefore negatively affecting the Company's
previously forecasted revenues for the 2002 fourth quarter and
the 2002 fiscal year.
- Reserves and Allowances: The Company will be increasing its
reserves and allowances, and as a result, accounts receivable
reserves are expected to fall within a range of approximately
21% to 25% at August 31, 2002.
- Gross Profit: During the quarter, international sales
increased above the Company's planned projections, while
domestic sales did not meet the Company's forecasts. This
change adversely affected the Company's overall gross profit,
as international revenues carry a lower gross profit than do
domestic revenues. This, compounded with the increase in the
Company's reserves and allowances, will reduce the Company's
gross profit guidance for the fourth quarter of its 2002
fiscal year from 61%, to a range of approximately 51% to 53%.
The Company's gross profit for the 2002 fiscal year, is
expected to fall within a range of approximately 57% to 59%.
- One time Charge: During the quarter, the Company recorded a
charge of approximately $2.2 million, as a result of the
discontinuance of the development of two products, which were
previously capitalized.
- Operating Expenses: Operating expenses exceeded the Company's
plan by $2.6 million due to additional advertising and
marketing expenses incurred.
"While we are disappointed with our performance for the quarter,
we have improved our cash position and strengthened our balance sheet
from the prior year, and are well positioned for growth in the next
fiscal year," said Gerard F. Agoglia, Chief Financial Officer for
Acclaim.
Revised Guidance: The Company is revising its previously stated
revenue and earnings guidance for its fourth quarter and fiscal year
2002. The following table outlines preliminary, unaudited ranges of
expected results of operations:
-0-
*T
(In millions, except share data)
Q4 `02 % Change(1) FY `02 %Change(1)
----------------------------------------------------------------------
Net Revenue $69 - $71 (25%) - (23%) $284 - $286 (7%) - (7%)
----------------------------------------------------------------------
Income (loss)
Before ($12) - ($10)(188%) - (173%) $13 - $15 (66%) - (61%)
Extraordinary
Item
----------------------------------------------------------------------
Diluted EPS ($0.13) - ($0.11) $0.14 - $0.17
Before
Extraordinary
Item
----------------------------------------------------------------------
Diluted Shares 93,000 90,000
----------------------------------------------------------------------
(1) Percentage change from previous guidance.
*T
Cash: As of August 31, 2002, the Company expects its cash position
to be approximately $51.0 million and the Company forecasts that it
will remain cash flow positive throughout the 2003 fiscal year.
Actual results for the fourth quarter and fiscal year ended August
31, 2002 and further details on the Company's expectations for fiscal
year 2003 will be reported during the Company's scheduled earnings
conference call after the close of the market on Thursday, October 17,
2002.
Revised Guidance for First and Second Quarters and Fiscal Year
2003
The Company has revised its revenue and earnings guidance for the
first and second quarters of 2003, as well as fiscal year 2003. The
Company is rescheduling the release of VEXX from the first fiscal
quarter of 2003 to the second fiscal quarter of 2003.
"After the disappointing performance of Aggressive Inline and
Turok: Evolution, we are adjusting our previous fiscal 2003 revenue
guidance to reflect growth of between 16% to 21% over fiscal year
2002," added Edmond Sanctis, President and Chief Operating Officer for
Acclaim North America. "Additionally, we are moving the release of
VEXX to our second quarter to ensure that we have fully prepared the
market and polished the product."
The revised guidance follows:
-0-
*T
(in millions, except share data)
Q1 `03 % change(2) Q2 `03 % change(2)
----------------------------------------------------------------------
Net
Revenue $90 - $100 (18%) - (17%) $75 - $85 (6%) - (6%)
----------------------------------------------------------------------
Pre Tax
Income $11.5 - $17.5 (50%) - (30%) $3 - $6 (63%) - (33%)
----------------------------------------------------------------------
Diluted EPS $0.13 - $0.19 $0.03 - $0.07
----------------------------------------------------------------------
Diluted Shares 90,000 90,000
----------------------------------------------------------------------
(in millions, except share data)
FY `03 % change(2)
-----------------------------------------------------
Net
Revenue $330 - $345 (13%) - (9%)
-----------------------------------------------------
Pre Tax
Income $35 - $43 (47%) - (35%)
-----------------------------------------------------
Diluted EPS $0.37 - $0.45
-----------------------------------------------------
Diluted Shares 95,000
----------------------------------------------------- --------
(2) Percentage change from previous guidance.
At this time, the Company is no longer providing guidance for
fiscal year 2004.
Fiscal Year 2003 Release Schedule
The Company has updated and revised its release schedule for
fiscal year 2003. The Company intends to release 56 SKU's: 16 for
PlayStation(R)2; 16 for Nintendo's Game Cube(TM); 15 for Microsoft's
Xbox(TM), 5 for Nintendo's Game Boy(R) Advance and 4 for personal
computers.
During the first quarter of fiscal year 2003, Acclaim intends on
releasing 12 SKU's:
-0-
*T
Console Title Month
----------------------------------------------------------------------
PlayStation 2: Burnout 2: Point
of Impact(TM) September
----------------------------------------------------------------------
BMX XXX(TM) November
----------------------------------- ----------------------------------
Legends of Wrestling(TM) 2 October
----------------------------------------------------------------------
Mary-Kate & Ashley
Sweet 16(TM) November
----------------------------------------------------------------------
Game Cube: BMX XXX(TM) November
----------
----------------------------------- ----------------------------------
Legends of Wrestling(TM) 2 October
----------------------------------- ----------------------------------
Mary-Kate & Ashley
Sweet 16(TM) November
----------------------------------------------------------------------
Xbox: BMX XXX(TM) November
-----
----------------------------------------------------------------------
Legends of Wrestling(TM) 2 October
----------------------------------------------------------------------
Game Boy Advance: BMX XXX(TM) November
-----------------
----------------------------------------------------------------------
Legends of Wrestling(TM) 2 October
----------------------------------------------------------------------
Mary-Kate & Ashley Sweet 16(TM) November
During the second quarter of fiscal year 2003, Acclaim intends on
releasing 14 SKU's:
Console Title Month
----------------------------------------------------------------------
PlayStation 2: All-Star Baseball(TM)2004 February
--------------
----------------------------------------------------------------------
ATV Quad Power Racing(TM) 2 January
----------------------------------------------------------------------
Paris Dakar Rally(TM) 2 January
----------------------------------------------------------------------
VEXX(TM) February
----------------------------------------------------------------------
Game Cube: All-Star Baseball(TM)2004 February
----------
----------------------------------- ----------------------------------
ATV Quad Power Racing(TM) 2 January
----------------------------------- ----------------------------------
Paris Dakar Rally(TM) 2 January
----------------------------------- ----------------------------------
VEXX(TM) February
----------------------------------- ----------------------------------
Xbox: All-Star Baseball(TM)2004 February
-----
----------------------------------------------------------------------
ATV Quad Power Racing(TM) 2 January
----------------------------------- ----------------------------------
Paris Dakar Rally(TM) 2 January
----------------------------------- ----------------------------------
VEXX(TM) February
----------------------------------- ----------------------------------
Game Boy Advance: All-Star Baseball(TM)2004 February
-----------------
----------------------------------- ----------------------------------
Paris Dakar Rally(TM) 2(3) January
----------------------------------- ----------------------------------
(3) Denotes European release only. All other titles are for
international distribution.
*T
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 as well as personal computer hardware systems. Acclaim
owns and operates six studios located in the United States and the
United Kingdom, which includes a motion capture and recording studio
in the U.S., and publishes and distributes its software through its
subsidiaries in North America, the United Kingdom, Germany, France and
Spain. The Company uses regional distributors worldwide. 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 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.
The statements contained in this release which are not historical
facts, are "forward-looking statements." Acclaim cautions readers of
this press release that a number of important factors could cause
Acclaim's actual future results to differ materially from those
expressed in any such forward- looking statements. These important
factors, including, without limitation, the financial strength of the
interactive entertainment industry, dependence on new product
introductions and the ability to maintain the scheduling of such
introductions, technological changes, dependence on major platform
manufacturers and other factors that could affect Acclaim, are
described in Acclaim's Annual Report on Form 10-K for the fiscal year
ended August 31, 2001, and Acclaim's subsequent Quarterly Reports on
Form 10-Q, all of which were filed with the United States Securities
and Exchange Commission. Readers of this press release are referred to
such filings.
--30--fap/ny*
CONTACT: Acclaim Entertainment, Inc.
Media Contact: Alan B. Lewis, 516/656-5000
alewis@acclaim.com
Financial Contact: Gerard F. Agoglia, 516/656-5000
gagoglia@acclaim.com
KEYWORD: NEW YORK
INDUSTRY KEYWORD: ELECTRONIC GAMES/MULTIMEDIA ENTERTAINMENT
SOFTWARE
SOURCE: Acclaim Entertainment, Inc.
COPYRIGHT 2002 Business Wire
No portion of this article can be reproduced without the express written permission from the copyright holder.
Copyright 2002, Gale Group. All rights reserved. Gale Group is a Thomson Corporation Company.
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