Acclaim Entertainment Comments On Expectations for Earnings and Industry Trends.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)--March 17, 2000 Acclaim Entertainment (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) ) announced today that it expects net revenue and earnings for the second quarter ending February 29, 2000 and for fiscal year 2000 will fall below analysts' expectations. The Company anticipates reporting results for the fiscal second quarter during the second week of April. The Company stated that due to the slowdown in the rate of sales growth of the main hardware consoles, the Company's previous strategy emphasizing on Nintendo software and a decrease in sales of its video game software, net revenues for the quarter will fall below last year's comparable period. At the same time the Company's commitment to producing software for all of the next generation consoles has increased current research and development spending by 35%. The combination of these factors are anticipated to result in a loss for the quarter of approximately $20 million, and for the year, net revenues are forecast to be approximately 30% below fiscal 1999 net revenues resulting in a net loss of approximately $50 million. "Our industry is in the midst Adv. 1. in the midst - the middle or central part or point; "in the midst of the forest"; "could he walk out in the midst of his piece?" midmost of a major transition, as manufacturers, retailers and game players await the next generation of powerful new video game consoles This is a list of video game consoles by the era they appeared in. Eras are named based on the dominant console type of the era (even though not all consoles of those eras are of the same type). Some eras are referred to based on how many bits a major console could process. ," 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. , Co-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. of Acclaim. "Although the effects of this transition are being felt throughout the industry, Acclaim has been particularly affected, due to our prior emphasis on the Nintendo 64 platform. Product demand has declined in our first two fiscal quarters, and we do not expect a rebound until the fall, when Sony releases its Playstation 2 console. Significant levels of sales for this and other new consoles are at least six months away, and we will not see the benefits for another nine to twelve months after those sales begin. "We are also feeling the impact of discounting at retail outlets retail outlet n → punto de venta retail outlet n → point m de vente retail outlet retail n → and lower inventory targets for current products, and we are incurring a substantial increase in research and development investment in building new engines and tools. We intend to be ready with games for all current and future major video game consoles, including Sony's PlayStation 2, Nintendo's Dolphin and Microsoft's recently-announced X-Box. As a result, our research and development budget for fiscal 2000 is up by more than 50% as compared to last year. "This transition has created serious challenges, but we are taking aggressive steps to meet them and to build our business for the long term. We have begun a complete review of expenses, to ensure that overall expense levels remain consistent with revenue levels. "We have the financial resources to continue to build for the long term. Acclaim has a number of strong brands, as well as a structure to develop new brands through increased responsiveness to consumer preferences. In short, while we face near-term difficulties, we are positive about our long term outlook. We join consumers and retailers in eagerly awaiting the next generation of video game consoles and software and intend to be a major player in this important growth arena." 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. . There are certain important factors that could cause results to differ materially from those anticipated by the statements made above. Such risks and uncertainties include, among other things, the rate of growth of the installed base of the next generation gaming and PC systems, the timely availability and acceptance of Acclaim's future products for such systems, the timing of the introduction of next generation systems, the Company's ability to develop successful products for those systems, the competitive environment in the consumer software and related industries, the management of inventories and operating overheads and the related impact upon liquidity should any of these risks occur. These and other risks and uncertainties are detailed from time to time in Acclaim's reports filed with the Securities and Exchange Commission. Acclaim Entertainment Background Information Acclaim Entertainment, Inc. is a 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 six 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 comic books 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 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 www.acclaim.com. |
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