Acclaim reports record revenues and earnings increase for fiscal year.

GLEN COVE, N.Y.--(BUSINESS WIRE)--October 17, 1995--For the fiscal year ended August 31, 1995, Acclaim Entertainment, Inc. (NASDAQ: AKLM) reported record revenues of $585 million, a 22 percent increase over the previous year, while net income for the year rose to $55 million or $1.06 per share as compared to revenues of $481 million and net income of $45 million or $1.00 per share last fiscal year. The increase in earnings per share also reflects an increase in the number of shares outstanding from 39.3 million in fiscal 1994 to 46.3 million shares outstanding in fiscal 1995.

"We are pleased to report significant revenues and earnings growth for our fiscal year -- a year highlighted by the shift of our resources to support next-generation and PC game platforms as well as the continued solidifying of the company's future through diversification, acquisitions, investments and major alliances," said Robert Holmes, president of Acclaim. "Through the recently announced acquisitions of the industry's top development companies, we exponentially increased our development capabilities and in effect captured a sizable segment of the creative community. During the year we also established a new company with Tele-Communications, Inc. for creating a network games channel; stepped up our support of next-generation games systems while entering the PC DOS and Windows market; formed alliances with major Hollywood companies, Warner Bros. and Pressman Films; and completed our motion capture and blue screen studios."

"While the industry continues its transition to CD-based game platforms, we believe this holiday season will be strong for 16-bit software sales, though it may be the final season of this magnitude for 16-bit technology," Holmes added. "As we look at the year ahead, we foresee potential success for several next-generation gaming systems as well as the advancement of electronic distribution and network gaming via modem. Acclaim continues to focus its energies on both advancing the quality level of interactive entertainment and expanding its technological resources to take full advantage of what we view as vast opportunities on the horizon."

During fiscal 1995, Acclaim achieved the following corporate milestones:

New Business/Acquisitions/Investments

- Completed a stock swap with Tele-Communications, Inc. in

connection with establishing a joint venture for the creation

of games channels as well as to assist in the design of a games

architecture to be incorporated in future set-top boxes. The new

company, headed by MTV founder John Lack, is owned 65 percent by

Acclaim; 35 percent by TCI. TCI acquired 10 percent of Acclaim;

- Acquired coin-op ticket redemption game company Lazer-Tron

Corporation, in a stock merger transaction, boosting position in

coin-op market;

- Acquired Iguana Entertainment, leading interactive

entertainment software developer and designer of NBA Jam, NBA Jam

Tournament Edition and NFL Quarterback Club;

Key Agreements/Alliances

- Joined forces with Edward R. Pressman Film Corporation,

world-renowned film production company, to create interactive

entertainment titles based on Pressman produced films including

The Crow: City of Angels and Mutant Chronicles;

- Struck multi-title, multi-product development, sales and

distribution agreement with Marvel Entertainment Group, Inc. to

co-develop and publish entertainment software based on key comic

book and television properties, including The Fantastic Four and

Iron Man;

Technology Advances

- Proprietary motion capture technology tapped by Warner Bros.

for creation of some special effects for blockbuster film,

Batman Forever;

- New Line Cinema utilized Acclaim motion capture technology for

Mortal Kombat home video animation special effects;

- Power Rangers film special effects created by Twentieth Century

Fox utilizing Acclaim's motion capture technology;

- Developed new data compression audio technology for

coin-operated arcade games allowing high fidelity, motion picture

sound quality with applications for high-end game platforms;

- Continued development of Acclaim Studios, unveiling blue screen

studio utilizing advanced Ultimatte software and proprietary video

processing tools for compositing and layering of characters in

variety of entertainment media;

Continued Product Leadership

- Shipped 56 titles for a variety of home gaming systems;

- Sega Saturn title D achieved top-seller status in Japan;

StreetFighter: The Movie, Myst, and Robotica top-sellers at major

Saturn retailers in U.S.;

- Announced support for Windows '95; entered PC games market;

- Obtained interactive rights to NBA Jam, Myst, Robotica, Spawn,

Demolition Man, The Dragon, Mortal Kombat 3 (in Europe), The Crow:

City of Angels, Mutant Chronicles;

Business Expansion

- Expanded number of affiliated label companies handled by

Acclaim Distribution, Inc.:

-- struck a sub-licensing and distribution agreement with Sunsoft

to include several Warner Bros. and DC Comics properties;

-- struck a European sales and distribution agreement with

Interplay Productions for PC CD-ROM, Macintosh and Amiga

software in Germany, Austria and Switzerland;

-- struck exclusive agreement for European sales and distribution

of Domark's Sega and Nintendo software titles;

-- struck global sales and distribution agreement with Sound

Source Interactive, leading developer of PC-based

edutainment and entertainment products;

Acclaim Entertainment, Inc. is a leading worldwide publisher of software for Nintendo, Sega, Sony, personal computer and CD-ROM hardware systems; and comic books. Acclaim also develops coin-operated arcade and ticket redemption games; and operates blue screen and motion capture studios, as well as A.D.I., a global sales and distribution company for products from a variety of entertainment software publishers, including Acclaim, Digital Pictures, Domark, Interplay, Marvel and Sound Source Interactive. Acclaim, which recently formed a new company with Tele-Communications, Inc. for electronically distributed interactive entertainment, is publicly traded on the NASDAQ National Market System under the symbol AKLM. -0-

                       ACCLAIM ENTERTAINMENT, INC.
                           AND SUBSIDIARIES
                       CONSOLIDATED BALANCE SHEETS
                     (in 000s, except per share data)

                                             August 31,
                                          1995         1994

ASSETS
CURRENT ASSETS
Cash                                    $44,749       $34,676
Marketable securities                    26,503         1,926
Accounts receivable - net               185,311       164,794
Inventories                              16,015        15,295
Other current assets                     52,383        34,010
    TOTAL CURRENT ASSETS                324,961       250,701

OTHER ASSETS
Other assets                            138,993        85,177
    TOTAL ASSETS                       $463,954      $335,878

LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Trade accounts payable                  $49,072       $69,376
Short-term borrowings                     4,233         1,757
Other current liabilities                53,726        47,748
    TOTAL CURRENT LIABILITIES           107,031       118,881

LONG-TERM LIABILITIES
Other long-term liabilities              19,461        41,754
    TOTAL LIABILITIES                   126,492       160,635

MINORITY INTEREST                         1,628          ----

STOCKHOLDERS' EQUITY
Common stock                                926           787
Additional paid in capital              168,785        69,246
Retained earnings                       163,616       106,571
Treasury stock                             (807)         (807)
Unrealized gain (loss) on
  available for sale securities           2,503          ----
Foreign currency translation
  adjustment                                811          (554)
    TOTAL STOCKHOLDERS' EQUITY          335,834       175,243
    TOTAL LIABILITIES AND
      STOCKHOLDERS' EQUITY             $463,954      $335,878

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                    ACCLAIM ENTERTAINMENT, INC.
                         AND SUBSIDIARIES
                STATEMENTS OF CONSOLIDATED EARNINGS
                 (in 000s, except per share data)

                             Three Months Ended    Fiscal Year Ended
                                  August 31,           August 31,
                              1995        1994      1995        1994

NET REVENUES                $151,492    $148,868   $584,723   $480,756
COST OF REVENUES              63,588      75,606    268,501    220,744
GROSS PROFIT                  87,904      73,262    316,222    260,012

OPERATING EXPENSES
Selling, advertising,
  general and
  administrative expenses     59,738      46,990    214,056    176,725
Operating interest               990         370      3,957      1,979
Depreciation and
  amortization                 3,135       1,213      9,543      3,838
TOTAL OPERATING EXPENSES      63,863      48,573    227,556    182,542

EARNINGS FROM OPERATIONS      24,041      24,689     88,666     77,470

OTHER INCOME (EXPENSE)         4,272        (261)     5,608       (475)

EARNINGS BEFORE INCOME TAXES  28,313      24,428     94,274     76,995

PROVISION FOR INCOME TAXES    11,830      10,296     39,150     31,940

EARNINGS BEFORE MINORITY INTEREST
  INTEREST                    16,483      14,132     55,124     45,055

MINORITY INTEREST                (94)       ----       (121)      ----

NET EARNINGS                 $16,577     $14,132    $55,245    $45,055

NET EARNINGS PER COMMON AND
  COMMON EQUIVALENT SHARE      $0.30       $0.31      $1.06      $1.00

WEIGHTED AVERAGE NUMBER OF
  COMMON AND COMMON EQUIVALENT
  SHARES OUTSTANDING          55,000      45,150     52,300     45,150

CONTACT: Acclaim Entertainment, Inc., Glen Cove

(Media) (Financial)

Allyne Mills Anthony Williams

516/656-5000 Dawn Berrie, 212/656-5000