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ELECTRONIC ARTS ANNOUNCES 64 PERCENT INCREASE IN NET INCOME FOR ITS SECOND QUARTER

 ELECTRONIC ARTS ANNOUNCES 64 PERCENT INCREASE
 IN NET INCOME FOR ITS SECOND QUARTER
 SAN MATEO, Calif., Oct. 12 /PRNewswire/ -- Electronic Arts (EA) (NASDAQ: ERTS) today announced its second quarter, fiscal year 1993 operating results. Net income for the second quarter ended Sept. 30, 1992 was $5,230,000, up 64 percent from $3,186,000 earned in the quarter ended Sept. 30, 1991. Net income for the six months ended Sept. 30, 1992 was $9,984,000 compared to $5,155,000 in the first six months for the last fiscal year, an increase of 94 percent. Earnings-per-share for the second quarter of fiscal year 1993 were $0.22, up 57 percent from $0.14 earned in the same quarter last year. Earnings-per-share for the six months ended Sept. 30, 1992, were $0.43 compared to $0.23 in the same period last year, an increase of 87 percent.
 Revenues for the quarter ended Sept. 30, 1992, were $54,601,000 compared to $35,420,000 in the second quarter of the prior fiscal year, an increase of 54 percent. Revenues for the six months ended Sept. 30, 1992, were $104,700,000 compared to $62,312,000 in the same period last year, an increase of 68 percent.
 Revenue growth in the September quarter was achieved primarily from the sales of products for the Sega(TM) Genesis(TM) and the Super Nintendo Entertainment System(R)(Super NES) in the North American market and from Sega Genesis (Mega-Drive) products in Europe. The company released four new titles for the Genesis in the quarter -- Team USA Basketball(TM), NHLPA(TM) Hockey 93, The Aquatic Games(TM)," and The Legend of Galahad(TM) -- and one new title -- Rampart(TM) for the Super NES. In addition, seven new IBM products were shipped during the quarter.
 The company announced two significant events during the quarter which it believes will contribute to its future growth. In September, the company completed its acquisition of Origin Systems, Inc. (OSI), a premier publisher of high-end entertainment software, in an exchange of common stock valued at about $35,000,000 at the time of signing. Origin brings two of the most successful product franchises in the industry with its Ultima(R) and Wing Commander(TM) series as well as a wealth of creative talent and a history of growth and profitability. The acquisition will be accounted for as a pooling of interests. The reported operating results contributed $273,000 and $929,000 to net income in the three months and six months ended Sept. 30, 1992, respectively. Prior year operating results have been restated to include OSI's contributions to net income of $519,000 and $1,036,000 in the three months and six months ended Sept. 30, 1991, respectively.
 In addition to Origin, the company announced the formation of a joint venture company in Japan with Victor Musical Industries (VMI), a wholly owned subsidiary of JVC. The charter of Electronic Arts Victor is to convert EA's library of products to Japanese and distribute them in the Japanese market and to create original titles for distribution in worldwide markets. Initial capitalization will be approximately $10,000,000 and Electronic Arts will own 65 percent of the joint venture.
 Larry Probst, president and chief executive officer of Electronic Arts said, "This has been a great quarter for both our core business and for furthering our strategic goals. The market for Sega Genesis and Super NES software continues to grow in North American markets and has been strengthened by the aggressive pricing of hardware. In Europe, the growth of the Sega Mega-Drive (Genesis) has been truly outstanding and we have been particularly well-positioned with our large catalogue of Genesis titles. The acquisition of Origin is an excellent strategic fit. It comes with two of the most successful product lines and some of the most creative talent in the industry, and puts us immediately in the CD ROM market. Finally, our joint venture with VMI positions us directly in the large Japanese market with a significant Japanese partner."
 NOTE: Sega and Genesis are trademarks of Sega Enterprises Ltd. Nintendo and Super Nintendo Entertainment System are registered trademarks of Nintendo of America Inc. NHLPA is a trademark of the National Hockey League Players Association. Rampart is a trademark of Atari Games Corp. Wing Commander and Ultima are trademarks of Origin Systems, Inc. All other marks are trademarks of Electronic Arts.
 ELECTRONIC ARTS
 2ND QUARTER EARNINGS ANNOUNCEMENT, FISCAL YEAR 1993
 CONDENSED STATEMENTS OF INCOME (UNAUDITED)
 (In thousands, except per share data)
 3 Months Ended 6 Months Ended
 Sept. 30 Sept. 30
 1992 1991 1992 1991
 Net revenues $54,601 $35,420 $104,700 $62,312
 Cost of sales 27,919 17,914 53,730 31,395
 Gross profit 26,682 17,506 50,970 30,917
 Operating
 expenses:
 Marketing and
 sales 7,491 5,329 13,849 9,579
 General and
 administrative 4,955 3,240 9,308 5,717
 Research and
 development 7,613 4,549 14,569 8,748
 Total operating
 expenses 20,059 13,118 37,726 24,044
 Operating income 6,623 4,388 13,244 6,873
 Interest and
 other income, net 850 337 1,239 723
 Income before
 income taxes 7,473 4,725 14,483 7,596
 Provision for
 income taxes 2,243 1,539 4,499 2,441
 Net income $ 5,230 $ 3,186 $ 9,984 $ 5,155
 Earnings per
 share $ 0.22 $ 0.14 $ 0.43 $ 0.23
 Weighted
 average shares
 outstanding 23,496 22,298 23,388 22,188
 CONDENSED BALANCE SHEETS
 (In thousands)
 (Unaudited)
 Sept. 30, March 31,
 1992 1992
 ASSETS
 Cash and cash
 equivalents $ 69,119 $ 59,053
 Accounts receivable,
 net 27,349 19,801
 Inventories 8,127 9,343
 Prepaid royalties 4,474 2,847
 Other current assets 7,157 4,095
 Total current assets 116,226 95,139
 Furniture and
 equipment, net 10,121 5,227
 Prepaid royalties 2,193 2,165
 Other assets 6,031 3,242
 Total assets $134,571 $105,773
 LIABILITIES AND SHAREHOLDERS' EQUITY
 Accounts payable $ 21,676 $ 14,590
 Accrued liabilities 32,667 23,174
 Total current
 liabilities 54,343 37,764
 Common stock 226 219
 Paid in capital 37,775 28,812
 Retained earnings 43,267 39,223
 Translation
 adjustment (1,040) (245)
 Total Liabilities and
 Shareholders' Equity $134,571 $105,773
 NOTE: The company's financial statements have been restated to include the accounts and operations of Origin Systems Inc. for all applicable periods reported.
 -0- 10/12/92
 /CONTACT: Holly Hartz, director of public relations, 415-513-7510, or fax 415-571-7993, or Stan McKee, senior vice president, chief financial and administrative officer, 415-513-7345, or fax 415-571-6375, both of Electronic Arts/
 (ERTS) CO: Electronic Arts ST: California IN: CPR SU: ERN


SB-GT -- SF004 -- 8810 10/12/92 11:04 EDT
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