Eidos plc Announces Results for the Three and Nine Months Ended December 31, 1997.LONDON--(BUSINESS WIRE)--Feb. 26, 1998-- Revenues and Net Income Surpass Expectations for the Third Quarter Increasing 153% and 174%, Respectively Eidos plc (NASDAQ: EIDSY), Europe's largest publisher and developer of entertainment software, announces results for the quarter ended December 31, 1997. Announced today are record revenues of Btsh lbs (Location-Based Services) See mobile positioning..81.3m up from Btsh lbs.32.1m for the corresponding period last year. On a US GAAP basis the Company's profit before tax for the quarter ended December 31, 1997 was Btsh lbs.29.1m (1996: Btsh lbs.7m), giving a net income of Btsh lbs.18.3m and earnings per share of 107.8 pence based on weighted average shares outstanding for the quarter of 16,943,355, compared to a net income of Btsh lbs.6.7m and an earnings per share of 47.8 pence for the corresponding period last year. The fully diluted earnings per share for the quarter was 92.8pence compared to 46.9pence in the corresponding period last year.(Restated in accordance with SFAS 128). For the nine months ended December 31, 1997 Eidos reported revenues of Btsh lbs.103.1m up from Btsh lbs.52.6m for the corresponding period last year. On a US GAAP basis the Company's loss before tax for the nine months ended December 31, 1997 was Btsh lbs.3.2m (1996:Btsh lbs.14.6m loss) giving a net loss of Btsh lbs.7.7m and a loss per share of 45.4 pence based on weighted average shares outstanding of 16,937,132, compared to a net loss of Btsh lbs.14.9m and a loss per share of 115.0 pence for the corresponding period last year. The loss for the nine months ended December 31, 1997 is stated after Eidos has recorded a cumulative charge to operating income of Btsh lbs.15.8m (Btsh lbs.11.9m net of taxes or 70.3pence per share), reflecting a change in its accounting principle for royalty advances paid to third party developers and licensors which is inseparable from the effect of a change in the accounting estimate of the amounts recoverable in respect of the royalty advance asset recorded at March 31, 1997. The loss for the nine months ended December 31, 1996 is stated after a one off charge of Btsh lbs.13.8m for acquired in-process research and development. Commenting on Eidos' third quarter results Mr Ian Livingstone, Chairman, said, "During the third quarter, we surpassed virtually all financial and operating expectations. Our 153% revenue increase reflects both the sales success of our premium titles and our decision to release our highest quality content during the busiest season of the year. Sales trends have been particularly impressive for Tomb Raider 2, Fighting Force and Championship Manager 97/98." "The entertainment software markets for both PC and PlayStation were buoyant throughout the holiday season, particularly PlayStation with a potential installed base which has more than doubled during 1997 to over 2 million units in the UK and over 30 million units world-wide." Mr Charles Cornwall, Chief Executive Officer, said, "The performance of the Company during the third quarter reflects the release of a diverse mix of premium titles. We have translated our operational success into significant shareholder value, as witnessed by an almost three-fold increase in our net income. Sales trends have remained strong in early 1998, and in fiscal 1999 Eidos will bear the fruit of its significant investment in product development which began over 18 months ago following the acquisition of CentreGold. Although we are clearly pleased with our performance in this period there is considerable scope for further improvement. Moving into the next fiscal year with a significantly better quality line-up of products, combined with the robust growth of both the PlayStation and PC markets, we are very optimistic about the Company's growth prospects." Recent developments -- Seven games launched in the period, including Championship Manager 97/98, Fighting Force, Tomb Raider 2 and Flight Unlimited 2. -- Tomb Raider 2 number one in the UK Charts across all formats in 1997. -- Championship Manager 97/98 number one in the UK PC CD charts in 1997. -- Eidos currently has three of top six PC CD titles in UK. -- PC rights to leading video game Final Fantasy VII acquired-over 5 million units sold to date on PlayStation. -- In December Eidos launched a game called Myth, The Fallen Lords, a title licensed to the Company by Bungie Software Products Inc. This game has attracted a High Court Writ from a company claiming rights to the name Myth. We strongly dispute this claim and the action is being strenuously defended. The directors consider that the outcome of this case should not have a material effect on the Company's results. UK GAAP UK GAAP - United Kingdom Generally Accepted Accounting Principles Financial Summary Under UK GAAP Eidos made a profit before tax of Btsh lbs.31.3m for the three months ended December 31, 1997 compared to a restated profit before tax of Btsh lbs.7.3m for the corresponding period last year. Earnings per share amounted to 121.0 pence compared to 50.4 pence in the same period last year based on a weighted average number of shares outstanding in the period of 16,943,355 (1996: 13,972,973). The fully diluted earnings per share amounted to 99.8 pence compared to 47.0 pence in the same period last year, based on 20,942,453 shares (1996: 14,988,213). The year to date results for the nine months ended December 31, 1997 show profits before tax of Btsh lbs.13.0m from turnover of Btsh lbs.103.1m compared to a restated loss before tax of Btsh lbs.5.2m from turnover of Btsh lbs.52.6m for the corresponding period last year. This gives an earnings per share of 50.2 pence (1996: loss of 42.7p) and a fully diluted earnings per share of 46.5 pence, based on a weighted average number of shares outstanding in the period of 16,937,132 (1996: 12,990,315) and 20,936,230 respectively. These interim figures have been prepared under the new accounting policy for games development costs. The impact on the results for the three and nine months ended December 31, 1997 was a reduction of Btsh lbs.0.2m (1996: Btsh lbs.0.5m) and Btsh lbs.5.9m (1996: Btsh lbs.8.3m) in the profit before tax, respectively. Net cash outflow from operating activities was Btsh lbs.11.9 m and Btsh lbs.25.0m for the three months and nine months ended 31 December 1997 respectively. This includes the company's investment in product development of Btsh lbs.7.1m (YTD: Btsh lbs.23.1m) and reflects the investment in debtors which rose from Btsh lbs.25.1m to Btsh lbs.82.1m in the quarter. There were seven new products released in the three months ended December 31, 1997. These included five for PC CD only, and two for PlayStation. Top selling new titles included Tomb Raider 2 on PlayStation and PC CD, Fighting Force on PlayStation only, and Flight Unlimited 2, Joint Strike Fighter and Championship Manager 97/98 on PC CD. This compares with eight products released in the corresponding period last year. 70% of net revenues were generated in currencies other than sterling predominantly French Francs, Deutschmarks and US Dollars, compared to 62% in the corresponding period. Selling and marketing expenses for the three months ended December 31, 1997 were Btsh lbs.10.8 m, or 13.3% of turnover compared to Btsh lbs.4.1m, or 12.8% of turnover in the corresponding period in 1996. The increase over the corresponding period last year was due primarily to more widespread TV advertising of premium products. Research and development of Btsh lbs.7.1m (YTD: Btsh lbs.23.1m) for the three months ended 31 December 1997 represents product development costs incurred in the period. This charge included Btsh lbs.4.9m (YTD: Btsh lbs.13.9m) invested in product still to be released, such as Deathtrap Dungeon, Daikatana, Dominion Storm and Ninja. General and administrative expenses before amortisation of goodwill for the three months ended December 31, 1997 were Btsh lbs.4.3m, or 5.3% of turnover compared to Btsh lbs.4.7m or 14.6% of turnover in the corresponding period in 1996. The increase in expenses as a result of the general expansion of Eidos was more than offset by exchange losses of Btsh lbs.1.6m incurred in the corresponding period last year. For US GAAP purposes the adjustment for goodwill amortisation was Btsh lbs.2.2m compared to Btsh lbs.1.2m for the corresponding period last year. After deducting operating expenses of Btsh lbs.22.3m Eidos generated an operating profit of Btsh lbs.31.3m in the three months ended December 31, 1997 representing 38% of turnover, compared to Btsh lbs.7.5m and 23.4% in the corresponding period last year. Eidos plc is Europe's largest publisher and developer of entertainment software. The Company develops and distributes a diverse mix of titles for the Sony PlayStation and multimedia PC markets in the US, England and Europe. The Company's shares are traded on the NASDAQ Stock Market under the symbol EIDSY. Certain statements contained in this press release may be deemed forward-looking that involve a number of risks and uncertainties. The Company's actual results may differ materially from the expectations expressed in such forward looking statements. Among the factors that could cause actual results to differ materially are world-wide business and industry conditions, including consumer buying and retailer ordering patterns, products delays, changes in research and development spending, company consumer relations, in particular, levels of sales to mass merchants, retail acceptance of the company's published and third-party titles, competitive conditions and other risks detailed, from time to time, in the company's SEC filings, including, but not limited to, the Company's form 20-F for the year ended March 31, 1997. -0-
EIDOS plc
Unaudited Consolidated Statements of Operations Reconciled
to US GAAP for the Three and Nine Months Ended December 31, 1997
Unaudited Three Months Ended
December 31, 1997
UK GAAP Adjustment US GAAP
Btsh lbs.000 Btsh lbs.000 Btsh lbs.000
Turnover -
continuing operations 81,252 81,252
Cost of goods sold (27,674) (27,674)
-------- -------- --------
Gross profit 53,578 53,578
Selling and marketing (10,840) (10,840)
Research and development (7,100) (7,100)
Software development write off 0 0
General and administrative (4,319) (2,224) (6,543)
(Loss)/profit from interest in 0 0
associates
-------- -------- --------
Operating Expenses (22,259) (2,224) (24,483)
-------- -------- --------
Profit/(loss) on ordinary 31,319 (2,224) 29,095
activities before interest
Profit on sale of operations 500 500
Interest income/(expense) net (502) (502)
-------- -------- --------
Profit/(loss) before tax 31,317 (2,224) 29,093
Taxation (10,823) (10,823)
-------- -------- --------
Net profit/(loss) 20,494 (2,224) 18,270
-------- -------- --------
Earnings/(loss) per share 121.0p 107.8p
Fully diluted earnings/(loss) per 99.8p 92.8p
share
Unaudited Nine Months Ended
December 31, 1997
UK GAAP Adjustment US GAAP
Btsh lbs.000 Btsh lbs.000 Btsh lbs.000
Turnover -
continuing operations 103,069 103,069
Cost of goods sold (36,802) (36,802)
-------- -------- --------
Gross profit 66,267 66,267
Selling and marketing (17,429) (17,429)
Research and development (17,056) (412) (17,468)
Software development write off (6,016) (9,831) (15,847)
General and administrative (12,513) (6,061) (18,574)
(Loss)/profit from interest in 0 118 118
associates
-------- -------- --------
Operating Expenses (53,014) (16,186) (69,200)
-------- -------- --------
Profit/(loss) on ordinary 13,253 (16,186) (2,933)
activities before interest
Profit on sale of operations 500 500
Interest income/(expense) net (767) (767)
-------- -------- --------
Profit/(loss) before tax 12,986 (16,186) (3,200)
Taxation (4,482) (4,482)
-------- -------- --------
Net profit/(loss) 8,504 (16,186) (7,682)
-------- -------- --------
Earnings/(loss) per share 50.2p (45.4p)
Fully diluted earnings/(loss) per 46.5p n/a
share
Three Months Ended Nine Months Ended
December 31, 1997 December 31, 1997
Net profit according to the consolidated Btsh lbs.000 Btsh lbs.000
statement of operations (prepared under UK 20,494 8,504
GAAP)
Amortisation of goodwill (2,224) (6,061)
Computer games software 0 (10,125)
--------- ----------
Net profit/(loss) in accordance with US GAAP 18,270 (7,682)
---------- -----------
EIDOS plc
Unaudited Consolidated Balance Sheet Reconciled to US GAAP
December
31,1997
UK GAAP Adjustments US GAAP
Btsh lbs.000 Btsh lbs.000 Btsh lbs.000
Fixed Assets
Goodwill 12,160 12,160
Tangible assets 7,164 7,164
Investments 11,195 11,195
-----------------------------
Total fixed assets 18,359 12,160 30,519
-----------------------------
Current Assets
Stocks 2,333 2,333
Debtors: amounts falling
due within one year 82,066 82,066
Cash at bank and in hand 4,117 4,117
-----------------------------
Total current assets 88,516 88,516
Creditors: amount falling
due within one year 41,717 41,717
-----------------------------
Net current assets 46,799 46,799
-----------------------------
Total assets less
current liabilities 65,158 12,160 77,318
-----------------------------
Creditors due after more
than one year US
$50 million
convertible bonds 29,185 29,185
Other creditors 575 575
-----------------------------
29,760 29,760
-----------------------------
Net assets 35,398 12,160 47,558
-----------------------------
-----------------------------
Capital and reserves
Called up share capital 1,694 1,694
Share premium account 48,978 29,526 78,504
Capital reserves 167 167
Goodwill write off reserve (13,322) 13,322
Profit and loss account (2,119) (30,688) (32,807)
-----------------------------
35,398 12,160 47,558
-----------------------------
-----------------------------
December
31,1997
Btsh lbs.000
Shareholders' equity according to the 35,398
consolidated balance sheet (prepared under
UK GAAP)
Goodwill 24,349
Less amortisation (12,189)
-----------
Shareholders' equity in accordance with US GAAP 47,558
-----------
EIDOS plc
UK GAAP Unaudited Consolidated Balance Sheets
Restated
Unaudited Unaudited
December 31, 1997 December 31, 1996
Btsh lbs.000
Fixed assets
Tangible assets 7,164 4,168
Investments 11,195 10
----------------- -----------
Total fixed assets 18,359 4,178
----------------- -----------
Current assets
Stocks 2,333 3,493
Debtors: amounts falling
due within one year 82,066 36,705
Cash at bank and in hand 4,117 13,701
----------------- -----------
Total current assets 88,516 53,899
Creditors: amounts falling
due within one year 41,717 24,236
----------------- -----------
Net current assets 46,799 29,663
----------------- -----------
Total assets less
current liabilities 65,158 33,841
----------------- -----------
Creditors due after more
than one year:
US $50 million convertible
bonds 29,185 0
Other creditors 575 709
----------------- -----------
29,760 709
----------------- -----------
Net Assets 35,398 33,132
----------------- -----------
Capital and reserves
Called up share capital 1,694 1,664
Share premium account 48,978 46,990
Capital reserve 167 167
Goodwill write off reserve (13,322) (7,807)
Profit and Loss account (2,119) (7,882)
--------------- ---------------
Equity shareholders' funds 35,398 33,132
--------------- ---------------
EIDOS plc
UK GAAP Unaudited Consolidated Statements of Operations
Restated
Three months Three months
ended ended
December 31, December 31,
1997 1996
Btsh lbs.000 Btsh lbs.000
Turnover -
continuing operations 81,252 32,074
Costs of goods sold (27,674) (11,131)
---------- ----------
Gross profit 53,578 20,943
Selling and marketing (10,840) (4,102)
Research and development (7,100) (4,641)
General and administrative (4,319) (4,681)
---------- ----------
Operating expenses (22,259) (13,424)
---------- ----------
Profit on ordinary activities before
interest 31,319 7,519
Profit on sale of operations 500 0
Net interest and similar charges (502) (203)
---------- ---------
Profit on ordinary activities before tax 31,317 7,316
Taxation (10,823) (276)
---------- ---------
Net profit after tax 20,494 7,040
---------- ---------
Earnings per share (pence) 121.0p 50.4p
Fully diluted earnings per share (pence) 99.8p 47.0p
EIDOS plc
UK GAAP Unaudited Consolidated Statements of Operations
Restated
Nine months Nine months
ended ended
December 31, December 31,
1997 1996
Btsh lbs.000 Btsh lbs.000
Turnover -
continuing operations 103,069 52,565
Costs of goods sold (36,802) (20,725)
---------- ----------
Gross profit 66,267 31,840
Selling and marketing (17,429) (8,961)
Research and development (23,072) (17,562)
General and administrative (12,513) (9,950)
---------- ----------
Operating expenses (53,014) (36,473)
---------- ----------
Profit/(loss) on ordinary activities 13,253 (4,633)
before interest
Profit on sale of operations 500 0
Net interest and similar charges (767) (548)
---------- ----------
Profit/(loss) on ordinary activities 12,986 (5,181)
before tax
Taxation (4,482) (365)
---------- ----------
Net profit/(loss) after tax 8,504 (5,546)
---------- ----------
Earnings/(loss) per share (pence) 50.2p (42.7p)
Fully diluted earnings per share
(pence) 46.5p n/a
EIDOS plc
UK GAAP Unaudited Consolidated Statements of Cash Flow
Restated
Nine months Nine months
ended ended
December 31, December 31,
1997 1996
Btsh lbs.000 Btsh lbs.000
-------- ----------
Net cash outflow from operating activities (24,952) (17,156)
-------- ----------
Returns on investments and servicing of finance
Interest received 869 107
Interest paid (734) (461)
Interest paid on finance leases (118) (194)
-------- ----------
17 (548)
-------- ----------
Taxation
Overseas tax paid (723) (322)
UK corporation tax paid (609) -
-------- ----------
(1,332) (322)
-------- ----------
Capital expenditure and financial investment
Purchase of tangible fixed assets (4,572) (1,546)
Sale of tangible fixed assets 3 285
Purchase of fixed asset investments (11,824) -
-------- ----------
(16,393) (1,261)
-------- ----------
Acquisitions and disposals
Sale of business held for resale 500 7,500
Purchase of subsidiaries, net of cash acquired - (19,543)
Purchase of associates (166) (120)
-------- ----------
334 (12,163)
-------- ----------
Cash outflow before financing (42,326) (31,450)
Issue of ordinary share capital - 46,207
Repayment of principal under finance leases (704) (988)
Proceeds from bond issue 30,864 -
Expenses paid in connection with share issue (140) (5,282)
Expenses paid in connection with bond issue (1,102) -
-------- ----------
(Decrease)/increase in cash in the period (13,408) 8,487
-------- ----------
-------- ----------
Eidos plc Statistical Information for the Periods Ended
December 31, 1997
Geographical Revenue Mix
(Unaudited)
Quarter Ended
Dec 31, 1997 Dec 31, 1996
Btsh lbs.000's %of Total Btsh lbs.000's %of Total
North America 31,589 38.9% 10,812 33.7%
UK/Europe 46,123 56.8% 20,460 63.8%
Rest of World 3,540 4.4% 802 2.5%
-------- ------- -------- -----------
Total net revenues 81,252 100.0% 32,074 100.0%
-------- ------- -------- -----------
Nine Months
Ended
Dec 31, 1997 Dec 31, 1996
Btsh lbs.000's %of Total Btsh lbs.000's %of Total
North America 37,677 36.6% 14,691 27.9%
UK/Europe 60,570 58.8% 35,605 67.7%
Rest of World 4,822 4.7% 2,270 4.3%
--------- -------- --------- ---------
Total net revenues 103,069 100.0% 52,565 100.0%
--------- -------- --------- ---------
Percentage Increase
Quarter YTD
North America 192.2% 156.5%
UK/Europe 125.4% 70.1%
Rest of World 341.4% 112.4%
----------- -----------
Total net revenue 153.3% 96.1%
----------- -----------
Platform Revenue Mix (Games Revenue only)
(Unaudited)
Quarter Ended
Dec 31, 1997 Dec 31, 1996
Btsh lbs.000's %of Total Btsh lbs.000's %of Total
Console 55,382 68.9% 20,297 64.5%
PC 25,034 31.1% 11,171 35.5%
--------- --------- -------- -----------
Total net revenues 80,416 100.0% 31,468 100.0%
--------- --------- -------- -----------
Nine Months
Ended
Dec 31, 1997 Dec 31, 1996
Btsh lbs.000's %of Total Btsh lbs.000's %of Total
Console 63,374 63.1% 31,483 61.7%
PC 36,995 36.9% 19,543 38.3%
--------- -------- -------- -----------
Total net revenues 100,369 100.0% 51,026 100.0%
--------- -------- -------- -----------
Percentage Increase
Quarter YTD
Console 172.9% 101.3%
PC 124.1% 89.3%
----------- ----------
Total net 153.3% 96.1%
revenue
----------- ----------
CONTACT: Eidos plc, London Charles Cornwall, Chief Executive Officer Tel:(44) 181 636 3000 or Brainerd Communicators, Inc., New York Chris Plunkett/ Ryan Barr Tel:(212) 986 6667 or Binns & Co., London Neil Camp/ Lisa Cohen Tel: (44) 171 786 9600 |
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