Fiscal 2005 Half-Year Financial Results in Line with Forecasts; Reaffirms Fiscal 2005 Operational Profitability; Redemption Plan for OCEANE 2005 Bonds Announced.PARIS Paris, in Greek mythology Paris or Alexander, in Greek mythology, son of Priam and Hecuba and brother of Hector. Because it was prophesied that he would cause the destruction of Troy, Paris was abandoned on Mt. -- Infogrames Entertainment S.A. ("IESA IESA Infogrames Entertainment SA IESA International Executive Security Association IESA Illinois Elementary Sports Association IESA Integrated Equiangular Spiral Antenna "), the majority shareholder of Atari, Inc. (Nasdaq: ATAR), today announced fiscal 2005 half-year financial results and a proposed redemption plan for its OCEANE 2005 bonds as part of its ongoing planned financial restructuring restructuring - The transformation from one representation form to another at the same relative abstraction level, while preserving the subject system's external behaviour (functionality and semantics). . "We are announcing today a solution to balance the Group's finances by means of a redemption plan for the OCEANE 2005 bonds, designed with the best interests of both our shareholders and the company's creditors in mind, while ensuring that we are in a financial position to repay our remaining debt. First-half financial results were in line with our guidance and we remain on track to meet our goal of an operating profit Operating profit (or loss) Revenue from a firm's regular activities less costs and expenses and before income deductions. operating profit See operating income. in the range of 20 to 30 million euros for fiscal 2005. With a healthy financial position and an upgraded production system, Infogrames is better prepared for the onset of a new technology cycle," comments Infogrames Chairman Bruno Bonnell Bruno Bonnell is one of the founders of Infogrames Entertainment SA. A qualified chemical engineer, Bonnell received a degree in economics at the Université Paris IX. He began his long career on the Thomson TO7, one of the earliest French-produced home computers, before founding . I. HALF-YEAR FINANCIAL RESULTS IN LINE WITH FORECASTS Consolidated revenue for the first half of fiscal 2005 was EUR EUR In currencies, this is the abbreviation for the Euro. Notes: The currency market, also known as the Foreign Exchange market, is the largest financial market in the world, with a daily average volume of over US $1 trillion. 277 million on a current exchange-rate basis, down from EUR 314.9 million last year; on a constant exchange-rate basis, revenue amounted to EUR 285.5 million. Business was sustained in all of the Group's markets during the second quarter, including in Europe and Asia, where sales were up 30% to EUR 48.4 million. Revenue rose by 18% at Atari, Inc., which reported revenues of US$71.4 million. Gross profit amounted to EUR 143 million, reflecting a one-point increase in gross margin from the previous year (to 51.6% from 50.4%) primarily as a result of the increased internalization Internalization A decision by a brokerage to fill an order with the firm's own inventory of stock. Notes: When a brokerage receives an order they have numerous choices as to how it should be filled. and concentration of our software publishing portfolio. Spending for research and development totaled EUR 42.5 million. Annual expenditures, including for third parties, have been averaging about US$150 million dollars. Marketing and distribution expenses amounted to EUR 69.0 million for the six-month period, unchanged in absolute terms (Alg.) such as are known, or which do not contain the unknown quantity. See also: Absolute but up 3% relative to sales (to 25% from 22%). The increase was accounted for by additional spending on the Group's franchises (DRIV3R, Transformers). Overhead and administrative expenses continued to decline. There was a small consolidated operating loss operating loss The excess of operating expenses over revenue. As with operating income, operating losses exclude revenues and expenses from operations that are not considered a regular part of the business. Also called deficit. Compare operating income. at the end of the first half of fiscal 2005 (EUR 3.5 million), consistent with the volume of sales for the period and in line with earlier Group estimates. Net interest and investment expenses for the period totaled EUR 12.2 million, compared with EUR 14.3 million last year, reflecting the decline in the debt over the period. An extraordinary loss of EUR 16.7 million was recorded for the period, consisting mainly of a one-time dilutive impact of EUR 13.1 million resulting from the termination of the Nexgen financing arrangement in October 2004. A year ago, the Group had recognized an extraordinary dilution Dilution A reduction in earnings per share of common stock that occurs through the issuance of additional shares or the conversion of convertible securities. Notes: Adding to the number of shares outstanding reduces the value of holdings of existing shareholders. gain from the recapitalization Recapitalization Restructuring a company's debt and equity mixture often with the aim of making a company's capital structure more stable. Notes: Companies often want to diversify their debt-to-equity ratio to improve liquidity. of Atari, Inc. The consolidated entities reported a loss of EUR 32.8 million for the six-month period, before amortization of goodwill and minority interests. The Group posted a consolidated loss after minority interests of EUR 42.2 million for the first half of the current fiscal year. In the absence of non-recurring items, the consolidated loss would have been EUR 27.3 million. The financial results are consistent with the Company's business objectives. II. OUTLOOK FOR THE YEAR CONFIRMED After the close of the first half on September 30, 2004, the Group sold the rights to its Civilization civilization, culture with a relatively high degree of elaboration and technical development. The term civilization also designates that complex of cultural elements that first appeared in human history between 8,000 and 6,000 years ago. franchise for US$ 22.3 million, generating a one-time gain of EUR 15.5 million. The Group also released RollerCoaster Tycoon 3, which reached the top of the charts 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. on PC, and, in the US, it sold more than 500,000 units of its Atari Flashback The Atari Flashback and Atari Flashback 2 are dedicated video game consoles marketed by Atari in the mid-2000s. They are preprogrammed with classic Atari 2600 and Atari 7800 console games from the 1970s and 1980s built in, and do not use cartridges. (a replica Earlier document exchange software from Farallon Communications, Inc. that converted a Windows or Mac document into a proprietary viewing format. The viewer could be distributed separately or embedded within the document itself, turning it into a single-document viewer. of the historic Atari 7800 console featuring 20 classic Atari games Atari Games Corporation was an American producer of arcade games, and originally part of Atari Inc. History When, in 1984, Warner Communications sold the Atari Consumer division of Atari Inc. ). Products scheduled to be released during the third quarter include Dragon Ball Z “DBZ” redirects here. For the meteorological term, see dBZ (meteorology). Dragon Ball Z (ドラゴンボールZ : Budokai 3 for PS2; and a series of other games, such as Titeuf Mega Compet (GBA GBA Game Boy Advance (Nintendo 32-Bit Game Boy) GBA Gran Buenos Aires (Argentina) GBA God Bless America GBA Gundam Battle Assault (video game) GBA Alderney ), Godzilla: Save The Earth (PS2 and Xbox), Axis & Allies (PC), Duel Masters Duel Masters (デュエルマスターズ Dyueru Masutāzu) is a franchise based on a manga, anime and a trading card game. (PS2), Duel Masters: Kaijudo Showdown (GBA), YuYu Hakusho: Tournament Tactics (GBA), Sid (1) (Society for Information Display, Santa Ana, CA, www.sid.org) A membership organization founded in 1962 devoted to the information display industry. With chapters around the world, SID hosts conferences in the U.S. and abroad and publishes a monthly magazine. Meier's Pirates This is a list of known pirates, buccaneers, corsairs, privateers, and others involved in piracy. This list includes both captains and prominent crew members. See also: pirates, wokou, buccaneers, corsairs, and privateers Ancient World Among the highlights of the fourth quarter will be the release of an exceptional game, Act of War for PC, which updates modern warfare Modern warfare involves the widespread use of highly advanced technology. As a term, it is normally taken as referring to conflicts involving one or more first world powers, within the modern electronic era. simulation, along with games from the Backyard Sports, Dragon Ball Z and Dungeons Dungeons may refer to:
Atari, Inc., the Group's US subsidiary, confirmed its earlier forecast of sales in the range of US $450 million to US $470 million for the year and expects to earn net income of US $25 to US $30 million (US GAAP GAAP See: Generally Accepted Accounting Principles GAAP See generally accepted accounting principles (GAAP). ). The volume of business anticipated by the consolidated companies for the second half would confirm the Group's announced expectations of moderate growth for the year as a whole, at constant exchange rates. The combination of these factors is expected to generate operating income Operating Income The profit realized from a business' own operations. Notes: This would not include income from things such as investments in other firms. Also referred to as operating profit or recurring profit. in the range of 20 to 30 million euros for all of fiscal 2005. III. OCEANE 2005 REDEMPTION PLAN Infogrames Entertainment is announcing a plan to retire the OCEANE 2005 bond debt. The plan has three key components and ensures that equal attention is given to the interests of the Company's shareholders and creditors: --Every single Infogrames Entertainment shareholder will receive one warrant for every two shares owned; --The exercise of those warrants will contribute to the financing of the repurchase re·pur·chase tr.v. re·pur·chased, re·pur·chas·ing, re·pur·chas·es To buy (something) again. n. The act of buying something that one previously sold or owned. Noun 1. of OCEANEs 2005 which will be carried out by means of a public tender offer; --The conversion ratio of OCEANEs 2005 not tendered will be increased in return for the deferral deferral - Waiting for quiet on the Ethernet. of their maturity date and the waiver The voluntary surrender of a known right; conduct supporting an inference that a particular right has been relinquished. The term waiver is used in many legal contexts. of redemption premiums redemption premium See call premium. . The above measures are expected to be implemented in January 2005, after they are approved by the bondholders and shareholders, and subject to approval by the French stock market authorities (AMF AMF ACE (Allied Command, Europe) Mobile Force AMF Autorité des Marchés Financiers (French) AMF Action Message Format AMF Arab Monetary Fund AMF Asian Monetary Fund AMF Autocrine Motility Factor ). --Distribution of free warrants The free warrants will have the following attributes: --each two IESA shares outstanding will be entitled en·ti·tle tr.v. en·ti·tled, en·ti·tling, en·ti·tles 1. To give a name or title to. 2. To furnish with a right or claim to something: to one free warrant; --each free warrant will be exercisable for one IESA share at a price of EUR 1.11 --warrants will be exercisable for a period of fifteen days following their allocation The apportionment or designation of an item for a specific purpose or to a particular place. In the law of trusts, the allocation of cash dividends earned by a stock that makes up the principal of a trust for a beneficiary usually means that the dividends will be treated as (expected in January 2005) --Tender offer for the OCEANE 2005 bonds The company will offer to repurchase all OCEANE bonds outstanding for EUR 35 each, as follows: --60% payment in cash if all warrants are exercised. If only some of the warrants are exercised, the portion paid for in cash will be proportionately pro·por·tion·ate adj. Being in due proportion; proportional. tr.v. pro·por·tion·at·ed, pro·por·tion·at·ing, pro·por·tion·ates To make proportionate. reduced and supplemented by newly-issued IESA shares. If all of the warrants are exercised, no new shares will be issued for the bondholders. --The balance will be settled through the issuance by the company of a three-year bond (with a final maturity date of March 15, 2008). The new bond will bear interest at 6%, will be callable Callable Applies mainly to convertible securities. Redeemable by the issuer before the scheduled maturity under specific conditions and at a stated price, which usually begins at a premium to par and declines annually. by the company at any time and will be guaranteed by Atari, Inc. shares. If all OCEANE 2005 bonds are tendered, the bond issue will have a principal value of EUR 35.5 million. --Changes in the terms and conditions of the OCEANE 2005 bonds not tendered The company will propose the following changes: --The conversion ratio of OCEANE 2005 bonds not tendered will be improved from 1.05 to 10.5. --Conversely, the bonds' maturity will be moved from July 1, 2005 to July 1, 2011 and the EUR 7.11 redemption premium will be cancelled. Infogrames' net debt prior to the redemption Prior to the bond redemption, the maturity schedule of the debt is as follows:
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(EUR millions) Fiscal Fiscal Fiscal Fiscal Fiscal Fiscal
2005 2006 2007 2008 2009 2010
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OCEANE 2005 - 117.0 - - -
----------------------------------------------------------------------
OCEANE 2009 - - - - - 124.3
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Other debt (1) 28.8 36.6 - - - -
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Total annual repayments 28.8 153.6 - - - 124.3
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(1) Other debt consists of EUR 63.7 million in bank borrowings under medium-term credit facilities credit facilities npl → facilidades fpl de crédito credit facilities npl → facilités fpl de paiement credit facilities , of which EUR 28.8 million mature on 12/31/04, EUR 26.7 million on 4/1/05 and the balance is due on April 30, 2005. Infogrames' net debt following the redemption Assuming that all of the bonds are tendered, the maturity schedule of the debt would be as follows:
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(EUR millions) Fiscal Fiscal Fiscal Fiscal Fiscal Fiscal
2005 2006 2007 2008 2009 2010
----------------------------------------------------------------------
OCEANE 2005 - 11.8 11.8 11.8 -
----------------------------------------------------------------------
OCEANE 2009 - - - - - 124.3
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Other debt (1) 28.8 36.6 - - - -
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Total annual repayments 28.8 48.4 11.8 11.8 - 124.3
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(1) Other debt consists of EUR 63.7 million in bank borrowings under medium-term credit facilities, of which EUR 28.8 million mature on 12/31/04, EUR 26.7 million on 4/1/05 and the balance is due on April 30, 2005. Annual repayments would thus be spread over time in a manner consistent with the company's estimated cash resources. This would also bring the debt-to-equity ratio debt-to-equity ratio The relationship between long-term funds provided by creditors and funds provided by owners. A firm's debt-to-equity ratio is calculated by dividing long-term debt by owners' equity. Both items are shown on the balance sheet. down to less than 1 after the bonds are redeemed re·deem tr.v. re·deemed, re·deem·ing, re·deems 1. To recover ownership of by paying a specified sum. 2. To pay off (a promissory note, for example). 3. . The impact for shareholders if all OCEANE bonds are tendered and various percentages of warrants are exercised would be as follows: ---------------------------------------------------------------------- Percentage of warrants exercised 0% 25% 50% 75% 100% ---------------------------------------------------------------------- % dilution for shareholders 36.7% 26.0% 14.6% 2.2% 0% ---------------------------------------------------------------------- The plan to redeem redeem v. to buy back, as when an owner who had mortgaged his/her real property pays off the debt. The term also refers to paying the amount due and all charges after a foreclosure (due to failure to make payments when due) has begun. the OCEANE 2005 bonds provides a balance between the interests of: --the shareholders, by limiting the dilutive effect Dilutive effect Result of a transaction that decreases earnings per common share (EPS). to a range of 0 to 37 percent --the bondholders, by providing a strong security --the company, by striking a balance between cash resources and debt repayments.
----------------------------------------------------------------------
(EUR millions) 9/30/2004 9/30(1)/2003 3/31/2004
(6 months) (6 months) (12 months)
----------------------------------------------------------------------
Revenue 277.0 314.9 700.8
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Gross profit 143.0 158.7 341.1
(gross margin) 51.6% 50.4% 48.7%
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Research and development (42.5) (52.3) (110.5)
(15.3%) (16.6%) (15.8%)
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Marketing and sales expenses (69.0) (68.3) (158.2)
(24.9%) (21.7%) (22.6%)
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Overhead and administrative (35.0) (36.4) (69.8)
expenses (12.7%) (11.6%) (10.0%)
----------------------------------------------------------------------
Operating income (loss) (3.5) 1.7 2.6
(1.3%) 0.5% 0.4%
----------------------------------------------------------------------
Financial income (loss) (12.2) (14.3) (19.8)
(4.4%) (4.4%) (2.8%)
----------------------------------------------------------------------
Extraordinary items (16.7) 18.9 10.0
(6.0%) 6.0% 1.4%
----------------------------------------------------------------------
Corporate income tax (0.3) (0.2) 0.8
(0.1%) (0.1%) 0.1%
----------------------------------------------------------------------
Net income of consolidated entities (32.8) 6.1 (6.4)
(11.8%) 2.0% (0.9%)
----------------------------------------------------------------------
Amortization of goodwill (11.2) (12.8) (24.3)
(4.1%) (4.1%) (3.5%)
----------------------------------------------------------------------
Consolidated net income (44.0) (6.7) (30.8)
(15.9%) (2.1%) (4.4%)
----------------------------------------------------------------------
Net income after minority interests (42.2) (9.8) (31.5)
(15.2%) (3.1%) (4.5%)
----------------------------------------------------------------------
Consolidated balance sheet items:
---------------------------------
----------------------------------------------------------------------
(EUR millions) 9/30/2004 3/31/2004
----------------------------------------------------------------------
Fixed assets 387.5 413.1
----------------------------------------------------------------------
Inventories 41.3 42.5
----------------------------------------------------------------------
Prepaid royalties 61.2 57.2
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Trade receivables 64.6 57.1
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Other assets 35.3 43.7
----------------------------------------------------------------------
Cash 19.5 40.4
----------------------------------------------------------------------
Total 609.4 654.0
----------------------------------------------------------------------
Shareholders' equity 104.5 136.5
of which, Group's interest 14.0 56.2
----------------------------------------------------------------------
Provisions 5.3 10.7
----------------------------------------------------------------------
Net debt 333.0 353.7
----------------------------------------------------------------------
Trade payables 139.3 119.4
----------------------------------------------------------------------
Other debts 27.3 33.7
----------------------------------------------------------------------
Total 609.4 654.0
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Infogrames' debt Infogrames' debt has been drastically dras·tic adj. 1. Severe or radical in nature; extreme: the drastic measure of amputating the entire leg; drastic social change brought about by the French Revolution. 2. reduced by over 200 million euros over the past three years and its maturity has been significantly increased:
----------------------------------------------------------------------
(EUR millions) 9/30/04 3/31/04 3/31/03 3/31/02
----------------------------------------------------------------------
OCEANE 2004 - 23.4 124.3 125.8
----------------------------------------------------------------------
OCEANE 2005 117.1 117.1 221.0 311.4
----------------------------------------------------------------------
OCEANE 2009 124.3 124.3 - -
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NexGen 1.7 - - -
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Other debt 83.8 (1) 82.4 134.8 99.5
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Lease commitments 6.1 6.5 7.4 -
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Net debt 333.0 353.7 487.5 536.7
----------------------------------------------------------------------
(1) including EUR 20,1 million in short-term credit facilities backed
by assigned receivables.
Sales by region:
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9/30/2004 9/30/2003
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USA 50% 56%
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EUROPE 42% 36%
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ASIA 8% 8%
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Sales by format:
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9/30/2004 9/30/2003
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Playstation 2 48% 34%
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PC 21% 26%
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Xbox 17% 14%
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GBA / GBC 10% 10%
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GameCube 3% 9%
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Playstation 1% 7%
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