THQ Announces Fiscal 2004 First Quarter Results; Sales of ``Disney/Pixar's Finding Nemo'' Drive Strong Top-Line Performance.Business Editors/High-Tech Writers CALABASAS HILLS, Calif.--(BUSINESS WIRE)--July 24, 2003 THQ THQ Toy Headquarters THQ Territorial Headquarters THQ Tehsil Headquarters (Pakistan) THQ The Holy Quran THQ Theater Headquarters Inc. (Nasdaq:THQI) today announced that revenue for the first quarter ended June 30, 2003 increased to $98.1 million from $85.8 million for the same period a year earlier, on strong sales of "Disney/Pixar's Finding Nemo" and other new titles. The net loss for the first quarter of fiscal 2004 was $3.6 million, or $0.09 per share. Net income for last year's quarter ended June 30 was $2.3 million, or $0.05 per diluted share, which included a non-cash charge Non-Cash Charge A charge off, made by a company against earnings, that does not require an initial outlay of cash. Notes: Non-cash charges are typically against the depreciation, amortization, and depletion accounts on a company's balance sheet. of $2.6 million (net after tax). "In addition to the successful cross-platform release of `Finding Nemo' in May, first quarter revenue growth was driven by `Evil Dead: A Fistful fist·ful n. pl. fist·fuls The amount that a fist can hold. Noun 1. fistful - the quantity that can be held in the hand handful containerful - the quantity that a container will hold of Boomstick'(TM), `MotoGP 2' and several Game Boy Advance titles," said Brian Farrell
Brian Farrell (born Bernard Bredan Farrell January 9, 1929) is an Irish author, journalist, academic & broadcaster. , president 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. , THQ. "According to according to prep. 1. As stated or indicated by; on the authority of: according to historians. 2. In keeping with: according to instructions. 3. NPD NPD New Product Development NPD Nouveau Parti Démocratique (Canada) NPD Narcissistic Personality Disorder NPD Norwegian Petroleum Directorate NPD Nationaldemokratische Partei Deutschlands TRST TRST Trust TRST Teacher Retirement System of Texas TRST Test Logic Reset TRST Test Reset Input Signal data, THQ was the number three independent publisher with a 6.4% market share for the quarter, demonstrating that our strategy of delivering a broad portfolio of quality entertainment for all ages is on target. Our focus on improved game quality is reflected in the positive game press received and significant retail interest in THQ's product lineup." Fiscal 2004 Financial Guidance THQ is providing initial guidance for the second quarter of fiscal 2004 and updating guidance for the fiscal year ending March 31, 2004: -- For the second quarter of fiscal 2004, the company expects net sales of approximately $120 million and net income of about $0.08 per diluted share. -- For the fiscal year ending March 31, 2004, THQ anticipates net sales in the range of $530 million to $540 million and net income of between $0.80 and $0.85 per diluted share. First Quarter Highlights -- THQ released the first title in its multi-property, multi-year publishing agreement with Disney and Pixar. Six "Finding Nemo" SKUs were released across each of the major game consoles, GameBoy Advance and PC in the U.S. on May 9, in advance of the movie's theatrical release. The movie's box office success combined with quality game ratings fueled sales of "Finding Nemo" during the quarter. The game will launch in Europe, Australia and Asia as the movie debuts in various international territories during the second half of 2003. -- To date, THQ has shipped more than one million units of "Finding Nemo" in the U.S. "Finding Nemo" was a top-ten selling title based on dollar sales for the month of June on PS2, Xbox, GameCube and 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 , and a top-ten selling title based on unit sales unit sales Sales measured in terms of physical units rather than dollars. Unit sales data are often used by financial analysts when evaluating the health of a company. for the month of June on PC, according to NPD data. -- THQ announced that "Full Spectrum Warrior Full Spectrum Warrior is a video game classified as a real-time tactics action/war game. It was developed by Pandemic Studios and published by THQ. It was released on June 1 2004 for the Xbox, September 21 2004 for Windows and on March 23 2005 for the PlayStation 2. ," developed by Pandemic Studios Pandemic Studios is a video game developer notable for creating destructible environments that is based in Los Angeles, California and Brisbane, Australia. Recently, their major hits have been Full Spectrum Warrior, , , Destroy All Humans! and . , is scheduled to launch on the Xbox and PC in the fourth quarter of fiscal 2004. High critical praise at the game's E3 trade show unveiling included "Best Original Game" and "Best Simulation Game" awards from the Game Critics Awards The Game Critics Awards are a set of annual awards held after the Electronic Entertainment Expo (E³) since 1998 to current. The awards are given to products displayed at the Electronic Entertainment Expo (E³) with the title Best of E³ of their category. - Best of E3 2003, as well as the "Xbox - Most Innovative" award from IGN IGN Ignored (Status) IGN Institut Geographique National IGN Ignition IGN Instituto Geografico Nacional (Spain) IGN Imagine Games Network IGN In-Game Name (gaming) , a leading gaming Web site. -- THQ continued its expansion into the high-end PC market with two new content agreements: 1. The company announced a two-property, multi-year agreement with world-renowned PC development studio Relic Entertainment Inc., creators of the critically acclaimed real-time strategy "Homeworld" franchise, which has sold more than one million units. The first of the two projects included in the agreement is scheduled to release in fiscal 2005. 2. The company also announced a publishing agreement with GSC GSC gas-solid chromatography. Gameworld to publish "S.T.A.L.K.E.R.: Oblivion Lost," also scheduled for fiscal 2005 release. The game received strong critical praise at E3 including PC Gamer's Top 20 list. -- THQ was the #3 independent publisher year-to-date through June 2003 according to NPD TRST data. THQ also maintained its long-standing ranking as the #1 independent publisher of handheld games. -- THQ appointed a fifth independent director, Henry T. DeNero, to its Board. DeNero has extensive leadership experience, including tenure as chief executive officer of HomeSpace, Inc. and senior financial officer roles with leading technology and retail companies, First Data Corporation and Dayton Hudson Corporation. The company's second quarter lineup includes both new original properties and proven brands, including "SplashDown splash·down n. The landing of a spacecraft or missile in water. splashdown Noun the landing of a spacecraft on water at the end of a flight Verb splash down (R): Rides Gone Wild"(TM) from THQ's Rainbow Studios and "Sphinx and the Cursed Mummy For other uses see Sphinx (disambiguation) and or The Mummy Sphinx and the Cursed Mummy is an original 3rd person action-adventure video game inspired by the mythology of Ancient Egypt for the Xbox, PlayStation 2 and Nintendo GameCube consoles. "(TM), both for the PlayStation 2 computer entertainment system; "WWE Raw 2" for the Xbox videogame console; and "WWE WrestleMania XIX This article is about the Nintendo GameCube video game. For the professional wrestling pay-per-view event, see WrestleMania XIX. WWE WrestleMania XIX is a video game released for the Nintendo GameCube by THQ in late 2003. " for Nintendo GameCube. Investor Conference Call THQ management will host an investor conference call today, July 24, 2003, at 2:00 p.m. PDT PDT abbr. Pacific Daylight Time PDT Pacific Daylight Time PDT n abbr (US) (= Pacific Daylight Time) → hora de verano del Pacífico PDT (5:00 p.m. EDT EDT abbr. Eastern Daylight Time EDT Eastern Daylight Time EDT n abbr (US) (= Eastern Daylight Time) → hora de verano de Nueva York EDT ) to review the company's financial results and operations for the quarter ended June 30, 2003 and discuss its future outlook. The call may be accessed by dialing 877-316-2542 or 706-679-0855 or by visiting the investor relations Investor relations The process by which the corporation communicates with its investors. calendar on THQ's Web site at http://www.thq.com/Corporate/IRCalendar/. The audio webcast will be available through August 7, 2003. THQ (Nasdaq:THQI) is a leading independent publisher of interactive entertainment software worldwide. The company develops its products for all popular game systems including the PlayStation(R) 2 computer entertainment system from Sony Computer Entertainment, the Xbox(TM) videogame system from Microsoft, Nintendo(R) GameCube(TM) and Game Boy(R) Advance, personal computers as well as wireless devices. The THQ Web site is located at www.thq.com. The THQ Wireless site is located at www.thqwireless.com. THQ is a registered trademark of THQ Inc. This press release contains statements that are forward-looking statements within the meaning of the Private Securities Litigation Reform Act The Private Securities Litigation Reform Act of 1995 (PSLRA) implemented several significant substantive changes affecting certain cases brought under the federal securities laws, including changes related to pleading, discovery, liability, class representation and awards fees and of 1995. Such statements include, but are not limited to, the company's expectations for net sales Net Sales The amount a seller receives from the buyer after costs associated with the sale are deducted. Notes: This amount is calculated by subtracting the following items from gross sales: merchandise returned for credit, allowances for damaged or missing goods, freight , net income and earnings per share for the quarter ending September 30, 2003 and the fiscal year ending March 31, 2004. These statements are based on current expectations, estimates and projections about THQ's business based, in part, on assumptions made by its management. These statements are not guarantees of THQ's future performance and involve risks, uncertainties and assumptions that are difficult to predict. Therefore, actual outcomes and results may differ materially from what is expressed or forecasted in such forward-looking statements due to numerous factors, including, but not limited to, those described above and the following: changes in demand for THQ's products, including the original content and licensed content games referenced herein, product mix, the timing of product development, customer orders and deliveries and the impact of competitive products. In addition, such statements could be affected by growth rates Growth Rates The compounded annualized rate of growth of a company's revenues, earnings, dividends, or other figures. Notes: Remember, historically high growth rates don't always mean a high rate of growth looking into the future. and market conditions relating to the interactive software industry and general domestic and international economic conditions. Specific information concerning these and other such factors is contained in the company's transition report on Form 10-KT for the period ended March 31, 2003. A copy of this filing may be obtained by contacting THQ or the SEC. The forward-looking statements contained herein speak only as of the date on which they are made, and THQ does not undertake any obligation to update any forward-looking statement to reflect events or circumstances after the date of this release.
THQ Inc.
First Quarter Earnings Announcement 2004
Condensed Statements of Operations
(In thousands, except per share data)
Three Months Ended
June 30,
2003 2002
Net sales $98,095 $85,762
Costs and expenses:
Cost of sales 38,253 32,497
License amortization and royalties 9,252 7,099
Software development amortization 19,244 11,587
Product development 8,766 8,166
Selling and marketing 19,129 11,424
Payment to venture partner 465 1,500
General and administrative 9,362 7,193
Total costs and expenses 104,471 79,466
Income (loss) from operations (6,376) 6,296
Interest income, net 733 1,579
Other expenses (4) (3,006)
Income (loss) before income taxes (5,647) 4,869
Income taxes (2,090) 2,578
Net income (loss) $(3,557) $2,291
Net income (loss) per share - diluted $(0.09) $0.05
Shares used in per share calculation - diluted 38,162 42,052
The above table reflects our Condensed con·dense v. con·densed, con·dens·ing, con·dens·es v.tr. 1. To reduce the volume or compass of. 2. To make more concise; abridge or shorten. 3. Physics a. Statement of Operations See Income statement. in accordance with U.S. Generally Accepted Accounting Principles The standard accounting rules, regulations, and procedures used by companies in maintaining their financial records. Generally accepted accounting principles (GAAP) provide companies and accountants with a consistent set of guidelines that cover both broad accounting . This table includes a non-cash charge of $2.6 million (net after tax) for the discontinuation dis·con·tin·u·a·tion n. A cessation; a discontinuance. Noun 1. discontinuation - the act of discontinuing or breaking off; an interruption (temporary or permanent) discontinuance of the Network Interactive Sports on-line joint venture in the United Kingdom for the three months ended June 30, 2002. Certain reclassifications have been made to the prior year's consolidated financial statements Consolidated Financial Statements The combined financial statements of a parent company and its subsidiaries. Notes: Because consolidated financial statements present an aggregated look at the financial position of a parent and its subsidiaries, they enable you to gauge to conform to current period consolidated financial statements.
THQ Inc.
First Quarter Earnings Announcement 2004
Balance Sheets
(In thousands)
June 30, March 31,
2003 2003
ASSETS
Cash, cash equivalents and short-term
investments $188,061 $216,011
Accounts receivable, net of allowances 52,297 35,976
Inventory 18,899 24,339
Licenses 20,182 15,330
Software development 54,242 54,824
Income taxes receivable 5,002 1,116
Prepaid expenses and other current assets 8,828 11,316
Total current assets 347,511 358,912
Property and equipment, net 17,519 16,408
Licenses, net of current portion 20,864 20,053
Software development, net of current portion 4,496 2,640
Deferred taxes, net of current portion 8,270 8,346
Goodwill, net 60,909 58,609
Other long term assets, net 8,947 7,981
Total assets $468,516 $472,949
LIABILITIES AND STOCKHOLDERS' EQUITY
Accounts payable $17,610 $21,001
Accrued expenses 22,255 20,766
Accrued royalties 15,714 22,893
Deferred income taxes 7,477 7,353
Total current liabilities 63,056 72,013
Accrued royalties, net of current portion 5,392 4,523
Common stock 385 380
Additional paid-in capital 310,036 305,328
Accumulated other comprehensive income 3,995 1,496
Retained earnings 85,652 89,209
Total stockholders' equity 400,068 396,413
Total liabilities and stockholders' equity $468,516 $472,949
THQ Inc.
Supplementary Tables
Three Months Ended
June 30,
2003 2002
Platform Revenue Mix
PlayStation 2 28.5% 27.4%
PlayStation 3.8 8.4
Game Boy Advance 21.3 27.0
Game Boy Color 1.4 1.6
Game Cube 7.0 18.7
Xbox 19.7 9.0
PC 15.8 6.9
Other 2.5 1.0
100.0% 100.0%
Geographic Revenue Mix
Domestic 70.7% 79.8%
Foreign 29.3 20.2
100.0% 100.0%
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