GT Interactive reports record revenues up 56 percent for fiscal year.
"We are very pleased with our achievements during our first full year as a public company," said Ron Chaimowitz, president and chief executive officer of GT Interactive. "Unlike most of our competitors, we were profitable in all four calendar quarters. We also accomplished what we set out to do at our initial public offering by achieving strong revenue growth, in particular a 63 percent increase in overall publishing revenues; market share leadership in interactive games; four strategic acquisitions; entry into the video games market; and a fast-emerging international business."
Revenues for the fourth quarter of 1996 were $135 million, a 30 percent increase over the comparable 1995 quarter. Net income for the quarter was $8.5 million, a 16.8 percent decrease from the fourth quarter of 1995. Earnings per share for the quarter were $.13 versus $.16 in the prior year.
The decline in net income for the quarter was primarily the result of video game product delays which reduced the company's higher-margin publishing revenue relative to its lower-margin mass merchant distribution sales, which exhibited significant growth. The strong growth in mass merchant sales during the fourth quarter was a reflection of seasonal trends as well as the continuing shift of sales to this channel. GT Interactive's higher-margin publishing sales were 48 percent of net revenue during the fourth quarter compared with 60 percent in the 1995 quarter, and 54 percent for 1996 as a whole.
In 1996 GT Interactive had the number two market share in front-line games and the number one share in value-priced software, according to PC Data. Two GT Interactive games - - Duke Nukem 3D and Quake -- performed among the year's top 10 best-sellers.
Publishing revenue rose from $121 million in 1995 to $197 million in 1996. Front-line publishing revenues grew approximately 95 percent, and revenues of value-priced software rose approximately 20 percent. At $40 million, international revenues increased in excess of 275 percent, comprising the fastest-growing segment of GT Interactive's business.
"Looking to the balance of 1997, we believe GT Interactive has the industry's strongest games lineup for PC as well as N64, Sony Playstation and Sega Saturn," Chaimowitz added. "We expect international sales to continue to be the fastest growing component of our business, augmented by our acquisitions of Time Warner Interactive and One Stop in Europe, as well as our agreement with Midway Games. In addition, we intend to continue to acquire, invest in and form alliances with the most creative and innovative independent design groups in the industry."
GT Interactive's 1997 lineup includes Unreal, from Epic Megagames; OddWorld: Abe's Oddysee, from OddWorld Inhabitants, (of which GT Interactive owns 50 percent); Total Annihilation(TM), the first title from GT Interactive's recently announced internal studio, Cavedog Entertainment; Shadow Warrior, from Apogee/3D Realms, creators of Duke Nukem 3D; as well as a host of titles from its children's subsidiary, Humongous Entertainment. GT Interactive will also offer one of the largest console lineups overseas as a result of its agreement with Midway Games.
During 1996, GT Interactive:
-- Released 47 new titles globally for PC, Macintosh, Sony
Playstation and Sega Saturn including industry best-sellers
Duke Nukem 3D, Quake and Final Doom;
-- Acquired The WizardWorks Group, a top-ten value-priced
software developer and publisher;
-- Acquired FormGen Corporation, publishers of the number
one PC hit, Duke Nukem 3D;
-- Acquired Humongous Entertainment, premier developer and
publisher of award-winning children's software featuring
original characters Pajama Sam, Freddi Fish and Putt-Putt;
-- Acquired 50 percent of OffWorld Entertainment, Inc.
(known as Oddworld Inhabitants), obtaining exclusive global
publishing rights to Oddworld software titles for all media,
including PC, console, print, merchandising and online
-- Acquired Warner Interactive Entertainment, a European
subsidiary of Warner Music Group, in a cash transaction;
-- Acquired 10 percent of UK-based software developer Mirage;
-- Entered into an agreement with Target Stores whereby GT
Interactive became Target's primary national supplier of
-- Obtained an exclusive option from WMS Industries to
publish Atari titles for PC worldwide and next-generation
video game systems in Europe and other foreign territories;
-- Entered into an exclusive broad-based publishing
agreement with children's author Mercer Mayer for rights to
publish Mayer's catalog, including Little Critter, L.C. and
the Critter Kids, Little Monster and Critters of the Night
across all interactive media;
-- Launched full version of id Software's Quake globally;
-- Struck exclusive global publishing agreement with Epic
Megagames Inc. whereby GT Interactive obtained exclusive
rights to publish Unreal and a sequel for PC, and an option
for Sony PlayStation, Sega Saturn and Nintendo 64 systems on
a worldwide basis. In addition, GT Interactive obtained
rights to Epics' UnrealEd, a proprietary 3D authoring tool
for publishing associated game "level sets."
Headquartered in NY, with offices in London, Paris, Hamburg, San Francisco, Seattle, Phoenix and Minneapolis, GT Interactive Software Corp. is a leading global publisher of entertainment, edutainment and value-priced software under the GT Interactive, Humongous Entertainment, Cavedog Entertainment and WizardWorks brands, for IBM-compatible and Macintosh computers as well as game systems from Nintendo, Sony and Sega. Among GT Interactive's best-selling titles are Duke Nukem 3D and QUAKE. Located at http://www.gtinteractive.com on the World Wide Web, GT Interactive is publicly traded on the NASDAQ National Market System under the symbol GTIS. -0- NOTE: Certain statements contained in this press release may be deemed forward-looking statements 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 worldwide business and industry conditions, including consumer buying and retailer ordering patterns, product delays, company customer relations, 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 registration statement on Form S-1, SEC file no. 333-14441. -0-
GT Interactive Software Corp. and Subsidiaries Condensed Consolidated Balance Sheets (unaudited) December December 31, 31, 1996 1995(a) (in thousands) Cash and short-term investments $ 93,694 $ 76,584 Receivables, net 84,810 95,941 Inventories, net 49,145 60,457 Other current assets 45,587 90,995 Total current assets 273,236 323,977 Property and equipment, net 6,087 10,082 Other assets 22,318 33,052 Total assets $ 301,641 $ 367,111 Accounts payable $ 87,518 $ 107,842 Accrued liabilities 45,306 52,812 Other current liabilities 34,664 49,671 Total current liabilities 167,488 210,325 Long-term liabilities 8,113 4,648 Total liabilities 175,601 214,973 Stockholders' equity 126,040 152,138 Total liabilities and stockholders' equity $ 301,641 $ 367,111 (a) The above information has been restated for the acquisition of WizardWorks Group, Inc., Candel, Inc. and Humongous Entertainment. -0- GT Interactive Software Corp. And Subsidiaries Condensed Consolidated Statements Of Operations (unaudited) For The Quarter Ended December 31, 1995(a) 1996 (in thousands) Net sales $ 104,060 $ 135,015 Cost of goods sold 60,830 84,348 Selling, general and administrative expenses 25,553 36,826 Income before merger and other costs, amortization of goodwill and income taxes 17,677 13,841 Merger and other costs 1,024 Amortization of goodwill 277 273 Provision for income taxes 7,166 4,029 Net income $ 10,234 $ 8,515 Net income per share $ 0.13 Weighted average number of shares outstanding 66,391 -0- For The Year Ended December 31, 1995(a) 1996 (in thousands) Net sales 234,461 365,490 Cost of goods sold 138,662 214,580 Selling, general and administrative expenses 62,146 105,333 Income before merger and other costs, amortization of goodwill and income taxes 33,653 45,577 Merger and other costs 3,718 Amortization of goodwill 567 1,092 Provision for income taxes 10,482 15,628 Net income $ 22,604 $ 25,139 Pro forma adjustment to income tax provision(b) 4,616 Pro forma net income $ 17,988 Net income per share $ 0.38 Weighted average number of shares outstanding 66,391 (a) The above information has been restated for the acquisition of WizardWorks Group, Inc., Candel, Inc. and Humongous Entertainment. (b) Reflects the income tax provision that would have been provided had the Company been a C Corporation for the entire period ended December 31, 1995.
CONTACT: (investors) (media)
Dawn Berrie Allyne Mills
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|Date:||Feb 10, 1997|
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