Document_and_Entity_Informatio
Document and Entity Information | 6 Months Ended | |
Sep. 30, 2014 | Oct. 31, 2014 | |
Document And Entity Information [Abstract] | ' | ' |
Document Type | '10-Q | ' |
Amendment Flag | 'false | ' |
Document Period End Date | 30-Sep-14 | ' |
Document Fiscal Year Focus | '2015 | ' |
Document Fiscal Period Focus | 'Q2 | ' |
Trading Symbol | 'MCZ | ' |
Entity Registrant Name | 'MAD CATZ INTERACTIVE INC | ' |
Entity Central Index Key | '0001088162 | ' |
Current Fiscal Year End Date | '--03-31 | ' |
Entity Filer Category | 'Smaller Reporting Company | ' |
Entity Common Stock, Shares Outstanding | ' | 64,488,798 |
Consolidated_Balance_Sheets
Consolidated Balance Sheets (USD $) | Sep. 30, 2014 | Mar. 31, 2014 |
In Thousands, unless otherwise specified | ||
Current assets: | ' | ' |
Cash | $1,666 | $1,496 |
Accounts receivable, net | 12,024 | 8,059 |
Other receivables | 1,313 | 1,531 |
Inventories | 20,097 | 17,189 |
Deferred tax assets | 918 | 926 |
Income tax receivable | 895 | 895 |
Prepaid expenses and other current assets | 1,906 | 1,605 |
Total current assets | 38,819 | 31,701 |
Deferred tax assets | 1,293 | 1,334 |
Other assets | 366 | 499 |
Property and equipment, net | 2,544 | 2,737 |
Intangible assets, net | 2,803 | 3,022 |
Total assets | 45,825 | 39,293 |
Current liabilities: | ' | ' |
Bank loan | 10,535 | 5,612 |
Accounts payable | 18,187 | 13,661 |
Accrued liabilities | 5,177 | 4,874 |
Note payable | 1,045 | 1,336 |
Income taxes payable | 18 | 330 |
Total current liabilities | 34,962 | 25,813 |
Note payable, less current portion | 900 | 1,023 |
Warrant liability | 20 | 75 |
Deferred tax liabilities | 173 | 178 |
Other long-term liabilities | 130 | 78 |
Total liabilities | 36,185 | 27,167 |
Shareholders' equity: | ' | ' |
Common stock, no par value, unlimited shares authorized; 64,488,798 and 63,931,506 shares issued and outstanding at September 30, 2014 and March 31, 2014, respectively | 61,323 | 60,847 |
Accumulated other comprehensive loss | -2,552 | -1,757 |
Accumulated deficit | -49,131 | -46,964 |
Total shareholders' equity | 9,640 | 12,126 |
Total liabilities and shareholders' equity | $45,825 | $39,293 |
Consolidated_Balance_Sheets_Pa
Consolidated Balance Sheets (Parenthetical) (USD $) | Sep. 30, 2014 | Mar. 31, 2014 | ||
Statement of Financial Position [Abstract] | ' | ' | ||
Common stock, par value | ' | ' | ||
Common stock, shares authorized | ' | [1] | ' | [1] |
Common stock, shares issued | 64,488,798 | 63,931,506 | ||
Common stock, shares outstanding | 64,488,798 | 63,931,506 | ||
[1] | unlimited |
Consolidated_Statements_of_Ope
Consolidated Statements of Operations (USD $) | 3 Months Ended | 6 Months Ended | ||
In Thousands, except Share data, unless otherwise specified | Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2013 |
Income Statement [Abstract] | ' | ' | ' | ' |
Net sales | $22,467 | $17,839 | $39,214 | $36,523 |
Cost of sales | 15,736 | 13,069 | 27,420 | 26,388 |
Gross profit | 6,731 | 4,770 | 11,794 | 10,135 |
Operating expenses: | ' | ' | ' | ' |
Sales and marketing | 3,477 | 3,923 | 5,889 | 6,829 |
General and administrative | 2,722 | 3,015 | 5,873 | 6,248 |
Research and development | 846 | 1,167 | 1,368 | 2,178 |
Acquisition related items | ' | 53 | ' | 152 |
Amortization of intangible assets | 110 | 229 | 219 | 463 |
Total operating expenses | 7,155 | 8,387 | 13,349 | 15,870 |
Operating loss | -424 | -3,617 | -1,555 | -5,735 |
Other (expense) income: | ' | ' | ' | ' |
Interest expense, net | -167 | -135 | -325 | -253 |
Foreign currency exchange loss, net | -382 | -392 | -417 | -416 |
Change in fair value of warrant liability | 74 | -317 | 55 | -334 |
Other (expense) income | -2 | 26 | 79 | 97 |
Total other expense | -477 | -818 | -608 | -906 |
Loss before income taxes | -901 | -4,435 | -2,163 | -6,641 |
Income tax (expense) benefit | -21 | -110 | -4 | 31 |
Net loss | ($922) | ($4,545) | ($2,167) | ($6,610) |
Net loss per share: | ' | ' | ' | ' |
Basic | ($0.01) | ($0.07) | ($0.03) | ($0.10) |
Diluted | ($0.01) | ($0.07) | ($0.03) | ($0.10) |
Shares used in per share computations: | ' | ' | ' | ' |
Basic | 64,149,124 | 63,689,909 | 64,115,591 | 63,584,235 |
Diluted | 64,149,124 | 63,689,909 | 64,115,591 | 63,584,235 |
Consolidated_Statements_of_Com
Consolidated Statements of Comprehensive Loss (USD $) | 3 Months Ended | 6 Months Ended | ||
In Thousands, unless otherwise specified | Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2013 |
Statement of Comprehensive Income [Abstract] | ' | ' | ' | ' |
Net loss | ($922) | ($4,545) | ($2,167) | ($6,610) |
Foreign currency translation adjustments | -937 | 922 | -795 | 956 |
Comprehensive loss | ($1,859) | ($3,623) | ($2,962) | ($5,654) |
Consolidated_Statements_of_Cas
Consolidated Statements of Cash Flows (USD $) | 6 Months Ended | |
In Thousands, unless otherwise specified | Sep. 30, 2014 | Sep. 30, 2013 |
Cash flows from operating activities: | ' | ' |
Net loss | ($2,167) | ($6,610) |
Adjustments to reconcile net loss to net cash used in operating activities: | ' | ' |
Depreciation and amortization | 1,060 | 1,409 |
Accrued and unpaid interest expense on note payable | 10 | ' |
Amortization of deferred financing fees | 36 | 16 |
Loss on disposal of assets | 6 | ' |
Stock-based compensation | 240 | 347 |
Change in fair value of contingent consideration | ' | -711 |
Change in fair value of warrant liability | -55 | 334 |
Provision for deferred income taxes | 44 | -2 |
Changes in operating assets and liabilities: | ' | ' |
Accounts receivable | -4,195 | 4,105 |
Other receivables | 205 | -940 |
Inventories | -3,077 | -3,697 |
Prepaid expenses and other current assets | -319 | -992 |
Other assets | 187 | -65 |
Accounts payable | 4,332 | 3,332 |
Accrued liabilities | 285 | -280 |
Income taxes receivable/payable | -330 | -262 |
Net cash used in operating activities | -3,738 | -4,016 |
Cash flows from investing activities: | ' | ' |
Purchases of property and equipment | -686 | -690 |
Net cash used in investing activities | -686 | -690 |
Cash flows from financing activities: | ' | ' |
Borrowings on bank loan | 29,220 | 34,417 |
Repayments on bank loan | -24,297 | -30,035 |
Payment of financing fees | -50 | -15 |
Repayments on note payable | -469 | ' |
Proceeds from exercise of stock options | 236 | 188 |
Payment of contingent consideration | ' | -787 |
Net cash provided by financing activities | 4,640 | 3,768 |
Effects of foreign currency exchange rate changes on cash | -46 | 72 |
Net increase (decrease) in cash | 170 | -866 |
Cash, beginning of period | 1,496 | 2,773 |
Cash, end of period | 1,666 | 1,907 |
Supplemental cash flow information: | ' | ' |
Income taxes paid | 305 | 808 |
Interest paid | $199 | $214 |
Basis_of_Presentation
Basis of Presentation | 6 Months Ended |
Sep. 30, 2014 | |
Accounting Policies [Abstract] | ' |
Basis of Presentation | ' |
(1) Basis of Presentation | |
Nature of Operations | |
Mad Catz Interactive, Inc. (“Mad Catz”) designs, manufactures (primarily through third parties in Asia), markets and distributes innovative interactive entertainment products marketed under its Mad Catz® (gaming), Tritton® (audio), and Saitek® (simulation) brands. Mad Catz products, which primarily include headsets, mice, keyboards, controllers, specialty controllers, and other accessories, cater to passionate gamers across multiple platforms including in-home gaming consoles, handheld gaming consoles, Windows® PC and Mac® computers, smart phones, tablets and other mobile devices. Mad Catz distributes its products through its online store as well as through many leading retailers around the globe. Operationally headquartered in San Diego, California, Mad Catz also maintains offices in Europe and Asia. | |
Basis of Accounting | |
The accompanying unaudited consolidated financial information has been prepared by management, without audit, in accordance with the instructions to Form 10-Q and Article 10 of Regulation S-X. The consolidated balance sheet at March 31, 2014 was derived from the audited consolidated financial statements at that date; however, it does not include all disclosures required by accounting principles generally accepted in the United States (“U.S. GAAP”). | |
In the opinion of management, the unaudited consolidated financial statements for the interim period presented reflect all material adjustments, consisting only of normal recurring adjustments, necessary for a fair presentation of the financial position and results of operations as of and for such periods indicated. These unaudited consolidated financial statements and notes hereto should be read in conjunction with the consolidated financial statements and notes thereto included in our Annual Report on Form 10-K for the fiscal year ended March 31, 2014. These consolidated financial statements refer to the Company’s fiscal years ending March 31 as its “fiscal” years. The Company generates a substantial percentage of net sales in the last three months of every calendar year, its fiscal third quarter. Results for the interim periods presented herein are not necessarily indicative of results that may be reported for any other interim period or for the fiscal year ending March 31, 2015. All currency amounts are presented in U.S. dollars. | |
Principles of Consolidation | |
The accompanying unaudited consolidated financial statements include the accounts of Mad Catz and its wholly-owned subsidiaries. All intercompany balances and transactions have been eliminated in consolidation. References to the “Company,” “we,” “us,” “our” and other similar words refer to Mad Catz Interactive, Inc. and its consolidated subsidiaries, unless the context suggests otherwise. | |
Use of Estimates | |
The unaudited consolidated financial statements have been prepared in conformity with U.S. GAAP. Applying these principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the unaudited consolidated financial statements and the reported amounts of sales and expenses during the reporting periods. On an ongoing basis, the Company evaluates its estimates, including those related to asset impairments, reserves for accounts receivable and inventories, contingencies and litigation, valuation and recognition of share-based payments, warrant liability and income taxes. As future events and their effects cannot be determined with precision, actual results could differ from these estimates. | |
Recently Issued Accounting Standards | |
The following new accounting standards have been issued, but not adopted by the Company as of September 30, 2014: | |
In May 2014, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) 2014-09, Revenue from Contracts with Customers. ASU 2014-09 requires an entity to recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods and services. The effective date of ASU 2014-09 is for annual reporting periods beginning after December 15, 2016. The Company is currently evaluating the impact of adopting ASU 2014-09. | |
In August 2014, the FASB issued ASU 2014-15, Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern. ASU 2014-15 requires management to perform interim and annual assessments of an entity’s ability to continue as a going concern for a one year period subsequent to the date of the financial statements. An entity must provide certain disclosures if conditions or events raise substantial doubt about the entity’s ability to continue as a going concern. The guidance is effective for all entities for the first annual period ending December 15, 2016 and interim periods thereafter, with early adoption permitted. Adoption of this guidance is not expected to have any impact on the Company’s financial statements. |
Fair_Value_Measurements
Fair Value Measurements | 6 Months Ended | ||||||||||||||||
Sep. 30, 2014 | |||||||||||||||||
Fair Value Disclosures [Abstract] | ' | ||||||||||||||||
Fair Value Measurements | ' | ||||||||||||||||
(2) Fair Value Measurements | |||||||||||||||||
The carrying values of the Company’s financial instruments, including cash, accounts receivable, other receivables, accounts payable, accrued liabilities and income taxes receivable/payable approximate their fair values due to the short maturity of these instruments. The carrying value of the bank loan approximates its fair value as the interest rate and other terms are that which is currently available to the Company. The carrying value of the note payable approximates fair value as it represents the present value of the fixed payment schedule using an effective interest rate of 5.25%, which approximates the interest rate on the Company’s bank loan. | |||||||||||||||||
For a description of the fair value hierarchy, see Note 2 to the Company’s 2014 consolidated financial statements contained in the Company’s Annual Report on Form 10-K for its fiscal year ended March 31, 2014. | |||||||||||||||||
The following tables provide a summary of the recognized assets and liabilities carried at fair value on a recurring basis as of September 30, 2014 and March 31, 2014 (in thousands): | |||||||||||||||||
Basis of Fair Value Measurements | |||||||||||||||||
Balance as of | Level 1 | Level 2 | Level 3 | ||||||||||||||
September 30, 2014 | |||||||||||||||||
Liabilities: | |||||||||||||||||
Warrant liability (Note 4) | $ | (20 | ) | $ | — | $ | — | $ | (20 | ) | |||||||
Basis of Fair Value Measurements | |||||||||||||||||
March 31, 2014 | Level 1 | Level 2 | Level 3 | ||||||||||||||
Liabilities: | |||||||||||||||||
Warrant liability (Note 4) | $ | (75 | ) | $ | — | $ | — | $ | (75 | ) | |||||||
The following tables provide a roll forward of the Company’s level three fair value measurements during the six months ended September 30, 2014, which consist of the Company’s warrant liability (in thousands): | |||||||||||||||||
Warrant liability: | |||||||||||||||||
Balance at March 31, 2014 | $ | (75 | ) | ||||||||||||||
Change in fair value of warrant liability | 55 | ||||||||||||||||
Balance at September 30, 2014 | $ | (20 | ) | ||||||||||||||
Inventories
Inventories | 6 Months Ended | ||||||||
Sep. 30, 2014 | |||||||||
Inventory Disclosure [Abstract] | ' | ||||||||
Inventories | ' | ||||||||
(3) Inventories | |||||||||
Inventories consist of the following (in thousands): | |||||||||
September 30, | March 31, | ||||||||
2014 | 2014 | ||||||||
Raw materials | $ | 1,206 | $ | 1,032 | |||||
Finished goods | 18,891 | 16,157 | |||||||
$ | 20,097 | $ | 17,189 | ||||||
Securities_Purchase_Agreement
Securities Purchase Agreement | 6 Months Ended | ||||||||
Sep. 30, 2014 | |||||||||
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | ' | ||||||||
Securities Purchase Agreement | ' | ||||||||
(4) Securities Purchase Agreement | |||||||||
In April 2011, the Company entered into a Securities Purchase Agreement (the “Securities Purchase Agreement”) with certain accredited investors, pursuant to which the Company sold (a) an aggregate of 6,352,293 shares of its common stock (the “Shares”) and (b) warrants to purchase an aggregate of 2,540,918 shares of common stock of the Company (“Warrants” and, together with the Shares, the “Securities”). On May 3, 2011 the Company filed a Registration Statement registering up to 8,893,211 common shares of the Company comprised of: (i) 6,352,293 common shares and (ii) 2,540,918 common shares issuable upon exercise of 2,540,918 warrants. The Securities were issued at a price equal to $1.92 for aggregate gross proceeds of approximately $12,196,000. The Warrants became exercisable on October 21, 2011 at a per share exercise price equal to $2.56. The Warrants contain provisions that adjust the exercise price in the event the Company pays stock dividends, effects stock splits or issues additional shares of common stock at a price per share less than the exercise price of the Warrants. The Warrants will remain exercisable until October 21, 2016. | |||||||||
The Company accounts for the Warrants with exercise price reset features as liabilities and carried at fair value, with changes in fair value included in net income (loss) until such time as the Warrants are exercised or expire. | |||||||||
The fair value of the Warrants decreased from $75,000 as of March 31, 2014 to $20,000 as of September 30, 2014, which resulted in a $55,000 gain from the change in fair value of warrants for the six months ended September 30, 2014. | |||||||||
These Warrants are not traded in an active securities market, and as such, the Company estimated the fair value of the Warrants using the Black-Scholes option pricing model using the following assumptions: | |||||||||
September 30, | March 31, | ||||||||
2014 | 2014 | ||||||||
Expected term | 2.0 years | 2.5 years | |||||||
Common stock market price | $ | 0.39 | $ | 0.48 | |||||
Risk-free interest rate | 0.58 | % | 0.67 | % | |||||
Expected volatility | 67.09 | % | 68.56 | % | |||||
Expected volatility is based primarily on historical volatility. Historical volatility is computed using daily pricing observations for recent periods that correspond to the expected term of the Warrants. The Company believes this method produces an estimate that is representative of the Company’s expectations of future volatility over the expected term of these Warrants. The Company currently has no reason to believe future volatility over the expected remaining life of these Warrants is likely to differ materially from historical volatility. The expected life is based on the remaining contractual term of the Warrants. The risk-free interest rate is the interest rate for treasury constant maturity instruments published by the Federal Reserve Board that is closest to the expected term of the Warrants. | |||||||||
Fluctuations in the fair value of the Warrants are impacted by unobservable inputs, most significantly the assumption with regards to future equity issuances and their impact to the down-round protection feature. Significant increases (decreases) in this input in isolation would result in a significantly higher (lower) fair value measurement. |
Basic_and_Diluted_Net_Loss_per
Basic and Diluted Net Loss per Share | 6 Months Ended |
Sep. 30, 2014 | |
Earnings Per Share [Abstract] | ' |
Basic and Diluted Net Loss per Share | ' |
(5) Basic and Diluted Net Loss per Share | |
Basic net loss per share is calculated by dividing the net loss for the period by the weighted average number of common shares outstanding during the period. Diluted net loss per share includes the impact of potentially dilutive securities unless inclusion of such securities would be anti-dilutive. | |
Outstanding options to purchase an aggregate of 7,091,167 and 7,012,031 shares of the Company’s common stock for the three and six months ended September 30, 2014, respectively, and 7,750,878 and 7,978,227 shares of the Company’s common stock for the three and six months ended September 30, 2013, respectively, were excluded from the diluted net loss per share calculations because of their anti-dilutive effect during these periods. Outstanding warrants to purchase an aggregate of 2,540,918 shares of the Company’s common stock for each of the three and six months ended September 30, 2014 and 2013, were excluded from the diluted net loss per share calculations because of their anti-dilutive effect during these periods. |
Geographic_and_Product_Line_Da
Geographic and Product Line Data and Concentrations | 6 Months Ended | ||||||||||||||||
Sep. 30, 2014 | |||||||||||||||||
Segment Reporting [Abstract] | ' | ||||||||||||||||
Geographic and Product Line Data and Concentrations | ' | ||||||||||||||||
(6) Geographic and Product Line Data and Concentrations | |||||||||||||||||
The Company’s net sales are attributed to the following geographic regions (in thousands): | |||||||||||||||||
Three Months Ended | Six Months Ended | ||||||||||||||||
September 30, | September 30, | ||||||||||||||||
2014 | 2013 | 2014 | 2013 | ||||||||||||||
EMEA | $ | 10,904 | $ | 9,477 | $ | 19,278 | $ | 19,592 | |||||||||
Americas | 7,260 | 6,718 | 12,709 | 13,318 | |||||||||||||
APAC | 4,303 | 1,644 | 7,227 | 3,613 | |||||||||||||
$ | 22,467 | $ | 17,839 | $ | 39,214 | $ | 36,523 | ||||||||||
Revenue is attributed to geographic regions based on the location of the customer. “EMEA” includes Europe, the Middle East and Africa. During the three and six months ended September 30, 2014, one customer accounted for approximately 12% of the Company’s gross sales in each period and one other customer accounted for approximately 11% and 10% of the Company’s gross sales, respectively. During the three and six months ended September 30, 2013 one customer accounted for approximately 13% and 11% of the Company’s gross sales, respectively, and one other customer accounted for approximately 12% of the Company’s gross sales in each period. At September 30, 2014, one customer represented 16% of accounts receivable and another customer represented 10% of accounts receivable. At March 31, 2014, one customer represented 15% of accounts receivable. During the three and six months ended September 30, 2014 and 2013, no other customers accounted for greater than 10% of gross sales. At September 30, 2014 and March 31, 2014, no other customers accounted for greater than 10% of accounts receivable. | |||||||||||||||||
The Company’s sales by platform as a percentage of gross sales were as follows: | |||||||||||||||||
Three Months Ended | Six Months Ended | ||||||||||||||||
September 30, | September 30, | ||||||||||||||||
2014 | 2013 | 2014 | 2013 | ||||||||||||||
PC and Mac | 43 | % | 49 | % | 45 | % | 48 | % | |||||||||
Next gen consoles (a) | 21 | % | 1 | % | 17 | % | — | % | |||||||||
Universal | 20 | % | 30 | % | 22 | % | 28 | % | |||||||||
Smart devices | 11 | % | 2 | % | 10 | % | 1 | % | |||||||||
Legacy consoles (b) | 5 | % | 17 | % | 6 | % | 22 | % | |||||||||
All others | — | % | 1 | % | — | % | 1 | % | |||||||||
100 | % | 100 | % | 100 | % | 100 | % | ||||||||||
(a) | Includes products developed for Xbox One, PlayStation 4 and Wii U. | ||||||||||||||||
(b) | Includes products developed for Xbox 360, PlayStation 3 and Wii. | ||||||||||||||||
The Company’s sales by product category as a percentage of gross sales were as follows: | |||||||||||||||||
Three Months Ended | Six Months Ended | ||||||||||||||||
September 30, | September 30, | ||||||||||||||||
2014 | 2013 | 2014 | 2013 | ||||||||||||||
Audio | 39 | % | 41 | % | 39 | % | 43 | % | |||||||||
Specialty controllers | 25 | % | 16 | % | 24 | % | 17 | % | |||||||||
Mice and keyboards | 22 | % | 32 | % | 23 | % | 31 | % | |||||||||
Controllers | 9 | % | 1 | % | 9 | % | 1 | % | |||||||||
Accessories | 4 | % | 8 | % | 4 | % | 7 | % | |||||||||
Games and other | 1 | % | 2 | % | 1 | % | 1 | % | |||||||||
100 | % | 100 | % | 100 | % | 100 | % | ||||||||||
The Company’s sales by brand as a percentage of gross sales were as follows: | |||||||||||||||||
Three Months Ended | Six Months Ended | ||||||||||||||||
September 30, | September 30, | ||||||||||||||||
2014 | 2013 | 2014 | 2013 | ||||||||||||||
Tritton | 37 | % | 37 | % | 37 | % | 38 | % | |||||||||
Mad Catz | 34 | % | 49 | % | 34 | % | 48 | % | |||||||||
Saitek | 18 | % | 13 | % | 18 | % | 12 | % | |||||||||
Other | 11 | % | 1 | % | 11 | % | 2 | % | |||||||||
100 | % | 100 | % | 100 | % | 100 | % | ||||||||||
Basis_of_Presentation_Policies
Basis of Presentation (Policies) | 6 Months Ended |
Sep. 30, 2014 | |
Accounting Policies [Abstract] | ' |
Nature of Operations | ' |
Nature of Operations | |
Mad Catz Interactive, Inc. (“Mad Catz”) designs, manufactures (primarily through third parties in Asia), markets and distributes innovative interactive entertainment products marketed under its Mad Catz® (gaming), Tritton® (audio), and Saitek® (simulation) brands. Mad Catz products, which primarily include headsets, mice, keyboards, controllers, specialty controllers, and other accessories, cater to passionate gamers across multiple platforms including in-home gaming consoles, handheld gaming consoles, Windows® PC and Mac® computers, smart phones, tablets and other mobile devices. Mad Catz distributes its products through its online store as well as through many leading retailers around the globe. Operationally headquartered in San Diego, California, Mad Catz also maintains offices in Europe and Asia. | |
Basis of Accounting | ' |
Basis of Accounting | |
The accompanying unaudited consolidated financial information has been prepared by management, without audit, in accordance with the instructions to Form 10-Q and Article 10 of Regulation S-X. The consolidated balance sheet at March 31, 2014 was derived from the audited consolidated financial statements at that date; however, it does not include all disclosures required by accounting principles generally accepted in the United States (“U.S. GAAP”). | |
In the opinion of management, the unaudited consolidated financial statements for the interim period presented reflect all material adjustments, consisting only of normal recurring adjustments, necessary for a fair presentation of the financial position and results of operations as of and for such periods indicated. These unaudited consolidated financial statements and notes hereto should be read in conjunction with the consolidated financial statements and notes thereto included in our Annual Report on Form 10-K for the fiscal year ended March 31, 2014. These consolidated financial statements refer to the Company’s fiscal years ending March 31 as its “fiscal” years. The Company generates a substantial percentage of net sales in the last three months of every calendar year, its fiscal third quarter. Results for the interim periods presented herein are not necessarily indicative of results that may be reported for any other interim period or for the fiscal year ending March 31, 2015. All currency amounts are presented in U.S. dollars. | |
Principles of Consolidation | ' |
Principles of Consolidation | |
The accompanying unaudited consolidated financial statements include the accounts of Mad Catz and its wholly-owned subsidiaries. All intercompany balances and transactions have been eliminated in consolidation. References to the “Company,” “we,” “us,” “our” and other similar words refer to Mad Catz Interactive, Inc. and its consolidated subsidiaries, unless the context suggests otherwise. | |
Use of Estimates | ' |
Use of Estimates | |
The unaudited consolidated financial statements have been prepared in conformity with U.S. GAAP. Applying these principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the unaudited consolidated financial statements and the reported amounts of sales and expenses during the reporting periods. On an ongoing basis, the Company evaluates its estimates, including those related to asset impairments, reserves for accounts receivable and inventories, contingencies and litigation, valuation and recognition of share-based payments, warrant liability and income taxes. As future events and their effects cannot be determined with precision, actual results could differ from these estimates. | |
Recently Issued Accounting Standards | ' |
Recently Issued Accounting Standards | |
The following new accounting standards have been issued, but not adopted by the Company as of September 30, 2014: | |
In May 2014, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) 2014-09, Revenue from Contracts with Customers. ASU 2014-09 requires an entity to recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods and services. The effective date of ASU 2014-09 is for annual reporting periods beginning after December 15, 2016. The Company is currently evaluating the impact of adopting ASU 2014-09. | |
In August 2014, the FASB issued ASU 2014-15, Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern. ASU 2014-15 requires management to perform interim and annual assessments of an entity’s ability to continue as a going concern for a one year period subsequent to the date of the financial statements. An entity must provide certain disclosures if conditions or events raise substantial doubt about the entity’s ability to continue as a going concern. The guidance is effective for all entities for the first annual period ending December 15, 2016 and interim periods thereafter, with early adoption permitted. Adoption of this guidance is not expected to have any impact on the Company’s financial statements. |
Fair_Value_Measurements_Tables
Fair Value Measurements (Tables) | 6 Months Ended | ||||||||||||||||
Sep. 30, 2014 | |||||||||||||||||
Fair Value Disclosures [Abstract] | ' | ||||||||||||||||
Recognized Assets and Liabilities Carried at Fair Value on Recurring Basis | ' | ||||||||||||||||
The following tables provide a summary of the recognized assets and liabilities carried at fair value on a recurring basis as of September 30, 2014 and March 31, 2014 (in thousands): | |||||||||||||||||
Basis of Fair Value Measurements | |||||||||||||||||
Balance as of | Level 1 | Level 2 | Level 3 | ||||||||||||||
September 30, 2014 | |||||||||||||||||
Liabilities: | |||||||||||||||||
Warrant liability (Note 4) | $ | (20 | ) | $ | — | $ | — | $ | (20 | ) | |||||||
Basis of Fair Value Measurements | |||||||||||||||||
March 31, 2014 | Level 1 | Level 2 | Level 3 | ||||||||||||||
Liabilities: | |||||||||||||||||
Warrant liability (Note 4) | $ | (75 | ) | $ | — | $ | — | $ | (75 | ) | |||||||
Fair Value Measurements of Warrant Liability | ' | ||||||||||||||||
The following tables provide a roll forward of the Company’s level three fair value measurements during the six months ended September 30, 2014, which consist of the Company’s warrant liability (in thousands): | |||||||||||||||||
Warrant liability: | |||||||||||||||||
Balance at March 31, 2014 | $ | (75 | ) | ||||||||||||||
Change in fair value of warrant liability | 55 | ||||||||||||||||
Balance at September 30, 2014 | $ | (20 | ) | ||||||||||||||
Inventories_Tables
Inventories (Tables) | 6 Months Ended | ||||||||
Sep. 30, 2014 | |||||||||
Inventory Disclosure [Abstract] | ' | ||||||||
Schedule of Inventory | ' | ||||||||
Inventories consist of the following (in thousands): | |||||||||
September 30, | March 31, | ||||||||
2014 | 2014 | ||||||||
Raw materials | $ | 1,206 | $ | 1,032 | |||||
Finished goods | 18,891 | 16,157 | |||||||
$ | 20,097 | $ | 17,189 | ||||||
Securities_Purchase_Agreement_
Securities Purchase Agreement (Tables) | 6 Months Ended | ||||||||
Sep. 30, 2014 | |||||||||
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | ' | ||||||||
Estimated Fair Value of Warrants | ' | ||||||||
These Warrants are not traded in an active securities market, and as such, the Company estimated the fair value of the Warrants using the Black-Scholes option pricing model using the following assumptions: | |||||||||
September 30, | March 31, | ||||||||
2014 | 2014 | ||||||||
Expected term | 2.0 years | 2.5 years | |||||||
Common stock market price | $ | 0.39 | $ | 0.48 | |||||
Risk-free interest rate | 0.58 | % | 0.67 | % | |||||
Expected volatility | 67.09 | % | 68.56 | % |
Geographic_and_Product_Line_Da1
Geographic and Product Line Data and Concentrations (Tables) | 6 Months Ended | ||||||||||||||||
Sep. 30, 2014 | |||||||||||||||||
Sales Attributed to Geographic Regions | ' | ||||||||||||||||
The Company’s net sales are attributed to the following geographic regions (in thousands): | |||||||||||||||||
Three Months Ended | Six Months Ended | ||||||||||||||||
September 30, | September 30, | ||||||||||||||||
2014 | 2013 | 2014 | 2013 | ||||||||||||||
EMEA | $ | 10,904 | $ | 9,477 | $ | 19,278 | $ | 19,592 | |||||||||
Americas | 7,260 | 6,718 | 12,709 | 13,318 | |||||||||||||
APAC | 4,303 | 1,644 | 7,227 | 3,613 | |||||||||||||
$ | 22,467 | $ | 17,839 | $ | 39,214 | $ | 36,523 | ||||||||||
Platform [Member] | ' | ||||||||||||||||
Summary of Sales by Platform, Product Category and Brand | ' | ||||||||||||||||
The Company’s sales by platform as a percentage of gross sales were as follows: | |||||||||||||||||
Three Months Ended | Six Months Ended | ||||||||||||||||
September 30, | September 30, | ||||||||||||||||
2014 | 2013 | 2014 | 2013 | ||||||||||||||
PC and Mac | 43 | % | 49 | % | 45 | % | 48 | % | |||||||||
Next gen consoles (a) | 21 | % | 1 | % | 17 | % | — | % | |||||||||
Universal | 20 | % | 30 | % | 22 | % | 28 | % | |||||||||
Smart devices | 11 | % | 2 | % | 10 | % | 1 | % | |||||||||
Legacy consoles (b) | 5 | % | 17 | % | 6 | % | 22 | % | |||||||||
All others | — | % | 1 | % | — | % | 1 | % | |||||||||
100 | % | 100 | % | 100 | % | 100 | % | ||||||||||
(a) | Includes products developed for Xbox One, PlayStation 4 and Wii U. | ||||||||||||||||
(b) | Includes products developed for Xbox 360, PlayStation 3 and Wii. | ||||||||||||||||
Product Category [Member] | ' | ||||||||||||||||
Summary of Sales by Platform, Product Category and Brand | ' | ||||||||||||||||
The Company’s sales by product category as a percentage of gross sales were as follows: | |||||||||||||||||
Three Months Ended | Six Months Ended | ||||||||||||||||
September 30, | September 30, | ||||||||||||||||
2014 | 2013 | 2014 | 2013 | ||||||||||||||
Audio | 39 | % | 41 | % | 39 | % | 43 | % | |||||||||
Specialty controllers | 25 | % | 16 | % | 24 | % | 17 | % | |||||||||
Mice and keyboards | 22 | % | 32 | % | 23 | % | 31 | % | |||||||||
Controllers | 9 | % | 1 | % | 9 | % | 1 | % | |||||||||
Accessories | 4 | % | 8 | % | 4 | % | 7 | % | |||||||||
Games and other | 1 | % | 2 | % | 1 | % | 1 | % | |||||||||
100 | % | 100 | % | 100 | % | 100 | % | ||||||||||
Brand [Member] | ' | ||||||||||||||||
Summary of Sales by Platform, Product Category and Brand | ' | ||||||||||||||||
The Company’s sales by brand as a percentage of gross sales were as follows: | |||||||||||||||||
Three Months Ended | Six Months Ended | ||||||||||||||||
September 30, | September 30, | ||||||||||||||||
2014 | 2013 | 2014 | 2013 | ||||||||||||||
Tritton | 37 | % | 37 | % | 37 | % | 38 | % | |||||||||
Mad Catz | 34 | % | 49 | % | 34 | % | 48 | % | |||||||||
Saitek | 18 | % | 13 | % | 18 | % | 12 | % | |||||||||
Other | 11 | % | 1 | % | 11 | % | 2 | % | |||||||||
100 | % | 100 | % | 100 | % | 100 | % | ||||||||||
Fair_Value_Measurements_Additi
Fair Value Measurements - Additional Information (Detail) (Notes Payable [Member]) | Sep. 30, 2014 |
Notes Payable [Member] | ' |
Fair Value Measurements Disclosure [Line Items] | ' |
Note payable, interest rate percentage | 5.25% |
Fair_Value_Measurements_Recogn
Fair Value Measurements - Recognized Assets and Liabilities Carried at Fair Value on Recurring Basis (Detail) (USD $) | Sep. 30, 2014 | Mar. 31, 2014 |
In Thousands, unless otherwise specified | ||
Liabilities: | ' | ' |
Warrant liability (Note 4) | ($20) | ($75) |
Level 1 [Member] | ' | ' |
Liabilities: | ' | ' |
Warrant liability (Note 4) | ' | ' |
Level 2 [Member] | ' | ' |
Liabilities: | ' | ' |
Warrant liability (Note 4) | ' | ' |
Level 3 [Member] | ' | ' |
Liabilities: | ' | ' |
Warrant liability (Note 4) | ($20) | ($75) |
Fair_Value_Measurements_Fair_V
Fair Value Measurements - Fair Value Measurements of Warrant Liability (Detail) (USD $) | 3 Months Ended | 6 Months Ended | ||
In Thousands, unless otherwise specified | Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2013 |
Warrant liability: | ' | ' | ' | ' |
Beginning Balance | ' | ' | ($75) | ' |
Change in fair value of warrant liability | 74 | -317 | 55 | -334 |
Ending Balance | ($20) | ' | ($20) | ' |
Inventories_Schedule_of_Invent
Inventories - Schedule of Inventory (Detail) (USD $) | Sep. 30, 2014 | Mar. 31, 2014 |
In Thousands, unless otherwise specified | ||
Inventory Disclosure [Abstract] | ' | ' |
Raw materials | $1,206 | $1,032 |
Finished goods | 18,891 | 16,157 |
Inventories | $20,097 | $17,189 |
Securities_Purchase_Agreement_1
Securities Purchase Agreement - Additional Information (Detail) (USD $) | 0 Months Ended | 3 Months Ended | 6 Months Ended | |||||||||
Oct. 21, 2011 | 3-May-11 | Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2013 | Mar. 31, 2014 | 3-May-11 | Apr. 30, 2011 | ||||
Schedule of Investments [Abstract] | ' | ' | ' | ' | ' | ' | ' | ' | ' | |||
Sale of common stock | ' | ' | 64,488,798 | ' | 64,488,798 | ' | 63,931,506 | ' | 6,352,293 | |||
Warrants to purchase shares of common stock | ' | ' | ' | ' | ' | ' | ' | 2,540,918 | 2,540,918 | |||
Number of shares, registering | ' | ' | ' | [1] | ' | ' | [1] | ' | ' | [1] | 8,893,211 | ' |
Securities issued price per share | ' | ' | $0.39 | ' | $0.39 | ' | $0.48 | $1.92 | ' | |||
Proceeds from issuance of Securities | ' | $12,196,000 | ' | ' | ' | ' | ' | ' | ' | |||
Warrants exercise price | $2.56 | ' | ' | ' | ' | ' | ' | ' | ' | |||
Warrants expiration date | ' | ' | ' | ' | 21-Oct-16 | ' | ' | ' | ' | |||
Fair value of warrants | ' | ' | 20,000 | ' | 20,000 | ' | 75,000 | ' | ' | |||
Change in fair value of warrant liability | ' | ' | $74,000 | ($317,000) | $55,000 | ($334,000) | ' | ' | ' | |||
[1] | unlimited |
Securities_Purchase_Agreement_2
Securities Purchase Agreement - Estimated Fair Value of Warrants (Detail) (USD $) | 6 Months Ended | 12 Months Ended | |
Sep. 30, 2014 | Mar. 31, 2014 | 3-May-11 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | ' | ' | ' |
Expected term | '2 years | '2 years 6 months | ' |
Common stock market price | $0.39 | $0.48 | $1.92 |
Risk-free interest rate | 0.58% | 0.67% | ' |
Expected volatility | 67.09% | 68.56% | ' |
Basic_and_Diluted_Net_Loss_per1
Basic and Diluted Net Loss per Share - Additional Information (Detail) | 3 Months Ended | 6 Months Ended | ||
Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2013 | |
Outstanding Warrants [Member] | ' | ' | ' | ' |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ' | ' | ' | ' |
Purchase of common stock outstanding | 2,540,918 | 2,540,918 | 2,540,918 | 2,540,918 |
Options [Member] | ' | ' | ' | ' |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ' | ' | ' | ' |
Purchase of common stock outstanding | 7,091,167 | 7,750,878 | 7,012,031 | 7,978,227 |
Geographic_and_Product_Line_Da2
Geographic and Product Line Data and Concentrations - Sales Attributed to Geographic Regions (Detail) (USD $) | 3 Months Ended | 6 Months Ended | ||
In Thousands, unless otherwise specified | Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2013 |
Segment Reporting Information [Line Items] | ' | ' | ' | ' |
Net sales | $22,467 | $17,839 | $39,214 | $36,523 |
EMEA [Member] | ' | ' | ' | ' |
Segment Reporting Information [Line Items] | ' | ' | ' | ' |
Net sales | 10,904 | 9,477 | 19,278 | 19,592 |
Americas [Member] | ' | ' | ' | ' |
Segment Reporting Information [Line Items] | ' | ' | ' | ' |
Net sales | 7,260 | 6,718 | 12,709 | 13,318 |
APAC [Member] | ' | ' | ' | ' |
Segment Reporting Information [Line Items] | ' | ' | ' | ' |
Net sales | $4,303 | $1,644 | $7,227 | $3,613 |
Geographic_and_Product_Line_Da3
Geographic and Product Line Data and Concentrations - Additional Information (Detail) (EMEA [Member]) | 3 Months Ended | 6 Months Ended | 3 Months Ended | 6 Months Ended | 3 Months Ended | 6 Months Ended | 3 Months Ended | 6 Months Ended | 3 Months Ended | 6 Months Ended | |||||||
Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2013 | Mar. 31, 2014 | Sep. 30, 2014 | Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2013 | Mar. 31, 2014 | Sep. 30, 2014 | |
Customer One [Member] | Customer One [Member] | Customer One [Member] | Customer One [Member] | Customer One [Member] | Customer One [Member] | Customer Two [Member] | Customer Two [Member] | Customer Two [Member] | Customer Two [Member] | Customer Two [Member] | Customer Two [Member] | Customer Two [Member] | Customer Two [Member] | Customer Two [Member] | Customer Two [Member] | Customer Two [Member] | |
Customer Concentration Risk [Member] | Customer Concentration Risk [Member] | Customer Concentration Risk [Member] | Customer Concentration Risk [Member] | Credit Concentration Risk [Member] | Credit Concentration Risk [Member] | Customer Concentration Risk [Member] | Customer Concentration Risk [Member] | Customer Concentration Risk [Member] | Customer Concentration Risk [Member] | Credit Concentration Risk [Member] | Maximum [Member] | Maximum [Member] | Maximum [Member] | Maximum [Member] | Maximum [Member] | Maximum [Member] | |
Gross Sales [Member] | Gross Sales [Member] | Gross Sales [Member] | Gross Sales [Member] | Accounts Receivable [Member] | Accounts Receivable [Member] | Gross Sales [Member] | Gross Sales [Member] | Gross Sales [Member] | Gross Sales [Member] | Accounts Receivable [Member] | Customer Concentration Risk [Member] | Customer Concentration Risk [Member] | Customer Concentration Risk [Member] | Customer Concentration Risk [Member] | Credit Concentration Risk [Member] | Credit Concentration Risk [Member] | |
Gross Sales [Member] | Gross Sales [Member] | Gross Sales [Member] | Gross Sales [Member] | Accounts Receivable [Member] | Accounts Receivable [Member] | ||||||||||||
Revenue, Major Customer [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Customers accounted for revenue and accounts receivable, Percentage | 12.00% | 13.00% | 12.00% | 11.00% | 15.00% | 16.00% | 11.00% | 12.00% | 10.00% | 12.00% | 10.00% | 10.00% | 10.00% | 10.00% | 10.00% | 10.00% | 10.00% |
Geographic_and_Product_Line_Da4
Geographic and Product Line Data and Concentrations - Summary of Sales by Platform (Detail) (Platform [Member], Sales [Member]) | 3 Months Ended | 6 Months Ended | ||
Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2013 | |
Sales Information [Line Items] | ' | ' | ' | ' |
Percentage of sales by platform | 100.00% | 100.00% | 100.00% | 100.00% |
PC and Mac [Member] | ' | ' | ' | ' |
Sales Information [Line Items] | ' | ' | ' | ' |
Percentage of sales by platform | 43.00% | 49.00% | 45.00% | 48.00% |
Next gen consoles [Member] | ' | ' | ' | ' |
Sales Information [Line Items] | ' | ' | ' | ' |
Percentage of sales by platform | 21.00% | 1.00% | 17.00% | ' |
Universal [Member] | ' | ' | ' | ' |
Sales Information [Line Items] | ' | ' | ' | ' |
Percentage of sales by platform | 20.00% | 30.00% | 22.00% | 28.00% |
Smart devices [Member] | ' | ' | ' | ' |
Sales Information [Line Items] | ' | ' | ' | ' |
Percentage of sales by platform | 11.00% | 2.00% | 10.00% | 1.00% |
Legacy consoles [Member] | ' | ' | ' | ' |
Sales Information [Line Items] | ' | ' | ' | ' |
Percentage of sales by platform | 5.00% | 17.00% | 6.00% | 22.00% |
All Others [Member] | ' | ' | ' | ' |
Sales Information [Line Items] | ' | ' | ' | ' |
Percentage of sales by platform | ' | 1.00% | ' | 1.00% |
Geographic_and_Product_Line_Da5
Geographic and Product Line Data and Concentrations - Summary of Sales by Product Category (Detail) (Product Category [Member], Sales [Member]) | 3 Months Ended | 6 Months Ended | ||
Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2013 | |
Sales Information [Line Items] | ' | ' | ' | ' |
Percentage of sales by product category | 100.00% | 100.00% | 100.00% | 100.00% |
Audio [Member] | ' | ' | ' | ' |
Sales Information [Line Items] | ' | ' | ' | ' |
Percentage of sales by product category | 39.00% | 41.00% | 39.00% | 43.00% |
Specialty controllers [Member] | ' | ' | ' | ' |
Sales Information [Line Items] | ' | ' | ' | ' |
Percentage of sales by product category | 25.00% | 16.00% | 24.00% | 17.00% |
Mice and Keyboards [Member] | ' | ' | ' | ' |
Sales Information [Line Items] | ' | ' | ' | ' |
Percentage of sales by product category | 22.00% | 32.00% | 23.00% | 31.00% |
Controllers [Member] | ' | ' | ' | ' |
Sales Information [Line Items] | ' | ' | ' | ' |
Percentage of sales by product category | 9.00% | 1.00% | 9.00% | 1.00% |
Accessories [Member] | ' | ' | ' | ' |
Sales Information [Line Items] | ' | ' | ' | ' |
Percentage of sales by product category | 4.00% | 8.00% | 4.00% | 7.00% |
Games and others [Member] | ' | ' | ' | ' |
Sales Information [Line Items] | ' | ' | ' | ' |
Percentage of sales by product category | 1.00% | 2.00% | 1.00% | 1.00% |
Geographic_and_Product_Line_Da6
Geographic and Product Line Data and Concentrations - Summary of Sales by Brand (Detail) (Brand [Member], Sales [Member]) | 3 Months Ended | 6 Months Ended | ||
Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2013 | |
Sales Information [Line Items] | ' | ' | ' | ' |
Percentage of sales by brand | 100.00% | 100.00% | 100.00% | 100.00% |
Tritton [Member] | ' | ' | ' | ' |
Sales Information [Line Items] | ' | ' | ' | ' |
Percentage of sales by brand | 37.00% | 37.00% | 37.00% | 38.00% |
Mad Catz [Member] | ' | ' | ' | ' |
Sales Information [Line Items] | ' | ' | ' | ' |
Percentage of sales by brand | 34.00% | 49.00% | 34.00% | 48.00% |
Saitek [Member] | ' | ' | ' | ' |
Sales Information [Line Items] | ' | ' | ' | ' |
Percentage of sales by brand | 18.00% | 13.00% | 18.00% | 12.00% |
All others [Member] | ' | ' | ' | ' |
Sales Information [Line Items] | ' | ' | ' | ' |
Percentage of sales by brand | 11.00% | 1.00% | 11.00% | 2.00% |