Exhibit 99.1
Take-Two Interactive Software, Inc. Reports Second Quarter Fiscal 2005 Financial
Results; Sales Increase 45% Year over Year
NEW YORK--(BUSINESS WIRE)--June 2, 2005--Take-Two Interactive
Software, Inc. (NASDAQ:TTWO) today announced financial results for its
second quarter and six months ended April 30, 2005. The Company's
results reflect the three-for-two stock split completed in April 2005.
Net sales in the second quarter increased 45% to $222.1 million,
compared to $153.4 million in the second quarter of fiscal 2004. Net
loss for the quarter was $8.2 million, compared to a net loss of $14.6
million last year, with a net loss of $(0.12) per share compared to a
net loss per share of $(0.22) last year.
Net sales for the six months ended April 30, 2005 increased 37% to
$724.5 million, compared to $528.9 million for the same period a year
ago. Net income for the first six months more than doubled to $47.1
million from net income of $17.2 million in the comparable period last
year. Diluted earnings per share of $0.67 increased 168% from $0.25
per diluted share in the prior year's first six months.
Take-Two attributed its increased second quarter sales to the
launch of Midnight Club 3: DUB Edition for PlayStation(R)2 and Xbox(R)
and Major League Baseball 2K5 for PlayStation 2 and Xbox, as well as
continued consumer demand for its Grand Theft Auto: San Andreas title
for PlayStation 2.
Guidance
Take-Two is reiterating its guidance for the fiscal year ending
October 31, 2005 of $1.3 to $1.35 billion in net sales and $1.40 to
$1.47 in diluted earnings per share, reflecting the Company's
three-for-two stock split.
Take-Two is updating its third fiscal quarter guidance to reflect
the movement of the following products from the third fiscal quarter
to the fourth fiscal quarter: Grand Theft Auto: Liberty City Stories
for the PSP(TM); Call of Cthulhu: Dark Corners of the Earth(TM) for
PlayStation 2 and Xbox; and Top Spin for PlayStation 2. The Company
now expects $205 to $215 million in net sales and a net loss per share
of $(0.05) to $(0.10) for the third quarter ending July 31, 2005.
The Company's diluted earnings/(loss) per share for all periods
above reflect the three-for-two stock split completed in April 2005,
but do not include the impact of adopting FASB 123(R), requiring the
expensing of employee stock options, which the Company expects to
adopt beginning November 1, 2005.
Rockstar Games
Rockstar's Midnight Club 3: DUB Edition, the third installment in
the multi-million unit selling, genre-defining Midnight Club street
racing franchise developed by Rockstar San Diego, was released in late
April for the PlayStation 2 and Xbox. Also in the second quarter,
Rockstar launched the PlayStation 2 Greatest Hits version of Red Dead
Revolver, bringing Take-Two's catalog of Greatest Hits products for
PlayStation 2 to eleven titles.
Rockstar has a strong product lineup planned for the balance of
fiscal 2005, beginning with Grand Theft Auto: San Andreas for Xbox and
PC, which will be in stores in North America on June 7th and in Europe
on June 10th, followed by Midnight Club 3: DUB Edition for the PSP
system, which will be in stores in North America on June 28th.
In the fourth quarter, Rockstar is introducing an all new Grand
Theft Auto title, Grand Theft Auto: Liberty City Stories, exclusively
for the PSP system. Returning to Liberty City, the setting of Grand
Theft Auto 3, the title has an entirely original storyline with all
new missions and the freedom, production value and depth of play
comparable to other Grand Theft Auto titles.
Also planned for fourth quarter release is The Warriors(TM), a new
Rockstar title based on the Paramount Pictures feature film, and
Bully, an original title that takes the Rockstar tradition of
groundbreaking, innovative, original gameplay and humorous
tongue-in-cheek storytelling to an entirely new setting - the
schoolyard. Both titles will be released on PlayStation 2 and Xbox.
Rockstar will also introduce Grand Theft Auto: San Andreas for
PlayStation 2 in Japan.
2K Games, 2K Sports and Global Star
2K Games' second quarter releases included Stronghold 2 for PC and
Close Combat: First to Fight for Xbox and PC. 2K Sports released Major
League Baseball 2K5 for PlayStation 2 and Xbox.
Products planned for third quarter release include Sid Meier's
Pirates! for Xbox and Charlie and the Chocolate Factory on multiple
platforms.
Fourth quarter titles from 2K Games will include Call of Cthulhu:
Dark Corners of the Earth(TM) for PlayStation 2 and Xbox; Shattered
Union for Xbox and PC; Serious Sam 2 for Xbox and PC; Vietcong 2 on
PC; and the North American releases of 24: The Game on PlayStation 2;
and Conflict: Global Terror on multiple platforms.
2K Sports' fourth quarter releases will include World Poker Tour
on multiple platforms; NBA 2K6 and NHL 2K6, both for PlayStation 2 and
Xbox; and Top Spin for PlayStation 2.
Global Star's fourth quarter releases will include console titles
for Codename: Kids Next Door and Dora the Explorer.
Jack of All Games
The Company's Jack of All Games distribution business realized an
increase in sales primarily attributable to demand for Sony's newly
released PSP system and related accessories, as well as increased
console hardware availability.
Management Comments
Paul Eibeler, President and Chief Executive Officer, stated, "We
were pleased with the performance of our second quarter releases, as
well as the continued success of Grand Theft Auto: San Andreas.
Additionally, having just returned from E3, we are excited about our
future. Rockstar, 2K Games, 2K Sports and Global Star showcased a
diverse assortment of over 25 games across all genres, platforms and
demographic appeal to much critical and consumer acclaim."
Mr. Eibeler continued, "The powerful capabilities and
functionality of next generation hardware demonstrated at E3 will
enable us to further develop our content and enrich the game playing
experience. With eight titles already announced for Xbox 360 and more
in development for Xbox 360, PlayStation(R)3 and the PSP, along with
our pipeline of products for the large installed base of current
generation hardware, we are well on our way to sustaining a leadership
position as we enter the next cycle."
Conference Call
Take-Two will host a conference call today at 4:30 pm Eastern Time
to review its second quarter results and to discuss its outlook. A
live webcast of the call is available by visiting
http://ir.take2games.com and a replay will be available following the
call at the same location.
About Take-Two Interactive Software
Headquartered in New York City, Take-Two Interactive Software,
Inc. is an integrated global developer, marketer, distributor and
publisher of interactive entertainment software games and accessories
for the PC, PlayStation(R) game console, PlayStation(R)2 computer
entertainment system, PSP(TM) handheld entertainment system,
PlayStation(R)3 computer entertainment system, the Xbox(R) video game
and entertainment system from Microsoft, the Xbox 360(TM) video game
and entertainment system from Microsoft, Nintendo GameCube(TM),
Nintendo DS(TM) and Game Boy(R) Advance. The Company publishes and
develops products through its wholly owned labels Rockstar Games, 2K
Games, 2K Sports and Global Star Software; and distributes products in
North America through its Jack of All Games subsidiary. Take-Two also
manufactures and markets video game accessories in Europe, North
America and the Asia Pacific region through its Joytech subsidiary.
The Company maintains sales and marketing offices in Cincinnati, New
York, Toronto, London, Paris, Munich, Madrid, Vienna, Milan, Sydney,
Breda (Netherlands) and Auckland. Take-Two's common stock is publicly
traded on NASDAQ under the symbol TTWO. For more corporate and product
information please visit our website at www.take2games.com.
All trademarks and copyrights contained herein are the property of
their respective holders.
Safe Harbor Statement under the Private Securities Reform Act of
1995: This press release contains forward-looking statements made in
reliance upon the safe harbor provisions of Section 27A of the
Securities Act of 1933, as amended, and Section 21E of the Securities
Exchange Act of 1934, as amended. The statements contained herein
which are not historical facts are considered forward-looking
statements under federal securities laws. Such forward-looking
statements are based on the beliefs of our management as well as
assumptions made by and information currently available to them. The
Company has no obligation to update such forward-looking statements.
Actual results may vary significantly from these forward-looking
statements based on a variety of factors. These important factors are
described in the Company's Form 10-Q for the quarter ended January 31,
2005 in the section entitled "Risk Factors".
TAKE-TWO INTERACTIVE SOFTWARE, INC. and SUBSIDIARIES
Consolidated Condensed Statements of Operations
For the three and six months ended April 30, 2005 and 2004 (unaudited)
(In thousands, except per share data)
Three months ended Six months ended
April 30, April 30,
2005 2004 2005 2004
--------- --------- --------- ---------
(Unaudited) (Unaudited)
Net sales $222,068 $153,368 $724,542 $528,880
Cost of sales
Product costs 123,504 104,573 360,989 328,951
Royalties 21,938 13,016 102,147 33,014
Software development costs 4,780 1,573 8,985 5,555
--------- --------- --------- ---------
Total cost of sales 150,222 119,162 472,121 367,520
--------- --------- --------- ---------
Gross profit 71,846 34,206 252,421 161,360
Operating expenses
Selling and marketing 36,275 22,271 87,206 58,173
General and administrative 28,705 24,050 57,392 48,090
Research and development 13,785 8,228 37,202 21,657
Depreciation and
amortization 5,102 3,910 9,888 7,655
--------- --------- --------- ---------
Total operating
expenses 83,867 58,459 191,688 135,575
Income (loss) from
operations (12,021) (24,253) 60,733 25,785
Interest income, net 1,164 648 1,704 1,074
--------- --------- --------- ---------
Income (loss) before
income taxes (10,857) (23,605) 62,437 26,859
Provision (benefit) for income
taxes (2,671) (9,029) 15,374 9,677
--------- --------- --------- ---------
Net income (loss) $ (8,186) $(14,576) $ 47,063 $ 17,182
========= ========= ========= =========
Per share data:
Basic:
Weighted average common
shares outstanding 70,112 66,891 69,365 66,734
========= ========= ========= =========
Net income (loss) per
share - Basic $ (0.12) $ (0.22) $ 0.68 $ 0.26
========= ========= ========= =========
Diluted:
Weighted average common
shares outstanding 70,112 66,891 70,678 68,228
========= ========= ========= =========
Net income (loss) per
share - Diluted $ (0.12) $ (0.22) $ 0.67 $ 0.25
========= ========= ========= =========
OTHER INFORMATION Three months ended Six months ended
- ----------------- April 30, April 30,
2005 2004 2005 2004
--------- --------- --------- ---------
Total revenue mix
------------------
Publishing 66% 58% 69% 61%
Distribution 34% 42% 31% 39%
Geographic revenue mix
-----------------------
North America 70% 67% 67% 76%
International 30% 33% 33% 24%
Publishing platform revenue mix
-------------------------------
Sony PlayStation 2 58% 47% 80% 54%
Sony PlayStation - 3% - 2%
Microsoft Xbox 27% 38% 12% 36%
GameCube - 2% - 1%
PC 11% 1% 5% 2%
Handheld 2% 5% 1% 3%
Accessories 2% 4% 2% 2%
TAKE-TWO INTERACTIVE SOFTWARE, INC. and SUBSIDIARIES
Consolidated Condensed Balance Sheets
As of April 30, 2005 (unaudited) and October 31, 2004
(In thousands, except share data)
ASSETS April 30, October 31,
2005 2004
---------- -----------
Current assets
Cash and cash equivalents $210,241 $155,095
Accounts receivable, net of allowances of
$56,496 and $72,215 at April 30, 2005 and
October 31, 2004 respectively 127,278 285,709
Inventories, net 116,568 154,345
Software development costs 50,802 33,980
Licenses 5,981 4,240
Prepaid expenses and other current assets 73,871 60,018
Deferred tax asset 11,701 11,554
--------- ---------
Total current assets 596,442 704,941
Fixed assets, net 43,075 34,291
Software development costs, net of current portion 47,423 30,342
Licenses, net of current portion 2,650 1,425
Goodwill, net 166,417 135,477
Intangibles, net 59,934 36,104
Deferred tax asset 6,219 6,219
Other assets, net 2,061 1,714
--------- ---------
Total assets $924,221 $950,513
========= =========
LIABILITIES and STOCKHOLDERS' EQUITY
Current liabilities
Accounts payable $ 90,524 $163,961
Accrued expenses and other current liabilities 84,982 125,567
Income taxes payable 8,758 17,319
--------- ---------
Total current liabilities 184,264 306,847
Other long-term liabilities 2,741 2,963
Deferred tax liability 11,026 5,233
--------- ---------
Total liabilities 198,031 315,043
--------- ---------
Stockholders' equity
Common stock, par value $.0067 per share;
100,000,000 shares authorized; 71,193,228
and 68,159,477 shares issued and outstanding
at April 30, 2005 and October 31, 2004
respectively 475 454
Additional paid-in capital 436,714 382,156
Deferred compensation (13,095) (3,896)
Retained earnings 297,465 250,402
Accumulated other comprehensive income 4,631 6,354
--------- ---------
Total stockholders' equity 726,190 635,470
--------- ---------
Total liabilities and stockholders' equity $924,221 $950,513
========= =========
CONTACT: Take-Two Interactive Software, Inc.
Corporate Press/Investor Relations:
Jim Ankner, 646-536-3006; 646-536-2926 fax
james.ankner@take2games.com