EXHIBIT 99.1
PRESS RELEASESOURCE: INTERPLAY ENTERTAINMENT CORP.
INTERPLAY ANNOUNCES FOURTH QUARTER 2002 EARNINGS
TUESDAY APRIL 1, 4:00 PM ET
IRVINE, CALIF., APRIL 1
/PRNEWSWIRE-FIRSTCALL/
INTERPLAY ENTERTAINMENT CORP. (IPLY.OB) TODAY REPORTED OPERATING RESULTS
FOR THE FOURTH QUARTER OF 2002.
For the fourth quarter ended December 31, 2002, the Company reported a net loss
of $5.4 million, or ($.06) per share, compared to a net loss of $4.8 million, or
($.09) per share, in the same period last year. Net revenues for the fourth
quarter 2002 were $7.1 million versus $21.5 million in the same period a year
ago, a decrease of 67 percent. The decrease in net revenues was partially
attributable to releasing two new titles under the new distribution agreement
with Vivendi Universal Games, Inc., whereby Vivendi pays the Company a lower per
unit rate and in return assumes all credit, product return and price concession
risks, as well as responsibility for all manufacturing, marketing and
distribution expenditures. Additionally, net revenues were lower in the fourth
quarter 2002 as a result of lower total unit sales compared to the same period
last year. Gross profit margin for the fourth quarter 2002 was 16 percent,
compared to 40 percent in the fourth quarter of 2001. Finally, operating losses
increased 66 percent from the prior year to $5.3 million in the fourth quarter
2002 as compared to $3.2 million in the fourth quarter 2001.
For the twelve-month period ended December 31, 2002, the Company reported net
income of $15.1 million, or $.18 per basic share and $.16 per diluted share,
compared to a net loss of $46.3 million, or ($1.23) per basic and diluted share,
in the same period last year. The net income reported in the twelve-month period
of this year was primarily the result of the recording of a $28.8 million gain
on the sale of Shiny Entertainment, Inc. in April 2002. Net revenues for the
twelve-month period ended December 31, 2002 were $44 million versus $56.4
million in the same period a year ago, a decrease of 22 percent. The decrease in
net revenues was due in part to the release of five new titles under the new
Vivendi distribution agreement. Furthermore, net revenues were lower in the
twelve-month period ended December 31, 2002 as a result of lower total unit
sales compared to the same period last year. Gross profit margin for the 2002
twelve-month period was 39 percent, compared to 19 percent in the same period
last year.
Gross profit margin was lower in the fourth quarter this year as compared to
last year mainly due to $2.0 million in write-offs of cancelled development
projects as compared to no write-offs of cancelled development projects in the
same period last year, and was offset in part by no inventory expenditures for
two titles released in the fourth quarter this year under the new North American
distribution agreement with Vivendi. Gross profit margin was higher in the
twelve-month period ended December 31, 2002 as compared to the same period last
year mainly due to recording the majority of calendar year 2002 new title
releases under the
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terms of the new North American distribution agreement with Vivendi as well as a
$4 million decrease in write-offs of cancelled development projects.
As a result of both management's continued efforts to reduce expenditures and
the sale of Shiny Entertainment, Inc. in April 2002, total operating expenses
were down 45 percent for the fourth quarter 2002 versus the fourth quarter in
2001, and were down 43 percent for the twelve-month period ended December 31,
2002 as compared to the same period last year.
Net revenues by platform for the fourth quarter of 2002 were 57 percent PC, 41
percent console, and 2 percent OEM, royalties and licensing. On a geographic
basis, North America accounted for 77 percent of total net revenues,
International represented 21 percent, and OEM, royalty and licensing accounted
for 2 percent.
Net revenues by platform for the twelve-month period of 2002 were 36 percent PC,
37 percent console, and 27 percent OEM, royalties and licensing. On a geographic
basis, North America accounted for 60 percent of total net revenues,
International represented 13 percent, and OEM, royalty and licensing accounted
for 27 percent.
Commenting on the fourth quarter and year-end earnings announcement, Interplay
Chairman and Chief Executive Officer Herve Caen said, "Interplay today is a
smaller, yet healthier company due to the changes our Board and management have
instituted over the past eighteen months. Amidst a very competitive landscape
and difficult financial markets, we have been able to reposition the company as
a developer of high-quality content that improves its balance sheet along the
way.
Caen continued, "While we would have hoped for better sales of some of our
products in 2002, we believe that our balance sheet is stronger, we have tight
cost controls in place, we have a stable of proven intellectual property, and we
have survived an extremely difficult period for the Company and in our sector in
general. In 2003, the third year of our turnaround, we believe we will be judged
by our ability to leverage our existing franchise licenses into profitable
games, while seeking out new content opportunities that will move Interplay back
into a growth mode."
About Interplay Entertainment Corp.
Interplay Entertainment is a leading developer, publisher and distributor of
interactive entertainment software for both core gamers and the mass market.
Interplay develops games for personal computers as well as next generation video
game consoles, many of which have garnered industry accolades and awards.
Interplay releases products through Interplay, Black Isle Studios and its
distribution partners.
Safe Harbor Statement under the Private Securities Litigation Reform Act of 1995
Statements contained in this release except for historical information are
forward-looking statements that are based on current expectations and involve
risks and uncertainties. Without limiting the generality of the foregoing, words
such as "may," "will," "expect," "believe," "anticipate," "intend," "could,"
"estimate," or "continue" or the negative or other variations thereof or
comparable terminology are intended to identify forward-looking statements. The
risks and uncertainties inherent in such statements may cause actual future
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events or results to differ materially and adversely from those described in the
forward-looking statements. Examples of such forward-looking statements include,
among other things, future improvements in gross margin, operating expenditures,
and product sales. Important factors that may cause actual future events or
results to differ materially and adversely from those described in the
forward-lookingstatements include (a) the success of the company's future
adventure and role playing games, (b) consumer reaction to the company's future
games, (c) the company's ability to consistently and timely release profitable
products and its ability to control costs, and (d) other factors discussed in
the company's filings from time to time with the Securities and Exchange
Commission, including but not limited to the company's annual report on Form
10-K for the fiscal year ended December 31, 2002 and the company's subsequent
quarterly filings on Form 10-Q. The company disclaims any obligation to revise
or update any forward-looking statements that may be made from time to time by
it or on its behalf.
INTERPLAY ENTERTAINMENT CORP.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
THREE MONTHS ENDED TWELVE MONTHS ENDED
DECEMBER 31, DECEMBER 31,
(UNAUDITED)
2002 2001 2002 2001
----------- ----------- ---------- ----------
(Dollars in thousands, except per share amounts)
Net revenues............................... $ 7,105 $ 21,508 $ 43,999 $ 56,448
Cost of goods sold......................... 5,952 12,890 26,706 45,816
Gross profit.......................... 1,153 8,618 17,293 10,632
Operating expenses
Marketing and sales................... 1,030 3,809 5,814 18,697
General and administrative............ 1,800 3,363 7,655 12,622
Product development................... 3,667 4,657 16,184 20,603
Total operating expenses............ 6,497 11,829 29,653 51,922
Operating income (loss).................... (5,344) (3,211) (12,360) (41,290)
Other expenses............................. (174) (1,637) (1,531) (4,526)
Sale of Shiny.............................. -- -- 28,813 --
Income (loss) before income taxes.......... (5,518) (4,848) 14,922 (45,816)
(Benefit) provision for income taxes....... (150) -- (225) 500
Net income (loss).......................... $ (5,368) $ (4,848) $ 15,147 $ (46,316)
Cumulative dividend on participating
preferred stock......................... $ -- $ 160 $ 133 $ 966
Accretion of warrants on preferred
stock................................... $ -- $ -- $ -- $ 266
Net income (loss) attributable to
common stockholders..................... $ (5,368) $ (5,008) $ 15,014 $ (47,548)
Net income (loss) per common share:
Basic................................. $ (0.06) $ (0.09) $ 0.18 $ (1.23)
Diluted............................... $ (0.06) $ (0.09) $ 0.16 $ (1.23)
Weighted average number of common shares
outstanding:
Basic................................. 93,138 55,960 83,585 38,670
Diluted............................... 93,138 55,960 96,070 38,670
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INTERPLAY ENTERTAINMENT CORP.
CONDENSED CONSOLIDATED BALANCE SHEETS
DECEMBER 31,
2002 2001
--------- ---------
(DOLLARS IN THOUSANDS)
ASSETS
Current Assets
Cash .......................................... $ 134 $ 119
Trade receivables, net ........................ 2,676 9,487
Inventories ................................... 2,029 3,978
Prepaid licenses and royalties ................ 5,129 10,341
Other current assets .......................... 1,200 1,162
Total Current Assets ........................ 11,168 25,087
Property and Equipment, net ...................... 3,130 5,038
Other assets ..................................... -- 981
TOTAL ASSETS ..................................... $ 14,298 $ 31,106
LIABILITIES AND STOCKHOLDERS' EQUITY
(DEFICIT)
Current Liabilities
Current debt .................................. $ 2,082 $ 4,794
Accounts payable .............................. 16,681 20,816
Accrued expenses .............................. 9,465 33,646
Total Current Liabilities ................... 28,228 59,256
Commitments and Contingencies
Stockholders' Equity (Deficit)
Series A preferred stock ...................... -- 11,753
Common stock .................................. 94 45
Paid-in-capital ............................... 121,637 110,701
Accumulated deficit ........................... (135,793) (150,807)
Accumulated other comprehensive income ........ 132 158
Total Stockholders' Equity (Deficit) ........ (13,930) (28,150)
TOTAL LIABILITIES AND STOCKHOLDERS'
EQUITY (DEFICIT) .............................. $ 14,298 $ 31,106
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INTERPLAY ENTERTAINMENT CORP.
QUARTER END INFORMATION SHEET
3 MONTHS ENDED - DECEMBER 31, 2002 AND 2001
(DOLLARS IN THOUSANDS)
(UNAUDITED)
PERCENT
INCREASE
QUARTER ENDED (DECREASE)
DECEMBER 31, 2002 DECEMBER 31, 2001 QUARTER
GEOGRAPHIC REVENUE MIX
% OF % OF
AMOUNT TOTAL AMOUNT TOTAL
North America $ 5,485 77.2% $ 11,366 52.8% -51.7%
International 1,452 20.4% 7,785 36.2% -81.3%
OEM, royalty and licensing 168 2.4% 2,357 11.0% -92.9%
Total net revenues $ 7,105 100.0% $ 21,508 100.0% -67.0%
PERCENT
INCREASE
QUARTER ENDED (DECREASE)
DECEMBER 31, 2002 DECEMBER 31, 2001 QUARTER
GEOGRAPHIC REVENUE MIX
% OF % OF
AMOUNT TOTAL AMOUNT TOTAL
PC $ 4,011 56.4% $ 7,297 33.9% -45.0%
Console 2,926 41.2% 11,854 55.1% -75.3%
OEM, royalty and
licensing 168 2.4% 2,357 11.0% -92.9%
Total net revenues $ 7,105 100.0% $ 21,508 100.0% -67.0%
QUARTER ENDED
NEW TITLES BY PLATFORM Q4-02 Q4-01
PC 0 1
Console 2 2
Total new titles 2 3
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