EXHIBIT 99.1
NEWSLEAD
Contact: Luke Haase
231.932.0400
INTERPLAY ANNOUNCES THIRD QUARTER 2003 OPERATING RESULTS
IRVINE, CA, November 14, 2003 -- Interplay Entertainment Corp. (OTC Bulletin
Board: IPLY) ("Interplay") today reported operating results for the third
quarter of 2003.
For the third quarter ended September 30, 2003, Interplay reported a net loss of
$2.2 million, or $.02 per basic and diluted common share, compared to a net loss
of $1.8 million, or $.02 per basic and diluted common share, in the same period
last year. Net revenues for the third quarter 2003 were $4.7 million versus $9.7
million in the same period a year ago, a decrease of 52 percent. The decrease in
net revenues was mainly a result of delivering one new title gold master in
North America in the 2003 period compared to delivering three new title gold
masters in North America in the 2002 period. This was offset by releasing three
titles, two of which had previously been released only in North America, in
Europe in the 2003 period as compared to releasing one title in Europe in the
2002 period. Additionally, back catalog sales were lower in the 2003 period
compared to the 2002 period.
For the nine-month period ended September 30, 2003, Interplay reported a net
loss of $2.0 million, or $.02 per basic and diluted common share, compared to a
net income of $20.5 million, or $.25 per basic and diluted common share, in the
same period last year. The decrease in net income from last year is mainly a
result of recording a $28.8 million gain on the sale of Shiny Entertainment,
Inc., a subsidiary, in the first nine months of last year. Net revenues for the
nine-month period ended September 30, 2003 were $24.8 million versus $37.0
million in the same period a year ago, a decrease of 33 percent. Net revenues
during the nine-month period ended September 30, 2003 included $15 million in
revenue related to the sale of all future interactive entertainment publishing
rights to the "Hunter: The Reckoning" franchise. Finally, operating loss
decreased 73 percent from the prior year to $1.9 million in the nine-month
period ended September 30, 2003 as compared to a $7.0 million operating loss in
the 2002 period.
Gross profit margin for the third quarter 2003 was 61 percent, compared to 41
percent in the third quarter of 2002. Gross profit margin was higher in the
third quarter this year as compared to last year mainly due to a decrease in
product returns and price concessions, lower cost of goods in the 2003 period as
the only cost of goods Interplay incurs under the August 2002 agreement with
Vivendi Universal Games, Inc. ("Vivendi") are expenses related to royalties due
third parties and lower amortization of prepaid royalties on externally
developed titles. Total operating expenses decreased 7 percent to $5.0 million
from $5.4 million in the third quarter of this year as compared to the same
period last year. The decrease in operating expenses is a result of lower
personnel costs and general expenses, offset by an increase in advertising
expense paid to Avalon Interactive Group Limited ("Avalon"), formally named
Virgin Interactive Entertainment Limited.
Gross profit margin for the nine-month period ended September 30, 2003 was 60
percent, compared to 44 percent in the same period of 2002. Gross profit margin
was higher in the 2003 period as compared to the same period last year mainly
due to a decrease in product returns and price concessions, lower cost of goods
in the 2003 period as the only cost of goods Interplay incurs under the August
2002 agreement with Vivendi are expenses related to royalties due third parties
and the gross profit margin realized from the $15 million in revenue related to
the sale of all future interactive entertainment publishing rights to the
"Hunter: The Reckoning" franchise. Total operating expenses decreased 28 percent
to $16.7 million from $23.3 million in the first nine months of 2003 as compared
to the same period last year. The decrease in operating expenses is a result of
lower personnel costs and general expenses, the lack of advertising expense
under the terms of the August 2002 distribution agreement with Vivendi and a
decrease in advertising expense and overhead fees paid to Avalon.
Net revenues by platform for the third quarter of 2003 were 64 percent PC, 34
percent console, and 2 percent OEM, royalties and licensing. On a geographic
basis, North America accounted for 38 percent of total net revenues,
international represented 60 percent, and OEM, royalty and licensing accounted
for 2 percent.
Interplay also confirmed that, although both titles will likely go gold before
the end of the year, Fallout: Brotherhood of Steel and Baldur's Gate: Dark
Alliance 2 may ship in January in some territories. Management added that this
should not impact retail sell-through because management believes the beginning
of the year tends to be less crowded with new releases, and new hardware owners
following the holidays are often avid consumers of software. Assuming these
titles go gold before the end of the year, Interplay's fourth quarter revenue
recognition will be unaffected, based on the terms of the recently reinstated
distribution agreement with Vivendi.
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 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
events or results to differ materially and adversely from those described in the
forward-looking statements. Examples of such forward-looking statements include,
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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-looking statements include (a) the success of company's future adventure
and role playing games, (b) consumer reaction to Interplay's future games, (c)
Interplay's ability to consistently and timely release profitable products and
its ability to control costs, and (d) other factors discussed in Interplay's
filings from time to time with the Securities and Exchange Commission, including
but not limited to Interplay's annual report on Form 10-K for the fiscal year
ended December 31, 2002 and Interplay's subsequent quarterly filings on Form
10-Q. Interplay 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 Nine Months Ended
September 30, September 30,
(unaudited) (unaudited)
-------------------- --------------------
2003 2002 2003 2002
-------- -------- -------- --------
(Dollars in thousands, except per share amounts)
Net revenues ................... $ 4,727 $ 9,677 $ 24,758 $ 37,041
Cost of goods sold ............. 1,849 5,675 9,948 20,754
-------- -------- -------- --------
Gross profit ................. 2,878 4,002 14,810 16,287
Operating expenses
Marketing and sales .......... 496 965 962 5,328
General and administrative ... 928 1,010 4,587 5,816
Product development .......... 3,555 3,460 11,124 12,161
-------- -------- -------- --------
Total operating expenses .. 4,979 5,435 16,673 23,305
-------- -------- -------- --------
Operating income (loss) ........ (2,101) (1,433) (1,863) (7,018)
Other income (expense) ......... (88) (414) (126) (1,323)
Gain on sale of Shiny .......... -- -- -- 28,781
-------- -------- -------- --------
Income (loss) before benefit
for income taxes ............. $ (2,189) $ (1,847) $ (1,989) $ 20,440
-------- -------- -------- --------
Benefit for income taxes ....... $ -- $ -- $ -- $ 75
-------- -------- -------- --------
Net income (loss) .............. $ (2,189) $ (1,847) $ (1,989) $ 20,515
-------- -------- -------- --------
Cumulative dividend on
participating preferred
stock ........................ $ -- $ -- $ -- $ 133
-------- -------- -------- --------
Net income (loss)
attributable to common
stockholders ................. $ (2,189) $ (1,847) $ (1,989) $ 20,382
======== ======== ======== ========
Net income (loss) per
common share:
Basic .......................... $ (0.02) $ (0.02) $ (0.02) $ 0.25
Diluted ........................ $ (0.02) $ (0.02) $ (0.02) $ 0.25
Weighted average number of
common shares outstanding:
Basic .......................... 93,856 93,138 93,851 80,365
Diluted ........................ 93,856 93,138 93,851 80,365
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INTERPLAY ENTERTAINMENT CORP.
CONDENSED CONSOLIDATED BALANCE SHEETS
September 30, December 31,
2003 2002
ASSETS (unaudited)
--------- ---------
Current Assets (Dollars in thousands)
Cash .......................................... $ 7 $ 134
Trade receivables, net ........................ 2,462 2,676
Inventories ................................... 922 2,029
Prepaid licenses and royalties ................ 1,189 5,129
Other current assets .......................... 731 1,200
--------- ---------
Total Current Assets ...................... 5,311 11,168
Property and Equipment, net ...................... 2,411 3,130
--------- ---------
TOTAL ASSETS ..................................... $ 7,722 $ 14,298
========= =========
LIABILITIES AND STOCKHOLDERS' DEFICIT
Current Liabilities
Current debt .................................. $ 1,442 $ 2,082
Accounts payable .............................. 12,046 17,720
Accrued expenses .............................. 10,152 8,426
--------- ---------
Total Current Liabilities .................. 23,640 28,228
Commitments and Contingencies
Stockholders' Deficit
Common stock .................................. 94 94
Paid-in-capital ............................... 121,640 121,637
Accumulated deficit ........................... (137,782) (135,793)
Accumulated other comprehensive income ........ 130 132
--------- ---------
Total Stockholders' Deficit ................ (15,918) (13,930)
--------- ---------
TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT ...... $ 7,722 $ 14,298
========= =========
INTERPLAY ENTERTAINMENT CORP.
QUARTER END INFORMATION SHEET - 3 MONTHS ENDED - SEPTEMBER 30, 2003 AND 2002
(Dollars in thousands)
(Unaudited)
PERCENT
INCREASE
QUARTER ENDED (DECREASE)
- --------------------------------------------------------------------------------
GEOGRAPHIC REVENUE MIX September 30, 2003 September 30, 2002 QUARTER
Amount % of Total Amount % of Total
- --------------------------------------------------------------------------------
North America ...... $ 1,808 38.2% $ 7,985 82.5% -77.4%
International ...... 2,818 59.7% 1,153 11.9% 144.4%
Oem, Royalty and
Licensing ....... 101 2.1% 539 5.6% -81.3%
- ----------------------------------------------------------------------------
TOTAL NET REVENUES ... $ 4,727 100.0% $ 9,677 100.0% -51.2%
- ----------------------------------------------------------------------------
PERCENT
INCREASE
QUARTER ENDED (DECREASE)
- -------------------------------------------------------------------------------
PLATFORM REVENUE MIX September 30, 2003 September 30, 2002 QUARTER
Amount % of Total Amount % of Total
- -------------------------------------------------------------------------------
PC ................. $ 3,009 63.7% $ 4,548 47.0% -33.8%
Console ............ 1,617 34.2% 4,590 47.4% -64.8%
Oem, Royalty and
Licensing ....... 101 2.1% 539 5.6% -81.3%
- -----------------------------------------------------------------------------
TOTAL NET REVENUES ... $ 4,727 100.0% $ 9,677 100.0% -51.2%
- -----------------------------------------------------------------------------
QUARTER ENDED
- ------------------------------------------------------------
NEW TITLES BY PLATFORM Q3-03 Q3-02
- ------------------------------------------------------------
PC ........................... 1 1
Console ...................... 0 2
- ------------------------------------------------------------
TOTAL NEW TITLES ............... 1 3
- ------------------------------------------------------------
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