EXHIBIT 99.1
NEWSLEAD
Contact: Luke Haase
231.932.0400
INTERPLAY ANNOUNCES FOURTH QUARTER AND YEAR-END 2003 OPERATING RESULTS
IRVINE, CA, April 14, 2004 -- Interplay Entertainment Corp. (OTC Bulletin Board:
IPLY) ("Interplay") today reported operating results for the fourth quarter and
year-end of 2003.
For the fourth quarter ended December 31, 2003, Interplay reported a net income
of $3.3 million, or $.04 per basic and diluted common share, compared to a net
loss of $5.4 million, or $.06 per basic and diluted common share, in the same
period last year. The increase in net income is mainly a result of recording
revenue for the delivery of BALDUR'S GATE: DARK ALLIANCE II (SONY PLAYSTATION 2
AND MICROSOFT XBOX) product gold masters in North America in the fourth quarter
this year. Net revenues for the fourth quarter 2003 were $11.5 million versus
$7.1 million in the same period a year ago, an increase of 62 percent. The
increase in net revenues in the fourth quarter was mainly a result of increased
net revenues from the delivery of more new product gold masters in North
America, increased royalty and licensing net revenues due to the sale of the
GALLEON video game and lower product returns and price concessions in both North
America and Europe, offset in part by a decrease in catalog sales in the 2003
period as compared to the 2002 period.
For the twelve-month period ended December 31, 2003, Interplay reported a net
income of $1.3 million, or $.01 per basic and diluted common share, compared to
a net income of $15.1 million, or $.18 per basic common share and $.16 per
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 2002 period. Net revenues for
the twelve-month period ended December 31, 2003 were $36.3 million versus $44.0
million in the same period a year ago, a decrease of 18 percent. Net revenues
during the twelve-month period ended December 31, 2003 included $15 million in
revenue related to the sale of all future interactive entertainment publishing
rights to the HUNTER: THE RECKONING license. Additionally, although we delivered
the product gold masters to six new titles in each of the 2003 and 2002 periods,
all six titles in 2003 were released by Vivendi Universal Games, as compared to
five in 2002, under the terms of the 2002 distribution agreement, whereby
Vivendi pays us a lower per unit rate and in return assumes all credit, product
return and price concession risks, as well as being responsible for all
manufacturing, marketing and distribution expenditures. Finally, operating
income increased 111 percent from the prior year to a $1.4 million operating
income in the twelve-month period ended December 31, 2003 as compared to a $12.4
million operating loss in the 2002 period.
Commenting on the results, Interplay Chairman and Chief Executive Officer Herve
Caen said, "These results mark an important milestone for Interplay. In 2003, we
had a return
to operating profit and substantially reduced our debt. However, we continue to
operate under cash constraints. Specifically, Interplay is three months in
arrears on its corporate lease obligation, may have short-term payroll
difficulties and has outstanding payroll tax obligations as of the date of this
release. Certainly, financial challenges remain, yet we are proud of what our
team has accomplished thus far and we are committed to working even harder to
maintain our return to operating profitability."
Gross profit margin for the fourth quarter 2003 was 73 percent, compared to 16
percent in the fourth quarter of 2002. Gross profit margin was higher in the
fourth quarter this year as compared to last year mainly due to a decrease in
product returns and price concessions and lower amortization of prepaid
royalties on externally developed titles. Total operating expenses decreased 21
percent to $5.1 million from $6.5 million in the fourth 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 and a decrease in
advertising expense.
Gross profit margin for the twelve-month period ended December 31, 2003 was 64
percent, compared to 39 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 royalty
expense as a result of a decrease of $1.2 million in write-offs of prepaid
royalties 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 license. Total operating expenses decreased 27 percent
to $21.8 million from $29.7 million in the twelve 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 Interactive
Group Ltd.
Net revenues by platform for the fourth quarter of 2003 were 26 percent PC, 66
percent console, and 8 percent OEM, royalties and licensing. On a geographic
basis, North America accounted for 77 percent of total net revenues,
international represented 15 percent, and OEM, royalty and licensing accounted
for 8 percent.
According to NPD Funworld, BALDUR'S GATE: DARK ALLIANCE II was a top 10 title
shipped to retail in the United States in January 2004.
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,
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(R) IS AN INTERPLAY ENTERTAINMENT CORP. TRADEMARK. THIS PRESS RELEASE
ALSO CONTAINS TRADEMARKS BELONGING TO OTHERS.