NEW YORK--(BUSINESS WIRE)--August 11, 1999--
Driver Becomes the Company's Most Successful
PlayStation Title Ever
GT Interactive Software Corp. (Nasdaq: GTIS), a leading entertainment software publisher, today announced operating results for the first fiscal quarter ended June 30, 1999.
Net revenues in the first quarter were $121 million, a 4% increase compared to the same period last year. The increase in sales was driven by strong performances of new internally developed titles including Driver for the PlayStation, and Total Annihilation: Kingdoms for the PC, offsetting slightly lower distribution revenues.
The net loss from continuing operations for the quarter was $3.9 million compared to net income of $1.8 million in same period last year. The net loss attributable to common was $0.06 per share, compared to earnings per share of $0.03 in the prior year period. Year-over-year, margins were negatively impacted by a shift in published product mix to more console titles and an increase in marketing expenditures, especially television advertising.
"We are beginning to see a positive turnaround in our business and the June launch of Driver was a catalyst event. Driver continues to be the number one selling PlayStation title in the world and has quickly established itself as a major franchise for the Company," said Mr. Thomas A. Heymann, GT's Chairman and Chief Executive Officer.
"We are excited about the upcoming quarter, with such anticipated titles as Duke Nukem Zero Hour for Nintendo 64, and Unreal Tournament, Driver, FLW Pro Bass Tournament, Deer Hunter 3, and Blue's Clues Treasure Hunt for PC. This strong release pipeline, coupled with solid reorders on Driver PlayStation and ongoing management initiatives, gives us confidence our operating performance will continue to show improvement," he concluded.
Headquartered in New York, GT Interactive Software Corp. (Nasdaq: GTIS) is a leading global developer, publisher and distributor of interactive consumer software. The company maintains seven internal development studios: Humongous Entertainment, Cavedog Entertainment, SingleTrac, WizardWorks, Oddworld, Legend Entertainment and Reflections. The company has publishing operations throughout the world with offices in the US, Canada, UK, Germany, France, Holland and Australia. GT Interactive's ecommerce system provides secure online transactions through each of the studios' Web sites and www.gtstore.com. GT Interactive can be found on the Internet at www.gtinteractive.com.
When used in this press release, the words "intends," "expects," "plans," "estimates," "projects," "believes," "anticipates," and similar expressions are intended to identify forward-looking statements. Except for historical information contained herein, the matters discussed and the statements made herein concerning the Company's future prospects are "forward-looking statements" within the meaning of Section 27A of the Securities Act and Section 21E of the Securities Exchange Act. Although the company believes that its plans, intentions and expectations reflected in such forward-looking statements are reasonable, it can give no assurance that such plans, intentions or expectations will be achieved. There is no assurance that the company will complete a recapitalization, merger or sale transaction. There can be no assurance that other future results will be achieved, and actual results could differ materially from the forecast and estimates. Important factors that could cause actual results to differ materially include, but are not limited to, world-wide business and industry conditions (including consumer buying and retailer ordering patterns,) adoption of new hardware systems, product delays, changes in research and development spending, software development requirements and their impact on product launches, Company customer relations (in particular, levels of sales to Wal-Mart and other mass merchants) retail acceptance of the Company's published and third-party titles, competitive conditions and other risks and factors, including, but not limited to, those discussed in the Company's form 10-K for the fiscal year ended March 31, 1999. -0-
GT INTERACTIVE SOFTWARE CORP. AND SUBSIDIARIES CONSOLIDATED CONDENSED BALANCE SHEETS (in thousands) March 31, 1999 June 30, 1999 ------------------- ------------------- (audited) (unaudited) ASSETS Current assets: Cash, cash equivalents and short term investments $ 13,512 $ 7,830 Receivables, net 185,042 181,559 Inventories, net 131,889 131,808 Income taxes receivable 1,973 1,973 Other current assets 58,284 66,483 ---------------- ------------------- Total current assets 390,700 389,653 Property and equipment, net 36,808 36,974 Goodwill, net 34,194 33,019 Deferred income taxes 12,664 12,664 Other assets 13,249 13,393 ================ =================== Total assets $ 487,615 $ 485,703 ================ =================== LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Accounts payable $ 152,556 $ 170,545 Accrued liabilities 84,205 59,136 Revolving credit facility - 109,500 Royalties payable 18,515 15,138 Income taxes payable 2,569 1,402 Other current liabilities 1,085 1,507 ---------------- ------------------- Total current liabilities 258,930 357,228 Long term debt 98,750 - Other non current liabilities 2,802 2,674 ---------------- ------------------- Total liabilities 360,482 359,902 ---------------- ------------------- Commitments and contingencies Stockholders' equity: Series A Convertible preferred stock 30,000 30,000 Common stock 727 729 Additional paid-in capital 161,073 164,228 Retained earnings (64,667) (69,156) ---------------- ------------------- Total stockholders' equity 127,133 125,801 ---------------- ------------------- Total liabilities and stockholders' equity $ 487,615 $ 485,703 ================ =================== GT INTERACTIVE SOFTWARE CORP. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS (in thousands, except per share data) For the Three Months Ended June 30, ----------------------------------------- 1998 1999 ------------------- ------------------ (unaudited) (unaudited) Net revenues $ 116,391 $ 121,325 Cost of goods sold 55,898 62,143 Selling and distribution expenses 26,460 33,876 General and administrative expenses 12,453 11,761 Research and development 16,597 16,366 ---------------- ----------------- Operating income before restructuring charges and 4,983 (2,821) amortization of goodwill Amortization of goodwill 871 888 ---------------- ----------------- Operating income (loss) 4,112 (3,709) Interest and other expenses, net 1,176 2,252 ---------------- ----------------- Income (loss) before provision for (benefit from) income taxes 2,936 (5,961) Provision for (benefit from) income taxes 1,133 (2,109) ---------------- ----------------- Net income (loss) from continuing operations 1,803 (3,852) Less dividends on preferred stock 0 600 ---------------- ----------------- Net income (loss) attributable to common stockholders $ 1,803 $ (4,452) =========== ========== Basic net income (loss) per share $ 0.03 $ (0.06) Weighed average shares outstanding 68,056 72,869 ======= ====== Diluted net income (loss) per share $ 0.03 $ (0.06) Weighed average shares outstanding 68,988 72,869 ======= ======
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