Net revenue for the third quarter ended December 31, 2004, was $161.8 million compared to $190.6 million in the comparable year-earlier period. Publishing net revenue was $143.3 million compared to $174.4 million in the prior December quarter, while distribution revenue was $18.5 million compared to $16.2 million in the comparable year-earlier quarter. Decreased revenue for the period was attributable to a lower number of titles released in the quarter, strong competition and a shortage of console hardware in the marketplace. Top-selling titles for the quarter included, Atari Anthology (PS2 and Xbox), Dragon Ball Z: Budokai 3 (PS2), Pirates! (PC), RollerCoaster Tycoon 3 (PC) and the Company’s stand-alone, plug-and-play Atari Flashback Classic Game Console.
Net income for the quarter was $19.6 million, or $0.16 per share, compared with $23.0 million, or $0.19 per share, in the year-earlier period.
Net revenue for the nine-month period ended December 31, 2004, was $343.4 million versus $402.5 million in the comparable year-earlier period. Publishing net revenue was $301.0 million versus $355.0 million in the prior nine-month period, while distribution revenue was $42.4 million versus $47.5 million in the comparable year-earlier period. Net income for the nine-month period was $14.8 million, or $0.12 per share, compared to $18.1 million, or $0.20 per share, in the year-earlier period, before a $39.4 million, or $0.44 per share, one-time non-cash dividend relating to the Company's September 2003 recapitalization and public offering. Including the $39.4 million dividend, loss attributable to common shareholders for the nine-months ended December 31, 2003, was $21.3 million, or a loss of $0.24 per share.
Atari’s product lineup for the remainder of fiscal 2005 and its preliminary fiscal 2006 lineup is expected to include the following new releases:
For the fourth quarter ending March 31, 2005:
- Act of War: Direct Action (PC),
- Backyard Baseball 2006 (GBA),
- Dragon Ball Z: Sagas (PS2, Xbox and GameCube),
- DRIV3R (PC)
- Retro Atari Classics (DS).
For Fiscal 2006 ending March 31, 2006:
- Pirates! (Xbox)
- Boiling Point (PC)
- Dragon Ball GT: Transformation (GBA)
- Dragonshard (PC)
- Dungeons & Dragons Online (PC)
- Marc Ecko’s Getting Up: Contents Under Pressure (PS2)
- RollerCoaster Tycoon 3: Soaked (PC)
- Timeshift (PC, Xbox)
- Tycoon City: New York (PC)
- among others.
Primarily as a result of the negative affect of the console hardware shortage in the holiday season, an unusually competitive fiscal fourth quarter retail environment, and delays in product development which resulted in new management’s decisions to move release dates, the Company is revising its 2005 fiscal fourth quarter and year-end guidance. Product rollout initiatives undertaken include: 1) a reduction of Flashback expectations based on retailers’ demand for an accelerated launch of a newly configured plug-and-play product in the early summer; 2) holding the release of Dragon Ball Z: Sagas until the last week of the 2005 fiscal fourth quarter to ensure a high-quality product, and maximum marketing support; and 3) moving Dragonshard and Boiling Point to fiscal 2006 to maximize each title’s revenue potential.
For the 2005 fiscal fourth quarter ending March 31, 2005, Atari anticipates net revenue in the range of $70 million to $80 million. The Company expects to report a net loss in the range of breakeven to $10 million, or $0.00 to $0.08 per share, prior to any restructuring charges associated with, among other things, the closing of offices in Santa Monica, CA and Beverly, MA.
For the fiscal year ending March 31, 2005, Atari anticipates full-year net revenue in the range of $413 million to $423 million. The Company anticipates net income to be in the range of $4 million to $15 million, or $0.03 to $0.12 per share, prior to any restructuring charges.