For the first quarter of fiscal 2008, THQ reported net sales of $104.5 million, driven primarily by shipments of more than one million units of Disney/Pixar's Ratatouille videogames and strong catalog sales led by Disney/Pixar's Cars and WWE SmackDown! vs. Raw 2007. For the same period a year ago, THQ reported net sales of $138.8 million.
For the first quarter of fiscal 2008, THQ reported a net loss of $9.3 million, or $0.14 per share, which included stock-based compensation expense of $0.05 per share, and a tax benefit of $0.10 per share related to prior years that will not change the company's expected full-year tax rate. For the first quarter of fiscal 2007, THQ reported a net loss of $12.1 million, or $0.19 per share, which included stock-based compensation expense of $0.03 per share. A reconciliation of results determined in accordance with United States generally accepted accounting principles ("GAAP") to results determined on a non-GAAP basis is provided in the accompanying financial tables.
"Fiscal 2008 is shaping up as we anticipated," said Brian Farrell, THQ president and CEO. "Ratatouille is off to a successful start in North America. With five titles based on owned intellectual properties expected to ship more than one million units each and a proven family and casual line-up for the popular Nintendo Wii and DS platforms, we are well positioned for the rest of the year."
- The company announced an agreement with leading Chinese game operator Shanda Interactive Entertainment Ltd. to bring THQ's award-winning PC title, Company of Heroes to the online market in China in calendar 2008
- Four of THQ's titles -- Company of Heroes: Opposing Fronts, de Blob, Stuntman: Ignition and WWE SmackDown vs. Raw 2008 -- were nominated for the
prestigious Game Critics Awards: "Best of E3 2007"
- THQ recently announced two new internally developed owned intellectual properties, de Blob and Darksiders, scheduled for release in fiscal 2008 and 2009, respectively
- THQ's Stuntman: Ignition Xbox Live! demo downloads exceeded 500,000, mirroring last year's successful Saints Row demo launch
- On July 31, 2007, THQ's board authorized an additional $25 million for stock repurchase. This results in $58 million available for repurchase.
THQ reaffirmed previous guidance for the full fiscal year ending March 31, 2008 and provided initial guidance for the fiscal second quarter ending September 30, 2007:
- Consistent with previous guidance, for the fiscal year ending March 31, 2008, THQ expects net sales in the range of $1.12 billion to $1.15 billion and net income in the range of $1.34 to $1.44 per diluted share. This excludes forecasted stock-based compensation expense of $0.23 per diluted share.
- For the second quarter of fiscal 2008, the company expects net sales of approximately $240 million and net income of approximately $0.10 per diluted share, excluding forecasted stock-based compensation expense of $0.07 per diluted share.
In addition to results determined in accordance with GAAP, THQ discloses certain non-GAAP financial measures that exclude stock-based compensation expense and related income tax effects. The non-GAAP financial measures included in the earnings release have been reconciled to the comparable GAAP results and should be considered in addition to results prepared in accordance with GAAP, but should not be considered a substitute for, or superior to, GAAP results.
When evaluating the performance of its business, THQ does not consider stock-based compensation charges. Likewise, THQ excludes stock-based compensation expense from its short and long-term operating plans. In contrast, THQ's management team is held accountable for cash-based compensation and such amounts are included in the company's operating plans. In addition, the stock-based compensation charges are subject to significant fluctuation outside the control of management due to the variables used to estimate the fair value of a share-based payment, such as, THQ's stock price, interest rates and the volatility of THQ's stock price. Further, when considering the impact of equity award grants, THQ places a greater emphasis on overall shareholder dilution rather than the accounting charges associated with such grants.
In the financial tables below, THQ has provided a reconciliation of the most comparable GAAP financial measure to each of the historical non-GAAP financial measures used in this press release