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Atari Financial Results Bleak, But New Titles Revealed

by Rainier on Feb. 13, 2008 @ 8:58 a.m. PST

While EA revealed an impressive list of titles in development for fiscal 2009 and beyond, Atari's financial statement was less impressive. While revenues are down and loss increased (mainly due to restructuring cost) compared to last year, it did, however, reveal some new titles as well. A new Neverwinter Nights 2 expansion is planned, as well as a mysterious multiplatform title, Airborne Rangers (PS3, X360,PC), and new casual titles like Panoramix Brain Trainer (NDS), Lucky Luke: Dalton (NDS), Hogs of War 2 (NDS/PS2/Wii/PC), Asterix at the Olympic Games (X360) and My Horse & Me 2 (NDS/PS2/Wii/X360/PC).

Net revenue for the third quarter ended December 31, 2007, was $41.1 million versus $47.3 million in the comparable year-earlier period. Publishing net revenue was $35.2 million, versus $46.0 million in the prior year, while distribution revenue was $5.9 million, versus $1.3 million in the comparable year-earlier period.

Net loss for the third quarter ended December 31, 2007 was $0.3 million, or $0.03 loss per share, compared to net loss of $0.6 million, or $0.05 loss per share, in the year-earlier period. Without restructuring charges of $3.7 million, the loss for the third quarter ended December 31, 2007 would have been income of $3.4 million or $0.25 income per share.

Net revenue for the nine months ended December 31, 2007, was $64.8 million versus $95.3 million in the comparable year-earlier period. Publishing net revenue was $56.2 million, versus $78.8 million in the prior year's nine month period, while distribution revenue was $8.6 million, versus $16.5 million in the comparable year-earlier period.

Net loss for the nine months ended December 31, 2007 was $20.0 million, or $1.48 loss per share, compared to net loss of $8.0 million, or $0.59 loss per share, in the year-earlier period.

As of December 31, 2007 and through February 12, 2008, Atari, Inc. was in violation of its financial covenants. BlueBay High Yield Investments (Luxembourg) S.A.R.L., Atari, Inc.'s lender and a majority shareholder of Infogrames Entertainment S.A., has not waived this violation and has entered into a forbearance agreement with Atari, Inc. which states its lender will not exercise its rights on its facility until the earlier of March 3, 2008, additional covenant defaults except for the ones existing as of February 12, 2008 or if any action transpires which is viewed to be adverse to the position of the lender. Atari, Inc. continues to pursue a resolution with its lender, however, there is no guarantee a resolution will ultimately be made.

Atari will not be holding a conference call for the third quarter ended December 31, 2007.

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