Net revenue for the second fiscal quarter was $229.7 million, compared to $539.8 million for the same quarter of fiscal 2008, which included the release of the blockbuster title Grand Theft Auto IV, which surpassed all-time records for the launch of an entertainment property. Second quarter sales were led by The Lost and Damned, the critically acclaimed first episode of downloadable content for Grand Theft Auto IV on Xbox LIVE, Major League Baseball 2K9, Grand Theft Auto IV and Grand Theft Auto: Chinatown Wars for Nintendo DS.
Net loss for the second quarter was $10.1 million or $0.13 per share, compared to net income of $98.2 million or $1.29 per share in the second quarter of fiscal 2008.
The second quarter results include $5.3 million in stock-based compensation expense ($0.07 per share) and $1.8 million in professional fees and expenses related to unusual matters ($0.02 per share). Results for the second quarter of 2008 included $12.4 million in stock-based compensation expense ($0.16 per share) and $4.7 million in professional fees and expenses related to unusual matters, as well as business reorganization costs ($0.06 per share).
Non-GAAP net loss was $2.9 million or $0.04 per share in the second quarter, compared to net income of $115.4 million or $1.52 per share in the second quarter of 2008, which included the launch of Grand Theft Auto IV. (Please refer to Non-GAAP Financial Measures and reconciliation tables included later in this release for additional information and details on non-GAAP items.)
For the six months ended April 30, 2009, net revenues were $486.5 million, compared to $780.3 million for the same period a year ago, which included the launch of Grand Theft Auto IV. Net loss for the first half of fiscal 2009 was $60.5 million or $0.79 per share, compared to net income of $60.2 million or $0.80 for the 2008 period. Results for the first six months of fiscal 2009 include $11.5 million in stock-based compensation expense ($0.15 per share) and $6.7 million in professional fees and expenses related to unusual matters ($0.09 per share). Results for the first six months of fiscal 2008 included $18.5 million in stock-based compensation expense ($0.25 per share) and $6.4 million in professional fees and expenses related to unusual matters, as well as business reorganization costs ($0.08 per share).
Non-GAAP net loss was $42.3 million or $0.55 per share in the first six months of 2009, versus net income of $85.1 million or $1.14 per share in the comparable period of 2008, which included the launch of Grand Theft Auto IV. (Please refer to Non-GAAP Financial Measures and reconciliation information included later in this release.)
Among the recent developments, Take-Two noted the following:
- Rockstar Games announced Max Payne 3, the latest in the award-winning Max Payne franchise, which is planned for a winter 2009 release.
- 2K Games announced plans to deliver a multiplayer experience for BioShock 2.
- Sid Meier’s Civilization IV: The Complete Edition for Games for Windows is now available in North America from 2K Games.
Take-Two is providing initial guidance for the third fiscal quarter ending July 31, 2009 and fourth fiscal quarter ending October 31, 2009, and is updating its guidance for the fiscal year ending October 31, 2009 to reflect the following changes in its release schedule:
* As announced today, Rockstar Games is planning to release Grand Theft Auto: Episodes from Liberty City, a new Xbox 360 standalone title based on the blockbuster Grand Theft Auto franchise in the fourth quarter of fiscal 2009. The product will consist of the two downloadable episodes of Grand Theft Auto IV, including the critically acclaimed episode The Lost and Damned, and the upcoming second episode, The Ballad of Gay Tony, together on a single disc exclusively for Xbox 360. Grand Theft Auto: Episodes from Liberty City will be in stores simultaneously with the release of The Ballad of Gay Tony downloadable episode on Xbox LIVE. Players will not be required to have the original version of Grand Theft Auto IV in order to play Grand Theft Auto: Episodes from Liberty City, which will be available for $39.99.
* Mafia II and Red Dead Redemption are now scheduled for release in the first half of fiscal 2010 to allow additional development time for the titles and to maximize their full potential in terms of the quality of the player experience and market performance.
* Take-Two is maintaining its guidance for non-GAAP EPS for the full fiscal year 2009, while reducing its revenue expectations, primarily based on the above changes in the release schedule, continued cost cutting initiatives, and a reduction in tax expense.
Key assumptions and dependencies underlying the Company’s guidance include continued consumer acceptance of the Xbox 360, PS3 and Wii; the ability to develop and publish products that capture market share for these current generation systems while continuing to leverage opportunities on certain prior generation platforms; as well as the timely delivery of the titles detailed in this release.
Following are the titles planned for release in the Q3 2009:
- Birthday Party Bash (Wii)
- The BIGS 2 (Multiple platforms)
Following are the titles planned for release in the Q4 2009:
- Beaterator (TBA)
- BioShock 2 (PS3, X360, PC)
- Borderlands (Xbox 360, PS3, PC)
- Grand Theft Auto: Episodes from Liberty City (Xbox 360)
- Grand Theft Auto: The Ballad of Gay Tony (Xbox LIVE/downloadable episode)
- NBA 2K10 (Multiple platforms)
- NHL 2K10 (Multiple platforms)
- Ringling Bros. and Barnum & Bailey Circus (Wii, DS)
“Take-Two again outperformed our expectations, with higher net revenue and a smaller quarterly net loss than originally anticipated. This is largely due to the continuing dedication of our talented team to provide the strongest possible line up of interactive entertainment titles, as well as our determination to operate efficiently while investing in innovation and creativity. Recognizing that this remains a challenging environment for our industry and the consumer marketplace generally, we are sharply focused on executing our business plan and working to enhance shareholder value,” noted Strauss Zelnick, Chairman of Take-Two.
Ben Feder, Chief Executive Officer of Take-Two, added, “Our guidance for fiscal year 2009 demonstrates our confidence in the Company’s strong and balanced portfolio, along with the strides we have made in enhancing the efficiency of our business. Take-Two’s expected results for the remainder of this fiscal year reflect a high quality release schedule that is diversified by franchise, genre and platform, with the heaviest volume of releases scheduled for the fourth quarter. We are well positioned for the future, in an industry with an expanding consumer base and exciting growth opportunities, through our focus on producing a select offering of interactive entertainment titles that are among the most compelling in the market.”