sonycowboy
Member
Wednesday July 28, 4:00 pm ET
Expects Return to Profitability in Q4 2004: First Profitable Quarter since 1999
Signs Multi-Year Publishing Agreement for Unreal Franchise
CHICAGO--(BUSINESS WIRE)--July 28, 2004-- Midway Games Inc. (NYSE:MWY - News) today announced results of operations for the three- and six-month periods ended June 30, 2004. The Company also updated its guidance for the year ending December 31, 2004, established revenue and earnings guidance for the quarter ending September 30, 2004 and announced a multi-year agreement to publish a major videogame franchise.
SECOND QUARTER RESULTS
Revenues for the 2004 second quarter were $47.3 million, up from $5.0 million in the 2003 second quarter. The 2004 second quarter net loss was $9.0 million, compared with a 2003 second quarter net loss of $54.8 million. The 2004 second quarter loss applicable to common stock was $10.7 million or $0.16 per share, compared with a 2003 second quarter loss applicable to common stock of $55.7 million or $1.20 per share. The 2004 second quarter results included $1.6 million of charges associated with severance payments to Kenneth J. Fedesna who departed from the position of executive vice president - product development, and payments to Neil D. Nicastro who resigned from the position of Chairman of the Board during the quarter. The 2003 second quarter results included $23.2 million of charges relating to the writedown of capitalized product development costs, and $9.5 million of charges incurred under the terms of the Company's severance agreement with its former chief executive officer, Mr. Nicastro.
Other key operating and financial items include:
* During the second quarter, Midway released three new videogame titles in North America: MLB SlugFest: Loaded, NBA Ballers, and Psi-Ops: the Mindgate Conspiracy, all for PlayStation 2 and Xbox.
* NBA Ballers was the #2 best-selling PlayStation 2 game and the #5 best-selling Xbox game in the U.S. during the April-June 2004 quarter, according to The NPD Group, Inc./NPD Funworld/TRSTS Video Games Service. Midway expects to have shipped over one million units of NBA Ballers through 2004 Q3.
* Midway was the #1-ranked software publisher for games released in the first half of 2004 based on average review scores on Gamerankings.com for publishers with four or more reviewed products (as of July 27, 2004).
* Midway announced today that it has acquired worldwide rights from Epic Games to publish the next three Unreal titles including Unreal Championship 2: the Liandri Conflict scheduled for first quarter 2005, and the next two Unreal Tournament titles. Unreal is a world-renowned PC and console franchise selling over seven million units and generating nearly $200 million of retail sales since 1999.
* Midway also announced that $26.79 million of its $47.5 million of Series D Convertible Preferred Stock has been converted, as of July 27, 2004, resulting in the issuance of 7,267,893 shares of its common stock. As of July 27, 2004, Midway had 79,662,270 shares of common stock outstanding.
"Midway's second quarter product releases reflect the significant progress we have made toward publishing the highest-quality products in the industry. NBA Ballers, Psi-Ops: the Mindgate Conspiracy and MLB SlugFest: Loaded were all critically-acclaimed releases. These games, as well as the first quarter release of The Suffering, contributed to Midway's position as the #1-ranked publisher in the first-half of 2004 according to average review scores as compiled by Gamerankings.com. Our commitment to creating great games is beginning to translate into higher sales, which we believe will enable us to achieve our financial goals," commented president and chief executive officer David F. Zucker.
"Securing the rights to publish the next three Unreal titles is an important accomplishment for Midway, particularly in light of the competition we faced to secure this franchise. With these titles, we are entering the premium PC market with one of the most respected brands in the industry and adding established content to our product portfolio for the next generation of consoles. We look forward to growing the Unreal franchise with our partners at Epic Games both in the PC and console videogame markets. We plan to announce several exciting details in the near future regarding our plans for this franchise, including innovative marketing and promotional campaigns," added Mr. Zucker.
SIX-MONTHS RESULTS
Revenues for the six months ended June 30, 2004 were $67.4 million, up from $50.8 million in the six months ended June 30, 2003. The net loss was $23.2 million, compared with a net loss of $64.1 million in the prior year. The loss applicable to common stock was $25.7 million or $0.42 per share, compared with a loss applicable to common stock of $65.3 million or $1.40 per share in the prior year. Included in the results for the six months ended June 30, 2004 are $2.8 million of charges relating to the writedown of capitalized product development costs and $1.6 million of charges associated with the departures of Mr. Fedesna and Mr. Nicastro. Included in the results for the six months ended June 30, 2003 were $23.2 million of charges relating to the writedown of capitalized product development costs and $9.5 million of charges incurred under the terms of the Company's severance agreement with its former chief executive officer, Mr. Nicastro.
OUTLOOK
For the quarter ending September 30, 2004, the Company expects revenues of approximately $12 million with a net loss of approximately $20 million. The Company expects to release one title in North America during the third quarter, Shadowhearts: Covenant for PlayStation 2. However, this title is scheduled to be released during the last week of the quarter and, as a result, the Company does not expect to record any significant revenues during the third quarter from this product.
For the year ending December 31, 2004, Midway is raising its outlook for revenues to approximately $157 million from $148 million, representing a 70% increase over the 2003 revenue levels. The Company expects to release two titles in North America during the fourth quarter, Mortal Kombat: Deception and Midway Arcade Treasures 2, both for PlayStation 2 and Xbox. The Company has moved one of its major releases, Area 51, from 2004 into 2005. Midway now expects a net loss of approximately $20 million for the year compared with the Company's prior guidance of a loss of $18 million. Included in the expected net loss for the year ending December 31, 2004 are $1.6 million of charges in the second quarter results associated with payments to former Midway executives as well as increased investment in future titles for 2005 and 2006 not previously forecasted. The $20 million net loss represents an approximately $95 million improvement versus 2003. Midway expects net income for the second half of 2004 to be positive, marking the Company's return to profitability driven by anticipated strong fourth quarter results. Midway last reported a profit in the quarter ended December 31, 1999.
"We are shifting Area 51 into 2005 as we believe it is a prudent strategic move from a competitive positioning standpoint. Area 51 is a superb game, and we believe it will receive much more attention in a launch period with comparatively less crowding, such as the first half of 2005. With the additions to our 2005 lineup of Area 51 and Unreal Championship 2, we have significantly bolstered our 2005 product portfolio," concluded Mr. Zucker.
Expects Return to Profitability in Q4 2004: First Profitable Quarter since 1999
Signs Multi-Year Publishing Agreement for Unreal Franchise
CHICAGO--(BUSINESS WIRE)--July 28, 2004-- Midway Games Inc. (NYSE:MWY - News) today announced results of operations for the three- and six-month periods ended June 30, 2004. The Company also updated its guidance for the year ending December 31, 2004, established revenue and earnings guidance for the quarter ending September 30, 2004 and announced a multi-year agreement to publish a major videogame franchise.
SECOND QUARTER RESULTS
Revenues for the 2004 second quarter were $47.3 million, up from $5.0 million in the 2003 second quarter. The 2004 second quarter net loss was $9.0 million, compared with a 2003 second quarter net loss of $54.8 million. The 2004 second quarter loss applicable to common stock was $10.7 million or $0.16 per share, compared with a 2003 second quarter loss applicable to common stock of $55.7 million or $1.20 per share. The 2004 second quarter results included $1.6 million of charges associated with severance payments to Kenneth J. Fedesna who departed from the position of executive vice president - product development, and payments to Neil D. Nicastro who resigned from the position of Chairman of the Board during the quarter. The 2003 second quarter results included $23.2 million of charges relating to the writedown of capitalized product development costs, and $9.5 million of charges incurred under the terms of the Company's severance agreement with its former chief executive officer, Mr. Nicastro.
Other key operating and financial items include:
* During the second quarter, Midway released three new videogame titles in North America: MLB SlugFest: Loaded, NBA Ballers, and Psi-Ops: the Mindgate Conspiracy, all for PlayStation 2 and Xbox.
* NBA Ballers was the #2 best-selling PlayStation 2 game and the #5 best-selling Xbox game in the U.S. during the April-June 2004 quarter, according to The NPD Group, Inc./NPD Funworld/TRSTS Video Games Service. Midway expects to have shipped over one million units of NBA Ballers through 2004 Q3.
* Midway was the #1-ranked software publisher for games released in the first half of 2004 based on average review scores on Gamerankings.com for publishers with four or more reviewed products (as of July 27, 2004).
* Midway announced today that it has acquired worldwide rights from Epic Games to publish the next three Unreal titles including Unreal Championship 2: the Liandri Conflict scheduled for first quarter 2005, and the next two Unreal Tournament titles. Unreal is a world-renowned PC and console franchise selling over seven million units and generating nearly $200 million of retail sales since 1999.
* Midway also announced that $26.79 million of its $47.5 million of Series D Convertible Preferred Stock has been converted, as of July 27, 2004, resulting in the issuance of 7,267,893 shares of its common stock. As of July 27, 2004, Midway had 79,662,270 shares of common stock outstanding.
"Midway's second quarter product releases reflect the significant progress we have made toward publishing the highest-quality products in the industry. NBA Ballers, Psi-Ops: the Mindgate Conspiracy and MLB SlugFest: Loaded were all critically-acclaimed releases. These games, as well as the first quarter release of The Suffering, contributed to Midway's position as the #1-ranked publisher in the first-half of 2004 according to average review scores as compiled by Gamerankings.com. Our commitment to creating great games is beginning to translate into higher sales, which we believe will enable us to achieve our financial goals," commented president and chief executive officer David F. Zucker.
"Securing the rights to publish the next three Unreal titles is an important accomplishment for Midway, particularly in light of the competition we faced to secure this franchise. With these titles, we are entering the premium PC market with one of the most respected brands in the industry and adding established content to our product portfolio for the next generation of consoles. We look forward to growing the Unreal franchise with our partners at Epic Games both in the PC and console videogame markets. We plan to announce several exciting details in the near future regarding our plans for this franchise, including innovative marketing and promotional campaigns," added Mr. Zucker.
SIX-MONTHS RESULTS
Revenues for the six months ended June 30, 2004 were $67.4 million, up from $50.8 million in the six months ended June 30, 2003. The net loss was $23.2 million, compared with a net loss of $64.1 million in the prior year. The loss applicable to common stock was $25.7 million or $0.42 per share, compared with a loss applicable to common stock of $65.3 million or $1.40 per share in the prior year. Included in the results for the six months ended June 30, 2004 are $2.8 million of charges relating to the writedown of capitalized product development costs and $1.6 million of charges associated with the departures of Mr. Fedesna and Mr. Nicastro. Included in the results for the six months ended June 30, 2003 were $23.2 million of charges relating to the writedown of capitalized product development costs and $9.5 million of charges incurred under the terms of the Company's severance agreement with its former chief executive officer, Mr. Nicastro.
OUTLOOK
For the quarter ending September 30, 2004, the Company expects revenues of approximately $12 million with a net loss of approximately $20 million. The Company expects to release one title in North America during the third quarter, Shadowhearts: Covenant for PlayStation 2. However, this title is scheduled to be released during the last week of the quarter and, as a result, the Company does not expect to record any significant revenues during the third quarter from this product.
For the year ending December 31, 2004, Midway is raising its outlook for revenues to approximately $157 million from $148 million, representing a 70% increase over the 2003 revenue levels. The Company expects to release two titles in North America during the fourth quarter, Mortal Kombat: Deception and Midway Arcade Treasures 2, both for PlayStation 2 and Xbox. The Company has moved one of its major releases, Area 51, from 2004 into 2005. Midway now expects a net loss of approximately $20 million for the year compared with the Company's prior guidance of a loss of $18 million. Included in the expected net loss for the year ending December 31, 2004 are $1.6 million of charges in the second quarter results associated with payments to former Midway executives as well as increased investment in future titles for 2005 and 2006 not previously forecasted. The $20 million net loss represents an approximately $95 million improvement versus 2003. Midway expects net income for the second half of 2004 to be positive, marking the Company's return to profitability driven by anticipated strong fourth quarter results. Midway last reported a profit in the quarter ended December 31, 1999.
"We are shifting Area 51 into 2005 as we believe it is a prudent strategic move from a competitive positioning standpoint. Area 51 is a superb game, and we believe it will receive much more attention in a launch period with comparatively less crowding, such as the first half of 2005. With the additions to our 2005 lineup of Area 51 and Unreal Championship 2, we have significantly bolstered our 2005 product portfolio," concluded Mr. Zucker.
