Interplay's First Quarter Earnings
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Interplay Announces First Quarter 2004 Earnings And Future Direction
IRVINE, Calif., June 25 /PRNewswire-FirstCall/ -- Interplay Entertainment Corp. (OTC Bulletin Board: IPLY - News) today reported operating results for the first quarter of 2004. Interplay Chairman and Chief Executive Officer Herve Caen also announced the company's strategic decision to enter Massively Multiplayer Online Gaming (MMOG) with Interplay's wholly owned intellectual properties.
For the first quarter ended March 31, 2004, the Company reported a net loss of $.9 million, or .01 per basic and diluted share, compared to a net income of $5.6 million or $.06 per basic and diluted share, in the same period last year. Net revenues for the first quarter 2004 were $8.4 million versus $18.8 million in the same period last year, a decrease of 55 percent. Finally the Company reported an operating loss of $.9 million in the first quarter as compared to operating income of $5.6 million in the first quarter of 2003. The decrease in net revenues and net income was mainly due to the sale of all future interactive entertainment publishing rights to the "Hunter: The Reckoning" franchise for $15 million in the first quarter of 2003.
Gross profit margin for the first quarter 2004 decreased to 40 percent, compared to 63 percent in the first quarter of 2003. Gross profit margin was lower in the first quarter this year as compared to last yearly mainly due to the sale of all future interactive entertainment publishing rights to the "Hunter: The Reckoning" franchise in the first quarter of 2003, which yielded approximately an 80 percent profit margin. Total operating expenses decreased 32 percent to $4.2 million from $6.2 million in the first quarter of this year as compared to the same period last year.
Net revenues by platform for the first quarter of 2004 were 8 percent PC, 89 percent console, and 2 percent OEM royalties and licensing. On a geographic basis, North America accounted for 4 percent of total net revenues, International represented 94 percent, and OEM, royalty and licensing accounted for 2 percent.
Commenting on the announcement, Mr. Caen said, "Based on a detailed review of where our industry stands and the level of interest in the gaming community in taking some of our premier properties online, we are now pursuing several options to fund our entry into Massively Multiplayer Online Gaming with titles including Fallout. Initial feedback from our investment bank and ongoing dialogue with others in the gaming sector appear to confirm that the combination of our valuable and popular intellectual properties with the rapidly growing online gaming community is the best way to maximize Interplay shareholder value."
Mr. Caen continued, "As outlined in our 10-Q filing, several short-term obstacles remain for Interplay. Management is focused on simultaneously financing and executing our new long-term strategy and finding ways to solve these short-term issues."
Mr. Caen added that the company would likely continue to develop select games for personal computers and next generation gaming consoles as well as develop purely online games.
Interplay Entertainment Corp. is a leading developer, publisher and distributor of interactive entertainment software for both core gamers and the mass market. Interplay currently balances its development efforts by publishing for personal computers as well as current and next generation video game consoles. Interplay releases products through Interplay, Black Isle Studios and its distribution partners. More comprehensive information on Interplay and its products is available through its website at http://www.interplay.com.
