Print page
Email page
Download PDF
« Previous Release | Next Release »
New York, NY - February 28, 2007 - Take-Two Interactive Software, Inc. (NASDAQ:TTWO) today announced that it has completed the restatement of its financial statements to reflect the recognition of stock-based compensation expense and tax effects resulting from the previously announced investigation of past stock-based compensation awards. Take-Two's restated financial statements are included in the Company's Annual Report on Form 10-K for the fiscal year ended October 31, 2006, filed today with the Securities and Exchange Commission.
As previously disclosed, in June 2006 a Special Committee of Take-Two's Board of Directors, working with independent legal and accounting advisors, commenced a comprehensive review of Take-Two's historical stock option granting process. The Company cooperated fully with the investigation. As a result of the investigation, management of the Company concluded, and the Audit Committee of its Board of Directors agreed, that incorrect measurement dates were used for financial accounting purposes for certain stock-based compensation awards made in prior periods. The report by the Special Committee found no pattern or practice of backdating or other improper accounting for option grants subsequent to August 2003 and that none of the Company's current executive officers engaged in any misconduct.
Based on the results of the investigation, the Company has recorded additional non-cash stock-based compensation expense and tax effects with regard to past stock-based compensation awards. The cumulative adjustments amounted to non-cash charges of $42.1 million, net of tax, for the period from April 1997 through October 31, 2005.
Today's filing of the Company's Form 10-K for the fiscal year ended October 31, 2006 satisfies certain key conditions specified by the NASDAQ Listing Qualifications Panel for Take-Two to maintain continued listing on The NASDAQ Stock Market, as specified in a written notification by the NASDAQ Panel previously disclosed by the Company. Take-Two expects to satisfy the remaining NASDAQ listing requirements by filing its Form 10-Q for the third quarter ended July 31, 2006 on or before March 19, 2007 and holding its combined 2005 and 2006 annual meeting of stockholders on or before March 27, 2007. The Company has no update regarding the previously disclosed informal non-public Securities and Exchange Commission investigation into stock option grants or the subpoenas from the New York County District Attorney.
A summary of the impact of the restatement adjustments on certain of the Company's historical statements of operations is reflected in the following table.
(In thousands, Diluted Net
except per share Income (Loss)
data) Net Income (Loss) Per Share
------------------- -----------------
Net Revenue Reported Restated Reported Restated
----------- --------- --------- -------- --------
Year Ended October
31, 2005 (1) (2) $1,201,220 $37,475 $35,314 $0.53 $0.50
First Quarter $502,474 $55,249 $54,154 $0.79 $0.78
Second Quarter $222,068 ($8,186) ($8,725) ($0.12) ($0.12)
Third Quarter $169,899 ($28,780) ($28,976) ($0.41) ($0.41)
Fourth Quarter (1) $306,779 $19,192 $18,861 $0.27 $0.27
Year Ended October
31, 2004 $1,127,751 $65,378 $62,119 $0.95 $0.91
Year Ended October
31, 2003 $1,033,693 $98,118 $88,672 $1.51 $1.37
Year Ended October
31, 2002 $794,676 $71,563 $59,667 $1.21 $1.00
(1) Includes the effect of unrecorded adjustments in the fourth
quarter of 2005 that were previously considered insignificant as of
October 31, 2005.
(2) Diluted net income (loss) per share is computed independently for
each of the quarters presented; accordingly, the sum of quarterly
diluted net income (loss) per share does not equal annual diluted net
income (loss) per share.
Conference Call
Take-Two will host a conference call today at 5:45 pm Eastern Time to discuss this press release and other topics. The call can be accessed by dialing (877) 407-0984 or (201) 689-8577. A live listen-only webcast of the call is available by visiting http://ir.take2games.com and a replay will be available following the call at the same location.
About Take-Two Interactive Software
Headquartered in New York City, Take-Two Interactive Software, Inc. is a global developer, marketer, distributor and publisher of interactive entertainment software games for the PC, PlayStation® game console, PlayStation®2 and PLAYSTATION®3 computer entertainment systems, PSP® (PlayStation®Portable) system, Xbox® and Xbox 360™ video game and entertainment systems from Microsoft, Wii™, Nintendo GameCube™, Nintendo DS™ and Game Boy® Advance. The Company publishes and develops products through its wholly owned labels Rockstar Games, 2K and 2K Sports, and Global Star Software; and distributes software, hardware and accessories in North America through its Jack of All Games subsidiary. Take-Two's common stock is publicly traded on NASDAQ under the symbol TTWO. For more corporate and product information please visit our website at www.take2games.com.
All trademarks and copyrights contained herein are the property of their respective holders.
Safe Harbor Statement under the Private Securities Litigation Reform Act of 1995: This press release contains forward-looking statements made in reliance upon the safe harbor provisions of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. The statements contained herein which are not historical facts are considered forward-looking statements under federal securities laws. Such forward-looking statements are based on the beliefs of our management as well as assumptions made by and information currently available to them. The Company has no obligation to update such forward-looking statements. Actual results may vary significantly from these forward-looking statements based on a variety of factors. These risks and uncertainties include the final conclusions of the Special Committee and the Board of Directors concerning matters related to the Company's stock option grants, including, but not limited to, the accuracy of the stated dates of option grants and whether all proper procedures were followed, the impact of any restatement of financial statements of the Company or other actions that may be taken or required as a result of such reviews; the timing of the completion of the Special Committee's investigation; and the possibility that the Special Committee's investigation or any governmental investigation may reveal issues that the Company does not currently realize exist. In addition, the investigation and conclusions of the Special Committee may require additional expenses to be recorded; may continue to adversely affect the Company's ability to file required reports with the U.S. Securities and Exchange Commission ("SEC") on a timely basis, may require revisions to the Company's conclusions on the effectiveness of internal control over financial reporting and disclosure controls and procedures, and may impede the Company's ability to meet the requirements of the NASDAQ Stock Market for continued listing of the Company's shares; and may result in claims and proceedings relating to such matters, including previously disclosed shareholder and derivative litigation and actions by the SEC and/or other governmental agencies and negative tax or other implications for the Company resulting from any accounting adjustments or other factors. Other important factors are described in the Company's Form 10-Q for the quarter ended April 30, 2006 in the section entitled "Risk Factors".
###