NEW YORK, Dec 17, 2009 (BUSINESS WIRE) -- Take-Two Interactive Software, Inc. (NASDAQ:TTWO) today announced
financial results for its fourth quarter and fiscal year ended October
31, 2009.
Net revenue for the fourth fiscal quarter was $343.4 million, compared
to $323.4 million for the same quarter of fiscal 2008. Fourth quarter
fiscal 2009 sales were led by Borderlands(TM), NBA(R)2K10,
Grand Theft Auto: Episodes from Liberty City, Grand Theft
Auto: The Ballad of Gay Tony, and Grand Theft Auto IV.
Net loss for the fourth quarter was $22.0 million or $0.28 per share,
compared to net loss of $15.0 million or $0.20 per share in the fourth
quarter of fiscal 2008.
The fourth quarter 2009 results included $14.8 million in non-cash
goodwill and intangible impairment charges on its distribution segment
in connection with the Company's annual assessment of goodwill ($0.19
per share); $9.8 million in stock-based compensation expense ($0.13 per
share); and $4.3 million in non-cash tax expense for the cumulative
impact of deferred tax liabilities associated with tax deductible
amortization of goodwill ($0.06 per share). Results for the fourth
quarter of 2008 included $9.3 million in stock-based compensation
expense ($0.12 per share); and $7.2 million in professional fees and
expenses related to unusual matters, as well as business reorganization
costs ($0.09 per share).
Non-GAAP net income was $7.0 million or $0.09 per share in the fourth
quarter of fiscal 2009, compared to non-GAAP net income of $1.6 million
or $0.02 per share in the fourth quarter of 2008. (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 fiscal year ended October 31, 2009, net revenue was $968.5
million, compared to $1,537.5 million for fiscal 2008, which included
the release and strong post-launch performance of Grand Theft Auto IV.
Net loss for fiscal 2009 was $137.9 million or $1.80 per share, compared
to net income of $97.1 million or $1.28 for fiscal 2008. Results for
fiscal 2009 included $25.9 million in stock-based compensation expense
($0.34 per share); $14.8 million in non-cash goodwill and intangible
impairment charges on its distribution segment in connection with the
Company's annual assessment of goodwill ($0.19 per share); $7.2 million
in professional fees and expenses related to unusual matters ($0.09 per
share); and $4.3 million in non-cash tax expense for the cumulative
impact of deferred tax liabilities associated with tax deductible
amortization of goodwill ($0.06 per share). Results for fiscal 2008
included $40.4 million in stock-based compensation expense ($0.53 per
share); and $20.7 million in professional fees and expenses related to
unusual matters, as well as business reorganization costs ($0.27 per
share).
Non-GAAP net loss was $85.7 million or $1.12 per share for fiscal 2009,
compared to a record non-GAAP net income of $158.2 million or $2.08 per
share for fiscal 2008. (Please refer to Non-GAAP Financial Measures and
reconciliation tables included later in this release for additional
information and details on non-GAAP items).
Recent Product Highlights
-
Rockstar Games won the following awards at the 2009 Spike TV Video
Game Awards on December 12th:
-
Best Handheld Game:Grand Theft Auto: Chinatown Wars
-
Best DLC: Grand Theft Auto: The Ballad of Gay Tony
- Borderlands from 2K Games has now sold over 2 million units
worldwide and has established itself as a key franchise for Take-Two,
for which the Company has long-term publishing rights.
- NBA 2K10 from 2K Sports was the #1 selling and #1 rated
basketball game for the Xbox 360(R) video game and entertainment system
from Microsoft and the PlayStation(R)3 computer entertainment system
through November 2009, according to The NPD Group's estimates of U.S.
retail video game sales and Metacritic.com.
-
The Company's internally owned and developed Carnival Games(TM)
franchise from 2K Play's Cat Daddy Games studio sold over 5 million
units worldwide on the Wii(TM) and DS(TM).
-
2K Games announced that Spec Ops(R): The Line(TM), a third-person
modern military shooter, is currently in development for the Xbox 360,
PlayStation and Windows PC. The title debuted at the 2009 Spike TV
Video Game Awards and is planned for release in Take-Two's fiscal year
ending October 31, 2011.
Financial Guidance
The Company is reiterating its guidance for the first quarter ending
January 31, 2010 and for the fiscal year ending October 31, 2010 as
provided below. The Company's fiscal year 2010 guidance includes a
non-GAAP net loss from the Company's Major League Baseball(R)
business in the range of $30 million to $35 million, or $0.38 to $0.44
per share.
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First quarter ending
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Fiscal year ending
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1/31/2010
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10/31/2010
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Revenue
|
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$210 to $260 million
|
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$1.0 to $1.2 billion
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Non-GAAP EPS
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$(0.40) to $(0.50)
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$(0.40) to $(0.60)
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Stock-based compensation |
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expense per share (a) |
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$0.11
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$0.46
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Non-cash interest expense
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related to convertible debt (b)
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$0.03
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$0.11
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(a) The Company's stock-based compensation expense for the first
quarter and fiscal year 2010 includes the cost of approximately 2
million stock options and 1.5 million shares previously issued to
ZelnickMedia that are subject to variable accounting. Actual
expense to be recorded in connection with these options and shares
is dependent upon several factors, including future changes in
Take-Two's stock price.
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(b) The Company will adopt a new accounting standard in the first
quarter of fiscal 2010 that requires convertible debt to be
bifurcated into debt and equity components. As a result of the new
standard, the Company will also begin recording non-cash interest
expense on its convertible notes, in addition to the interest
expense already recorded for coupon payments. The Company will
report the non-cash portion of the interest expense as a non-GAAP
financial measure.
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Key assumptions and dependencies underlying the Company's guidance
include continued consumer acceptance of the Xbox 360 video game and
entertainment system from Microsoft, PLAYSTATION 3 computer
entertainment system and Wii(TM) home video game system from Nintendo; 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.
Product Releases
The following titles shipped to date during the first quarter of fiscal
2010:
Title |
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Platform |
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Borderlands: The Zombie Island of Dr. Ned (DLC) |
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Xbox 360, PS3, PC
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Dora the Explorer: Dora Saves the Crystal Kingdom |
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Wii, PS2
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Dora the Explorer: Dora Puppy |
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DS
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NBA(R) 2K10 |
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Wii
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Ni Hao, Kai-Lan: New Year's Celebration |
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DS
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Ringling Bros. and Barnum & Bailey(TM)
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Wii, DS
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Take-Two's lineup of key titles announced to date for the remainder of
fiscal 2010 includes:
Title |
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Platform |
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BioShock(R) 2 |
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Xbox 360, PS3, PC
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Borderlands: Mad Moxxi's Underdome Riot (DLC) |
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Xbox 360, PS3, PC
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Mafia(R) II |
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Xbox 360, PS3, PC
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Major League Baseball(R) 2K10 |
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Xbox 360, PS3, PS2, PSP, Wii,
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DS, PC
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Max Payne 3 |
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Xbox 360, PS3, PC
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NBA(R) 2K11 |
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TBA
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Red Dead Redemption |
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Xbox 360, PS3
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Management Comment
Strauss Zelnick, Chairman of Take-Two, stated, "Our company and industry
experienced a very difficult economic environment in 2009. We believe
that 2010 will continue to be challenging and our outlook, while
disappointing, reflects a prudent approach to managing our business. The
fact remains that Take-Two is in a fundamentally strong position to
build long term value. We have an outstanding portfolio of hit
franchises based largely on internally developed and owned intellectual
property, a team of extraordinarily creative and talented people,
opportunities to extend our business to new media and markets, and the
financial resources to support our strategies."
Ben Feder, Chief Executive Officer of Take-Two, commented, "We are
excited about our product lineup for 2010, which includes BioShock 2,
Mafia II, Max Payne 3 and Red Dead Redemption. We
also have just announced Spec Ops: The Line, an intense military
third-person shooter, for fiscal 2011. Our broad portfolio reflects the
fantastic creative assets that will be the source of our long term
success. Moving forward, we plan to build our company by continuing to
focus on select high-potential titles, leveraging our successful
franchises and applying our creative abilities to emerging
opportunities. We also intend to strengthen our business through
increased cost management, improved operational efficiencies, and the
timely delivery of our titles."
Conference Call
Take-Two will host a conference call today at 4:30 p.m. Eastern Time to
review these results and discuss other topics. The call can be accessed
by dialing (877) 407-0984 or (201) 689-8577. A live listen-only webcast
of the call will be available by visiting http://ir.take2games.com
and a replay will be available following the call at the same location.
Non-GAAP Financial Measures
In addition to reporting financial results in accordance with U.S.
generally accepted accounting principles (GAAP), the Company uses
non-GAAP measures of financial performance that exclude certain
non-recurring or non-cash items. Non-GAAP gross profit, income (loss)
from operations, net income (loss) and earnings (loss) per share are
measures that exclude certain non-recurring or non-cash items and should
be considered in addition to results prepared in accordance with GAAP.
They are not intended to be considered in isolation from, as a
substitute for, or superior to, GAAP results. These non-GAAP financial
measures may be different from similarly titled measures used by other
companies.
The non-GAAP measures exclude the following items from the Company's
statements of operations:
-
Business reorganization, restructuring and related expenses
-
Stock-based compensation
-
Professional fees and expenses associated with unusual legal and other
matters, including the Company's concluded process to evaluate its
strategic alternatives
-
Impairment of goodwill and long-lived assets
-
Non-cash tax expense for the cumulative impact of deferred tax
liabilities associated with tax deductible amortization of goodwill
In addition, the Company may consider whether other significant
non-recurring items that arise in the future should also be excluded
from the non-GAAP financial measures it uses.
The Company believes that these non-GAAP financial measures, when taken
into consideration with the corresponding GAAP financial measures, are
important in gaining an understanding of the Company's ongoing business.
These non-GAAP financial measures also provide for comparative results
from period to period. Therefore, the Company believes it is appropriate
to exclude certain items as follows:
Business reorganization, restructuring and related expenses
In March 2007, the Company's stockholders elected a new slate of members
to Take-Two's Board of Directors, who immediately removed the Company's
former President and Chief Executive Officer. Subsequently, the
Company's former Chief Financial Officer resigned. As a result of these
actions and the implementation of a business reorganization plan, the
Company incurred significant costs in the fiscal years ended October 31,
2007 and October 31, 2008 to reduce headcount, relocate employees and
consolidate sales and operational functions. These costs were related to
severance, asset write-offs and associated professional fees. As of
October 31, 2008, the Company had substantially concluded the
reorganization plan.
The Company does not engage in reorganization activities on a regular
basis and therefore believes it is appropriate to exclude business
reorganization expenses from its non-GAAP financial measures.
Stock-based compensation
The Company does not consider stock-based compensation charges when
evaluating business performance and management does not contemplate
stock-based compensation expense in its short and long-term operating
plans. The Company places greater emphasis on stockholder dilution than
accounting charges when assessing the impact of stock-based equity
awards.
Professional fees and expenses associated with unusual legal and
other matters, including the Company's concluded strategic review process
The Company incurred significant legal, consulting and investment
banking expenses in the fiscal year ended October 31, 2008 related to
the tender offer by Electronic Arts Inc. to acquire all of the Company's
outstanding shares, which was launched in March 2008 and expired in
August 2008, and the Company's related strategic review process which
was completed in October 2008.
Additionally, the Company has realized significant legal and other
professional fees associated with both the investigation of its
historical stock option granting process and the Company's responses to
related governmental inquiries and civil lawsuits. The Company has also
incurred legal expenses related to the tender offer by Electronic Arts.
One of management's primary objectives is to bring conclusion to its
outstanding legal matters. The Company continues to incur expenses for
professional fees and has accrued for legal settlements that are outside
its ordinary course of business. As a result, the Company has excluded
such expenses from its non-GAAP financial measures.
Impairment of goodwill and long-lived assets
The Company is required under generally accepted accounting principles
to review its goodwill for impairment annually or more frequently when
events or changes in circumstances indicate the carrying value may not
be recoverable.
During the annual test for its fiscal year ended October 31, 2009, the
Company determined that goodwill and other intangible assets attributed
to its distribution segment were impaired due to the Company's outlook
for this segment. As a result, the Company recorded non-cash impairment
charges related to its distribution segment. The impairment charges
represented all of the Company's distribution segment goodwill and net
intangible assets and were recorded in the impairment of goodwill and
long-lived assets line in the Company's consolidated statements of
operations.
The Company does not routinely record impairment charges to its goodwill
and long-lived assets and therefore believes it is appropriate to
exclude these non-cash charges from its non-GAAP financial measures.
Non-cash tax expense for the cumulative impact of deferred tax
liabilities associated with tax deductible amortization of goodwill
The Company recorded non-cash tax expense for the cumulative impact of
deferred tax liabilities associated with tax deductible amortization of
goodwill in the fourth quarter of the fiscal year ended October 31,
2009. Due to the cumulative nature of the adjustment as well as the
expectation that it will not have any cash impact in the foreseeable
future, the Company believes it is appropriate to exclude this expense
from its non-GAAP financial measures.
EBITDA and Adjusted EBITDA
Earnings (loss) before interest, taxes, depreciation and amortization
("EBITDA") is a financial measure not calculated and presented in
accordance with U.S. GAAP. Management uses EBITDA adjusted for business
reorganization and related expenses ("Adjusted EBITDA"), among other
measures, in evaluating the performance of the Company's business units.
Adjusted EBITDA is also a significant component of the Company's
incentive compensation plans. Adjusted EBITDA should not be considered
in isolation from, or as a substitute for, net income/(loss) prepared in
accordance with GAAP.
Reclassifications
Certain prior year amounts have been reclassified to conform to current
year presentation.
About Take-Two Interactive Software, Inc.
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(R)3 and PlayStation(R)2
computer entertainment systems, PSP(R) (PlayStation(R)Portable) system, Xbox
360(R) video game and entertainment system from Microsoft, Wii(TM), Nintendo
DS(TM), iPhone(TM) and iPod(R) touch. The Company publishes and develops
products through its wholly owned labels Rockstar Games and 2K, which
publishes its titles under 2K Games, 2K Sports and 2K Play. Take-Two
also distributes software, hardware and accessories in North America
through its Jack of All Games subsidiary. The Company'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.
Cautionary Note Regarding Forward-Looking Statements
The statements contained herein which are not historical facts are
considered forward-looking statements under federal securities laws and
may be identified by words such as "anticipates," "believes,"
"estimates," "expects," "intends," "plans," "potential," "predicts,"
"projects," "seeks," "will," or words of similar meaning and include,
but are not limited to, statements regarding the outlook for the
Company's future business and financial performance. Such
forward-looking statements are based on the current beliefs of our
management as well as assumptions made by and information currently
available to them, which are subject to inherent uncertainties, risks
and changes in circumstances that are difficult to predict. Actual
outcomes and results may vary materially from these forward-looking
statements based on a variety of risks and uncertainties including: our
dependence on key management and product development personnel, our
dependence on our Grand Theft Auto products and our ability to develop
other hit titles for current generation platforms, the timely release
and significant market acceptance of our games, the ability to maintain
acceptable pricing levels on our games, our reliance on a primary
distribution service provider for a significant portion of our products,
our ability to raise capital if needed, risks associated with
international operations, and the matters relating to the investigation
by a special committee of our board of directors of the Company's stock
option grants and the claims and proceedings relating thereto (including
stockholder and derivative litigation and negative tax or other
implications for the Company resulting from any accounting adjustments
or other factors). Other important factors and information are contained
in the Company's Annual Report on Form 10-K for the fiscal year ended
October 31, 2008, in the section entitled "Risk Factors," as updated in
the Company's Quarterly Report on Form 10-Q for the fiscal quarter ended
July 31, 2009, and the Company's other periodic filings with the SEC,
which can be accessed at www.take2games.com.
All forward-looking statements are qualified by these cautionary
statements and apply only as of the date they are made. The Company
undertakes no obligation to update any forward-looking statement,
whether as a result of new information, future events or otherwise.
|
TAKE-TWO INTERACTIVE SOFTWARE, INC. and SUBSIDIARIES |
CONSOLIDATED STATEMENTS OF OPERATIONS |
(in thousands, except per share amounts) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended October 31, |
|
|
Year ended October 31, |
|
|
2009 |
|
2008 |
|
|
|
2009 |
|
2008 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net revenue
|
|
$ |
343,392 |
|
|
$
|
323,442
|
|
|
|
|
$ |
968,488 |
|
|
$
|
1,537,530
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of goods sold:
|
|
|
|
|
|
|
|
|
|
|
Product costs
|
|
|
147,271 |
|
|
|
146,422
|
|
|
|
|
|
486,762 |
|
|
|
633,979
|
|
Software development costs and royalties
|
|
|
47,490 |
|
|
|
43,276
|
|
|
|
|
|
115,960 |
|
|
|
169,398
|
|
Internal royalties
|
|
|
27,725 |
|
|
|
18,003
|
|
|
|
|
|
58,224 |
|
|
|
128,772
|
|
Licenses
|
|
|
17,927 |
|
|
|
17,071
|
|
|
|
|
|
56,880 |
|
|
|
56,546
|
|
Total cost of goods sold
|
|
|
240,413 |
|
|
|
224,772
|
|
|
|
|
|
717,826 |
|
|
|
988,695
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross profit
|
|
|
102,979 |
|
|
|
98,670
|
|
|
|
|
|
250,662 |
|
|
|
548,835
|
|
|
|
|
|
|
|
|
|
|
|
|
Selling and marketing
|
|
|
51,471 |
|
|
|
44,846
|
|
|
|
|
|
148,624 |
|
|
|
167,380
|
|
General and administrative
|
|
|
34,381 |
|
|
|
44,524
|
|
|
|
|
|
135,127 |
|
|
|
171,440
|
|
Research and development
|
|
|
14,159 |
|
|
|
16,052
|
|
|
|
|
|
63,748 |
|
|
|
63,929
|
|
Business reorganization and related
|
|
|
- |
|
|
|
1,601
|
|
|
|
|
|
- |
|
|
|
4,478
|
|
Impairment of goodwill and long-lived assets
|
|
|
14,754 |
|
|
|
-
|
|
|
|
|
|
14,754 |
|
|
|
-
|
|
Depreciation and amortization
|
|
|
4,282 |
|
|
|
5,629
|
|
|
|
|
|
18,623 |
|
|
|
25,755
|
|
Total operating expenses
|
|
|
119,047 |
|
|
|
112,652
|
|
|
|
|
|
380,876 |
|
|
|
432,982
|
|
Income (loss) from operations
|
|
|
(16,068 |
) |
|
|
(13,982
|
)
|
|
|
|
|
(130,214 |
) |
|
|
115,853
|
|
Interest and other expense, net
|
|
|
(885 |
) |
|
|
(2,845
|
)
|
|
|
|
|
(3,195 |
) |
|
|
(3,710
|
)
|
Income (loss) before income taxes
|
|
|
(16,953 |
) |
|
|
(16,827
|
)
|
|
|
|
|
(133,409 |
) |
|
|
112,143
|
|
Provision (benefit) for income taxes
|
|
|
5,036 |
|
|
|
(1,873
|
)
|
|
|
|
|
4,521 |
|
|
|
15,046
|
|
Net income (loss)
|
|
$ |
(21,989 |
) |
|
$
|
(14,954
|
)
|
|
|
|
$ |
(137,930 |
) |
|
$
|
97,097
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings (loss) per share:
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
$ |
(0.28 |
) |
|
$
|
(0.20
|
)
|
|
|
|
$ |
(1.80 |
) |
|
$
|
1.29
|
|
Diluted
|
|
$ |
(0.28 |
) |
|
$
|
(0.20
|
)
|
|
|
|
$ |
(1.80 |
) |
|
$
|
1.28
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average shares outstanding:
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
|
77,569 |
|
|
|
76,046
|
|
|
|
|
|
76,815 |
|
|
|
75,039
|
|
Diluted
|
|
|
77,569 |
|
|
|
76,046
|
|
|
|
|
|
76,815 |
|
|
|
75,943
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended October 31, |
|
|
Year ended October 31, |
OTHER INFORMATION |
|
2009 |
|
2008 |
|
|
|
2009 |
|
2008 |
|
|
|
|
|
|
|
|
|
|
|
Total revenue mix
|
|
|
|
|
|
|
|
|
|
|
Publishing
|
|
|
82
|
%
|
|
|
75
|
%
|
|
|
|
|
72
|
%
|
|
|
80
|
%
|
Distribution
|
|
|
18
|
%
|
|
|
25
|
%
|
|
|
|
|
28
|
%
|
|
|
20
|
%
|
|
|
|
|
|
|
|
|
|
|
|
Geographic revenue mix
|
|
|
|
|
|
|
|
|
|
|
North America
|
|
|
69
|
%
|
|
|
65
|
%
|
|
|
|
|
73
|
%
|
|
|
65
|
%
|
International
|
|
|
31
|
%
|
|
|
35
|
%
|
|
|
|
|
27
|
%
|
|
|
35
|
%
|
|
|
|
|
|
|
|
|
|
|
|
Publishing revenue platform mix
|
|
|
|
|
|
|
|
|
|
|
Microsoft Xbox 360
|
|
|
53
|
%
|
|
|
28
|
%
|
|
|
|
|
41
|
%
|
|
|
39
|
%
|
Sony PlayStation 3
|
|
|
21
|
%
|
|
|
35
|
%
|
|
|
|
|
16
|
%
|
|
|
34
|
%
|
Sony PSP
|
|
|
7
|
%
|
|
|
7
|
%
|
|
|
|
|
7
|
%
|
|
|
5
|
%
|
PC
|
|
|
7
|
%
|
|
|
5
|
%
|
|
|
|
|
11
|
%
|
|
|
3
|
%
|
Nintendo Wii
|
|
|
5
|
%
|
|
|
13
|
%
|
|
|
|
|
11
|
%
|
|
|
9
|
%
|
Sony PlayStation 2
|
|
|
4
|
%
|
|
|
8
|
%
|
|
|
|
|
7
|
%
|
|
|
8
|
%
|
Nintendo DS
|
|
|
3
|
%
|
|
|
4
|
%
|
|
|
|
|
7
|
%
|
|
|
2
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
TAKE-TWO INTERACTIVE SOFTWARE, INC. and SUBSIDIARIES |
CONSOLIDATED BALANCE SHEETS |
(in thousands, except per share amounts) |
|
|
|
|
|
|
|
|
|
|
|
October 31, |
|
|
|
October 31, |
|
|
|
2009 |
|
|
|
2008 |
|
|
|
|
|
|
|
|
ASSETS |
|
|
|
|
|
|
|
Current assets:
|
|
|
|
|
|
|
|
Cash and cash equivalents
|
|
|
$ |
102,083 |
|
|
|
|
$
|
280,277
|
|
Accounts receivable, net of allowances of $47,265 and $68,448 at
October 31, 2009 and
|
|
|
|
|
|
|
|
October 31, 2008, respectively
|
|
|
|
199,395 |
|
|
|
|
|
157,458
|
|
Inventory
|
|
|
|
93,996 |
|
|
|
|
|
104,235
|
|
Software development costs and licenses
|
|
|
|
167,341 |
|
|
|
|
|
113,436
|
|
Prepaid taxes and taxes receivable
|
|
|
|
8,814 |
|
|
|
|
|
23,763
|
|
Prepaid expenses and other
|
|
|
|
56,595 |
|
|
|
|
|
44,605
|
|
Total current assets
|
|
|
|
628,224 |
|
|
|
|
|
723,774
|
|
|
|
|
|
|
|
|
|
Fixed assets, net
|
|
|
|
27,392 |
|
|
|
|
|
32,361
|
|
Software development costs and licenses, net of current portion
|
|
|
|
75,521 |
|
|
|
|
|
61,991
|
|
Goodwill
|
|
|
|
220,881 |
|
|
|
|
|
230,809
|
|
Other intangibles, net
|
|
|
|
23,224 |
|
|
|
|
|
26,123
|
|
Other assets
|
|
|
|
33,329 |
|
|
|
|
|
8,294
|
|
Total assets
|
|
|
$ |
1,008,571 |
|
|
|
|
$
|
1,083,352
|
|
|
|
|
|
|
|
|
|
LIABILITIES AND STOCKHOLDERS' EQUITY |
|
|
|
|
|
|
|
Current liabilities:
|
|
|
|
|
|
|
|
Accounts payable
|
|
|
$ |
172,976 |
|
|
|
|
$
|
156,167
|
|
Accrued expenses and other current liabilities
|
|
|
|
174,983 |
|
|
|
|
|
153,089
|
|
Deferred revenue
|
|
|
|
6,334 |
|
|
|
|
|
56,163
|
|
Total current liabilities
|
|
|
|
354,293 |
|
|
|
|
|
365,419
|
|
|
|
|
|
|
|
|
|
Long-term debt
|
|
|
|
138,000 |
|
|
|
|
|
70,000
|
|
Income taxes payable
|
|
|
|
10,146 |
|
|
|
|
|
26,399
|
|
Other long-term liabilities
|
|
|
|
- |
|
|
|
|
|
6,416
|
|
Total liabilities
|
|
|
|
502,439 |
|
|
|
|
|
468,234
|
|
Commitments and contingencies
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stockholders' equity:
|
|
|
|
|
|
|
|
Preferred stock, $.01 par value, 5,000 shares authorized
|
|
|
|
- |
|
|
|
|
|
- |
|
Common stock, $.01 par value, 150,000 shares authorized; 81,925 and
77,694 shares
|
|
|
|
819 |
|
|
|
|
|
777
|
|
issued and outstanding at October 31, 2009 and October 31, 2008,
respectively
|
|
|
|
|
Additional paid-in capital
|
|
|
|
616,776 |
|
|
|
|
|
603,579
|
|
Retained earnings (accumulated deficit)
|
|
|
|
(119,655 |
) |
|
|
|
|
18,275
|
|
Accumulated other comprehensive income (loss)
|
|
|
|
8,192 |
|
|
|
|
|
(7,513
|
)
|
Total stockholders' equity
|
|
|
|
506,132 |
|
|
|
|
|
615,118
|
|
|
|
|
|
|
|
|
|
Total liabilities and stockholders' equity
|
|
|
$ |
1,008,571 |
|
|
|
|
$
|
1,083,352
|
|
|
TAKE-TWO INTERACTIVE SOFTWARE, INC. and SUBSIDIARIES |
CONSOLIDATED STATEMENTS OF CASH FLOWS |
(in thousands) |
|
|
|
Year ended October 31, |
|
|
|
2009 |
|
|
2008 |
|
|
|
|
|
|
|
Operating activities: |
|
|
|
|
|
|
Net income (loss)
|
|
$ |
(137,930 |
) |
|
|
$
|
97,097
|
|
|
Adjustments to reconcile net income (loss) to net cash provided by
(used for) operating activities:
|
|
|
|
|
|
|
Amortization and impairment of software development costs and
licenses
|
|
|
105,521 |
|
|
|
|
146,102
|
|
|
Depreciation and amortization of long-lived assets
|
|
|
18,623 |
|
|
|
|
25,755
|
|
|
Impairment of goodwill and long-lived assets
|
|
|
14,754 |
|
|
|
|
-
|
|
|
Amortization and impairment of intellectual property
|
|
|
478 |
|
|
|
|
2,350
|
|
|
Stock-based compensation
|
|
|
25,933 |
|
|
|
|
40,387
|
|
|
Deferred income taxes
|
|
|
3,432 |
|
|
|
|
(391
|
)
|
|
Foreign currency transaction (gain) loss and other
|
|
|
(3,448 |
) |
|
|
|
6,688
|
|
|
Changes in assets and liabilities, net of effect from purchases of
businesses:
|
|
|
|
|
|
|
Accounts receivable
|
|
|
(41,937 |
) |
|
|
|
(52,421
|
)
|
|
Inventory
|
|
|
10,239 |
|
|
|
|
(4,904
|
)
|
|
Software development costs and licenses
|
|
|
(164,828 |
) |
|
|
|
(157,076
|
)
|
|
Prepaid expenses, other current and other non-current assets
|
|
|
(519 |
) |
|
|
|
16,831
|
|
|
Deferred revenue
|
|
|
(49,829 |
) |
|
|
|
(5,381
|
)
|
|
Accounts payable, accrued expenses, income taxes payable and other
liabilities
|
|
|
9,307 |
|
|
|
|
36,389
|
|
|
Total adjustments
|
|
|
(72,274 |
) |
|
|
|
54,329
|
|
|
Net cash provided by (used for) operating activities
|
|
|
(210,204 |
) |
|
|
|
151,426
|
|
|
|
|
|
|
|
|
Investing activities: |
|
|
|
|
|
|
Purchase of fixed assets
|
|
|
(11,176 |
) |
|
|
|
(12,277
|
)
|
|
Cash received from sale of business
|
|
|
- |
|
|
|
|
3,000
|
|
|
Payments in connection with business combinations, net of cash
acquired
|
|
|
(5,813 |
) |
|
|
|
(7,503
|
)
|
|
Net cash used for investing activities
|
|
|
(16,989 |
) |
|
|
|
(16,780
|
)
|
|
|
|
|
|
|
|
Financing activities: |
|
|
|
|
|
|
Proceeds from exercise of employee stock options
|
|
|
22 |
|
|
|
|
25,962
|
|
|
Net borrowings (payments) on line of credit
|
|
|
(70,000 |
) |
|
|
|
52,000
|
|
|
Proceeds from issuance of Convertible Notes
|
|
|
138,000 |
|
|
|
|
-
|
|
|
Purchase of convertible note hedges
|
|
|
(43,592 |
) |
|
|
|
-
|
|
|
Issuance of warrants to purchase common stock
|
|
|
26,342 |
|
|
|
|
-
|
|
|
Payment of debt issuance costs
|
|
|
(4,984 |
) |
|
|
|
(962
|
)
|
|
Net cash provided by financing activities
|
|
|
45,788 |
|
|
|
|
77,000
|
|
|
|
|
|
|
|
|
|
Effects of exchange rates on cash and cash equivalents
|
|
|
3,211 |
|
|
|
|
(9,126
|
)
|
|
|
|
|
|
|
|
|
Net increase (decrease) in cash and cash equivalents
|
|
|
(178,194 |
) |
|
|
|
202,520
|
|
|
Cash and cash equivalents, beginning of year
|
|
|
280,277 |
|
|
|
|
77,757
|
|
|
Cash and cash equivalents, end of period
|
|
$ |
102,083 |
|
|
|
$
|
280,277
|
|
|
|
|
|
|
|
|
|
|
|
|
TAKE-TWO INTERACTIVE SOFTWARE, INC. and SUBSIDIARIES |
CONSOLIDATED STATEMENTS OF OPERATIONS |
(in thousands, except per share amounts) |
|
|
|
|
|
|
Non-GAAP Reconciling Items |
|
|
|
|
|
Three months |
|
|
Impairment of |
|
|
Professional |
|
|
|
|
|
|
|
|
Non-GAAP three |
|
|
ended October 31, |
|
|
goodwill and |
|
|
fees and |
|
|
Stock-based |
|
|
Non-cash |
|
|
months ended October 31, |
|
|
2009 |
|
|
long-lived assets |
|
|
legal matters |
|
|
compensation |
|
|
income taxes |
|
|
2009 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net revenue
|
|
$
|
343,392
|
|
|
|
$
|
-
|
|
|
|
$
|
-
|
|
|
|
$
|
-
|
|
|
|
$
|
-
|
|
|
|
$
|
343,392
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of goods sold:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Product costs
|
|
|
147,271
|
|
|
|
|
-
|
|
|
|
|
-
|
|
|
|
|
-
|
|
|
|
|
-
|
|
|
|
|
147,271
|
|
Software development costs and royalties
|
|
|
47,490
|
|
|
|
|
-
|
|
|
|
|
-
|
|
|
|
|
(2,415
|
)
|
|
|
|
-
|
|
|
|
|
45,075
|
|
Internal royalties
|
|
|
27,725
|
|
|
|
|
-
|
|
|
|
|
-
|
|
|
|
|
-
|
|
|
|
|
-
|
|
|
|
|
27,725
|
|
Licenses
|
|
|
17,927
|
|
|
|
|
-
|
|
|
|
|
-
|
|
|
|
|
-
|
|
|
|
|
-
|
|
|
|
|
17,927
|
|
Total cost of goods sold
|
|
|
240,413
|
|
|
|
|
-
|
|
|
|
|
-
|
|
|
|
|
(2,415
|
)
|
|
|
|
-
|
|
|
|
|
237,998
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross profit
|
|
|
102,979
|
|
|
|
|
-
|
|
|
|
|
-
|
|
|
|
|
2,415
|
|
|
|
|
-
|
|
|
|
|
105,394
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Selling and marketing
|
|
|
51,471
|
|
|
|
|
-
|
|
|
|
|
-
|
|
|
|
|
(1,135
|
)
|
|
|
|
-
|
|
|
|
|
50,336
|
|
General and administrative
|
|
|
34,381
|
|
|
|
|
-
|
|
|
|
|
(98
|
)
|
|
|
|
(5,118
|
)
|
|
|
|
-
|
|
|
|
|
29,165
|
|
Research and development
|
|
|
14,159
|
|
|
|
|
-
|
|
|
|
|
-
|
|
|
|
|
(1,151
|
)
|
|
|
|
-
|
|
|
|
|
13,008
|
|
Business reorganization and related
|
|
|
-
|
|
|
|
|
-
|
|
|
|
|
-
|
|
|
|
|
-
|
|
|
|
|
-
|
|
|
|
|
-
|
|
Impairment of goodwill and long-lived assets
|
|
|
14,754
|
|
|
|
|
(14,754
|
)
|
|
|
|
-
|
|
|
|
|
-
|
|
|
|
|
-
|
|
|
|
|
-
|
|
Depreciation and amortization
|
|
|
4,282
|
|
|
|
|
-
|
|
|
|
|
-
|
|
|
|
|
-
|
|
|
|
|
-
|
|
|
|
|
4,282
|
|
Total operating expenses
|
|
|
119,047
|
|
|
|
|
(14,754
|
)
|
|
|
|
(98
|
)
|
|
|
|
(7,404
|
)
|
|
|
|
-
|
|
|
|
|
96,791
|
|
Income (loss) from operations
|
|
|
(16,068
|
)
|
|
|
|
14,754
|
|
|
|
|
98
|
|
|
|
|
9,819
|
|
|
|
|
-
|
|
|
|
|
8,603
|
|
Interest and other expense, net
|
|
|
(885
|
)
|
|
|
|
-
|
|
|
|
|
-
|
|
|
|
|
-
|
|
|
|
|
-
|
|
|
|
|
(885
|
)
|
Income (loss) before income taxes
|
|
|
(16,953
|
)
|
|
|
|
14,754
|
|
|
|
|
98
|
|
|
|
|
9,819
|
|
|
|
|
-
|
|
|
|
|
7,718
|
|
Provision (benefit) for income taxes
|
|
|
5,036
|
|
|
|
|
-
|
|
|
|
|
-
|
|
|
|
|
-
|
|
|
|
|
(4,319
|
)
|
|
|
|
717
|
|
Net income (loss)
|
|
$
|
(21,989
|
)
|
|
|
$
|
14,754
|
|
|
|
$
|
98
|
|
|
|
$
|
9,819
|
|
|
|
$
|
4,319
|
|
|
|
$
|
7,001
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings (loss) per share:*
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
$
|
(0.28
|
)
|
|
|
$
|
0.19
|
|
|
|
$
|
0.00
|
|
|
|
$
|
0.13
|
|
|
|
$
|
0.06
|
|
|
|
$
|
0.09
|
|
Diluted
|
|
$
|
(0.28
|
)
|
|
|
$
|
0.19
|
|
|
|
$
|
0.00
|
|
|
|
$
|
0.13
|
|
|
|
$
|
0.06
|
|
|
|
$
|
0.09
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average shares outstanding
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
|
77,569
|
|
|
|
|
77,569
|
|
|
|
|
77,569
|
|
|
|
|
77,569
|
|
|
|
|
77,569
|
|
|
|
|
77,569
|
|
Diluted
|
|
|
77,569
|
|
|
|
|
77,569
|
|
|
|
|
77,569
|
|
|
|
|
77,569
|
|
|
|
|
77,569
|
|
|
|
|
78,344
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
EBITDA: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income (loss) before income taxes
|
|
$
|
(16,953
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
7,718
|
|
Interest
|
|
|
2,188
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2,188
|
|
Depreciation and amortization
|
|
|
4,282
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
4,282
|
|
EBITDA |
|
$
|
(10,483
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
14,188
|
|
Add: Impairment of goodwill and long-lived assets
|
|
|
14,754
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
-
|
|
Adjusted EBITDA |
|
$
|
4,271
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
14,188
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
*Basic and diluted earnings (loss) per share may not add due to
rounding |
|
|
|
|
|
TAKE-TWO INTERACTIVE SOFTWARE, INC. and SUBSIDIARIES |
CONSOLIDATED STATEMENTS OF OPERATIONS |
(in thousands, except per share amounts) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP Reconciling Items |
|
|
|
|
|
Three months |
|
|
Business |
|
|
Professional |
|
|
|
|
|
Non-GAAP three |
|
|
ended October 31, |
|
|
reorganization |
|
|
fees and |
|
|
Stock-based |
|
|
months ended October 31, |
|
|
2008 |
|
|
and related |
|
|
legal matters |
|
|
compensation |
|
|
2008 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net revenue
|
|
$
|
323,442
|
|
|
|
$
|
-
|
|
|
|
$
|
-
|
|
|
|
$
|
-
|
|
|
|
$
|
323,442
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of goods sold:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Product costs
|
|
|
146,422
|
|
|
|
|
-
|
|
|
|
|
-
|
|
|
|
|
-
|
|
|
|
|
146,422
|
|
Software development costs and royalties
|
|
|
43,276
|
|
|
|
|
-
|
|
|
|
|
-
|
|
|
|
|
(2,863
|
)
|
|
|
|
40,413
|
|
Internal royalties
|
|
|
18,003
|
|
|
|
|
-
|
|
|
|
|
-
|
|
|
|
|
-
|
|
|
|
|
18,003
|
|
Licenses
|
|
|
17,071
|
|
|
|
|
-
|
|
|
|
|
-
|
|
|
|
|
-
|
|
|
|
|
17,071
|
|
Total cost of goods sold
|
|
|
224,772
|
|
|
|
|
-
|
|
|
|
|
-
|
|
|
|
|
(2,863
|
)
|
|
|
|
221,909
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross profit
|
|
|
98,670
|
|
|
|
|
-
|
|
|
|
|
-
|
|
|
|
|
2,863
|
|
|
|
|
101,533
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Selling and marketing
|
|
|
44,846
|
|
|
|
|
-
|
|
|
|
|
-
|
|
|
|
|
(444
|
)
|
|
|
|
44,402
|
|
General and administrative
|
|
|
44,524
|
|
|
|
|
-
|
|
|
|
|
(5,589
|
)
|
|
|
|
(4,804
|
)
|
|
|
|
34,131
|
|
Research and development
|
|
|
16,052
|
|
|
|
|
-
|
|
|
|
|
-
|
|
|
|
|
(1,214
|
)
|
|
|
|
14,838
|
|
Business reorganization and related
|
|
|
1,601
|
|
|
|
|
(1,601
|
)
|
|
|
|
-
|
|
|
|
|
-
|
|
|
|
|
-
|
|
Impairment of goodwill and long-lived assets
|
|
|
-
|
|
|
|
|
-
|
|
|
|
|
-
|
|
|
|
|
-
|
|
|
|
|
-
|
|
Depreciation and amortization
|
|
|
5,629
|
|
|
|
|
-
|
|
|
|
|
-
|
|
|
|
|
-
|
|
|
|
|
5,629
|
|
Total operating expenses
|
|
|
112,652
|
|
|
|
|
(1,601
|
)
|
|
|
|
(5,589
|
)
|
|
|
|
(6,462
|
)
|
|
|
|
99,000
|
|
Income (loss) from operations
|
|
|
(13,982
|
)
|
|
|
|
1,601
|
|
|
|
|
5,589
|
|
|
|
|
9,325
|
|
|
|
|
2,533
|
|
Interest and other expense, net
|
|
|
(2,845
|
)
|
|
|
|
-
|
|
|
|
|
-
|
|
|
|
|
-
|
|
|
|
|
(2,845
|
)
|
Income (loss) before income taxes
|
|
|
(16,827
|
)
|
|
|
|
1,601
|
|
|
|
|
5,589
|
|
|
|
|
9,325
|
|
|
|
|
(312
|
)
|
Provision (benefit) for income taxes
|
|
|
(1,873
|
)
|
|
|
|
-
|
|
|
|
|
-
|
|
|
|
|
-
|
|
|
|
|
(1,873
|
)
|
Net income (loss)
|
|
$
|
(14,954
|
)
|
|
|
$
|
1,601
|
|
|
|
$
|
5,589
|
|
|
|
$
|
9,325
|
|
|
|
$
|
1,561
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings (loss) per share:*
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
$
|
(0.20
|
)
|
|
|
$
|
0.02
|
|
|
|
$
|
0.07
|
|
|
|
$
|
0.12
|
|
|
|
$
|
0.02
|
|
Diluted
|
|
$
|
(0.20
|
)
|
|
|
$
|
0.02
|
|
|
|
$
|
0.07
|
|
|
|
$
|
0.12
|
|
|
|
$
|
0.02
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average shares outstanding
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
|
76,046
|
|
|
|
|
76,046
|
|
|
|
|
76,046
|
|
|
|
|
76,046
|
|
|
|
|
76,046
|
|
Diluted
|
|
|
76,046
|
|
|
|
|
76,046
|
|
|
|
|
76,046
|
|
|
|
|
76,046
|
|
|
|
|
76,903
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
EBITDA: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income (loss) before income taxes
|
|
$
|
(16,827
|
)
|
|
|
|
|
|
|
|
|
|
|
|
$
|
(312
|
)
|
Interest
|
|
|
(1,159
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
(1,159
|
)
|
Depreciation and amortization
|
|
|
5,629
|
|
|
|
|
|
|
|
|
|
|
|
|
|
5,629
|
|
EBITDA |
|
$
|
(12,357
|
)
|
|
|
|
|
|
|
|
|
|
|
|
$
|
4,158
|
|
Add: Business reorganization and related
|
|
|
1,601
|
|
|
|
|
|
|
|
|
|
|
|
|
|
-
|
|
Adjusted EBITDA |
|
$
|
(10,756
|
)
|
|
|
|
|
|
|
|
|
|
|
|
$
|
4,158
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
*Basic and diluted earnings (loss) per share may not add due to
rounding |
|
|
|
TAKE-TWO INTERACTIVE SOFTWARE, INC. and SUBSIDIARIES |
CONSOLIDATED STATEMENTS OF OPERATIONS |
(in thousands, except per share amounts) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP Reconciling Items |
|
|
|
|
|
Year |
|
|
Impairment of |
|
|
Professional |
|
|
|
|
|
|
Non-GAAP year |
|
|
ended October 31, |
|
|
goodwill and |
|
|
fees and |
|
|
Stock-based |
|
|
Non-cash |
|
|
ended October 31, |
|
|
2009 |
|
|
long-lived assets |
|
|
legal matters |
|
|
compensation |
|
|
income taxes |
|
|
2009 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net revenue
|
|
$
|
968,488
|
|
|
|
$
|
-
|
|
|
|
$
|
-
|
|
|
|
$
|
-
|
|
|
|
$
|
-
|
|
|
|
$
|
968,488
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of goods sold:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Product costs
|
|
|
486,762
|
|
|
|
|
-
|
|
|
|
|
-
|
|
|
|
|
-
|
|
|
|
|
-
|
|
|
|
|
486,762
|
|
Software development costs and royalties
|
|
|
115,960
|
|
|
|
|
-
|
|
|
|
|
-
|
|
|
|
|
(6,094
|
)
|
|
|
|
-
|
|
|
|
|
109,866
|
|
Internal royalties
|
|
|
58,224
|
|
|
|
|
-
|
|
|
|
|
-
|
|
|
|
|
-
|
|
|
|
|
-
|
|
|
|
|
58,224
|
|
Licenses
|
|
|
56,880
|
|
|
|
|
-
|
|
|
|
|
-
|
|
|
|
|
-
|
|
|
|
|
-
|
|
|
|
|
56,880
|
|
Total cost of goods sold
|
|
|
717,826
|
|
|
|
|
-
|
|
|
|
|
-
|
|
|
|
|
(6,094
|
)
|
|
|
|
-
|
|
|
|
|
711,732
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross profit
|
|
|
250,662
|
|
|
|
|
-
|
|
|
|
|
-
|
|
|
|
|
6,094
|
|
|
|
|
-
|
|
|
|
|
256,756
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Selling and marketing
|
|
|
148,624
|
|
|
|
|
-
|
|
|
|
|
-
|
|
|
|
|
(2,551
|
)
|
|
|
|
-
|
|
|
|
|
146,073
|
|
General and administrative
|
|
|
135,127
|
|
|
|
|
-
|
|
|
|
|
(7,225
|
)
|
|
|
|
(14,119
|
)
|
|
|
|
-
|
|
|
|
|
113,783
|
|
Research and development
|
|
|
63,748
|
|
|
|
|
-
|
|
|
|
|
-
|
|
|
|
|
(3,169
|
)
|
|
|
|
-
|
|
|
|
|
60,579
|
|
Business reorganization and related
|
|
|
-
|
|
|
|
|
-
|
|
|
|
|
-
|
|
|
|
|
-
|
|
|
|
|
-
|
|
|
|
|
-
|
|
Impairment of goodwill and long-lived assets
|
|
|
14,754
|
|
|
|
|
(14,754
|
)
|
|
|
|
-
|
|
|
|
|
-
|
|
|
|
|
-
|
|
|
|
|
-
|
|
Depreciation and amortization
|
|
|
18,623
|
|
|
|
|
-
|
|
|
|
|
-
|
|
|
|
|
-
|
|
|
|
|
-
|
|
|
|
|
18,623
|
|
Total operating expenses
|
|
|
380,876
|
|
|
|
|
(14,754
|
)
|
|
|
|
(7,225
|
)
|
|
|
|
(19,839
|
)
|
|
|
|
-
|
|
|
|
|
339,058
|
|
Income (loss) from operations
|
|
|
(130,214
|
)
|
|
|
|
14,754
|
|
|
|
|
7,225
|
|
|
|
|
25,933
|
|
|
|
|
-
|
|
|
|
|
(82,302
|
)
|
Interest and other expense, net
|
|
|
(3,195
|
)
|
|
|
|
-
|
|
|
|
|
-
|
|
|
|
|
-
|
|
|
|
|
-
|
|
|
|
|
(3,195
|
)
|
Income (loss) before income taxes
|
|
|
(133,409
|
)
|
|
|
|
14,754
|
|
|
|
|
7,225
|
|
|
|
|
25,933
|
|
|
|
|
-
|
|
|
|
|
(85,497
|
)
|
Provision (benefit) for income taxes
|
|
|
4,521
|
|
|
|
|
-
|
|
|
|
|
-
|
|
|
|
|
-
|
|
|
|
|
(4,319
|
)
|
|
|
|
202
|
|
Net income (loss)
|
|
$
|
(137,930
|
)
|
|
|
$
|
14,754
|
|
|
|
$
|
7,225
|
|
|
|
$
|
25,933
|
|
|
|
$
|
4,319
|
|
|
|
$
|
(85,699
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings (loss) per share:*
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
$
|
(1.80
|
)
|
|
|
$
|
0.19
|
|
|
|
$
|
0.09
|
|
|
|
$
|
0.34
|
|
|
|
$
|
0.06
|
|
|
|
$
|
(1.12
|
)
|
Diluted
|
|
$
|
(1.80
|
)
|
|
|
$
|
0.19
|
|
|
|
$
|
0.09
|
|
|
|
$
|
0.34
|
|
|
|
$
|
0.06
|
|
|
|
$
|
(1.12
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average shares outstanding
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
|
76,815
|
|
|
|
|
76,815
|
|
|
|
|
76,815
|
|
|
|
|
76,815
|
|
|
|
|
76,815
|
|
|
|
|
76,815
|
|
Diluted
|
|
|
76,815
|
|
|
|
|
76,815
|
|
|
|
|
76,815
|
|
|
|
|
76,815
|
|
|
|
|
76,815
|
|
|
|
|
76,815
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
EBITDA: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income (loss) before income taxes
|
|
$
|
(133,409
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
(85,497
|
)
|
Interest
|
|
|
7,087
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
7,087
|
|
Depreciation and amortization
|
|
|
18,623
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
18,623
|
|
EBITDA |
|
|
(107,699
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(59,787
|
)
|
Add: Impairment of goodwill and long-lived assets
|
|
|
14,754
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
-
|
|
Adjusted EBITDA |
|
$
|
(92,945
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
(59,787
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
*Basic and diluted earnings (loss) per share may not add due to
rounding |
|
TAKE-TWO INTERACTIVE SOFTWARE, INC. and SUBSIDIARIES |
CONSOLIDATED STATEMENTS OF OPERATIONS |
(in thousands, except per share amounts) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP Reconciling Items |
|
|
|
|
|
Year |
|
|
Business |
|
|
Professional |
|
|
|
|
|
Non-GAAP year |
|
|
ended October 31, |
|
|
reorganization |
|
|
fees and |
|
|
Stock-based |
|
|
ended October 31, |
|
|
2008 |
|
|
and related |
|
|
legal matters |
|
|
compensation |
|
|
2008 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net revenue
|
|
$
|
1,537,530
|
|
|
|
$
|
-
|
|
|
|
$
|
-
|
|
|
|
$
|
-
|
|
|
|
$
|
1,537,530
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of goods sold:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Product costs
|
|
|
633,979
|
|
|
|
|
-
|
|
|
|
|
-
|
|
|
|
|
-
|
|
|
|
|
633,979
|
|
Software development costs and royalties
|
|
|
169,398
|
|
|
|
|
-
|
|
|
|
|
-
|
|
|
|
|
(13,461
|
)
|
|
|
|
155,937
|
|
Internal royalties
|
|
|
128,772
|
|
|
|
|
-
|
|
|
|
|
-
|
|
|
|
|
-
|
|
|
|
|
128,772
|
|
Licenses
|
|
|
56,546
|
|
|
|
|
-
|
|
|
|
|
-
|
|
|
|
|
-
|
|
|
|
|
56,546
|
|
Total cost of goods sold
|
|
|
988,695
|
|
|
|
|
-
|
|
|
|
|
-
|
|
|
|
|
(13,461
|
)
|
|
|
|
975,234
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross profit
|
|
|
548,835
|
|
|
|
|
-
|
|
|
|
|
-
|
|
|
|
|
13,461
|
|
|
|
|
562,296
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Selling and marketing
|
|
|
167,380
|
|
|
|
|
-
|
|
|
|
|
-
|
|
|
|
|
(2,370
|
)
|
|
|
|
165,010
|
|
General and administrative
|
|
|
171,440
|
|
|
|
|
-
|
|
|
|
|
(16,243
|
)
|
|
|
|
(19,678
|
)
|
|
|
|
135,519
|
|
Research and development
|
|
|
63,929
|
|
|
|
|
-
|
|
|
|
|
-
|
|
|
|
|
(4,878
|
)
|
|
|
|
59,051
|
|
Business reorganization and related
|
|
|
4,478
|
|
|
|
|
(4,478
|
)
|
|
|
|
-
|
|
|
|
|
-
|
|
|
|
|
-
|
|
Impairment of goodwill and long-lived assets
|
|
|
-
|
|
|
|
|
-
|
|
|
|
|
-
|
|
|
|
|
-
|
|
|
|
|
-
|
|
Depreciation and amortization
|
|
|
25,755
|
|
|
|
|
-
|
|
|
|
|
-
|
|
|
|
|
-
|
|
|
|
|
25,755
|
|
Total operating expenses
|
|
|
432,982
|
|
|
|
|
(4,478
|
)
|
|
|
|
(16,243
|
)
|
|
|
|
(26,926
|
)
|
|
|
|
385,335
|
|
Income (loss) from operations
|
|
|
115,853
|
|
|
|
|
4,478
|
|
|
|
|
16,243
|
|
|
|
|
40,387
|
|
|
|
|
176,961
|
|
Interest and other expense, net
|
|
|
(3,710
|
)
|
|
|
|
-
|
|
|
|
|
-
|
|
|
|
|
-
|
|
|
|
|
(3,710
|
)
|
Income (loss) before income taxes
|
|
|
112,143
|
|
|
|
|
4,478
|
|
|
|
|
16,243
|
|
|
|
|
40,387
|
|
|
|
|
173,251
|
|
Provision (benefit) for income taxes
|
|
|
15,046
|
|
|
|
|
-
|
|
|
|
|
-
|
|
|
|
|
-
|
|
|
|
|
15,046
|
|
Net income (loss)
|
|
$
|
97,097
|
|
|
|
$
|
4,478
|
|
|
|
$
|
16,243
|
|
|
|
$
|
40,387
|
|
|
|
$
|
158,205
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings (loss) per share:*
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
$
|
1.29
|
|
|
|
$
|
0.06
|
|
|
|
$
|
0.22
|
|
|
|
$
|
0.54
|
|
|
|
$
|
2.11
|
|
Diluted
|
|
$
|
1.28
|
|
|
|
$
|
0.06
|
|
|
|
$
|
0.21
|
|
|
|
$
|
0.53
|
|
|
|
$
|
2.08
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average shares outstanding
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
|
75,039
|
|
|
|
|
75,039
|
|
|
|
|
75,039
|
|
|
|
|
75,039
|
|
|
|
|
75,039
|
|
Diluted
|
|
|
75,943
|
|
|
|
|
75,943
|
|
|
|
|
75,943
|
|
|
|
|
75,943
|
|
|
|
|
75,943
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
EBITDA: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income (loss) before income taxes
|
|
$
|
112,143
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
173,251
|
|
Interest
|
|
|
(695
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
(695
|
)
|
Depreciation and amortization
|
|
|
25,755
|
|
|
|
|
|
|
|
|
|
|
|
|
|
25,755
|
|
EBITDA |
|
|
137,203
|
|
|
|
|
|
|
|
|
|
|
|
|
|
198,311
|
|
Add: Business reorganization and related
|
|
|
4,478
|
|
|
|
|
|
|
|
|
|
|
|
|
|
-
|
|
Adjusted EBITDA |
|
$
|
141,681
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
198,311
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
*Basic and diluted earnings (loss) per share may not add due to
rounding |

SOURCE: Take-Two Interactive Software, Inc.
Take-Two Interactive Software, Inc. Corporate Press/Investor Relations: Meg Maise, 646-536-2932 meg.maise@take2games.com
|