View:
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
____________________
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of report (Date of earliest event reported) March 4, 2005
TAKE-TWO INTERACTIVE SOFTWARE, INC.
(Exact Name of Registrant as Specified in its Charter)
Delaware 0-29230 51-0350842
- -------------------------------- ---------------- -----------------------
(State or other jurisdiction (Commission (I.R.S. Employer
of incorporation) File Number) Identification No.)
622 Broadway, New York, New York 10012
- -------------------------------------------------------------------------------
(Address of principal executive offices) (Zip code)
Registrant's telephone number, including area code: (646) 536-2842
- --------------------------------------------------------------------------------
Check the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of the registrant under any of the
following provisions:
[_] Written communications pursuant to Rule 425 under the Securities Act (17
CFR 230.425)
[_] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
[_] Pre-commencement communications pursuant to Rule 14d-2(b) under the
Exchange Act (17 CFR 240.14d-2(b))
[_] Pre-commencement communications pursuant to Rule 13e-4(c) under the
Exchange Act (17 CFR 240.13e-4(c))
Item 2.02 Results of Operations and Financial Condition.
On March 3, 2005 Take-Two Interactive Software, Inc. (the "Company") issued
a news release reporting the earnings results of the Company for its fiscal
quarter ended January 31, 2005. A copy of the news release is attached to this
Current Report as Exhibit 99.1.
The information in this Current Report on Form 8-K, including the exhibit
included herewith, is furnished pursuant to Item 2.02 and shall not be deemed to
be "filed" for purposes of Section 18 of the Securities Exchange Act of 1934, as
amended, or otherwise subject to the liabilities of that section.
Item 9.01 Financial Statements and Exhibits
(c) Exhibits
99.1 Press Release dated March 3, 2005 relating to Take-Two Interactive
Software, Inc.'s financial results for the first fiscal quarter ended
January 31, 2005.
SIGNATURES
Pursuant to the requirements of the Securities and Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
TAKE-TWO INTERACTIVE SOFTWARE, INC.
Date: March 4, 2005 By: /s/ Karl H. Winters
----------------------------------
Karl H. Winters
Chief Financial Officer
INDEX TO EXHIBITS
Exhibit No. Description
- ---------- -----------
99.1 Press Release dated March 3, 2005 relating to Take-Two Interactive
Software, Inc.'s financial results for the first fiscal quarter ended
January 31, 2005.
Exhibit 99.1
Take-Two Interactive Software, Inc. Reports First Quarter Fiscal 2005 Financial
Results; Company Reports Record Quarterly Revenue of $502.5 Million; Grand Theft
Auto: San Andreas Sales Exceed 12 Million Units since Launch
NEW YORK--(BUSINESS WIRE)--March 3, 2005--Take-Two Interactive
Software, Inc. (NASDAQ:TTWO) today announced financial results for its
first quarter ended January 31, 2005.
Net sales for the first quarter were $502.5 million compared to
$375.5 million for the first quarter of fiscal 2004, an increase of
34%. Net income for the quarter rose to $55.2 million, a 74% increase
from net income of $31.8 million during the same period last year.
Diluted earnings per share of $1.19 increased 70% from $0.70 per
diluted share in the prior year's first quarter.
Take-Two generated approximately $185 million in cash flow from
operations in the quarter, bringing the Company's cash position to
approximately $303 million as of January 31, 2005.
Take-Two attributed the sharply higher first quarter results
primarily to continued strong consumer demand for its Grand Theft
Auto: San Andreas title, as well as robust sales of the 2K Sports line
of products and improved performance of the Company's Jack of All
Games distribution business.
Guidance
Take-Two is updating its guidance for fiscal 2005 as follows:
-- For the fiscal year ending October 31, 2005, $1.3 to $1.35
billion in net sales and $2.10 to $2.20 in diluted earnings
per share.
-- For the second quarter ending April 30, 2005, $200 to $210
million in net sales and a net loss per share of $(0.20).
Take-Two is issuing initial guidance for its third quarter of
fiscal 2005 as follows:
-- For the third quarter ending July 31, 2005, $220 to $240
million in net sales and $0.05 to $0.15 in diluted earnings
per share.
The Company's diluted earnings/(loss) per share for all periods
above do not include the impact of adopting FASB 123(R), which
requires the expensing of employee stock options.
Rockstar Games
Rockstar's Grand Theft Auto: San Andreas, released in late October
for the PlayStation(R)2 computer entertainment system, was a
significant contributor to the first quarter results. Created by the
world-class developers Rockstar North, Grand Theft Auto: San Andreas
was the top performing product in Take-Two's publishing business in
the quarter. According to NPDFunworld(SM), Grand Theft Auto: San
Andreas was the top selling PlayStation 2 title in the United States
in each of the four months since its release. The Company's life to
date sales of Grand Theft Auto: San Andreas through the end of the
first quarter have exceeded 12 million units.
Rockstar has a strong product lineup planned for the balance of
fiscal 2005, beginning with Midnight Club 3: DUB Edition, the third
installment in the multi-million unit selling, genre-defining Midnight
Club street racing franchise developed by Rockstar San Diego. The
title is slated for release in April for PlayStation 2, Xbox(R) and
the PSP(TM) handheld entertainment system.
Rockstar is introducing Grand Theft Auto: San Andreas for Xbox and
PC in the third quarter of fiscal 2005. Also planned for release in
the third quarter is an all new Grand Theft Auto title, set in Liberty
City, for the highly anticipated PSP handheld entertainment system.
The Warriors(TM), a new Rockstar title based on the Paramount
Pictures feature film, is now planned for release on both PlayStation
2 and Xbox in the fourth quarter. Rockstar also expects to publish a
new console title from their internal studios in the fourth quarter,
as well as introduce Grand Theft Auto: San Andreas for the PlayStation
2 in Japan.
2K Games
During the quarter, Take-Two established the 2K Games publishing
label and its sports division, 2K Sports, following the Company's
acquisition of Visual Concepts and Kush Games, developers of the
highly successful and critically acclaimed 2K series of simulation
team sports games. Since the launch of the label in January, 2K Games
has announced the following:
-- Acquisition of rights to the multi-million unit selling
Civilization PC strategy franchise and a long-term partnership
with Civilization creator Sid Meier and his development studio
FIRAXIS Games(R) beginning with the publishing rights to
Civilization IV;
-- A co-publishing agreement with Bethesda Softworks for The
Elder Scrolls(R) IV: Oblivion, the fourth title in the
best-selling Elder Scroll series, along with Call of Cthulhu:
Dark Corners of the Earth(TM);
-- An agreement with SCi Games for North American publishing
rights to Conflict: Global Terror, Carmageddon and Reservoir
Dogs;
-- A licensing agreement with WPT Enterprises for games based on
their hit television show World Poker Tour(R); and
-- The exclusive third-party publishing rights for officially
licensed Major League Baseball games.
2K Sports released College Hoops in the first quarter, followed by
the second quarter release of Major League Baseball 2K5, both for
PlayStation 2 and Xbox. Other titles planned for second quarter
release from 2K Games include Close Combat: First to Fight for Xbox
and PC; Stronghold 2 for PC; and Ford Racing 3 for PlayStation 2, Xbox
and PC. Third quarter releases include Charlie and the Chocolate
Factory on multiple platforms.
Jack of All Games
Jack of All Games' distribution business benefited in the quarter
from holiday demand for value priced software products and newly
released frontline software titles, although console hardware
availability continued to be constrained.
Management Comments
Paul Eibeler, President and Chief Executive Officer, stated,
"Fiscal 2005 is off to a great start. We are extremely pleased with
the continued success of Grand Theft Auto: San Andreas and Rockstar's
plans to extend the reach of this blockbuster title to multiple
platforms and the Asian market later this year. Additionally, we have
made significant progress in diversifying our business, building our
product pipeline and adding to our sports game development
capabilities. We will continue to leverage our internal resources and
invest in new opportunities, including extending our content to new
hardware platforms. With our strong performance in the first quarter
and our rapidly expanding portfolio of proven franchises, new brands
and licensed properties, Take-Two is positioned for significant annual
growth."
Conference Call
Take-Two will host a conference call today at 4:30 pm Eastern Time
to review its first quarter results and to discuss its outlook. A live
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 an integrated global developer, marketer, distributor and
publisher of interactive entertainment software games and accessories
for the PC, PlayStation(R) game console, PlayStation(R)2 computer
entertainment system, PSP(TM) handheld entertainment system, Xbox(R),
Nintendo GameCube(TM) and Game Boy(R) Advance. The Company publishes
and develops products through its wholly owned labels Rockstar Games,
2K Games and Global Star Software; and distributes products in North
America through its Jack of All Games subsidiary. Take-Two also
manufactures and markets video game accessories in Europe, North
America and the Asia Pacific region through its Joytech subsidiary.
The Company maintains sales and marketing offices in Cincinnati, New
York, Toronto, London, Paris, Munich, Madrid, Vienna, Milan, Sydney,
Breda (Netherlands) and Auckland. 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.
Microsoft, Xbox, and the Xbox logos are either registered
trademarks or trademarks of Microsoft Corporation in the United States
and/or other countries.
PSP and "UMD" are trademarks of Sony Computer Entertainment Inc.
"PlayStation" and the "PS" Family logo are registered trademarks of
Sony Computer Entertainment Inc.
Safe Harbor Statement under the Private Securities 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 important factors are
described in the Company's Annual Report on Form 10-K for the fiscal
year ended October 31, 2004 in the section entitled "Risk Factors".
TAKE-TWO INTERACTIVE SOFTWARE, INC. and SUBSIDIARIES
Consolidated Condensed Statements of Operations
For the three months ended January 31, 2005 and 2004 (unaudited)
(In thousands, except per share data)
Three months ended
January 31,
2005 2004
--------- ---------
(Unaudited)
Net sales $ 502,474 $ 375,512
Cost of sales
Product costs 237,485 224,378
Royalties 80,209 19,998
Software development costs 4,205 3,982
---------- ----------
Total cost of sales 321,899 248,358
---------- ----------
Gross profit 180,575 127,154
Operating expenses
Selling and marketing 50,931 35,902
General and administrative 28,687 24,040
Research and development 23,417 13,429
Depreciation and amortization 4,786 3,745
---------- ----------
Total operating expenses 107,821 77,116
Income from operations 72,754 50,038
Interest income, net 540 426
---------- ----------
Income before income taxes 73,294 50,464
Provision for income taxes 18,045 18,706
---------- ----------
Net income $ 55,249 $ 31,758
========== ==========
Per share data:
Basic:
Weighted average common shares
outstanding 45,686 44,386
========== ==========
Net income per share - Basic $ 1.21 $ 0.72
========== ==========
Diluted:
Weighted average common shares
outstanding 46,516 45,421
========= ==========
Net income per share - Diluted $ 1.19 $ 0.70
========== ==========
OTHER INFORMATION Three months ended
- ----------------- January 31,
2005 2004
--------- ---------
Total revenue mix
------------------
Publishing 71% 62%
Distribution 29% 38%
Geographic revenue mix
-----------------------
North America 66% 80%
International 34% 20%
Publishing platform revenue mix
--------------------------------
Sony PlayStation 2 90% 57%
Sony PlayStation - 2%
Microsoft Xbox 6% 35%
PC 2% 2%
Handheld 1% 2%
Accessories 1% 2%
TAKE-TWO INTERACTIVE SOFTWARE, INC. and SUBSIDIARIES
Consolidated Condensed Balance Sheets
As of January 31, 2005 (unaudited) and October 31, 2004
(In thousands, except share data)
ASSETS January 31, October 31,
2005 2004
------------- ----------
Current assets
Cash and cash equivalents $ 303,070 $ 155,095
Accounts receivable, net of allowances of
$79,796 and $72,215 at January 31, 2005
and October 31, 2004 respectively 136,515 285,709
Inventories, net 134,103 154,345
Software development costs 34,827 33,980
Licenses 6,689 4,240
Prepaid expenses and other current assets 49,535 60,018
Deferred tax asset 11,699 11,554
---------- ----------
Total current assets 676,438 704,941
Fixed assets, net 37,952 34,291
Software development costs, net of current portion 57,731 30,342
Licenses, net of current portion 1,800 1,425
Goodwill, net 159,081 135,477
Intangibles, net 57,375 36,104
Long-term deferred tax asset 6,219 6,219
Other assets, net 2,316 1,714
---------- ----------
Total assets $ 998,912 $ 950,513
========== ==========
LIABILITIES and STOCKHOLDERS' EQUITY
Current liabilities
Accounts payable $ 87,409 $ 163,961
Accrued expenses and other current liabilities 174,659 125,567
Income taxes payable 14,934 17,319
---------- ----------
Total current liabilities 277,002 306,847
Other long-term liabilities 2,741 2,963
Deferred tax liability 9,937 5,233
---------- ----------
Total liabilities 289,680 315,043
---------- ----------
Stockholders' equity
Common stock, par value $.01 per share;
100,000,000 shares authorized;
46,393,738 and 45,439,651 shares
issued and outstanding at January 31, 2005
and October 31, 2004 respectively 464 454
Additional paid-in capital 410,227 382,156
Deferred compensation (14,905) (3,896)
Retained earnings 305,651 250,402
Accumulated other comprehensive income 7,795 6,354
---------- ----------
Total stockholders' equity 709,232 635,470
---------- ----------
Total liabilities and
stockholders' equity $ 998,912 $ 950,513
========== ==========
CONTACT: Take-Two Interactive Software, Inc.
Corporate Press/Investor Relations:
Jim Ankner, 646-536-3006
[email protected]
or
Comm-Counsellors, LLC
Corporate Press Relations:
Ed Nebb, 203-972-8350
[email protected]