The Wargamer

THQ Q3 Finanacial Results

INDUSTRY NEWS posted on 6 FEB 2008 by Jim Zabek

THQ has released the financial figures for its third quarter.

THQ Inc. (NASDAQ:THQI) today announced financial results for the third quarter of fiscal 2008, consistent with the company’s recently announced revised financial guidance. The company also reaffirmed its financial outlook for the fourth quarter of fiscal 2008.

For the third quarter of fiscal 2008, THQ reported net sales of $509.6 million, driven primarily by WWE® SmackDown® vs. Raw® 2008, Cars: Mater-National and MX vs. ATV™ Untamed, each across multiple game systems. For the same period a year ago, THQ reported net sales of $475.7 million.

For the third quarter of fiscal 2008, THQ reported GAAP net income of $15.5 million, or $0.23 per diluted share, which includes $0.01 per diluted share of stock-based compensation expense. On a non-GAAP basis, excluding stock-based compensation expense, the company reported net income of $16.4 million, or $0.24 per diluted share. Both GAAP and non-GAAP net income include a $0.02 per diluted share gain from the receipt of additional proceeds related to the sale of Minick AG in fiscal year 2007. For the same period a year ago, THQ reported GAAP net income of $62.1 million, or $0.91 per diluted share, which includes $0.09 per diluted share of stock-based compensation expense. On a non-GAAP basis, excluding stock-based compensation expense, net income for the prior-year period was $68.1 million, or $1.00 per diluted share. Both GAAP and non-GAAP net income include a $0.03 per diluted share gain from the receipt of proceeds related to the sale of Minick AG in fiscal year 2007. A reconciliation of non-GAAP to GAAP results is provided in the accompanying financial tables.

As previously reported by the company, fiscal 2008 third quarter results include approximately $27 million in non-cash charges related to the company’s decision to cancel certain projects in development and the write-down of the value of certain intellectual properties as part of its product quality initiatives, as well as approximately $20 million in accelerated amortization expense.

For the nine months ended December 31, 2007, THQ reported net sales of $843.4 million, compared with $854.8 million in the corresponding prior-year period. The company reported a GAAP net loss of $806,000, or $0.01 per share, which includes $0.13 per share of stock-based compensation expense. On a non-GAAP basis, excluding stock-based compensation expense, the company reported nine-month net income of $8.1 million, or $0.12 per diluted share. Both GAAP net loss and non-GAAP net income include a $0.02 per share gain from receipt of additional proceeds related to the sale of Minick AG in fiscal year 2007. For the prior-year period, THQ reported GAAP net income of $61.5 million or $0.92 per diluted share, which included stock-based compensation expense of $0.18 per diluted share. On a non-GAAP basis, excluding stock-based compensation expense, net income for the prior-year period was $74.0 million, or $1.10 per diluted share. Both GAAP and non-GAAP net income include a $0.03 per diluted share gain from the receipt of proceeds related to the sale of Minick AG in fiscal year 2007. A reconciliation of non-GAAP to GAAP results is provided in the accompanying financial tables.

“During the holiday quarter, we were pleased with the record performance of WWE SmackDown vs. Raw 2008 and the successful launch of our internally developed game MX vs. ATV Untamed,” said Brian Farrell, THQ president and CEO.

Farrell continued, “We continue to strengthen our product development capabilities to support our long-term strategy of creating new owned intellectual properties. We look forward to launching Frontlines: Fuel of War at the end of this month. In fiscal 2009, we are well positioned for increased sales and profitability with strong owned intellectual properties such as Red Faction and Saints Row and well-known licensed franchises including WWE, UFC, Disney/Pixar and Nickelodeon.”

Recent Developments:

• During the quarter, THQ shipped more than 5 million units of WWE SmackDown vs. Raw 2008, bringing total lifetime WWE franchise net sales to more than $1 billion.
  
• During the quarter, total lifetime Nickelodeon franchise net sales surpassed $1 billion, driven by Avatar, Nicktoons and SpongeBob SquarePants.
  
• For the nine months ended December 31, 2007, THQ’s international net sales increased significantly, to 50% of total global net sales from 40% a year ago, as THQ continued to execute on its international growth strategy.
  
• For the quarter and nine months ended December 31, 2007, THQ grew its Nintendo DS™ revenue 94% year-over-year, aided by the launch of Drawn to Life™, a newly established owned franchise created specifically for the Nintendo DS system.
  
• On January 18, 2008, the company acquired Big Huge Games, a veteran development studio focused on the multi-billion dollar Role-Playing-Games market.
  
• On January 23, 2008, THQ announced the appointment of two executives to newly-created product development positions to help drive new intellectual property creation.
  
• On February 4, 2008, THQ announced the appointment of technology industry veteran Colin Slade as executive vice president and chief financial officer.
  

Go back...