Mad Catz Announces Q1 Revenue
INDUSTRY NEWS posted on 13 AUG 2009 by Jim Zabek
Net sales in North America were up, but a stronger dollar pushed overall sales and revenue down.
Mad Catz Interactive, Inc. (“Mad Catz” or “the Company”) (AMEX/TSX: MCZ), a leading third-party interactive entertainment accessory provider, today announced financial results for its first fiscal quarter ended June 30, 2009.
Mad Catz reported net sales for the quarter ended June 30, 2009 of $22.4 million, a decrease of 3.7% from record first quarter revenue of $23.2 million in fiscal 2009. While net sales in the company’s largest market – North America – grew by 12.5%, the stronger U.S. Dollar, which reduced the value of British Pound (“GBP”) and Euro-denominated sales when translated into U.S. dollars, and weaker sales in certain markets caused European sales to decline by 27.6%. Due primarily to this currency translation impact, gross profit decreased 22.4% to $6.4 million from $8.2 million in the same quarter of the prior year, leading to a gross profit margin for the fiscal 2010 first quarter of 28.4%, compared with 35.3% in the year-ago quarter.
Total operating expenses in the fiscal 2010 first quarter decreased 29.7% to $6.4 million, resulting in approximately a break-even operating performance compared to an operating loss of $0.9 million a year ago. Foreign exchange losses for the first quarter of fiscal 2010 totaled $0.3 million compared to a foreign exchange loss of $0.1 million for the prior fiscal first quarter. After income tax expense of $0.2 million, Mad Catz reported a net loss of $1.0 million in the quarter ended June 30, 2009, or a loss of $0.02 per diluted share, compared to a net loss of $0.8 million, or $0.01 per diluted share, after a tax benefit of $0.5 million in the first quarter of the prior fiscal year.
EBITDA, a non-GAAP measure (defined as earnings before interest, taxes, depreciation and amortization), rose 158% to a first fiscal quarter record $0.7 million, compared with EBITDA of $0.3 million in the comparable period of fiscal 2009.
Commenting on the quarter, Darren Richardson, President and Chief Executive Officer of Mad Catz, stated, “Fiscal 2010 first quarter revenue results represent a solid performance in the face of challenging economic and industry environments. We are also pleased that we are delivering on our goal of significantly reducing our operating expenses.”
“In addition, we continue to deliver on our goal of leveraging our new product capabilities to increase the flow of new products while adding exciting new product licenses. Noteworthy among these was the recent launch of our first new controller under a wireless license with Microsoft for the Rock Band franchise, a bass guitar controller modeled after the Fender American Precision Bass.”
Mr. Richardson added, “The first fiscal quarter of 2010 demonstrates our continued focus on diversifying our product offerings across all platforms and categories. Our growing lineup of Xbox 360 products and added retail placements were contributing factors in shifting the revenue mix, with Xbox 360 sales accounting for 32% of total gross sales in the quarter compared to 11% of total gross sales in the first fiscal quarter of 2009. Our growth on this platform was fueled in part by the increased available supply of our critically-acclaimed Street Fighter IV Fight Sticks and Fight Pads resulting in incremental sales of these products during the quarter. Furthermore, our core console videogame products such as our Xbox 360 control pad and a growing assortment of new products helped grow current generation console product sales to 59% of total gross sales compared to 40% in the year ago quarter.”
“As important to our initiatives to bring a growing range of products that heighten the playing experience is our ability to benefit from a more efficient operating model. With strict ongoing cost management efforts we reduced selling, general and administrative expenses by 31.3% from the prior year period to $5.5 million. We are on track to achieve our goal of reducing our SG&A expenses by no less than 10% in fiscal 2010 versus fiscal 2009, which is expected to contribute to significant improvements in overall profitability.”
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