Revenues for the third quarter increased to $70.8 million, compared to $63.6 million for the same period in 2000. Publishing revenues increased to $47.0 million from $32.6 million in the prior year period, while distribution revenues decreased to $23.8 million from $31.0 million in the prior year period. Net loss for the third quarter decreased to $21.4 million, or $0.31 per share, compared to a net loss of $168.7 million, or $8.17 per share, for the same period in 2000. For the third quarter of fiscal 2001, EBITDA (earnings before interest, taxes, depreciation and amortization) was a loss of $14.4 million, compared to a loss of $126.1 million for the comparable period in 2000. Adjusted EBITDA (excluding one-time events) for the third quarter would have been a loss of $12.2 million, or $0.18 per share, for the 2001 period, compared to a loss of $46.8 million, or $2.27 per share, for the same period in 2000.
For the nine months ended March 31, 2001, revenues were $237.8 million, compared to $264.7 million for the same period in 2000. Publishing revenues for the nine months ended March 31, 2001 increased to $177.9 million, compared to $145.8 million in 2000, and distribution revenues were $59.9 million in 2001 compared to $118.9 million for the same period in 2000. Sales performance throughout the first nine months of fiscal 2001 was significantly influenced by the Company’s continued increased emphasis on publishing high quality titles for the mass market and decreased emphasis on the less profitable third-party distribution business. Net loss for the first nine months, decreased to $37.7 million, or $0.71 per share, compared to a net loss of $342.3 million, or $20.05 per share, for the same period in 2000.
For the first nine months, EBITDA was a loss of $14.5 million, compared to a loss of $263.4 million for the comparable period in 2000. Adjusted EBITDA for the first nine months would have been a loss of $5.7 million, or $0.11 per share, for the 2001 period, compared to a loss of $144.6 million, or $8.47 per share, for the same period in 2000. The Company’s financial results include the effect of its merger with Infogrames North America, which closed on October 2, 2000. Since Infogrames, Inc. and Infogrames North America were under the common control of Infogrames Entertainment SA (Euronext: 5257) prior to their merger, US GAAP (Generally Accepted Accounting Principles) requires the Company to report its financial results as if the merger took place at the time common control began, December 16, 1999.
The March quarter has traditionally been the slowest period for the Company. This year was no different. Despite the slower period, the Company was able to generate significant additional publishing revenues during the quarter as it published several games developed by its parent company Infogrames Entertainment SA (IESA). The additional publishing business is directly attributed to the acquisition of Hasbro Interactive (now Infogrames Interactive) by IESA in January 2001. Through an agreement with IESA, the Company will be publishing and distributing all games for Infogrames Interactive in North America. Going forward, this should substantially bolster publishing revenues for the Company.
During the quarter, the Company also continued its efforts to create new operating efficiencies. The most significant of these efforts is the relocation of the Company’s San Jose publishing label, which has been combined with the Company’s Los Angeles publishing label. As a result of this relocation, the Company recorded a restructuring charge of $2.1 million during the third quarter.
Bruno Bonnell, chairman and CEO of Infogrames, Inc., stated, We are pleased with our operating performance for the quarter. From a year over year perspective, we have been able to substantially reduce operating expenses, without sacrificing our sales pipeline. However, the biggest development during the quarter is the Hasbro Interactive acquisition by Infogrames Entertainment SA, which is very beneficial for Infogrames, Inc. in more ways than one. Financially, we expect this to generate in excess of $100 million in additional publishing revenue on a yearly basis, while contributing positively to the Company’s bottom line.
In addition to the financial advantages of the distribution agreement, we believe this will go a long way towards building significant market presence and brand awareness for the Company as we distribute the games throughout North America. These benefits combined with the consolidation of our California labels, create an even brighter financial future for Infogrames, Inc.
Bonnell continued, From a product standpoint, we didn’t release any significant new titles during the three months ended March 31, 2001. However, we continued to experience a steady stream of sales from our existing catalogue. On top of the robust demand for existing titles, which we expect to continue, we also have several titles shipping in the coming quarters that we believe are going to very popular, including those for PlayStation2, such as Le Mans 24 Hours, Test Drive Off-Road Wide Open, and Motor Mayhem. There are also several titles for PlayStation, like Alone in the Dark: The New Nightmare, and Sheep Raider, in addition to Monopoly City, and Freddie Fish and the Case of the Creature of Coral Cove for the PC.
In addition, we continued our strategy of acquiring well-known licenses over the past several months. Some of these include the license from the hit television show Survivor, the most popular comic strip in history, PEANUTS, and the world’s sexiest spy, La Femme Nikita.
Bonnell concluded, We are very excited about everything that is happening at the Company. Each accomplishment confirms our place as a leader in the interactive entertainment market.
