Revenues during the quarter ended September 30, 2001 were $28,335,000, down from $47,275,000 in the prior year period primarily due to the Company’s exit from the coin-operated games business. The pro forma loss applicable to common stock during the September 30, 2001 quarter was $3,945,000, $0.10 per share, compared with a loss applicable to common stock of $9,951,000, $0.26 per share in the prior year period. The pro forma adjustments in the September 30, 2001 quarter are an imputed dividend on the redeemable convertible preferred stock that increased the loss by $1,657,000, $0.04 per share and an income tax credit of $2,078,000, $0.06 per share, that under accounting interpretations the Company is required to exclude for periods after December 31, 2000. Before adjusting for these items, Midway had a loss applicable to common stock of $7,680,000, $0.20 per share in the quarter ended September 30, 2001. Also during the quarter, net capitalized product development costs increased by $6,900,000 from June 30, 2001 as a result of a combination of exiting the coin-operated games business and the longer design cycles involved in developing next-generation home videogame products.
During the September 30, 2001 quarter, Midway released four new home videogame products, three for Sony’s PlayStation2 computer entertainment system and one for Nintendo’s Game Boy Advance handheld system. All four products shipped during the month of September. Two of the PlayStation 2 titles released, Spy Hunter and NHL Hitz 20-02 generated very strong early consumer demand, ranking among the top PlayStation 2 titles sold in North America since their launch, according to retail sell-through data published by the NPD Group. The Game Boy Advance title released in the quarter, NFL Blitz 20-02, currently ranks as the top selling league licensed sports title for the Game Boy Advance and has been a top-ten Game Boy Advance title since its launch, according to NPD Group data.
