Take-Two Financials, XCOM By April 2012

[BreakingBacks]

Take-Two Interactive Software, Inc. (NASDAQ:TTWO) today announced financial results for its fiscal third quarter ended December 31, 2010. In addition, the Company increased its financial guidance for the fiscal year 2011. As previously announced, the Company has changed its fiscal year-end from October 31 to March 31 and all results are now reported in accordance with this change.

“Strong holiday sales enabled Take-Two to continue to deliver better-than-expected revenue and earnings in the third quarter. Our results year-to-date clearly demonstrate the Company’s ability to translate its world-class creative resources and diverse portfolio of triple-A franchises into meaningful profits.”

For the third quarter ended December 31, 2010, net revenue was $334.3 million, as compared to $360.4 million for the year-ago period. GAAP income from continuing operations was $40.8 million, or $0.45 per diluted share, as compared to $39.4 million, or $0.44 per diluted share, for the year-ago period. Non-GAAP income from continuing operations was $49.5 million, or $0.52 per diluted share, as compared to $49.2 million, or $0.53 per diluted share, for the year-ago period. Non-GAAP income from continuing operations excludes certain non-cash and non-operational gains and losses identified on the attached reconciliation of GAAP and Non-GAAP measures.

The strongest contributors to net revenue and profitability in the third quarter this year included NBA® 2K11, Red Dead Redemption, Red Dead Redemption: Undead Nightmare (standalone disc), Grand Theft Auto IV: Complete, Borderlands™ Game of the Year and Sid Meier’s Civilization® V. Catalog titles that contributed to the strength in the recent period were led by the Grand Theft Auto franchise. Digitally delivered content also continued to be an important component of Take-Two’s sales, particularly driven by strong sales of offerings for Red Dead Redemption, Borderlands and Sid Meier’s Civilization V.

For the nine-months ended December 31, 2010, net revenue increased 80% year-over-year to $954.6 million. GAAP income from continuing operations increased to $76.2 million, or $0.88 per diluted share, as compared to a loss of ($98.4) million, or ($1.27) per share, for the year-ago period. Non-GAAP income from continuing operations increased to $108.8 million, or $1.15 per diluted share, as compared to a loss of ($67.5) million, or ($0.87) per share, for the year-ago period.

Management Comments

Strauss Zelnick, Chairman and Chief Executive Officer of Take-Two, commented, “Strong holiday sales enabled Take-Two to continue to deliver better-than-expected revenue and earnings in the third quarter. Our results year-to-date clearly demonstrate the Company’s ability to translate its world-class creative resources and diverse portfolio of triple-A franchises into meaningful profits.

“Looking ahead to the balance of the year and fiscal 2012, I have never been more enthusiastic about our diverse line-up of upcoming releases. From unique, groundbreaking new titles such as L.A. Noire, to the long anticipated return of Duke Nukem, the interactive entertainment industry’s most irreverent hero, we will deliver a broad array of entertainment experiences that promise to delight audiences around the world.

“In addition to producing triple-A titles focused on the traditional console market, we are also actively pursuing opportunities to grow our revenues by leveraging the strength of our brands in emerging markets and across new platforms and distribution channels. These include opportunities in Asia and Latin America, evolving downloadable content models and online multiplayer experiences.”

Product Highlights

Since October 1, 2010:

* Rockstar Games released Red Dead Redemption: Undead Nightmare as both a standalone disc and DLC.
* Rockstar Games’ Red Dead Redemption has sold-in over 8 million units worldwide since launching in May 2010.
* Rockstar Games announced that it plans to release L.A. Noire on May 17, 2011 in North America and May 20, 2011 in Europe.
* 2K Sports launched NBA 2K11, which to date has sold-in nearly 4 million units worldwide and received the highest scores in the history of the franchise (89 – Metacritic.com).
* 2K Sports signed pitcher Roy Halladay of the Philadelphia Phillies as the cover athlete for Major League Baseball 2K11, which is planned to launch on March 8, 2011. The label is supporting the launch of the title with the Major League Baseball 2K11 Challenge that will award $1 million to the first person to pitch a perfect game using the latest installment of the popular franchise during the contest period.
* 2K Sports announced that it plans to release Top Spin 4 on March 15, 2011.
* 2K Games announced that it plans to release Duke Nukem Forever® on May 3, 2011 in North America and on May 6, 2011 internationally.
* 2K Games announced that it plans to release The Darkness™ II in fall 2011.
* 2K Play released Nickelodeon Fit, the Company’s first fitness title for children featuring the television network’s popular characters, exclusively for the Wii™ system.
* 2K Play announced that it plans to release Carnival Games®: Monkey See, Monkey Do™ for Kinect for Xbox 360 in April 2011. The Carnival Games franchise has sold more than 7 million units worldwide and the title marks the Company’s first offering for Microsoft’s new interactive entertainment hardware.


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