Mad Catz Pulls in Profit for Third Quarter

No Comment 28 Views

Mad Catz announced financial results for its fiscal third quarter ended December 31, 2009.

Mad Catz reported net sales for the quarter ended December 31, 2009 of $48.8 million, an increase of 19% from third quarter  in fiscal 2009 and the second-best quarter of sales in the Company’s history. Net sales in North America, the Company’s largest market, totaled $24.6 million, while net sales to Europe increased to a record $23.0 million for the fiscal 2010 third quarter. Gross profit of $15.9 million in the fiscal 2010 third quarter represented an increase of 51% from $10.5 million in the same quarter of the prior year, primarily due to a shift in the Company’s product mix and a return to more normal levels of reserves as a percentage of sales as compared to last year’s period of unusual economic uncertainty. Gross profit margin improved by nearly 7 percentage points to 33% from 26% in the year-ago quarter.

Excluding the $28.5 million goodwill impairment charge taken in the third quarter of fiscal 2009, total operating expenses in the third quarter of fiscal 2010 decreased by 2% to $8.3 million, resulting in operating income of $7.6 million for the quarter, compared to operating income of $2.1 million in the year ago period. In the first nine months of fiscal 2010, Mad Catz reduced its total operating expenses by approximately 16%, or $4.2 million, compared to the first nine months of the prior fiscal year when excluding the goodwill impairment charge taken in the year-ago period. The Company had a foreign exchange gain of $0.1 million for the third quarter of fiscal 2010, compared to a $1.0 million gain in the prior year’s fiscal third quarter. Reflecting income tax expenses of $1.6 million, Mad Catz reported record quarterly net income of $5.6 million in the quarter ended December 31, 2009, or $0.09 per diluted share – also a quarterly record – compared to a net loss of $26.9 million, or a loss of $0.49 per diluted share after income tax expenses of $1.1 million in the third quarter of the prior fiscal year.

EBITDA, a non-GAAP measure (defined as earnings before interest, taxes, depreciation and amortization), was the highest for any quarter in the Company’s history, rising 107% to $8.7 million in the third fiscal quarter, compared with EBITDA (excluding goodwill impairment) of $4.2 million in the comparable period of fiscal 2009.

“Net sales growth was led by record quarterly sales from our European operations, which rose 58% over the prior year period. In the U.S., we experienced a slight year-over-year decline in sales due to the cautious consumer environment coupled with a tough year-over-year comparison given the strong sales of Wii accessories in the same period last year.

Third Quarter Fiscal 2010 Financial Highlights:

  • Net sales for the fiscal 2010 third quarter rose 19% from the prior year quarter:
    • North American net sales declined 1% to $24.6 million, or 50% of quarterly sales;
    • European net sales rose 58% to $23.0 million, or 47% of quarterly sales; and,
    • Net sales to other countries declined 21% to $1.2 million, or 3% of quarterly sales.
  • Gross sales by platform were diversified as follows:
    • Xbox 360 accounted for 31% of total gross sales vs. 21% a year ago;
    • PC products represented 23% of total gross sales vs. 27% in the prior year quarter;
    • Wii represented 14% of total gross sales vs. 17% in the prior year quarter;
    • PlayStation 3 accounted for 17% of total gross sales vs. 5% a year ago; and,
    • All other platforms represented 15% of total gross sales vs. 30% a year ago.
  • Gross sales by category were diversified as follows:
    • Accessories represented 30% of total gross sales vs. 45% a year ago;
    • Controllers represented 26% of total gross sales vs. 26% a year ago;
    • Specialty controllers represented 21% of total gross sales vs. 11% a year ago;
    • Audio products represented 10% of total gross sales vs. 5% a year ago;
    • PC input device products accounted for 8% of total gross sales vs. 11% a year ago;
    • All other products totaled 3% of total gross sales vs. 0% in the prior year quarter; and,
    • Games accounted for 2% of total gross sales vs. 2% a year ago.
  • Reported net position of bank loan less cash at December 31, 2009, of $17.4 million, compared to $19.5 million at December 31, 2008.

Highlights of New Products Shipped in the Third Quarter of Fiscal 2010:

  • Call of Duty: Modern Warfare 2 accessories, including wireless and wired Combat Controllers, Voice Communicator and Headset, Controller Faceplates, Mice and Keyboards;
  • Mad Catz Marvel vs Capcom 2 Arcade FightStick: Tournament Edition;
  • Street Fighter IV ‘Round 2’ accessories, including official Street Fighter IV ‘Round 2’ Arcade FightStick: Tournament Edition and official Street Fighter IV ‘Round 2’ FightPad;
  • Racing Wheel for Xbox 360 featuring Dale Earnhardt, Jr. artwork;
  • Wireless Network Adaptor for Xbox 360 and PlayStation 3;
  • Rock Band Wireless Fender Telecaster ‘Player’s Edition’ guitar for the Xbox 360® videogame console; and,
  • Private label Wii-motes for a major retailer.

Highlights of Recent/Upcoming Product Launches:

  • Tatsunoko VS. Capcom Arcade FightStick For Wii (North America and Europe – January 2010);
  • Eclipse touchmouse (North America and Europe – January 2010);
  • PRO Flight X65F Combat Control System (North America and Europe – February 2010);
  • Controller faceplates for Xbox 360 and PlayStation 3 featuring Dale Earnhardt, Jr. artwork (North America – February 2010);
  • Eclipse Wireless litetouch Keyboard, litetouch Keyboard, and mobilemouse (North America and Europe – March 2010);
  • Licensed Sonic the Hedgehog accessories for use with Nintendo DSi and Nintendo DS Lite video game systems (North America – Spring 2010);
  • Super Street Fighter IV FightStick;
  • Licensed Nintendo accessories for use with the Wii, Nintendo DSi and Nintendo DS Lite videogame systems (North America and Europe – Spring 2010);
  • Super Street Fighter IV Arcade FightStick Tournament Edition for Xbox 360 and PlayStation 3; and,
  • Next-gen premium Cyborg R.A.T. Gaming mice (North America and Europe – Spring 2010).
In : PC

About the author

Leave a Reply

Your email address will not be published. Required fields are marked (required)

What is 14 + 13 ?
Please leave these two fields as-is:
IMPORTANT! To be able to proceed, you need to solve the following simple math.
Trending Now