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THQ records $431 million loss

Publisher's revenue down, losses up in what has been a "challenging fiscal 2009"

Saints Row publisher THQ has released its financial results for both the fourth quarter and for the entire fiscal year of 2009, showing a drop in revenue and substantial rise in losses, though the publisher maintains that its new business plan is putting them on track for a healthier FY10.

For the quarter, THQ reported revenue of USD 170.3 million, down from USD 187 million in the same period one year ago. Losses were reported at USD 96.9 million, up substantially from 34.5 million reported last year. Sales during the quarter were primarily driven by WWE Legends of Wrestlemania and Warhammer 40,000: Dawn of War II.

In terms of the full fiscal 2009 year, THQ reported revenue of USD 830 million, down from USD 1 billion in the previous year. Losses were reported at USD 431.1 million, up from 35.3 million the previous year.

"In light of a challenging fiscal 2009, we have substantially completed a significant realignment of our business to position THQ for profitability and positive cash flow in fiscal 2010," said THQ president and CEO Brian Farrell, referring to November's announcement that the company would reduce its output of "core gamer" titles to one or two a year, focus more on its kids and mass market products, and eliminate staff.

"We have taken decisive actions to achieve our cost saving objectives, eliminating USD 220 million in cash expenditures while at the same time implementing a focused product strategy," said Farrell. "We are investing in the brands and products with the highest potential to drive THQ’s long-term profitable growth."

According to information received today, these business realignments cost the publisher USD 44.7 million, consisting of USD 4.5 million in severance and employee costs and USD 40.2 million in "noncash impairment charges related to the cancellation of titles and long-lived assets associated with studio closures." These expenses are considered non-GAAP, and are therefore not a part of the quarter or annual losses outlined above.

The publisher also reported that Saints Row 2 shipped more than 2.8 million units worldwide across its PC, Xbox 360 and PC SKUs.

Looking ahead, the company said that it is working diligently on its plan to reduce planned spending for fiscal year 2010 by USD 220 million, which includes redundancies of approximately 600 employees, or 24 per cent of its headcount.

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