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Atari Reports Fiscal 2007 First Quarter Results

NEW YORK, Aug. 9: Atari, Inc. (Nasdaq: ATAR), a leader in interactive entertainment, today announced financial results for the fiscal 2007 first quarter ended June 30, 2006.

Net revenue for the quarter ended June 30, 2006, was $19.5 million versus $23.9 million in the comparable year-earlier period. Publishing net revenue was $9.8 million versus $12.4 million in the prior year, while distribution revenue was $9.7 million versus $11.5 million in the comparable year-earlier period.

Net loss for the fiscal 2007 first quarter was $7.1 million, or $0.05 per share, compared to a net loss of $32.8 million, or $0.27 per share, in the year-earlier period. Loss from continuing operations for the first quarter of fiscal 2007 was $4.6 million, or $0.03 per share, compared to a loss from continuing operations of $30.1 million, or $0.25 per share, in fiscal 2006.

"Atari continues to execute on its strategic objectives," stated Bruno Bonnell, Chairman, CEO and Chief Creative Officer of Atari. "We previously announced plans to streamline our portfolio of titles and our operations. Since those announcements, we have divested ourselves of Timeshift, Stuntman, Driver, and our Reflections studio, raising approximately $37.0 million for investment in our future. Further, we are starting to see the results from our previously announced cost savings initiatives as we have reduced general and administrative expenses by 32% in our fiscal 2007 first quarter as compared to the prior year's first quarter."

Mr. Bonnell continued, "As we look forward, we are focused on improving profitability, releasing high quality product such as Test Drive Unlimited for Xbox 360, which will take advantage of next generation online capabilities and growing shareholder value."

Atari's product lineup for the remainder of fiscal 2007 is expected to include the following new releases:

Arthur and the Invisibles (PlayStation ® 2 computer entertainment system, PSP system, Nintendo DS TM , Game Boy ® Advance and Windows), Bullet Witch TM (Xbox 360) Dragon Ball Z ® : Budokai Tenkaichi TM 2 (PlayStation ® 2 and Nintendo ® Wii), DUNGEONS & DRAGONS ® : Tactics TM (PSP system), Earthworm Jim (PSP system), HOT PXL (PSP system), Neverwinter Nights 2 (Windows), Super DBZ ® (PlayStation ® 2), and Test Drive Unlimited (Xbox 360, Windows, PlayStation ® 2, PSP system), among others.

Atari will host a teleconference with a simultaneous webcast at 5:00 p.m. Eastern Time today to discuss the Company's fiscal 2007 first quarter results. To access the teleconference, please dial 1-866-831-6243 (domestic) or 1-617-213-8855 (international), access code 43549574, or listen to it live via the Internet by accessing the Company's Web site ( http://www.atari.com). For those unable to listen to the live broadcast, a replay will be available on the Company's Web site or by dialing 1- 888-286-8010 (domestic) or 1-617-801-6888 (international), playback access code 71769511, beginning approximately one hour after the conclusion of the call and available through August 14, 2006.

About Atari

New York-based Atari, Inc. (Nasdaq: ATAR) develops interactive games for all platforms and is one of the largest third-party publishers of interactive entertainment software in the U.S. The Company's 1,000+ titles include hard-core, genre-defining franchises such as The Matrix TM (Enter The Matrix and The Matrix: Path of Neo) and Test Drive ® ; and mass-market and children's franchises such as Nickelodeon's Blue's Clues TM and Dora the Explorer TM , and Dragon Ball Z ® . Atari, Inc. is a majority-owned subsidiary of France-based Infogrames Entertainment SA (Euronext - ISIN: FR-0000052573), the largest interactive games publisher in Europe. For more information, visit http://www.atari.com.

Safe Harbor Statement

With the exception of the historical information contained in this release, the matters described herein contain certain "forward-looking statements" that are made pursuant to the Safe Harbor provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements in this release are not promises or guarantees and are subject to risks and uncertainties that could cause our actual results to differ materially from those anticipated. These statements are based on management's current expectations and assumptions and are naturally subject to uncertainty and changes in circumstances. We caution you not to place undue reliance upon any such forward-looking statements. Actual results may vary materially from those expressed or implied by the statements herein. Some of the factors which could cause our results to differ materially include the following: the loss of key customers, such as Wal-Mart, Best Buy, Target, GameStop and EB Games; delays in product development and related product release schedules; inability to secure capital; adapting to the rapidly changing industry technology, including new console technology; maintaining relationships with leading independent video game software developers; maintaining or acquiring licenses to intellectual property; fluctuations in the Company's quarterly net revenues and results of operations based on the seasonality of our industry; the termination or modification of our agreements with hardware manufacturers; and other factors described in our SEC filings.

The Company undertakes no duty to update any forward-looking statements to

conform the statement to actual results or changes in the Company's

expectations.

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