Management Reaffirms Fiscal 2006 Earnings Guidance
AGOURA HILLS, Calif. - October 27, 2005 - THQ Inc. (NASDAQ: THQI) today announced that continued strong global sales of its original franchises and family titles drove 48% year-over-year net sales growth and a narrower-than-expected loss for the second quarter of fiscal 2006.
For the three months ended September 30, 2005, THQ reported record second quarter net sales of $142.7 million and a net loss of $1.4 million, or $0.02 per share. These results exceeded the company's previous guidance of net sales of $125 million and a loss of $0.07 per share. For the same period a year ago, THQ reported net sales of $96.3 million and a net loss of $6.4 million, or $0.11 per share.
For the six months ended September 30, 2005, net sales grew 63% to $300.7 million from $184.5 million for the same period a year ago. THQ's net loss was $5.4 million, or $0.09 per share, compared with a net loss of $10.3 million, or $0.18 per share, for the first six months of fiscal 2005.
"THQ's games continue to strike a responsive cord in players of all ages around the world. Our second quarter results reflected strong sales of our original properties Tak, Destroy All Humans! and Juiced, as well as our industry leading portfolio of licensed properties, including WWE Day of Reckoning 2 and Scooby Doo! Unmasked. Our catalog also continues to perform well, with three of our holiday 2004 titles moving to Greatest Hits status during the second quarter," said Brian Farrell, president and CEO, THQ.
"This holiday season we plan to bring to market games based on our most successful brands targeted to the mass-market consumer on the huge installed base of current generation hardware," Farrell continued. "We are confident WWE SmackDown, SpongeBob SquarePants, The Incredibles, Bratz and Tak will top holiday shoppers' wish lists this year, and we intend to support these brands with significant marketing and in-store promotion activities."
Fiscal 2006 Guidance
THQ reaffirmed previous earnings guidance and increased net sales guidance for the full fiscal year ending March 31, 2006, and provided initial guidance for the fiscal third quarter ending December 31, 2005:
- For the fiscal year ending March 31, 2006, THQ expects net sales of approximately $770 million and net income of approximately $0.67 per diluted share
- For the third quarter of fiscal 2006, the company expects net sales of approximately $320 million and net income of about $0.65 per diluted share
All per share amounts reflect a 3-for-2 stock split effected on September 1, 2005.
- THQ was the #2 independent video game software publisher in North America, the UK and Australia/New Zealand for the first nine months of calendar 2005, according to the NPD Group, Inc., Chart Track and GfK, respectively
- THQ announced an extension of its new JuicedTM franchise on the PlayStation® Portable (PSPTM) handheld entertainment system, scheduled for spring 2006
- THQ's flagship titles from holiday 2004:The Incredibles, The SpongeBob SquarePantsTM Movie and WWE® SmackDown® vs. Raw® each achieved "Greatest Hits" status during the second quarter
- THQ added 25 years of product, online and marketing experience to its management team, naming Kelly Flock executive vice president of worldwide publishing
- THQ appointed Jeff Griffiths, former president and CEO of Electronics Boutique, to its board of directors
- Microsoft's recent X05 event highlighted three of THQ's upcoming titles for the Xbox 360TM: MotoGPTM Ultimate Racing Technology 2006, Saint's RowTM and The OutfitTM, and each garnered critical acclaim from the enthusiast press
Investor Conference Call
THQ will host a conference call to discuss fiscal second quarter results today at 5:00 p.m. Eastern/2:00 p.m. Pacific. Please dial (800) 510-0146 or (617) 614-3449 access code 54006118 to listen to the call or visit the THQ Inc. Investor Relations home page at www.thq.com. The online archive of the broadcast will be available approximately two hours after the live call ends. In addition, a telephonic replay of the conference call will be provided approximately two hours after the live call ends through October 29, 2005 by dialing (888) 286-8010 or (617) 801-6888 access code 61384406.
THQ Inc. (NASDAQ: THQI) is a leading worldwide developer and publisher of interactive entertainment software. The company develops its products for all popular game systems, personal computers and wireless devices. Headquartered in Los Angeles County, California, THQ sells product through its global network of offices located in the United States, United Kingdom, Austria, France, Germany, Netherlands, Spain, Korea and Australia. More information about THQ and its products may be found at www.thq.com and www.thqwireless.com. THQ, THQ Wireless, Destroy All Humans!, Juiced, The Outfit, Saint's Row and their respective logos are trademarks and/or registered trademarks of THQ Inc.
Microsoft, Xbox, Xbox 360 and the Xbox logos are either registered trademarks or trademarks of Microsoft Corporation in the U.S. and/or in other countries.
"PlayStation" and the "PS" Family logo are registered trademarks of Sony.
This press release contains statements that are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Such statements include, but are not limited to, the company's expectations for revenue and earnings per share for the quarter ending December 31, 2005 and the fiscal year ending March 31, 2006 and for the company's product releases and financial performance in future periods. These forward-looking statements are based on current expectations, estimates and projections about the business of THQ Inc. and its subsidiaries (collectively referred to as "THQ") and are based upon management's beliefs and certain assumptions made by management. Such forward-looking statements are subject to risks and uncertainties that could cause actual results to differ materially from those expressed or implied by such forward-looking statements, including, but not limited to, economic, competitive and technological factors affecting the operations, markets, products, services and pricing of THQ. THQ did not retain nor otherwise influence The NPD Group, Inc., Chart-Track or GfK. Unless otherwise required by law, THQ disclaims any obligation to update its view on any such risks or uncertainties or to revise or publicly release the results of any revision to these forward-looking statements. Readers should carefully review the risk factors and the information that could materially affect THQ's financial results, described in other documents that THQ files from time to time with the Securities and Exchange Commission, including its Quarterly Reports on Form 10-Q and its Annual Report on Form 10-K for the fiscal period ended March 31, 2005, and particularly the discussion of risk factors that may affect results of operations set forth therein. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of this press release.