Monday, August 4th 2014
Mad Catz Reports Fiscal 2015 First Quarter Financial Results
Mad Catz Interactive, Inc. (NYSE MKT/TSX: MCZ), today announced financial results for the fiscal 2015 first quarter ended June 30, 2014. Fiscal 2015 first quarter net sales declined 10% to $16.7 million, driven by a 17% decline in net sales in both EMEA and the Americas, offset partially by a 49% increase in net sales in APAC. Gross margin for the fiscal 2015 first quarter improved to 30.2%, compared to 28.7% in the prior year quarter. Total operating expenses in the fiscal 2015 first quarter decreased 17% from the prior year period to $6.2 million.
Diluted loss per share was ($0.02) for the fiscal 2015 first quarter, compared to a diluted loss per share of ($0.03) in the prior year quarter. Net position of bank loan, less cash, of $5.3 million at June 30, 2014, compared to $4.1 million at March 31, 2014 and $8.4 million at June 30, 2013. Highlights also include shipping of the new range of Tritton Xbox One licensed headsets, the S.T.R.I.K.E.M Mobile Keyboard for iOS, Android and Windows; the Saitek X-55 RHINO H.O.T.A.S. System for Windows PC; the R.A.T.TE (Tournament Edition) Gaming Mouse for Windows PC and Mac, and the Mad Catz C.T.R.L.R Wireless Gamepad for Amazon Fire TV, PC, Mac, and Android Smart Devices. The company announced participation in Needham Interconnect Conference on August 6, 2014.
Commenting on the Company's fiscal 2015 first quarter results, Darren Richardson, President and Chief Executive Officer of Mad Catz, said, "Our financial results are in-line with our expectations as they reflect the impact from the ramp-up in sales of next generation consoles following their introduction in late 2013. The initial industry reception is exceeding expectations and reflects the strong consumer appeal the video game industry holds. As the installed base reaches critical mass, we expect consumers will look to complement their console investment with other video game products and we are confident in our ability to successfully bring to market products that enable our consumers to achieve their goals of maximizing their gaming experience wherever they choose to play."
Karen McGinnis, Chief Financial Officer of Mad Catz, commented, "We experienced a 10% decrease in net sales during the first quarter driven by declines in sales of products for legacy consoles in all regions as a result of the console transition and, to a lesser extent, declines in sales of mice and keyboards. These declines were offset partially by strong sales of products for the new consoles and smart devices, as well as an increase in sales of our Saitek flight simulation products. Although sales declined 10% compared to the prior year, our gross margin improved to 30% and our operating expenses decreased by 17%. As a result, our operating loss in the first quarter was $1.1 million, compared to the $2.1 million operating loss generated in the first quarter last year. We also remained focused on managing our overall liquidity position and ended the quarter with a net position of bank loan less cash of $5.3 million, compared to $8.4 million a year ago and $4.1 million last quarter."
Mr. Richardson, concluded, "Overall, we are pleased with the results around our initiatives to reduce operating expenses, improve gross margins and launch new products across various platforms. As we enter fiscal 2015, we remain confident that our business strategy, product offerings and financial position are primed to deliver improved results and help us to return to growth and profitability by focusing on what we do best: designing innovative products for passionate gamers and executing strong global market launches of those products; selling gaming accessories for new platforms, including smart devices; expanding our global sales reach, particularly in APAC; maintaining our disciplined approach to working capital management and product placement profitability; expanding our Saitek flight simulation business; and identifying strategic opportunities for the expansion of products in adjacent and compatible categories."
The Company will host a conference call and simultaneous webcast on August 4, 2014, at 5:00 p.m. ET, which can be accessed by dialing (212) 231-2901. Following its completion, a replay of the call can be accessed for 30 days at the Company's Web site (www.madcatz.com, select "About Us/Investor Relations") or for seven days via telephone at (800) 633-8284 (reservation #21728090) or, for International callers, at (402) 977-9140.
Diluted loss per share was ($0.02) for the fiscal 2015 first quarter, compared to a diluted loss per share of ($0.03) in the prior year quarter. Net position of bank loan, less cash, of $5.3 million at June 30, 2014, compared to $4.1 million at March 31, 2014 and $8.4 million at June 30, 2013. Highlights also include shipping of the new range of Tritton Xbox One licensed headsets, the S.T.R.I.K.E.M Mobile Keyboard for iOS, Android and Windows; the Saitek X-55 RHINO H.O.T.A.S. System for Windows PC; the R.A.T.TE (Tournament Edition) Gaming Mouse for Windows PC and Mac, and the Mad Catz C.T.R.L.R Wireless Gamepad for Amazon Fire TV, PC, Mac, and Android Smart Devices. The company announced participation in Needham Interconnect Conference on August 6, 2014.
Karen McGinnis, Chief Financial Officer of Mad Catz, commented, "We experienced a 10% decrease in net sales during the first quarter driven by declines in sales of products for legacy consoles in all regions as a result of the console transition and, to a lesser extent, declines in sales of mice and keyboards. These declines were offset partially by strong sales of products for the new consoles and smart devices, as well as an increase in sales of our Saitek flight simulation products. Although sales declined 10% compared to the prior year, our gross margin improved to 30% and our operating expenses decreased by 17%. As a result, our operating loss in the first quarter was $1.1 million, compared to the $2.1 million operating loss generated in the first quarter last year. We also remained focused on managing our overall liquidity position and ended the quarter with a net position of bank loan less cash of $5.3 million, compared to $8.4 million a year ago and $4.1 million last quarter."
Mr. Richardson, concluded, "Overall, we are pleased with the results around our initiatives to reduce operating expenses, improve gross margins and launch new products across various platforms. As we enter fiscal 2015, we remain confident that our business strategy, product offerings and financial position are primed to deliver improved results and help us to return to growth and profitability by focusing on what we do best: designing innovative products for passionate gamers and executing strong global market launches of those products; selling gaming accessories for new platforms, including smart devices; expanding our global sales reach, particularly in APAC; maintaining our disciplined approach to working capital management and product placement profitability; expanding our Saitek flight simulation business; and identifying strategic opportunities for the expansion of products in adjacent and compatible categories."
The Company will host a conference call and simultaneous webcast on August 4, 2014, at 5:00 p.m. ET, which can be accessed by dialing (212) 231-2901. Following its completion, a replay of the call can be accessed for 30 days at the Company's Web site (www.madcatz.com, select "About Us/Investor Relations") or for seven days via telephone at (800) 633-8284 (reservation #21728090) or, for International callers, at (402) 977-9140.
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