Acclaim Reports Profitable Q1, Cautious About Upcoming Q2 Results

The net revenues for the first quarter were $72.0 million, off from the $101.2 million the company pulled in for the same quarter in the prior year. Acclaim said that these results met the company's goals, and that the lower sales reflect their revised release schedules and their transition to 128-bit consoles. "While we are cautiously optimistic about the continued positive performance of the company in fiscal 2001," said Gregory Fischbach, co-chairman and CEO of Acclaim, "we do expect a loss in the second quarter of this fiscal year as the holiday retail selling season was disappointing." Net earnings for the first quarter of 2001 were $10.8 million, or $0.18 per diluted share, compared with net earnings of $0.4 million, or $0.01 per diluted share for the same period in the prior year. Acclaim attributed its profitable performance to several titles, including Dave Mirra Freestyle BMX for the PSX, Dreamcast and Game Boy Color; ATV Quad Racing for PlayStation; and the continuing expansion of the successful Mary-Kate and Ashley franchise on the PSX and Game Boy Color. The company said that it realized significant benefits from "recent business right-sizing" which reduced general and administrative expenses, as well as from changes in its product development and marketing strategies. As a result, Acclaim lowered its total operating expenses by $22.7 million (40%) from the Q1 of the prior year. Gross revenues by platform for the quarter consisted of 59% from 32-bit software, 17% from128-bit software and 14% from portable cartridges. On a geographic basis, North American operations generated 77.7% of net revenues and international 22.3% for the quarter, which compares to 63.4% and 36.6%, respectively for the same period a year ago.