Atari Posts Modest Q2 Profit On Continued Restructuring

Officials from struggling game publisher Atari, a subsidiary of the French headquartered Infogrames, today announced the company's fiscal 2007 second quarter results, which included a slight profit of $300,000 as compared to a loss of $25.2 million over the same period a year ago. Revenue for the period ended September 30 was $28.6 million, down from $38.4 million posted a year ago. According to Atari, revenue for the quarter was made up of $23.1 million from publishing and $5.5 million from distribution. Taking into account both the first and second quarters combined, revenue was $48.1 million versus the $62.2 million posted the prior fiscal year. Looking at the whole of the company's fiscal 2006, Atari confirmed a loss of $6.8 million, an altogether drastic improvement when compared to the net loss of $58.0 million during the same period in fiscal 2006. Heading into the holiday season, Atari officials noted that the company plans to release several new titles, such as Dragon Ball Z: Budokai Tenkaichi 2 for the Nintendo Wii; Arthur and the Invisibles for the Nintnendo DS, Game Boy Advance, and PC; Bullet Witch for the Xbox 360; and Dungeon & Dragons: Tactics and Hot PXL, both for the PSP. The company, which yesterday announced a new $15 million credit line and plans for a one-for-ten reverse stock split ahead of posting its second quarter results, is still undergoing a major restructuring effort that has seen the divestiture of its external studios, most recently Shiny to Foundation 9 and last week's sale of Melbourne House to Krome. “Atari continues to execute on its plans,” commented Atari President and CEO David Pierce. “First and foremost, we have secured a three year $15 million credit facility with Guggenheim Corporate Funding, LLC, a prestigious financial partner. This facility will provide Atari with flexibility on our short-term working capital needs.” Pierce added, “Secondly, with the sale of the Shiny development studio, we have completed the divesture of our internal development studios streamlining our development operations. Finally, we are realizing the results of our previously announced cost reduction plans as general and administrative expenses are down 31%."