Mad Catz Sees Gears Of War, Next-Gen Accessories Grow Profit

Officials from third party peripheral manufacturer Mad Catz Interactive have announced the company’s third quarter results for the period ended December 31st 2006, during which it saw profits increase, despite a drop in sales. Net sales for the quarter were put at $36.5 million, down 19 percent from a figure of $45.0 million at the same time the previous year. However, the company's profit was $3.7 million, up from a break even figure the previous year. The company’s gross profit margin increased from 14.8 percent to a record 28.7 percent. For the current nine months of the company’s financial year net sales were $80.4 million, down by 3.8 percent from the previous year. Profit was $3.0 million, down slightly from $3.3 million during the previous nine months. The company pointed out its Gears of War themed faceplates, “Console Skinz” and “Console Crates” products as one of the best selling lines during the all important gift buying season. The Arcade GameStick for Xbox 360 and PC was also mentioned as a strong seller, along with the company’s initial range of Wii and PlayStation 3 accessories. Commenting on the results, Darren Richardson, president and CEO of Mad Catz stated, "While year-over-year net sales declined, our strategy of eliminating less profitable product placements, adding higher margin products and continuing to reduce operating costs is working as evidenced by the strong fiscal third quarter earnings." "The third quarter again demonstrated success with our ongoing efforts to mitigate the impact of the console transition cycle by offering higher margin licensed products and accessories and interactive hardware and software bundles, rebuilding margins in the core accessory business, improving inventory turns, strengthening the balance sheet, launching product lines for the PlayStation 3 and Wii consoles, leveraging our distribution channels and increasing our European market penetration, while strategically discontinuing certain lower margin product placements", he added.