Majesco Q2 Sales Rise On Wii Titles Cooking Mama, Bust A Move

Publisher Majesco has announced the results of its second quarter, showing sales up from $11 to $14.6 million, over half of which came from from Wii software sales of Cooking Mama: Cook Off and Bust A Move Bash. Majesco said sales in the quarter came 84 percent from its new releases, and 16 percent from catalog sales. 62 percent of sales were console titles -- 55 of which for the Wii, and 37 percent were handheld titles, 33 percent for Nintendo's DS. Because of a $2.5 million charge related to a class action lawsuit, the publisher said, the quarter saw losses of $1.3 million. In a conference call with investors, company officials said the $2.5 million would be paid in company stock. Interim CEO Jesse Sutton said in a release, "During the quarter, we launched our first two games for the Nintendo Wii as well as three DS titles, which drove net revenue growth of 30 percent compared to last year." The company said it continues to expect fiscal 2007 sales to decline 10-15 percent compared to fiscal 2006 sales of $66.7 million, with 65 to 70 percent of those sales generated from new releases, 20-25 percent from catalog and digital sales. The publisher also said that its recently announced agreement with Eidos Interactive to distribute Majesco's games in PAL territories would help drive sales, and align its international distribution network with its "mass market strategy.” Majesco also updated its software shipment schedule, including the recently-released The New York Times Crosswords for Nintendo DS, and, through the above agreement, international shipments of Guilty Gear, Mech Assault: Phantom War, Super Black Bass Fishing, Dino Master, Nacho Libre and F-24 Stealth Fighter, all in its third quarter. Company officials said in the conference call that the third quarter would be the first in which the Eidos agreement would impact sales from the above titles. Its fourth quarter will see the worldwide release of Operation: Vietnam for DS, as well as North American releases of The Wild West, Turn It Around, Nancy Drew and the Deadly Secret of Olde World Park, and Holly Hobbie & Friends for the DS, as well as Kengo: Legend of the 9 for the Xbox 360. Majesco said it also has one Wii and one DS title slated for the fourth quarter that are yet to be announced. Said Sutton, "We have met our goals for the quarter and delivered solid financial results by executing our strategy to further penetrate the mass market, strengthen our international distribution, leverage licensing and development relationships, improve gross margins, and continue to reduce costs." "In addition, we have made progress related to our class action law suit and reached a tentative understanding on settlement terms. We look forward to putting this situation behind us and we believe that the settlement, if consummated, will have no effect on the company’s ongoing operations,” he concluded. [UPDATE: Comments on Eidos deal, class action settlement added from analyst call.]