Acclaim Lowers Guidance For 2002 & 2003; Lackluster Sales Blamed

The company lowered its expected Q4 net revenues by 23-25% (to $69-71 million), and lowered its net revenue expectations by 7% on the year (to $284-286 million). It increased its expected Q4 net loss by approximately 180%, to $10-12 million. For the year, it expects to post a loss of $13-15 million -- more than 60% higher than earlier forecasts. The company blamed the shortfall on lackluster sales of Turok: Evolution and Aggressive Inline, on the need to up its reserves for unsold products, and on an unbudgeted $2.6 million it spent on advertising and marketing. Acclaim also lowered revenue and earnings guidance for fiscal year 2003, due to the delayed release of VEXX from the Q1 to Q2. It lowered net revenue by 9-13%, and lowered its expected pre-tax income by about 40%. "After the disappointing performance of Aggressive Inline and Turok: Evolution, we are adjusting our previous fiscal 2003 revenue guidance to reflect growth of between 16% to 21% over fiscal year 2002," said Edmond Sanctis, President and COO for Acclaim North America. "Additionally, we are moving the release of VEXX to our second quarter to ensure that we have fully prepared the market and polished the product." The company will announce fiscal 2002 earnings on Thursday, October 17, 2002.