-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, JiJuKGSj8KZ9irqtiz/g6C2FFBDEeiC1z4etCF2ymmXY3HoXXMThq8GNG/ZGNtIB t9/2RMVnNlAMOQYK0NN3IA== 0000950123-05-009658.txt : 20050809 0000950123-05-009658.hdr.sgml : 20050809 20050809165205 ACCESSION NUMBER: 0000950123-05-009658 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20050809 ITEM INFORMATION: Results of Operations and Financial Condition ITEM INFORMATION: Financial Statements and Exhibits FILED AS OF DATE: 20050809 DATE AS OF CHANGE: 20050809 FILER: COMPANY DATA: COMPANY CONFORMED NAME: ATARI INC CENTRAL INDEX KEY: 0001002607 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-PREPACKAGED SOFTWARE [7372] IRS NUMBER: 133689915 STATE OF INCORPORATION: DE FISCAL YEAR END: 0331 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 000-27338 FILM NUMBER: 051010624 BUSINESS ADDRESS: STREET 1: 417 FIFTH AVENUE CITY: NEW YORK STATE: NY ZIP: 10016 BUSINESS PHONE: 2127266500 MAIL ADDRESS: STREET 1: 417 FIFTH AVENUE CITY: NEW YORK STATE: NY ZIP: 10016 FORMER COMPANY: FORMER CONFORMED NAME: INFOGRAMES INC DATE OF NAME CHANGE: 20000511 FORMER COMPANY: FORMER CONFORMED NAME: GT INTERACTIVE SOFTWARE CORP DATE OF NAME CHANGE: 19951023 8-K 1 y11767e8vk.txt FORM 8-K ================================================================================ UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 --------------- FORM 8-K CURRENT REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934 Date of Report (Date of earliest event reported): AUGUST 9, 2005 ATARI, INC. (Exact name of registrant as specified in charter) DELAWARE (State or other jurisdiction of incorporation or organization) Commission File Number: 0-27338 13-3689915 (I.R.S. employer identification no.) 417 FIFTH AVENUE NEW YORK, NEW YORK 10016 (Address of principal executive offices, including zip code) (212) 726-6500 (Registrant's telephone number, including area code) Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below): [ ] Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) [ ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) [ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) [ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) ================================================================================ ITEM 2.02 RESULTS OF OPERATIONS AND FINANCIAL CONDITION On August 9, 2005, Atari, Inc. (the "Company") issued a press release announcing its unaudited financial results for the fiscal first quarter ended June 30, 2005. A copy of the press release is furnished as Exhibit 99.1 to this report. The information in this report shall not be deemed to be "filed" for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), or otherwise subject to the liability of that section, and shall not be incorporated by reference into any registration statement or other document filed under the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by specific reference in such filing. The attached press release discloses the Company's loss from continuing operations for the three month period ended June 30, 2005, excluding restructuring charges, which is considered to be a non-GAAP financial measure. A reconciliation of non-GAAP loss from continuing operations to GAAP loss from continuing operations is included in the press release filed with this Current Report on Form 8-K. The Company's management believes that the non-GAAP financial measure provides a fuller understanding of ongoing operations and enhances comparability of those results in prior periods as well as demonstrating the effects of unusual charges in the quarter ended June 30, 2005. The Company's management believes that a meaningful analysis of the Company's financial performance requires an understanding of the factors underlying that performance and that investors may find it useful to see such non-GAAP financial measures to analyze financial performance without the impact of unusual items that may obscure trends in the Company's underlying performance. Management uses certain non-GAAP measures internally to evaluate the performance of the business, including to allocate resources and to evaluate results relative to incentive compensation targets. ITEM 9.01 FINANCIAL STATEMENTS AND EXHIBITS (c) Exhibits. The following exhibit is furnished as part of this report: Exhibit 99.1- Press Release of Atari, Inc., dated August 9, 2005. 2 SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. ATARI, INC. By: /s/ Diane Price Baker ---------------------------------- Diane Price Baker Executive Vice President and Chief Financial Officer Date: August 9, 2005 3 EXHIBIT INDEX Exhibit No. Description 99.1 Press release of Atari, Inc., dated August 9, 2005 EX-99.1 2 y11767exv99w1.txt EX-99.1: PRESS RELEASE Exhibit 99.1 [ATARI LOGO] FOR IMMEDIATE RELEASE ATARI, INC. 417 Fifth Avenue New York, NY 10016 www.atari.com Contact: Ryan Barr Atari, Inc 212-726-6996 Ryan.Barr@atari.com ATARI REPORTS FISCAL 2006 FIRST QUARTER FINANCIAL RESULTS NEW YORK - AUGUST 9, 2005 - Atari, Inc. (Nasdaq: ATAR), a leader in interactive entertainment, today announced financial results for the fiscal 2006 first quarter ended June 30, 2005. Net revenue for the quarter ended June 30, 2005, was $24.2 million, excluding approximately $0.3 million of revenue from the discontinued operations of Humongous, versus $108.1 million, excluding approximately $2.2 million of revenue from the discontinued operations of Humongous, in the comparable year-earlier period. The change in quarterly revenue is primarily attributable to the June 2004 release of DRIV3R (PS2 and Xbox), which ranked as the #2 PS2 title and #5 Xbox title in the U.S., and the Company's decision to release fewer SKUs in fiscal 2006 compared to fiscal 2005 in order to focus on releasing higher quality titles. Publishing net revenue excluding discontinued operations was $12.8 million versus $97.5 million in the prior year, while distribution revenue was $11.4 million versus $10.6 million in the comparable year-earlier period. Net loss for the fiscal 2006 first quarter was $32.8 million, or $0.27 per share, compared to net income of $12.1 million, or $0.10 per share, in the year earlier period. Loss from continuing operations for the first quarter of fiscal 2006 was $30.5 million, or $0.25 per share, compared to income from continuing operations of $14.1 million, or $0.12 per share, in fiscal 2005. The Company previously announced on February 9, 2005, that it would begin to take steps to streamline its U.S. operations, including the closing of its studios in Santa Monica, California and Beverly, Massachusetts. In doing so, the Company recorded restructuring charges of $2.2 million in the first quarter of 2006. Excluding restructuring charges and losses from discontinued operations, the loss for the first quarter of fiscal 2006 would have been $28.3 million, or $0.23 per share. "With many exciting advances happening within our industry and at Atari, we will continue to execute on our strategic initiatives in order to better position Atari for future growth," stated Bruno Bonnell, Chairman, CEO and Chief Creative Officer of Atari. "Fiscal 2006 is a year of focus at Atari as we are committed to improving the Company's financial position, growing our market share on a global basis, capitalizing on technological innovations and releasing unique new products which appeal to both hardcore gamers and the mass-audience." - more - -2- Atari's product lineup for the remainder of fiscal 2006 is expected to include the following new releases: - Dragon Ball GT: Transformation (GBA), Dragon Ball Z Budokai: Tenkaichi (PS2), Dragonshard (PC), Duel Masters: Shadow Code (GBA), Dungeons & Dragons Online (PC), Indigo Prophecy (PS2, Xbox and PC), Marc Ecko's Getting Up: Contents Under Pressure (PS2, Xbox and PC), The Matrix: Path of Neo (PS2, Xbox and PC), Timeshift (PC, Xbox), and Tycoon City: New York (PC), among others. As a result of major shifts in product release dates and increased development investment for future product releases, it was necessary to secure waivers for failure to comply with first quarter financial covenants included in the Company's credit facility with HSBC Business Credit, the asset-based lending unit of HSBC Bank USA, N.A. and to obtain amendments to those covenants for the remainder of the Company's fiscal year. In support of its majority-owned subsidiary, IESA has agreed to provide financial backing to Atari to support Atari's operations and cash requirements. Such financial assistance may be provided through a variety of means, including additional funding, asset purchases, capital contributions, modifications of the terms of existing indebtedness and inter-company licensing arrangements, and/or other means. Mr. Bonnell continued, "As a result of the support of IESA, we believe Atari will have the financial flexibility necessary to meet the current demands of our marketplace, be better positioned for future growth and the worldwide exploitation of owned and licensed IPs, engage leading development studios and secure new relationships with the best creative talent in the entertainment industry. There is substantial opportunity to expand our business going forward by focusing on product. Our path for the future of Atari is clear and, as evident from our actions, we believe we are positioning Atari to maximize the benefits of the continued growth and evolution of the interactive entertainment industry." ATARI WILL HOST A TELECONFERENCE WITH A SIMULTANEOUS WEBCAST AT 5:00 P.M. EASTERN TIME TODAY TO DISCUSS THE COMPANY'S FIRST QUARTER RESULTS. TO ACCESS THE TELECONFERENCE, PLEASE DIAL 1-800-261-3417 (DOMESTIC) OR 1-617-614-3673 (INTERNATIONAL), ACCESS CODE 19214353, OR LISTEN TO IT LIVE VIA THE INTERNET BY ACCESSING THE COMPANY'S WEB SITE (WWW.ATARI.COM). FOR THOSE UNABLE TO LISTEN TO THE LIVE BROADCAST, A REPLAY WILL BE AVAILABLE ON THE COMPANY'S WEB SITE OR BY DIALING 1-888-286-8010 (DOMESTIC) OR 1-617-801-6888 (INTERNATIONAL), PLAYBACK ACCESS CODE 48936327, BEGINNING APPROXIMATELY ONE HOUR AFTER THE CONCLUSION OF THE CALL AND AVAILABLE THROUGH AUGUST 16, 2005. ABOUT ATARI New York-based Atari, Inc. (Nasdaq: ATAR) develops interactive games for all platforms and is one of the largest third-party publishers of interactive entertainment software in the U.S. The Company's 1,000+ titles include hard-core, genre-defining franchises such as DRIVER(TM), The Matrix(TM), Stuntman(TM) and Test Drive(R); and mass-market and children's franchises such as Backyard Sports(TM), Nickelodeon's Blue's Clues(TM) and Dora the Explorer(TM), and Dragon Ball Z(R). Atari, Inc. is a majority-owned subsidiary of France-based Infogrames Entertainment SA (Euronext - ISIN: FR-0000052573), the largest interactive games publisher in Europe. For more information, visit www.atari.com. - more - -3- SAFE HARBOR STATEMENT With the exception of the historical information contained in this release, the matters described herein contain certain "forward-looking statements" that are made pursuant to the Safe Harbor provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements in this release are not promises or guarantees and are subject to risks and uncertainties that could cause our actual results to differ materially from those anticipated. These statements are based on management's current expectations and assumptions and are naturally subject to uncertainty and changes in circumstances. We caution you not to place undue reliance upon any such forward-looking statements. Actual results may vary materially from those expressed or implied by the statements herein. Some of the factors which could cause our results to differ materially include the following: the loss of key customers, such as Wal-Mart, Best Buy, Target, GameStop and EB Games; delays in product development and related product release schedules; inability to secure capital; loss of our credit facility, adapting to the rapidly changing industry technology, including new console technology; maintaining relationships with leading independent video game software developers; maintaining or acquiring licenses to intellectual property; fluctuations in the Company's quarterly net revenues and results of operations based on the seasonality of our industry; the termination or modification of our agreements with hardware manufacturers; and other factors described in our SEC filings, including our Annual Report on Form 10-K for the year ended March 31, 2005 and our quarterly reports on Form 10-Q. The Company undertakes no duty to update any forward-looking statements to conform the statement to actual results or changes in the Company's expectations. (Tables to Follow) # # # -4- ATARI, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS (IN THOUSANDS, EXCEPT PER SHARE DATA)
FOR THE THREE MONTHS ENDED JUNE 30, ------------------------ 2004 2005 --------- --------- (UNAUDITED) (UNAUDITED) Net revenues $ 108,124 $ 24,199 Cost of goods sold 50,864 18,417 --------- --------- Gross profit 57,260 5,782 Research and product development 15,511 16,786 Selling and distribution expenses 16,707 7,002 General and administrative expenses 7,515 7,944 Restructuring expenses -- 2,177 Depreciation and amortization 2,688 2,329 --------- --------- Operating income (loss) 14,839 (30,456) Interest expense, net (174) (48) Other income 18 9 --------- --------- Income (loss) before provision for income taxes 14,683 (30,495) Provision for income taxes 609 -- --------- --------- Income (loss) from continuing operations 14,074 (30,495) (Loss) from discontinued operations of Humongous Entertainment (2,018) (2,322) --------- --------- NET INCOME (LOSS) $ 12,056 $ (32,817) Basic and diluted net income (loss) per share: Income (loss) from continuing operations $ 0.12 $ (0.25) (Loss) from discontinued operations (0.02) (0.02) --------- --------- Net income (loss) $ 0.10 $ (0.27) ========= ========= Basic weighted average shares outstanding 121,249 121,299 ========= ========= Diluted weighted average shares outstanding 121,334 121,299 ========= =========
-5- ATARI, INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (IN THOUSANDS)
MARCH 31, JUNE 30, 2005 2005 --------- --------- (UNAUDITED) ASSETS Current assets: Cash $ 10,433 $ 5,846 Receivables, net 42,179 15,080 Inventories, net 25,209 19,200 Income taxes receivable 1,533 126 Due from related parties 248 1,078 Prepaid expenses and other current assets 20,996 16,845 Assets of discontinued operations 3,555 3,348 --------- --------- Total current assets 104,153 61,523 Property and equipment, net 8,289 7,815 Goodwill, net of accumulated amortization of $26,116 in both periods 70,224 70,224 Other intangible assets, net of accumulated amortization of $1,969 and $2,138, at March 31, 2005 and June 30, 2005, respectively 731 562 Other assets 6,642 6,446 --------- --------- Total assets $ 190,039 $ 146,570 ========= ========= LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Accounts payable $ 27,756 $ 19,063 Accrued liabilities 16,614 14,287 Restructuring reserve 1,885 2,514 Royalties payable 13,641 12,532 Income taxes payable 500 490 Due to related parties 5,421 5,761 Liabilities of discontinued operations 2,685 2,987 --------- --------- Total current liabilities 68,502 57,634 Deferred income 478 459 Other long-term liabilities 392 264 --------- --------- Total liabilities 69,372 58,357 --------- --------- Commitments and contingencies Stockholders' equity: Preferred stock, $0.01 par value, 5,000 shares authorized, none issued or Outstanding -- -- Common stock, $0.01 par value, 300,000 shares authorized, 121,296 and 121,307 shares issued and outstanding at March 31, 2005 and June 30, 2005, respectively 1,213 1,213 Additional paid-in capital 736,790 737,087 Accumulated deficit (619,744) (652,561) Accumulated other comprehensive income 2,408 2,474 --------- --------- Total stockholders' equity 120,667 88,213 --------- --------- Total liabilities and stockholders' equity $ 190,039 $ 146,570 ========= =========
-6- SUPPLEMENTAL TABLE
Three Months Ended June 30, ------------------ 2004 2005 ------ ------ PUBLISHING REVENUE MIX PC 15.2% 60.5% PlayStation 2 46.8% 17.8% GameCube 1.9% 10.3% Xbox 23.0% 5.7% Game Boy 11.8% 4.7% Nintendo DS 0.0% 0.6% PlayStation 1.3% 0.4%
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