Mad Catz Reports Fiscal 2014 First Quarter Financial Results


Mad Catz Reports Fiscal 2014 First Quarter Financial Results

Net Sales – $18.7 million; Diluted Loss per Share – $0.03

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Mad Catz Interactive, Inc. (Mad Catz or the Company) (NYSE MKT/TSX: MCZ), today announced financial results for the fiscal 2014 first quarter ended June 30, 2013.

Key Fiscal 2014 First Quarter Highlights:

  • Net sales in the quarter declined 14% to $18.7 million, as a 37% decrease in sales to North America was partially offset by increases in sales of 3% in Europe and 24% in APAC;
  • Gross margin remained stable at 28.7% versus the first quarter last year;
  • Total operating expenses declined 6% year-over-year to $7.5 million, driven primarily by lower acquisition-related items;
  • Diluted loss per share of $0.03 remained flat versus the prior year;
  • Net position of bank loan, less cash, was $8.4 million at June 30, 2013 compared to $6.1 million at March 31, 2013 and $11.9 million at June 30, 2012;
  • Shipped the TRITTON Kunai Universal Headset for consoles, PC, Mac and smart devices;
  • Shipped the TRITTON F.R.E.Q.7 surround sound gaming headset, Mad Catz M.O.U.S.9 wireless mouse and R.A.T.M gaming mouse for PC, Mac and smart devices;
  • Announced the Mad Catz M.O.J.O. Android Micro Console as part of the Companys GameSmart initiative;
  • Announced the Mad Catz C.T.R.L.R Wireless GamePad for mobile and smart devices;
  • Announced the TRITTON Kunai Stereo Gaming Headset, the TRITTON Pro+ True 5.1 Surround Sound Headset for PC and Mac as well as the TRITTON F.R.E.Q.4D Gaming Headset for PC, Mac and smart devices;
  • Announced the Mad Catz Killer Instinct Arcade FightStick Tournament Edition 2 and the Mad Catz Arcade FightStick Tournament Edition 2 for Xbox One; and
  • Announced the appointment of Karen McGinnis as Chief Financial Officer.
  • (1) Definitions, disclosures and reconciliations regarding non-GAAP financial information are included on page 8.
  • Commenting on the results, Darren Richardson, President and Chief Executive Officer of Mad Catz, said, We entered fiscal 2014 with several key objectives, including furthering the transition of our business toward higher-value products, positioning the Company to take full advantage of the shift towards mobile gaming, and strategically leveraging our resources to best benefit from the launch of the Xbox One and PlayStation 4 gaming consoles during the upcoming holiday season.
  • As expected, we saw a decline in our console-related product sales during the first quarter due to the consumer anticipation around the upcoming console transition. However, this decline was partially offset by continuing strong sales growth in our PC and Mac products. We continued to grow our presence and market share across emerging markets, and were especially pleased with the on-going growth in Europe where we grew market share in the face of considerable headwinds.
  • Mr. Richardson concluded, The video gaming industry is clearly at an important inflection point, our entire range of products across the Mad Catz, Tritton and Saitek brands are positioned to take advantage of this shift and to provide a platform for long-term growth. We are particularly excited about the potential for our mobile product ecosystem around GameSmart as well as our upcoming offering of unique products for both the Xbox One and PlayStation 4 consoles. We believe these products will make a positive contribution to sales as our fiscal year unfolds.
  • Karen McGinnis, Chief Financial Officer of Mad Catz, added, While console-related sales were down significantly as consumers prepare for the upcoming launch of the next generation gaming consoles, gross sales of products for the PC and Mac were up over 26% driven principally by our professional gaming mice and keyboards. And, despite a year-over-year decline in gross sales of audio devices, we saw strength at the lower price points of our audio product range driven by the Kunai line of headsets. We successfully held the line on gross margin at 28.7% for the quarter and saw a 6% decrease in total operating expenses, keeping our net loss per share flat year-over-year at $0.03.