Infogrames has announced its results for fiscal 2002, showing a marked improvement in almost every area of the company’s operations, with revenues up 44% to $419 million and a small operating profit of $962,000 – compared with last years operating loss of almost $51 million.
However, the company still made a net loss overall of $10.9 million, thanks mostly to the massive interest repayments being made on its substantial debts. Interest expenses for 2002 clocked in at just under $12 million – a significant black mark on the publisher’s balance sheet.
The overall picture is certainly improving rapidly, however. The company’s EBITDA figure for the year is $6.4 million, which contrasts with a loss of $30.7 last year. Key areas of note in the balance sheet include the slashing almost in half of the company’s administrative expenses – no doubt the fruits of the painful restructuring Infogrames has undergone in recent years.
The company credits a wide variety of games as being responsible for its success in sales terms this year, with the finger being pointed particularly at the Dragon Ball Z franchise titles on GBA, PC titles Civilization III and Neverwinter Nights, Stuntman and Test Drive on PS2, and Test Drive 2001 on Xbox. The Backyard Baseball and Backyard Basketball games on GBA and PC respectively also sold well, as did the Rollercoaster Tycoon titles on PC.
Our full-year results mark several major steps forward for Infogrames, claims Bruno Bonnell, chairman and CEO of Infogrames. First, we’re reporting an operating profit less than two years after having acquired a financially troubled company. Second, we’re seeing our multi-platform strategy bear fruit, as we’ve had successful titles this year on the PlayStation 2, Game Boy Advance, PC and Xbox. Third, our streamlined operations and aggressive cost management efforts have maximized our efficiencies throughout the company.
Looking ahead, our first priority will be to improve profitability. To that end, we will remain vigilant in scheduling our slate of releases to maximize the sales potential of each title throughout the year, a challenge that continues to grow in an increasingly crowded marketplace. We will also continue to implement improved controls over the development of our games to insure their timely release. With upcoming titles that include Unreal Championship, Unreal Tournament 2003, Enter The Matrix, Godzilla: Destroy All Monsters Melee, and future Dragon Ball Z games, among many others, we believe we will have our strongest lineup to date, and will be well positioned to capitalize on the first full cycle in which all gaming platforms will be in distribution.
The results are certainly better than most analysts would have expected, but they are tempered not only by the debt situation at the company – which has grown so serious that Infogrames in Europe is thought to be having trouble securing additional lines of credit – but by the persistent rumours of more lay-offs to come, many of which may affect the UK operations of the company. The closure of the Microprose studio which created the Geoff Crammond’s Grand Prix titles may be part of an ongoing restructuring effort at the publisher, but that doesn’t make the job losses any less unpleasant.