Interplay looks set to be delisted from the NASDAQ stock exchange later this month, having passed the August 13 deadline set by the exchange for boosting its share price above $1.00. The company has now received a letter from Nasdaq warning it that its shares will be delisted on August 22, with the deadline for appeals against the ruling set for 4pm on August 21.
The company’s case with the exchange, which hinges on a proposed 1 for 10 reverse stock split, is unlikely to be helped by its latest set of results, which cover the second quarter ended June 30. Although the company made a net income of $20.9 million in the quarter, compared with a loss of $12.4 million in the same period last year, this profit is entirely due to a $28.8 million gain on the sale of Shiny Entertainment – one of the company’s key development resources.
A truer picture is painted by the 20 per cent decrease in net revenues, which were a mere $11.8 million for the quarter – although operating losses were also down, from $11.4 million last year to $7.1 million this year. Net revenues are down by 15 per cent over the last six months for the company.
It’s not all bad news, however; operating expenses were down 45 per cent year on year for the quarter, and Xbox title Hunter: The Reckoning was the best selling game on the system for May in the USA. High hopes are also pinned on Icewind Dale II on the PC, which will appear in early September. However, the sale of key development assets such as Shiny does not bode well for Interplay in the long term.
Despite the falling revenues and gross profit margins at the company, CEO Herve Caen was upbeat about the results. This quarter we met and exceeded another series of milestones in our turnaround plan, according to Caen. The sale of Shiny Entertainment to improve our balance sheet, better execution of fewer, better titles, and tighter cost controls are all key components of Interplay’s resurgence.