COMPANY PRESS RELEASE: THQ reported record net sales and net income for the fourth quarter 2001, contributing to a 50% increase in net income for the year ended December 31, 2001.
For the fourth quarter ended December 31, 2001, net income grew 32% to $28.5 million, or $1.12 per diluted share, from $21.5 million, or $0.99 per diluted share a year ago, on an increase in net sales to $196.4 million from $190.9 million a year ago.
For the year ended December 31, 2001, net income increased 50% to $36.0 million, or $1.52 per diluted share, compared with pro forma net income (excluding a May 24, 2000 non-cash charge) of $24.1 million, or $1.12 per diluted share, for 2000. Net sales for the year increased 9% to $379.0 million from $347.0 million in 2000.
THQ’s record results for the fourth quarter reflected a 22% operating margin, our best ever, said Brian Farrell, president and chief executive officer, THQ. Our strong performance in 2001, particularly in the fourth quarter, reflects THQ’s ability to deliver consistent results that are unparalleled in the interactive entertainment industry.
With the successful launch of three new gaming systems, 2001 was an exciting year for our industry, Mr. Farrell said. We’re pleased with THQ’s performance through this technology transition, and we’re even more excited about our leadership position as the industry enters a period of accelerated growth. In 2001, we successfully established several new brands, giving us the product depth and diversity to appeal to gamers at every stage of the technology curve. Because of the rapid adoption of the new consoles and anticipated hardware price reductions this year to mass market price points, we believe our industry-leading kids product line and mass market brands will play a key role in our continued growth.
In 2001, THQ executed on several key strategic business initiatives that position the Company for significant growth through 2002 and beyond. The completion of the Company’s secondary offering raised $156 million for future business development and expansion. The acquisition of acclaimed developer Rainbow Studios furthers THQ’s growing technology and content creation capabilities with world-class internal development talent. Finally, the establishment of THQ Wireless positions the Company to take full advantage of the emerging wireless gaming market.
THQ plans to ship more than 70 products in 2002 across every viable game platform. Titles scheduled for release include both sequels to proven franchises such as Red Faction, World Wrestling Federation, the Nickelodeon brands, Motocross and Scooby-Doo, and the launch of new properties including BattleBots, Pride FC, and games based on pop culture icon Britney Spears.
Based on the continuing positive trends discussed above, the Company is increasing earnings guidance for the first quarter and full year 2002. THQ anticipates net sales of $70 million to $75 million in the first quarter of 2002 and earnings per diluted share of between $0.07 and $0.09. For the year, the company expects net sales of $510 million to $520 million and diluted earnings per share of between $1.83 and $1.93.