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MIDWAY REPORTS Q4 NET INCOME OF $17.6 MILLION AND DILUTED EPS OF $0.19
2004 Full Year Revenues Rise 75%
CHICAGO, Illinois, February 28, 2005 - Midway Games Inc. (NYSE:MWY) today announced results of operations for the fourth quarter and year ended December 31, 2004. The Company also provided revenue and earnings guidance for the quarter ending March 31, 2005 and year ending December 31, 2005.
FOURTH QUARTER RESULTS
Revenues for the 2004 fourth quarter were $77.2 million, up 156% from $30.1 million in the 2003 fourth quarter. Net income was $17.6 million in the 2004 fourth quarter, compared with a 2003 fourth quarter net loss of $27.8 million. Income applicable to common stock was $17.6 million or $0.19 per diluted share in the 2004 fourth quarter, compared with a 2003 fourth quarter loss applicable to common stock of $28.6 million or $0.52 per diluted share. The 2004 fourth quarter results include $5.6 million of charges related to the writedown of capitalized product development costs which were offset by other income of $5.0 million due to a settlement that reduced liabilities to Midway's former parent, WMS Industries Inc. The 2003 fourth quarter results included $5.9 million of charges related to the writedown of capitalized product development costs.
Other key operating and financial highlights include:
FULL YEAR RESULTS
Revenues for the year ended December 31, 2004 were $161.6 million, up 75% from $92.5 million in the year ended December 31, 2003. The net loss was $19.9 million, compared with a net loss of $115.2 million in the prior year. The loss applicable to common stock was $24.7 million or $0.34 per share, compared with a loss applicable to common stock of $117.9 million or $2.43 per share in the prior year.
The results for the year ended December 31, 2004 include:
The results for the year ended December 31, 2003 included:
"Our 2004 fourth quarter results cap a year of progress at Midway which has positively repositioned the Company for the future," commented President and Chief Executive Officer, David F. Zucker. "By focusing on improving our key operating functions such as product development and marketing, Midway produced much higher quality games and generated much better visibility and demand for our games in 2004. In addition to the progress we made in improving our operations, we also made several strategic acquisitions and partnerships that strengthened our product development capabilities, brought us key franchise content and extended our reach into new markets, such as PC games," added Mr. Zucker.
OUTLOOK
For the year ending December 31, 2005, Midway expects revenues to grow approximately 40% to $225 million and expects a net loss of approximately $38 million including approximately $2 million of stock options expense in the second half of the year. The benefits of continued revenue growth will be offset in 2005 by investment in titles releasing in 2006 and 2007 for next generation consoles. For the quarter ending March 31, 2005, the Company expects revenues of approximately $14 million and a net loss of approximately $18 million. The Company expects to release Mortal Kombat: Deception for GameCube and NARC for PlayStation 2 and Xbox in North America during the quarter.
"We look to build on the progress we made in 2004 by continuing to pursue major franchise products and by continuing to build industry-leading product development and marketing organizations. We believe that further strengthening these functions will lay the foundation for successfully navigating the upcoming console transition while expanding and diversifying our revenue base to achieve the size and scale necessary to generate consistent and significant profits," remarked Mr. Zucker. "We will continue to invest heavily during 2005, particularly in the areas of product development and our product pipeline. In the first months of 2005 we have already taken two important steps in this direction through our arrangement to license Unreal Engine 3.0 technology for next generation console development and through our multi-product agreements with Warner Brothers to bring a broad portfolio of Cartoon Network programming to the videogame market. Although we expect to grow revenues approximately 40% in 2005, we are even more excited about our 2006 product lineup when we expect to see results from our investment in next generation console development, major PC franchise launches and licensed content from our Warner agreements," added Mr. Zucker.
