Non-GAAP Net Revenue was $1.669 Billion
Non-GAAP Net Income was $1.98 Per Diluted
Share
Provides Profitable Non-GAAP Financial Outlook
for Fiscal Year 2016
Increases Share Repurchase Authorization to 10
Million Shares
Take-Two Interactive Software, Inc. (NASDAQ:TTWO) today reported
strong revenues and better-than-expected Non-GAAP earnings for its
fourth quarter and fiscal year 2015, ended March 31, 2015, and
provided its initial financial outlook for its first quarter and
fiscal year 2016. In addition, the Company announced that its Board
of Directors has approved an increase to its share repurchase
authorization up to an aggregate of 10 million shares of Take-Two’s
common stock.
Fiscal Fourth Quarter
2015
GAAP Financial Results
For fiscal fourth quarter 2015, GAAP net revenue grew 54% to
$300.1 million, as compared to $195.2 million for fiscal fourth
quarter 2014. GAAP net loss was $242.8 million, or $2.99 per
diluted share, as compared to $30.8 million, or $0.40 per diluted
share, for the year-ago period. GAAP results for fiscal fourth
quarter 2015 reflect the deferral of net revenue and cost of goods
sold related to sell-in of certain titles during the quarter.
During fiscal fourth quarter 2015, the Company’s cash and
short-term investments balance increased to $1.098 billion as of
March 31, 2015, up from $976.6 million as of December 31, 2014.
Non-GAAP Financial Results
For fiscal fourth quarter 2015, Non-GAAP net revenue grew 83% to
$427.7 million, as compared to $233.2 million for fiscal fourth
quarter 2014. Non-GAAP net income increased to $54.3 million, or
$0.49 per diluted share, as compared to $21.5 million, or $0.21 per
diluted share, for the year-ago period.
The largest contributors to Non-GAAP net revenue in fiscal
fourth quarter 2015 were Grand Theft Auto V® and Grand Theft Auto
Online, Evolve™, NBA® 2K15 and Borderlands®: The Handsome
Collection™,. Non-GAAP net revenue from digitally-delivered content
grew 66% year-over-year to $202.5 million, led by offerings from
the Grand Theft Auto, NBA 2K, Evolve, Borderlands and WWE® 2K
series. Revenue from recurrent consumer spending (virtual currency,
downloadable add-on content and online games) grew 47%
year-over-year and accounted for 54% of Non-GAAP net revenue from
digitally-delivered content. Catalog sales accounted for $78.3
million of Non-GAAP net revenue led by the Grand Theft Auto and
Borderlands series.
Fiscal Year 2015
GAAP Financial Results
For fiscal year 2015, GAAP net revenue was $1.083 billion, as
compared to $2.351 billion for fiscal year 2014, which had
benefited from the record-breaking launch of Grand Theft Auto V for
PlayStation 3 and Xbox 360. GAAP net loss was $279.5 million, or
$3.48 per diluted share, as compared to GAAP net income of $361.6
million, or $3.20 per diluted share, for the prior fiscal year.
GAAP results for fiscal year 2015 reflect the deferral of net
revenue and cost of goods sold related to sell-in of certain titles
during the fiscal third and fourth quarters.
Non-GAAP Financial Results
For fiscal year 2015, Non-GAAP net revenue was $1.669 billion,
as compared to $2.414 billion for fiscal year 2014. Non-GAAP net
income was $219.2 million, or $1.98 per diluted share, as compared
to $510.7 million, or $4.26 per diluted share, for the prior fiscal
year.
The largest contributors to Non-GAAP net revenue in fiscal year
2015 were Grand Theft Auto V and Grand Theft Auto Online, NBA 2K15,
WWE 2K15, Evolve and Borderlands: The Pre-Sequel. Non-GAAP net
revenue from digitally-delivered content grew 42% year-over-year to
a record $616.0 million, led by offerings from the Grand Theft
Auto, NBA 2K, Borderlands, Sid Meier’s Civilization and Evolve
series. Revenue from recurrent consumer spending grew 45%
year-over-year and accounted for 49% of Non-GAAP net revenue from
digitally-delivered content.
Management Comments
“Our strong fourth quarter revenues and better-than-expected
Non-GAAP profits marked an outstanding close to one of our
Company’s best years ever,” said Strauss Zelnick, Chairman and CEO
of Take-Two. “During fiscal 2015, we seamlessly launched five
triple-A titles for the holiday season led by Grand Theft Auto V
and NBA 2K15; added an exciting new franchise with the successful
release of Evolve; and achieved record digitally-delivered revenue,
including our highest-ever revenues from recurrent consumer
spending. Our business generated significant cash flow and, as a
result, we ended the fiscal year with $1.1 billion in cash and
short-term investments.
“Fiscal 2016 is off to a great start, highlighted by the April
launch of Grand Theft Auto V for the PC, which has exceeded our
expectations. Throughout the coming year, we will continue to
execute our proven strategy of launching a select array of the
highest-quality titles, led by new annual releases of NBA 2K and
WWE 2K; Battleborn, a groundbreaking new intellectual property from
Gearbox Software; and a soon-to-be announced new triple-A title
from 2K. We also will continue to deliver innovative offerings
designed to promote ongoing engagement with our games and drive
recurrent consumer spending. Beyond fiscal 2016, we have a robust
development pipeline and our Company is well-positioned to deliver
growth and margin expansion over the long-term.”
Business and Product
Highlights
Since January 1, 2015:
Rockstar Games:
- Launched Grand Theft Auto V and Grand
Theft Auto Online on the PC. Grand Theft Auto V has now sold-in
nearly 52 million units across PlayStation 4, PlayStation 3, Xbox
One, Xbox 360 and PC.
- Released Grand Theft Auto Online Heists
– a four-player co-op mode for Grand Theft Auto Online that enables
players to plan, prepare and execute multi-tiered Heists across Los
Santos and Blaine County – as a free update on PlayStation 4,
PlayStation 3, Xbox One, Xbox 360 and PC.
2K:
- Launched Evolve on Xbox One,
PlayStation 4 and PC. Developed by Turtle Rock Studios, Evolve is
being supported with a robust array of downloadable add-on content,
including a Hunting Season Pass, as well as a companion App –
Evolve: Hunters Quest. The game received positive reviews from
influential critics, including IGN which scored it 9 out of 10 and
Game Informer which scored it 8.5 out of 10, and has sold-in
approximately 2.5 million units to date.
- Released Borderlands: The Handsome
Collection on PlayStation 4 and Xbox One. The Handsome Collection
includes Borderlands 2 and Borderlands: The Pre-Sequel along with
all of the downloadable content for both titles.
- Launched Sid Meier’s Starships™ on PC,
Mac and iPad. This turn-based, tactical space combat game features
cross-connectivity and unlockable bonuses with Sid Meier’s
Civilization: Beyond Earth.
- Brought WWE simulation video gaming to
the PC and mobile platforms for the first time ever with the
release of WWE 2K15 for PC and WWE 2K for iOS and Android.
- Announced that Sid Meier’s
Civilization: Beyond Earth – Rising Tide, an expansion pack for the
popular PC title from Firaxis Games, is planned for release in fall
2015.
Financial Outlook for Fiscal
2016
Take-Two is providing its initial financial outlook for its
fiscal first quarter ending June 30, 2015 and fiscal year ending
March 31, 2016 as follows:
First Quarter
Fiscal Year
Ending 6/30/2015
Ending 3/31/2016
Non-GAAP net revenue
$325 to $350 Million
$1.3 to $1.4 Billion
Non-GAAP net income per diluted
share (1)
$0.25 to $0.35
$0.75 to $1.00
GAAP to Non-GAAP
Reconciling Items (2):
Net effect from deferral in net revenues
and related cost of goods sold
$0.17 ($0.51)
Stock-based compensation expense (3)
$0.12 $0.47
Business reorganization, restructuring and
related expenses
$0.01 $0.01
Non-cash amortization of discount on
convertible notes
$0.03 $0.14
Non-cash tax expense
$0.00 $0.02
1)
For the fiscal first quarter ending June
30, 2015 and fiscal year ending March 31, 2016, the Non-GAAP net
income per diluted share outlook is calculated using the
“if-converted” method as a result of the issuances of our 1.75%
Convertible Notes in November 2011 and 1.00% Convertible Notes in
June 2013, and Non-GAAP diluted net income for the first quarter
and fiscal year is adjusted by adding-back $1.4 million and $5.6
million, respectively, related to coupon interest and debt issuance
costs, net of tax. Shares used to calculate the Non-GAAP net income
per diluted share outlook are as follows:
Weighted average basic shares
82.5 Million
83.0 Million
Add: Weighted average participating
shares
5.0 Million
4.5 Million
Add: Potential Dilution from convertible
notes
26.5 Million
26.5 Million
Total weighted average diluted
shares
114.0 Million
114.0 Million
2)
All GAAP to Non-GAAP reconciling items are
net of tax and per share.
3)
The Company's stock-based compensation
expense for the periods above includes the cost of approximately
0.6 million restricted stock units previously granted to
ZelnickMedia that are subject to variable accounting. Actual
expense to be recorded in connection with these shares is dependent
upon several factors, including future changes in Take-Two's stock
price.
Key assumptions and dependencies underlying the Company’s
financial outlook include: the timely delivery of the titles
included in this financial outlook; continued consumer acceptance
of the Xbox One and PlayStation 4; the ability to develop and
publish products that capture market share for these new-generation
systems while continuing to leverage opportunities on the Xbox 360,
PlayStation 3 and PC; and stable foreign exchange rates. See also
“Cautionary Note Regarding Forward Looking Statements” below.
Product Releases
The following titles were released since January 1, 2015:
Label
Title
Platforms
Release Date
2K
WWE 2K15: New Moves Pack (DLC)
Xbox 360, Xbox One, PS3, PS4 January
13, 2015 2K
Borderlands: The Pre-Sequel – Lady
Hammerlock Pack (DLC)
Xbox 360, PS3, PC January 27, 2015 2K
Evolve: Hunters Quest
iOS, Amazon, Windows Phone, Android January 29, 2015 2K
WWE 2K15: 2K Showcase: One More Match
(DLC)
Xbox 360, Xbox One, PS3, PS4 February 3, 2015 2K
Evolve
Xbox One, PS4, PC February 10, 2015 2K
WWE 2K15: 2K Showcase: Hall of Pain
(DLC)
Xbox 360, Xbox One, PS3, PS4 February 17, 2015 2K
WWE 2K15: NXT ArRIVAL Pack (DLC)
Xbox 360, Xbox One, PS3, PS4 March 10, 2015 2K
Sid Meier’s Starships
PC, Mac, iPad March 12, 2015 2K
Borderlands: The Pre-Sequel – Claptastic
Voyage (DLC)
Xbox 360, PS3, PC March 24, 2015* 2K
Borderlands: The Pre-Sequel – Ultimate
Vault Hunter Upgrade Pack 2 (DLC)
Xbox 360, PS3, PC March 24, 2015* 2K
Borderlands: The Handsome Collection
Xbox One, PS4
March 24, 2015*
2K
WWE 2K15: Path of the Warrior Pack
(DLC)
Xbox 360, Xbox One, PS3, PS4 March 31, 2015 2K
Evolve: Behemoth, Hunters, Observer Mode
& Maps (DLC)
Xbox One, PS4, PC March 31, 2015 Rockstar Games
Grand Theft Auto V
PC April 14, 2015 2K
WWE 2K
iOS and Android Devices April 16, 2015 2K
WWE 2K15
PC
April 28, 2015
*North American release date;
international release date followed three days after.
Take-Two's lineup of future titles announced to date
includes:
Label
Title
Platforms
Release Date
2K
WWE 2K16
Xbox 360, Xbox One, PS3, PS4
October 27, 2015*
2K
Sid Meier’s Civilization Beyond Earth –
Rising Tide (expansion pack)
PC
Fall 2015
2K
NBA 2K16
Xbox 360, Xbox One, PS3, PS4, PC,
Mobile
Fall 2015
2K
Battleborn
PS4, Xbox One, PC
Fiscal Year 2016
*North American release date;
international release date followed three days after.
Share Repurchase
Authorization
Take-Two also announced that its Board of Directors has
authorized an increase in the number of its shares of common stock
that the Company is permitted to repurchase, up to an aggregate of
10 million shares. The authorization permits the Company to
purchase shares from time to time through a variety of methods,
including in the open market or through privately negotiated
transactions, in accordance with applicable securities laws. It
does not obligate the Company to make any purchases at any specific
time or situation. Repurchases are subject to the availability of
stock, prevailing market conditions, the trading price of the
stock, the Company's financial performance and other conditions.
The program may be suspended or discontinued at any time for any
reason. As of May 15, 2015, the Company had approximately 84.61
million common shares outstanding.
Conference Call
Take-Two will host a conference call today at 4:30 p.m. Eastern
Time to review these results and discuss other topics. The call can
be accessed by dialing (877) 407-0984 or (201) 689-8577. A live
listen-only webcast of the call will be available by visiting
http://ir.take2games.com and a replay will be available following
the call at the same location.
Non-GAAP Financial
Measures
In addition to reporting financial results in accordance with
U.S. generally accepted accounting principles (GAAP), the Company
uses Non-GAAP measures of financial performance. The Company
believes that these Non-GAAP financial measures, when taken into
consideration with the corresponding GAAP financial measures, are
important in gaining an understanding of the Company’s ongoing
business. These Non-GAAP financial measures also provide for
comparative results from period to period. Therefore, the Company
believes it is appropriate to exclude the following Non-GAAP items,
net of applicable taxes, as discussed below:
- Net effect from deferral in net
revenues and related cost of goods sold - the Company defers
revenue and related costs from the sale of certain titles that have
undelivered elements upon the sale of the game and recognizes that
revenue upon the delivery of the undelivered elements. The Company
also defers revenue and related costs for certain sales generated
from certain titles for which we have or expect to provide certain
additional add-on content. These amounts are deferred over the
estimated remaining life of the game to which they pertain. As
there is no impact to the Company’s operating cash flow, management
excludes the impact of deferred net revenue and related costs from
its Non-GAAP financial measures when evaluating the Company's
operating performance, when planning, forecasting and analyzing
future periods, and when assessing the performance of its
management team. In addition, we believe that these Non-GAAP
financial measures provide a more timely indication of trends in
our business, provide comparability with the way our business is
measured by analysts, and provide consistency with industry data
sources.
- Stock-based compensation – the Company
does not consider stock-based compensation charges when evaluating
business performance and management does not contemplate
stock-based compensation expense in its short- and long-term
operating plans. As a result, the Company has excluded such
expenses from its Non-GAAP financial measures.
- Business reorganization, restructuring
and related expenses – although the Company has incurred business
reorganization expenses in the past, each charge relates to a
discrete event based on a unique set of business objectives.
Management does not believe these charges reflect the Company's
primary business, ongoing operating results or future outlook. As
such, the Company believes it is appropriate to exclude these
expenses and related charges from its Non- GAAP financial
measures.
- Non-cash amortization of discount on
convertible notes – the Company records non-cash amortization of
discount on convertible notes as interest expense in addition to
the interest expense already recorded for coupon payments. The
Company excludes the non-cash portion of the interest expense from
its Non-GAAP financial measures because these amounts are unrelated
to its ongoing business operations.
- Loss on extinguishment of debt – the
Company recorded a loss on extinguishment of debt as a result of
settling its 4.375% Convertible Notes in August 2013. The Company
excludes the impact of such transactions when evaluating the
Company’s operating performance. Management does not believe this
loss reflects the Company's primary business, ongoing operating
results or future outlook. As such, the Company believes it is
appropriate to exclude this loss from its Non-GAAP financial
measures.
- Gain on convertible note hedge and
warrants, net – the Company entered into unwind agreements with
respect to its convertible note hedge and warrant transactions. As
a result of the unwind agreements, these transactions were
accounted for as derivatives whereby gains and losses resulting
from changes in the fair value were reported as a gain on
convertible note hedge and warrants, net. The Company excludes the
impact of such transactions when evaluating the Company’s operating
performance. Management does not believe these gains and losses
reflect the Company's primary business, ongoing operating results
or future outlook. As such, the Company believes it is appropriate
to exclude these gains and losses from its Non-GAAP financial
measures.
- Non-cash tax expense for the impact of
deferred tax liabilities associated with tax deductible
amortization of goodwill – due to the nature of the adjustment as
well as the expectation that it will not have any cash impact in
the foreseeable future, the Company believes it is appropriate to
exclude this expense from its Non-GAAP financial measures.
- Gain on long-term investments, net –
from time to time, the Company makes strategic investments. The
Company excludes the impact of any gains and losses on such
investments from its Non-GAAP financial measures.
- Discontinued operations – the Company
does not engage in sales of subsidiaries on a regular basis and
therefore believes it is appropriate to exclude such gains (losses)
from its Non-GAAP financial measures. As the Company is no longer
active in its discontinued operations, it believes it is
appropriate to exclude income (losses) thereon from its Non-GAAP
financial measures.
These Non-GAAP financial measures are not intended to be
considered in isolation from, as a substitute for, or superior to,
GAAP results. These Non-GAAP financial measures may be different
from similarly titled measures used by other companies.
Final Results
The financial results discussed herein are presented on a
preliminary basis; final data will be included in Take-Two’s Annual
Report on Form 10-K for the fiscal year ended March 31, 2015.
About Take-Two Interactive
Software
Headquartered in New York City, Take-Two Interactive Software,
Inc. is a leading developer, publisher and marketer of interactive
entertainment for consumers around the globe. The Company develops
and publishes products through its two wholly-owned labels Rockstar
Games and 2K. Our products are designed for console systems and
personal computers, including smartphones and tablets, and are
delivered through physical retail, digital download, online
platforms and cloud streaming services. The Company’s common stock
is publicly traded on NASDAQ under the symbol TTWO. For more
corporate and product information please visit our website at
http://www.take2games.com.
All trademarks and copyrights contained herein are the property
of their respective holders.
Cautionary Note Regarding
Forward-Looking Statements
The statements contained herein which are not historical facts
are considered forward-looking statements under federal securities
laws and may be identified by words such as "anticipates,"
"believes," "estimates," "expects," "intends," "plans,"
"potential," "predicts," "projects," "seeks," "will," or words of
similar meaning and include, but are not limited to, statements
regarding the outlook for the Company's future business and
financial performance. Such forward-looking statements are based on
the current beliefs of our management as well as assumptions made
by and information currently available to them, which are subject
to inherent uncertainties, risks and changes in circumstances that
are difficult to predict. Actual outcomes and results may vary
materially from these forward-looking statements based on a variety
of risks and uncertainties including: our dependence on key
management and product development personnel, our dependence on our
Grand Theft Auto products and our ability to develop other hit
titles, the timely release and significant market acceptance of our
games, the ability to maintain acceptable pricing levels on our
games, our ability to raise capital if needed and risks associated
with international operations. Other important factors and
information are contained in the Company's Annual Report on Form
10-K for the fiscal year ended March 31, 2014, including the risks
summarized in the section entitled "Risk Factors," the Company’s
Quarterly Report on Form 10-Q for the fiscal quarter ended December
31, 2014, and the Company's other periodic filings with the SEC,
which can be accessed at www.take2games.com. All forward-looking
statements are qualified by these cautionary statements and apply
only as of the date they are made. The Company undertakes no
obligation to update any forward-looking statement, whether as a
result of new information, future events or otherwise.
TAKE-TWO INTERACTIVE SOFTWARE, INC. and SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS (in thousands,
except per share amounts) Three
months ended March 31, Twelve months ended March 31,
2015 2014
2015 2014 Net
revenue
$ 300,089 $ 195,208
$
1,082,938 $ 2,350,568 Cost of goods
sold: Internal royalties
271,907 28,233
306,717
538,604 Software development costs and royalties
86,752
28,299
231,615 333,450 Product costs
39,389 39,022
178,810 477,861 Licenses
12,634
12,734
77,725 64,412
Total cost of goods sold
410,682
108,288
794,867 1,414,327
Gross profit (loss)
(110,593 ) 86,920
288,071 936,241 Selling and marketing
52,467
27,577
235,341 240,996 General and administrative
38,202 50,773
175,093 161,374 Research and
development
35,157 28,632
115,043 105,256
Depreciation and amortization
5,934
3,522
21,057 13,359 Total
operating expenses
131,760 110,504
546,534 520,985 Income
(loss) from operations
(242,353 ) (23,584 )
(258,463 ) 415,256 Interest and other, net
(7,204 ) (7,535 )
(31,893 ) (33,553 )
Gain on long-term investment, net
- -
17,476 - Loss
on extinguishment of debt
- -
- (9,014 ) Gain on
convertible note hedge and warrants, net
- -
- 3,461 Income (loss)
from continuing operations before income taxes
(249,557
) (31,119 )
(272,880 ) 376,150 Provision
(benefit) for income taxes
(6,766 ) (345 )
6,590 14,459 Income (loss) from
continuing operations
(242,791 ) (30,774 )
(279,470 ) 361,691 Loss from discontinued operations,
net of taxes
- (13 )
-
(86 ) Net income (loss)
$ (242,791
) $ (30,787 )
$ (279,470 ) $ 361,605
Earnings (loss) per share: Continuing operations
$ (2.99 ) $ (0.40 )
$ (3.48
) $ 3.79 Discontinued operations
-
-
- - Basic
earnings (loss) per share
$ (2.99 ) $ (0.40 )
$ (3.48 ) $ 3.79 Continuing
operations
$ (2.99 ) $ (0.40 )
$
(3.48 ) $ 3.20 Discontinued operations
- -
- -
Diluted earnings (loss) per share
$ (2.99
) $ (0.40 )
$ (3.48 ) $ 3.20
Weighted average shares outstanding:
Basic
81,085 77,000
80,367 95,347 Diluted
81,085 77,000
80,367 124,710
Computation of
Basic EPS: Net income (loss)
$ (242,791 )
$ (30,787 )
$ (279,470 ) $ 361,605 Less: net
income allocated to participating securities
-
-
$ - (41,065 ) Net
income (loss) for basic EPS calculation
$ (242,791
) $ (30,787 )
$ (279,470 ) $ 320,540
Weighted average shares outstanding - basic
81,085 77,000
$ 80,367 95,347 Less: weighted
average participating shares outstanding
-
-
- (10,828 ) Weighted
average common shares outstanding - basic
81,085
77,000
$ 80,367
84,519 Basic EPS
$
(2.99 ) $ (0.40 )
$ (3.48 ) $
3.79
Computation of Diluted EPS: Net income
(loss)
$ (242,791 ) $ (30,787 )
$
(279,470 ) $ 361,605 Less: net income allocated to
participating securities
- -
- (31,397 ) Add:
interest expense, net of tax, on Convertible Notes
-
-
- 33,718
Net income (loss) for diluted EPS calculation
$
(242,791 ) $ (30,787 )
$ (279,470
) $ 363,926 Weighted average shares
outstanding - basic
81,085 77,000
80,367 84,519 Add:
dilutive effect of common stock equivalents
-
-
- 29,363
Weighted average common shares outstanding - diluted
81,085 77,000
80,367
113,882 Diluted
EPS
$ (2.99 ) $ (0.40 )
$ (3.48
) $ 3.20
Three months ended March
31, Twelve months ended March 31,
OTHER
INFORMATION
2015 2014
2015 2014 Geographic
revenue mix United States
55 % 57 %
58
% 47 % International
45 % 43 %
42
% 53 % Platform revenue mix Console
87
% 79 %
81 % 91 % PC and other
13
% 21 %
19 % 9 % Net revenue by
distribution channel: Physical retail and other
52 %
57 %
58 % 84 % Digital online
48 % 43 %
42 % 16 %
TAKE-TWO INTERACTIVE
SOFTWARE, INC. and SUBSIDIARIES CONSOLIDATED BALANCE
SHEETS (in thousands, except per share amounts)
March 31, March 31, 2015
2014 ASSETS Current assets: Cash
and cash equivalents
$ 911,120 $ 935,400 Short-term
investments
186,929 - Restricted cash
169,678 193,839
Accounts receivable, net of allowances of $70,471 and $75,518 at
March 31, 2015 and 2014, respectively
217,860 53,143
Inventory
20,051 29,780 Software development costs and
licenses
163,385 116,203 Deferred cost of goods sold
56,779 5,002 Prepaid expenses and other
55,506
66,073 Total current assets
1,781,308 1,399,440 Fixed
assets, net
69,792 42,572 Software development costs and
licenses, net of current portion
124,329 109,506 Deferred
cost of goods sold, net of current portion
19,869 858
Goodwill
217,288 226,705 Other intangibles, net
4,769
5,113 Other assets
13,745 15,436
Total assets
$ 2,231,100 $ 1,799,630
LIABILITIES AND STOCKHOLDERS' EQUITY Current
liabilities: Accounts payable
$ 38,789 $ 16,452
Accrued expenses and other current liabilities
444,738
397,173 Deferred revenue
482,733 61,195
Total current liabilities
966,260
474,820 Long-term debt
476,057 454,031
Non-current deferred revenue
164,618 18,128 Other long-term
liabilities
61,077 50,845 Total
liabilities
1,668,012 997,824
Commitments and contingencies Stockholders' equity:
Preferred stock, $.01 par value, 5,000 shares authorized
- -
Common stock, $.01 par value, 200,000 shares authorized; 104,594
and 105,156 shares issued and 88,356 and 88,918 outstanding at
March 31, 2015 and 2014, respectively
1,046 1,052 Additional
paid-in capital
1,028,197 954,699 Treasury stock, at cost
(16,238 common shares at March 31, 2015 and 2014)
(276,836
) (276,836 ) (Accumulated deficit) retained earnings
(158,695 ) 120,775 Accumulated other comprehensive
(loss) income
(30,624 ) 2,116
Total stockholders' equity
563,088
801,806 Total liabilities and stockholders' equity
$
2,231,100 $ 1,799,630
TAKE-TWO INTERACTIVE SOFTWARE, INC. and
SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH
FLOWS
(in thousands)
Twelve months ended March 31, 2015
2014
Operating activities:
Net income (loss)
$ (279,470 ) $ 361,605
Adjustments to reconcile net income (loss) to net cash provided by
operating activities: Amortization and impairment of software
development costs and licenses
133,453 265,533 Depreciation
and amortization
21,057 13,359 Loss from discontinued
operations
- 86 Amortization and impairment of intellectual
property
344 3,558 Stock-based compensation
65,246
78,118 Deferred income taxes
2,279 (19,036 ) Amortization of
discount on Convertible Notes
22,026 22,801 Amortization of
debt issuance costs
1,663 1,947 (Gain) on long-term
investments, net
(17,476 ) - Loss on extinguishment
of debt
- 9,014 Gain on convertible note hedge and warrants,
net
- (3,461 ) Other, net
2,068 (208 ) Changes in
assets and liabilities, net of effect from purchases of businesses:
Restricted cash
24,161 (186,350 ) Accounts receivable
(164,717 ) 136,453 Inventory
9,729 438
Software development costs and licenses
(188,772 )
(192,357 ) Prepaid expenses, other current and other non-current
assets
5,398 (20,590 ) Deferred revenue
568,028
34,276 Deferred cost of goods sold
(70,788 ) 2,166
Accounts payable, accrued expenses and other liabilities
78,585 194,228 Net cash used in discontinued operations
- (1,318 ) Net cash provided by
operating activities
212,814 700,262
Investing activities:
Purchase of fixed assets
(49,501 ) (29,813 )
Purchases of short-term investments
(187,616 ) -
Purchase of long-term investment
(5,000 ) - Cash
received from the sale of long-term investment
21,976 -
Payments in connection with business combinations, net of cash
acquired
- (1,000 ) Net cash used in
investing activities
(220,141 ) (30,813
)
Financing activities:
Excess tax benefit from stock-based compensation
928 -
Repurchase of common stock
- (276,836 ) Proceeds from
issuance of 1.00% Convertible Notes
- 283,188 Payment for
extinguishment of 4.375% Convertible Notes
- (165,999 )
Proceeds from termination of convertible note hedge transactions
- 84,429 Payment for termination of convertible note warrant
transactions
- (55,651 ) Payment of debt issuance costs for
the issuance of 1.00% Convertible Notes
-
(2,815 ) Net cash provided by (used in) financing
activities
928 (133,684 )
Effects of foreign exchange rates on cash and cash equivalents
(17,881 ) (2,867 ) Net
(decrease) increase in cash and cash equivalents
(24,280
) 532,898 Cash and cash equivalents, beginning of year
935,400 402,502 Cash and cash
equivalents, end of period
$ 911,120 $ 935,400
TAKE-TWO INTERACTIVE SOFTWARE, INC. and
SUBSIDIARIES RECONCILIATION OF GAAP TO Non-GAAP MEASURES
(Unaudited) (in thousands, except per share amounts)
Three months ended March
31, Twelve months ended March 31,
2015 2014 2015
2014 Net Revenues GAAP Net
Revenues $ 300,089 $ 195,208
$
1,082,938 $ 2,350,568 Net effect from deferral in net
revenues
127,647 37,947
585,827 63,152
Non-GAAP Net
Revenues $ 427,736 $ 233,155
$ 1,668,765 $ 2,413,720
Digital Online Revenues (included in Net Revenues above)
GAAP Digital Online Revenues $ 144,612 $
84,391
$ 455,299 $ 371,970 Net effect from deferral
in digital online revenues
57,920
37,947
160,675 63,152
Non-GAAP Digital Online Revenues $ 202,532
$ 122,338
$ 615,974 $ 435,122
Gross Profit GAAP Gross Profit (Loss)
$ (110,593 ) $ 86,920
$ 288,071
$ 936,241 Net effect from deferral in net revenues and related cost
of goods sold
309,026 23,442
502,565 36,179
Stock-based compensation
6,059 948
17,121 30,124
Non-GAAP
Gross Profit $ 204,492 $ 111,310
$ 807,757 $ 1,002,544
Income
(Loss) from Operations GAAP (Loss) Income from
Operations $ (242,353 ) $ (23,584 )
$ (258,463 ) $ 415,256 Net effect from
deferral in net revenues and related cost of goods sold
309,026 23,442
502,565 36,179 Stock-based
compensation
12,772 20,524
65,246 78,118 Business
reorganization, restructuring and related
-
2,560
195 4,490
Non-GAAP Income (Loss) from Operations $
79,445 $ 22,942
$ 309,543
$ 534,043
Net Income (Loss) GAAP Net Income
(Loss) $ (242,791 ) $ (30,787 )
$
(279,470 ) $ 361,605 Net effect from deferral in net
revenues and related cost of goods sold
279,554 23,442
451,749 36,179 Stock-based compensation
11,450 20,524
36,206 78,118 Business reorganization, restructuring and
related
- 2,560
156 4,490 Non-cash amortization of
discount on Convertible Notes
5,806 5,294
18,933
22,801 Gain on long-term investment, net
- -
(9,999
) - Loss on extinguishment of debt
- -
- 9,014
Gain on convertible note hedge and warrants, net
- -
- (3,461 ) Non-cash tax expense
265 447
1,669
1,890 Discontinued operations
- 13
- 86
Non-GAAP Net
Income (Loss) $ 54,284 $ 21,493
$ 219,244 $ 510,722
Diluted
Earnings (Loss) Per Share GAAP earnings (loss) per share
$ (2.99 ) $ (0.40 )
$ (3.48
) $ 3.20 Non-GAAP earnings (loss) per share
$
0.49 $ 0.21
$ 1.98 $ 4.26 Number of
diluted shares used in computation GAAP
81,085 77,000
80,367 124,710 Non-GAAP
114,034 115,627
113,951 122,608
Computation of Diluted GAAP
EPS: Net income (loss)
$ (242,791 ) $
(30,787 )
$ (279,470 ) $ 361,605 Less: net
income allocated to participating securities
- -
-
(31,397 ) Add: interest expense, net of tax, on Convertible Notes
- -
-
33,718 Net income (loss) for diluted EPS calculation
$ (242,791 ) $ (30,787 )
$
(279,470 ) $ 363,926 Weighted average
shares outstanding - diluted
81,085 77,000
80,367
95,347 Add: dilutive effect of common stock equivalents
- -
-
29,363 Total weighted average shares outstanding - diluted
81,085 77,000
80,367 124,710 Less: weighted average
participating shares outstanding
- -
- (10,828 ) Weighted average
common shares outstanding - diluted
81,085 77,000
80,367 113,882 Diluted earnings
(loss) per share
$ (2.99 ) $ (0.40 )
$
(3.48 ) $ 3.20
Computation of
Diluted Non-GAAP EPS: Non-GAAP net earnings (loss)
$
54,284 $ 21,493
$ 219,244 $ 510,722 Less: net
income (loss) allocated to participating securities
(3,091
) (2,224 )
(13,716 ) (45,104 ) Add: interest
expense, net of tax, on Convertible Notes
1,375
2,204
5,515 10,917
Net income for diluted earnings (loss) per share calculation
$ 52,568 $ 21,473
$
211,043 $ 476,535 Weighted average
shares outstanding - basic
87,579 88,964
87,496
96,043 Add: dilutive effect of common stock equivalents
26,455 26,663
26,455
26,565 Total weighted average shares
outstanding - diluted
114,034 115,627
113,951 122,608
Less: weighted average participating shares outstanding
(6,494 ) (11,964 )
(7,129
) (10,828 ) Weighted average common shares
outstanding - diluted
107,540 103,663
106,822 111,780
Diluted earnings (loss) per share
$ 0.49 $ 0.21
$ 1.98
$ 4.26
View source
version on businesswire.com: http://www.businesswire.com/news/home/20150518006638/en/
Take-Two Interactive Software, Inc.Investor
Relations:Henry A. Diamond, 646-536-3005Senior Vice
PresidentInvestor Relations & Corporate
CommunicationsHenry.Diamond@take2games.comorCorporate Press:Alan
Lewis, 646-536-2983Vice PresidentCorporate Communications &
Public AffairsAlan.Lewis@take2games.com
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