First quarter fiscal 2007 results
For its first quarter ended January 31, 2007.
Net revenue for the first quarter was $277.3 million compared to $265.0 million for the first quarter of fiscal 2006. Net loss for the quarter was $21.5 million or $0.30 per share, compared to a net loss of $29.1 million or $0.41 per share in the prior year's first quarter. The first quarter 2007 loss includes $6.4 million for legal and other professional fees associated with the investigation of stock option grants and the Company's responses to the New York County District Attorney's subpoenas, $6.1 million to record valuation allowances for deferred tax assets as required under Statement of Financial Accounting Standards (SFAS) 109, and $2.2 million in stock-based compensation as required by SFAS 123®.
While Take-Two's first quarter results continued to be negatively impacted by the video game industry's ongoing transition to next-generation platforms, the Company realized higher gross profit margins in both its publishing and distribution businesses compared to the first quarter last year. Publishing margins rose due to increased sales of the Company's sports products, primarily NBA® 2K7, along with the contribution of higher margin titles such as Grand Theft Auto: Liberty City Stories for the PlayStation® 2 computer entertainment system and Grand Theft Auto: San Andreas for the PlayStation 2 in Japan. Distribution gross margins rose due to a more favorable mix of software titles sold, particularly an increase in those for next-generation platforms compared to the prior period. Take-Two's operating expenses declined by $10.0 million, or approximately 10%, from last year's first quarter as a result of reduced sales and marketing expenses, the closure of three development studios in 2006, and lower stock-based compensation.
