<font> <font> Majesco Entertainment Company Reports Second Quarter 2009 Financial Results </font>
<font> Monday, June 15, 2009 4:05:00 PM ET </font> </font>
<font> Majesco Entertainment Company ( COOL ), an innovative provider of video games for the mass market, today reported financial results for the second quarter and six months ended April 30, 2009. </font>
<font> For the second quarter ended April 30, 2009, Majesco’s net revenues increased 60.8 percent to $20.5 million versus $12.8 million in the same period a year ago. During this same period, the Company reported an operating loss of $0.6 million, compared to a $0.3 million loss in the second quarter of 2008. Non-GAAP operating income was $0.5 million versus non-GAAP operating income of $0.2 million in 2008. Net loss for the quarter was $1.7 million versus a net loss of $0.3 million in 2008. On a non-GAAP basis, net income for the quarter was $0.3 million compared to non-GAAP net income of $0.1 million last year. </font>
<font> The Company’s basic and diluted net loss per share for the quarter ended April 30, 2009 was $0.06 compared to a net loss per basic and diluted share of $0.01 in the same period last year. Non-GAAP basic and diluted net income per share was $0.01 compared to $0.0 last year. </font>
<font> For the six months ended April 30, 2009, the Company’s net revenues increased 69.8 percent to $53.4 million versus the year ago period. During this same period, the Company reported operating income of $3.1 million compared to operating income of $2.1 million in the same 2008 period. Non-GAAP operating income for the six month period was $5.3 million compared to $2.9 million for the comparable 2008 period. Net income through the first six months of fiscal 2009 was $2.5 million versus net income of $2.4 million in the comparable 2008 period. Non-GAAP net income was $4.5 million for the first six months of fiscal 2009 compared to $2.6 million in the same 2008 period. </font>
<font> The Company’s basic and diluted earnings per share for the six months ended April 30, 2009 and the six months ended April 30, 2008 was $0.09. The Company’s non-GAAP basic and diluted earnings per share for the six months ended April 30, 2009 was $0.16 compared to $0.09 in the comparable 2008 period. </font>
<font> Jesse Sutton, Chief Executive Officer of Majesco, said, "We delivered another impressive quarter as we continued to successfully execute on our business plan and capitalize on the strength of the family friendly, casual game market. Our revenue growth was driven by the continued strength of Jillian Michaels’ Fitness Ultimatum 2009 and our Cooking Mama franchise. During the quarter we launched Gardening Mama, our first brand extension of the Mama franchise, which delivered a solid performance and demonstrated the power of the Mama brand and its ability to extend beyond cooking. As expected, profitability in the quarter was dampened by our strategic marketing campaigns as we made investments to support the growth of our franchises and most promising titles. We believe the benefits of these investments will continue beyond the first half of 2009 and help drive future growth. Despite these investments, for the first six months of fiscal 2009 we delivered improved operating and net income on both a GAAP and non-GAAP basis. For the first six months, our non-GAAP operating income grew $2.4 million or 83 percent to $5.3 million, while our non-GAAP net income reached $4.5 million, an increase of $1.9 million or 75 percent. </font>
<font> "As a result of our success to date this year, and the strength of our release schedule for the rest of the fiscal year we have increased our revenue guidance for fiscal 2009 to $80 to $85 million. We remain focused on prudently managing our costs and are committed to delivering profitable growth. We have a proven strategy, are executing operationally and believe we have the right team in place to continue creating value for our shareholders over the long-term." </font>
<font> Financial Highlights </font>
<font> -- Second quarter 2009 net revenues for the U.S. were $20.3 million, an increase of $8.9 million or 78 percent compared to the same quarter last year. Second quarter 2009 international sales were $0.3 million, a decline of $1.1 million or 81 percent compared to the same period of 2008. </font>
<font> -- For the six months year-to-date, net revenues for the U.S. were $52.0 million, an increase of $22.2 million or 74 percent compared to the same period last year. International sales for the same period declined $0.3 million or 17 percent compared to the same period last year. </font>
<font> -- Net Sales for the Wii increased $7.5 million, or 235 percent, to $10.7 million for the second quarter of fiscal 2009. DS sales for the same period increased 3 percent, from $9.0 million to $9.3 million. </font>
<font> -- For the six months year-to-date, Wii sales increased $24.8 million, or 359 percent, to $31.7 million. DS sales for the same period declined 12 percent from $23.2 million to $20.5 million. </font>
<font> -- The second quarter of 2009 also includes $1.0 million in advertising expense (included in selling and marketing) in support of the Company’s strategic marketing initiatives and a loss on impairment of development costs of $0.3 million (included in general and administrative) due to cancellation of titles in development. </font>
<font> -- The six months ended April 30, 2009 also includes $2.3 million in advertising expense (included in selling and marketing) in support of the Company’s strategic marketing initiatives and a loss on impairment of development costs of $0.3 million (included in general and administrative) due to cancellation of titles in development. </font>
<font> Generally Accepted Accounting Principles (GAAP) and Non-GAAP Metrics </font>
<font> To facilitate a comparison between the three and six months ended April 30, 2009 and 2008, the Company has presented both GAAP and Non-GAAP financial results. GAAP financial measures, including operating income, net income, and basic and diluted earnings per share, have been adjusted to report certain Non-GAAP financial measures. </font>
<font> These Non-GAAP financial measures exclude the following items from the Company’s unaudited condensed consolidated statements of operations: </font>
<font> -- Expenses related to non-cash compensation
-- Net proceeds from sale of income tax net operating loss carryforwards
-- Settlement charges related to the settlement of class action litigation
-- Change in fair value of warrants
-- Expenses for the California studio which will be closed in the third
quarter fiscal 2009
</font>
<font> These Non-GAAP measures are provided to enhance investors’ overall understanding of the Company’s current financial performance and the Company’s prospects for the future. These measures should be considered in addition to results prepared in accordance with GAAP, but should not be considered a substitute for, or superior to, GAAP results. </font>
<font> For more information on these Non-GAAP financial measures, please see the tables in this release captioned "Reconciliation of GAAP and Non-GAAP Financial Measures" which includes a reconciliation of the Non-GAAP to the GAAP results. </font>
<font> Announced Product Line-up </font>
<font> Third Quarter 2009 ending July 31, 2009: </font>
<font> All of the following titles have been or are expected to be released in North America during the Company’s third quarter: </font>
<font> -- Go Play Lumberjacks for Wii is the first game in Majesco’s recently announced Go Play line of motion-based, family friendly Wii titles that lets players use the Wii Remote to chop, climb, saw and logroll to victory in 5 entertaining events that include support for the Wii Balance Board accessory. </font>
<font> -- Go Play Circus Star for Wii is the second game in Majesco’s recently announced Go Play line that includes a full collection of all-time favorite circus attractions. Featuring support for the Wii Balance Board accessory, the game lets players wow the crowd with death-defying stunts, animal tricks and sleight of hand in 15 different events. </font>
<font> -- Night at the Museum: Battle of the Smithsonian for Wii/DS/360/PC follows the storyline of Twentieth Century Fox’s highly anticipated theatrical release of the same name which debuted in theaters May 22nd. Featuring the voice and likeness of the film’s star, Ben Stiller, the game brings the movie experience directly into the home with all of the excitement and humor from the feature film. </font>
<font> -- Drama Queens for DS tasks players with juggling their love life, career and friendships as they compete in a popularity contest set within a virtual 3D board game. </font>
<font> -- Math Blaster in the Prime Adventure for DS is inspired by the original hit PC game from Knowledge Adventure that makes learning fun by combining a variety of adventure-based learning games with challenging mathematic puzzles and the unique capabilities of Nintendo DS. </font>
<font> -- Rollin’ Rascals for DS is an addictive puzzler that challenges players to roll adorable pets around obstacles and into identical pairs to clear them from the game board. </font>
<font> -- Powerbike for DS is an intense motorcycle racer that features death-defying stunts, intense police chases and competitive multiplayer modes. </font>
<font> -- Ultimate Game Room for DS is a compilation of 3 classic recreational sports--Pool, Darts and Bowling -- that lets players compete against friends on the go. </font>
<font> -- Puffins Island Adventure for DS lets players experience life as part of a Puffin flock as they fly, dive, swim, explore and start a family in this fun and educational experience focused on one of nature’s more unusual and endearing sea birds. </font>
<font> -- Marker Man Adventures for DS is a unique game based on drawing and physics challenges in which players maneuver the charming stick figure, Marker Man, through a myriad of scrolling world puzzles in his attempt to find his best friend, Doodles. </font>
<font> -- Escape the Museum for Wii traps players in the National Museum of History after a devastating earthquake. Players search the museum for survivors and priceless archeological artifacts by completing 12 different hunt and find areas and 25 action-packed adventure scenes. </font>
<font> -- Hot and Cold: A 3D Hidden Object Adventure for DSiWare is inspired by the classic children’s game in which players use temperature cues to indicate proximity to an item. Players will search through 50 multi-room levels using the Hot and Cold Meter as a guide for discovering hundreds of items with real world physics. </font>
<font> Fourth Quarter 2009 Ending October 31, 2009: </font>
<font> To date, the Company has announced the following titles that are expected to be released during its fiscal fourth quarter 2009: </font>
<font> -- Go Play City Sports for Wii is the third game in Majesco’s new Go Play line. This compilation of urban sports lets players compete against the best neighborhood athletes in six classic games, including stickball, kickball, handball, rooftop hockey, shootout soccer and jump rope. The game also features four player gameplay and support for the Wii Balance Board accessory. </font>
<font> -- My Hero: Firefighter for DS is part of Majesco’s new aspirational line of My Hero adventure games that lets players experience firsthand the heroic acts of the role models they look up to. Players use the stylus as a fire hose, ladder and ax as they complete 13 varied missions relating to fire emergencies and courageous rescues. </font>
<font> -- My Hero: Astronaut for DS is the first astronaut game available and also part of Majesco’s new aspirational line of My Hero adventure games. On an expedition to Mars, players will pilot a Space Rover, Space Shuttle, and Lunar Lander as they blast off through over 40 different missions that include landing on a space station, repairing satellites, destroying meteors and more. </font>
<font> -- Our House: Party! for Wii turns the Wii Remote into the ultimate home renovation tool that lets up to four players compete party style to build their own personalized trophy home that they can then share with friends via WiiConnect24. </font>
<font> -- Our House for DS is a companion game to the Wii version. The title lets players work as contractors and then use their work-for-hire earnings to design, build and decorate their own personalized home. </font>
<font> -- A Boy and His Blob for Wii is IGN’s Best of E3 runner-up in the Wii Platformer category. The game is a rebirth of the NES classic that expands upon the original platform adventure and features groundbreaking hand drawn and painted animation technology. By feeding the blob jelly beans, players can activate his special abilities to transform him into tools that help the pair solve puzzles, defeat monsters and escape danger. </font>
<font> First Quarter Fiscal 2010 Ending January 31, 2010 </font>
<font> To date, the Company has announced the following titles that are expected to be released during its fiscal first quarter 2010, which includes the holiday sales period: </font>
<font> -- Jillian Michaels Fitness Ultimatum 2010 for Wii and Jillian Michaels Pocket Trainer 2010 for DS feature the celebrity fitness trainer, life coach, and star of the popular television series The Biggest Loser as she leads players through high-intensity, one-on-one workouts while providing direct feedback and motivation to help players reach their personal fitness goals. </font>
<font> -- My Hero: Doctor for DS is part of Majesco’s new aspirational line of My Hero adventure games. As a doctor’s apprentice, players will manage 10 major medical emergencies by utilizing the microphone and stylus as an all-in-one medical tool. </font>
<font> -- Dawn of Heroes for DS is a tactical role playing game that combines classic RPG concepts -- including character development, epic combat, quests and puzzles -- with a humorous style. </font>
<font> -- Flip’s Twisted World for Wii, a Gamespot E3 ’09 Editor’s Choice award finalist, is a unique puzzle platformer that stars Flip, a magician’s apprentice who mistakenly gets sucked into a cubed world where up and down are only a matter of perspective. Players will help Flip escape his cube prison by rotating the environment 90 degrees in any direction with a simple twist of the Wii Remote. </font>
<font> Fiscal 2009 Outlook </font>
<font> The Company increased its outlook for fiscal 2009 full year net revenue to $80 to $85 million from its previous outlook provided on March 11, 2009 of full year net revenue of $75 to $80 million. The Company expects non-GAAP earnings per share to be between $0.10 and $0.14 for the fiscal 2009 full year. The guidance reflects both the success of the first half of fiscal 2009, and the costs of the investments it is making to support and extend the Cooking Mama franchise and to build out the new Go Play brand. The Company’s guidance assumes the release of approximately 33 titles in 2009 including 18 DS and 14 Wii. The Company’s results are also impacted by seasonality from the December holiday period and variability based on release schedules. </font>
<font> Conference Call </font>
<font> At 4:30 PM ET today, management will host an earnings conference call. To access the call in the U.S., please dial 1-800-860-2442 and international callers please dial 1-412-858-4600. The access code for the call is "Majesco". Please dial in approximately 10 minutes prior to the start of the conference call. The conference call will also be broadcast live over the Internet and available for replay for 90 days from the "Investor Info" section of the Company’s Web site at http://www.majescoentertainment.com . In addition, a replay of the call will be available via telephone for seven days beginning approximately two hours after the call. To listen to the telephone replay in the U.S., please dial 1-877-344-7529 and for international callers, dial 1-412-317-0088. Enter access code 431058. </font>
<font> About Majesco Entertainment Company </font>
<font> Majesco Entertainment Company is a provider of video games for the mass market. Building on more than 20 years of operating history, the company is focused on developing and publishing a wide range of casual and family oriented video games on leading console and portable systems. Product highlights include Cooking Mama(TM) and Cake Mania(R)2 for Nintendo DS(TM), and Cooking Mama World Kitchen and Jillian Michaels’ Fitness Ultimatum 2009 for Wii(TM). The company’s shares are traded on the Nasdaq Stock Market under the symbol: COOL. Majesco is headquartered in Edison, NJ and has an international office in Bristol, UK. More information about Majesco can be found online at www.majescoentertainment.com. @Majesco is on twitter or at www.twitter.com/majesco. </font>
<font> Safe Harbor </font>
<font> Some statements set forth in this release, including the estimates under the headings "Outlook" contain forward-looking statements that are subject to change. Statements including words such as "anticipate", "believe", "estimate" or "expect" and statements in the future tense are forward-looking statements. These forward-looking statements are subject to risks and uncertainties that could cause actual events or actual future results to differ materially from the expectations set forth in the forward-looking statements. Some of the factors which could cause our results to differ materially from our expectations include the following: consumer demand for our products, the availability of an adequate supply of current-generation and next-generation gaming hardware, including but not limited to Nintendo’s DS and Wii(TM) platforms; our ability to predict consumer preferences among competing hardware platforms; consumer spending trends; the seasonal and cyclical nature of the interactive game segment; timely development and release of our products; competition in the interactive entertainment industry; developments in the law regarding protection of our products; our ability to secure licenses to valuable entertainment properties on favorable terms; our ability to manage expenses; our ability to attract and retain key personnel; adoption of new accounting regulations and standards; adverse changes in the securities markets; our ability to comply with continued listing requirements of the Nasdaq stock exchange; the availability of and costs associated with sources of liquidity; and other factors described in our filings with the SEC, including our Annual Report on Form 10-K for the year ended October 31, 2008. We do not undertake, and specifically disclaim any obligation, to release publicly the results of any revisions that may be made to any forward-looking statements to reflect the occurrence of anticipated or unanticipated events or circumstances after the date of such statements. </font>
<font> MAJESCO ENTERTAINMENT FISCAL 2009 & 2010 RELEASE SCHEDULE*
2009 GAMES
Quarter 1 Quarter 2
Cooking Mama World Kitchen Wii, KarmaStar iPhone, Price
$49.99 Varies
Orchard PC, Price Varies Major Minor’s Majestic March Wii,
$39.99
FusionFall: Cartoon Network Gardening Mama DS, $29.99
Universe PC, $19.99
Left Brain Right Brain 2 DS, Escape the Museum Wii, $19.99
$19.99
Wonder World Amusement Park DS, Math Blaster in the Prime
$19.99 Adventure DS, $19.99
Cake Mania: In the Mix! Wii,
$29.99
Bananagrams Facebook, Free
Quarter 3 Quarter 4
Go Play Lumberjacks Wii, $29.99 Our House: Party! Wii, $39.99
Go Play Circus Star Wii, $29.99 Our House DS, $19.99
Ultimate Game Room DS, $19.99 A Boy and His Blob Wii, Price TBA
Hot -n- Cold DSiWare, Price TBA Go Play City Sports Wii,
$29.99
Marker Man Adventures DS, $19.99 My Hero: Astronaut DS, $19.99
Drama Queens DS, $19.99 My Hero: Firefighter DS,
$19.99
Powerbike DS, $19.99
Puffins Island Adventure DS,
$19.99
Rollin’ Rascals DS, $19.99
Night at the Museum: Battle of
the Smithsonian Wii and Xbox 360
($39.99), DS ($29.99) PC ($19.99)
2010 GAMES
Quarter 1
Jillian Michaels Fitness Ultimatum 2010 Wii,
Price TBA
Jillian Michaels Pocket Trainer 2010 DS,
Price TBA
Flip’s Twisted World Wii, Price TBA
My Hero: Doctor DS, $19.99
Dawn of Heroes DS, Price TBA
*Includes all released and announced titles to date. Prices subject to
change for unreleased titles.
MAJESCO ENTERTAINMENT COMPANY
UNAUDITED SUPPLEMENTARY PRODUCT DATA
Net Revenue by Platform - Yearly
FY09 FY08 FY07 FY06
Estimate Actual Actual Actual
CONSOLE:
Wii 56.5% 34.0% 19.6% 0.0%
PS2 0.0% 1.0% 6.8% 18.7%
Xbox 1.4% 0.2% 3.3% 15.7%
57.9% 35.2% 29.7% 34.4%
HANDHELD:
DS 40.1% 61.7% 53.7% 24.4%
GBA 0.0% 0.1% 5.6% 28.0%
PSP 0.1% 1.1% 3.0% 3.4%
40.2% 62.9% 62.3% 55.8%
OTHER 1.9% 1.9% 8.0% 9.8%
TOTAL 100.0% 100.0% 100.0% 100.0%
Net sales by Platform for three and six months
Three Months Ended April 30,
2009 % 2008 %
Nintendo Wii 10,734 52.2% 3,204 25.1%
Nintendo DS 9,305 45.3% 9,010 70.5%
Other 509 2.5% 561 4.4%
TOTAL 20,548 100.0% 12,775 100.0%
Six Months Ended April 30,
2009 % 2008 %
Nintendo Wii 31,737 59.5% 6,908 22.0%
Nintendo DS 20,463 38.3% 23,230 73.9%
Other 1,168 2.2% 1,301 4.1%
TOTAL 53,368 100.0% 31,439 100.0%
MAJESCO ENTERTAINMENT COMPANY AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited, in thousands, except share amounts)
Three Months Ended Six Months Ended
April 30, April 30,
2009 2008 2009 2008
Net revenues $20,548 $12,775 $53,368 $31,439
Cost of sales
Product costs 7,816 5,765 19,647 13,697
Software development costs
and license fees 6,016 2,577 15,146 5,797
13,832 8,342 34,793 19,494
Gross profit 6,716 4,433 18,575 11,945
Operating costs and expenses
Product research and
development 1,411 708 2,704 1,609
Selling and marketing 3,198 1,915 7,322 4,220
General and administrative 2,369 2,020 4,874 4,128
Depreciation and amortization 69 86 138 163
Settlement of litigation and
related charges, net 264 - 404 (322)
7,311 4,729 15,442 9,798
Operating (loss) income (595) (296) 3,133 2,147
Other expenses (income)
Interest and financing costs,
net 221 97 679 296
Change in fair value of
warrants 880 (136) 1,015 (594)
(Loss) income before
income taxes (1,696) (257) 1,439 2,445
Income taxes - - (1,027) -
Net (loss) income $(1,696) $(257) $2,466 $2,445
Net (loss) income per share:
Basic $(0.06) $(0.01) $0.09 $0.09
Diluted $(0.06) $(0.01) $0.09 $0.09
Weighted average shares
outstanding:
Basic 28,494,960 27,416,230 28,206,927 27,384,035
Diluted 28,494,960 27,416,230 28,420,121 27,384,035
MAJESCO ENTERTAINMENT COMPANY AND SUBSIDIARY
CONSOLIDATED BALANCE SHEETS
(in thousands, except share amounts)
April 30, October 31,
2009 2008
(unaudited)
ASSETS
Current assets:
Cash and cash equivalents $10,262 $5,505
Accounts and other receivables 2,396 3,032
Inventory 2,926 5,619
Capitalized software development costs and
license fees 8,578 6,812
Prepaid expenses 4,267 1,956
Total current assets 28,429 22,924
Property and equipment - net 507 563
Other assets 93 83
Total assets $29,029 $23,570
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable and accrued expenses $13,671 $10,697
Accrued litigation settlement 233 1,250
Due to factor 746 983
Customer billings due under distribution
agreement 203 1,487
Inventory financing payable - 1,540
Deferred income and advances from customers 1,293 265
Total current liabilities 16,146 16,222
Warrant liability 1,225 211
Stockholders’ equity:
Common stock - $.001 par value; 250,000,000
shares authorized; 31,420,104 and 30,127,950
issued and outstanding at April 30, 2009 and
October 31, 2008, respectively 31 30
Additional paid-in capital 103,939 101,722
Accumulated deficit (91,706) (94,172)
Accumulated other comprehensive loss (606) (443)
Total stockholders’ equity 11,658 7,137
Total liabilities and stockholders’ equity $29,029 $23,570
MAJESCO ENTERTAINMENT COMPANY AND SUBSIDIARY
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited, in thousands)
Six Months Ended
April 30,
2009 2008
CASH FLOWS FROM OPERATING ACTIVITIES
Net income $2,466 $2,445
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation and amortization 138 163
Change in fair value of warrants 1,015 (594)
Share-based litigation settlement 404 (322)
Fair value of common stock purchase warrants
issued for services - 77
Non-cash compensation expense 805 749
Provision for price protection and customer
allowances 1,145 1,696
Amortization of software development costs
and prepaid license fees 5,230 2,441
Changes in operating assets and liabilities:
Due to factor (1,382) (3,741)
Other receivables 515 216
Inventory 2,693 1,943
Capitalized software development costs and
prepaid license fees (7,019) (4,329)
Prepaid expenses and other (2,341) 299
Accounts payable and accrued expenses 3,014 (54)
Advances from customers and deferred revenue (237) 105
Net cash provided by operating activities 6,446 1,094
CASH FLOWS FROM INVESTING ACTIVITIES
Purchases of property and equipment (82) (208)
Net cash used in investing activities (82) (208)
CASH FLOWS FROM FINANCING ACTIVITIES
Issuance cost on equity financing - (40)
Inventory financing (1,540) -
Net cash used in financing activities (1,540) (40)
Effect of exchange rates on cash and cash
equivalents (67) (49)
Net increase in cash and cash equivalents 4,757 797
Cash and cash equivalents - beginning of
period 5,505 7,277
Cash and cash equivalents - end of period $10,262 $8,074
SUPPLEMENTAL SCHEDULE OF NON-CASH INVESTING
AND FINANCING ACTIVITIES
Cash paid for interest $680 $304
Litigation settlement costs paid in stock $1,412 $-
MAJESCO ENTERTAINMENT COMPANY
RECONCILIATION OF GAAP to NON-GAAP FINANCIAL MEASURES
(in thousands, except share amounts)
(Unaudited)
Three Months Ended Six Months Ended
April 30 April 30
2009 2008 2009 2008
GAAP operating (loss)
income $(595) $(296) $3,133 $2,147
Settlement of litigation and
related charges, net (1) 264 - 404 (322)
Non-Cash Compensation (3) 394 351 806 749
California studio (4) 421 96 960 320
Non-GAAP operating income $484 $151 $5,303 $2,894
GAAP net (loss) income $(1,696) $(257) $2,466 $2,445
Settlement of litigation and
related charges, net (1) 264 - 404 (322)
Change in fair value of
warrants (2) 880 (136) 1,015 (594)
Non-Cash Compensation (3) 394 351 806 749
California studio (4) 421 96 960 320
Net proceeds from sale of NJ
state operating loss
carryforwards (5) - - (1,115) -
Non-GAAP net income $263 $54 $4,536 $2,598
GAAP net (loss) income per
diluted share $(0.06) (0.01) $0.09 $0.09
Settlement of litigation and
related charges, net (1) 0.01 - 0.01 (0.01)
Change in fair value of
warrants (2) 0.03 (0.00) 0.03 (0.02)
Non-Cash Compensation (3) 0.01 0.01 0.03 0.03
California studio (4) 0.01 0.00 0.03 0.01
Net proceeds from sale of NJ
state operating loss
carryforwards (5) - - (0.04) -
Non-GAAP net income per
diluted share $0.01 $0.00 $0.16 $0.09
Shares used in GAAP and
Non-GAAP per diluted
share amounts 28,494,960 27,416,230 28,420,121 27,384,035
(1) Represents charges to settle certain litigations pending in the
United States District Court, District of New Jersey: (i) a
securities class action brought on behalf of a purported class of
purchasers of the Company’s securities; (ii) a private securities
action filed by Trinad Capital Master Fund, Ltd.; and (iii) a second
action filed by Trinad purportedly on behalf of the Company. All
three actions are now concluded.
(2) Represents the change in the fair value of warrants, classified as a
liability. The fair value of the warrants is calculated at each
balance sheet date with a corresponding charge or credit to
earnings for the amount of the change in fair value.
(3) Represents expenses recorded for stock compensation expense in
accordance with SFAS 123R. The Company does not consider stock-based
compensation charges when evaluating business performance
and management does not consider stock-based compensation expense in
evaluating its short and long-term operating plans.
(4) Represents operating expenses related to our internal development
studio in California, which were not allocated to capitalizable
projects. After evaluation of the studio’s performance, and
changes in the availability and cost of development with our third
party partners, we now believe that closing the studio and taking
advantage of these external opportunities represents a better
value for the Company.
(5) In November 2008, the Company received net proceeds of approximately
$1.1 million from the sale of the rights to approximately $14.2
million of New Jersey state income tax operating loss carryforwards,
under the Technology Business Tax Certificate Program administered by
the New Jersey Economic Development Authority. The amount represents
utilization of approximately 34% of the $41.0 million of net
operating loss carryforwards available to the company in the state
of New Jersey, prior to the transfer. The amount has been recorded
as an income tax benefit during the six months ended April 30, 2009.
</font>
<font> SOURCE Majesco Entertainment Company </font>
<font> http://www.majescoentertainment.com
</font>
$2.09 (06/16/09)
