THQ Reports Fiscal 2013 First Quarter Results

Financial Highlights

Q1 Non-GAAP net sales were $38.5 million, above guidance of $25 - $30 million.
Q1 Non-GAAP net loss per share was ($3.41), better than guidance of ($4.00) – ($4.50). Net loss per share amounts for the current and prior period were adjusted for the 1-for-10 reverse split of the company’s common stock effected on July 5, 2012.
A reconciliation of GAAP to non-GAAP results is provided in the accompanying financial tables, and a supplemental consolidated reconciliation can be found at http://investor.thq.com.

“We have made significant progress reshaping the company. With the changes implemented over the last several months, we are in a much better position today to deliver on our pipeline of games, beginning with Darksiders® II, which launches next week in North America,” said THQ Chairman and CEO Brian Farrell. “We are also pleased to have new management on board at THQ, led by President Jason Rubin, who brings tremendous experience to the company and has a proven track record of bringing multi-million unit sellers to market; Jason Kay, a fifteen-year media and entertainment industry veteran, as Chief Strategy Officer; and Ron Moravek, a seasoned creative development executive who has co-founded and led several technology businesses, including one of our most successful studios, Relic Entertainment, as EVP, Production. Jason Rubin and his new team bring an entrepreneurial approach to our game slate as we seek to maximize the value of our intellectual properties and evolve our business in the face of our increasingly digital future.”

Fiscal 2013 First Quarter Highlights and Recent Developments

THQ announced it would transform development of the standalone expansion Saints Row®: The Third – Enter the Dominatrix™ into a full-fledged, full-priced sequel, with far greater potential to generate stronger results over the long term. The sequel is currently scheduled for release in calendar year 2013.
The company’s digital revenues for the first quarter of fiscal 2013 were $13.4 million, or 35 percent of non-GAAP net sales.
THQ’s line-up featured at the Electronic Entertainment Expo ("E3") garnered 29 awards from more than 67 nominations across the portfolio for upcoming titles such as Darksiders II, Company of Heroes® 2, Metro: Last Light and South Park™: The Stick of Truth™, which won a prestigious Game Critics Award “Best of E3” for best RPG.
The company transferred its license to develop future video games based on the Ultimate Fighting Championship® (UFC), which resulted in a cash payment to THQ by the licensor. THQ will continue to publish its existing UFC console and mobile titles through March 31, 2013.
Fiscal 2013 Product Slate

THQ has announced the following releases scheduled through its fiscal 2013:

Title


Platforms


Planned Release

Darksiders® II

Console, PC August 2012
WWE® ’13

Console

October 2012
Company of Heroes® 2

PC Q4 FY13
Metro: Last Light

Console, PC Q4 FY13
South Park™: The Stick of Truth™

Console, PC

March 2013


Restructuring and Business Realignment

THQ continued the implementation of its plans to streamline the organization and cost structure to position the company for sustained profitability.

During the fiscal first quarter, the company recorded approximately $4.5 million in non-GAAP business realignment expenses, which include cash costs of approximately $0.7 million related to severance and other employee-related costs, and non-cash impairment charges of approximately $4.3 million related to decisions made to cancel or reconfigure titles.