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Take-Two Interactive Software, Inc. (TTWO)
F1Q09 Earnings Call
March 10, 2009 4:30 pm ET
Cindy Buckwalter - Executive Vice President
Strauss Zelnick - Chairman of the Board
Benjamin Feder - Chief Executive Officer, Director
Lainie Goldstein - Chief Financial Officer
Doug Creutz - Cowen and Company
John Taylor - Arcadia Investment Corporation
Daniel Ernst - Hudson Square Research
Edward Williams - BMO Capital Markets
Heath Terry - FBR Capital Markets
Greetings, ladies and gentlemen, and welcome to the Take-Two Interactive first quarter 2009 conference call. (Operator Instructions)
Previous Statements by TTWO
» Take-Two F3Q09 (Qtr End 7/31/09) Earnings Call Transcript
» Take-Two F4Q08 (Qtr End 10/31/08) Earnings Call Transcript
» Take-Two Interactive Software, Inc. F3Q08 (Qtr End 07/31/08) Earnings Call Transcript
Thank you. Thank you all for joining us today for our first quarter conference call. Today's call will be led by Strauss Zelnick, Chairman of Take-Two, Ben Feder, our CEO, and Lainie Goldstein, our CFO. Our team will be available to answer your questions during the Q&A discussion following our prepared remarks.
Before we begin, I'd first like to quickly review our safe harbor statement by reminding everyone that the statements made during this call that are not historical facts are considered forward-looking statements under federal securities laws. These forward-looking statements are based on the beliefs of our management as well as assumptions made by and information currently available to us. We have no obligation to update these forward-looking statements.
Actual operating results may vary significantly from these forward-looking statements based on a variety of factors. These important factors are described in our press release today and our filings with the SEC, including our 10-K for the fiscal year ended October 31, 2008. These documents may be obtained from our website at www.TakeTwoGames.com.
Now I'll turn the call over to Strauss.
Thanks, Cindy, and good afternoon, everyone. Today we'll review our financial results for the first quarter, discuss operating highlights, our upcoming product lineup and initial guidance for the second quarter. We'll provide our insights into the economy's ongoing challenges and uncertainties and how we remain focused on driving toward continued success.
Take-Two's first quarter results were somewhat better than the initial guidance we provided in December. That said, we were not satisfied to report a significant loss. We expect this quarter's loss to represent the low point of our fiscal year and we're maintaining our prudent outlook and previously stated 2009 guidance.
The interactive entertainment industry enjoyed significant growth in 2008 and performed better this holiday season than many other consumer sectors. We still believe, though, that entertainment isn't immune to economic downturns that our industry will be negatively affected in 2009. It's likely the consumers of interactive entertainment will continue to spend cautiously and retailers will also remain challenged in their ability to stock their shelves with the same level of inventory as in previous years.
Our strategy has been to release only a select number of triple-A titles that are internally owned and developed and to enhance our release schedule with a few top quality licensed brands. We're confident that this continues to be the right strategy for our business.
I want to reiterate that we believe we're extremely well positioned in all facets of our business to manage effectively through these challenging times. Now I'll turn the call over to Ben, who'll provide more detail about first quarter results, operations, products and our road map for the balance of the year.
Thanks, Strauss. Q1 sales were led by the continued success of Grand Theft Auto IV, Carnival Games, NBA 2K9, Midnight Club Los Angeles and various catalog titles. Today we reported net revenue for the quarter of $256.8 million compared with $240.4 million for the first quarter of 2008. Non-GAAP net loss was $39.3 million or $0.52 per share compared to non-GAAP net loss of $30.3 million or $0.41 per share in the first quarter of 2008. And we ended the first quarter with $218 million in cash. Our cash position net of debt was $148 million. Lainie will provide further details about the quarter.
I'd like to take a moment to discuss some of our recent business highlights. We released The Lost and Damned, our first downloadable episode for Grand Theft Auto IV exclusively on Xbox LIVE. The episode received critical acclaim from the media and eclipsed first day revenue for all previous downloadable content on Xbox LIVE. With The Lost and Damned we set new benchmarks for innovation and made significant contributions to the evolution of this high margin platform. The digital distribution of such a substantial piece of content is a new opportunity for us, and we're pleased with the profitability of this product and believe that downloadable content will continue to be an important part of our business going forward.
Last week 2K Sports launched Major League Baseball 2K9 across multiple platforms, featuring their new cover athlete National League Cy Young award winner Tim Lincecum of the San Francisco Giants. We look forward to the upcoming release of the first downloadable content for Midnight Club Los Angeles for both Xbox 360 and PlayStation 3. The South Central premium upgrade features a whole new section of Los Angeles, together with new cars, races, music and more to significantly extend the street racing experience.
We're confident in our great lineup and we are keenly focused on delivering the strongest possible performance in these challenging times while continuing to scale our business for profitable growth in the future. We believe we're well positioned to meet consumers' demands for quality and value and we've taken recent actions to strengthen our sales operations and build our presence in emerging markets.