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Take-Two Interactive Software, Inc. /quotes/comstock/15*!ttwo/quotes/nls/ttwo (TTWO 9.03, -0.25, -2.69%) today announced financial results for its first quarter ended January 31, 2010.

Net revenue for the first fiscal quarter was $163.2 million, compared to $149.4 million for the same quarter of fiscal 2009. First quarter fiscal 2010 sales were led by Borderlands(TM), NBA(R) 2K10, Grand Theft Auto IV, Grand Theft Auto: Episodes from Liberty City and Carnival Games(TM).

Net loss from continuing operations for the first quarter was $33.8 million or $0.43 per share, compared to a net loss from continuing operations of $53.8 million or $0.71 per share in the first quarter of fiscal 2009.

The first quarter 2010 results from continuing operations included $6.4 million in stock-based compensation expense ($0.08 per share); $1.7 million in non-cash interest expense on the law software Ontario Company’s convertible notes ($0.02 per share); $0.7 million in professional fees and expenses related to unusual matters ($0.01 per share); and $0.6 million in non-cash tax expense ($0.01 per share). Results from continuing operations for the first quarter of 2009 included $6.2 million in stock-based compensation expense ($0.08 per share); and $4.9 million in professional fees and expenses related to unusual matters ($0.06 per share).

Non-GAAP net loss from continuing operations was $24.4 million or $0.31 per share in the first quarter of fiscal 2010, compared to non-GAAP net loss from continuing operations of $42.8 million or $0.56 per share in the first quarter of 2009. (Please refer to Non-GAAP Financial Measures and reconciliation tables included later in this release for additional information and details on non-GAAP avery label software Ontario items).

Business Highlights

– Consistent with Take-Two’s strategy to focus its resources on its core publishing business, the Company completed the previously announced sale of its Jack of All Games distribution business to SYNNEX template software Ontario Corporation on February 26, 2010. The transaction was valued at approximately $44 million, including $37.5 million in cash at closing and up to an additional $6.75 million in deferred payments subject to the achievement of certain objectives after the close of the transaction. For the first quarter ended January 31, 2010, the results of the Company’s distribution segment were excluded from continuing operations and have been reclassified to discontinued label software Ontario operations. Net loss from discontinued operations for the first quarter was $0.1 million or $0.00 per share.

– Take-Two is in the process of implementing a targeted restructuring of its corporate departments in order to align resources more closely with its current goals. The restructuring involves a 15% reduction in corporate headcount and other cost savings initiatives, and is expected to result in approximately $8 million in savings in fiscal 2010, and $15 million on an annualized basis.

Product Milestones

– 2K Games launched BioShock 2 globally on February 9. The title has been a commercial and critical success, and has shipped over 3 million units to date. The original BioShock real estate software Ontario title launched in August 2007 has now sold over 4 million units, bringing the total sales of the franchise to 7 million units.

– NBA 2K10 from 2K Sports has shipped over 2 million units. The title continues to be the #1 selling and #1 rated basketball game for the Xbox 360 and PlayStation 3 through January 2010, according to The NPD Group’s estimates of U.S. retail video game sales and Metacritic.com.

– Grand Theft Auto IV from Rockstar Games has sold over 15 million units globally.

– 2K Play’s Carnival Games franchise has sold over 6 million units worldwide on the Wii and DS.

Product Highlights

– Red Dead Redemption from Rockstar Games is now planned for release on May 18, 2010 in North America and May 21, 2010 internationally.

– Rockstar Games announced Grand Theft Auto: Episodes from Liberty City for the PlayStation 3 and Games for Windows(R) - LIVE, both planned for release on March 30, 2010. The Lost and Damned and The Ballad of Gay Tony will be available at the same time for digital download.

– 2K Games announced the development of Sid Meier’s Civilization(R) V, the newest entry from the strategy-based franchise, coming to PC this fall.

Financial Guidance

The real estate software Canada Company is providing initial guidance for the second quarter ending April 30, 2010 and updating its guidance for the fiscal year ending October 31, 2010. The Company’s fiscal year 2010 guidance provided below assumes the following factors:

– a non-GAAP net loss from the Company’s Major League Baseball(R) business in the range of $30 to $35 million, or $0.38 to $0.44 per share;

– the launch of Red Dead Redemption in the third fiscal quarter; and

– L.A. Noire, Mafia II, Max Payne 3 and Sid Meier’s Civilization V are all planned for release in the fourth fiscal quarter; however, the legal software Ontario Company’s fiscal year 2010 guidance reflects the potential movement of one of these titles into fiscal 2011.

Second quarter ending Fiscal year ending
4/30/2010 10/31/2010
Revenue $250 to $300 million $725 to $925 million
Non-GAAP EPS from $0.20 to $0.30 $(0.40) to $(0.60)
continuing operations
Stock-based compensation $0.08 $0.40
expense per share (a)
Non-cash interest expense $0.02 $0.09
related to convertible
debt (b)
Business restructuring costs $0.01 $0.02
and expenses related to
unusual
legal matters
Non-cash tax expense $0.01 $0.04
(a) The Company’s stock-based compensation expense for the second
quarter and fiscal year 2010 includes the cost of approximately 2
million stock options and 1.5 million shares previously issued to
ZelnickMedia that are subject to variable accounting. Actual
expense to be recorded in connection with these options and shares
is dependent upon several factors, including future changes in
Take-Two’s stock price.
(b) The Company adopted a new accounting standard in the first
quarter of fiscal 2010 that requires convertible debt to be
bifurcated into debt and equity components. As a result of the new
standard, the Company has begun to record non-cash interest
expense on its convertible notes, in addition to the interest
expense already recorded for coupon payments.

Key assumptions and dependencies underlying the Company’s guidance include continued consumer acceptance of the Xbox 360, PlayStation 3 and Wii; the ability to develop and publish products that capture market share for these current generation systems while continuing to leverage opportunities on certain prior generation platforms; as well as the timely delivery of the titles detailed in this release.