Southpeak Games Announces Q1 2011 Financials
Southpeak Games has announced its financial results for the first quarter of 2011. Their net revenues declined steeply due to fewer titles being released, but the net loss was reduced, too.
Melanie Mroz, CEO of SouthPeak said, “Our sales for the period were largely impacted by our ongoing legal proceedings with Nobilis which caused us not to release any new titles for the quarter or remanufacture our catalogue of titles under this contract. I’m pleased to report that in October we received a summary judgment granting us the right to resume production of My Baby™ First Steps and reinstate the contract with Nobilis, which includes the rights for My Baby sequels, catalogue titles and 14 additional games. We have since resumed manufacturing titles under this contract in order to address the remainder of the holiday selling season. We are hopeful that the summary judgment will be upheld at the final ruling scheduled for December 2.
{default}“We simultaneously remain focused on advancing our complementary growth opportunities, continuing to control costs and releasing a prudent selection of titles for the holiday season. For the first quarter, we posted an EBITDA profit and maintained exceptionally low expenses as our revenues for the quarter reflect select catalogue title sales only. The bulk of our marketing costs for the period were associated with costs for promoting our sequel titles for Two Worlds II and preliminary public relations activities for StrongHold 3. Given the success of earlier installments of both games we expect these releases to gain even more robust market penetration.
“We have now shipped our first title for the next generation PlayStation Move platform, Get Fit with Mel B, which we expect to be a top contributor to our future sales. Our digital strategy and entering other existing high growth markets where we can gain immediate traction remain a core focus for propelling our growth in fiscal 2011. We are particularly excited about our strategic partnership with NVIDIA to bring games to their new phones and tablets. NVIDIA’s new Droid platform technology is a significant step forward in our strategy to broaden our digital offerings. Also in November, we announced the release of our title Tap and Teach: The Story of Noah’s Ark. This marks our first title to address the interactive educational gaming sector, another area where we believe we can grow our business with new games that complement and expand our extensive portfolio,” Ms. Mroz concluded.
Fiscal 2011 First Quarter Financial and Business Highlights
- Net revenues of $1.4 million, compared with $16.7 million in the first quarter of fiscal 2010.
- Gross profit of $0.6 million, compared with $8.0 million in the first quarter of fiscal 2010.
- Total operating expenses decreased by 67% to $2.3 million, compared with $7.1 million in the first quarter of fiscal 2010.
- Net loss attributable to common shareholders of ($1.2) million, or ($0.02) per share, compared with a net income of $0.7 million, or $0.01 per diluted share, in the first quarter of fiscal 2010.
- EBITDA1 profit $24,000, compared with an EBITDA profit of $1.2 million in the first quarter of fiscal 2010
- Secured $7.5 million in capital through the issuance of senior convertible notes and warrants.
- Strengthened cash position by entering into a factoring agreement with Rosenthal & Rosenthal, Inc. for up to $10.0 million and a master purchase order assignment agreement with Wells Fargo Bank, National Association for up to $2.0 million.
- In conjunction with Deep Silver, completed first exclusive publishing agreement (in North America) in September for Playstation®Move game Get Fit with Mel B.
- Resolved all litigation disputes with CDV Software Entertainment A.G.
- Partnered with Japanese video game publisher Intergrow Inc. to publish award-winning developer Renegade Kid’s survival horror title Dementium II on Nintendo DS™ in Japan
A full statement of the financials can be found here.
