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THQ Management Discusses Q1 2013 Results - Earnings Call Transcript

More importantly, over the last 8 months, we have taken a number of steps to transform THQ and put it back on the path to profitability and growth. Since the restructuring that we began in January, we have exited nonperforming businesses, shed underperforming licenses and discontinued titles and products that did not fit our strategy or profitability targets.

We also significantly reduced costs and headcount in our corporate and global publishing organizations. As part of these efforts, we streamlined our product portfolio to focus on those titles we believe can achieve robust profitability and create long-term shareholder value. In the last 8 months, we have reduced our annual licensing commitments by $32 million and our annualized product development spend, selling and marketing expense and G&A by approximately $180 million, creating significantly better operating leverage going forward.

Additionally, in May, we bolstered our management team by naming Jason Rubin as our new President. Jason is a proven talent in the video game industry, who in a short time here, has already made important contributions to our company. He has energized our studios, brought us a fresh point of view on our intellectual properties and is formulating a plan to enable THQ to compete and thrive in the evolving market for games. Jason will share with you his perspective momentarily.

Following all of these recent actions, we believe THQ is well positioned to return to profitability and to create shareholder value. As we've said, our strategy is to develop and market high-demand core games with a significant digital component. These connected experiences are integral to increasing customer engagement, retention and monetization in our increasingly digital future.

With that, Paul will review our Q1 financials in more detail and discuss our guidance for fiscal '13 and Q2. Paul?

Paul J. Pucino

Thank you, Brian, and good afternoon. I will begin with a recap of our fiscal '13 first quarter results and then discuss our future business outlook. To recap the first quarter, for the 3 months ended June 30, 2012, we reported net sales of $39 million, compared with $141 million in the prior year Q1 and a net loss of $3.41 per share, compared to a net loss of $9.42 one year ago. As a reminder, our earnings per share amounts for the current and prior period have been adjusted for the 1-for-10 reverse stock split, which was effective as of July 5, 2012.

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