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TheStreet Open House

Mad Catz® Reports Fiscal 2014 Third Quarter Financial Results

Mad Catz Interactive, Inc. (“Mad Catz” or the “Company”) (NYSE MKT/TSX:MCZ), today announced financial results for the fiscal 2014 third quarter ended December 31, 2013.

Key Highlights of Fiscal 2014 Third Quarter and Subsequent:

  • Net sales in the quarter declined 27% to $32.9 million, with the Company’s European sales down 9% and sales to North America and APAC down 48% and 27%, respectively;
  • Gross margin was 24.1%, compared to 28.7% in the third quarter last year;
  • Total operating expenses decreased 20% year-over-year to $7.0 million;
  • Diluted loss per share of ($0.01), compared to diluted earnings per share of $0.05 in the third quarter last year;
  • Net position of bank loan, less cash, of $11.1 million at December 31, 2013, compared to $6.1 million at March 31, 2013 and $13.5 million at December 31, 2012;
  • Announced the S.T.R.I.K.E. M Mobile Gaming Keyboard for mobile devices;
  • Shipped the TRITTON™ Kunai™ Mobile Stereo Headset for handheld consoles, Windows ® PC, Mac ®, and smart devices;
  • Shipped the M.O.J.O.™ Micro-Console™ for Android™;
  • Announced the Saitek ® X-55 RHINO ® H.O.T.A.S. System for Windows ® PC;
  • Announced the R.A.T. TE (Tournament Edition) Gaming Mouse for Windows ® PC and Mac ®;
  • Shipped the TRITTON Kama Stereo Headset for PlayStation ® 4 and PlayStation ® Vita; and
  • Appointed John Nyholt and Scott Guthrie to the Board of Directors.
 
Summary of Financials
(in US$ thousands, except margins and per-share data)
                   
Three Months Nine Months
Ended December 31, Ended December 31,
2013 2012 Change 2013 2012 Change
 
Net sales $ 32,889 $ 45,019 (27 )% $ 69,412 $ 98,056 (29 )%
Gross profit 7,925 12,903 (39 )% 18,060 28,165 (36 )%
Total operating expenses   7,023     8,759   (20 )%   22,893     25,201   (9 )%
Operating income (loss)   902     4,144   (78 )%   (4,833 )   2,964   (263 )%
Net (loss) income   ($566 ) $ 3,127   (118 )%   ($7,176 ) $ 960   (848 )%
Net (loss) income per share, basic   ($0.01 ) $ 0.05   (120 )%   ($0.11 ) $ 0.02   (650 )%
Net (loss) income per share, diluted   ($0.01 ) $ 0.05   (120 )%   ($0.11 ) $ 0.01   (1200 )%
 
Gross margin 24.1 % 28.7 % (4.6 )% 26.0 % 28.7 % (2.7 )%
 
EBITDA (loss) (1) $ 1,556 $ 5,202 (70 )% ($3,407 ) $ 5,830 (158 )%
Adjusted EBITDA (loss) (1) $ 1,333 $ 5,390 (75 )% ($2,797 ) $ 7,056 (140 )%
 
(1)   Definitions, disclosures and reconciliations regarding non-GAAP financial information are included on page 7.

Commenting on the results, Darren Richardson, President and Chief Executive Officer of Mad Catz, said, “The 2013 holiday quarter was pivotal for the video games industry with the launch of Xbox One and PlayStation 4 marking the turning point in the console transition. Consistent with other industry participants, sales of our legacy console products declined at a faster-than-anticipated pace following the launch. However, we successfully reduced our inventory levels of legacy console products during the holiday selling season, and we believe demand will continue for these products.”

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