Majesco gives Q4, full year results, may not pursue future Zumba titles

EDISON, N.J., January 14, 2014 /Marketwire/ -- Majesco Entertainment Company (NASDAQ: COOL), an innovative provider of video games for the mass market, today reported financial results for the fourth quarter and full year of fiscal 2013 ended October 31, 2013.

Fourth Quarter Results
For the fourth quarter ended October 31, 2013, Majesco's net revenues were $10.1 million, down 62 percent versus $26.6 million in the same period a year ago. During the fourth quarter of fiscal 2013, the Company reported an operating loss of $4.5 million, compared to operating loss of $3.0 million in the fourth quarter of fiscal 2012. Net loss for the fourth quarter was $4.6 million compared to net loss of $2.7 million in the fourth quarter of fiscal 2012. The Company's basic and diluted net loss per share for the quarter ended October 31, 2013 was $(0.10), compared to basic and diluted net loss per share of $(0.07) in the same period last year.

On a non-GAAP basis, the net loss for the fourth quarter ended October 31, 2013 was $4.2 million compared to non-GAAP net loss of $2.7 million in the fourth quarter of last year. The non-GAAP diluted net loss per share for the quarter ended October 31, 2013 was $(0.09) compared to diluted net loss per share of $(0.07) in the same period last year. Please refer to the Reconciliation of GAAP to non-GAAP Financial Measures table included later in this release for additional information and details on non-GAAP items.

Twelve Month Fiscal 2013 Results

For the twelve months ended October 31, 2013, the Company's net revenues were $47.3 million versus $132.3 million in the year ago period, a decline of 64 percent. The Company reported an operating loss of $12.2 million compared to operating income of $3.7 million in the same period of 2012. For the twelve months ended October 31, 2013, net loss was $12.6 million compared to net income of $4.6 million for the twelve months ended October 31, 2012. Included in twelve month fiscal 2013 operating results is a charge of $0.8 million for severance expenses from the strategic realignment implemented in January 2013. The Company's basic and diluted net loss per share for the twelve months ended October 31, 2013 was $(0.30), compared to basic and diluted net income per share of $0.12 and $0.11, respectively, for the corresponding period in 2012.

Non-GAAP operating loss for the twelve month period was $10.0 million compared to non-GAAP operating income of $5.4 million for the comparable period in 2012. For the same period, non-GAAP net loss was $10.5 million in 2013 compared to non-GAAP net income of $4.4 million in 2012. The Company's non-GAAP basic and diluted net loss per share for the twelve months ended October 31, 2013 was $(0.25) compared to diluted net income per share of $0.10 in the corresponding period of 2012. Please refer to the Reconciliation of GAAP to non-GAAP Financial Measures table included later in this release for additional information and details on non-GAAP items.

Management Commentary

"Given the ongoing industry transition in console gaming, 2013 unfolded as we expected," said Jesse Sutton, Chief Executive Officer of Majesco Entertainment. "The casual game market has fragmented as new digital platforms have gained popularity, causing disruption and opportunity for Majesco. In response to the changing landscape, we have implemented a multi-pronged strategy that leverages Majesco's traditional core competencies - our sales and marketing expertise, strong industry relationships and broad distribution reach - to diversify our revenue sources and position Majesco for renewed growth. Key elements of the strategy include shifting to an outsourced variable cost business model, focusing on a smaller slate of high-profile branded games based on popular characters or franchises and investing in two strategic growth areas: online casino games and digital lotteries through our partnership in GMS Entertainment and the formation of a new division, Midnight City, to publish and distribute digital games for independent developers."

"During the fourth quarter Midnight City released its first set of games and GMS Entertainment completed the acquisition of Pariplay Limited. We also released console and mobile games based on characters with established audiences such as Phineas and Ferb, Agent P Doofendash and Monster High. The rest of our holiday slate was released early in our first fiscal quarter of 2014, including the newest iterations of our Zumba franchise, Zumba Kids and Zumba Fitness World Party, which launched in November and followed the popular release of Zumba Dance, the first ever motion-based fitness experience for mobile tablets," added Mr. Sutton.

"Looking ahead, although the next generation of gaming consoles has been launched, the development of an installed user base and casual game market is still a "work in progress". Accordingly, in our ongoing relationship with Zumba Fitness, we plan to continue to jointly promote the current popular game titles in the marketplace in 2014, including our recently launched Zumba Fitness World Party, rather than enter into a fixed long-term agreement for new sequels. We will evaluate plans for future motion sensing games on next generation platforms as we gain more visibility in the market and see the installed base grow. Our balance sheet, with approximately $18.2 million of cash and availability from our factor, continues to afford Majesco the financial strength to weather the current industry transition and to invest for renewed growth," concluded Mr. Sutton.

Fiscal 2014 Outlook

Due to the continuing lack of clarity on market development and consumer preferences for the recently released video gaming consoles, management is currently not providing sales and earnings guidance for fiscal 2014.

Announced Product Line-up

First Quarter Fiscal 2014 Ending January 31, 2014

To date, the Company has announced the following titles that were, or are expected to be, released during its fiscal first quarter 2014, which includes the recent holiday sales period:

Zumba® Fitness World Partyon Xbox One®, the all-in-one games and entertainment system from Microsoft, Kinect™ for Xbox 360®, Wii U™ and Wii™ is the latest game in the successful dance fitness franchise that has sold more than 10 million units worldwide. This fun, freeing fitness journey embodies Zumba's global reach of over 185 countries by taking your work out to exotic locations around the world. Work your body with new modes, dance styles and 40 high-energy new routines set to a world-class soundtrack featuring Lady Gaga, Daddy Yankee and Pitbull. (Launched in November)
Zumba® Kids on Kinect™ for Xbox 360®and Wii™ is the first brand extension of the best-selling Zumba franchise that is custom-designed for younger players. Featuring a range of dance styles, creative mini-games, customization and chart-topping hits from Justin Bieber and Willow Smith, this engaging interactive experience is packed with gameplay to keep kids moving! (Launched in November)
Young Justice: Legacy(distributed by Majesco, published by Little Orbit) on PlayStation®3, Xbox 360 and Wii U™ is based on the acclaimed Cartoon Network animated series inspired by the DC Comics characters. Players assemble their Young Justice team from 12 heroes including NightWing, Kid Flash, Robin and more. Track down notorious villains and be mentored by powerful superheroes as you explore, customize and battle in this action-packed, RPG styled game. (Launched in November)
Barbie™ Dreamhouse Party™(distributed by Majesco, published by Little Orbit) on Wii U™, Wii™, Nintendo 3DS™ and DS™ takes fans behind the pink doors into the fantastic world of the Barbie®Dreamhouse®mansion. (Launched in November)
The Bridgeon the Xbox Live online entertainment network from Microsoft offers a supremely cerebral 2D puzzle experience. Players join our stalwart, amnesiac protagonist through a journey into his heart, mind and soul to discover the life he's forgotten. Throughout the story, players progress through detail-oriented, hand-drawn environments with aesthetics reminiscent of M.C. Escher's artwork and style.
Agent P: Doofendash, on tablets, iOS and Android phones is an action-packed endless runner set in the Phineas and Ferb universe. Featuring Agent P and the top agents of the Organization Without a Cool Acronym (O.W.C.A.), the game transports players onto the rooftops of Danville through Doofenshmirtz Evil Inc., and into the skies above the Tri-State Area to provide an authentic Phineas and Ferb experience.(Launched in November)
The motion-based Zumba® Dancefor iOS and Android smartphones brings one of the "Best Tablet Fitness Apps of 2013" to millions of mobile phones for the first time. Offering motion-tracking technology that uses the phone's front-facing camera, the game also features global dance styles coupled with chart-topping hits, a progress tracker that counts calories burned, class customization, tutorials and a live class locator.
BandFuse: Rock Legends, (distributed by Majesco, published by Mastiff) on Xbox 360® video game and entertainment system from Microsoft and PlayStation® 3 computer entertainment system, features legendary rockers who transform players into real-world guitarists, bassists and vocalists. Reinvigorating the music genre with a stellar lineup of acclaimed talent, exclusive real-guitar and vocal multiplayer, authentic animated tablature and lag-free audio, the game unleashes a full band experience for players of all skill levels with 55 genre-jumping songs ranging from rock to metal and punk to funk.
Fiscal 2014

The Company expects to announce details of its 2014 lineup in the coming months.