10-QPeriod: Q3 FY2002

TAKE TWO INTERACTIVE SOFTWARE INC Quarterly Report for Q3 Ended Jan 31, 2002

Filed March 18, 2002For Securities:TTWO

Summary

Take-Two Interactive Software, Inc. reported a significant increase in net sales for the three months ended January 31, 2002, driven primarily by its publishing segment. Net sales surged by 79.5% to $282.9 million, compared to $157.6 million in the prior year period. This growth was largely fueled by the strong performance of titles such as "Grand Theft Auto 3" and the release of "Max Payne" across multiple platforms. The company also saw a substantial rise in net income to $34.8 million, a significant improvement from $8.2 million in the same period last year, reflecting robust sales and improved cost management. Financially, the company demonstrated improved liquidity, with cash and cash equivalents increasing by over $24.9 million to $30.9 million. Operating activities generated a strong $76 million in cash. Despite a substantial increase in operating expenses, largely due to marketing efforts for key titles, the company's gross profit margin improved due to the higher proportion of publishing revenues. However, investors should note the ongoing legal proceedings and SEC investigation, which, if resolved unfavorably, could materially impact the company's financial condition.

Key Highlights

  • 1Net sales increased by 79.5% to $282.9 million for the quarter ended January 31, 2002, compared to $157.6 million in the prior year.
  • 2Net income more than quadrupled to $34.8 million, up from $8.2 million in the same period last year.
  • 3Publishing revenues grew significantly by 146.8% due to strong sales of 'Grand Theft Auto 3' and 'Max Payne'.
  • 4Console game sales dominated, accounting for 87.3% of net sales, up from 61.0% in the prior year, driven by PlayStation 2 and the new Xbox platform.
  • 5Cash and cash equivalents increased by $24.9 million to $30.9 million, with operating activities generating $76 million in cash.
  • 6The company is facing multiple class-action lawsuits and an SEC investigation related to its financial reporting.
  • 7Selling and marketing expenses increased by 75.2% to support the launch of key titles.

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