Sales Dip As Mad Catz Adds Two To Board

Representatives from video game peripheral, game and accessories manufacturer Mad Catz Interactive have announced details of the company’s fourth quarter financial results, as well as announcing two new board members. The company has recently started publishing bundled game and accessory Real World Golf in North America, but its core business is still in accessories such as NBA-licensed control pads and officially Microsoft-licensed Xbox 360 Gamepad Pro series controllers for the next-gen console. During the fourth quarter, the company saw sales decrease by 21 percent to $17.2 million, down from $21.8 million the previous year. This dip in sales resulted in a loss of $3.3 million or 6 cents a share – compared to earnings of $900,000 or 2 cents a share at the same time last year. Gross margins were also down to 2.2 percent, from 24 percent a year ago. The company blamed the results on the migration to the next generation consoles, with a company statement claiming that, "Consistent with industry trends, during the fourth quarter, Mad Catz experienced a decline in overall product sales for current generation platforms though we generated impressive sales levels and contributions to the total net sales mix from our Xbox 360 offerings.” Sales were also apparently affected by aggressive pricing by competitors, price protection from retailers, higher royalty payments under existing technology agreements. The appointment of William Woodward and Robert Molyneux to the company’s board of directors was also announced, replacing chairman of the board Patrick Brigham and Andrew Redmond. Donald Lenz, the chairman of the audit committee will also step down once final fiscal 2006 financial results have been filed and certified, reducing the size of the company’s board to five members. Commenting on the newly appointed board members, Darren Richardson stated, "With Robert's accomplished background in finance, investment and the development of emerging companies, Bill's consistent, proven role as a successful investor, entrepreneur and innovator, and the recent appointment of former Sony Electronics executive Tom Brown, Mad Catz has a board with the business knowledge and vision to support the company's commitment to deliver greater value for its shareholders.”