3DO today lowered guidance for the current quarter, saying that the company has experienced "tougher than expected market conditions," particularly with regard to GameCube game sales. As such, it has decided to delay the release of Army Men: Sarge's War
until the June quarter, when it believes these conditions are expected to improve.
Other problems were reported as well. First, facing a cash crunch recently, 3DO said it was unable to fulfill retail orders on time, because it couldn't purchase enough inventory. Second, 3DO says it will take a non-cash accounting charge related to a $3 million loan conversion. The amount of the charge was not revealed.
On the upside, 3DO said that its turnaround plan is "nearing completion". The company said it has completed two financial transactions for a $10.5 million credit line with IIG Capital LLC, which the company says will provide working capital and balance sheet needs for the "foreseeable future".
The $10.5 million credit facility is secured by the company's accounts receivable and was completed and funded last week. So far the company has drawn approximately $4 million against the line, primarily to purchase inventory of new game releases.
The company also cited some retail successes with its recently released High Heat Major League Baseball 2004
, saying that some (unnamed) retailers had said the game cracked their top 10 in sales.