Net income for the quarter was $12.2 million (17 cents per share), down from last year's $16.5 million (24 cents per share). The company said that lower gross margins and operating income were to blame, which were caused by a "changing product mix" that raised manufacturing costs, royalties, selling and distribution costs.
However, for the first half of its fiscal year, Infogrames is ahead of where it stood last year in terms of both revenue (up 48%) and net income ($12.7 million in profit versus a loss of $16.3 million last year).
Of note, the company took a charge of $4.2 million associated with Kmart's bankruptcy, an act many other publishers will probably follow.
Bruno Bonnell, Chairman and CEO, attributed the company's results during the quarter to strong sales of the Backyard Sports series,
Civilization III and
Survivor for the PC;
Splashdown and
Test Drive Off-Road Wide Open for the PS2; and
Driver 2 for the PSone.
"We believe we are at the start of an upswing and that our performance will only improve over the next several quarters," Bonnell said. "The domestic market for interactive entertainment is as strong as it has ever been, and the international launches of the Xbox and GameCube are imminent ... we intend to capitalize on the growing opportunities by releasing approximately 75 new titles over the next 10 months, spanning all platforms."
