Majesco Entertainment has announced that its CEO and Chairman Carl Yankowski has resigned, following a major revision of Majesco's guidance for the fiscal year ending October 31st, 2005 which has plunged the company into predicting a loss for the year.
Majesco's previously stated expectations were for net revenues of $175 to $185 million and profits of $16 to $18 million, with at least 50 percent of the net revenues occurring in the fourth fiscal quarter. However, the company now anticipates net revenues for the period ending October 31st to be between $120 million and $125 million, with an associated operating loss of $16 million to $19 million.
In an official release, Majesco listed a number of reasons for this major change, including substantially weaker than expected sales across all of the company's product lines (reports of poor sales for both Advent Rising
have already concerned analysts significantly
), the movement of one of its key (unspecified, but likely to be Aeon Flux
) movie-based video game titles out of the fiscal year in order to better coincide with the related theatrical release, and what the company describes as "an exceptionally slow summer season exacerbated by an earlier than expected impact of the upcoming video game platform transition."
Jesse Sutton, the President of Majesco, commented with regard to these changes: "We are disappointed in our anticipated results for the year. Our weaker than expected sales and recent discussions with industry partners have led us to conclude that it is prudent to adjust our guidance. Despite the difficult retail environment we are experiencing, we plan to exploit the growing market for video game products and remain focused on producing high-quality games and other digital entertainment products."
With regard to Mr. Yankowski's departure, the Majesco board has commenced an immediate search for a permanent Chief Executive, has elected current Board member Jim Halpin as Chairman of the Board, and also announced the CFO of the company, Jan Chason, has been shifted to a newly created 'Chief Accounting Officer' position. John Gross, formerly of FactSet Research Systems, has joined the company as Executive Vice President and Chief Financial Officer.
Needless to say, Wall Street has been extremely cool in after-hours trading on Majesco, whose NASDAQ symbol is, coincidentally enough, COOL - its shares were trading at $3.44, down almost exactly 50 percent from a market close of $6.89, in after-the-bell action.