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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of report (Date of earliest event reported) July 21, 2004 (July 21, 2004)
ACTIVISION, INC.
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(Exact Name of Registrant as Specified in Charter)
Delaware 0-12699 95-4803544
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(State or Other Jurisdiction (Commission (IRS Employer
of Incorporation) File Number) Identification No.)
3100 Ocean Park Blvd., Santa Monica, CA 90405
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(Address of Principal Executive Offices) (Zip Code)
Registrant's telephone number, including area code (310) 255-2000
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N/A
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(Former Name or Former Address, if Changed Since Last Report)
Item 7. Financial Statements, Pro Forma Financial Statements and Exhibits.
(c) Exhibits.
99.1 Press Release of Activision, Inc., dated July 21, 2004.
Item 9. Regulation FD Disclosure.
On July 21, 2004, Activision, Inc. issued a press release announcing its
financial results for the fiscal quarter ended June 30, 2004. The press release
is attached hereto as Exhibit 99.1.
The information in this Form 8-K and the Exhibit attached hereto shall not
be deemed "filed" for purposes of Section 18 of the Securities Exchange Act of
1934, nor shall it be deemed incorporated by reference in any filing under the
Securities Act of 1933, except as shall be expressly set forth by specific
reference in such filing.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
Date: July 21, 2004
ACTIVISION, INC.
By:/s/ Ronald Doornink
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Name: Ronald Doornink
Title: President
Exhibit 99.1
Contacts: Bill Chardavoyne
Chief Financial Officer
(310) 255-2229
bchardavoyne@activision.com
Kristin Mulvihill Southey
Vice President, Investor Relations
(310) 255-2635
ksouthey@activision.com
Maryanne Lataif
Vice President, Corporate Communications
(310) 255-2704
mlataif@activision.com
FOR IMMEDIATE RELEASE
ACTIVISION ANNOUNCES RECORD FIRST QUARTER 2005 RESULTS
- Net Revenues Hit Q1 All Time High, Rising 33% Year Over Year -
- Company Increases Q2 and Fiscal 2005 Net Revenues and E.P.S. Outlook -
- FY 2005 Earnings Per Diluted Share Outlook Up 28% Year Over Year -
-
Santa Monica, CA - July 21, 2004 - Activision, Inc. (Nasdaq: ATVI) today
announced financial results for the first fiscal quarter ended June 30, 2004.
Net revenues were $211.3 million as compared to net revenues of $158.7
million reported for the first quarter last fiscal year. Net income for the
first fiscal quarter was $12.0 million, an increase of $7.8 million, as compared
with net income of $4.2 million for the previous first quarter. Earnings per
diluted share were $0.08, an increase of $0.05, as compared with $0.03 per
diluted share reported for the same period last year.
Robert A. Kotick, Chairman and CEO of Activision, stated, "In addition to
delivering record net revenues for the first quarter, we also significantly
increased our earnings. Both Shrek 2(TM) and Spider-Man 2(TM) were top-selling
titles, and as of today, the two titles combined have shipped more than five
million units. In the past nine months, all five games created by our internal
development studios have each shipped more than one million units, with three
shipping more than three million units."
(more)
Activision Announces Q1 FY 2005 Results
Kotick continued, "Our focus on big propositions is yielding superb results
and we intend to continue leveraging our increasing portfolio of franchises. For
the balance of this year and next year, our production strategy centers around
developing games based on proven, predictable brands. This strategy should
enable us to grow our revenues, earnings and operating margin, and increase our
return on invested capital as we have over the past few years. As we look toward
the future, Activision will also selectively develop groundbreaking original
content, as we did last year with the introductions of True Crime: Streets of
L.A.(TM) and Call of Duty(TM)."
Business Highlights
Activision's results were driven by strong global consumer response to its
products across all platforms. During the quarter, the company released Shrek
2(TM) and Spider-Man 2(TM) for the PlayStation(R) 2 computer entertainment
system, Xbox(R)video game system, Nintendo(R) GameCube(TM), Nintendo Game Boy(R)
Advance and the PC and True Crime: Streets of L.A.(TM) for the PC.
Other highlights include:
o Today, Activision announced that one of its wholly owned studios,
Neversoft, the creators behind the Tony Hawk franchise, is in
development on a compelling new intellectual property that will bring
Neversoft's world renowned development prowess to a new genre. The
unnamed title is slated for release in fiscal 2006, alongside a new
game based on the Tony Hawk franchise that Neversoft will also develop
for fiscal 2006.
o According to NPD TRSTS, Spider-Man 2 was the #1 best-selling video
game in the U.S. across all platforms for the month of June.
Additionally, Shrek 2 was the #1 best-selling title across all
platforms for the month of May and the #2 game behind Spider-Man 2 in
June.
o On July 16, Activision Value Publishing, announced a multi-year
alliance with Discovery Consumer Products to develop and distribute
video games based on the popular television series American Chopper.
(more)
Activision Announces Q1 FY 2005 Results
o On July 14, Activision confirmed that id Software's highly anticipated
DOOM 3(TM) for the PC has entered manufacturing and will begin
shipping to retail stores worldwide the week of August 2.
o On July 7, Activision announced that the company's North American
Publishing unit has shipped more than two million units of its
Spider-Man 2 video game timed to the theatrical release of Sony
Pictures Entertainment's Columbia Pictures "Spider-Man(R) 2".
o On April 8, Activision announced that it had partnered with Nielsen
Entertainment to develop a new initiative that will allow video game
companies to supply advertisers with audience measurement metrics to
help them assess the impact of in-game ad exposure. The new initiative
will provide tools for advertisers to effectively measure everything
from ad exposure to demographics to audience recall when it comes to
video game use.
Activision also increased its outlook for fiscal 2005. For the second
quarter, the company expects net revenues of $254 million and earnings per
diluted share of $0.08. For the third quarter, it expects net revenues of $515
million and earnings per diluted share of $0.52. For the fourth quarter,
Activision expects net revenues of $120 million and earnings per diluted share
of $0.01. For the full fiscal year, the company expects net revenues of $1.10
billion and earnings per diluted share of $0.69. The company's previous fiscal
year outlook was $1.05 billion in net revenues and earnings per diluted share of
$0.64. The company's revised outlook represents a 16% increase in net revenues
and a 28% increase in earnings per diluted share year over year.
Looking ahead to the second quarter, Activision's slate will be driven by
Doom 3(TM) and Rome: Total War(TM), two of the most anticipated PC games of the
year; Call of Duty: United Offensive(TM), the expansion pack to the
best-selling, critically acclaimed PC title Call of Duty; DreamWork's Shark
Tale(TM), for the PlayStation 2 computer entertainment system, Xbox video game
system, Nintendo GameCube, Nintendo Game Boy Advance and the PC; and X-Men
Legends(TM) for the PlayStation 2 computer entertainment system, Xbox video game
system and Nintendo GameCube.
Today at 4:30 p.m. EDT, Activision's management will host a conference call
and Webcast to discuss its Q1 fiscal year 2005 results and outlook. The company
welcomes all members of the financial and media communities to visit the
"Investor Relations" area of www.activision.com to listen to the conference call
via live Webcast or to listen to the call live by dialing into (719) 457-2617 in
the U.S.
(more)
Activision Announces Q1 FY 2005 Results
Headquartered in Santa Monica, California, Activision, Inc. is a leading
worldwide developer, publisher and distributor of interactive entertainment and
leisure products. Founded in 1979, Activision posted net revenues of $948
million for the fiscal year ended March 31, 2004.
Activision maintains operations in the U.S., Canada, the United Kingdom,
France, Germany, Italy, Japan, Australia, Scandinavia and the Netherlands. More
information about Activision and its products can be found on the company's
World Wide Web site, which is located at www.activision.com.
Note: The statements made in this press release that are not historical facts
are "forward-looking" statements. These forward-looking statements are based on
current expectations and assumptions that are subject to risks and
uncertainties. The company cautions readers of this press release that a number
of important factors could cause Activision's actual future results to differ
materially from those expressed in any such forward-looking statements.
Such factors include, without limitation, product delays, retail acceptance of
our products, industry competition, rapid changes in technology and industry
standards, protection of proprietary rights, maintenance of relationships with
key personnel, vendors and third-party developers, international economic and
political conditions, integration of recently acquired subsidiaries and
identification of suitable future acquisition opportunities.
These important factors and other factors that potentially could affect the
company's financial results are described in our filings with the Securities and
Exchange Commission, including the company's most recent Annual Report on Form
10-K and Quarterly Reports on Form 10-Q. Readers of this press release are
referred to such filings. The company may change its intention, belief or
expectation, at any time and without notice, based upon any changes in such
factors, in the company's assumptions or otherwise. The company undertakes no
obligation to release publicly any revisions to its forward-looking statements
to reflect events or circumstances after the date hereof or to reflect the
occurrence of unanticipated events.
(Tables to Follow)
ACTIVISION, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except earnings per share data)
Quarter ended June 30,
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2004 2003
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Restated
Net revenues $ 211,276 $ 158,725
Costs and expenses:
Cost of sales - product costs 89,088 76,610
Cost of sales - software royalties and 12,283 15,498
amortization
Cost of sales - intellectual property 17,648 10,143
licenses
Product development 21,105 13,580
Sales and marketing 41,734 26,285
General and administrative 13,685 11,463
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Total operating expenses 195,543 153,579
Operating income 15,733 5,146
Investment income, net 2,112 1,257
Income before provision for income taxes 17,845 6,403
Provision for income taxes 5,888 2,240
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Net income $ 11,957 $ 4,163
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Basic earnings per share $ 0.09 $ 0.03
Weighted average common shares outstanding 137,765 132,069
Diluted earnings per share $ 0.08 $ 0.03
Weighted average common shares outstanding
assuming dilution 153,407 140,655
Share and earnings per share data have been restated to reflect our
three-for-two stock split for shareholders of record as of February 23, 2004,
paid March 15, 2004.
ACTIVISION, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)
June 30, March 31,
2004 2004
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ASSETS
Current assets:
Cash, cash equivalents and short-term investments $ 539,146 $ 587,649
Accounts receivable, net 123,048 62,577
Inventories 39,635 26,427
Software development 75,696 58,320
Intellectual property licenses 15,159 32,115
Deferred income taxes 23,497 26,127
Other current assets 21,184 18,660
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Total current assets 837,365 811,875
Software development 21,660 28,386
Intellectual property licenses 17,630 16,380
Property and equipment, net 24,841 25,539
Deferred income taxes 6,666 9,064
Other assets 1,243 1,080
Goodwill 76,436 76,493
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Total assets $ 985,841 $ 968,817
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LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable 75,558 72,874
Accrued expenses 56,534 63,205
Total current liabilities 132,092 136,079
Shareholders' equity:
Common stock - -
Additional paid-in capital 770,257 758,626
Retained earnings 220,236 208,279
Treasury stock (144,128) (144,128)
Accumulated other comprehensive income 7,384 9,961
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Total shareholders' equity 853,749 832,738
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Total liabilities and shareholders' equity $ 985,841 $ 968,817
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ACTIVISION, INC. AND SUBSIDIARIES
FINANCIAL INFORMATION
For the Quarter Ended June 30, 2004 and 2003
(Amounts in thousands)
Percent
Increase
Quarter Ended (Decrease)
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June 30, 2004 June 30, 2003
Amount % of Total Amount % of Total
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Geographic Revenue Mix
United States $125,191 59% $ 82,739 52% 51%
International 86,085 41% 75,986 48% 13%
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Total net revenues $211,276 100% $158,725 100% 33%
Activity/Platform Mix
Publishing:
Console $119,127 74% $ 88,484 77% 35%
Hand-held 18,430 11% 4,596 4% 301%
PC 24,095 15% 21,325 19% 13%
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Total publishing $161,652 77% $114,405 72% 41%
Distribution:
Console $ 39,194 79% $ 35,342 80% 11%
Hand-held 3,655 7% 2,912 6% 26%
PC 6,775 14% 6,066 14% 12%
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Total distribution $ 49,624 23% $ 44,320 28% 12%
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Total net revenues $211,276 100% $158,725 100% 33%
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ACTIVISION, INC. AND SUBSIDIARIES
FINANCIAL INFORMATION
For the Quarter Ended June 30, 2004 and 2003
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Quarter Ended Quarter Ended
June 30, 2004 Jun3 30, 2003
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Publishing Net Revenues
PC 15% 19%
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Console 74% 77%
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PlayStation 2 42% 37%
Microsoft Xbox 16% 31%
Nintendo GameCube 15% 5%
PlayStation 1% 4%
Hand-held 11% 4%
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Game Boy Advance 11% 4%
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Total publishing net revenues 100% 100%
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