Leading Videogame Company Achieves Year over Year Quarterly Sales Growth of 100%
MIDLOTHIAN, Va.–(BUSINESS WIRE)–Nov. 11, 2009– SouthPeak Interactive Corporation (OTCBB:SOPK), one of the fastest growing videogame publishers, today announced financial results for the quarter ended September 30, 2009.
For the quarter ended September 30, 2009, SouthPeak reported net revenues of $16.7 million compared to $8.3 million in the comparable period in 2008. Earnings before interest, taxes, depreciation and amortization, as adjusted (“Adjusted EBITDA”), was $1.3 million for the period compared to a loss of $1.3 million in the comparable period in 2008. Non-GAAP net income for the period was $843 thousand compared a loss of $1.4 million in the comparable period in 2008. GAAP Net income was $687 thousand or $.01 per diluted share for the period compared to a GAAP net loss of $2.7 million or ($.08) per diluted share in the comparable period in 2008.
“We are pleased with our operational results for the quarter, and continue to see the benefits of our investment in our infrastructure and personnel. In this period, we launched three Xbox 360™ titles, which included the global launch of Section 8™ on Xbox 360 and Games for Windows LIVE,” said Melanie Mroz, CEO of SouthPeak. “We are pleased with our continued revenue growth despite the ongoing challenges in the retail environment and are excited by the hardware price reductions. We expect that the recent price reductions can drive momentum for the industry going into the holiday season.”
Highlights of the Quarter include:
Quarterly net revenue increase of approximately 100%, to $16.7 million from $8.3 million in the comparable period in 2008.
Adjusted EBITDA of $1.3 million for the period compared to a loss of $1.3 million in the comparable period in 2008.
Acquired in bankruptcy certain assets owned by Midway relating to video games based on the TNA iMPACT wrestling brand.
Continued strong demand for My Baby™ (Nintendo DS™) makes it one of the best-selling life simulation titles on Nintendo DS. Highly anticipated product extensions of this franchise are expected to hit stores this holiday season.
Upcoming product releases include My Baby: First Steps (Wii™ and Nintendo DS), Horrid Henry (Wii, Nintendo DS and PC), Miniclip™ Sushi Go Round (Wii, Nintendo DSi™ and iPhone™), TNA iMPACT: Cross the Line (PSP, PSPgo and DS), Dementium™ II (Nintendo DS), Fast Food Panic (Wii and Nintendo DS), Sled Shred featuring the Jamaican Bobled Team (Wii), Crime Scene(Nintendo DS) and Montessori Music (Nintendo DS).
Terry Phillips, Chairman of SouthPeak, added, “Our results validate our business strategy, and our unique positioning in the industry is providing us with many exciting product opportunities. Brands around which we will release titles this year include TNA wrestling, Montessori education, Miniclip, Horrid Henry and the Jamaican Bobsled Team. We are excited by the continued success of the My Baby brand, and have recently just released product extensions on both Wii and Nintendo DS.”
Conference Call
SouthPeak will hold a conference call to discuss its Q1 2010 financial results, latest game sales and prospects for the coming fiscal year at 4:30 p.m. Eastern, on Wednesday, November 11, 2009.
The teleconference can be accessed by calling 866-730-5763 and entering participant passcode # 69755125. Participants outside of the U.S. and Canada can join by calling 857-350-1587. Please dial in 5 minutes prior to the beginning of the call.
A webcast of the call will be available on SouthPeak’s corporate portal www.southpeakgames.com.
Supplemental Information
In addition to presenting financial results in accordance with generally accepted accounting principles, or GAAP, this earnings release also presents Adjusted EBITDA and non-GAAP net income. Adjusted EBITDA is calculated by deducting operating expenses from net income and excluding amounts related to interest expense ($299,316) depreciation and amortization expense ($160,770), stock-based compensation ($156,196), and Non-GAAP net income is calculated by deducting operating expenses from net income and excluding amounts related to stock-based compensation ($156,196 ). SouthPeak believes these non-GAAP financial measures provide investors with additional insight into our ongoing operating performance. These non-GAAP financial measures should be considered in conjunction with, but not as a substitute for, the financial information presented in accordance with GAAP. SouthPeak’s definition of Adjusted EBITDA may differ from the definition of Adjusted EBITDA used by other companies and may not be comparable to similarly titled measures used by other companies. Adjusted EBITDA is also a measure frequently requested by SouthPeak’s investors and analysts. Investors are advised to carefully review and consider this information as well as the GAAP financial results that are disclosed in the SouthPeak’s Securities and Exchange Commission filings, including its Form 10-Q for the quarter ended September 30, 2009, filed with the Securities and Exchange Commission on November 12, 2009.
About SouthPeak Interactive
SouthPeak Interactive Corporation develops and publishes interactive entertainment software for all current hardware platforms including: PLAYSTATION®3 computer entertainment system, PSP® (PlayStation® Portable) system, PlayStation®2 computer entertainment system, PSPgo, Xbox 360® videogame and entertainment system, Wii™, Nintendo DS™, DSi and PC. SouthPeak’s games cover all major genres including action/adventure, role playing, racing, puzzle strategy, fighting and combat. SouthPeak’s products are sold in retail outlets in North America, Europe, Australia and Asia. SouthPeak is headquartered in Midlothian, Virginia, and has offices in Grapevine, Texas and Leicester, England.
For additional information, please visit SouthPeak’s corporate website: www.southpeakgames.com
Forward-Looking Statements
This release contains “forward-looking” statements that are made pursuant to the Safe Harbor provisions of the Private Securities Litigation Reform Act of 1995. These are statements that are predictive in nature, that depend upon or refer to future events or conditions, or that include words such as “may,” “will,” “expects,” “projects,” “anticipates,” “estimates,” “believes,” “intends,” “plans,” “should,” “seeks,” and similar expressions. This press release contains forward-looking statements relating to, among other things, SouthPeak’s expectations and assumptions concerning future financial performance. Forward-looking statements involve known and unknown risks and uncertainties that may cause actual future results to differ materially from those projected or contemplated in the forward-looking statements. Forward-looking statements may be significantly impacted by certain risks and uncertainties described in SouthPeak’s filings with the Securities and Exchange Commission.
The risks and uncertainties referred to above include, but are not limited to, risks associated with SouthPeak’s potential inability to compete with larger businesses in its industry, the limitations of SouthPeak’s business model, SouthPeak’s potential inability to anticipate and adapt to changing technology, the possibility that SouthPeak may not be able to enter into publishing arrangements with some developers, SouthPeak’s dependence on vendors to meet its commitments to suppliers, SouthPeak’s dependence on hardware manufactures to publish new videogames, SouthPeak’s potential inability to recuperate the up-front license fees paid to console manufacturers, SouthPeak’s dependence on a limited number of customers, SouthPeak’s potential dependence on the success of a few videogames, SouthPeak’s dependence on developers to deliver their videogames on time, the potential of litigation, interference with SouthPeak’s business from the adoption of governmental regulations; and the inability to obtain additional financing to grow its business.
-Justin
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