Atari Reports Fiscal 2005 First Quarter Results

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Atari Reports Fiscal 2005 First Quarter Results

NEW YORK–(BUSINESS WIRE)–July 29, 2004–Atari, Inc. (Nasdaq: ATAR – News), a leader in interactive entertainment, today announced financial results for the fiscal 2005 first quarter ended June 30, 2004.

Net revenue for the first quarter ended June 30, 2004, was $110.3 million compared to $151.4 million in the comparable year-earlier period. Publishing net revenue was $99.7 million compared to $135.6 million in the prior June quarter, while distribution revenue was $10.6 million compared to $15.8 million in the comparable year-earlier quarter. Revenue for the period was driven by the highly anticipated release of DRIV3R (PS2 and Xbox), which sold-through approximately 50% of the units shipped to retail outlets worldwide in its first month on shelves and ranked as the #2 PS2 title and #5 Xbox title in the U.S. in June, while topping the charts in Australia, France, Germany, Italy, Spain, Sweden and the U.K. Additionally, sales were supported by Transformers (PS2), Shadow Ops: Red Mercury (Xbox), Duel Masters: Sempai Legends (GBA) and DBZ: Super Sonic Warriors (GBA), among others. The year-over-year change in net revenue was directly attributable to the earlier shipment date of last year’s smash-hit Enter The Matrix on four consoles (PS2, Xbox, GameCube, GBA and PC) compared to the later shipment of DRIV3R on two consoles, and the Company’s long-term strategy to reduce its lower margin third-party distribution arrangements.

Net income for the quarter was $12.1 million, or $0.10 per share, compared to net income of $23.8 million, or $0.34 per share, in the year-earlier period.

“The fiscal 2005 first quarter was highlighted by the strong global launch of DRIV3R, which has been embraced enthusiastically by consumers worldwide,” stated Bruno Bonnell, Chairman and CEO of Atari. “DRIV3R’s performance in just nine days of the quarter, combined with that of Transformers and Shadow Ops: Red Mercury, among others, enabled us to surpass our own expectations for profitability, thereby creating greater shareholder value. We are pleased to have delivered on our previously stated goals for the quarter and will continue to strive toward meeting the high expectations of our customers and shareholders.”

Atari’s product lineup for the remainder of fiscal 2005 is expected to include the following key releases, among many others:

For the second quarter ending September 30, 2004: Backyard Skater (PC), Deer Hunter 2005 (PC), Forgotten Realms: Demon Stone (PS2), Shadow Ops: Red Mercury (PC), Asterix & Obelix (PS2), Terminator 3: The Redemption (PS2, Xbox, and GameCube), Test Drive: Eve of Destruction (PS2 and Xbox), Unreal Tournament Editor’s Choice (PC), YuYu Hakusho: Dark Tournament (PS2), Zoids: Legacy (GBA), and Zoids: Battle Legends (GameCube).

For the third quarter ending December 31, 2004: Axis & Allies (PC), Backyard Basketball (GBA), Dragon Ball Z: Budokai 3 (PS2), Dragon Ball Z: Buu’s Fury (GBA), Duel Masters Cobalt (PS2), Duel Masters 2: Kaijudo Showdown (GBA), Forgotten Realms: Demon Stone (Xbox and PC), Godzilla: Save The Earth (PS2 and Xbox), RollerCoaster Tycoon 3 (PC), Sid Meier’s Pirates! (PC), and YuYu Hakusho: Tournament Tactics.

For the fourth quarter ending March 31, 2005: Revenue will be driven by releases from both the lucrative Dragon Ball Z and Dungeons & Dragons franchises.

Mr. Bonnell continued, “The remainder of our fiscal 2005 release slate is characterized as a balanced mix of established franchises and new IP, with many titles for the growing mass consumer audience. This audience is the key to increasing market share and will be a defining factor for Atari’s growth and overall success.”

For the 2005 fiscal second quarter ending September 30, 2004, Atari anticipates a 25% increase in net revenue to approximately $75 million compared to $60.6 million in the comparable year-earlier period. The Company expects to report net loss of approximately $19 million, or $0.16 per share.

For the fiscal year ending March 31, 2005, Atari reiterates full-year net revenue of approximately $470 million and net income and earnings per share in the range of $25 million to $30 million, or $0.20 to $0.25 per share.

Atari will host a teleconference with a simultaneous webcast at 4:45 p.m. Eastern Time today to discuss the Company’s first quarter results. To access the teleconference, please dial 1-800-901-5259 (domestic) or 1-617-786-4514 (international), access code 61758119, or listen to it live via the Internet by accessing the Company’s Web site (www.atari.com).

About Atari

New York-based Atari, Inc. (Nasdaq: ATAR – News) develops interactive games for all platforms and is one of the largest third-party publishers of interactive entertainment software in the U.S. The Company’s 1,000+ titles include hard-core, genre-defining games such as DRIV3R(TM), Enter the Matrix(TM), Neverwinter Nights(TM), Stuntman(TM), Test Drive®, Unreal® Tournament 2004, and Unreal® Championship; and mass-market and children’s games such as Backyard Sports(TM), Nickelodeon’s Blue’s Clues(TM) and Dora the Explorer(TM), Civilization®, Dragon Ball Z® and RollerCoaster Tycoon®. Atari, Inc. is a majority-owned subsidiary of France-based Infogrames Entertainment SA (Euronext 5257), the largest interactive games publisher in Europe. For more information, visit www.atari.com.