Atari Reports Fiscal 2005 Fourth Quarter and Year-End Results
Company: Atari
NEW YORK – June 14, 2005 – Atari, Inc. (Nasdaq: ATAR), a leader in interactive entertainment, today announced financial results for the fiscal 2005 fourth quarter and year-ended March 31, 2005.

"We have accomplished many of our goals as we have completed the relocation of our publishing operations, transformed our senior management team and secured a new credit facility. Atari remains focused on growing our market share and increasing profitability to industry levels, thereby creating greater shareholder value," stated Bruno Bonnell, Chairman, interim CEO and Chief Creative Officer of Atari. "Atari stands for innovation and we seek to provide our consumers, both hardcore gamers and the mass-audience, the best in content. We are well positioned to exploit the industry's technological advancements through Sony, Microsoft and Nintendo's next generation of consoles and the rapid growth of the handheld, mobile, online and interactive television markets."

Net revenue for the year-ended March 31, 2005, was $395.2 million, excluding approximately $12.6 million of revenue from the discontinued operations of Humongous, versus $447.5 million, excluding approximately $21.5 million of revenue from the discontinued operations of Humongous, in the comparable year-earlier period. As the Company previously stated, it has assessed its assets and resources and has determined that certain operations do not sufficiently complement its strategic vision or creative direction. The Company plans to dispose of those non-core assets. One such divestiture will be its Humongous Entertainment studio assets and operations, which the Company anticipates will occur prior to the end of fiscal 2006. Including revenue from discontinued operations, net revenue for fiscal 2005 was $407.8 million compared to $469.0 million in fiscal 2004. Publishing net revenue excluding discontinued operations was $341.0 million versus $384.5 million in the prior year, while distribution revenue was $54.2 million versus $63.0 million in the comparable year-earlier period.

Income attributable to common shareholders for fiscal 2005 was $5.7 million, or $0.05 per share, compared to a loss of $38.6 million, or $0.40 per share, in fiscal 2004. The Company previously announced on February 9, 2005, that it will begin to take steps to streamline its U.S. operations, including the closing of its studios in Santa Monica, California and Beverly, Massachusetts. In doing so, the Company recorded restructuring charges of $4.9 million. Excluding restructuring charges, net income for fiscal 2005 would have been $10.6 million, or $0.09 per share compared to $0.8 million, or $0.01 per share, prior to the $39.4 million, or $0.41 per share, one-time non-cash dividend relating to the Company's September 2003 recapitalization and public offering.

Net revenue for the fourth quarter ended March 31, 2005, was $62.7 million compared to $64.8 million in the comparable year-earlier period. Including revenue from discontinued operations of Humongous for the fourth quarters ended March 31, 2005 and 2004 of approximately $1.7 million and $1.6 million, respectively, net revenue for the fourth quarter ended March 31, 2005, would have been $64.4 million compared to $66.4 million in the comparable year-earlier period.

Publishing net revenue, excluding discontinued operations, was $51.0 million compared to $49.4 million in the prior March quarter, while distribution revenue was $11.7 million compared to $15.4 million in the comparable year-earlier quarter. Revenue for the period was driven by the highly anticipated release of Dragon Ball Z: Sagas (PS2, Xbox and GameCube) and Act of War: Direct Action (PC), and supported by the continued sales of Dragon Ball Z: Budokai 3 (PS2) and the Atari Flashback Classic Game Console, among others.

Loss attributable to common shareholders for the quarter was $9.1 million, or $0.07 per share, compared to a loss of $17.3 million, or $0.14 per share, in the year-earlier period. Excluding $4.9 million of restructuring charges, net loss for the quarter was $4.2 million dollars, or $0.03 per share.

Mr. Bonnell continued, "Fiscal 2006 will be a year of focus at Atari. We will be releasing fewer SKUs in fiscal 2006 than in fiscal 2005. By improving our business processes in order to release higher quality products on time and on budget and creating comprehensive global market initiatives to support them, we will be taking better advantage of our assets. We will continue to work with leading development studios and capitalize on our third-party distribution business."

Atari's product lineup for fiscal 2006 is expected to include the following new releases:

Dragon Ball GT: Transformation (GBA), Dragon Ball Z Budokai: Tenkaichi (PS2), Dragonshard (PC), Duel Masters: Shadow Code (GBA), Dungeons & Dragons Online (PC), Indigo Prophecy (PS2, Xbox and PC), Marc Ecko's Getting Up: Contents Under Pressure (PS2, Xbox and PC), RollerCoaster Tycoon 3: Soaked (PC), The Matrix: Path of Neo (PS2, Xbox and PC), Timeshift (PC, Xbox), Tycoon City: New York (PC) among others.

Atari will host a teleconference with a simultaneous webcast at 4:45 p.m. Eastern Time today to discuss the Company's year-end results. To access the teleconference, please dial 1-888-396-2298 (domestic) or 1-617-847-8708 (international), access code 77217479, or listen to it live via the Internet by accessing the Company's Web site (www.atari.com). For those unable to listen to the live broadcast, a replay will be available on the Company's Web site or by dialing 1-888-286-8010 (domestic) or 1-617-801-6888 (international), playback access code 33235182, beginning approximately one hour after the conclusion of the call and available through June 19, 2005.

About Atari

New York-based Atari, Inc. (Nasdaq: ATAR) 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 DRIV3RTM, Enter the MatrixTM, Neverwinter NightsTM, StuntmanTM, Test Drive®, Unreal® Tournament 2004, and Unreal® Championship; and mass-market and children's games such as Backyard SportsTM, Nickelodeon's Blue's CluesTM and Dora the ExplorerTM, Dragon Ball Z® and RollerCoaster Tycoon®. Atari, Inc. is a majority-owned subsidiary of France-based Infogrames Entertainment SA (Euronext – ISIN: FR-0000052573), the largest interactive games publisher in Europe. For more information, visit www.atari.com.

Safe Harbor Statement

With the exception of the historical information contained in this release, the matters described herein contain certain "forward-looking statements" that are made pursuant to the Safe Harbor provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements in this release are not promises or guarantees and are subject to risks and uncertainties that could cause our actual results to differ materially from those anticipated. These statements are based on management's current expectations and assumptions and are naturally subject to uncertainty and changes in circumstances. We caution you not to place undue reliance upon any such forward-looking statements. Actual results may vary materially from those expressed or implied by the statements herein. Some of the factors which could cause our results to differ materially include the following: the loss of key customers, such as Wal-Mart, Best Buy and Target; delays in product development and related product release schedules; fluctuations in the Company's quarterly net revenues and results of operations based on the seasonality of our industry; adapting to the rapidly changing industry technology, including new console technology; maintaining relationships with leading independent video game software developers; maintaining or acquiring licenses to intellectual property; the termination or modification of our agreements with hardware manufacturers; and other factors described in our SEC filings, including our Annual Report on Form 10-K for the year ended March 31, 2005 and our quarterly reports on Form 10-Q.

The Company undertakes no duty to update any forward-looking statements to conform the statement to actual results or changes in the Company's expectations.
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