Majesco has reported its fourth-quarter and full-year fiscal results for the period ended October 31, 2009. While sales continue to grow at the publisher, increasing nearly 33% in Q4 and 47.8% for the year (for a total of $94.5 million), the company has failed to translate this growth into profit. Net loss for 2009 was $7.2 million, compared to net income of $3.4 million in fiscal 2008.
Majesco pointed to weak sell-in and minimal reorders for its new IP, particularly Our House: Party. The company noted that the performanc "was indicative of a difficult retail environment that was especially hard on non-branded and new IP titles." Majesco also noted that its "international business suffered from a weak European packaged goods market and had delays in the release of some of its titles." The publisher generally had higher sales of lower margin product. Looking at the holiday season, Majesco also evaluated its 2010 portfolio and cancelled certain titles and wrote down others scheduled for release in 2010.
For fiscal 2010, Majesco is anticipating full-year sales of approximately $80 million. Non-GAAP earnings per share has been forecast to be approximately $0.05 for the full year. This guidance is based in part on a product slate that includes 37 SKUs in 2010, including 14 DS titles and 16 on Wii. The publisher remains very much casual and Nintendo focused. During fiscal '09, Wii sales increased $28.3 million, or 130.2%, to $50.1 million, while DS sales rose 2.7% from $39.4 million to $40.5 million.
"In 2009 we delivered a strong top line performance, exceeding our revenue guidance, despite a challenging economic environment and a difficult period for our industry overall. Our top line was driven by the Cooking Mama franchise, Jillian Michaels' titles and strong distribution revenue. However, we were disappointed in our inability to translate this strong growth to the bottom line. While our top titles performed well, and we successfully maintained costs and reduced marketing expenditures, we had a soft retail performance from new IP titles in the fourth quarter," stated Jesse Sutton, Chief Executive Officer of Majesco.
"In 2010 we must translate our revenue into profitability and this is the key focus for our management team. We are taking a number of steps to better position the Company for 2010 and beyond. We are well capitalized and in that regard, in better financial position than we've been in recent years. We are looking to focus our resources on our best opportunities, publishing fewer, but stronger titles than we initially planned and driving additional efficiencies across our operations by reducing our cost structure. We recently implemented personnel reductions in both the U.S. and Europe, lowering headcount by 17 percent. These personnel changes will leave our worldwide headcount 30 percent below the end of fiscal 2008. In addition, we made a number of other cost improvements during the year, including lowering the cost of our rent and some outside services that will provide further savings as we move into 2010. Including the elimination of costs of our studio, the reductions in international and reductions in overhead in the U.S., we've reduced costs by in excess of $3 million. We believe our efforts will result in profitability on a lower revenue base, which is reflected in our fiscal 2010."
"Our product focus in 2010 will also include leveraging our success with the Cooking Mama franchise. During this holiday season we launched the third Nintendo DS SKU in the Cooking Mama series. The title performed well, extending the reign of Mama as the most successful third party franchise on the DS and reinforcing its position as an evergreen brand. In addition, in 2009 we introduced our first line extension, in Gardening Mama, which was very successful, and we are presently working on two additional extensions for 2010. We also continue to explore opportunities to expand the reach of the Mama brand to her fans through new media channels."
