Video game accessories firm Mad Catz has reported its holiday results for the third quarter ended December 31, 2009, and it was a merry time indeed as sales rose 19% to $48.8 million and gross profit jumped 51% to $15.9 million. Gross profit margin also improved by nearly 7 percentage points to 33% from 26% in the year-ago quarter.
North America continues to be the company's largest market, and net sales came in at $24.6 million for the quarter, but net sales in Europe also reached a record $23.0 million for the third quarter. Although Wii accessories have been a big business in the past, Mad Catz has witnessed a drop-off in Wii sales. Wii represented 14% of total gross sales vs. 17% in the prior year quarter, whereas Xbox 360 sales have gone up considerably; Xbox 360 accounted for 31% of total gross sales vs. 21% a year ago. PS3 also saw a big increase, as PS3 accessories accounted for 17% of total gross sales vs. 5% a year ago.
"While the videogame industry has experienced significant economic-related pressure, we are highly encouraged by the consumer reception to our product portfolio and believe that our strategy to diversify our product line-up across a broader range of licensed and non-licensed properties, hardware platforms, both within the videogame sector as well as expanding into the PC market, will continue to serve the Company well," said Darren Richardson, President and Chief Executive Officer of Mad Catz. "We also believe our balance sheet provides us the financial flexibility to continue our efforts to grow sales, earnings, free cash flow and shareholder value."
He added, "Over the past few years, we've successfully transitioned Mad Catz' product strategy from a value-oriented console videogame focus to a premium products focus, diversifying both geographically and by expanding to the PC market. We recently showcased many of our newest PC products at the annual Consumer Electronics Show to extremely positive industry and trade reviews. As we enter calendar 2010, we believe we have an excellent product line-up, our most expansive sales and product distribution reach, and an operating expense structure that offers further opportunities for earnings leverage."
