Interplay Announces Substantial Improvement in Operating Results In Fourth Quarter 2000 Over Last Year, and Year 2000 Over 1999

Apr 16, 2001, 01:00 ET from Interplay Entertainment Corp.

    IRVINE, Calif., April 16 /PRNewswire/ -- Interplay Entertainment Corp.
 (Nasdaq:   IPLY) today reported operating results for the fourth quarter and
 year-end for 2000.
     (Photo:  http://www.newscom.com/cgi-bin/prnh/19991130/IPLYLOGO )
     For the quarter ended December 31, 2000, the Company reported net revenues
 of $30.8 million a 13 percent increase over net revenues of $27.3 million for
 the same period a year ago.  The operating loss for the quarter was
 $3.8 million versus an operating loss of $4.6 million in the same quarter a
 year ago.  Gross profit margin for the quarter was 42 percent, consistent with
 the same quarter a year ago.  The Company reported a net loss of half the net
 loss a year ago, $4.8 million, or $(0.18) per share in the fourth quarter of
 this year, compared with a net loss of $9.6 million, or $(0.35) per share, in
 the fourth quarter of last year.
     For the year ended 2000, Interplay reported net revenues of $104.6 million
 compared to net revenues of $101.9 million in 1999.  Gross profit margin for
 the year was 48 percent, compared to 40 percent in the prior year, this eight
 percent improvement resulting from a decrease in returns and allowances and a
 higher margin product mix.  The operating loss was $8.4 million in 2000,
 representing about one-fourth of the operating loss of $32.8 million in 1999.
 The net loss of $12.1 million, or $(0.45) per share for 2000 was about
 one-third the net loss of $41.7 million, or $(1.86) per share for 1999.
     "We are extremely pleased that our year over year operating results
 reflect Interplay's operating turn around.  While the results of the 2000
 Holiday season business fell short of our expectations due to a shortage of
 Sony PlayStation2 hardware and a slow PC market, the best is yet to come in
 2001.  We have a 2001 title release schedule placing more emphasis on the next
 generation console market, while still supporting the PC role-playing genre,
 which has been our strength historically.  We plan to release eight major
 console titles in 2001, six on the Sony PlayStation2, one on the Microsoft
 Xbox, and one on the Nintendo Gamecube.  We will have titles such as Baldur's
 Gate: Dark Alliance, RLH, Galleon and Hunter for next generation consoles and
 Neverwinter Nights for the PC, just to name a few," said Brian Fargo,
 Interplay's chairman and chief executive officer.
     "Our net revenues increased quarter over quarter and year over year, our
 gross profit margins improved eight percent year over year, and we have
 successfully reduced our operating expenses in all areas of the company
 without sacrificing future product development and revenue growth.  These are
 measurable signs that we are headed in the right direction," noted Manuel
 Marrero, Interplay's chief operating and chief financial officer.  "This
 year's operating loss was reduced to about one-fourth of our operating loss
 last year, and our net loss was also reduced to about one-third of what it was
 last year.  We had no non-recurring or unusual charges in 2000 for
 reorganization, tax asset valuation reserves, or any other purposes.  Our
 operating expenses have stabilized, and the focus for the future will remain
 on releasing high quality titles, on a timely basis, that generate increased
 net revenue and gross profit," Marrero continued.
     "Earlier today, we announced a new financing that should reduce our
 interest expense by about $1.5 million annually, and should contribute to
 improving our bottom line in the future.  We will continue to maintain our
 current levels of asset management, and expect that our accounts receivable
 days sales outstanding should remain in the range of 75 to 85 days, and our
 inventory turns should also remain in the range of 15 to 20 times a year, both
 of which continue to reflect substantial improvements over last year," Marrero
 added.
     Fargo concluded, "We have already invested over $20 million in our product
 pipe-line, which has about 20 titles scheduled for future release.  Our
 improved market position is evidenced by our increased PC market share and
 overall market share ranking so far in 2001, according to PC Data.  We believe
 that we are well positioned for future success as the market changes begin to
 evolve in the upcoming months. "
     Net revenues by platform for the quarter were 81 percent PC, 12 percent
 console and 7 percent OEM, royalties and licensing.  On a geographic basis,
 North America accounted for 50 percent of total net revenues, international
 represented 43 percent and OEM, royalty and licensing accounted for 7 percent.
     Net revenues by platform for the year were 74 percent PC, 14 percent
 console and 12 percent OEM, royalty and licensing.  On a geographic basis,
 North America accounted for 54 percent of total net revenues, international
 represented 34 percent and OEM, royalty and licensing accounted for
 12 percent.
 
     Interplay Entertainment Corp. is a leading developer, publisher and
 distributor of interactive entertainment software for both core gamers and the
 mass market.  Interplay currently balances its development efforts by
 publishing for personal computers and current generation video game consoles.
 Interplay releases products through Interplay, Shiny Entertainment, Digital
 Mayhem, Black Isle Studios, 14 Degrees East, its distribution partner and its
 wholly owned subsidiary, Interplay OEM, Inc.  More comprehensive information
 on Interplay and its products is available through its worldwide web site at
 www.interplay.com
 
     Investor Conference Call
     Interplay will host an investor conference call today, April 16, 2001, at
 4:30 p.m. eastern time, to review the Company's financials and operations for
 the fourth-quarter and twelve-month periods.  The call will be open to all
 interested investors through the following dial-in numbers: (800) 633-8540
 (domestic) and (212) 346-7495 (international) or through a live audio Web
 broadcast via the Internet at http://webcast.themeetingson.com/webcast.jsp?
 Reservation# 18628526 For those who are not available to listen to the
 conference call, a replay will be available for 48 hours beginning at
 3:30 p.m. pacific time on April 16, 2001 by calling (800) 633-8284,
 reservation number 18628526 (domestic) or (858) 812-6440.
 
     Safe Harbor Statement under the Private Securities Litigation Reform Act
 of 1995:
     Statements contained in this release except for historical information are
 forward-looking statements that are based on current expectations and involve
 risks and uncertainties.  Without limiting the generality of the foregoing,
 words such as "may," "will," "expect," "believe," "anticipate," "intend,"
 "could," "estimate," or "continue" or the negative or other variations thereof
 or comparable terminology are intended to identify forward-looking statements.
 The risks and uncertainties inherent in such statements may cause actual
 future events or results to differ materially and adversely from those
 described in the forward-looking statements.  For example, there can be no
 assurance that the Company's current scheduled titles will ship in the
 projected time frame or that they will be as popular as the Company presently
 anticipates, that the Company will be able to achieve its projected continued
 revenues from its existing titles, or that the Company will be able to
 increase the number of console titles it releases.  Additional important
 factors that may cause a difference between projected and actual results for
 Interplay include, but are not limited to, future capital requirements, that
 equity or bank financing will be available on terms satisfactory to the
 company or at all, risks of loss of the Company's listing on the Nasdaq
 National Market, risk of delays in development and introduction of new
 products, dependence on new product introduction which achieve significant
 market acceptance and the uncertainties of consumer preferences, risks of
 product returns and markdown allowances, dependence on third party software
 developers for a significant portion of new products, risks of rapid
 technological change and platform change, intense competition, seasonality,
 risks of product defects and resulting returns, dependence upon licenses from
 third parties, risks associated with, dependence upon third party
 distribution, dependence upon key personnel and risks associated with
 international business, intellectual property disputes and other factors
 discussed in the Company's filings from time to time with the Securities and
 Exchange Commission, including but not limited to the Company's annual reports
 on Form 10-K and the Company's subsequent quarterly filings on Form 10-Q.
 Interplay disclaims any obligation to revise or update any forward-looking
 statements that may be made from time to time by it or on its behalf.
 
     Note: All trademarks and copyrights are the property of their respective
 owners.
 
 
                         INTERPLAY ENTERTAINMENT CORP.
                CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
                                  (Unaudited)
 
                                Three Months Ended      Twelve Months Ended
                                   December 31,              December 31,
                                 2000         1999         2000        1999
                             (Dollars in thousands, except per share amounts)
 
     Net revenues               $30,773      $27,323     $104,582   $101,930
     Cost of goods sold          17,712       15,714       54,061     61,103
       Gross profit              13,061       11,609       50,521     40,827
     Operating expenses
       Marketing and sales        8,864        8,058       26,482     29,524
       General and
        administrative            2,618        2,705       10,249     18,155
       Product development        5,379        5,476       22,176     20,629
       Other                         --           --                   5,323
         Total operating
          expenses               16,861       16,239       58,907     73,631
     Operating income (loss)     (3,800)      (4,630)      (8,386)   (32,804)
     Other expense:
       Interest expense, net        730          920        2,992      3,640
       Other Expense, net           242          (13)         697       (169)
     Income (loss) before
      income taxes               (4,772)      (5,537)     (12,075)   (36,275)
     Provision for income taxes      --        4,026           --      5,410
     Net income (loss)          $(4,772)     $(9,563)    $(12,075)  $(41,685)
 
     Cumulative dividend on
      participating preferred
      stock                        $303          $--         $870        $--
     Accretion of warrants
      on preferred stock            200           --          532         --
     Net loss attributable
      to common stockholders    $(5,275)     $(9,563)    $(13,477)  $(41,685)
     Net loss per common share:
       Basic                     $(0.18)      $(0.35)      $(0.45)    $(1.86)
     Weighted average number
      of common shares
      outstanding:
       Basic                 30,108,040   27,265,496   30,046,701 22,418,463
 
 
                         INTERPLAY ENTERTAINMENT CORP.
                     CONDENSED CONSOLIDATED BALANCE SHEETS
                                  (Unaudited)
 
                                     Pro-forma         Actual         Actual
                                     December 31,   December 31,  December 31,
                                         2000            2000          1999
                          ASSETS      (Note-1)
     Current Assets                             (Dollars in thousands)
       Cash                             $2,835          $2,835          $399
       Restricted cash                      --              --         2,597
       Trade receivables, net           28,136          28,136        22,209
       Inventories                       3,359           3,359         6,057
       Prepaid licenses and royalties   17,704          17,704        19,249
       Other current assets                772             772           874
         Total Current Assets           52,806          52,806        51,385
     Property and Equipment, net         5,331           5,331         4,225
     Other assets                          944             944         1,326
     TOTAL ASSETS                      $59,081         $59,081       $56,936
 
          LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
 
     Current Liabilities
       Current debt                    $13,887         $25,433       $19,630
       Accounts payable                 12,270          12,270        21,462
       Accrued expenses                 14,980          14,980        17,915
         Total Current Liabilities      41,137          52,683        59,007
     Commitments and Contingencies
         Total Stockholders' Equity
          (Deficit)                     17,944           6,398        (2,071)
     TOTAL LIABILITIES AND
      STOCKHOLDERS' EQUITY (DEFICIT)   $59,081         $59,081       $56,936
 
     Note-1:  Subsequent to December 31, 2000, the Company completed a private
 placement of Common Stock and secured a new working capital line of credit
 with a bank.  The proceeds for these transactions were used to reduce debt by
 approximately $11.5 million and to provide future working capital.  This
 pro-forma balance sheet reflects the Company's financial position as if these
 transactions had been completed as of December 31, 2000.
 
     For further information, please contact: Lisa Bucek of Interplay
 Entertainment Corp., 949-553-6655, lbucek@interplay.com; or investor
 relations, Chris Rosgen, chris@liolios.com, or Patrick Sutton,
 pat@liolios.com, both of Liolios Group, 949-574-3860, for Interplay
 Entertainment Corp.
 
 

SOURCE Interplay Entertainment Corp.
    IRVINE, Calif., April 16 /PRNewswire/ -- Interplay Entertainment Corp.
 (Nasdaq:   IPLY) today reported operating results for the fourth quarter and
 year-end for 2000.
     (Photo:  http://www.newscom.com/cgi-bin/prnh/19991130/IPLYLOGO )
     For the quarter ended December 31, 2000, the Company reported net revenues
 of $30.8 million a 13 percent increase over net revenues of $27.3 million for
 the same period a year ago.  The operating loss for the quarter was
 $3.8 million versus an operating loss of $4.6 million in the same quarter a
 year ago.  Gross profit margin for the quarter was 42 percent, consistent with
 the same quarter a year ago.  The Company reported a net loss of half the net
 loss a year ago, $4.8 million, or $(0.18) per share in the fourth quarter of
 this year, compared with a net loss of $9.6 million, or $(0.35) per share, in
 the fourth quarter of last year.
     For the year ended 2000, Interplay reported net revenues of $104.6 million
 compared to net revenues of $101.9 million in 1999.  Gross profit margin for
 the year was 48 percent, compared to 40 percent in the prior year, this eight
 percent improvement resulting from a decrease in returns and allowances and a
 higher margin product mix.  The operating loss was $8.4 million in 2000,
 representing about one-fourth of the operating loss of $32.8 million in 1999.
 The net loss of $12.1 million, or $(0.45) per share for 2000 was about
 one-third the net loss of $41.7 million, or $(1.86) per share for 1999.
     "We are extremely pleased that our year over year operating results
 reflect Interplay's operating turn around.  While the results of the 2000
 Holiday season business fell short of our expectations due to a shortage of
 Sony PlayStation2 hardware and a slow PC market, the best is yet to come in
 2001.  We have a 2001 title release schedule placing more emphasis on the next
 generation console market, while still supporting the PC role-playing genre,
 which has been our strength historically.  We plan to release eight major
 console titles in 2001, six on the Sony PlayStation2, one on the Microsoft
 Xbox, and one on the Nintendo Gamecube.  We will have titles such as Baldur's
 Gate: Dark Alliance, RLH, Galleon and Hunter for next generation consoles and
 Neverwinter Nights for the PC, just to name a few," said Brian Fargo,
 Interplay's chairman and chief executive officer.
     "Our net revenues increased quarter over quarter and year over year, our
 gross profit margins improved eight percent year over year, and we have
 successfully reduced our operating expenses in all areas of the company
 without sacrificing future product development and revenue growth.  These are
 measurable signs that we are headed in the right direction," noted Manuel
 Marrero, Interplay's chief operating and chief financial officer.  "This
 year's operating loss was reduced to about one-fourth of our operating loss
 last year, and our net loss was also reduced to about one-third of what it was
 last year.  We had no non-recurring or unusual charges in 2000 for
 reorganization, tax asset valuation reserves, or any other purposes.  Our
 operating expenses have stabilized, and the focus for the future will remain
 on releasing high quality titles, on a timely basis, that generate increased
 net revenue and gross profit," Marrero continued.
     "Earlier today, we announced a new financing that should reduce our
 interest expense by about $1.5 million annually, and should contribute to
 improving our bottom line in the future.  We will continue to maintain our
 current levels of asset management, and expect that our accounts receivable
 days sales outstanding should remain in the range of 75 to 85 days, and our
 inventory turns should also remain in the range of 15 to 20 times a year, both
 of which continue to reflect substantial improvements over last year," Marrero
 added.
     Fargo concluded, "We have already invested over $20 million in our product
 pipe-line, which has about 20 titles scheduled for future release.  Our
 improved market position is evidenced by our increased PC market share and
 overall market share ranking so far in 2001, according to PC Data.  We believe
 that we are well positioned for future success as the market changes begin to
 evolve in the upcoming months. "
     Net revenues by platform for the quarter were 81 percent PC, 12 percent
 console and 7 percent OEM, royalties and licensing.  On a geographic basis,
 North America accounted for 50 percent of total net revenues, international
 represented 43 percent and OEM, royalty and licensing accounted for 7 percent.
     Net revenues by platform for the year were 74 percent PC, 14 percent
 console and 12 percent OEM, royalty and licensing.  On a geographic basis,
 North America accounted for 54 percent of total net revenues, international
 represented 34 percent and OEM, royalty and licensing accounted for
 12 percent.
 
     Interplay Entertainment Corp. is a leading developer, publisher and
 distributor of interactive entertainment software for both core gamers and the
 mass market.  Interplay currently balances its development efforts by
 publishing for personal computers and current generation video game consoles.
 Interplay releases products through Interplay, Shiny Entertainment, Digital
 Mayhem, Black Isle Studios, 14 Degrees East, its distribution partner and its
 wholly owned subsidiary, Interplay OEM, Inc.  More comprehensive information
 on Interplay and its products is available through its worldwide web site at
 www.interplay.com
 
     Investor Conference Call
     Interplay will host an investor conference call today, April 16, 2001, at
 4:30 p.m. eastern time, to review the Company's financials and operations for
 the fourth-quarter and twelve-month periods.  The call will be open to all
 interested investors through the following dial-in numbers: (800) 633-8540
 (domestic) and (212) 346-7495 (international) or through a live audio Web
 broadcast via the Internet at http://webcast.themeetingson.com/webcast.jsp?
 Reservation# 18628526 For those who are not available to listen to the
 conference call, a replay will be available for 48 hours beginning at
 3:30 p.m. pacific time on April 16, 2001 by calling (800) 633-8284,
 reservation number 18628526 (domestic) or (858) 812-6440.
 
     Safe Harbor Statement under the Private Securities Litigation Reform Act
 of 1995:
     Statements contained in this release except for historical information are
 forward-looking statements that are based on current expectations and involve
 risks and uncertainties.  Without limiting the generality of the foregoing,
 words such as "may," "will," "expect," "believe," "anticipate," "intend,"
 "could," "estimate," or "continue" or the negative or other variations thereof
 or comparable terminology are intended to identify forward-looking statements.
 The risks and uncertainties inherent in such statements may cause actual
 future events or results to differ materially and adversely from those
 described in the forward-looking statements.  For example, there can be no
 assurance that the Company's current scheduled titles will ship in the
 projected time frame or that they will be as popular as the Company presently
 anticipates, that the Company will be able to achieve its projected continued
 revenues from its existing titles, or that the Company will be able to
 increase the number of console titles it releases.  Additional important
 factors that may cause a difference between projected and actual results for
 Interplay include, but are not limited to, future capital requirements, that
 equity or bank financing will be available on terms satisfactory to the
 company or at all, risks of loss of the Company's listing on the Nasdaq
 National Market, risk of delays in development and introduction of new
 products, dependence on new product introduction which achieve significant
 market acceptance and the uncertainties of consumer preferences, risks of
 product returns and markdown allowances, dependence on third party software
 developers for a significant portion of new products, risks of rapid
 technological change and platform change, intense competition, seasonality,
 risks of product defects and resulting returns, dependence upon licenses from
 third parties, risks associated with, dependence upon third party
 distribution, dependence upon key personnel and risks associated with
 international business, intellectual property disputes and other factors
 discussed in the Company's filings from time to time with the Securities and
 Exchange Commission, including but not limited to the Company's annual reports
 on Form 10-K and the Company's subsequent quarterly filings on Form 10-Q.
 Interplay disclaims any obligation to revise or update any forward-looking
 statements that may be made from time to time by it or on its behalf.
 
     Note: All trademarks and copyrights are the property of their respective
 owners.
 
 
                         INTERPLAY ENTERTAINMENT CORP.
                CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
                                  (Unaudited)
 
                                Three Months Ended      Twelve Months Ended
                                   December 31,              December 31,
                                 2000         1999         2000        1999
                             (Dollars in thousands, except per share amounts)
 
     Net revenues               $30,773      $27,323     $104,582   $101,930
     Cost of goods sold          17,712       15,714       54,061     61,103
       Gross profit              13,061       11,609       50,521     40,827
     Operating expenses
       Marketing and sales        8,864        8,058       26,482     29,524
       General and
        administrative            2,618        2,705       10,249     18,155
       Product development        5,379        5,476       22,176     20,629
       Other                         --           --                   5,323
         Total operating
          expenses               16,861       16,239       58,907     73,631
     Operating income (loss)     (3,800)      (4,630)      (8,386)   (32,804)
     Other expense:
       Interest expense, net        730          920        2,992      3,640
       Other Expense, net           242          (13)         697       (169)
     Income (loss) before
      income taxes               (4,772)      (5,537)     (12,075)   (36,275)
     Provision for income taxes      --        4,026           --      5,410
     Net income (loss)          $(4,772)     $(9,563)    $(12,075)  $(41,685)
 
     Cumulative dividend on
      participating preferred
      stock                        $303          $--         $870        $--
     Accretion of warrants
      on preferred stock            200           --          532         --
     Net loss attributable
      to common stockholders    $(5,275)     $(9,563)    $(13,477)  $(41,685)
     Net loss per common share:
       Basic                     $(0.18)      $(0.35)      $(0.45)    $(1.86)
     Weighted average number
      of common shares
      outstanding:
       Basic                 30,108,040   27,265,496   30,046,701 22,418,463
 
 
                         INTERPLAY ENTERTAINMENT CORP.
                     CONDENSED CONSOLIDATED BALANCE SHEETS
                                  (Unaudited)
 
                                     Pro-forma         Actual         Actual
                                     December 31,   December 31,  December 31,
                                         2000            2000          1999
                          ASSETS      (Note-1)
     Current Assets                             (Dollars in thousands)
       Cash                             $2,835          $2,835          $399
       Restricted cash                      --              --         2,597
       Trade receivables, net           28,136          28,136        22,209
       Inventories                       3,359           3,359         6,057
       Prepaid licenses and royalties   17,704          17,704        19,249
       Other current assets                772             772           874
         Total Current Assets           52,806          52,806        51,385
     Property and Equipment, net         5,331           5,331         4,225
     Other assets                          944             944         1,326
     TOTAL ASSETS                      $59,081         $59,081       $56,936
 
          LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
 
     Current Liabilities
       Current debt                    $13,887         $25,433       $19,630
       Accounts payable                 12,270          12,270        21,462
       Accrued expenses                 14,980          14,980        17,915
         Total Current Liabilities      41,137          52,683        59,007
     Commitments and Contingencies
         Total Stockholders' Equity
          (Deficit)                     17,944           6,398        (2,071)
     TOTAL LIABILITIES AND
      STOCKHOLDERS' EQUITY (DEFICIT)   $59,081         $59,081       $56,936
 
     Note-1:  Subsequent to December 31, 2000, the Company completed a private
 placement of Common Stock and secured a new working capital line of credit
 with a bank.  The proceeds for these transactions were used to reduce debt by
 approximately $11.5 million and to provide future working capital.  This
 pro-forma balance sheet reflects the Company's financial position as if these
 transactions had been completed as of December 31, 2000.
 
     For further information, please contact: Lisa Bucek of Interplay
 Entertainment Corp., 949-553-6655, lbucek@interplay.com; or investor
 relations, Chris Rosgen, chris@liolios.com, or Patrick Sutton,
 pat@liolios.com, both of Liolios Group, 949-574-3860, for Interplay
 Entertainment Corp.
 
 SOURCE  Interplay Entertainment Corp.