March Revenues Lower Than Expected
REDWOOD CITY, Calif., May 13 /PRNewswire/ --
The 3DO Company (Nasdaq: THDO) announced today that it is evaluating its
strategic options in light of continuing adverse economic conditions that have
reduced revenues and access to capital. Net revenues for the quarter ended
March 31, 2003 were below expectations at approximately $10.0 million. Full
results for the quarter and the fiscal year are expected to be released in
June.
"Market conditions for us appeared to take a turn for the worse when the
war with Iraq began," said Chairman and CEO Trip Hawkins. "In recent weeks
sales of our products have not picked up as we had hoped, which is preventing
us from being able to fully utilize our new credit facility."
As a result, the Company has taken measures to reduce spending, including
providing notice to a significant minority of its workforce pursuant to the
WARN Act, which requires advance notification of a reduction in force
involving at least 50 employees. The Company is considering all of its
strategic options, including raising additional capital, licensing overseas
and other publishing rights to its games, and merging with other companies.
The Company is holding a stockholders' meeting later this month to vote on
the proposed issuance of common stock and warrants to Mr. Hawkins in
connection with the cancellation of $3.0 million of debt held by him. Details
regarding this transaction are on file with the Securities and Exchange
Commission. The original intention of this proposed transaction was to
maintain compliance with Nasdaq's minimum stockholders' equity requirement.
However, there can be no assurance that this transaction will be sufficient to
achieve or to maintain Nasdaq compliance in the future.
New products from The 3DO Company will be on display this week at E3, the
industry's major annual trade show. New titles including The Four Horsemen of
the Apocalypse(TM) and Street Racing Syndicate(TM) have recently been
receiving high praise in previews from several gaming publications and will
make their public debut at E3.
About The 3DO Company
The 3DO Company, headquartered in Redwood City, Calif., develops,
publishes and distributes interactive entertainment software for personal
computers, the Internet, and advanced entertainment systems such as the
PlayStation(R)2 computer entertainment system, the Xbox(TM) video game system
from Microsoft, and the Nintendo GameCube(TM) and Game Boy(R) Advance systems.
More information about The 3DO Company and 3DO products can be found on the
Internet at http://www.3do.com.
The statements contained in this release that are not historical facts are
"forward-looking statements" that are subject to risks and uncertainties.
Actual results may vary. Factors that could cause the Company's results to
differ materially include, without limitation, the timely development and
release of the Company's products and recognition of revenues, the popularity
of the Company's brands, the discontinuance of development projects,
unanticipated expenses, the need for additional capital, potential delisting
from the Nasdaq National Market, and the consequences of competitive factors
in the marketplace. The Company has not entered into any definitive
agreements regarding potential strategic options. There can be no assurance
that the Company will be able to complete any such transaction or on
acceptable terms. Results for the quarter and fiscal year ended March 31,
2003 are subject to additional internal review and review by the Company's
independent auditors. The issuance of common stock and warrants to Mr.
Hawkins for cancellation of $3.0 million of debt requires stockholder approval
and no assurances can be made that such approval will be obtained or that the
Company will not be delisted from the Nasdaq National Market. Further
information on potential factors which could affect such forward-looking
statements and the Company's financial results are described in the Company's
filings with the Securities and Exchange Commission, including the Company's
Annual Report on Form 10-K for the fiscal year ended March 31, 2002, and the
Company's Quarterly Reports on Form 10-Q for the fiscal quarters ended
December 31, 2002, September 30, 2002, and June 30, 2002. The Company
disclaims any obligation to update any forward-looking statement to reflect
events or circumstances occurring after the date hereof.
NOTE: 3DO, Street Racing Syndicate, The Four Horsemen of the Apocalypse,
and their respective logos, are trademarks or registered trademarks of The 3DO
Company in the U.S. and other countries.
"PlayStation" and the "PS" Family logo are registered trademarks of Sony
Computer Entertainment Inc.
TM, (R), Game Boy Advance and the Nintendo GameCube logo are trademarks of
Nintendo. (C) 2001 Nintendo.
Xbox is a trademark of Microsoft Corporation in the United States and/or
other countries.
All other trademarks belong to their respective owners.
SOURCE The 3DO Company
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Related links:
http://www.3do.com
CONTACT:
Christina Hees of The 3DO Company,
+1-650-385-3000, or christina.hees@3do.com
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