THQ Yearly Losses Explode to $431 Million

THQ announced today their results for the fiscal year ending March 31, 2009. The company saw sales of $830 million for the twelve-month period compared with sales of $1.03 billion from one year ago. The publisher suffered a net loss of $431 million (negative $6.45 per share) for fiscal 2009, compared to a loss of $35.3 million (negative $0.53 per share) for the year previous.

"In light of a challenging fiscal 2009, we have substantially completed a significant realignment of our business to position THQ for profitability and positive cash flow in fiscal 2010," said Brian Farrell, THQ president and CEO. "We have taken decisive actions to achieve our cost saving objectives, eliminating $220 million in cash expenditures while at the same time implementing a focused product strategy. We are investing in the brands and products with the highest potential to drive THQ's long-term profitable growth."

For fiscal Q4 2009, the company saw sales of $170 million compared with $187 million for the same period last year. WWE Legends of Wrestlemania and Warhammer 40,000 Dawn of War II were the company's largest releases. During the fourth quarter, THQ saw a loss of $96.9 million (negative $1.44 per share), nearly three times the $34.5 million loss (negative $0.52 per share) recorded during Q4 2008.

The publisher noted that it has improved the quality of its various titles and was particularly pleased with the results of Saints Row 2, which has shipped over 2.8 million units so far. "We delivered on our product quality promise with Saints Row 2, WWE SmackDown vs. Raw 2009, de Blob, Warhammer 40,000 Dawn of War II and other fiscal 2009 titles," added Farrell. "Our upcoming product pipeline continues to emphasize our commitment to delivering high quality entertainment for gamers. We look forward to the upcoming launch of our first games based on the popular Ultimate Fighting Championship, and the exciting new version of our Red Faction franchise."

THQ went through what it called a "business realignment," reducing planned spending by $220 million this year, including layoffs of approximately 600 people, or a quarter of its workforce. The company expects "positive cash flow generation" for fiscal 2010.

Additionally, THQ signed a commitment letter for a $35 million secured credit facility with Bank of America. "In today's economic environment, we are pursuing this credit facility as a prudent backup to our $141 million cash and short-term investment balance at March 31, 2009," said Paul Pucino, THQ executive vice president and CFO.