Midway Dumps some non-core Licenses
10/17/2008 7:10:00 AM
In a release yesterday, Midway announced that they would be canceling some of its non-core game license. Specific titles were not announced, but this is a change in focus for the beleaguered Chicago based company which has struggled recently. The shift to its core products (WWE, TNA and DC comics) looks like a streamlining effort in order to get the company more focused and back on stable footing.
Midway Focuses Development on Core Game Properties, Optimizes Licensing Line-up
Termination of non-core licenses and other non-cash charges result in revised earnings guidance for third quarter
CHICAGO --(Business Wire)-- Oct 16, 2008 Midway Games Inc. (NYSE: MWY) today announced it has come to mutually beneficial terms with licensing partners resulting in the cancellation of future versions of related game properties and associated development expenditures. The resolution of these licenses accelerates non-cash charges into the third quarter ended September 30, 2008, and, combined with other non-cash charges, results in a revision of Midway’s estimates for the third quarter.
Midway now expects a third quarter net loss of $0.70 per basic and diluted share, compared to its previously adjusted estimate of a net loss of approximately $0.49 per basic and diluted share. On a non-GAAP basis, which excludes approximately $0.10 of non-cash convertible debt interest expense, stock option expense, and deferred income tax expense related to goodwill, the Company now expects a loss of approximately $0.60 per basic and diluted share, compared to its prior estimate of $0.39 per basic and diluted share.
“The resolution of these licensing arrangements on good terms for the company is a very positive step as we continue to review Midway’s involvement with underperforming projects and focus on our core properties,” said Matt Booty, interim CEO and president. “Our fall lineup and strong pipeline of games that tie in to market-leading licenses like DC Comics and TNA Wrestling underscore our strategy of aligning with consumer and entertainment properties that can drive a solid gaming experience.”