THQ's 2009 fiscal year was, to put it politely, turbulent. Facing mounting losses on sinking revenues even before the global economy took a dive at the end of 2008, the publisher has enacted sweeping company-wide changes that include $220 million in cost-cutting measures at the cost of nearly a quarter of its global workforce.
Today, THQ's financial status snapped into focus, as the publisher reported that revenues for its fiscal year ended March 31, 2009, had slipped 22 percent to $830 million. Losses for the period expanded dramatically, with THQ posting a net loss of $431.1 million during its 2009 fiscal year, compared to $35.3 million in the red a year ago.
Breaking out its performance during the January-March quarter, THQ said revenues slipped 9 percent to $170.3 million, with losses totaling $96.9 million. Top sellers for the publisher during the period were WWE Legends of Wrestlemania and Warhammer 40,000: Dawn of War II. The publisher also said that Saints Row 2--developed by layoff-target Volition Inc.--has now sold 2.6 million units worldwide.
"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 THQ president and CEO Brian Farrell said in a statement. "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."
THQ also announced today that it has secured a $35 million line of credit at Bank of America--itself an institution that needs to raise $33.9 billion in capital to satisfy government regulators, The New York Times reports. As noted by THQ CFO Paul Pucino, "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."
Looking ahead to fiscal 2010, which runs April 1, 2009, through March 31, 2010, THQ expects to increase upon that cash balance by $50 million by year's end. Top releases for the publisher include Darksiders, Red Faction Guerrilla, UFC 2009 Undisputed, and WWE SmackDown vs. Raw 2010. In addition to the previously revealed mass-market titles MX vs. ATV and All Star Cheer Squad 2, THQ expects to announce three more titles of the casual-oriented ilk for release during the current fiscal year.
THQ is holding its quarterly conference call with investors this afternoon. This story will be updated with details as appropriate.
[UPDATE] Highlights from the conference call are listed below:
--THQ CEO Brian Farrell said that the Warhammer 40,000 franchise has now shipped more than 4.5 million units, while the Saints Row franchise has sold nearly 5 million units. WWE SmackDown vs. RAW 2009 also shipped more than 4.5 million units during the 2009 fiscal year.
--CFO Paul Pucino detailed a number of reasons THQ sales dipped during the fiscal year. Namely, the financial officer noted that WWE franchise sales slipped 24 percent, kid-friendly game sales fell 38 percent, and currency exchange rates were unfavorable.
--According to Farrell, THQ is not expecting Sony to cut the price of the PlayStation 3 at E3, though he does expect a price cut to occur later this year.
--Citing figures from Microsoft, Farrell said that UFC 2009 demo downloads are in the top 1 percent of all demos released through Xbox Live. Red Faction is in the top 7 percent, said Farrell.