Atari Q1 revenues tank

Atari today reported near-ruinous earnings for the quarter ending June 30, 2005. On sales of 24.2 million, 78 percent below those reported a year ago, the company lost slightly more than $32 million. Last year's first fiscal-year quarter saw earnings of more than $12 million.

Atari CFO Diane Baker referred to the tough comp of last year's big title for Atari, Driver 3, as driving down revenues on a percentage basis. Absent any major releases for the first quarter, the company said 89 percent of revenues came from sales of catalog titles.

In today's conference call with analysts, Baker called the revenues "somewhat disappointing."

Baker also clarified the dire situation Atari is in with its creditors. "At this time, because of our performance in the first quarter, it was necessary to seek waivers of certain financial covenants contained in our HSBC credit facility," Baker said.

In a statement, Atari said its parent company, Infogrames, would bail out the cash-strapped publisher, agreeing to "provide financial backing to support Atari's operations and cash requirements." The support from Infogrames is something Atari might need, as no games are expected to be released in the current quarter. As well, Atari expects to ship fewer games overall this fiscal year, compared to last year.

"As a result of the support of Infogrames," Atari CEO Bruno Bonnel said in a statement, "we believe Atari will have the financial flexibility necessary to meet the current demands of our marketplace and be better positioned for future growth and the worldwide exploitation of owned and licensed IPs."

The company offered no guidance for the current quarter.