Atari running out of quarters?
Publisher expresses "substantial doubt" about its own future in belated earnings filing; revenues shrink to $10M as losses rise to $12M.
The Atari name has been tied to periods of tremendous success and financial failure. It is currently weathering a rocky couple of years that has seen the Infogrames subsidiary cease all internal development of games, sell off valuable studios and properties, institute wide-ranging layoffs, repeatedly flirt with delisting from the Nasdaq stock exchange, fight to retain the lucrative Dragon Ball Z license, and unexpectedly overhaul its board of directors, much to the chagrin of some investors.
Now the publisher isn't sure if this is a slide from which it can recover. Last month Atari announced a change to an existing line of credit. However, in its just-filed report for the first quarter of its fiscal year 2008, Atari said the maximum amount it can borrow through the agreement won't even provide the funding it needs to make it through the current holiday season. Atari management is looking for additional financing, though by the company's own account, there's no guarantee it will materialize.
"The uncertainty caused by these above conditions raises substantial doubt about our ability to continue as a going concern," Atari said in its filing. The publisher is considering another round of layoffs and suspended development on multiple games to save some money.
"The above actions may or may not prove to be consistent with our long-term strategic objectives, which have been shifted in the last fiscal year, as we have discontinued our internal development activities and increased our focus on online and casual gaming, among other things," the filing reads. "We cannot guarantee the completion of these actions or that such actions will generate sufficient resources to fully address the uncertainties of our financial position."
The filing was actually the publisher's belated quarterly report for the three months ended June 30, 2007. For the quarter, Atari brought in $10.42 million in revenues, down from $19.47 million for the same period the year before. It also saw its net losses spike to $11.94 million from the prior year's $7.30 million shortfall. At the end of the quarter, the company's total assets measured $34.99 million.
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