GT Making Money

GT Interactive released its financial results for the third quarter and nine-month periods that ended Dec. 31, 1998.

GT's net revenues for the third quarter were US$246.8 million, an increase of 16 percent compared with the same period in 1997. Before nonrecurring items in both periods, the company's net income for the quarter was US$22.9 million (33 cents per share) compared with $16.4 million (24 cents per share) for the same period in 1997. Factor in those nonrecurring items, and GT posted a net income for the quarter of $16.8 million (24 cents per share) compared with a loss of $42.5 million (63 cents per share) in the same period last year.

GT touted strong performances of PlayStation titles Oddworld: Abe's Exoddus and Duke Nukem: Time to Kill as well as Blue's Birthday Adventure, Blue's ABC Time Activities, and Deer Hunter II for the PC, as reasons for the increase in revenues.

During the third quarter, GT incurred a $5 million charge relating to costs associated with its acquisition of Reflections Interactive Ltd., and a $1.7 million charge related to the retention bonus program associated with its acquisition of SingleTrac Entertainment last year.

For the nine-month period that ended December 31, revenues were $479.3 million compared with $437.3 million in the same period in 1997. Net income for the period was $19.9 million (29 cents per share) versus a loss of $29.5 million (43 cents per share) in the same period the year before.

You'd think GT would be happy with those results. Of course, GT is the same company that, until a week or so ago, was headed by Ron Chaimowitz, now chairman and CEO of OneZero Media. Thomas A. Heymann, the company's newly appointed chair and CEO, said of these results, "While GT's net income has improved, our operating performance this year has been unsatisfactory. I am committed to taking decisive and significant action to return GT Interactive to acceptable levels of profitability and to build a foundation for consistent and profitable growth. To that end, I will be using the next eight weeks to conduct a thorough assessment of our operations and reevaluate our new release schedule. GT's fourth fiscal quarter will be a transitional period, as I make the appropriate revisions to our long-term business plan.

"I am very confident about GT Interactive's future because of GT's many strengths and assets, especially our high-quality brands, people, and products, as well as our strong retail distribution. We are committed to improving the company's financial performance by defining a clear business model and action plan to deliver these results," he said.