ATARI: HALF-YEAR 2023/2024 RESULTS
HALF-YEAR 2023/2024 RESULTS
PARIS, FRANCE (December 11, 2023 - 8.00
am CET) - Atari® — one of the world's most iconic consumer
brands and interactive entertainment producers — today announced
the Group’s consolidated results for the half year ended September
30, 2023, approved by the Board of Directors during its meeting
held on December 8, 2023. The half-year financial statements were
the subject of a limited review by its Statutory Auditors. The
half-year financial report is available on Atari’s investors
relation website https://atari-investisseurs.fr/en/.
Highlights for
the first-half ended September 30, 2023
- Acquisition of GTI catalog of retro games
- Update to listing on OTC markets in the United States
- Acquisition of M Network Atari 2600 titles and related
trademarks
- Acquisition of Nightdive Studios, Inc. (“Nightdive”)
- €30M convertible bond issue
- Strategic collaboration with Playmaji Inc.
- Termination of token project and claim provided to eligible
token holders
Post-closing
events
- Acquisition of Awesomenauts, Sword & Soldier from Ronimo
Games
- Acquisition of Digital Eclipse Entertainment Partners Co.
- Official release of Atari 2600+ on November 17, 2023
HY 2024
financial performance summary
- Revenues for the period at €6.4M (vs. €4.3M in previous year),
with Games revenue for the period at €5.3M, including Nightdive
(vs. €2.8M in previous year)
- Current operating income -€3.4M (vs. -€4.2M in previous
year)
- Operating income at -€5.0M (vs. -€5.2M in previous year)
- Net income at -€6.6M (vs. -€5.4M in previous year)
Wade Rosen,
Chairman and Chief Executive Officer commented: “We
continued to execute on our retro focused strategy in the 1st half
of this fiscal year by releasing new Atari games, announcing the
2600+, and continuing to build our licensing pipeline. The
acquisition of Nightdive Studios and Digital Eclipse Entertainment,
two world leaders in celebrating gaming history who share the same
DNA with Atari, helps to support our retro-focused growth
strategy.”
HIGHLIGHTS OF
THE PERIOD
During the first-half of the fiscal year, the
Company has continued to focus its resources on its activities
across its four lines of business as well as the execution of its
inorganic growth strategy:
-
Games - Continued investment in the development of
new games with four new game launches including Mr Run and Jump,
Quantum Recharged, Days of Doom, and Pixel Ripped 1978. During the
period, Atari also announced the launch of Rollercoaster Tycoon
Adventures: Deluxe, Haunted House and Berzerk Recharged for the
second half of the year. During the period, Nightdive Studios
launched System Shock Remake and Rise of the Triad: Ludicrous
Edition and announced planned launches of Star Wars Dark Forces and
Turok 3 for the second half of the year;
-
Hardware - Continued work on optimizing the VCS
operating system and content expansion with more than 13 games
added to the VCS store. Two Atari XP releases have been concluded
in the first-half of the year, Mr Run and Jump and Outlaw, and
pre-orders for new Atari 2600+ opened in August 2023 and delivery
started in November 2023. During the period, Atari also concluded a
strategic partnership with Playmaji, the Company behind the
Polymega® game console, to collaborate on innovative retro hardware
and software initiatives, alongside an investment in the
company;
-
Licensing - Continued efforts on building new
licensing verticals and drive new initiatives across new categories
and geographies with well respected international brands;
-
Web3 - While the general blockchain market
environment remains difficult, Atari X is pivoting from Web3 only
towards community development, cross-collaborations with other
lines of business and exclusive drops built on launch of Atari
Club. In this context, Atari also announced that it had terminated
its new token project previously announced and provided a claim of
a fixed number of third-party tokens to eligible ATRI holders which
ended September 22, 2023;
Other general corporate
developments
- Brand
and e-commerce - During the period, foundational work has
been made to allow for scalable e-commerce operations: atari.com
homepage and product pages have been reviewed, new licensees have
been on-boarded on atari.com, and specific marketing efforts have
been made to support ongoing holiday season and Atari 2600+ launch
campaign;
-
Financing - In the course of the half-year, Atari
has successfully completed the offering of senior unsecured bonds
convertible into new ordinary shares due July 31, 2026, for a
nominal amount of €30M (€16.3M subscribed by debt set-off and
€12.9M in cash);
-
Acquisitions - Several acquisitions have been
completed in the course of the first-half of the year which aimed
at i) further complementing Atari’s portfolio of intellectual
properties (e.g. GTI catalog of retro games, and M Network Atari
2600 titles), ii) increasing Atari publishing and development
capabilities in retro-gaming (Nightdive Studios) and iii)
complementing Atari’s community of fans with the acquisition
AtariAge.
BREAKDOWN OF
REVENUES BY LINES OF BUSINESS
(M€) |
H1 23/24 |
H1 22/23 |
Games |
5.3 |
2.8 |
Hardware |
0.5 |
0.2 |
Licensing |
0.4 |
0.6 |
Web3 |
0.1 |
0.7 |
Total Revenue |
6.4 |
4.3 |
Revenues - For the first-half
ending September 30, 2023, the Group recorded a revenue of €6.4M,
compared to €4.3M for the same period last year. Revenues for the
period notably include the contribution of Nightdive Studios which
was fully consolidated starting May 11, 2023. This evolution
represents an increase of +46% at current exchange rate and +50% at
constant exchange rate.
-
Games: For the period, Games revenues represent
€5.3M compared to €2.8M in the previous period, and include €2.7M
revenues from Nightdive Studios which was acquired on May 11,
20231. Excluding the contribution of Nightdive, Games revenues
represent €2.6M for the period.
-
Hardware: Hardware revenues for the period
represent €0.5M compared to €0.2M in the previous period. This does
not include revenues from Atari 2600+ pre orders, announced in
August 2023, which will be recorded in the second half of the
fiscal year.
-
Licensing: Licensing revenues for the period
represent €0.4M compared to €0.6M in the previous period, as Atari
is building a new pipeline of opportunities across new categories
and geographies.
-
Web3: Web3 revenues for the period stood at €0.1M,
compared to €0.7M in the previous period, essentially generated by
Atari’s Limited Edition Summer Camp Collection available via the
Coinbase Onchain Summer Program in August 2023. Atari is pivoting
the Atari X model from Web3 towards community management and
cross-collaborations.
CONSOLIDATED
INCOME STATEMENT SUMMARY
(M€) |
H1 23/24 |
H1 22/23 |
Revenue |
6.4 |
4.3 |
Gross margin |
4.7 |
3.3 |
Current operating income (loss) |
(3.4) |
(4.2) |
Operating income (loss) |
(5.0) |
(5.2) |
Net income (loss) for the year |
(6.6) |
(5.4) |
Gross Margin – Gross margin for
the period stands at €4.7M compared to €3.3M for the previous
period, thanks to lower cost of goods sold, notably on hardware,
and Nightdive’s deferred revenue recognition, partially compensated
by higher games royalty expenses paid by Atari and Nightdive.
Current Operating Income –
Current operating income for the period stood at -€3.4M, compared
to -€4.2M in the previous period. Research & Development
expenses increased from €2.3M to €3.3M, notably with the effect of
Nightdive integration and related amortization expenses on game
development. Marketing & Sales expenses increased from €0.3M to
€0.5M, while General & Administrative expenses decreased by
€1.0M compared to the previous period.
Operating Income – Operating
income for the period came at -€5.0M compared to -€5.2M after
taking into account €1.3M impairment on selected games and €0.3M
expenses related to third-party token granted to ATRI holders as
part of the claim concluded in September 2023.
Consolidated Net Income –
Consolidated net income showed a loss of €6.6M for the period
compared to a loss of €5.4M in the previous period. Cost of debt
includes notably €0.6M accrued interests on the convertible bonds
issued on June 1, 2023. Other financial expense include a negative
impact of €0.9M related to convertible bonds amortization2.
BALANCE
SHEET
ASSETS (M€) |
H1 23/24 |
FY23 |
Non-current assets |
42.3 |
18.1 |
Current assets |
12.3 |
7.1 |
Total assets |
54.6 |
25.2 |
In relation with the acquisitions completed
during the period, non-current assets went from €18.1M in March
2023 to €42.3M in September 2023, with:
- + €11.9M resulting from the goodwill
recognized for the acquisition of Nightdive Studios Inc. concluded
on 11 May 2023;
- + €7M in other intangible assets, with an increase in
capitalized R&D in relation with the relaunch of premium games
and the acquisition of Nightdive and IPs;
- + €5.4M in non-current financial
assets, reflecting notably the €4.6M investment concluded by Atari
in Playmaji;
Current assets increase from €7.1M to €12.3M
over the period, notably due to the €4.8M increase in cash and cash
equivalents, taking into account the proceeds of the convertible
bonds issuance completed on June 1, 2023.
EQUITY & LIABILITIES (M€) |
H1 23/24 |
FY23 |
Total equity |
11.2 |
7.8 |
Non-current liabilities |
32.5 |
9.5 |
Current liabilities |
10.8 |
7.9 |
Total equity and liabilities |
54.6 |
25.2 |
The Group’s shareholders’ equity went from €7.8M
to €11.2M mainly resulting from the issuance of 39,662,142 total
new shares3. Share premium increases from €32.7M to €36.2M,
accounting for the convertible bond derivative value for an amount
of €3.6M, as well as the €0.9M gain on the conversion of Antstream
convertible note.
Non-current Liabilities increased from €9.5M to
€32.5M over the period, due to the accounting of the convertible
bond debt component for €26.8M as well as a €3.9M liability
estimated for the non-current part of the earn-out payable in cash
to Nightdive.
Current Liabilities increase to €10.8M over the
period and comprise notably €2.3M liability estimated for the
earn-out due to Nightdive for the first year after closing of the
acquisition, around €2M deferred revenues from ATRI Tokens, and €1M
revenues from Atari 2600+ pre-orders that will be recognized upon
delivery, in the course of the second half of the year4.
(M€) |
H1 23/24 |
FY23 |
Cash and cash equivalents |
6.5 |
1.7 |
Non-current financial liabilities |
(26.9) |
(7.7) |
Current financial liabilities |
(0.6) |
(0.2) |
Net debt |
(21.0) |
(6.2) |
As of September 30, 2023, net financial debt
stood at €21M, including €6.5M of cash and €27.6M of financial
debt, compared to net debt position of €6.2M in previous
period.
OUTLOOK
In the second half of this fiscal year, Atari
intends to continue to focus on executing its strategy across all
four lines of business, as well as on the integration of recently
acquired Nightdive Studios and Digital Eclipse and to expand its
internal development capabilities and to support Atari’s
retro-focused strategy.
-
Games - Continue launch of new games by Atari (Neo
Sprint, Roller Coaster Tycoon Adventure Deluxe, Haunted House,
Berzerk Recharged) and Nightdive (System Shock Remake on console,
Star Wars Dark Forces, Turok 3), as well as the integration of
Digital Eclipse. Additionally, new digital partnership
opportunities with leading platforms will be prioritized;
-
Hardware - Focus on the execution of Atari 2600+
launch and commercialization campaign, continued release for Atari
XP program, integration of AtariAge and implementation of strategic
partnership with Polymega;
-
Licensing - Continued development of licensing
opportunities across multiple geographies and verticals;
-
Web3 - Continued development of Atari’s Web3
ecosystem and Atari X community with the Atari Club, including
partnerships and collaborations with leading Web3 partners.
Given the uncertain macro-environment for video
games and Web3, the Group considers that the implementation of its
new growth strategy may require additional funding resources. Given
its uncertain cash flow horizon in a context of transformation, the
Company could in due course (i) enter into new tranches of
shareholder loans with Irata on market terms and conditions,
enabling it to meet certain short-term needs and/or (ii) raise new
financing, under terms and conditions and within a timeframe to be
determined (including, if necessary, by way of a public offering).
The Company currently benefits from the continued support of its
principal shareholder Irata LLC until the shareholders meeting
approving the financial statements as of March 31, 2024.
About
ATARI
Atari is an
interactive entertainment company and an iconic gaming industry
brand that transcends generations and audiences. The company is
globally recognized for its multi-platform, interactive
entertainment and licensed products. Atari owns and/or manages a
portfolio of more than 200 unique games and franchises, including
world-renowned brands like Asteroids®, Centipede®, Missile
Command®, Pong®, and RollerCoaster Tycoon®. Atari has offices in
New York and Paris. Visit us online at www.Atari.com.
Atari shares are
listed in France on Euronext Growth Paris (ISIN Code FR0010478248,
Ticker ALATA) and OTC Pink Current (Ticker PONGF).
©2023 Atari
Interactive, Inc. Atari wordmark and logo are trademarks owned by
Atari Interactive, Inc.
Contacts
Atari - Investor RelationsTel + 33 1 83 64 61 57 -
investisseur@atari-sa.com | www.atari.com/news/
Calyptus - Marie CalleuxTel + 33 1 53 65 68 68 –
atari@calyptus.net
Listing Sponsor - Euroland CorporateTel +33 1 44 70 20 84 -
Julia Bridger - jbridger@elcorp.com
DISCLAIMERThis press release
contains certain non-factual elements, including but not restricted
to certain statements concerning its future results and other
future events. These statements are based on the current vision and
assumptions of Atari’s leadership team. They include various known
and unknown uncertainties and risks that could result in material
differences in relation to the expected results, profitability and
events. In addition, Atari, its shareholders and its respective
affiliates, directors, executives, advisors and employees have not
checked the accuracy of and make no representations or warranties
concerning the statistical or forward-looking information contained
in this press release that is taken from or derived from
third-party sources or industry publications. If applicable, these
statistical data and forward-looking information are used in this
press release exclusively for information.
1 Nightdive Studios revenues for the period also
include recognition in revenues of €1.4M received by Nightdive from
crowdfunding campaigns for System Shock game development recognized
in deferred revenues in prior periods.2 As per IFRS 9 Guidelines,
amortisation of the option value component, interests and issuance
costs3 Issued in context of Nightdive Studios Inc. acquisition.
4 Atari 2600+ pre-orders started on September
13, 2023 and was released on November 17, 2023.
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