UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q/A
(Mark One)
[x] Quarterly report pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934
For the quarterly period ended January 31, 2001
OR
[ ] Transition report pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934
For the transition period from __________to__________
Commission File Number 0-29230
TAKE-TWO INTERACTIVE SOFTWARE, INC.
(Exact name of registrant as specified in its charter)
DELAWARE 51-0350842
(State of incorporation or organization) (IRS Employer Identification No.)
575 Broadway, New York, NY 10012
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (212) 334-6633
Indicate by check mark whether the Registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months and (2) has been subject to such filing requirements for
the past 90 days. Yes X No__
As of March 5, 2001, there were 33,037,939 shares of the registrant's Common
Stock outstanding.
TAKE-TWO INTERACTIVE SOFTWARE, INC.
QUARTER ENDED JANUARY 31, 2001
INDEX
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements*
Consolidated Condensed Balance Sheets - As of January 31, 2001
Restated and October 31, 2000 (unaudited) 1
Consolidated Condensed Statements of Operations - For the three
months ended January 31, 2001 Restated and 2000 (unaudited) 2
Consolidated Condensed Statements of Cash Flows - For the three
months ended January 31, 2001 Restated and 2000 (unaudited) 3
Consolidated Condensed Statements of Stockholders' Equity -
For the year ended October 31, 2000 and the three
months ended January 31, 2001 Restated (unaudited) 4
Notes to Consolidated Condensed Financial Statements 5
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations 12
PART II. OTHER INFORMATION
Item 1. Legal Proceedings 19
Item 2. Changes in Securities 19
Item 4. Submission of Matters to a Vote of Security Holders 19
Item 6. Exhibits and Reports on Form 8-K 19
* This amended form 10-Q is being filed as the result of the following:
On February 12, 2002, the Company restated its financial statements for the
fiscal year ended October 31, 2000, each of the quarters of fiscal 2000 and the
three fiscal quarters of fiscal 2001. All financial data in this report reflects
this restatement. See Note 2 of Notes to Unaudited Consolidated Condensed
Financial Statements.
TAKE-TWO INTERACTIVE SOFTWARE, INC. and SUBSIDIARIES
Consolidated Condensed Balance Sheets
As of January 31, 2001 and October 31, 2000 (unaudited)
(In thousands, except share data)
--------------------------------------------------------------------------------
ASSETS January 31, 2001 October 31, 2000
Restated
----------------- -----------------
Current assets
Cash and cash equivalents $ 13,658 $ 5,245
Accounts receivable, net of provision for doubtful accounts and
sales allowances of $12,166 and $11,615 at January 31, 2001 and
October 31, 2000, respectively 119,777 115,927
Inventories, net 52,429 53,798
Prepaid royalties 26,416 24,093
Prepaid expenses and other current assets 11,920 6,551
Investments 1,990 2,926
Deferred tax asset 9,243 9,243
--------- ---------
Total current assets 235,433 217,783
Fixed assets, net 6,082 5,260
Prepaid royalties 1,609 1,303
Capitalized software development costs, net 9,937 9,613
Investments 24,403 28,487
Intangibles, net 90,724 66,562
Other assets, net 2,553 1,565
--------- ---------
Total assets $ 370,741 $ 330,573
========= =========
LIABILITIES and STOCKHOLDERS' EQUITY
Current liabilities
Accounts payable 62,720 47,972
Accrued expenses 20,305 15,099
Lines of credit, current portion 82,093 84,605
Current portion of capital lease obligation 99 89
--------- ---------
Total current liabilities 165,217 147,765
Loan payable, net of unamortized discount of $2,585 and $2,732 at
January 31, 2001 and October 31, 2000, respectively 12,415 12,268
Notes payable 651 --
Capital lease obligation, net of current portion 328 348
--------- ---------
Total liabilities $ 178,611 $ 160,381
--------- ---------
Stockholders' equity
Common stock, par value $.01 per share; 50,000,000 shares authorized;
32,968,222 and 31,172,866 shares issued and outstanding 330 312
Additional paid-in capital 172,392 157,738
Deferred compensation -- (5)
Retained earnings 33,051 24,819
Accumulated other comprehensive loss (13,643) (12,672)
--------- ---------
Total stockholders' equity 192,130 170,192
--------- ---------
Total liabilities and stockholders' equity $ 370,741 $ 330,573
========= =========
The accompanying notes are an integral part of the consolidated condensed
financials statements.
Certain amounts have been reclassified for comparative purposes
TAKE-TWO INTERACTIVE SOFTWARE, INC. and SUBSIDIARIES
Consolidated Condensed Statements of Operations
For the three months ended January 31, 2001 and 2000 (unaudited)
(In thousands, except per share data)
--------------------------------------------------------------------------------
Three months ended January 31,
2001 2000
Restated
------------------------------
Net sales $ 157,853 $ 120,247
Cost of sales 104,260 84,955
--------- ---------
Gross profit 53,593 35,292
--------- ---------
Operating expenses
Selling and marketing 12,814 15,276
General and administrative 10,511 9,295
Research and development costs 1,400 1,625
Depreciation and amortization 2,422 1,403
--------- ---------
Total operating expenses 27,147 27,599
Income from operations 26,446 7,693
Interest expense, net 2,930 1,506
Equity in loss of affiliate -- 156
--------- ---------
Total non-operating expenses 2,930 1,662
Income before income taxes and cumulative effect of change in accounting principle 23,516 6,031
Provision for income taxes 9,947 2,065
--------- ---------
Income before cumulative effect of change in accounting principle 13,569 3,966
Cumulative effect of change in accounting principle, net of taxes of $3,558 5,337 --
--------- ---------
Net income $ 8,232 $ 3,966
========= =========
Per share data:
Basic:
Weighted average common shares outstanding 32,347 23,199
========= =========
Income before cumulative effect of change in accounting principle per share $ 0.41 $ 0.17
Cumulative effect of change in accounting principle per share (0.16) --
--------- ---------
Net income - Basic $ 0.25 $ 0.17
========= =========
Diluted:
Weighted average common shares outstanding 32,959 24,478
========= =========
Income before cumulative effect of change in accounting principle per share $ 0.41 $ 0.16
Cumulative effect of change in accounting principle per share (0.16) --
--------- ---------
Net income - Diluted $ 0.25 $ 0.16
========= =========
The accompanying notes are an integral part of the consolidated condensed
financials statements.
Certain amounts have been reclassified for comparative purposes
TAKE-TWO INTERACTIVE SOFTWARE, INC. and SUBSIDIARIES
Consolidated Condensed Statements of Cash Flows
For the three months ended January 31, 2001 and 2000 (unaudited)
--------------------------------------------------------------------------------
(In thousands, except share information)
Three months ended January 31,
------------------------------
2001 2000
Restated
--------- ---------
Cash flows from operating activities:
Net income $ 8,232 $ 3,966
Adjustment to reconcile net income to net cash used in operating activities:
Depreciation and amortization 2,422 1,403
Loss on disposal of fixed assets -- 2
Equity in loss of affiliate -- 156
Provision for doubtful accounts and sales allowances 551 29
Provision for inventory obsolescence 12 10
Amortization of various expenses and discounts 263 110
Tax benefit from exercise of stock options 68 403
Changes in operating assets and liabilities, net of effects of acquisitions:
Decrease in accounts receivable 4,912 18,297
Decrease (increase) in inventories, net 5,167 (6,908)
Increase in prepaid royalties (2,629) (9,595)
Increase in prepaid expenses and other current assets (4,001) (2,817)
Increase in capitalized software development costs (325) (993)
Increase (decrease) in accounts payable 2,300 (14,398)
Increase in accrued expenses 4,360 5,259
-------- --------
Net cash provided by (used in) operating activities 21,332 (5,076)
-------- --------
Cash flows from investing activities:
Purchase of fixed assets (1,333) (890)
Other investment -- (4,000)
Acquisitions, net of cash acquired (4,300) --
Additional cash paid for prior acquisition -- (459)
-------- --------
Net cash used in investing activities (5,633) (5,349)
-------- --------
Cash flows from financing activities:
Net (repayments) borrowings under lines of credit (9,152) 18,472
Repayment on notes payable -- (89)
Proceeds from exercise of stock options and warrants 1,195 1,950
Repayment of capital lease obligation (10) (21)
-------- --------
Net cash (used in) provided by financing activities (7,967) 20,312
-------- --------
Effect of foreign exchange rates 681 (1,006)
-------- --------
Net increase in cash for the period 8,413 8,881
Cash and cash equivalents, beginning of the period 5,245 10,374
-------- --------
Cash and cash equivalents, end of the period $ 13,658 $ 19,255
======== ========
Supplemental disclosure of non-cash investing activities:
Issuance of common stock in connection with prior acquisition $ -- $ 161
======== ========
Gathering purchase option $ -- $ 872
======== ========
During the quarter ended January 31, 2000, the Company paid $458,817 in cash and
issued $161,140 in stock related to a prior period acquisition. Such
payments were capitalized and recorded as Goodwill
Supplemental information on businesses acquired:
Fair value of assets acquired
Cash $ -- $ --
Accounts receivables, net 9,310 --
Inventories, net 3,810 --
Prepaid expenses and other assets 34 --
Property and equipment, net 286 --
Intangible asset 8,105 --
Goodwill 35,078 --
Less, liabilities assumed
Line of credit (6,641) --
Accounts payable (12,447) --
Accrued expenses (1,780) --
Other current liabilities (651) --
Stock issued (13,380) --
Value of asset recorded (17,266) --
Direct transaction costs (158) --
-------- --------
Cash paid 4,300 --
Less, cash acquired -- --
-------- --------
Net cash paid $ 4,300 $ --
======== ========
The accompanying notes are an integral part of the consolidated condensed
financials statements.
Certain amounts have been reclassified for comparative purposes
TAKE-TWO INTERACTIVE SOFTWARE, INC.
Consolidated Condensed Statements of Stockholders' Equity
For the year ended October 31, 2000 and the three months
ended January 31, 2001 (unaudited)
--------------------------------------------------------------------------------
(In thousands)
Common Stock Additional
---------------------- Paid-in Deferred
Shares Amount Capital Compensation
----------------------- ----------- ------------
Balance, November 1, 1999 23,086 $ 231 $ 67,345 $ (48)
Issuance of compensatory stock options -- -- 55 --
Proceeds from exercise of stock options and warrants 1,373 13 6,908 --
Amortization of deferred compensation -- -- -- 43
Issuance of common stock in connection with acquisitions 4,222 43 55,218 --
Issuance of common stock in connection with private placements,
net of issuance costs 2,422 24 21,261 --
Issuance of warrants in connection with a debt financing -- -- 2,927 --
Issuance of common stock in lieu of repayment of debt assumed from Pixel 168 2 2,528 --
Retirement of common stock (98) (1) (1,249) --
Tax benefit in connection with the exercise of stock options -- -- 2,745 --
Foreign currency translation adjustment -- -- -- --
Net unrealized loss on investments -- -- -- --
Net income -- -- -- --
--------- --------- --------- ---------
Balance, October 31, 2000 31,173 $ 312 $ 157,738 $ (5)
Proceeds from exercise of stock options and warrants 360 4 1,191 --
Amortization of deferred compensation -- -- -- 5
Issuance of common stock in connection with acquisitions 1,436 14 13,395 --
Tax benefit in connection with the exercise of stock options -- -- 68 --
Foreign currency translation adjustment -- -- -- --
Net unrealized loss on investments -- -- -- --
Net income - Restated -- -- -- --
--------- --------- --------- ---------
Balance, January 31, 2001 - Restated 32,969 $ 330 $ 172,392 $ --
========= ========= ========= =========
Accumulated
Other
Retained Comprehensive Comprehensive
Earnings Income (Loss) Total Income (Loss)
---------- -------------- -------- --------------
Balance, November 1, 1999 $ 18,402 $ (827) $ 85,103 $ 15,512
Issuance of compensatory stock options -- -- 55
Proceeds from exercise of stock options and warrants -- -- 6,921
Amortization of deferred compensation -- -- 43
Issuance of common stock in connection with acquisitions -- -- 55,261
Issuance of common stock in connection with private placements,
net of issuance costs -- -- 21,285
Issuance of warrants in connection with a debt financing -- -- 2,927
Issuance of common stock in lieu of repayment of debt assumed from Pixel -- -- 2,530
Retirement of common stock -- -- (1,250)
Tax benefit in connection with the exercise of stock options -- -- 2,745
Foreign currency translation adjustment -- (9,014) (9,014) (9,014)
Net unrealized loss on investments -- (2,831) (2,831) (2,831)
Net income 6,417 -- 6,417 6,417
--------- --------- --------- ---------
Balance, October 31, 2000 $ 24,819 $ (12,672) $ 170,192 $ (5,428)
Proceeds from exercise of stock options and warrants -- -- 1,195
Amortization of deferred compensation -- -- 5
Issuance of common stock in connection with acquisitions -- -- 13,409
Tax benefit in connection with the exercise of stock options -- -- 68
Foreign currency translation adjustment -- 681 681 681
Net unrealized loss on investments -- (1,652) (1,652) (1,652)
Net income - Restated 8,232 -- 8,232 8,232
--------- --------- --------- ---------
Balance, January 31, 2001 - Restated $ 33,051 $ (13,643) $ 192,130 $ 7,261
========= ========= ========= =========
The accompanying notes are an integral part of the consolidated condensed
financials statements.
Certain amounts have been reclassified for comparative purposes
TAKE-TWO INTERACTIVE SOFTWARE, INC. and SUBSIDIARIES
Notes to Unaudited Consolidated Condensed Financial Statements
1. Organization
Take-Two Interactive Software, Inc. (the "Company") is a leading global
developer, publisher and distributor of interactive software games designed for
PCs and video game console platforms.
2. Restatement of Financial Statements
In November 2001, the Company engaged outside counsel to conduct an
investigation into the Company's accounting treatment of certain transactions in
fiscal 2000 and 2001. Counsel was assisted in its investigation by forensic
accountants.
As a result of the investigation, the Company restated its previously issued
consolidated financial statements for fiscal 2000 and each of the quarters in
fiscal 2000 and the first three quarters in fiscal 2001. The amounts presented
herein for the year ended October 31, 2000 and the three months ended January
31, 2000 reflect the restated financial statements which have been filed with
the SEC. The restatement of the financial statements for the three months ended
January 31, 2001 relates to the elimination of $3,633,000 of net sales made to
independent third party distributors and related cost of sales of $4,715,000 and
the related tax effect, which were improperly recognized as revenue since the
products were later returned or repurchased by the Company.
In addition, the Company reviewed its revenue recognition policy, reserve
policies and its accounting for certain other transactions. As a result of this
review, the Company restated its previously issued unaudited consolidated
condensed financial statements for the three months ended January 31, 2001 for
the following transactions and the related tax effect:
o For the three months ended January 31, 2001, the recognition of net
sales of $3,780,000 and related cost of sales of $2,236,000 for
transactions that did not qualify for revenue recognition in the fourth
quarter of fiscal 2000.
o An adjustment of $750,000 for the three months ended January 31, 2001
for the reduction of revenue related to adjustment of the purchase
price of an acquired business, and a related reduction of amortization
expense of $29,000 for the three months ended January 31, 2001 (see
Note 5). Additionally, the Company recorded a net reduction for post
acquisition amortization of $381,000 comprised of a $563,000 reduction
of amortization of intangible assets offset by an increase of $182,000
in the amortization of prepaid royalties for the three months ended
January 31, 2001 from purchase allocation adjustments made relating to
acquisitions consummated in fiscal 2000 as a result of restatements
made to the 2000 financial statements.
Additionally, the Company restated its first quarter fiscal 2001 financial
statements to record the cumulative effect of the change in accounting related
to the adoption of SAB 101 "Revenue Recognition." In fiscal 2001, the Company
implemented changes to its practices to significantly reduce shipment time near
quarter and year end. Accordingly, the adoption of SAB 101 did not have a
significant impact on previously reported interim net income for the first
quarter of 2001 (See Note 3).
The effect of the restatement for the three months ended January 31, 2001 is as
follows (certain amounts have been reclassified and are presented in thousands,
except per share data):
5
Three months ended January 31, 2001
Effect of
As Reported Restatement SAB 101 As Restated
----------- ----------- ------- -----------
Statement of Operations Data:
Net sales $ 131,226 $ (603) $ 27,230 $ 157,853
Cost of sales 88,222 (2,297) 18,335 104,260
Depreciation and amortization 3,014 (592) -- 2,422
Income from operations 15,265 2,286 8,895 26,446
Income before provision for income
taxes and cumulative effect of
change in accounting principle 12,335 2,286 8,895 23,516
Provision for income taxes 4,585 1,804 3,558 9,947
Cumulative effect of change in
accounting principle -- -- 5,337 5,337
Net income $ 7,750 $ 482 $ -- $ 8,232
Basic income per share $ 0.24 $ 0.01 $ -- $ 0.25
Diluted income per share $ 0.24 $ 0.01 $ -- $ 0.25
January 31, 2001
As Reported As Restated
----------- -----------
Balance Sheet Data:
Accounts receivable $132,165 $119,777
Inventories, net 46,730 52,429
Prepaid royalties - current 22,860 26,416
Deferred tax asset 666 9,243
Intangibles, net 114,825 90,724
Total assets 389,398 370,741
Accrued expenses and other current liabilities 23,567 20,305
Total liabilities 181,873 178,611
Retained earnings 51,115 33,051
Accumulated other comprehensive loss (16,312) (13,643)
Total liabilities and stockholders' equity 389,398 370,741
Amendment of Credit Agreement
As a result of the restatement, in February 2002, the Company retroactively
amended its covenants under the credit agreement with Bank of America, N.A.
to December 1999. Accordingly, as of January 31, 2001, the Company was in
compliance with the covenants, as amended.
All applicable amounts relating to the aforementioned restatements have been
reflected in these unaudited consolidated condensed financial statements and
notes thereto.
6
3. Significant Accounting Policies and Transactions
Basis of Presentation
The unaudited Consolidated Condensed Financial Statements of the Company have
been prepared in accordance with the instructions to Form 10-Q and Article 10 of
Regulation S-X. Accordingly, the financial statements do not include all
information and disclosures necessary for a presentation of the Company's
financial position, results of operations and cash flows in conformity with
generally accepted accounting principles. In the opinion of management, the
financial statements reflect all adjustments (consisting only of normal
recurring accruals) necessary for a fair presentation of the Company's financial
position, results of operations and cash flows. The results of operations for
any interim periods are not necessarily indicative of the results for the full
year. The financial statements should be read in conjunction with the audited
financial statements and notes thereto contained in the Company's Annual Report
on Form 10-K/A for the fiscal year ended October 31, 2000.
Risk and Uncertainties
The Company's revenues are primarily derived from software publishing and
distribution activities, which are subject to increasing competition, rapid
technological change and evolving consumer preferences, often resulting in the
frequent introduction of new products and short product lifecycles. Accordingly,
the Company's profitability and growth prospects depend upon its ability to
continually acquire, develop and market new, commercially successful software
products and obtain adequate financing, if required. If the Company fails to
continue to acquire, develop and market commercially successful software
products, its operating results and financial condition could be materially
adversely affected in the near future.
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the dates of the financial statements and
the reported amounts of revenues and expenses during the reported periods. The
most significant estimates and assumptions relate to the recoverability of
prepaid royalties, capitalized software development costs and other intangibles
and investments, valuation of inventories and the adequacy of allowances for
returns and doubtful accounts. Actual amounts could differ significantly from
these estimates.
Prepaid Royalties and Capitalized Software Development Costs
The Company's agreements with licensors and developers generally require it to
make advance royalty payments and pay royalties based on product sales. Prepaid
royalties are amortized at the contractual royalty rate as cost of sales based
on actual net product sales. The Company continually evaluates the future
realization of prepaid royalties, and charges to cost of sales any amount that
management deems unlikely to be realized at the contractual royalty rate.
Prepaid royalties are classified as current and non-current assets based upon
estimated net product sales within the next year. For the three months ended
January 31, 2001 and 2000, no prepaid royalties were written down to estimated
net realizable value. For the three months ended January 31, 2001, amortization
of prepaid royalties amounted to $6,019,000 which is included in total royalty
expense of $6,399,000. For the three months ended January 31, 2000, royalty
expense was comprised solely of amortization of prepaid royalties, which
amounted to $2,802,000.
The Company capitalizes internal software development costs subsequent to
establishing technological feasibility of a title. Amortization of such
costs is based on the greater of the proportion of current year sales to
total estimated sales commencing with the title's release or the straight
line method. The Company continually evaluates the recoverability of
capitalized costs. For the three months ended January 31, 2001, no
capitalized software costs were written off. For the three months ended
January 31, 2000, capitalized software costs were written down by $9,000
to estimated net realizable value. Amortization of capitalized software
costs amounted to $893,000 and $69,000 for the three months ended January
31, 2001 and 2000, respectively.
7
Revenue Recognition
Distribution revenue is derived from the sale of third-party software products
and hardware and is recognized when the ownership and risk of loss pass to
customers which is generally upon receipt by the customers. Distribution revenue
was $79,934,000 and $59,945,000 for the three months ended January 31, 2001 and
2000, respectively. Publishing revenue is derived from the sale of internally
developed software products or from the sale of products licensed from
third-party developers and is recognized when the ownership and risk of loss
pass to customers which is generally upon receipt by the customers. Publishing
revenue was $77,919,000 and $60,302,000 for the three months ended January 31,
2001 and 2000, respectively.
In October 1997, the American Institute of Certified Public Accountants
("AICPA") issued Statement of Position ("SOP") 97-2 "Software Revenue
Recognition". SOP 97-2 provides guidance on applying generally accepted
accounting principles in recognizing revenue on software transactions. The
Company has adopted SOP 97-2 and such adoption did not have a material impact on
the Company's financial statements. The Company recognizes revenue upon
persuasive evidence of an arrangement, the Company's fulfillment of its
obligations under any such arrangement, and determination that collection is
probable. The Company's payment arrangements with its customers are fixed at the
time of sale with 30, 60, 90 or 120 day terms. The AICPA has also issued SOP
98-9, a modification of SOP 97-2, "Software Revenue Recognition with respect to
Certain Transactions". SOP 98-9 deals with the determination of vendor specific
objective evidence of fair value in multiple element arrangements, such as
maintenance agreements sold in conjunction with software packages. The adoption
of SOP 98-9 did not have a material impact on the Company's financial
statements.
The Company's distribution arrangements with customers generally do not give
them the right to return products; however, the Company accepts product returns
for stock balancing or defective products. In addition, the Company sometimes
negotiates accommodations to customers, including price discounts, credits and
product returns, when demand for specific products fall below expectations. The
Company's publishing arrangements require the Company to accept product returns.
The Company establishes a reserve for future returns based primarily on its
return policies, markdown allowances and historical return rates, and recognizes
revenues net of product returns.
Effective November 1, 2000, the Company adopted Staff Accounting Bulletin
("SAB") No. 101, "Revenue Recognition in Financial Statements." Consistent with
the guidelines provided in SAB No. 101, the Company changed its revenue
recognition policy to recognize revenue as noted above. Prior to the adoption of
SAB 101, the Company recognized revenue upon shipment. The cumulative effect of
the application of the revenue recognition policies set forth in SAB 101 for the
period ended January 31, 2001 was approximately $5.3 million, or $0.16 per
share, net of tax benefit of approximately $3.6 million. As a result of adopting
SAB 101, net sales and cost of sales of approximately $27.2 million and $18.3
million, respectively, which were originally recognized in the year ended
October 31, 2000 were also recognized in the quarter ended January 31, 2001.
This adoption had no effect on net income for the quarter ended January 31,
2001. It is impracticable for the Company to present pro forma information for
quarters prior to fiscal 2001.
8
4. Net Income per Share
The following table provides a reconciliation of basic earnings per share to
dilutive earnings per share for the three months ended January 31, 2001 and
2000.
Per Share
Net Income Shares Amount
----------- -------- ----------
(in thousands, except per share data)
Three Months Ended January 31, 2001 -
Restated:
Basic $8,232 32,347 $ .25
Effect of dilutive securities - Stock options
and warrants
-- 612 --
------ ------ -------
Diluted $8,232 32,959 $ .25
====== ====== =======
Three Months Ended January 31, 2000:
Basic $3,966 23,199 $ .17
Effect of dilutive securities - Stock options
and warrants -- 1,279 (.01)
------ ------ -------
Diluted $3,966 24,478 $ .16
====== ====== =======
The January 31, 2001 computation for diluted number of shares excludes
unexercised stock options and warrants which are anti-dilutive.
5. Acquisitions
In connection with the sale of Toga Holdings to Gameplay.com plc ("Gameplay") in
October 2000, the Company agreed to acquire Gameplay's game software development
and publishing business Neo Software Produktions GMBH ("Neo"). The Company
obtained an independent third party valuation in support of the value assigned
to its right to acquire Neo. In January 2001, the Company completed the
acquisition of Neo and assumed net liabilities of approximately $808,000, in
addition to the prepaid purchase price of $17.3 million.
In November 2000, the Company acquired all of the outstanding capital stock of
VLM Entertainment Group, Inc. ("VLM"), a company engaged in the distribution of
third-party software products. In connection with this transaction, the Company
paid the former stockholders of VLM $2 million in cash and issued 875,000 shares
of its common stock (valued at $8.0 million) and assumed net liabilities of
approximately $6.9 million, on a preliminary basis. In addition, all of the
former stockholders of VLM may receive up to an aggregate of 100,000 shares
based on the future financial performance of VLM. In connection with this
transaction, the Company recorded intangible assets of approximately $16.2
million on a preliminary basis. The acquisitions have been accounted for as a
purchase. The unaudited Consolidated Condensed Statement of Operations includes
the operating results of each business from the date of acquisition. The
following unaudited pro forma results below assumes the acquisitions of VLM and
Neo occurred on November 1, 1999 (in thousands, except per share data),
9
Three Months Ended Three Months Ended
January 31, 2001 January 31, 2000
---------------- ----------------
Net Sales $ 162,018 $ 131,812
Net Income 7,846 3,491
Net Income per share (basic) 0.24 0.14
Net Income per share (fully diluted) 0.24 0.13
In December 2000, the Company acquired the exclusive worldwide publishing rights
to the franchise of Duke Nukem PC and video games, including the PC, console and
sequel rights to Duke Nukem Forever. In connection with the transaction, the
Company paid $2.3 million in cash and issued 557,103 shares of its common stock
and assumed liabilities of $400,000. In addition, the Company is contingently
liable to make a further payment of $6 million upon delivery of the gold master
of Duke Nukem Forever. The Company recorded an intangible asset of $8.1 million
related to this transaction on a preliminary basis. The additional $6 million
will be recorded as an additional intangible asset upon resolution of the
contingency.
6. Investments
Investments are comprised of equity securities and are classified as current and
non-current assets. Investments are accounted for under the average cost method
as "available-for-sale" in accordance with Statement of Financial Standards No.
115 "Accounting for Certain Investments in Debt and Equity Securities".
Investments are stated at fair value, with unrealized appreciation (loss)
reported as a separate component of accumulated other comprehensive income
(loss) in stockholders' equity.
As of January 31, 2001, investments consist of (in thousands):
Current Non Current
-------------- --------------
Average cost $ 2,943 $ 30,602
Unrealized losses (953) (6,199)
-------------- --------------
Fair value $ 1,990 $ 24,403
============== ==============
7. Subsequent Events
In February 2001, Take-Two Interactive Software Europe Limited ("TTE") entered
into a credit facility agreement with Lloyds TSB Bank plc ("Lloyds") under which
Lloyds agreed to make available borrowings of up to $25,000,000. Advances under
the credit facility bear interest at the rate of 1.25% per annum over the bank's
base rate, and are guaranteed by the Company. The credit facility expires in
December 2001 and replaces the credit line TTE previously had with Barclay's
Bank.
10
In February 2001, certain stockholders of the Company exchanged 739,212 shares
of the Company's Common Stock for 6,318,703 shares of Gameplay stock having an
equivalent value.
11
Item 2.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Restatement of Historical Financial Statements
In November 2001, in connection with an informal and voluntary request from the
SEC to provide documents, the Company engaged outside counsel to conduct an
investigation into the Company's accounting treatment of certain transactions in
fiscal 2000 and 2001. Counsel retained advisors to perform a forensic accounting
investigation.
As a result of the investigation, the Company restated its previously issued
consolidated financial statements for fiscal 2000 and each of the quarters in
fiscal 2000 and the first three quarters in fiscal 2001. The amounts presented
herein for the year ended October 31, 2000 and the three months ended January
31, 2000 reflect the restated financial statements which have been filed with
the SEC. The restatement of the financial statements for the three months ended
January 31, 2001 relates to the elimination of $3,633,000 of net sales made to
independent third party distributors and related cost of sales of $4,715,000 and
the related tax effect, which were improperly recognized as revenue since the
products were later returned or repurchased by the Company.
In addition, the Company reviewed its revenue recognition policy, reserve
policies and its accounting for certain other transactions. As a result of this
review, the Company restated its previously issued unaudited consolidated
condensed financial statements for the three months ended January 31, 2001 for
the following transactions and the related tax effect:
o For the three months ended January 31, 2001, the recognition of net
sales of $3,780,000 and related cost of sales of $2,236,000 for
transactions that did not qualify for revenue recognition in the fourth
quarter of fiscal 2000.
o An adjustment of $750,000 for the three months ended January 31, 2001
for the reduction of revenue related to adjustment of the purchase
price of an acquired business, and a related reduction of amortization
expense of $29,000 for the three months ended January 31, 2001. See
Note 5 of Notes to Unaudited Consolidated Condensed Financial
Statements. Additionally, the Company recorded a net reduction for post
acquisition amortization of $381,000 comprised of a $563,000 reduction
of amortization of intangible assets offset by an increase of $182,000
in the amortization of prepaid royalties for the three months ended
January 31, 2001 from purchase allocation adjustments made relating to
acquisitions consummated in fiscal 2000 as a result of restatements
made to the 2000 financial statements.
Additionally, the Company restated its first quarter fiscal 2001 financial
statements to record the cumulative effect of the change in accounting related
to the adoption of SAB 101 "Revenue Recognition." In fiscal 2001, the Company
implemented changes to its practices to significantly reduce shipment time near
quarter and year end. Accordingly, the adoption of SAB 101 did not have a
significant impact on previously reported interim net income for the first
quarter of 2001. See Notes 2 and 3 of Notes to Unaudited Consolidated Condensed
Financial Statements.
Safe Harbor Statement: The Company makes statements in this report that are
considered forward looking statements under federal securities laws. Such
forward looking statements are based on the beliefs of management as well as
assumptions made by and information currently available to them. The words
"expect," "anticipate," "believe," "may," "estimate," "intend" and similar
expressions are intended to identify such forward looking statements. Forward
looking statements involve risks, uncertainties and assumptions including, but
not limited to: risks associated with future growth and operating results; the
Company's ability to continue to successfully manage growth and integrate the
operations of acquired businesses; the availability of adequate financing to
fund periodic cash flow shortages; credit risks; seasonal factors; inventory
obsolescence; technological change; competitive factors; product returns;
failure of retailers to sell-through the Company's products; the timing of the
introduction and availability of new hardware platforms; market and industry
factors adversely affecting the carrying value of the Company's assets; and
unfavorable general economic conditions, any or all of which could have a
material adverse effect on the Company's business, operating results and
financial condition. Actual operating results may vary significantly from such
forward looking statements.
12
Overview
The Company is a leading global developer, publisher and distributor of
interactive software games. The Company's software operates on PCs and video
game consoles manufactured by Sony, Nintendo and Sega. The following table sets
forth the percentages of publishing revenues derived from sales of titles for
specific platforms during the periods indicated:
Three Months Ended January 31
----------------------------------------
Platform 2001 2000
--------- ---- ----
PC............................. 34.1% 29.1%
Sony PlayStation 2............. 40.9 --
Sony PlayStation............... 12.8 44.1
Nintendo GameBoy............... 3.2 7.1
Nintendo 64.................... -- 6.4
Sega Dreamcast................. 2.9 4.3
Accessories.................... 6.1 9.0
------------------- ---------------
100.0% 100.0%
Revenue Recognition. The Company's principal sources of revenues are derived
from publishing and distribution operations. Publishing revenues are derived
from the sale of internally developed software or software licensed from third
parties. Distribution revenues are derived from the sale of third-party software
and hardware. Publishing activities generally generate higher margins than
distribution activities, with sales of PC software resulting in higher margins
than sales of CDs or cartridges designed for video game consoles. Effective
November 1, 2000, the Company recognizes net revenue when title and risk of loss
pass to customers (generally, upon receipt of products by customers.) Prior to
that date, we recognized revenue upon shipment.
Return and Reserves. The Company's arrangements with customers for published
titles require it to accept returns for stock balancing, markdowns or defects.
The Company establishes a reserve for future returns of published titles based
primarily on its return policies and historical return rates, and recognizes
revenues net of returns. The Company's distribution arrangements with customers
generally do not give them the right to return titles or to cancel firm orders.
However, the Company sometimes accepts returns for stock balancing and
negotiates accommodations to customers, which includes price discounts, credits
and returns, when demand for specific titles fall below expectations. At January
31, 2001, the Company's reserve against accounts receivable for returns,
customer accommodations and doubtful accounts was approximately $12,166,000. If
future returns significantly exceed the Company's reserves, the Company's
operating results would be adversely affected.
13
Capitalized Costs. The Company's agreements with licensors and developers
generally require it to make advance royalty payments and pay royalties based on
product sales. Prepaid royalties are amortized at the contractual royalty rate
as cost of sales based on actual net sales. At January 31, 2001, the Company had
prepaid royalties of $28,025,000. The Company also capitalizes internal software
development costs subsequent to establishing technological feasibility of a
title. Amortization of such costs is based on the greater of the proportion of
current year sales to total estimated sales commencing with the title's release
or the straight line method. At January 31, 2001, the Company had capitalized
software development costs of $9,937,000. The Company continually evaluates the
recoverability of capitalized costs. If the Company were required to write-off
these payments or costs to a material extent in future periods, the Company's
results of operations would be adversely affected.
Results of Operations
The following table sets forth for the periods indicated the percentage of net
sales represented by certain items reflected in the Company's statement of
operations:
Three Months Ended
January 31,
---------------------------
2001 2000
---- -----
Net Sales .............................. 100.0% 100.0%
Cost of Sales .......................... 66.0 70.7
Selling and Marketing .................. 8.1 12.7
General and Administrative ............. 6.7 7.7
Research and Development Costs ......... 0.9 1.4
Depreciation and Amortization .......... 1.5 1.2
Interest Expense, net .................. 1.9 1.3
Provision for Income Taxes ............. 6.3 1.7
Net Income ............................. 5.2 3.3
Three Months Ended January 31, 2001 and 2000
Net Sales. Net sales increased by $37,606,000, or 31.3%, to $157,853,000 for the
three months ended January 31, 2001 from $120,247,000 for the three months ended
January 31, 2000. The increase in net sales was primarily attributable to the
Company's expanded distribution operations. The adoption of SAB 101 effective
November 2000 resulted in the recognition of revenue when both title and all
risks of loss pass to customers. The effect of this adoption was an increase in
net sales of $27 million in the quarter ended January 31, 2001 for revenue that
was previously recognized in the year ended October 31, 2000. Distribution
revenues increased by $19,989,000, or 33.3%, to $79,934,000 for the three months
ended January 31, 2001 from $59,945,000 for the three months ended January 31,
2000. This increase was primarily attributable to the acquisition of VLM in
November 2000 and included $6 million relating to the adoption of SAB 101. The
Company expects that its distribution operations will continue to expand largely
as a result of the anticipated introduction of next-generation hardware
platforms and the wide-scale rollout of Playstation(R) 2. For the three months
ended January 31, 2001, distribution activities accounted for approximately
50.6% of net sales.
14
Publishing revenues increased by $17,617,000, or 29.2%, to $77,919,000 for the
three months ended January 31, 2001 from $60,302,000 for the three months ended
January 31, 2000. This increase included $21 million relating to the adoption of
SAB 101 offset by approximately a $4 million decrease primarily attributable to
a decrease in European publishing activities during the quarter. For this
period, software products designed for PC platforms accounted for approximately
34.1% of the Company's publishing revenues with software products designed for
video game console platforms accounting for 56.1% of the Company's publishing
revenues. The Company expects that sales of video game console products will
continue to account for a significant portion of its publishing revenues. For
the three months ended January 31, 2001, publishing activities accounted for
approximately 49.4% of net sales.
Cost of Sales. Cost of sales increased by $19,305,000, or 22.7%, to $104,260,000
for the three months ended January 31, 2001 from $84,955,000 for the three
months ended January 31, 2000. The increase was commensurate with increased net
sales and included $18 million resulting from the adoption of SAB 101. Cost of
sales as a percentage of net sales decreased from 70.7% to 66.0% primarily due
to the increased sale of higher margin budget products. In future periods, cost
of sales may be adversely affected by manufacturing and other costs, price
competition and by changes in product and sales mix and distribution channels.
Selling and Marketing. Selling and marketing expenses decreased by $2,462,000,
or 16.1%, to $12,814,000 for the three months ended January 31, 2001 from
$15,276,000 for the three months ended January 31, 2000. Selling and marketing
expenses as a percentage of net sales decreased to 8.1% for the three months
ended January 31, 2001 from 12.7% for the three months ended January 31, 2000.
The decrease in both absolute dollars and as a percentage of net sales was
primarily attributable to higher expenses incurred in the prior comparable
quarter in connection with the Company's release of GTA2. In addition, the
decrease generally reflects the Company's continued efforts to achieve cost
efficiencies.
General and Administrative. General and administrative expenses increased by
$1,216,000, or 13.1%, to $10,511,000 for the three months ended January 31, 2001
from $9,295,000 for the three months ended January 31, 2000. General and
administrative expenses as a percentage of net sales decreased to 6.7% for the
three months ended January 31, 2001 from 7.7% for the three months ended January
31, 2000. This increase in absolute dollars was primarily attributable to
salaries, rent, insurance premiums and professional fees associated with the
Company's expanded operations.
Research and Development. Research and development costs decreased by $225,000
to $1,400,000 for the three months ended January 31, 2001 from $1,625,000 for
the three months ended January 31, 2000. Research and development costs as a
percentage of net sales remained relatively constant.
Depreciation and Amortization. Depreciation and amortization expense increased
by $1,019,000 or 72.6%, to $2,422,000 for the three months ended January 31,
2001 from $1,403,000 for the three months ended January 31, 2000. The increase
was primarily due to the amortization of intangible assets from acquisitions.
Interest Expense, net. Interest expense increased by $1,424,000 or 94.6%, to
$2,930,000 for the three months ended January 31, 2001 from $1,506,000 for the
three months ended January 31, 2000. The increase resulted from increased bank
borrowings.
15
Income Taxes. Income taxes increased by $7,882,000, to $9,947,000 for the three
months ended January 31, 2001 from $2,065,000 for the three months ended January
31, 2000. Income taxes as a percentage of net sales increased to 6.3% for the
three months ended January 31, 2001 from 1.7% for the three months ended January
31, 2000. The increase in both absolute dollars and as a percentage of net sales
resulted from increased pre-tax income and previous utilization of net operating
loss carryforwards.
Cumulative Effect of Change in Accounting Principle. In connection with the
adoption of SAB 101, the Company recognized a cumulative effect of $5.3 million,
net of taxes of $3.6 million.
As a result of the foregoing, the Company achieved net income of $8,232,000 for
the three months ended January 31, 2001, as compared to net income of $3,966,000
for the three months ended January 31, 2000.
Liquidity and Capital Resources
The Company's primary cash requirements have been and will continue to be to
fund the acquisition, development, manufacture and commercialization of its
software products. The Company has historically satisfied its working capital
requirements primarily through the cash flow from operations, issuance of debt
and equity securities and bank borrowings. At January 31, 2001, the Company had
working capital of $70,216,000 as compared to working capital of $70,018,000 at
October 31, 2000.
The Company's cash and cash equivalents increased $8,413,000, to $13,658,000 at
January 31, 2001, from $5,245,000 at October 31, 2000. The increase is primarily
attributable to $21,332,000 of cash provided by operating activities, partially
offset by $5,633,000 used in investing activities and $7,967,000 used in
financing activities.
Net cash provided by operating activities for the three months ended January 31,
2001 was $21,332,000 compared to net cash used in operating activities of
$5,076,000 for the three months ended January 31, 2000. The increase in net cash
was primarily attributable to increased net income and decreased inventories and
accounts receivable as well as an increase in accounts payable. Net cash used in
investing activities for the three months ended January 31, 2001 was $5,633,000
as compared to net cash used in investing activities of $5,349,000 for the three
months ended January 31, 2000. Net cash used in investing activities reflects
the Company's continued investment in product development and acquisition
activities. Net cash used in financing activities for the three months ended
January 31, 2001 was $7,967,000 as compared to net cash provided by financing
activities of $20,312,000 for the three months ended January 31, 2000. The
increase in net cash used in financing activities was primarily attributable to
the repayment of indebtedness.
In February 2001, the Company's European subsidiary entered into a credit
facility agreement with Lloyds TSB Bank plc ("Lloyds") under which Lloyds agreed
to make available borrowings of up to $25,000,000. The outstanding balance and
available credit under the revolving line of credit was $14,064,000 and
$134,000, respectively, as of January 31, 2001. Advances under the credit
facility bear interest at the rate of 1.25% per annum over the bank's base rate,
and are guaranteed by the Company. The credit facility expires in December 2001.
In December 1999, the Company entered into a credit agreement with a group of
lenders led by Bank of America, N.A., as agent, which currently provides for
borrowings of up to $90,000,000 (decreasing to $75,000,000 in March 2001).
Thereafter, the Company may increase the credit line to up to $85,000,000
subject to certain conditions. Interest accrues on such advances at the bank's
prime rate plus 0.5% or at LIBOR plus 2.5%. Borrowings under the line of credit
are collaterized by all of the Company's assets. Under the terms of the credit
agreement, the Company is required to comply with certain financial, affirmative
and negative covenants, including consolidated net worth, consolidated leverage
ratio and consolidated fixed charge ratio. In addition, the credit agreement
limits or prohibits the Company from declaring or paying cash dividends, merging
or consolidating with another corporation, selling assets (other than in the
ordinary course of business), creating liens or incurring additional indebtness.
In February 2002, certain financial covenants and several other covenants were
amended retroactively to December 1999. Accordingly, as of January 31, 2001, the
Company was in compliance with the covenants, as amended. The line of credit
expires on December 7, 2002. The outstanding balance under the revolving line of
credit was $68,029,000 as of January 31, 2001.
16
In July 2000, the Company entered into a subordinated loan agreement with Finova
Mezzanine Capital Inc. under which the Company borrowed $15,000,000 evidenced by
a five-year promissory note bearing interest at the rate of 12.5% per annum,
payable monthly. In connection with the loan, the Company issued to Finova
warrants to purchase 451,747 shares of common stock at an exercise price of
$11.875 per share.
The Company's accounts receivable, less an allowance at January 31, 2001 was
$119,777,000. No single customer accounted for more than 10% of the receivable
balance at January 31, 2001. Most of the Company's receivables are covered by
insurance and generally the Company has been able to collect its receivables in
the ordinary course of business. The Company does not hold any collateral to
secure payment from customers. As a result, the Company is subject to credit
risks, particularly in the event that any of the receivables represent sales to
a limited number of retailers or are concentrated in foreign markets. If the
Company is unable to collect its accounts receivable as they become due and such
accounts are not covered by insurance, the Company could be required to increase
its allowance for doubtful accounts, which could adversely affect its liquidity
and working capital position.
The Company expects to incur costs and expenses of approximately $2 million
during fiscal 2001 associated with software and hardware upgrades to its
accounting systems. In addition, the Company expects to spend approximately $1
million in connection with various leasehold improvements to its facilities.
Other than the foregoing, the Company has no material commitments for capital
expenditures.
Based on its currently proposed operating plans and assumptions, the Company
believes that projected revenues from operations and available cash resources,
including amounts available under its line of credit, will be sufficient to
satisfy its cash requirements for the reasonably foreseeable future
Fluctuations in Operating Results and Seasonality
The Company has experienced fluctuations in quarterly operating results as a
result of the timing of the introduction of new titles; variations in sales of
titles developed for particular platforms; market acceptance of the Company's
titles; development and promotional expenses relating to the introduction of new
titles, sequels or enhancements of existing titles; projected and actual changes
in platforms; the timing and success of title introductions by the Company's
competitors; product returns; changes in pricing policies by the Company and its
competitors; the accuracy of retailers' forecasts of consumer demand; the size
and timing of acquisitions; the timing of orders from major customers; and order
cancellations and delays in product shipment. Sales of the Company's titles are
also seasonal, with peak shipments typically occurring in the fourth calendar
quarter (the fourth and first fiscal quarters) as a result of increased demand
for titles during the holiday season. Accordingly, quarterly comparisons of
operating results are not necessarily indicative of future operating results.
17
International Operations
Sales in international markets, principally in the United Kingdom and other
countries in Europe, have accounted for a significant portion of the Company's
revenues. For the three months ended January 31, 2001, and 2000, sales in
international markets accounted for approximately 23.8% and 34.6%, respectively,
of the Company's revenues. The Company is subject to risks inherent in foreign
trade, including increased credit risks, tariffs and duties, fluctuations in
foreign currency exchange rates, shipping delays and international political,
regulatory and economic developments, all of which can have a significant impact
on the Company's operating results.
Quantitative and Qualitative Disclosures About Market Risk
The Company is subject to market risks in the ordinary course of its business,
primarily risks associated with interest rate and foreign currency fluctuations
and possible impairment of the carrying values of the Company's investments.
Historically, fluctuations in interest rates have not had a significant impact
on the Company's operating results. At January 31, 2001, the Company had
$82,093,000 in outstanding variable rate indebtedness. A hypothetical 1%
increase in the interest rate of the Company's variable rate debt would increase
annual interest expense by approximately $821,000 as of January 31, 2001.
The Company transacts business in foreign currencies and is exposed to risk
resulting from fluctuations in foreign currency exchange rates. Accounts
relating to foreign operations are translated into United States dollars using
prevailing exchange rates at the relevant fiscal quarter. Translation
adjustments are included as a separate component of stockholders' equity. For
the three months ended January 31, 2001, the Company's foreign currency
translation adjustment gain was $681,000. A hypothetical 10% change in
applicable currency exchange rates at January 31, 2001 would result in a
material translation adjustment. The Company purchases currency forward
contracts to a limited extent to seek to minimize the Company's exposure to
fluctuations in foreign currency exchange rates.
In addition, the Company may be exposed to risk of loss associated with
fluctuations in the value of its investments. The Company's investments are
stated at fair value, with net unrealized appreciation and loss included as a
separate component of stockholders' equity. At January 31, 2001, the Company's
investments had an aggregate fair market value of $26,393,000. The Company
recorded an unrealized loss of $4,355,000, net of taxes, that is included as a
separate component of accumulated other comprehensive income (loss) in
stockholders' equity. The Company regularly reviews the carrying values of its
investments to identify and record impairment losses when events or
circumstances indicate that such investments may be permanently impaired. As of
January 31, 2001, no such impairment has been recorded. The Company's principal
investments are in the Internet industry, which are subject to significant
fluctuations in their market value due to stock market volatility, and a
substantial portion of such investments are recorded as long-term investments.
18
PART II - OTHER INFORMATION
Item 1. Legal Proceedings.
The Company is not involved in any material legal proceedings.
Item 2. Changes in Securities
From November 2000 to January 2001, 335,500 options from the 1997 Stock Option
Plan and 382,500 non-plan options were granted at exercise prices ranging from
$8.625 to $12.375.
In November 2000, the Company issued 875,000 shares of the Company's Common
Stock in connection with the acquisition of VLM.
In December 2000, the Company issued 557,103 shares of the Company's Common
Stock in connection with the acquisition of the rights to the Duke Nukem product
franchise.
In connection with the above securities issuances, the Company relied on Section
4(2) and Regulation D promulgated under the Securities Act of 1933, as amended.
Item 4. Submission of Matters to a Vote of Security Holders
The Company held its Annual Meeting of Stockholders on November 27, 2000. At the
Annual Meeting, Ryan A. Brant, Kelly Sumner, Barry Rutcofsky, Oliver R. Grace,
Jr., Robert Flug and Don Leeds were elected as directors by a vote of 22,179,676
for and 470,166 against. In addition, the stockholders voted 21,069,489 for and
1,534,694 against, with 45,659 abstentions, to increase the number of shares of
Common Stock available under the Company's 1997 Stock Option Plan from 3,500,000
to 5,000,000.
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibit
Exhibit 27 - Financial Data Schedule (SEC use Only)
(b) Reports on Form 8-K
None
19
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange
Act of 1934, Take-Two Interactive Software, Inc. has duly caused this report to
be signed on its behalf by the undersigned thereunto duly authorized.
Take-Two Interactive Software, Inc.
By: /s/ Kelly Sumner Dated: April 16, 2002
-----------------
Kelly Sumner
Chief Executive Officer
20