Mad Catz CEO announces 'Project MOJO' Android gaming console coming at E3

So, what with E3 just over the horizon, we're expecting a bunch of gaming news. But a new contestant in the Android gaming market? From an established gaming hardware maker? Well, apparently so, according to Mad Catz CEO Darren Richardson who announced "Project M.O.J.O." in a recent earnings call. Calling it an Android "micro console," Richardson claims it's like a supercharged smartphone, without a display, that you plug into a flatscreen TV. Richardson was also keen to stress that it's all about hardware performance, and will be open platform (rather than selling content). There are no details about specification at this stage, but M.O.J.O. is likely to be the fruit of a recent NVIDIA partnership, and will be the centerpiece of Mad Catz's own GameSmart products, which ensures a slew of peripherals and controller options. This partnership also likely means Tegra Zone compatibility, and therefore games from launch. For now we'll have to sit and wait, but it looks like Android gaming is about to step up a gear.

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Mad Catz Reports Fiscal 2013 Revenue of $122.7 Million
- Goodwill Impairment Charge of $10.5 Million -

SAN DIEGO -- (BUSINESS WIRE) -- Jun. 6, 2013 -- Mad Catz Interactive, Inc. ("Mad Catz" or "the Company") (NYSE MKT/TSX: MCZ), today announced financial results for the fiscal fourth quarter and full year ended March 31, 2013.

For the fiscal year ended March 31, 2013, the Company generated net sales of $122.7 million, an increase of 4% from net sales of $117.6 million in fiscal 2012. Gross profit for fiscal 2013 increased 10% to $34.5 million, from $31.5 million in the prior fiscal year, while gross profit margin increased to 28%, compared to 27% in fiscal 2012. Total operating expenses in fiscal 2013, inclusive of a $10.5 million non-cash goodwill impairment charge, were $44.0 million, an increase of $8.7 million over the prior year, leading to an operating loss of $9.5 million, compared to an operating loss of $3.9 million a year ago. Foreign exchange gain was $0.6 million in fiscal 2013, compared to a loss of $0.6 million in fiscal 2012. Reflecting income tax expense of $2.0 million, the Company recorded a net loss of $11.2 million, or a loss of $0.18 per share, in the fiscal year ended March 31, 2013, compared to a net loss of $1.6 million, or $0.03 per diluted share in the prior fiscal year.

Adjusted EBITDA, a non-GAAP measure (defined as earnings before interest, taxes, depreciation and amortization, goodwill impairment and change in fair value of warrant liability), was $4.6 million in fiscal 2013, compared to a loss of $1.1 million in fiscal 2012. Adjusted net income and adjusted net income per share, which exclude the impact of amortization of intangibles, stock-based compensation, change in warrant liability and goodwill impairment, were $0.0 million and $0.00, respectively, in fiscal 2013, versus $2.7 million and $0.04, respectively, in fiscal 2012. A reconciliation of Adjusted EBITDA, adjusted net income (loss) and adjusted diluted earnings (loss) per share to the Company's net income (loss) and net income loss per share is included in the financial tables accompanying this release.

For the fiscal fourth quarter ended March 31, 2013, Mad Catz reported net sales of $24.6 million, down 16% from $29.1 million in the fiscal 2012 fourth quarter. Gross profit for the March 2013 quarter declined 29% to $6.4 million, from $8.9 million in the same quarter of the prior year, while gross profit margin declined to 26%, compared to 31% in fiscal 2012. Total operating expenses in the fiscal 2013 fourth quarter, inclusive of a $10.5 million non-cash goodwill impairment charge, increased 121% to $18.8 million, resulting in an operating loss of $12.5 million, compared with operating income of $0.3 million in the comparable prior year period. Foreign exchange gain was $0.6 million in the fiscal 2013 fourth quarter, compared to a loss of $0.2 million in the fiscal 2012 fourth quarter. Reflecting income tax expense of $0.3 million, the Company reported a net loss of $12.2 million for the quarter ended March 31, 2013, or $0.19 per diluted share, versus net income of $0.8 million, or $0.01 per diluted share in the prior year fiscal fourth quarter.

Adjusted EBITDA loss was $0.7 million in the fourth quarter of fiscal 2013, compared to Adjusted EBITDA of $1.1 million in the prior year quarter. Adjusted net loss and adjusted net loss per share of $2.2 million and $0.04, respectively, in the fiscal fourth quarter of 2013 compared with adjusted net income and adjusted diluted earnings per share of $1.3 million and $0.02, respectively, in the same period a year ago.

Introduced the GameSmart technology initiative that allows control products to function through the Bluetooth Smart stack and be game and hardware independent;
Announced a new range of products featuring the Company's new GameSmart technology, including the R.A.T.M mobile gaming mouse, the F.R.E.Q.M headset, the M.O.U.S.9 wireless mouse, and the C.T.R.L.R wireless gamepad;

"Fiscal 2013 net sales of $122.7 million were the second highest in the Company's history. We also made improvements in gross margin from 27% to 28%. Operating expenses excluding goodwill impairment were reduced by 5%. We also made significant improvement to our balance sheet with inventory decreasing from $32.5 million to $23.8 million, a decrease of $8.7 million. Net debt was also reduced from $14.2 million to $6.1 million. This leaves the Company favorably positioned for the upcoming console transition.

"A key initiative that became a reality in fiscal 2013 was the launch of GameSmart, our line of interactive mobile gaming accessories including controllers, mice, keyboards and headsets. Smart devices have made considerable inroads in delivering all forms of entertainment including games, music, movies, books, and social media. Mobile gaming is a vibrant and exciting space and, while we don't see controller-based games replacing touch screen games, we expect controller-based games to enhance and enlarge the smart device gaming experience to include the living room experience.

"At next week's Electronic Entertainment Expo (E3) in Los Angeles we will unveil the keystone product in our GameSmart initiative, Project M.O.J.O., an android micro console configured to harness the maximum gaming horsepower from an android device. The Project M.O.J.O. android micro console is being designed to interact seamlessly with our GameSmart controllers, mice, keyboards and headsets. With our long history in the gaming industry, Mad Catz has the technical capability, product breadth, global distribution, and developer and publisher relationships that uniquely position our company to embark on this ambitious initiative. We believe the GameSmart initiative fits perfectly with our long-term strategy of designing innovative products for passionate gamers and our strategy of expanding into emerging markets.

"Be it our Saitek simulation products, Tritton audio products, R.A.T. gaming mice or our GameSmart line of products, we are confident these premium products hold much longer product life spans and offer the best path forward as the video game industry reaches another inflection point with both the introduction of new gaming consoles as well as the growing shift by casual gamers towards tablet and smartphone gaming. We realize and understand that more sales of these key products are needed and we are committed to increasing our sales and marketing efforts to expand awareness of these products, while keeping a sharp eye on operating expenses. We look forward to these factors benefiting our fiscal 2014 results.

"As games are increasingly crossing geographic borders brought on by the borderless on-line play afforded by the Internet, we will continue our efforts to expand our geographic footprint and position the Company as a leading provider of products that optimize the passionate video gamer's performance on a global basis. We are starting to realize the benefits of our investment in an expanded geographic footprint in the Asia Pacific region and Europe. European net sales increased 14% to $62.0 million in the fiscal 2013 full-year period, while net sales to other countries increased 65% to $9.4 million.

Mr. Richardson concluded, "So far in fiscal 2014, we're seeing a sharp reduction in our console product sales due to the upcoming console transition. This decline, however, is being partially offset by continuing strong growth in our PC & Mac product sales. We are hopeful that our GameSmart products will begin to make a positive contribution as the year unfolds, and we also expect to see added revenue from our drive into emerging markets. We are eagerly looking forward to the upcoming launch of the Xbox One and PlayStation 4 consoles and are excited about the opportunity to develop a range of innovative products to support the platforms that we expect will help drive new revenue streams and additional scope for innovation."