-- Company Announces New Strategic Plan to Improve Profitability
-- Q2 GAAP Results Include $80.5 Million ($1.21 per share)
Non-Cash Charge to Record Valuation Allowance and Related Tax
Effects for Deferred Tax Assets
AGOURA HILLS, Calif.--(BUSINESS WIRE)--Nov. 5, 2008--THQ Inc.
(NASDAQ: THQI) today announced financial results for the fiscal second
quarter ended September 30, 2008, reduced its financial outlook for
the fiscal year ending March 31, 2009, and announced a significant
business realignment.
Second Quarter Results
For the three months ended September 30, 2008, THQ reported net
sales of $164.8 million, compared with $229.3 million in the prior
year. On a non-GAAP basis, the company reported fiscal 2009 second
quarter net sales of $151.6 million. Fiscal 2009 second quarter sales
reflect a lighter new release schedule than the prior-year period, and
included the international roll-out of games based on Disney/Pixar's
WALL-E and initial global shipments of new original Wii(TM) title de
Blob(TM).
For the three months ended September 30, 2008, the company
reported a net loss of $115.3 million, or $1.73 per share, which
included a non-cash charge of $1.21 per share related to a valuation
allowance and the related tax effects for its deferred tax assets. In
the same period a year ago, the company reported a net loss of $7.0
million, or $0.11 per share. On a non-GAAP basis, the company reported
a fiscal 2009 second quarter net loss of $30.4 million, or $0.46 per
share. This was below the company's previous guidance of a loss of
$0.35 to $0.39 per share, primarily due to lower-than-anticipated
international sales of WALL-E and higher-than-expected sales returns
and allowances. In the same quarter a year ago, the company reported a
non-GAAP net loss of $2.2 million, or $0.03 per share.
The company's income tax expense for the quarter included a
non-cash charge of $80.5 million, or $1.21 per share, on a GAAP basis,
related to a valuation allowance and the related tax effects for its
deferred tax assets, in accordance with Statement of Financial
Accounting Standards (SFAS) No. 109. Although this non-cash valuation
allowance reduces the value of the net deferred tax assets on the
balance sheet, the company expects to be able to utilize these assets
to reduce tax expense in future profitable periods.
A reconciliation of non-GAAP to GAAP results is provided in the
accompanying financial tables.
Fiscal 2009 Second Quarter Highlights and Recent Developments
-- The company continued to build the Saints Row(R) franchise,
shipping more than two million units of Saints Row(R) 2
globally in its first two weeks and achieving a Metacritic
rating above 80
-- THQ established a new, internally developed Wii franchise with
de Blob, which achieved a Metacritic rating above 80
-- The company strengthened its portfolio of online games and
enhanced its online business with the following announcements:
-- A new agreement to launch WWE(R) Online (working title) in
Asia in 2010
-- The formation of a joint venture with ICE Entertainment
("ICE"), an operator of online games located in Shanghai,
China, to launch Dragonica, a free-to-play, micro-
transaction-based massively multiplayer online ("MMO") casual
game scheduled for release in North America in 2009
-- The opening of a new office in Shanghai, China, from which
THQ will pursue new development opportunities and expand
publishing partnerships in the growing Chinese market
Strategic Plan and Business Realignment
The company has prepared a new strategic plan, which will be
discussed on its conference call today. As part of the new plan, the
company today announced that it is undertaking a significant business
realignment to position THQ for future profitability and growth. As
part of this realignment, THQ plans to focus on fewer, higher quality
titles, and to align its organization and cost structure accordingly.
The company is in the process of implementing its plan with the
cancellation of several titles that were in development but had not
been publicly announced, the closure of five studios and a reduction
in product development personnel of approximately 250 people, or 17
percent of its studio staff, and the streamlining of its corporate
organization to support the new product strategy.
The company has reduced its fiscal 2010 forecasted annual product
development spending by approximately $100 million, a reduction of
about $30 million below its estimated product development spending in
fiscal 2009. The company will further reduce costs and streamline
operations, and expects to reduce selling, marketing and general and
administrative expenses on an annual basis by approximately $20
million. The company expects to incur significant charges as part of
its business realignment, which will be excluded from the company's
non-GAAP results. Most of the charges will be recognized in the
remainder of fiscal 2009.
"We have made substantial progress in improving product quality
and innovation, as evidenced by recent shipments of several
well-reviewed games including de Blob and Saints Row 2," said Brian
Farrell, THQ president and CEO. "We are aligning our business to be
more competitive in key consumer segments and address the current
business environment. We expect the combination of a much more focused
and competitive product line with a more efficient cost structure to
put THQ back on the path to growth and profitability in fiscal year
2010."
Fiscal 2009 Guidance
THQ issued initial guidance for the fiscal third quarter ending
December 31, 2008, and updated its guidance for the fiscal year ending
March 31, 2009. The primary drivers of the updated fiscal 2009
guidance are:
-- The company's decision to release original titles Red
Faction(R): Guerrilla(TM) and Darksiders(TM): Wrath of War(TM)
in the fiscal year ending March 31, 2010, instead of the
previously scheduled fourth quarter of fiscal 2009 accounted
for approximately $125 million in lower forecasted net sales
-- The significant appreciation of the US dollar accounted for
approximately $80 million in lower forecasted net sales
-- The company's expectations for a more cautious retail
environment and continued softness in sales of kids games
accounted for approximately $70 million in lower forecasted
net sales
As a result of these factors, THQ's new non-GAAP guidance is as
follows:
-- For the fiscal year ending March 31, 2009, THQ expects net
sales in the range of $875 million to $900 million. The
company expects earnings to be approximately breakeven in the
second half of the fiscal year.
-- For the fiscal third quarter ending December 31, 2008, THQ
expects to report net sales in the range of $400 million to
$420 million. The company expects to report net income per
diluted share in the range of $0.05 to $0.15.
-- The company also expects to record severance and other
expenses related to the business realignment announced today
but has not yet quantified these amounts, which will be
excluded from non-GAAP results.
Non-GAAP Financial Measures
In addition to results determined in accordance with GAAP, the
company discloses certain non-GAAP financial measures that exclude the
following: stock-based compensation expense, the impact of deferred
revenue and related costs, business realignment expense, the
other-than-temporary write-down on investments, the non-cash valuation
allowance for deferred tax assets and the related income tax effects
for each of these items. The non-GAAP financial measures included in
the earnings release have been reconciled to the comparable GAAP
results and should be considered in addition to results prepared in
accordance with GAAP, but should not be considered a substitute for,
or superior to, GAAP results. The company believes that these non-GAAP
financial measures, when taken together with the corresponding GAAP
financial measures, provide meaningful supplemental information to
investors regarding the company's performance by excluding certain
items that may not be indicative of the company's operating results.
These non-GAAP financial measures also facilitate comparisons of the
company's performance to prior periods.
Stock-Based Compensation. When evaluating the performance of its
business, THQ does not consider stock-based compensation charges.
Likewise, the company excludes stock-based compensation expense from
its short and long-term operating plans. In contrast, THQ's management
team is held accountable for cash-based compensation and such amounts
are included in the company's operating plans. In addition, the
stock-based compensation charges are subject to significant
fluctuation outside the control of management due to the variables
used to estimate the fair value of a share-based payment, such as,
THQ's stock price, interest rates and the volatility of the company's
stock price. Further, when considering the impact of equity award
grants, THQ places a greater emphasis on overall shareholder dilution
rather than the accounting charges associated with such grants.
Deferred Revenue/Costs. The company recognizes revenue and related
costs from the sale of certain titles with significant online
functionality over the estimated online service period. Although the
company will defer the recognition of a significant portion of its net
revenue and costs with respect to these titles, there will be no
adverse impact to its operating cash flow. Internally, THQ excludes
the impact of deferred net revenue and costs related to packaged games
in its non-GAAP financial measures when evaluating the company's
operating performance, when planning, forecasting and analyzing future
periods, and when assessing the performance of its management team.
Business Realignment Expense and Other-Than-Temporary Write-Down
on Investments. From time to time, the company expects to incur
certain expenses that are not part of normal ongoing operations. The
company believes that excluding the impact of these expenses from its
operating results is important to facilitate comparisons to prior
periods.
Non-Cash Valuation Allowance for Deferred Tax Assets. In
accordance with FAS No. 109, "Accounting for Income Taxes" (FAS 109),
the company evaluates its deferred tax assets, including net operating
losses and tax credits, to determine if a valuation allowance is
required. THQ has had three years of cumulative US tax losses.
Therefore, during the second quarter of fiscal 2009, the company
recorded a valuation allowance against its deferred tax assets.
Internally, THQ excludes the impact of the valuation allowance for
deferred tax assets in its non-GAAP financial measures when evaluating
the company's operating performance, when planning, forecasting and
analyzing future periods, and when assessing the performance of its
management team.
In the financial tables below, THQ has provided a reconciliation
of the most comparable GAAP financial measure to each of the non-GAAP
financial measures used in this press release.
Investor Conference Call
THQ will host a conference call to discuss fiscal second quarter
results today at 2:00 p.m. Pacific/5:00 p.m. Eastern. Please dial
877.356.8075 or 706.902.0203, conference ID 69135276 to listen to the
call or visit the THQ Inc. Investor Relations Home page at
http://investor.thq.com. The online archive of the broadcast will be
available approximately two hours after the live call ends. In
addition, a telephonic replay of the conference call will be provided
approximately two hours after the live call ends through November 7,
2008, by dialing 800.642.1687 or 706.645.9291, conference ID 69135276.
About THQ
THQ Inc. (NASDAQ: THQI) is a leading worldwide developer and
publisher of interactive entertainment software. Headquartered in Los
Angeles County, California, THQ sells product through its global
network of offices located throughout North America, Europe and Asia
Pacific. More information about THQ and its products may be found at
www.thq.com and www.thqwireless.com. THQ, Darksiders: Wrath of War, de
Blob, Red Faction: Guerrilla, Saints Row 2 and their respective logos
are trademarks and/or registered trademarks of THQ Inc.
All other trademarks are trademarks or registered trademarks of
their respective owners.
This press release contains statements that are forward-looking
statements within the meaning of the Private Securities Litigation
Reform Act of 1995. Such statements include, but are not limited to,
the company's expectations for revenue and earnings per share for the
quarter ending December 31, 2008, and the fiscal year ending March 31,
2009, statements about the expected impact of the business realignment
on our future operations and for the company's product releases and
financial performance in future periods. These forward-looking
statements are based on current expectations, estimates and
projections about the business of THQ Inc. and its subsidiaries
(collectively referred to as "THQ") and are based upon management's
beliefs and certain assumptions made by management. Such
forward-looking statements are subject to risks and uncertainties that
could cause actual results to differ materially from those expressed
or implied by such forward-looking statements, including, but not
limited to, economic, competitive and technological factors affecting
the operations, markets, products, services and pricing of THQ. Unless
otherwise required by law, THQ disclaims any obligation to update its
view on any such risks or uncertainties or to revise or publicly
release the results of any revision to these forward-looking
statements. Readers should carefully review the risk factors and the
information that could materially affect THQ's financial results,
described in other documents that THQ files from time to time with the
Securities and Exchange Commission, including its Quarterly Reports on
Form 10-Q and its Annual Report on Form 10-K for the fiscal period
ended March 31, 2008, and particularly the discussion of risk factors
that may affect results of operations set forth therein. Readers are
cautioned not to place undue reliance on these forward-looking
statements, which speak only as of the date of this press release.
THQ Inc. and Subsidiaries
Unaudited Consolidated Statements of Operations
(In thousands, except per share data)
Three Months Ended Six Months Ended
September 30, September 30,
------------------ ------------------
2008 2007 2008 2007
--------- -------- --------- --------
Net sales $ 164,816 $229,349 $ 302,394 $333,834
Costs and expenses:
Cost of sales - product
costs 76,038 87,449 136,046 131,164
Cost of sales - software
amortization and
royalties 39,512 38,311 66,512 50,909
Cost of sales - license
amortization and
royalties 20,007 22,159 32,931 35,830
Cost of sales - venture
partner expense 899 1,137 2,354 2,034
Product development 23,231 28,561 56,780 53,193
Selling and marketing 43,124 47,193 72,175 69,996
General and administrative 16,971 17,638 36,574 36,741
--------- -------- --------- --------
Total costs and
expenses 219,782 242,448 403,372 379,867
--------- -------- --------- --------
Loss from continuing
operations before interest
and other income, net,
income taxes and minority
interest (54,966) (13,099) (100,978) (46,033)
Interest and other income,
net (2,438) 2,569 56 9,925
--------- -------- --------- --------
Loss from continuing
operations before income
taxes and minority interest (57,404) (10,530) (100,922) (36,108)
Income taxes (a) 57,892 (3,491) 43,640 (19,795)
--------- -------- --------- --------
Loss from continuing
operations before minority
interest (115,296) (7,039) (144,562) (16,313)
Minority Interest 36 -- 36 --
--------- -------- --------- --------
Loss from continuing
operations (115,260) (7,039) (144,526) (16,313)
Gain on sale of discontinued
operations, net of tax -- -- 2,042 --
--------- -------- --------- --------
Net loss $(115,260)$ (7,039) $(142,484)$(16,313)
========= ======== ========= ========
Loss per share - basic:
Continuing operations $ (1.73)$ (0.11) $ (2.17)$ (0.24)
Discontinued operations -- -- 0.03 --
--------- -------- --------- --------
Loss per share - basic $ (1.73)$ (0.11) $ (2.14)$ (0.24)
========= ======== ========= ========
Loss per share - diluted:
Continuing operations $ (1.73)$ (0.11) $ (2.17)$ (0.24)
Discontinued operations -- -- 0.03 --
--------- -------- --------- --------
Loss per share - diluted $ (1.73)$ (0.11) $ (2.14)$ (0.24)
========= ======== ========= ========
Shares used in per share
calculation - basic 66,757 66,462 66,655 66,695
========= ======== ========= ========
Shares used in per share
calculation - diluted 66,757 66,462 66,655 66,695
========= ======== ========= ========
(a) Income tax expense for the three and six month periods ended
September 30, 2008 includes the deferred tax asset valuation
allowance and related tax impact of $80,520 recorded in
accordance with FAS No. 109, "Accounting for Income Taxes" (FAS
109).
THQ Inc. and Subsidiaries
Reconciliation of GAAP Net Income (Loss) to Non-GAAP Net Income (Loss)
(a)
(In thousands, except per share data)
Three Months Ended Six Months Ended
September 30, September 30,
------------------- -------------------
2008 2007 2008 2007
--------- -------- --------- --------
Net sales $ 164,816 $229,349 $ 302,394 $333,834
Changes in deferred net
revenue (b) (13,192) -- (29,696) --
--------- -------- --------- --------
Non-GAAP net sales $ 151,624 $229,349 $ 272,698 $333,834
========= ======== ========= ========
Three Months Ended Six Months Ended
September 30, September 30,
------------------- -------------------
2008 2007 2008 2007
--------- -------- --------- --------
Loss from continuing
operations $(115,260) $ (7,039) $(144,526) $(16,313)
Non-GAAP adjustments:
Changes in deferred net
revenue (b) (13,192) -- (29,696) --
Change in deferred cost
of sales:
Change in deferred
product costs 3,366 -- 7,268 --
Change in deferred
software amortization
and royalties 6,067 -- 12,762 --
--------- -------- --------- --------
Total change in deferred
cost of sales (b) 9,433 -- 20,030 --
Business realignment
expenses 669 -- 4,196 --
Other than temporary
impairment on
investments 4,561 -- 4,561 --
Stock-based compensation
and related costs:
Cost of sales -
software amortization
and royalties 1,152 1,212 1,728 2,978
Product development 724 1,135 1,872 2,172
Selling and marketing 866 795 1,681 1,510
General and
administrative 1,792 3,822 3,575 6,331
--------- -------- --------- --------
Total stock-based
compensation and related
costs (c) 4,534 6,964 8,856 12,991
Deferred tax asset
valuation allowance and
related tax impact (d) 80,520 -- 80,520 --
Income tax adjustments
(e) (1,705) (2,119) (1,823) (5,040)
--------- -------- --------- --------
Total non-GAAP adjustments 84,820 4,845 86,644 7,951
--------- -------- --------- --------
Non-GAAP loss from
continuing operations (30,440) (2,194) (57,882) (8,362)
Gain on sale of discontinued
operations, net of tax -- -- 2,042 --
--------- -------- --------- --------
Non-GAAP net loss $ (30,440) $ (2,194) $ (55,840) $ (8,362)
========= ======== ========= ========
Non-GAAP loss per share -
diluted:
Non-GAAP continuing
operations $ (0.46) $ (0.03) $ (0.87) $ (0.13)
Discontinued operations -- -- 0.03 --
--------- -------- --------- --------
Non-GAAP loss per share -
diluted $ (0.46) $ (0.03) $ (0.84) $ (0.13)
========= ======== ========= ========
Notes:
(a) See explanation above regarding the Company's practice on
reporting non-GAAP financial measures.
(b) Prior to the third quarter of fiscal 2008, the Company did not
defer net revenue or the related cost of sales.
(c) Stock-based compensation expense recorded under FAS 123(R) in
fiscal 2009 and fiscal 2008.
(d) Deferred tax asset valuation allowance and related tax impact
recorded in accordance with FAS 109.
(e) Income tax associated with other non-GAAP adjustments.
THQ Inc. and Subsidiaries
Unaudited Consolidated Balance Sheets
(In thousands)
September 30, March 31,
2008 2008
------------- ----------
ASSETS
Cash, cash equivalents and short-term
investments $162,627 $ 317,504
Accounts receivable, net of allowances 63,303 112,843
Inventory 63,811 38,240
Licenses 42,651 47,182
Software development 203,990 155,821
Deferred income taxes 7,503 --
Prepaid expenses and other current
assets 18,554 24,487
------------- ----------
Total current assets 562,439 696,077
Property and equipment, net 45,711 50,465
Licenses, net of current portion 75,558 39,597
Software development, net of current
portion 70,942 25,369
Income taxes receivable, net of current
portion 8,381 16,116
Deferred income taxes -- 61,710
Goodwill 122,110 122,385
Long-term marketable securities 37,760 52,599
Other long-term assets, net 18,086 20,002
------------- ----------
TOTAL ASSETS $940,987 $1,084,320
============= ==========
LIABILITIES, MINORITY INTEREST AND
STOCKHOLDERS' EQUITY
Accounts payable $ 79,772 $ 61,700
Accrued and other current liabilities 203,306 202,102
Income taxes payable 12,020 6,504
Deferred income taxes -- 29,266
------------- ----------
Total current liabilities 295,098 299,572
Other long-term liabilities 38,941 44,179
------------- ----------
Total liabilities 334,039 343,751
Minority Interest 3,464 --
Total stockholders' equity 603,484 740,569
------------- ----------
TOTAL LIABILITIES, MINORITY INTEREST AND
STOCKHOLDERS' EQUITY $940,987 $1,084,320
============= ==========
THQ Inc. and Subsidiaries
Unaudited Supplemental Financial Information
Three Months Ended September 30, 2008
-------------------------------------
GAAP Non-GAAP(a)
--------------------- ---------------
Platform Revenue Mix
Consoles
Microsoft Xbox 360 $ 19,978 12.1% $ 10,016 6.6%
Microsoft Xbox -- -- -- --
Nintendo Wii 30,504 18.5 30,504 20.1
Nintendo GameCube 62 -- 62 0.1
Sony PlayStation 3 11,622 7.1 11,622 7.7
Sony PlayStation 2 13,836 8.4 13,836 9.1
-------------- ------ -------- ------
76,002 46.1 66,040 43.6
-------------- ------ -------- ------
Handheld
Nintendo Dual Screen 48,585 29.5 48,585 32.0
Nintendo Game Boy Advance 1,511 0.9 1,511 1.0
Sony PlayStation Portable 11,233 6.8 11,233 7.4
Wireless 6,231 3.8 6,231 4.1
-------------- ------ -------- ------
67,560 41.0 67,560 44.5
-------------- ------ -------- ------
PC 21,254 12.9 18,024 11.9
Other -- -- -- --
-------------- ------ -------- ------
Total Net Sales $164,816 100.0% $151,624 100.0%
============== ====== ======== ======
Geographic Revenue Mix
Domestic $ 76,502 46.4% $ 69,272 45.7%
Foreign 88,314 53.6 82,352 54.3
-------------- ------ -------- ------
Total Net Sales $164,816 100.0% $151,624 100.0%
============== ====== ======== ======
Three Months Ended September 30, 2007
-------------------------------------
GAAP Non-GAAP(b)
--------------------- ---------------
Platform Revenue Mix
Consoles
Microsoft Xbox 360 $ 44,418 19.4% $ 44,418 19.4%
Microsoft Xbox 357 0.1 357 0.1
Nintendo Wii 8,914 3.9 8,914 3.9
Nintendo GameCube 1,801 0.8 1,801 0.8
Sony PlayStation 3 13,282 5.8 13,282 5.8
Sony PlayStation 2 62,667 27.3 62,667 27.3
-------------- ------ -------- ------
131,439 57.3 131,439 57.3
-------------- ------ -------- ------
Handheld
Nintendo Dual Screen 51,559 22.5 51,559 22.5
Nintendo Game Boy Advance 9,013 3.9 9,013 3.9
Sony PlayStation Portable 16,888 7.4 16,888 7.4
Wireless 4,874 2.1 4,874 2.1
-------------- ------ -------- ------
82,334 35.9 82,334 35.9
-------------- ------ -------- ------
PC 15,576 6.8 15,576 6.8
Other -- -- -- --
-------------- ------ -------- ------
Total Net Sales $229,349 100.0% $229,349 100.0%
============== ====== ======== ======
Geographic Revenue Mix
Domestic $ 77,803 33.9% $ 77,803 33.9%
Foreign 151,546 66.1 151,546 66.1
-------------- ------ -------- ------
Total Net Sales $229,349 100.0% $229,349 100.0%
============== ====== ======== ======
Six Months Ended September 30, 2008
-----------------------------------
GAAP Non-GAAP(a)
------------------- ---------------
Platform Revenue Mix
Consoles
Microsoft Xbox 360 $ 40,107 13.3% $ 17,537 6.4%
Microsoft Xbox -- -- -- --
Nintendo Wii 53,808 17.8 53,808 19.7
Nintendo GameCube 115 -- 115 0.1
Sony PlayStation 3 18,275 6.1 18,275 6.7
Sony PlayStation 2 33,688 11.1 33,688 12.4
------------ ------ -------- ------
145,993 48.3 123,423 45.3
------------ ------ -------- ------
Handheld
Nintendo Dual Screen 75,875 25.1 75,875 27.8
Nintendo Game Boy Advance 3,130 1.0 3,130 1.1
Sony PlayStation Portable 21,613 7.1 21,613 7.9
Wireless 11,378 3.8 11,378 4.2
------------ ------ -------- ------
111,996 37.0 111,996 41.0
------------ ------ -------- ------
PC 44,405 14.7 37,279 13.7
Other -- -- -- --
------------ ------ -------- ------
Total Net Sales $302,394 100.0% $272,698 100.0%
============ ====== ======== ======
Geographic Revenue Mix
Domestic $151,352 50.1% $136,379 50.0%
Foreign 151,042 49.9 136,319 50.0
------------ ------ -------- ------
Total Net Sales $302,394 100.0% $272,698 100.0%
============ ====== ======== ======
Six Months Ended September 30, 2007
-----------------------------------
GAAP Non-GAAP(b)
------------------- ---------------
Platform Revenue Mix
Consoles
Microsoft Xbox 360 $ 54,765 16.4% $ 54,765 16.4%
Microsoft Xbox 1,752 0.5 1,752 0.5
Nintendo Wii 15,238 4.6 15,238 4.6
Nintendo GameCube 5,974 1.8 5,974 1.8
Sony PlayStation 3 13,282 4.0 13,282 4.0
Sony PlayStation 2 88,255 26.4 88,255 26.4
------------ ------ -------- ------
179,266 53.7 179,266 53.7
------------ ------ -------- ------
Handheld
Nintendo Dual Screen 69,183 20.7 69,183 20.7
Nintendo Game Boy Advance 17,331 5.2 17,331 5.2
Sony PlayStation Portable 24,768 7.4 24,768 7.4
Wireless 9,248 2.8 9,248 2.8
------------ ------ -------- ------
120,530 36.1 120,530 36.1
------------ ------ -------- ------
PC 33,640 10.1 33,640 10.1
Other 398 0.1 398 0.1
------------ ------ -------- ------
Total Net Sales $333,834 100.0% $333,834 100.0%
============ ====== ======== ======
Geographic Revenue Mix
Domestic $143,896 43.1% $143,896 43.1%
Foreign 189,938 56.9 189,938 56.9
------------ ------ -------- ------
Total Net Sales $333,834 100.0% $333,834 100.0%
============ ====== ======== ======
Notes:
(a) See explanation above regarding the Company's practice on
reporting non-GAAP financial measures.
(b) Prior to the third quarter of fiscal 2008, the Company did not
defer net revenue.
CONTACT: THQ/Investor & Media Relations
Julie MacMedan, 818/871-5125
SOURCE: THQ Inc.
