News article: Acclaim Near Bankruptcy?

Ryan · Post by **Ryan** » Fri Jul 02, 2004 8:10 pm

http://cube.ign.com/articles/528/528064p1.html

Acclaim Near Bankruptcy?
Latest financials are down and the company considers dire options.

July 02, 2004 - Buried in Acclaim's fiscal year 2004 financial reports is quiet mention that the company may seek bankruptcy or even close its doors if current refinancing options do not succeed. The mention comes at the end of a slow year for the company, with revenue and gross profit down significantly from fiscal 2003.

Acclaim's net revenue for the fiscal year ended March 31, 2004 was $142.7 million, down $67.4 million from the $210.1 million reported for fiscal 2003. Acclaim reported a net loss of $56.4 million for 2004, compared to a net loss of $84.8 million last year. Acclaim reported a gross profit of $64.1 million, down from $78.1 million last year. The company suggests that the decreased gross profit is due to lower revenues.

A surprisingly large portion of Acclaim's losses, however, occurred in the final quarter of fiscal 2004, during which the company reports a net loss of $25.4 million (compared with a net loss of $45.0 million during the final quarter of fiscal 2003).

Acclaim is seeking a new credit lender as its current agreement with lender GMAC Commercial Finance, the investment banking concern of General Motors, is ending. However, in the event a new agreement cannot be secured, the company may turn to drastic measures. The company's financial report states, "Failure to obtain a new banking facility would materially adversely affect the Company's operations and liquidity and the Company could be forced to cease operations or seek bankruptcy protection."

Much of the company's fate may rest on its upcoming roster of titles, which include Worms Forts Under Siege, 100 Bullets, Juiced, Red Star, and the international publication of the new Bard's Tale game. If the company's current losses are indeed due largely to lower revenues, strong software sales in fiscal 2005 will likely be the great hope for the company.

Of course, we'll keep you posted on Acclaim's performance going forward, as well as bring you full coverage of its upcoming titles. Stay tuned.

OneArmedBandit · Post by **OneArmedBandit** » Fri Jul 02, 2004 9:37 pm

Might be an interesting thing to watch for the investor if Acclaim trades stock. I have been a Marvel True Believer since the early 80's. I started paying attenation to stocks at the advice of my grandfather. I watched MVL as it dropped to near $2.00 a share and trading was halted for a brief period. I saw it then climb to $3.27 a share and said, what the heck and bought 750 shares. Doesn't sound like much but at the time was I thin on cash and thought I could convince the wife it was a wise investment. Guess what........ It turned out to be. Currently trading at $18.97 and has been as high as $32.33. Its also fun to tell other fan-boys that I am a part owner of the company.

Ryan · Post by **Ryan** » Fri Jul 02, 2004 9:54 pm

I'm not an expert, but if they declare bankruptcy wouldn't the rights to the Valiant characters be auctioned off?

Daniel Jackson · Post by **Daniel Jackson** » Sat Jul 03, 2004 12:19 am

Yeah. maybe we can all dig into our spare change and buy them off ole bankrupt Acclaim. Beggars can't be choosers you know.

depluto · Post by **depluto** » Sat Jul 03, 2004 12:25 am

I got Marvel at 6, freaked and sold it at 16.

It went up past 30

and did a 3-2 split, that's why it's down in the 18s now.

100 Bullets video game sounds interesting. I used to love the original Turok for N64 that Acclaim put out. The second one wasn't quite as good but the third one was outstanding even if it did stray from the Turok storyline a bit.

BTW, Valiant artist Don Perlin was one of the main character designers for the first Turok game. A little homage in the game are those big hulking monsters, the Purr-Linns.

BodaZoffa · Post by **BodaZoffa** » Sat Jul 03, 2004 2:22 am

Ryan wrote:I'm not an expert, but if they declare bankruptcy wouldn't the rights to the Valiant characters be auctioned off?

This might be a good opportunity for us to chip in & buy the universe. Greg what do you think? I don't know how it would be handled after we obtained the rights, but it would be fun never the less.

Boda

andrew · Post by **andrew** » Sat Jul 03, 2004 12:28 pm

Seriously, guys, they're not going to sell properties for milk money.

depluto · Post by **depluto** » Sat Jul 03, 2004 12:42 pm

I'd pay $25 for one or two of the Psi-Lords.

depluto · Post by **depluto** » Sat Jul 03, 2004 12:44 pm

Eddie the Eagle was awesome.

There was always a little part of me that wanted him to somehow pull off some miraculous, medal-winning jump ... nah, crash, dammit, crash!!!

Ryan · Post by **Ryan** » Sat Jul 03, 2004 3:06 pm

andrew wrote:Seriously, guys, they're not going to sell properties for milk money.

true enough, but anywhere else would be a better place for these properties. I'm sure somebody would buy them and put them to better use than acclaim.

andrew · Post by **andrew** » Sat Jul 03, 2004 8:47 pm

Definately. A monkey could make X-O into a solid property. But as far as people on here getting together to buy a character, I can't imagine it happening.