Press release: 1995-02-09: 3DO Announces Third Quarter Financial Results

February 9 1995

3DO Annouces Third Quarter Results

REDWOOD CITY, Calif. - February 9, 1995 - The 3DO Company (NASDAQ:THDO) today released financial results for its third quarter, reporting revenues of $12.0 million for the three month period ended Dec. 31, 1994, compared to $3.5 million for the comparable period in the prior year. Software royalties and CD pressing and license fees were the primary source of revenue in the current period, whereas in the prior year, sales of development systems and title development revenues accounted for almost all of the revenue reported. Included in revenue for the most recent period is a $4.0 million license fee from Matsushita Electric Industrial Co., Ltd. for the right to manufacture 3DO-formatted CDs in Japan. The net loss for the quarter ended Dec. 31, 1994 totaled $9.4 million, or $0.41 per share, compared to a net loss of $7.1 million, or $0.35 per share, for the third quarter of the prior year.
For the first nine months of fiscal year 1995, the company reported revenues of $22.0 million, compared to $6.1 million for the first nine months of the prior year. The net loss for the nine months ended Dec. 31, 1994 totaled $38.3 million, compared to a prior year net loss for the same period of $44.0 million. The net loss for the most recent nine month period includes a non-cash operating charge of $8.4 million for the issuance of 3DO common stock under the company's hardware stock incentive program. The net loss for the comparable nine month period in the prior year includes a non-recurring non-cash charge of $20.7 million incurred in April 1993 resulting from the acquisition of NTG. Excluding the non-cash charges for the stock incentive and NTG acquisition, the net loss for the nine month period ended Dec. 31, 1994 would have been $29.9 million compared to a net loss of $23.3 million for the same period in the prior year.

The company's net loss for the third quarter included expenses for an aggressive nationwide print, network and cable TV advertising campaign that ran through the holiday selling season. The campaign successfully increased 3DOª brand awareness to 71% of the target market, up from 40% awareness in the spring of 1994. Advertising expenses associated with this campaign are expected to be funded through a portion of CD pressing fees as part of the company's recently implemented market development fund program.

Currently, more than 150 distinct titles are available worldwide for the 3DO platform, with an additional 150 titles in development. Several 3DO titles have pressed in excess of 100,000 units, bringing the number of revenue-bearing 3DO CDs manufactured to more than 4 million.

"3DO is hitting the critical mass necessary for selling software and the development community is responding in kind," said Trip Hawkins, 3DO's President and CEO, "In fact, more than 70 titles were released for the 3DO platform during the most recent quarter."

The Panasonic FZ-10 REALª 3DO Interactive Multiplayerª system is available in stores now. Panasonic recently announced its new FZ-10 3DO bundle- Total Eclipseª from Crystal Dynamics and a coupon to receive GEXª. Goldstar recently announced its Interactive Multiplayer system will be bundled with Electronic Arts' hit 3DO titles FIFA International Soccerª and Shock Waveª. Goldstar's 3DO MPEG Digital Video Module, which will enable consumers to play full-screen, full-motion videos such as movies and music videos, will be available later this month. Additionally, Panasonic's three button mouse peripheral product, providing players with an optional method of interacting with 3DO titles that take advantage of a pointing device, is expected to become available early this year.

Based in Redwood City, Calif., The 3DO Company (NASDAQ:THDO) develops and licenses advanced interactive technology to hardware and software companies worldwide. The company's award-winning product design, the 3DO Interactive Multiplayer system, was created to deliver a breakthrough in interactive entertainment at an affordable price. 3DO also develops, publishes, and distributes CD-ROM software products for the 3DO system. The 3DO system is available in the United States from Panasonic, Goldstar, and Creative Labs. 3DO products are also available in Canada, Japan, Korea, Taiwan, and the United Kingdom.

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3DO, the 3DO logos, Interactive Multiplayer are trademarks of The 3DO Company.

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