THQ Announces Fiscal 2005 SalesJuly 29, 2004 THQ Inc. (Nasdaq:THQI) today announced operating results for its fiscal 2005 first quarter and moved earnings per share guidance to $1.10, the high end of its previous range, for the fiscal year ending March 31, 2005. For the three months ended June 30, 2004, THQ reported net sales of $88.2 million and a net loss of $3.9 million, or $0.10 per share. For the same period a year earlier, the company reported net sales of $98.1 million and a net loss of $3.6 million, or $0.09 per share. "Expanding our product portfolio with new original properties is a key strategic objective for THQ in fiscal 2005," said Brian Farrell, president and CEO, THQ. "We are thrilled with the successful launch and continued strong sales of Full Spectrum Warrior(TM), and we look forward to the launch of more exciting new brands later this fiscal year. "Our portfolio of licensed content for both handheld and console systems also delivered favorable results in the June quarter with the successful launch of SONIC ADVANCE 3 for Game Boy(R) Advance and continued robust sales of catalog products. The recent video game console price cuts below $150 signal a new mass-market phase in which THQ excels and we were pleased to see strong sales of our titles for the mass-market consumer during the quarter," Farrell said. Fiscal 2005 Financial Guidance THQ moved guidance to the high end of its previous range for the fiscal year ending March 31, 2005 and provided initial guidance for the second quarter of fiscal 2005: -- For the fiscal year ending March 31, 2005, THQ continues to expect net sales of approximately $680 million. The company moved net income guidance to $1.10 per diluted share, the high end of its previous range, due primarily to expected product cost savings. -- For the second quarter of fiscal 2005, the company expects net sales of approximately $82 million and a net loss of about $0.20 per share. Key product releases anticipated for the quarter include WWE(TM) Day of Reckoning(TM) for the Nintendo(R) GameCube(TM), and Warhammer(R) 40,000: Dawn of War(TM) and Full Spectrum Warrior for the PC. The company announced that the new original PC title S.T.A.L.K.E.R.: Shadow of Chernobyl is now scheduled to ship in the fiscal fourth quarter in order to maximize its sales potential. Farrell said, "We remain focused on delivering another record year in fiscal 2005. We have planned our release schedule for the important holiday quarter to emphasize established brands with games based on three top holiday films: The Incredibles, The SpongeBob SquarePants(TM) Movie and The Polar Express. In addition, we will release the next installment in our perennial top-selling SmackDown!(TM) series, WWE SmackDown!(TM) vs. Raw(TM) for PlayStation(R) 2. "We have strategically scheduled S.T.A.L.K.E.R: Shadow of Chernobyl for PC, Pandemic Studios' Destroy All Humans(TM) for PlayStation 2 and Xbox, and The Punisher(TM), from internal studio Volition, for PlayStation 2 and Xbox for the fiscal fourth quarter, which we believe to be an optimal window for establishing new intellectual properties. In addition, we plan to release WWE(TM): Wrestlemania(R) XXI for Xbox in the fourth quarter in conjunction with the WWE's Wrestlemania promotional push," said Farrell. Recent Developments -- THQ established a new franchise, Full Spectrum Warrior. The title ranked #1 on Xbox and #2 overall for the month of June, according to the NPD Group, Inc. -- THQ was the #2 independent publisher for the first half of calendar 2004 and maintained the ranking as the #1 independent publisher of handheld games, according to NPD. Separately, the company announced that Eric Doctorow, who joined THQ as Chief Operating Officer in October 2003, has resigned to pursue other opportunities. Farrell will assume responsibility for Doctorow's duties while THQ evaluates candidates to join the company's executive team.