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Mad Catz lays off 63% of staff in restructuring plan
- Thread starter Shard
- Start date
CountAntonius
Member
Ouch. Hope everyone finds work.
Danny Dudekisser
I paid good money for this Dynex!
Wow. I guess it's about as much of a mess as people suspected from yesterday's news.
Shao Kahn Brewing a Stew
Banned
Conference call here: http://edge.media-server.com/m/p/k2vt3u3o/lan/en
Thereabouts, it could have been worse, but not by much.
Alcoholikaust
Member
63%!? wow- that is incredibly sad
SEGAvangelist
Member
Wow. That's a really big chunk. Bummer because I like my Mad Catz KI stick. They make good products when they want to.
StriKeVillain
Banned
Jesus. That's a lot.
From the other thread:
He already said he was planning to leave MadCatz this year, so this probably doesn't actually affect him that much.
NoctisVsStar
Member
Markman is fine that's all you need to know he got the Midas touch.
ShockingAlberto
Member
Their bet on Rock Band 4 still makes no sense to me.
That's a lot to risk for something that's far from a sure thing.
That's a lot to risk for something that's far from a sure thing.
Infernostew
Member
Sucks. Hope everyone that was laid off land on their feet and find some new work soon.
User 479360
Banned
Damn. That's a shame. Sorry for them.
Rock Band 4 must not have been a big success?
Rock Band 4 must not have been a big success?
Shao Kahn Brewing a Stew
Banned
Listening to the conference call, they said that Rock Band band bundles exceeded expectations. Unfortunately the guitar bundle was bad. It lowered their margin. They're aiming for long term sales, with hopefully good sales in 2016. Demand in EU was weak for Rock Band.
RipperGrim
Member
Man too many people are losing jobs in this industry.
Shao Kahn Brewing a Stew
Banned
http://www.smarteranalyst.com/2016/...-fiscal-2016-third-quarter-financial-results/
Key Highlights of Fiscal 2016 Third Quarter and Subsequent:
Fiscal 2016 third quarter net sales increased 114% to $65.0 million, the second highest quarterly net sales in the CompanyÂ’s history;
Net sales growth driven by a 391% increase in net sales to the Americas, partially offset by a 6% decrease in net sales to EMEA and a 56% decrease in net sales to APAC;
Gross margin declined to 17.5% from 26.9% in the prior year quarter;
Total operating expenses increased 44% from the prior year period to $8.6 million;
Operating income increased 28% to $2.8 million;
Diluted net income per share was $0.02 for the fiscal 2016 third quarter, consistent with the prior year;
Net position of bank loans, less cash and restricted cash, of $17.7 million at December 31, 2015, compared to $12.7 million at September 30, 2015 and $10.7 million at December 31, 2014;
Sold no shares under the “At-the-Market” (“ATM”) equity offering program;
Shipped F.R.E.Q.TE™ 7.1 surround sound gaming headset for Windows PC;
Announced the Tritton Katana HD 7.1 surround sound gaming headset, a 2016 CES Innovation Award Honoree and the First HDMI™-powered gaming headset for gaming consoles, Windows PC, smart devices and HDMI audio sources;
Announced the R.A.T. 1 gaming mouse, a 2016 CES Innovation Award Honoree;
Shipped the stand-alone Rock Band™ 4 Wireless Fender™ Stratocaster™ Guitar Controller and the stand-alone Rock Band™ 4 Triple Cymbals Expansion Kit;
Announced new range of Street Fighter™ V licensed controllers, including fightsticks, Tournament Edition fightsticks and fightpad controllers;
Announced the E.S. PRO1™ Gaming Earbuds specifically designed for eSports gamers;
Announced that the Company will be the first to offer traditional video game controller hardware for the “Designed for Samsung” program;
Announced executive level and Board of Directors changes including the departure of Chairman of the Board, Thomas Brown; President and CEO, Darren Richardson; SVP Business Affairs, General Counsel and Secretary, Whitney Peterson; and, the appointment of John Nyholt as Chairman of the Board; Karen McGinnis as President, CEO and member of the Board of Directors; David McKeon as CFO; Tyson Marshall as General Counsel and Secretary; and Andrew Young as Chief Technology Officer; and,
The Board of Directors approved a restructuring plan focused on lowering operating costs, increasing efficiencies and better aligning the CompanyÂ’s resources with its needs and goals.
Restructuring Plan
On February 5, 2016, the CompanyÂ’s Board of Directors approved a restructuring plan focused on lowering operating costs, increasing efficiencies and better aligning its workforce with the needs of the business. The plan consists of a reduction in the number of positions across the organization equal to approximately 37% of the total workforce and includes changes at the executive level. As a result of these actions, the Company expects to record a pre-tax cash restructuring charge of approximately $3.0 million during the fourth quarter of fiscal 2016, comprised primarily of severance and benefits afforded to terminated employees and executive officers (inclusive of amounts due Messrs. Richardson and Peterson pursuant to their amended and restated employment agreements, dated as of April 22, 2014). The Company anticipates that the actions associated with these headcount reductions will be substantially completed by the end of the fourth quarter of fiscal 2016, and that these actions will result in annual savings in excess of $5.0 millionstarting in the first quarter of fiscal 2017.
Key Highlights of Fiscal 2016 Third Quarter and Subsequent:
Fiscal 2016 third quarter net sales increased 114% to $65.0 million, the second highest quarterly net sales in the CompanyÂ’s history;
Net sales growth driven by a 391% increase in net sales to the Americas, partially offset by a 6% decrease in net sales to EMEA and a 56% decrease in net sales to APAC;
Gross margin declined to 17.5% from 26.9% in the prior year quarter;
Total operating expenses increased 44% from the prior year period to $8.6 million;
Operating income increased 28% to $2.8 million;
Diluted net income per share was $0.02 for the fiscal 2016 third quarter, consistent with the prior year;
Net position of bank loans, less cash and restricted cash, of $17.7 million at December 31, 2015, compared to $12.7 million at September 30, 2015 and $10.7 million at December 31, 2014;
Sold no shares under the “At-the-Market” (“ATM”) equity offering program;
Shipped F.R.E.Q.TE™ 7.1 surround sound gaming headset for Windows PC;
Announced the Tritton Katana HD 7.1 surround sound gaming headset, a 2016 CES Innovation Award Honoree and the First HDMI™-powered gaming headset for gaming consoles, Windows PC, smart devices and HDMI audio sources;
Announced the R.A.T. 1 gaming mouse, a 2016 CES Innovation Award Honoree;
Shipped the stand-alone Rock Band™ 4 Wireless Fender™ Stratocaster™ Guitar Controller and the stand-alone Rock Band™ 4 Triple Cymbals Expansion Kit;
Announced new range of Street Fighter™ V licensed controllers, including fightsticks, Tournament Edition fightsticks and fightpad controllers;
Announced the E.S. PRO1™ Gaming Earbuds specifically designed for eSports gamers;
Announced that the Company will be the first to offer traditional video game controller hardware for the “Designed for Samsung” program;
Announced executive level and Board of Directors changes including the departure of Chairman of the Board, Thomas Brown; President and CEO, Darren Richardson; SVP Business Affairs, General Counsel and Secretary, Whitney Peterson; and, the appointment of John Nyholt as Chairman of the Board; Karen McGinnis as President, CEO and member of the Board of Directors; David McKeon as CFO; Tyson Marshall as General Counsel and Secretary; and Andrew Young as Chief Technology Officer; and,
The Board of Directors approved a restructuring plan focused on lowering operating costs, increasing efficiencies and better aligning the CompanyÂ’s resources with its needs and goals.
Restructuring Plan
On February 5, 2016, the CompanyÂ’s Board of Directors approved a restructuring plan focused on lowering operating costs, increasing efficiencies and better aligning its workforce with the needs of the business. The plan consists of a reduction in the number of positions across the organization equal to approximately 37% of the total workforce and includes changes at the executive level. As a result of these actions, the Company expects to record a pre-tax cash restructuring charge of approximately $3.0 million during the fourth quarter of fiscal 2016, comprised primarily of severance and benefits afforded to terminated employees and executive officers (inclusive of amounts due Messrs. Richardson and Peterson pursuant to their amended and restated employment agreements, dated as of April 22, 2014). The Company anticipates that the actions associated with these headcount reductions will be substantially completed by the end of the fourth quarter of fiscal 2016, and that these actions will result in annual savings in excess of $5.0 millionstarting in the first quarter of fiscal 2017.
I still don't get how Harmonix sucks so much at generating excitement for the game in Europe. That was at least half of the problem they ran into last generation with the series, along with the initial and immediately moronic Wii snub and all the early hardware problems.
They need to fix their damn xbox one drum set first....shit drops notes left and right.
MatrixMan.EXE
Member
Days before the Street Fighter V launch as well. Markman, pls respond.
Gunslinger
Member
I hope the people affected by this finds work soon. I bet most of them got family who depends on them.
Crazypanda_85
Member
Is this percentage right? Game Informer said 37%.
Crimsonclaw111
Member
You know why demand in Europe was weak for RB? Sony and Microsoft Europe keep screwing things up.
Shao Kahn Brewing a Stew
Banned
"The plan consists of a reduction in the number of positions across the organization equal to approximately 37% of the total workforce and includes changes at the executive level."
EDIT: Yeah, seems like its 37%. Just heard the call.
crazyrabbits
Banned
37% reduction. Just said in the call.
Douche McBaggins The 3rd
Junior Member
Dolla dolla bills yo. Shoulda backed more divekick
MikeE21286
Member
What was the cause(s) for the bad financials?
Hero_of_the_Day
Member
The whole launch of RB4 was a fucking mess. Most stores got like two copies of the guitar packs, one full band pack, and good fucking luck finding the legacy adapter pack. It was crazy to then see Guitar Hero have fucking massive supplies of stock in every store I went to when it launched.
Then the whole debacle about having to hook instruments up to your PC to do a firmware update. Just, what the fuck were they doing with that launch!?