XBOX-HQ.COM - Acclaim Nearing Bankruptcy

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.

Source: IGN.com