For the fiscal second quarter ended September 30, 2009, THQ reported net sales of $101.3 million, compared with $164.8 million in the prior-year period. On a non-GAAP basis, for the three months ended September 30, 2009, the company reported net sales of $100.4 million, compared with $151.6 million a year ago. The company had no major product releases in the fiscal 2010 second quarter, and as a result, net sales were driven primarily by continued sales of previously released games.

For the three months ended September 30, 2009, the company reported a net loss of $5.6 million, or $0.08 per share, compared with a net loss of $115.3 million, or $1.73 per share, in the prior-year period. On a non-GAAP basis, for the three months ended September 30, 2009, the company reported a net loss of $25.2 million, or $0.37 per share, compared with a net loss of $30.4 million, or $0.46 per share, in the same quarter a year ago.

A reconciliation of non-GAAP to GAAP results is provided in the accompanying financial tables.

"THQ is now operating as a more focused, more efficient company," said Brian Farrell, THQ's president and CEO. "We continue to deliver highly rated hit titles such as UFC 2009 Undisputed and WWE SmackDown vs. Raw 2010. We believe we are well positioned this holiday with our strong mass-market line-up led by the highly rated WWE SmackDown vs. Raw 2010, and the latest version of our multi-million unit franchise MX vs. ATV Reflex. In addition, we have positioned THQ to take a leading role in emerging online platforms in Asia and the US."

In July 2009, THQ prevailed in arbitration and in August 2009, THQ reached a settlement with JAKKS Pacific, which established a 40% lower preferred return payment rate owed to JAKKS Pacific for video games sold under the WWE license from July 1, 2006 through December 31, 2009. Pursuant to the terms of the settlement agreement, the company paid $32.8 million of accrued venture partner expense to JAKKS Pacific for the period of July 1, 2006 through March 31, 2009. Also related to the settlement, the company reported a one-time benefit of $24.2 million in its GAAP financial results for the fiscal 2010 second quarter ending September 30, 2009.

Fiscal 2010 Second Quarter Highlights and Recent Developments

THQ gained market share for the first nine months of calendar 2009, ranking as the #3 independent publisher in the US1 with a 5.4% share and the #4 independent publisher in Europe2 with a 4.5% share

UFC® 2009 Undisputed is a top-five best selling Xbox 360® and PlayStation®3 game for the first nine months of calendar 2009, according to NPD

THQ strengthened its balance sheet with the issuance of $100 million of 5.00% convertible senior notes maturing in August 2014

THQ advanced its online games strategy with the:

launch of Dragonica Online in North America;

launch of the public beta version of Company of Heroes® Online in China with Shanda Games; and

new partnership with Windysoft to bring Company of Heroes Online to South Korea

THQ appointed Edward L. Kaufman as Executive Vice President of Business and Legal Affairs, and Corporate Secretary

 1Source: The NPD Group       
 2Source: Chart-Track and GfK 


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Business Outlook

Fiscal Year Ending March 31, 2010

The company reaffirmed its expectation to report fiscal 2010 net sales higher than those reported in fiscal 2009, and to achieve profitability for fiscal 2010, on a non-GAAP basis.