Atari : revision of the Estimated 2020/2021 Annual Results
REVISION OF THE ESTIMATED 2020/2021
ANNUAL RESULTS
A review of (i) the accounting treatment
of transactions related to digital assets and (ii) the fair value
of development costs for free-to-play mobile games capitalized on
the balance sheet has led to a downward revision of results
compared with the estimates communicated on August 16,
2021
Press release - Paris, France – October
18, 2021 – 08:00am – During its meeting on October 15,
2021, Atari SA’s Board of Directors, in the presence of its
Statutory Auditors, has reviewed the consolidated financial
estimates for the financial year ended March 31, 2021, following
the finalization of the work covering (i) the accounting treatment
of transactions related to digital assets and (ii) the fair value
of development costs for free-to-play mobile games capitalized on
the balance sheet. These estimates presented in the appendix to
this press release show a net loss of 11,9 M€.
The budget forecasts resulting from the new
strategy aimed at discontinuing unprofitable activities and
simplifying the Group's organization in order to return to
profitability and the accounting treatment of new activities
(transactions related to digital assets and the Atari VCS) have led
to a delay in the preparation of the 2020/2021 accounts.
The audit procedures for the consolidated
financial statements have been completed, the certification report
will be issued after finalization of the review of the notes to the
consolidated financial statements and of the Universal Registration
Document.
The General Meeting initially convened for
November 9, 2021 will be held no later than November 30, 2021.
Accounting treatment of transactions
related to digital assets. With the Atari Token, the Atari
Group aims to create a token for the entire video game industry. In
the financial year 2020/2021, the Atari Group invoiced (i) €0.8
million under the service and trademark license agreement with
Atari Chain for sales of Atari Tokens, (ii) €0.5 million for direct
sales of Atari Tokens and (iii) 1.1 million corresponding to the
allocation of Atari Tokens to certain members of the Group and to
third parties.
In its earnings estimates published on August
16, 2021, the Atari Group had estimated that it would be able to
recognize revenue of €2.4 million in respect of these transactions,
considering that the expected use cases of the Atari Tokens sold or
granted at that date would permit it.
Discussions between the Atari Group and its
statutory auditors have led the Atari Group to review this
accounting position with respect to the revenue recognition
criteria under IFRS 15 and to defer this revenue recognition to a
later period. This change in accounting position has a negative
impact on the estimated revenue and profit for the fiscal year
2020/2021 of €2.4 million, which is now recorded as deferred
revenue on the balance sheet.
The Atari Blockchain division is developing the
ecosystem related to Atari Tokens, notably by expanding the
adoption and use cases of the Atari Token already present on the
opensea.io and Decentraland platforms and those coming soon with
the Atari virtual world within the Alphaverse project.
Book value attributed to development
costs of free-to-play mobile games capitalized on the balance
sheet. The strategic review and the finalization of the
budget for 2021/2022 and subsequent years led the Group to perform
various impairment tests by comparing each of its assets to its
recoverable value. As a result of these tests, the Group has
recognized impairment losses in an additional amount of €3.6
million, Should the recoverable amount of these assets increase in
a subsequent period, these impairment losses would be reversed
through the income statement.
The new strategy of the video game division,
Atari Games, is aimed at improving cash-flow generation by
expanding its portfolio of games, notably by publishing premium
games for PC and consoles, re-releasing classic titles and focusing
on the most profitable and high-potential mobile games in its
portfolio. The first premium game, Centipede Recharged, was
launched in September and three other games in the "Recharged"
series (Black Widow, Asteroids and Breakout) will be released in
the coming months. Also, several new titles have been put
into production for release in 2022, including a new version of the
classic Food Fight, an Atari 50th Anniversary Collection as well as
Atari Mania, an original remix of classic Atari mini-games.
The loss for the financial year 2020/2021 is
mainly due to calculated expenses (additional depreciation and
amortization charges) and the delay in revenue recognition of the
Atari Token activities, which have no impact on the Group's net
cash position.
For 2021/2022, a transition year implementing
the change in strategy, the financial objective is to put in place
the profitability levers for the years to come, with priority given
to the monetization of the intellectual property portfolio (games
and licenses).
The Company has carried out a specific review of
its liquidity risk and considers that (i) the working capital
requirements related to the ramp-up of the production of the Atari
VCS, and (ii) the development of the new strategy for the video
games division will require external financing or a capital markets
transaction, the form of which is currently being evaluated. With
the financial support of its new principal shareholder and Chairman
and CEO, the Atari Group believes that it is in a position to meet
its future obligations.
Impact of the revision on the
consolidated income statement
IFRS in M€ |
31.03.2021Estimates published Aug 16,
2021 |
31.03.2021Revised estimates Oct 15,
2021 |
Revenue |
21.4 |
18,9 |
Cost of goods
sold |
(5.2) |
-5,5 |
GROSS MARGINin % of revenue |
16.275.7% |
13,470,3% |
Research and
development expenses |
(7.9) |
(7,9) |
Marketing and selling expenses |
(2.6) |
(2,6) |
General and
administrative expenses |
(6.3) |
(6,3) |
Other operating income (expenses) |
0,0 |
0,0 |
CURRENT
OPERATING INCOME |
(0.6) |
(3,4) |
Other income (expenses) |
(4.6) |
(8,2) |
OPERATING
INCOME |
(5.2) |
(11,6) |
Cost of debt |
(0.1) |
(0,1) |
Other financial
income (expenses) |
(0.2) |
(0,1) |
Share of net operational profit of equity affiliates |
- |
(0,1) |
Income tax |
(0.0) |
(0,0) |
CONSOLIDATED NET INCOME |
(5.5) |
(11,9) |
Group Share |
(5.4) |
(11,9) |
Impact of the revision on the
consolidated balance sheet
ASSETS (IFRS, M€) |
31.03.2021Estimates published Aug 16,
2021 |
31.03.2021Revised
estimatesOct 15, 2021 |
Intangible assets |
15.2 |
11,6 |
Property.
plant and equipment |
0.0 |
0,0 |
Right of use assets related to leases |
1.9 |
1,9 |
Non-current
financial assets |
16.0 |
15,8 |
Deferred tax assets |
1.9 |
1,9 |
NON-CURRENT ASSETS |
35.0 |
31,3 |
Inventories |
2.5 |
2,5 |
Trade
receivables |
3.2 |
3,3 |
Current tax assets |
0.0 |
0,0 |
Other
current assets |
0.6 |
0,6 |
Cash and cash equivalents |
2.5 |
2,5 |
Assets held
for sale |
0.3 |
0,3 |
CURRENT ASSETS |
9.1 |
9,1 |
TOTAL ASSETS |
44.1 |
40,4 |
LIABILITIES (IFRS, M€) |
31.03.2021Estimates published Aug 16,
2021 |
31.03.2021Revised
estimatesOct 15, 2021 |
Share capital |
3.0 |
3,0 |
Share premium |
19.1 |
19,1 |
Consolidated reserves |
14.0 |
14,0 |
Net income – Group share |
(5.4) |
11.9 |
SHAREHOLDERS’ EQUITY (GROUP SHARE) |
30.6 |
24,2 |
Minority interests |
(0.0) |
(0,0) |
TOTAL CONSOLIDATED EQUITY |
30.6 |
24,2 |
Provisions for non-current
contingencies and losses |
0.0 |
0,0 |
Non-current financial liabilities |
- |
- |
Long term lease liabilities |
1.6 |
1,6 |
Deferred tax liabilities |
- |
- |
Other non-current
liabilities |
0.7 |
0,7 |
NON-CURRENT LIABILITIES |
2.3 |
2,3 |
Provisions for current
contingencies and losses |
- |
- |
Current financial liabilities |
- |
- |
Current lease liabilities |
0.3 |
0,3 |
Trade payables |
7.3 |
7,3 |
Current tax liabilities |
- |
- |
Other current liabilities |
3.5 |
6,3 |
CURRENT
LIABILITIES |
11.2 |
13,9 |
TOTAL EQUITY AND LIABILITIES |
44.1 |
40,4 |
Disclaimer:The realization of
the plans, and their operational budget and financing plan remain
inherently uncertain, and the non-realization of these assumptions
may impact their value.
About Atari:Atari, comprised of
Atari SA and its subsidiaries, is a global interactive
entertainment and multiplatform licensing group. The true innovator
of the video game, founded in 1972, Atari owns and/or manages a
portfolio of more than 200 games and franchises, including globally
known brands such as Asteroids®, Centipede®, Missile Command® and
Pong®. From this important portfolio of intellectual properties,
Atari delivers attractive online games for smartphones, tablets,
and other connected devices. Atari also develops and distributes
interactive entertainment for Microsoft, Sony and Nintendo game
consoles. Atari also leverages its brand and franchises with
licensing agreements through other media, derivative products and
publishing. For more
information: www.atari.com and www.atari-investisseurs.fr/en/.
Atari shares are listed in France on Euronext Paris
(Compartment C, ISIN Code FR0010478248, Ticker ATA), in Sweden on
Nasdaq First North Growth Market as Swedish Depositary Receipts
(ISIN Code SE0012481232, Ticker ATA SDB) and are eligible for the
Nasdaq International program in the United States (OTC -
Ticker PONGF).
Contacts
Atari - Philippe Mularski,
CFO
Calyptus - Marie Calleux Tel +33 1 83 64 61 57 -
pm@atari-sa.com
Tel + 33 1 53 65 68 68 – atari@calyptus.net
Redeye AB (Certified Adviser)
Tel:
+46 8 121 576 90 – certifiedadviser@redeye.se
This is information that Atari SA. is obliged to
make public pursuant to the EU Market Abuse Regulation. The
information was submitted for publication, through the agency of
the contact persons set out above, on October 18, 2021 at 08:00am
CET.
- 2021 10 18 Resultats FY-2020-2021 VEN DEF