2008-10-07 17:34:01 -
- SouthPeak Interactive Corporation (OTC Bulletin Board: SOPK; SOPKU; SOPKW; SOPKZ), one of the fastest growing videogame publishers, today announced financial results for the fiscal year ended June 30, 2008.
Highlights of the financial results include:
-- Revenues increased 220% to $40.2 million from $12.5 million in the year-earlier period;
-- Earnings before interest, taxes, depreciation and
amortization, adjusted for one-time transaction costs ("EBITDA"), increased to $4.5 million from a loss of $0.7 million; and
-- Non-GAAP income before income taxes increased to $3.8 million from a loss before income taxes of $0.9 million.
Other important milestones include:
-- Going public and completing a $14.6 million financing;
-- Successfully launching critically acclaimed Xbox 360 title Two Worlds and developing the franchise with its first sequel Two Worlds: The Temptation;
-- Expanding next generation platform support with the Company's first two titles for Nintendo Wii: Pool Party and Dream Pinball; and
-- Creating additional partnerships with independent studios worldwide enabling the Company to more than double the number of title releases in 2009.
Commenting on the Company's results, Terry Phillips, Chairman of SouthPeak, stated, "The 2008 fiscal year was an exciting period for us. We rapidly grew our business and completed a going public transaction and an institutional financing. Our financial results were driven by strong market demand for our products and the continued expansion of our product portfolio. Our results underscore the scalability of our business model, as illustrated by the decrease in our G&A expenses as a percentage of our net revenues to 9.5% as compared to 18.2% in the year-earlier period."
Melanie Mroz, CEO of SouthPeak, added, "In the past year, we have built a strong product line for next generation hardware platforms, including solid franchises, like Two Worlds, that provide us with sequel opportunities. We plan to expand our portfolio in fiscal 2009 with the addition of several new IPs, including Ninjatown, X-Blades, My Baby and Two Worlds: The Temptation. With our strong stable of independent developers throughout the world, we are poised to more than double our titles next year."
About SouthPeak Interactive Corporation
SouthPeak Interactive Corporation develops and publishes interactive entertainment software for all current hardware platforms including: PLAYSTATION(R)3 computer entertainment system, PSP(R) (PlayStation(R) Portable) system, PlayStation(R)2 computer entertainment system, Xbox 360(R) videogame and entertainment system, Wii(TM), Nintendo DS(TM) and PC. SouthPeak's games cover all major genres including action/adventure, role playing, racing, puzzle strategy, fighting and combat. SouthPeak's products are sold in retail outlets in North America, Europe, Australia and Asia. SouthPeak is headquartered in Midlothian, Virginia, and has offices in Grapevine, Texas and London, England. www.southpeakgames.com
This release contains "forward-looking" statements that are made pursuant to the Safe Harbor provisions of the Private Securities Litigation Reform Act of 1995. These are statements that are predictive in nature, that depend upon or refer to future events or conditions, or that include words such as "may," "will," "expects," "projects," "anticipates," "estimates," "believes," "intends," "plans," "should," "seeks," and similar expressions. This press release contains forward-looking statements relating to, among other things, SouthPeak's expectations and assumptions concerning future financial performance. Forward-looking statements involve known and unknown risks and uncertainties that may cause actual future results to differ materially from those projected or contemplated in the forward-looking statements. Forward-looking statements may be significantly impacted by certain risks and uncertainties described in SouthPeak's filings with the Securities and Exchange Commission.
The risks and uncertainties referred to above include, but are not limited to, risks associated with SouthPeak's potential inability to compete with larger businesses in its industry, the limitations of SouthPeak's business model, SouthPeak's potential inability to anticipate and adapt to changing technology, the possibility that SouthPeak may not be able to enter into publishing arrangements with some developers, SouthPeak's dependence on vendors to meet its commitments to suppliers, SouthPeak's dependence on hardware manufactures to publish new videogames, SouthPeak's potential inability to recuperate the up-front license fees paid to console manufacturers, SouthPeak's dependence on a limited number of customers, SouthPeak's potential dependence on the success of a few videogames, SouthPeak's dependence on developers to deliver their videogames on time, the potential of litigation, interference with SouthPeak's business from the adoption of governmental regulations; and the inability to obtain additional financing to grow its business.
The non-GAAP financial measures discussed in the text of this press release represent financial measures used by SouthPeak's management to evaluate its operating performance. Management uses these non-GAAP financial measures for planning and evaluation purposes. Non-GAAP income before income taxes and EBITDA, defined as earnings before interest, taxes, depreciation and amortization of intangibles and stock-based compensation, exclude one-time transaction costs. The one-time transaction costs include $1,579,946 in professional fees expensed in connection with the Company's acquisition of SouthPeak Interactive L.L.C. and $643,418 in interest expense related to the fair value of common stock issued to a holder of the Company's Preferred Stock to induce conversion. These adjustments are one-time events which are not reflective of SouthPeak's ongoing operations. SouthPeak's definition of EBITDA may differ from the definition of EBITDA used by other companies and may not be comparable to similarly titled measures used by other companies. EBITDA is also a measure frequently requested by SouthPeak's investors and analysts. Investors are advised to carefully review and consider this information as well as the GAAP financial results that are disclosed in the SouthPeak's Securities and Exchange Commission filings.
Sandbox Strategies for SouthPeak
Bill Linn, 415-867-2100
bill@sandboxstrat.com 
