Source - THQ Inc.:
AGOURA HILLS, Calif., Jul 27, 2009 -- THQ Inc. (NASDAQ:THQI) today announced that it has prevailed in its binding arbitration with JAKKS Pacific, Inc. The arbitrator has established a significantly lower preferred return payment rate to JAKKS Pacific for WWE video games sold under a license granted by World Wrestling Entertainment, Inc. to THQ/JAKKS Pacific LLC. The new rate, which is 40% below the previous rate, is effective as of July 1, 2006 and applies through December 31, 2009.
As a result, the company expects to report a one-time benefit of approximately $23 million during the fiscal 2010 second quarter ending September 30, 2009, and to reduce its accrued venture partner expense on its balance sheet by the same amount.
Under the THQ/JAKKS Pacific LLC. operating agreement, JAKKS Pacific is to be paid a preferred return from sales of the LLC's WWE-licensed video games. The preferred return rate was to be reset for the period beginning July 1, 2006 through December 31, 2009. When the parties were unable to agree on a new preferred return rate, THQ filed suit to compel arbitration pursuant to the terms of the operating agreement.
"As we expected, we have prevailed in this matter. We are gratified the arbitrator agreed the preferred return rate to JAKKS Pacific on WWE video games will be significantly lower," said James M. Kennedy, THQ's executive vice president, business and legal affairs.
THQ Inc. (NASDAQ:THQI) is a leading worldwide developer and publisher of interactive entertainment software. The company develops its products for all popular game systems, personal computers and wireless devices. Headquartered in Los Angeles County, California, THQ sells product through its global network of offices located throughout North America, Europe and Asia Pacific. More information about THQ and its products may be found at www.thq.com and www.thqwireless.com. THQ, THQ Wireless, and their respective logos are trademarks and/or registered trademarks of THQ Inc.
This press release contains statements that are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Such statements include, but are not limited to, the company's expectations that its arbitration with JAKKS Pacific, Inc. has been concluded and the arbitrator's decision is final; and future WWE video game sales expectations. These forward-looking statements are based on current expectations, estimates and projections about the business of THQ Inc. and its subsidiaries (collectively referred to as "THQ") and are based upon management's beliefs and certain assumptions made by management. Such forward-looking statements are subject to risks and uncertainties that could cause actual results to differ materially from those expressed or implied by such forward-looking statements, including, but not limited to, economic, competitive and technological factors affecting the operations, markets, products, services and pricing of THQ. Unless otherwise required by law, THQ disclaims any obligation to update its view on any such risks or uncertainties or to revise or publicly release the results of any revision to these forward-looking statements. Readers should carefully review the risk factors and the information that could materially affect THQ's financial results, described in other documents that THQ files from time to time with the Securities and Exchange Commission, including its Quarterly Reports on Form 10-Q and its Annual Report on Form 10-K for the fiscal period ended March 31, 2009, and particularly the discussion of risk factors that may affect results of operations set forth therein. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of this press release.
Monday, July 27, 2009
Source - THQ Inc.: