Majesco Entertainment Company (COOL, Financial) filed Quarterly Report for the period ended 2010-07-31.
Majesco Entertainment Company has a market cap of $25.6 million; its shares were traded at around $0.6599 with and P/S ratio of 0.3. COOL is in the portfolios of Jim Simons of Renaissance Technologies LLC, Chuck Royce of Royce& Associates.
General and Administrative Expenses. For the three month period ended July 31, 2010, general and administrative expenses were $2.0 million, a decrease of $0.2 million from $2.2 million in the comparable period in 2009. The decrease was primarily due to decreased salaries and office expenses. General and administrative expenses include $0.4 million of non-cash compensation expenses for the three months ended July 31, 2010 and 2009, respectively.
Selling and Marketing Expenses. Total selling and marketing expenses were approximately $6.2 million for the nine months ended July 31, 2010 compared to $11.6 million for the nine months ended July 31, 2009. The $5.4 million decrease was primarily due to lower advertising media costs of approximately $4.0 million, lower shipping and commission expense related to lower sales and lower international selling costs due to the Companys change in its international business model. During the nine months ended July 31, 2009 we ran several television and internet advertising campaigns. After analyzing the costs and benefits of these programs, we decided to reduce our media-related expenditures during the nine months ended July 31, 2010. In addition, during the nine months ended July 31, 2010, we reduced sales and production staff in the U.S., and sales staff in the United Kingdom, related to the termination of our direct distribution strategy in Europe. In total, we incurred a total of $0.4 million in severance costs related to the staff reductions during the nine months ended July 31, 2010, classified as follows: (i) Product Research and Development Expenses of $0.1 million; (ii) Selling and Marketing Expenses of $0.2 million; and (iii) General and Administrative expenses of $0.1 million. Selling and Marketing expense as a percentage of net sales was approximately 12% for the nine months ended July 31, 2010 compared to 16% for the nine months ended July 31, 2009.
General and Administrative Expenses. For the nine month period ended July 31, 2010, general and administrative expenses were $6.4 million, a decrease of $0.3 million from $6.7 million in the comparable period in 2009. The decrease was primarily due to lower compensation expenses relating to our incentive compensation program. This incentive program is primarily based on net income generated by the Company. General and administrative expenses include $1.3 million of non-cash compensation expenses for each of the nine month periods ended July 31, 2010 and 2009. Non cash compensation expense for the nine months ended July 31, 2010 included approximately $0.1 million of expense related to the accelerated vesting of restricted stock upon termination of an employee.
In December 2009 and November 2008, we received proceeds of approximately $1.6 million and $1.1 million, respectively, from the sale of the rights to approximately $21.2 million and $25.9 million of New Jersey state income tax operating loss carryforwards, under the Technology Business Tax Certificate Program administered by the New Jersey Economic Development Authority. After the transfer, we have approximately $32.0 million of net operating loss carryforwards remaining in the state of New Jersey. Net proceeds have been recorded as an income tax benefit during each of the nine months ended July 31, 2010 and 2009.
We generated net income of $0.6 million for the nine months ended July 31, 2010. However, our operating results vary significantly from period to period. On an annual basis, we generated a net loss of $7.2 million in 2009, net income of $3.4 million in 2008, and a net loss of $4.8 million in 2007. Historically, we have funded our operating losses through sales of our equity and use of our purchase order financing and factor arrangements to satisfy seasonal working capital needs. We raised approximately $5.8 million in net proceeds from the sale of our equity securities in September 2007, and approximately $8.6 million in September 2009.
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Majesco Entertainment Company has a market cap of $25.6 million; its shares were traded at around $0.6599 with and P/S ratio of 0.3. COOL is in the portfolios of Jim Simons of Renaissance Technologies LLC, Chuck Royce of Royce& Associates.
Highlight of Business Operations:
Product Research and Development Expenses. Research and development costs decreased $0.5 million to $0.7 million for the three months ended July 31, 2010, from $1.2 million for the comparable period in 2009. The decrease primarily resulted from the elimination of $0.4 million expenses related to our development studio. After evaluation of the studios performance, and changes in the availability and cost of development with our third-party partners, we reduced the number of personnel at the studio in the second half of 2009 and incurred approximately $0.2 million in severance and lease termination costs during the three months ending July 31, 2009.General and Administrative Expenses. For the three month period ended July 31, 2010, general and administrative expenses were $2.0 million, a decrease of $0.2 million from $2.2 million in the comparable period in 2009. The decrease was primarily due to decreased salaries and office expenses. General and administrative expenses include $0.4 million of non-cash compensation expenses for the three months ended July 31, 2010 and 2009, respectively.
Selling and Marketing Expenses. Total selling and marketing expenses were approximately $6.2 million for the nine months ended July 31, 2010 compared to $11.6 million for the nine months ended July 31, 2009. The $5.4 million decrease was primarily due to lower advertising media costs of approximately $4.0 million, lower shipping and commission expense related to lower sales and lower international selling costs due to the Companys change in its international business model. During the nine months ended July 31, 2009 we ran several television and internet advertising campaigns. After analyzing the costs and benefits of these programs, we decided to reduce our media-related expenditures during the nine months ended July 31, 2010. In addition, during the nine months ended July 31, 2010, we reduced sales and production staff in the U.S., and sales staff in the United Kingdom, related to the termination of our direct distribution strategy in Europe. In total, we incurred a total of $0.4 million in severance costs related to the staff reductions during the nine months ended July 31, 2010, classified as follows: (i) Product Research and Development Expenses of $0.1 million; (ii) Selling and Marketing Expenses of $0.2 million; and (iii) General and Administrative expenses of $0.1 million. Selling and Marketing expense as a percentage of net sales was approximately 12% for the nine months ended July 31, 2010 compared to 16% for the nine months ended July 31, 2009.
General and Administrative Expenses. For the nine month period ended July 31, 2010, general and administrative expenses were $6.4 million, a decrease of $0.3 million from $6.7 million in the comparable period in 2009. The decrease was primarily due to lower compensation expenses relating to our incentive compensation program. This incentive program is primarily based on net income generated by the Company. General and administrative expenses include $1.3 million of non-cash compensation expenses for each of the nine month periods ended July 31, 2010 and 2009. Non cash compensation expense for the nine months ended July 31, 2010 included approximately $0.1 million of expense related to the accelerated vesting of restricted stock upon termination of an employee.
In December 2009 and November 2008, we received proceeds of approximately $1.6 million and $1.1 million, respectively, from the sale of the rights to approximately $21.2 million and $25.9 million of New Jersey state income tax operating loss carryforwards, under the Technology Business Tax Certificate Program administered by the New Jersey Economic Development Authority. After the transfer, we have approximately $32.0 million of net operating loss carryforwards remaining in the state of New Jersey. Net proceeds have been recorded as an income tax benefit during each of the nine months ended July 31, 2010 and 2009.
We generated net income of $0.6 million for the nine months ended July 31, 2010. However, our operating results vary significantly from period to period. On an annual basis, we generated a net loss of $7.2 million in 2009, net income of $3.4 million in 2008, and a net loss of $4.8 million in 2007. Historically, we have funded our operating losses through sales of our equity and use of our purchase order financing and factor arrangements to satisfy seasonal working capital needs. We raised approximately $5.8 million in net proceeds from the sale of our equity securities in September 2007, and approximately $8.6 million in September 2009.
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