Implementation of IESA Strategic Programme
Infogrames Entertainment SA (IESA or the Group) is making progress in implementing the multi-stage strategic programme its management outlined following the announcement of its annual results and during its Annual General Meeting:
1) Relaunching the publishing initiatives of the Group to introduce new video games based its extensive portfolio of franchises, including Alone in the Dark, Dungeons & Dragons and Never Winter Nights
2) Optimizing the global distribution network with best-in-class sales channels in the major markets of the US, Europe and Asia
3) Leveraging the Atari brand name and IESA’s other key assets to pursue opportunities in online distribution, advertising and entertainment
4) Maintaining appropriate financial foundation for the Group
As a result of implementing this strategic plan, the Group expects to re-emerge as one of the leading players in the video gaming industry with strong publishing and distribution capabilities worldwide.
Changes in the Composition of the Board of Atari, Inc.
Consistent with the strategic objectives set out above, the IESA Board of Directors decided, at its meeting of October 5, 2007, to exercise its rights, as the majority shareholder of Atari, Inc. and as per the Delaware Law, to change the composition of the Board of Directors of Atari, Inc. IESA has executed and delivered a written consent to remove five of the current directors of Atari. Such action will be implemented after Atari has delivered proper notice to all of its stockholders as required under U.S. securities laws. Immediately following this change, three directors, Evence Charles Coppee, Jean-Michel Perbet and Thomas Schmider will remain on the board of Atari Inc. Additional directors will be nominated to serve on the Atari Board, including directors who will qualify as independent to comply with applicable regulatory requirements.
Mission of the New Board of Atari
Establish measures to Improve Atari Profitability
In 2006-2007, based on US GAAP, Atari, Inc. had negative profit of US$70m and a negative operating cash flow of US$37m on revenue of US$122m, and therefore represented a significant drain on the Group’s profitability.
In order to stem this high level of losses, IESA expects the newly composed Board of Director of Atari, Inc. to focus on implementing necessary measures to restructure the company with a view toward stabilizing its operations and reducing losses to the benefit of all its shareholders.
Appoint a Chief Restructuring Officer
In order to implement these measures, the Board will select and appoint a Chief Restructuring Officer who will take all necessary actions in order to assess and address immediate requirements of Atari, Inc. with the goal of repositioning the company as a reliable player in the US video games market.
Reinforce Focus on Atari Inc’s Turnaround
The change in the composition of the Board of Directors of Atari, Inc. will allow Atari Inc. to work more closely with third parties and also IESA in order to address its turnaround.
Leverage the Atari Brand, in Coordination with the Group
IESA continues to own the Atari brand name worldwide and the atari.com url. Atari, Inc. will retain a license to use the name for videogames in North America until 2013.
In line with its key strategic objectives, IESA is investigating with Atari, Inc. how to better leverage the Atari brand name across a number of key global initiatives both in relation to packaged goods and online distribution and gaming.
Looking to the Future
IESA expects to make announcements in the near future with regard to its publishing line-up, new distribution alliances, brand management initiatives and online strategy.
IESA's Chairman and Chief Executive Officer, Patrick Leleu, declared: "The appointment of a new Board for Atari is a keystone of the Strategic Programme to improve the Group’s operating and financial performance. This major step will allow the Group to get closer to achieving the key objectives of this plan, which include: re-launching the publishing activities to leverage the Group's intellectual properties, taking the necessary actions to improve further our distribution, particularly in the United States, developing an online presence to take full advantage of this global entertainment medium, and more extensive use of the Atari name, one of the most recognized brands in the industry.”
This press release contains certain forward-looking statements. Although IESA believes its expectations are based on reasonable assumptions, these forward-looking statements are subject to numerous risks and uncertainties, which could cause actual results to differ materially from those anticipated in the forward-looking statements.
About Infogrames Entertainment and Atari :
Infogrames Entertainment (IESA), the parent company of the Atari Group, is listed on the Paris Euronext stock exchange (ISIN code: FR-0000052573) and has two principal subsidiaries: Atari Europe, a privately-held company, and Atari, Inc., a United States corporation listed on NASDAQ (ATAR).
The Atari Group is a producer, publisher and distributor of interactive entertainment software for all market segments and in all existing game formats (Microsoft, Nintendo and Sony) and on CD-ROM for PC. Its games are sold in more than 60 countries.
The Atari Group’s extensive catalogue of popular games is based on original franchises (Alone in the Dark, V-Rally, Test Drive, etc.) and international licenses (Dragon Ball Z, Dungeons & Dragons, etc.).
For more information: http://www.atari.com