THQ 2005 Annual Report Download - page 103

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80
Tetris Litigation. On April 14, 2005, we filed a complaint against The Tetris Company, LLC (“Tetris”) in
the Superior Court of California, County of Los Angeles. The complaint alleges that Tetris breached its
license agreement and certain oral agreements with us, which prevented us from releasing a Tetris product
for the Nintendo DS system as planned in March 2005. Additionally, Tetris has indicated that it believes
the term of our license agreement with Tetris may have expired on March 24, 2005, despite our compliance
with the requirements for renewal pursuant to the terms of the license. Our complaint seeks monetary
damages and injunctive relief against Tetris, as well as a judicial declaration that the term of our license
agreement with Tetris extends to March 24, 2007.
We are involved in other routine litigation arising in the ordinary course of our business. In the opinion of
our management, none of this pending routine litigation will have amaterial adverse effect on our
consolidated financial condition or results of operations.
16. Fiscal Year Change
Effective January 1, 2003, we changed our fiscal year from December 31 to March 31. The table below
summarizes the selected data for the three months ended March 31, 2003 and 2002 (unaudited),
respectively, (in thousands, except per share data):
Three Months Ended March 31,
20032002
(unaudited)
Net sales.......................................... $66,800 $79,682
Costs and expenses:
Cost of sales..................................... 26,378 33,680
License amortization and royalties ................. 5,5767,064
Software development amortization ................ 12,018 10,800
Product development. ............................ 8,8997,064
Selling and marketing ............................ 14,294 9,759
Payment to venture partner ....................... 6441,572
General and administrative ....................... 8,4426,641
Total costs and expenses............................ 76,251 76,580
Income (loss) from operations ....................... (9,451) 3,102
Interest income .................................... 8781,322
Other income (expenses)........................... (2,403) —
Income (loss) before income taxes................... (10,976) 4,424
Income taxes ...................................... (3,290) 1,659
Net income (loss) .................................. $(7,686) $2,765
Net income (loss) per share—diluted ................. $(0.20)$0.07
Shares used in per share calculation—diluted.......... 38,319 41,725