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39
approximately 28%. The tax rate for fiscal2007 is higher because of non-deductiblestock-based
compensation expense recognized under FAS 123R.
Minority Interest and Discontinued Operations
Minorityinterest reflects the income allocable to equity interests in Minick thatare not ownedbyTHQ.
Prior to December 1, 2006, we owned 50% of Minick’s outstandingcommon stock and controlledits board
of directors. On December 1, 2006, we sold ourinterest in Minick. As of March 31, 2007we received
approximately $17.1 million in cash and recognizeda gain of approximately $3.1 million in discontinued
operations dueto thesale. Pursuant to the Minick sale agreement, we mayreceive additionalconsideration
of approximately $2.7 million over the next 9to15months. If such amounts are received, the additional
gain recognized will be reported in discontinuedoperations in theperiod theproceeds are collected. The
results of Minick’s operations were not material to any of the periods presented and have therefore not
been reclassified as discontinued operations.
Comparison of Fiscal2006 to Fiscal 2005
Our net income for fiscal 2006 was $32.1 million, or $0.49 perdiluted share, as compared to $61.4 million,
or $1.02 perdiluted shareinfiscal 2005.
Net Sales
Thefollowing table detailsour netsales by territory for fiscal2006 and 2005 (in thousands):
Fiscal Year Ended March 31,Increase/
20062005 (Decrease) % Change
North America ..............$489,945 60.7% $470,619 62.2% $19,326 4.1%
Europe .....................269,928 33.5 245,083 32.4 24,845 10.1%
Asia Pacific.................46,687 5.8 41,029 5.4 5,658 13.8%
International................316,615 39.3 286,112 37.8 30,503 10.7%
Consolidated netsales........ $806,560 100.0% $756,731 100.0% $49,829 6.6%
Net sales in fiscal 2006 increased 7% over fiscal 2005,from $756.7 million to $806.6million. Theincrease
in net sales was primarily dueto thefollowing:
•An increase in the number of titles that shipped more than one million units in thefiscal year from
six in fiscal 2005 to 10 in fiscal2006.
•Higher fiscal 2006 sales of neworiginal,ownedpropertiestargeted to thecoregamer,Juiced,
Destroy AllHumans! and The Outfit,our first new generation console title,as compared to core
gamer titles released in fiscal2005: Full Spectrum Warrior™, The Punisherand Warhammer 40,000:
Dawn of War.
•International net sales increased $30.5 million and11% in fiscal 2006 as compared to fiscal 2005
due to continued sales and marketing expansion in the international markets as well as the release
of games with increased international appeal.
•The continued sales of games released in prior fiscal years (we refer to this as “catalog sales”).
•Higher sales of games on handheldplatforms due to the introduction of Nintendo Dual Screen and
PlayStation Portable.
•These itemswere partially offset by lower fiscal 2006 salesoftitles based on two of our key brands:
The Incredibles:Rise of the Underminerand SpongeBob SquarePants:Lights, Camera, PANTS! as