THQ 2012 Annual Report Download - page 83

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21. Quarterly Financial Data (Unaudited)
Twelve Months Ended March 31, 2012
Quarter Ended
(
Amounts in thousands, exce
p
t
p
er share data
)
June 30,
2011
Sept. 30,
2011
Dec. 31,
2011
March 31,
2012
Fiscal
2012
Net sales $ 195,153 $ 146,004 $ 305,449 $ 184,235
$ 830,841
Gross mar
g
in 55,031
(
13,031
)
48,244 4,317 94,561
Restructurin
g
(
140
)
6,082
(
480
)
1,341 6,803
O
p
eratin
g
loss
(
37,743
)
(
96,869
)
(
54,631
)
(
52,906
)
(
242,149
)
Net loss attributable to THQ Inc.
(
a
)
(
38,445
)
(
92,385
)
(
55,879
)
(
55,797
)
(
242,506
)
Loss
p
er share
—
b
asic $
(
0.56
)
$
(
1.35
)
$
(
0.82
)
$
(
0.82
)
$
(
3.55
)
Loss
p
er share
—
dilute
d
$
(
0.56
)
$
(
1.35
)
$
(
0.82
)
$
(
0.82
)
$
(
3.55
)
Twelve Months Ended March 31, 2011
Quarter Ended
(
Amounts in thousands, exce
p
t
p
er share data
)
June 30,
2010
Sept. 30,
2010
Dec. 31,
2010
March 31,
2011
Fiscal
2011
Net sales $ 149,379 $ 77,053 $ 314,589 $ 124,237
$ 665,258
Gross
p
rofit 34,433 11,305 61,951 38,024 145,713
Restructurin
g
168
(
161
)
140 455 602
O
p
eratin
g
loss
(
27,680
)
(
42,335
)
(
16,108
)
(
49,571
)
(
135,694
)
Net loss attributable to THQ Inc.
(
a
)
(
30,110
)
(
46,985
)
(
14,947
)
(
b
)
(
44,056
)
(
c
)
(
136,098
)
Loss
p
er share
—
b
asic $
(
0.44
)
$
(
0.69
)
$
(
0.22
)
$
(
0.65
)
$
(
2.00
)
Loss
p
er share
—
dilute
d
$
(
0.44
)
$
(
0.69
)
$
(
0.22
)
$
(
0.65
)
$
(
2.00
)
(a) Includes business realignment and related charges and adjustments related to severance and cancellation of games which are not classified as
restructuring, as follows (income/(expense)):
Quarter Ended Full Fiscal
Yea
r
(
Amounts in thousands
)
June 30 Se
p
tembe
r
30 Decembe
r
31 March 31
Fiscal 2012 $
(
4,831
)
$
(
39,004
)
$
(
4,010
)
$
(
61,456
)
$
(
109,301
)
Fiscal 2011
—
—
(
10,766
)
(
1,777
)
(
12,543
)
(b) Includes license impairment charges of $30.3 million on unreleased kids' movie-based licensed titles (for additional information see "Note 5 —
Licenses and Software Development").
(c) During the fourth quarter of fiscal 2011, we determined that interest expense related to our convertible debt offering in August 2009 had not been
properly capitalized to software development in accordance with ASC Topic 835 — Interest, during fiscal 2010 and the first three quarters of
fiscal 2011. As a result, we recorded an out-of-period adjustment to capitalize interest expense as of December 31, 2010 during the fourth
quarter of fiscal 2011. The adjustment included an increase in capitalized software development of $4.1 million, a decrease in interest expense of
$3.8 million, and a decrease in "Cost of sales — Software development amortization and royalties" of $0.3 million. The effect of this adjustment
decreased our basic and diluted net loss per share for the fourth quarter of fiscal 2011 by $0.06. We evaluated the impact of this accounting error
and concluded the effect of this adjustment was immaterial to our trend of earnings, and the interim and annual consolidated financial statements
of fiscal 2011.
22. Subsequent Events
Licensor relationship
On June 1, 2012, we entered into an agreement to transfer our license to develop future games based on the Ultimate Fighting
Championship ("UFC"). After the write-off of the capitalized software development related to the UFC game currently under
development, we estimate that this will result in a small gain. We also expect this action to result in the closure of the studio
developing the UFC game, which could result in additional cash charges of up to $1.1 million related to severance, up to $1.3
million in cash charges related to leased facilities and non-cash charges of up to $0.5 million related to long-lived assets. We