By selling part of itself, videogame peripheral maker Mad Catz Interactive Inc. made it into the black for its second quarter.
The cost of delivering products was nearly equal to net sales during the quarter, and the costs of running the business threatened to put Mad Catz (NYSE: MCZ) in the red — even though the company had dramatically cut its sales and marketing budget.
However, the business reported a net gain of $8.2 million on the sale of Saitek, its unit that makes flight simulators. Logitech paid $13 million cash in the deal, announced in mid-September.
Sales were dramatically lower than one year ago. Mad Catz reported net income of $4.1 million, or 6 cents per share, on net sales of $14.9 million for the quarter ended Sept. 30. For the same quarter one year ago, it reported a net loss of $1.6 million, or 2 cents per share, on net sales of $38.9 million.
The company attributed the revenue drop to lower sales of its Rock Band 4 peripherals, including guitar-shaped controllers.
Sales and marketing expenses were almost $4.5 million in the 2015 quarter. Mad Catz was able to cut that about 67 percent to less than $1.5 million in the second quarter of 2016. There was a 20 percent cut in general and administrative costs.
The cost of sales was $14.33 million in the recently completed quarter, barely lower than the $14.87 in net sales.
Karen McGinnis, the company’s CEO, said she and her co-workers “continue to make solid progress against our operational objectives while positioning Mad Catz to leverage the opportunities ahead around console, PC and mobile gaming. …
“As we enter the second half of fiscal 2017 and the holiday season, we will continue to focus on delivering shareholder value by efficiently bringing new products to market, supporting our new product launches, further expanding our retail partner footprint and maintaining operational discipline and focused execution. We’ve got momentum, a winning product portfolio and an exceptional team to lead us along the way.”
The company said it was able to sell its remaining Rock Band merchandise, selling it before the end of a wind-down period.
