Atari: Delay in Filing 10-K & Earnings Call Postponement
Published by 15 June 2007, 11:10 AM EDT

You have been hearing for some time from us that Atari is not doing so well in the financial world as of late. To add insult to injury, their latest press release states that they will be filing their 10-K (annual report) late, and have postponed their latest earnings conference call:

NEW YORK, June 14 /PRNewswire-FirstCall/ — Atari, Inc. (Nasdaq: ATAR), an interactive entertainment company, today announced that it would require an extension of time to file its Annual Report on Form 10-K, which was due to be filed today. The delay in filing is primarily due to a need to make a final determination regarding the amount of a goodwill impairment charge that will be reflected on its fourth quarter and year-end financial statements.

On April 30, 2007, the Company filed a Form 8-K in which it reported that it would be announcing that a non-cash charge for impairment of goodwill would be recorded during the fourth quarter of fiscal 2007 due to the significant decline in the Company’s market capitalization. However, it could not at that time make a reasonable estimate of the amount of the impairment.

Although the Company has not finalized its analysis, it now estimates that the charge will be equal to all or a substantial portion of the $54.1 million of goodwill that was on the Company’s books before the impairment charge.

Without taking account of the non-cash charge for impairment of goodwill, the Company would have a net loss approximating $17.2 million, or $1.28 per share, for the year ended March 31, 2007. The charge for the impairment of goodwill could increase the net loss by as much as $54.1 million, or $4.02 per share. Net revenues for the year ended March 31, 2007 were approximately $121.6 million.

The Company expects to file its Form 10-K in late June and will schedule an earnings call at that time.

Never a good thing.

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