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EX-99.1 - EX-99.1 - THQ INCa09302011ex991.htm


 


 

 
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C.  20549
 FORM 8-K
 
CURRENT REPORT
Pursuant to Section 13 OR 15(D) of The Securities Exchange Act of 1934
 
Date of Report (Date of earliest event reported): October 31, 2011

THQ INC.
(Exact name of registrant as specified in charter)
 
 
Delaware
 
0-18813
 
13-3541686
 
 
(State or other jurisdiction
 
(Commission
 
(IRS Employer
 
 
of incorporation)
 
File Number)
 
Identification No.)
 
 
 
29903 Agoura Road
 
 
 
 
Agoura Hills,
 
 
 
 
California
 
91301
 
 
(Address of principal executive offices)
 
(Zip Code)
 
 
(818) 871-5000
(Registrant's telephone number, including area code)
 
(Former name or former address, if changed since last report.)
 
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
 
o    Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
 
o    Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
 
o    Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
 
o    Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
  

 






Section 2 — Financial Information
 
Item 2.02  Results of Operations and Financial Condition
 
On November 2, 2011, THQ Inc. (“THQ” or the “Company”) issued a press release announcing its financial results for the fiscal 2012 second quarter.  A copy of the press release is attached hereto as Exhibit 99.1.  Neither the information contained in this Item 2.02 of this Form 8-K nor the information in the press release shall be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by specific reference in such a filing.
 
Use of Non-GAAP Financial Information
 
In addition to containing results determined in accordance with United States generally accepted accounting principles (“GAAP”), the Company's press release attached hereto as Exhibit 99.1 discloses non-GAAP financial measures that exclude the impact of the following: stock-based compensation expense; certain deferred revenue and related costs; business realignment expense; capitalized interest; and other significant charges and benefits.  The Company excludes these expenses from its non-GAAP financial measures primarily because the Company does not believe they are reflective of the Company's primary business, ongoing operating results or future outlook. Non-GAAP results also include the impact of any foreign currency fluctuations on our available-for-sale investment securities, when classified in equity for GAAP purposes. Additionally, for non-GAAP purposes, the Company uses a fixed, long-term projected tax rate of 15% to evaluate its operating performance, as well as to forecast, plan and analyze future periods. The Company believes that the use of non-GAAP financial measures provides meaningful supplemental information regarding its financial condition and results of operations, and helps investors compare actual results to its long-term operating goals as well as to its performance in prior periods.  The non-GAAP financial measures included in the press release have been reconciled to the comparable GAAP results and should be considered in addition to results prepared in accordance with GAAP, but should not be considered a substitute for, or superior to, GAAP results.

 
Item 2.03 Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant.

As of October 31, 2011, THQ has borrowed $22.0 million under its Credit Agreement and Security Agreement (collectively, the “Credit Facility”) with Wells Fargo Capital Finance, LLC (“Wells Fargo”). The Credit Facility provides for a $75 million revolving credit facility from October 1, 2011 through December 14, 2011 and $50 million revolving facility at all other times during the term of the Credit Facility. The Credit Facility was filed as Exhibits 10.1 and 10.2 to the Company's Current Report on Form 8-K filed on September 28, 2011. For a summary of the material terms of the Credit Facility, including payment and acceleration provisions and covenants, which are incorporated into this Item 2.03 by reference, see the Company's Current Report on Form 8-K filed on September 28, 2011.

These borrowings bear interest at an annual interest rate of approximately 4.0% for each draw. Over the next several weeks, the Company intends to borrow additional amounts of approximately $35.0 to $45.0 million. The proceeds will be used to fund working capital needs. Cash flow used in operations tends to be highest during the first part of the third fiscal quarter, as the Company invests heavily in inventory for the holiday season. Cash flow generally turns positive at the end of the third fiscal quarter as the Company starts to collect on holiday season accounts receivable. The Company anticipates repaying all borrowings under the Credit Facility prior to December 31, 2011.







Section 9 — Financial Statements and Exhibits
 
Item 9.01  Financial Statements and Exhibits
 
(d)
Exhibits
 
 
 
Exhibit
Number
 
Description
 
99.1
 
Press Release dated November 2, 2011, relating to the Company's financial results for the fiscal 2012 second quarter.
 

 





SIGNATURES
 
Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the Company has duly caused this report to be signed on its behalf by the undersigned, thereto duly authorized.
 
 
 
THQ INC.
 
 
 
 
By:
/s/ Paul J. Pucino
Date:    November 2, 2011
 
Paul J. Pucino,
 
 
Executive Vice President and Chief Financial Officer
 


 





INDEX TO EXHIBITS
 
Exhibit
Number
 
Description
 
 
 
99.1
 
Press Release dated November 2, 2011, relating to the Company's financial results for the fiscal 2012 second quarter.