THQ Reports Record Fiscal 2007 Third Quarter Results

THQ Reports Record Fiscal 2007 Third Quarter Results

THQ Inc. (Nasdaq: THQI) today announced record net sales and earnings for the fiscal third quarter ended December 31, 2006, updated its outlook for the fiscal year ending March 31, 2007, and provided initial guidance for the fiscal year ending March 31, 2008. THQ’s fiscal 2007 third quarter net sales increased 33% to $475.7 million, from $357.8 million a year ago, driven by strong sales of WWE(R) SmackDown(R) vs. Raw(R) 2007, Cars, Avatar, SpongeBob SquarePants and Destroy All Humans!(R) 2.

The company reported record fiscal third quarter net income of $62.1 million, or $0.91 per diluted share, which included stock-based compensation expense of $0.09 per diluted share. On a non-GAAP basis, excluding stock-based compensation expense, net income was $68.1 million, or $1.00 per diluted share. For the same period a year ago, THQ reported net income of $46.9 million, or $0.71 per diluted share, which included stock-based compensation expense of $0.02 per diluted share. On a non-GAAP basis, excluding stock-based compensation expense, fiscal 2006 third quarter net income was $47.8 million or $0.73 per diluted share. A reconciliation of non-GAAP to GAAP results is provided in the accompanying financial tables.

For the nine months ended December 31, 2006, net sales increased 30% to $854.8 million, from $658.5 million for the same period a year ago. THQ reported net income of $61.5 million, or $0.92 per diluted share, which included stock-based compensation expense of $0.18 per diluted share. On a non-GAAP basis, excluding stock-based compensation expense, net income was $74.0 million, or $1.10 per diluted share. For the prior year period, THQ reported net income of $40.8 million or $0.63 per diluted share, which included stock-based compensation expense of $0.03 per diluted share. On a non-GAAP basis, excluding stock-based compensation expense, net income for the prior year period was $43.1 million, or $0.66 per diluted share. A reconciliation of non-GAAP to GAAP results is provided in the accompanying financial tables.

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