Well, after yesterday’s surprise announcement that most of Mad Catz’s Sr Leadership had resigned, today we find out what may have been the catalyst. With their earnings announced, it was revealed that the company had a huge bump in sales, but had a significant drop in margin (9.7%) from the prior year quarter. That usually translates into over stock of inventory or selling your product too cheaply. The money quote comes courtesy of new President and CEO Karen McGinnis:
“Our quarterly net sales were the second highest in the Company’s history reflecting strong Rock Band 4 sales, which were partially offset by continuing softness in sales of our audio and PC gaming products. However, Rock Band sell-through was lower than originally forecast resulting in higher inventory balances as well as lower margins due to increased promotional activity with retailers.”
So there you have it. They forecasted way too high on Rock Band, whether that is the game or the peripherals (I am betting the latter) and their PC accessories and headset sales are simply not doing what they expect.
A couple of us had a quick discussion internally, and one of the issues the staff believes is that you simply cannot find the Mas Catz branded peripherals at your normal outlets. They don’t have much shelf space at big box retailers like Wal-Mart, Best Buy or target and most of their stuff has to be purchased online. Here his hoping that the company can make a quick turnaround, as they seem to be a literal mess right now as they wade through challenges with the corporate direction, leadership changes and fiscally.
UPDATE: Apparently missed in my first run through, the company will be restructuring and will be laying off 67% of the staff.
The plan consists of a reduction in the number of positions across the organization equal to approximately 37% of the total workforce and includes changes at the executive level.
Here is hoping that some of the good people we have met over the years are able to quickly find new work if they are impacted.
