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Atari Corporation Annual Report 1990 PDF

24 Pages·1991·2.3 MB·English
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1990 ANNUAL REPORT Profile AtariCorporationisoneofthelargestmanufacturersofpersonal computersandvideogamesystemsintheworld.Throughcreative application ofadvanced technoiogiesy the Company offers its customersa widerangeofcomputersandentertainmentgame systems. The Company alsoproduces an expandmg library of computerandvideogamesoftwareyOSwellasperipheralsand accessoriesthataresoldirtalmosteverymajorcountryintheworld. Atanisamulti-nationalcompanyemployingapproximately1260 peoplethroughouttheworld. Corporateheadquarters^ mcludmg compterandvideogameproductdesi^arelocatedinSunnyvak California.R&DcentersarelocatedintheUnitedStates,England, Japan,andTaiwan.ManufacturingiscarriedoutinTaiwan,Japan, and by various subcontractors m theFarEast The Company operatesthroughwhollyownedsubsidiariesinAustralia,Austria Belgium,Canada,Denmark,France,Germany,HongKong^Israel, Italy, Japan, Mexico, theNetherlands, Norway, Spain, Sweden, Switzerland, Taiwan,theUnitedKingdom,andtheUnitedStates. To Our Shareholders Duringtheyear 1990,Atari Corporationimproveditsbalance sheetand tooksteps toreduceinventory andoperatingexpenses. Whileoursubsidiaries inEuropeshowedoverallsalesgrowthwithgoodincreases inthe United Kingdom andFrance, ourbusiness inNorthAmericacontinuedtoexperience severe competitioninthevideogameandcomputermarkets andsaleswere downin 1990. FortheyearendedDecember31, 1990, netincomewas $14.9million onsalesof$411.5 million. Thiscompareswithnetincomeof$4.0millionon salesof$423.6millionin 1989. Duringthesecondhalfof 1990, the Company repurchasedapproximately40% ofits 5 convertiblesubordinated debentureswhichresultedinagainof$21.1 million. Inthefourth quarter of 1990, the Companyprovidedsignificantinventory reserves, including its traditionalU.S. videogameproducts, to reflectcurrentmarketvalue. In addition, havingsubstantially completeditsliquidationoftheremaining assets andliabilitiesofits discontinuedoperations, excessreserveswere adjustedindiscontinuedoperationsof$14.6million. Ourperformancein 1990wasdisappointingfrom asalesandoperatingprofitpointofview. Howeverasaresultofthereasonsabove, theCompany'sbalancesheet improvedwhichresultedinnetincomeof$14.9millionfortheyear. Net Income (inmillions) Atari Corporation 1 . Weare investinginnewproductR&D andthisshouldhelp positionthe Company intheyearstocome. Wearealso concentratingonreducingour operatingcostsbyvariousmeansincludingtheexpansionofindependent subcontractorsforproductionpurposes. Inthethirdquarterof1990, AtaristartedshippingtheAtariTT030™ personalcomputer, basedonthepowerfulMotorola®MC68030™ micro- processor. TheTT030, alongwiththe MEGASTE™ a68000basedcomputer, , addadvancedproducts to ourflagship line ofpersonalcomputers. The STE™ andTT™ linecontinues to attracttop software developersthroughoutthe worldandwe arecontinuingto developnewhardwareandsoftwareforthis family ofproducts. AttherecentHannoverFair(March 1991)inGermany, the AtariST™ compatibleNotebookportableandtheinnovativeAtariSTylus™ portablewereintroduced. Thetwomachineshavelongbattery life andthe AtariSTylus features apenorientedoperationwith characterrecognition. As aresultofournewmarketingapproach andalowerretailpricepoint, theAtariPortfolio®, ouronepoundportableP.C. advancedorganizer, is doing well. New Portfolio softwaretitles arebeingreleasedin 1991 which should enhancethe Portfolio'spositioninthe marketplace. TheAtarilineofMS-DOS® compatibles sufferedfrom acontinuingsevereshortageofIntel®80386 microprocessors. Withrecentproductannouncementsinthe80386market- Wrapping type aroundan irregular object. A featurefrom DeskSet IIby G.O. Graphics, Inc. Desk File Page ftrtide Region Objects Setup Text Options NeH AN CASTLE.DSZ V Load Docunent. *L . . Save Docunent. . . ,rJK/w^—S |rnAjdiriaiip™ro^viiiceofCnrinlhiareignsoneofEurope^mostmmai-ilic Load CIipboard ^[ mightyfortessprotBCtBd bym£«»ivewallsand 14 Save Clipboard... ^] ssilsatopasteeppillarofsolidstone.ThetactthatHochosierwitz }:attsaudc^cebsystfhuelly besiefgeeadrs,odmesepiTtuerikteihsihghlayndstraHteugnigcalroiccaut- Load Base Page... ests to the strength of this most forbidding Save Base Page... rstrecorded mention of Hochosterwitz was a.d.,when KingLudwigiheGermangave Load Tags... then called Aslartii^za,toArchbishop Save Tags. nizburg.But itsmostfamousresidents . powerful KhevenhulIers,0neofthe Ap alfnmilies inallofmedievalAustia. Print venhuller vonAiChe!berg received .fier the death of Archbishop Inforaation gin 1540. Then the ers strengthened and Quit ^^^^ casHeuntilitachieved ing appearanceoiiesees toihisday,toweringmajeslicallyaboveihevalleynearihesceniclittiedtyofSt.\te\t. Atari Corporation 2 . place, wehope thatthis shortagewillsubside duringthesecondhalfof 1991 andthatwe canreestablishthis lineinour distributionnetwork. Inourvideogamebusinesswe areverypleasedwiththe consumer response to the new marketingcampaign andlowerretailpricepoints ofthe AtariLynx™ as announcedattheJanuary 1991 ConsumerElectronicsShow. As aresultofthereleaseofonly 12 titles during 1990, andthehigherlaunch price, sales oftheLynxwereslow. However,with thenewmarketing campaignandtheplantomake availableforsaleover40titlesin 1991,we expectamuchbroadermassmarketappeal. TheAtari 2600®and7800™ continueto sellwellinEuropewhilethemarketforthesetwoproducts in NorthAmericais extremely slow. New table topvideogameconsoles are plannedforintroductionin 1992 Whilewelookat 1991 with caution dueto theworldwide economic downturn, we are confidentthat ourpresentandfutureproductswillbewell received. Thankyou allforyourcontinuedsupport. SamTramiel, President Retouche Professional by 3K Computerbildprovides leading technologyforprofessionalpreparation ofmaterialsforprinting. RE-PRO Datei Bild Job Atari 3 v. -j u i< A T 1 j . . Desk File UieN Options Install Icon. y . v.*.A _ F DE'.'ICE DE'.'ICE Install Devices [0] DE'.'ICE DE'.'ICE DE'-..'ICE ^^ff;* .W(V.'AVAVAN'.W- C!\FSMDEMO\*.» DEVICE DE'.'ICE Set Preferences. . d in 12 itews. a Read .INF File... IK'}M Desktop Configuration. .. [M] =RGFLM1Ji-.F-R1J M '.'C'RMJ.F'Ri W.V^*WAV/A*.WWiff*AV«Vi^iW.W»Wt-.VAV.".V.W.V.' FSMFONTS Save Desktop [V] Print Screen [P] UFII.PRG mi)ID'jTRRT.FRGS .A-.'A'.WAVAV y Cache UTILITIE F:\TT-DEMO\*.# 15B0132 byt^:. 338470 bytes used in 2B i I I III II Z 10.CFN FiRC 11?I CFH I=|RC_10IT.CFN FlRC_10_T -FTIN'.-'7.UND THEiET.MND NI I I II II |=|RC_EE-.CFN i=iRC_EE-1.CFN ftR:C_S&IT.CFN |=|RC_Z;E._T.CFN The Atari TT030 displays an easier than evergraphic interface. TheAtariTT030 system, whichbeganshippingduringthefalloflast yearhasbroughttothemarketplaceanewlevelofperformanceindesktop publishing, high speedgraphics, andprofessionalimageprocessing. Thepower, speed, andsuperbresolutionoftheTT030, enhancedby itsMotorolaMC68030 CPU runningat 32 MHz, enables theAtarisystem to professionally handle thepreparationofmaterials forprintinganddesktop publishingsoftware. Finalresults, which determine computer selection atthe outset, meet themost demandingstandards ofexpertlithographers. Thegraphsillustratedonpageoneofthisreportwerecreatedwith SciGraph™ ahigh-endgraphingandvectordrawingprogram from Scilab. , Thecaptions, alongwith allofthereporttextandfinancialdatainthisbook aretheproductofDeskSef" II, from G.O. Graphics, Inc. Thisprogram contains texteditingandpagelayoutcapabilities. Print-ready outputwasproducedon the Compugraphic®8400 typesettingsystemusingG.O. Graphics' Typesetter Driver Option'" cardinterface. Atari Corporation Desk File Functions Quantize HIDI Flags Options Edit Copy NOTATOR" fivm C-LAEP is an all encompassingMIDI composition andproduction system. Settingtextintooraroundanirregularshapeorimagehas alwaysbeen atedious, timeconsumingeffortby traditionalmethods. DeskSetIImakes iteasy andsetsnew standardsforoutstandinggraphicpresentations. RetoucheProfessional™ is astate-of-the-artimageprocessingpackage developedby 3KComputerbild. Itprovides 256levels ofgray tones. Halftones areimpeccable. Controls forelegantcontrastsandbrightness arecomple- mentedby anextensiverange offilters to achieve artisticeffects. Thisprogram offers a "jobs" feature fororganizingscannedimages, masks, type, andline artforassembly ofdistinctelementsintocombinedphotomontages. There areover 120 selectablehalftonescreenstomatchtheappropriatescreenangle anddotpatternforaparticularoutput device andadesiredprintingpress. Retouche CD"; acolordesignprogram, is alsoavailable. Atari Corporation 5 ReflectingthepowerandeaseofuseofthenewAtarisystemisits thoroughlydetailedgraphicuseriitorfaca Anoperatorcanactually custom- izeon-saeeniconsandkeytx)ardequivalents,makingdataorganizationmore * convenientthanever. TheessenceofAtari'sadvancedtechnology^ remainsits TOS® operating system. Itprovides thebroadesthorizonforcreativelicenseinpersonal computingandinthe arts. Inadditionto qualityprint output, Atari computers continueto generate the contemporary sounds ofmusicians aroundthe world. WorkingwithNOTATOR, thepowerfulcompositionandproduction programfrom G-Lab, newdimensionsinaudioarebeingexploredbysuch artistsasTerry Riley, pion^rof "Minimalism,"Jean-MichelJarre,renowned composer, andStarParodi, keyboardistforThePosse, ArsenioHall'sTVband. Atarisystemsalsohelptocreatethesoundtracks, andsoundeffectsinmany moviehitssuchas OliverStone's, "TheDoors," aTriStarPicturesrelease. Financial Contents Consolidated Balance Sheets 8 Consolidated Statements -OF'Operations :t .,-:mm^^m:''^'- Consolidated Statements of ShAKEHOLDERS* EQUiTY / 10 Consolidated Statements OF Cash Fiw 11 Notes to Consolidated 12 Financial Statements Independent Auditors' Report 16 MANAGEMENT'S DISCUSSION 17 AND Analysis Selected Financial Data 20 20 Directors and Officers 21 Corporate Offices mm 0 R P"0 R A T 1.0 N Consolidated Balance Sheets December31, 1990 and1989 (amounts in thousands, exceptshareamounts) 1990 1989 A^0lS ' \ ' Current ASSETS: Cash and equivalents (including $2,892 and $3,884 held as restricted balances in 1990 and 1989 respectively—Note 5) $ 36,919 $ . 54,912 Trade receivables (less allowances for returns and doubtfulaccounts: 1990, $9,738; 1989, $10,579) 95,844 99,296 Inventories (Note 3) ^ 114,331 129,881 Prepaid expenses 5,817 4,726 Other current tax assets 1,352 10,322 Total current assets 254,263 299,137 PROPERT^~Net (Note 4) ji , . f'' -i ,:,:;V,'>.U!•:'.*!, i*I'''' ,,<\' 13,639 13,900 Other Assets 4,736 9,939 Total $ 272,638 $ 322,976 Current Liabilities: ' Notes payable (Note 5) $ 28,231 $ 35,433 Accounts payable * 74,252 84,072 Net cuirrent liabilities of discontinued operations (Not^, 2) 11,868 Income taxes payable 427 367 Accrued liabilities (Note 7) 19,452 27,835 Total current liabilities 122,362 159,575 LongTerm Obligations (Note 5) 49,016 77,402 Commitments (Note 6) and Contingent Liabilities (Note 11) Shareholders' Equity (Note 9): Preferred sfock, $.01 par value—authorized 10,000,000 shares; none outstanding Common stock, $.01 par value—authorized, 100,000,000 shares; outstanding: ^ 1990, 57,743,042 shares; 1989, 57,697,835 shares 577 577 Additional paid-in capital 143,529 143,226 Notes receivable from sale of common stock r (614) (827) Accumulated deficit (41,054) (55,928) Accumulated translation adjustments (1'178) (1,049) Total shareholders' equity 101,260 85,999 \ TOT4L v„ , t $ 272,638 $ 322,976 See notes to consolidatedfinancialStatements. Atari Corpora t i o n

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