Majesco Q4 and FY2012: closures and cuts confirmed, Zumba still strong

Zumba publisher Majesco has turned in its financial report sheets for the fourth quarter and year ending October 31, 2012, quietly confirming job cuts and admitting to declining core sales.

Majesco reported net revenue of $26.6 million for the fourth quarter, a 6% year-on-year increase, but an operating loss of $3.0 million, precisely the same result as the same quarter in 2011.

For the year in total, Majesco enjoyed a 6% revenue increase to $132.3 million, but operating income of $3.7 million, a significant decrease on 2011's $11.4 million.

"We met our revenue expectations in fiscal 2012 against the backdrop of weak industry-wide sales," CEO Jesse Sutton said. "We ended the year with $31.3 million in combined cash and availability from our factor and no long term debt."

Zumba was clearly a highlight for the publisher, with Sutton noting it is now the second-best selling fitness franchise ever with more than 8 million sales globally.

But Majesco isn't optimistic about the future, and is keen to adapt to changing industry landscape, adopting an "outsourced, variable cost model", citing the possibility of 50% less sales during the 2013 holiday season.

"For fiscal 2013, we expect declining sales as our core products on legacy platforms decline, and we will be offering a smaller slate of new handheld and console titles than we introduced in fiscal 2012," Sutton said.

As such, Majesco confirmed the closure of its Foxboro, Massachusetts studio and announced job cuts at its New Jersey QA team as well as redundancies in marketing and support. The publisher expects up to $1 million in expenses related to severance packages, resulting in savings of up to $2 million per year.

Majesco's upcoming slate includes mobile title Flea Symphony and DS and Wii effort Monster High Skultimate Roller Maze in the first quarter. The 3DS version of Monster High Skultimate Roller Maze hits in the second quarter along with Young Justice: Legacy on PlayStation 3 and Xbox 360. In the third quarter, Majesco expects a new Zumba title, and a Phineas and Ferb game.

Majesco recently ramped up its mobile efforts. It is one of the most persistent of the smaller fringe publishers and occasionally produces something astonishing.