ACCLAIM ENTERTAINMENT TO REVISE FISCAL 1995 REVENUE AND NET INCOME; Defers Timing of Revenue Recognition on Foreign Licensing Agreements

Business Wire, Dec 4, 1995

GLEN COVE, N.Y.--(BUSINESS WIRE)--December 4, 1995--Acclaim Entertainment, Inc. (NASDAQ: AKLM) today announced that upon further review and analysis, and on advice of its accounting firm, it is revising results for the fiscal year ended August 31, 1995 to reflect a decision to defer $18 million of revenues, and net income of $10.5 million previously reported in the 1995 fourth fiscal quarter. Both revenue and profit will be realized in subsequent quarters as product is shipped.

The revenues being deferred represented nonrefundable, recoupable exclusivity fees. They were included in 1995 results based on an initial understanding that the appropriate accounting was similar to that applied in other entertainment industries for recoupable exclusivity fees.

On a revised basis, revenue for fiscal 1995 was $567 million, pre-tax income was $76 million, and net income was $45 million.

Acclaim has filed for an extension of submission of its form 10K for the 1995 fiscal year. The extension provides for a December 14 filing. However, the Company has indicated that it will file within the next few days.

Acclaim Entertainment, Inc. is a leading worldwide publisher of software for Nintendo, Sega, Sony, personal computer and CD-ROM hardware systems; and comic books. Acclaim also develops coin-operated arcade and ticket redemption games, and operates blue screen and motion capture studios, as well as A.D.I., a global sales and distribution company for products from a variety of entertainment publishers, including Digital Pictures, Domark, Interplay, Marvel, Sound Source Interactive and Sunsoft. Acclaim, which recently formed a new company with Tele-Communications, Inc. for electronically distributed entertainment, is publicly traded on the NASDAQ National Market System under the symbol AKLM. -0-

                    ACCLAIM ENTERTAINMENT, INC.
                          AND SUBSIDIARIES
                    CONSOLIDATED BALANCE SHEETS
                 (in 000s, except per share data)

                                                August 31,
                                            1995         1994
                                           Revised

ASSETS
CURRENT ASSETS
Cash                                       $44,749       $34,676
Marketable securities                       26,503         1,926
Accounts receivable - net                  179,311       164,794
Inventories                                 16,015        15,295
Other current assets                        59,908        34,010
    TOTAL CURRENT ASSETS                   326,486       250,701

OTHER ASSETS
Other assets                               126,993        85,177
    TOTAL ASSETS                          $453,479      $335,878

LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Trade accounts payable                     $49,072       $69,376
Short-term borrowings                        4,233         1,757
Other current liabilities                   53,726        47,748
    TOTAL CURRENT LIABILITIES              107,031       118,881

LONG-TERM LIABILITIES
Other long-term liabilities                 19,461        41,754
TOTAL LIABILITIES                          126,492       160,635

MINORITY INTEREST                            1,628          ----

STOCKHOLDERS' EQUITY
Common stock                                   926           787
Additional paid in capital                 168,785        69,246
Retained earnings                          153,141       106,571
Treasury stock                                (807)         (807)
Unrealized gain (loss) on
  available for sale securities              2,503          ----
Foreign currency translation adjustment        811          (554)
    TOTAL STOCKHOLDERS' EQUITY             325,359       175,243
    TOTAL LIABILITIES AND
      STOCKHOLDERS' EQUITY                $453,479      $335,878

-0-
                        ACCLAIM ENTERTAINMENT, INC.
                             AND SUBSIDIARIES
                    STATEMENTS OF CONSOLIDATED EARNINGS
                      (in 000s, except per share data)

                          Three Months Ended       Fiscal Year Ended
                               August 31,               August 31,
                            1995        1994        1995        1994
                           Revised                 Revised

NET REVENUES              $133,492    $148,868     $566,723   $480,756
COST OF REVENUES            63,588      75,606      268,501    220,744
GROSS PROFIT                69,904      73,262      298,222    260,012

OPERATING EXPENSES
Selling, advertising,
  general and
  administrative expenses   59,738      46,990      214,056    176,725
Operating interest             990         370        3,957      1,979
Depreciation and
  amortization               3,135       1,213        9,543      3,838
TOTAL OPERATING EXPENSES    63,863      48,573      227,556    182,542

EARNINGS FROM OPERATIONS     6,041      24,689       70,666     77,470

OTHER INCOME (EXPENSE)       4,272        (261)       5,608       (475)

EARNINGS BEFORE
 INCOME TAXES               10,313      24,428       76,274     76,995

PROVISION FOR INCOME TAXES   4,305      10,296       31,625     31,940

EARNINGS BEFORE MINORITY
  INTEREST                   6,008      14,132       44,649     45,055

MINORITY INTEREST              (94)       ----         (121)      ----

NET EARNINGS                $6,102     $14,132      $44,770    $45,055

NET EARNINGS PER COMMON AND
  COMMON EQUIVALENT SHARE    $0.11       $0.31        $0.86      $1.00

WEIGHTED AVERAGE NUMBER OF
  COMMON AND COMMON
  EQUIVALENT SHARES
  OUTSTANDING               55,000      45,150       52,300     45,150