MicroProse Inc. said yesterday that the recent resignations of two top executives, though coming on the heels of a disappointing earnings report, were not a sign of larger problems at the company.
An official at the Hunt Valley-based maker of flight simulation and other video games said yesterday that although the two resignations, both in the past week, were "just a coincidence," MicroProse would use the opportunity to improve its management and the timeliness of its new-game deliveries.
Company Vice President Jerry Blair acknowledged yesterday that "the timing of the announcements did not look good" and were liable to lead to speculation that the departures might be a result of Chairman and founder John W. "Wild Bill" Stealey's unhappiness with the company's poor financial performance.
But he said the departures of President Mark L. Barnett and Chief Operating Officer James W. Thomas were attributable to better opportunities, and he noted that computer executives change jobs frequently.
Some investors in MicroProse said they doubted the company's explanation, and said the resignations were mixed news for the company.
"It's not a coincidence," said Lisa Thompson, whose New York-based mutual fund, Evergreen Asset Management, holds 40,000 shares of MicroProse's stock.
She said she was sorry to see the company's announcement Monday that Mr. Thomas would be leaving to take a job with an unidentified company in California.
"He's professional," she said. "And in this industry, that's not that common. These guys don't build rocket engines; they make games. So, if they're a little flaky, you expect that."
Last week, the company said, without elaborating, that Mr. Barnett had resigned to create a company.
In December, the company announced that its most recent flight simulation game, "F-15 Strike Eagle III," wasn't shipped until Dec. 15 -- too late to make the Christmas rush. As a result, its earnings were only $893,000 in the three months that ended Dec. 31, representing a 61 percent decline from the same quarter a year earlier. For the first three fiscal quarters that ended Dec. 31, the company earned $771,000, down from $3.2 million the year before.
When the company was private, late deliveries didn't matter to the company as much, because game buyers don't usually mind if a game is late as long as it is good, Mr. Blair said. Investors are less patient.
Since the company went public in 1991, investors expect consistent earnings improvements, he said. "We've got to get better at delivering when the market is ripe," he said.
The company will take advantage of the management changes to find ways to improve timeliness, he said. For example, a veteran software developer, Raymond Rutledge, was promoted this week to take over development of the company's specialty -- high-powered games for personal computers.
Ms. Thompson said that the December shipment problem was the second delay of the year and that it explained why the company's stock was pounded down to its all-time low of $6.50 a share. It closed yesterday at $9.25 a share, down 25 cents.
In June, the company announced that product delays would force it to post a loss for that quarter.
"One blip we forgave; two blips are chronic," Ms. Thompson said, adding: "It's three strikes and you're out."