Thrustmaster Inc. released financial figures for the second quarter 1998, announcing that it raked in revenues of US$4.1 million, as compared with revenues of $7.1 million for the same quarter in 1997. That translated to a net loss of $2.8 million, or 65 cents per share, diluted, for the second quarter 1998, as compared with earnings of $300,000, or 7 cents per share, diluted, in 1997.

　　The company reported year-to-date revenues of $10.4 million for 1998, compared with $13.4 million for the first six months of 1997. Thrustmaster reported a net loss of $4.1 million (93 cents per share, diluted) for the period in 1998; in 1997, the company reported a net income of $600,000 or 14 cents per share, diluted.

　　The peripheral-maker issued a statement to explain the loss, saying, "Sales of personal computers and related peripherals in the retail PC consumer marketplace have been extremely soft during the second quarter of 1998 due in part to extreme seasonality and consumers delaying purchases until after the introduction of Windows 98 in June. Generally, retailers have aggressively moved to increase sagging sales by demanding increased marketing funds, rebate programs, and price protection. Consequently, the company incurred significant costs to maintain retail shelf space, which are reflected as an increase in selling expenses for the quarter. In early June, the company reduced revenue expectations for the quarter to between $4 and $5 million and initiated a cost-reduction program, which included a reduction in the workforce of 30 percent."

　　The statement goes on to say, "The company continued to experience higher than normal returns of its products, due in part to retail accounts returning excess inventory and general installation challenges with certain software games in the Windows environment. The company has moved aggressively with game developers to provide software upgrades and has made changes to its products to provide for easier installation. The introduction of Windows 98 coupled with the Universal Serial Bus (USB) should reduce returns as it provides a new level of true plug-and-play connectivity for future game controllers and other peripherals."