Mad Catz will be announcing its third quarter earnings for the current fiscal year tomorrow. Today, the company has announced the departure of its CEO and Chairman.
Thomas Brown has resigned as Chairman and will be replaced by John Nyholt. Nyholt has been a member of the Board of Directors since October 2013.
CEO Darren Richardson has also tendered his resignation from his executive post and from the board. He is replaced by former chief financial officer Karen McGinnis.
Additionally, the company’s general counsel and corporate secretary Whitney Person has resigned. He is replaced by Tyson Marshall, who was previously associate general counsel.
Mad Catz bet on Rock Band 4, co-publishing with Harmonix and taking on the hardware distribution. The company’s earnings call will take place on February 9 at 5 p.m. Eastern.
Our Take
This is a major leadership turnover, and the timing hints that the gamble on Rock Band 4 and additional debt financing has not paid off. When we covered the company’s debt warning in July 2015, we indicated that Rock Band 4 needed to hit big with new hardware sales. This signals that the bet may not have paid off.
The company has been posting operating losses since 2011, with recovery slow. If that trend slipped back, the gamble very well could have cost top leadership their jobs.