Mad Catz® Reports Fiscal 2015 Second Quarter Financial Results

Mad Catz Interactive, Inc. (“Mad Catz” or the “Company”) (NYSE MKT:MCZ)(TSX:MCZ), today announced financial results for the fiscal 2015 second quarter ended September 30, 2014.

Key Highlights of Fiscal 2015 Second Quarter and Subsequent:

• Fiscal 2015 second quarter net sales increased 26% to $22.5 million, driven by a 162% increase in net sales across APAC, a 15% increase in EMEA and an 8% increase in the Americas;
• Gross margin improved to 30.0%, compared to 26.7% in the prior year quarter;
• Total operating expenses decreased 15% from the prior year period to $7.2 million;
• Diluted loss per share was ($0.01) for the fiscal 2015 second quarter, compared to a diluted loss per share of ($0.07) last year;
• Net position of bank loan, less cash, of $8.9 million at September 30, 2014, compared to $11.4 million at September 30, 2013;
• Shipped new range of Tritton® Xbox One™ licensed headsets;
• Shipped Pro Racing™ Force Feedback Wheel and Pedals for Xbox One;
• Announced M.M.O.TE™ (Tournament Edition) Gaming Mouse for Windows PC and Mac;
• Announced S.T.R.I.K.E.TE™ (Tournament Edition) Gaming Keyboard for Windows PC and Mac; and,
• Filed a $30 million universal shelf registration statement.

Commenting on the Company’s fiscal 2015 second quarter results, Darren Richardson, President and Chief Executive Officer of Mad Catz, said, “Our results for the quarter were in-line with our previously expressed expectations of year-over-year net sales growth. Sales of our console products are rebounding on the back of the hugely successful next gen console launches, providing us with great optimism for future performance. We also have exciting new products for the PC and Mac that will be launching shortly and, while the smart device opportunity is still in the early stages, there are some clear signs that it’s gaining traction. We are on track with our goal of returning to sales growth and profitability in fiscal 2015.”

Karen McGinnis, Chief Financial Officer of Mad Catz, commented, “We are pleased with our return to top-line growth for the quarter and year-to-date and remain confident that our business strategy, product offerings and financial position will help us return to sales growth and profitability in fiscal 2015. We remain focused on effectively managing our inventory, expenses and accounts receivable while positioning the Company in the best way possible to fully benefit from the upcoming holiday season.”

The Company will host a conference call and simultaneous webcast on November 6, 2014, at 5:00 p.m. ET, which can be accessed by dialing (212) 231-2930. Following its completion, a replay of the call can be accessed for 30 days at the Company's Web site (www.madcatz.com, select “About Us/Investor Relations”) or for seven days via telephone at (800) 633-8284 (reservation #21738355) or, for International callers, at (402) 977-9140.

About Mad Catz

Mad Catz Interactive, Inc. (“Mad Catz”) (NYSE MKT/TSX:MCZ) is a global provider of innovative interactive entertainment products marketed under its Mad Catz® (gaming), Tritton® (audio), and Saitek® (simulation) brands. Mad Catz products cater to passionate gamers across multiple platforms including in-home gaming consoles, handheld gaming consoles, Windows® PC and Mac® computers, smart phones, tablets and other mobile devices. Mad Catz distributes its products through its online store as well as distribution via many leading retailers around the globe. Headquartered in San Diego, California, Mad Catz maintains offices in Europe and Asia. For additional information about Mad Catz and its products, please visit the Company’s website at www.madcatz.com.

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Safe Harbor

Information in this press release that involves the Company's expectations business prospects, plans, intentions or strategies regarding its future are forward-looking statements that are not facts and that involve substantial risks and uncertainties. You can identify these statements by the use of words such as "anticipate," "estimate," "expect," "project," "intend," "should," "plan," "goal," "believe," and other words and terms of similar meaning in connection with any discussion of future operating or financial performance. Among the factors that could cause the Company’s actual future results to differ materially from those expressed in the forward-looking statements set forth in this release are the following: the ability to maintain or renew the Company's licenses; competitive developments affecting the Company's current products; first-party price reductions; availability of capital under our credit facility; commercial acceptance of new in-home gaming consoles; the ability to successfully market both new and existing products domestically and internationally; difficulties or delays in manufacturing; unanticipated product delays; or a downturn in the market or industry. A further list and description of these and other factors, risks, uncertainties and other matters can be found in the Company's most recent annual report, and any subsequent quarterly reports, filed with the U.S. Securities and Exchange Commission and the Canadian Securities Administrators. The forward-looking statements in this release are based upon information available to the Company as of the date of this release, and the Company assumes no obligation to update any such forward-looking statements as a result of new information or future events or developments, except as may be require by applicable law. Forward-looking statements believed to be true when made may ultimately prove to be incorrect. These statements are not guarantees of the future performance of the Company and are subject to risks, uncertainties and other factors, some of which are beyond its control and may cause actual results to differ materially from current expectations.

Adjusted EBITDA (loss), a non-GAAP financial measure, represents net loss before interest, taxes, depreciation and amortization, stock-based compensation, the gain/loss on the change in the fair value of the related warrant liability, goodwill impairment, if any, and acquisition related items. Adjusted EBITDA is not intended to represent cash flows for the period, nor is it being presented as an alternative to operating or net income as an indicator of operating performance and should not be considered in isolation or as a substitute for measures of performance prepared in accordance with generally accepted accounting principles in the United States. As defined, Adjusted EBITDA is not necessarily comparable to other similarly titled captions of other companies due to potential inconsistencies in the method of calculation. We believe, however, that in addition to the performance measures found in our financial statements, Adjusted EBITDA is a useful financial performance measurement for assessing our Company’s operating performance. We use Adjusted EBITDA as a measurement of operating performance in comparing our performance on a consistent basis over prior periods, as it removes from operating results the impact of our capital structure, including the interest expense resulting from our outstanding debt, and our asset base, including depreciation and amortization of our capital and intangible assets. In addition, Adjusted EBITDA is an important measure for our lender.