Good morning. Thank you for joining us today for our annual meeting. My name is Hank Diamond, and I'm Senior Vice President of Investor Relations and Corporate Communications for Take-Two. Please note that today's shareholder meeting is being broadcast via listen-only webcast that is available on our website at www.taketwogames.com. A replay of the webcast will also be available on our website later today. Before we begin, I'd like to remind everyone that the statements made during this meeting that are not for historical facts are considered forward-looking statements under federal securities laws. These forward-looking statements are based on the beliefs of our management, as well as assumptions made by and information currently available to us. We have no obligation to update these forward-looking statements. Actual operating results may vary significantly from these forward-looking statements based on a variety of factors.
Other important factors and information are contained in the company's annual report on Form 10-K for the fiscal year ended March 31st, 2019 including any risks summarized in the section entitled Risk Factors. The company's quarterly report on Form 10-Q for the fiscal quarter ended June 30th, 2019, and the company's other periodic filings with the SEC, which can be accessed at www.taketwogames.com. I'd now like to introduce Strauss Zelnick, Chairman and CEO of Take-Two.
Good morning. Thanks, Hank. Welcome all. The annual meeting of stockholders of Take-Two Interactive Software will please come to order. Today's agenda includes a review of the procedures for today's meeting and the proposals to be voted on, and a question and answer session. First, I'd like to introduce our officers, Karl Slatoff, President, Lainie Goldstein, Chief Financial Officer, Dan Emerson, Executive Vice President and Chief Legal Officer, and Matt Breitman, General Counsel Americas and Corporate Secretary of the company. I'd also like to introduce our other board members and nominees who are present today, Michael Dornemann, Roland Hernandez, Jay Moses, Michael Sheresky, LaVerne Srinivasan, Susan Tolson, and Paul Viera. I'd now like to turn the floor over to Dan Emerson.
Good morning. Thank you, Strauss. I will act as chair of this portion of the meeting. Mr. Breitman will act as secretary of the meeting. This meeting will be conducted in accordance with the agenda that was distributed at the start of the meeting. The three proposals to be considered and voted upon at this annual meeting are set forth in Take-Two's proxy filing and will be described in detail shortly. Only stockholders of record at the close of business on July 22nd, 2019, are entitled to vote on the proposals at this annual meeting or any adjournment thereof. This meeting will be conducted in accordance with the procedural rules that have been established and distributed today to ensure that stockholders have an opportunity to properly consider and vote upon the business to come before the meeting.
I would like to take a moment to review several of the key rules. Anyone wishing to address the meeting must be a stockholder of record as of the July 22nd, 2019, record date, or a person holding a valid proxy from a stockholder of record. Stockholders of record should have a yellow coded name tag and a yellow index card stating stockholder of record, which was provided at the registration area before the meeting. Following the presentation of the proposals on the agenda, and while the polls are deemed open for voting on the proposals, we will entertain questions directly related to the matters being voted upon. After we have concluded the business of the meeting, the meeting will be adjourned. We will open the floor to general questions.
By your presence at this meeting, you acknowledge your understanding of and willingness to abide by the procedural rules that were provided to you today. Now let us continue with the business of the meeting. Mr. Breitman, will you please present proof of notice of this meeting? Thank you. Let the record reflect that I have been presented with a copy of the Notice of Annual Meeting of Stockholders dated July 26th, 2019, and the proxy materials dated July 26th, 2019, together with an affidavit of an authorized representative of Broadridge, the company responsible for mailing said materials, affirming as to the mailing on July 30th, 2019, of the notice of annual meeting and proxy materials to stockholders of record at the close of business on July 22nd, 2019. I order the affidavit of mailing be filed with the minutes of this meeting.
Mr. Breitman, will you please present a list of stockholders as of the close of business on July 22nd, 2019, the record date fixed by the board of directors for the purposes of determining stockholders entitled to vote at this meeting. Let the record reflect that I have been presented with a list of stockholders of record as of the close of business on July 22nd, 2019, furnished by an authorized representative of the company's transfer agent. There are 113,178,028 shares of common stock entitled to vote at this meeting. The list of stockholders will be open for inspection by any stockholder of record for the duration of this meeting. I hereby appoint Tom Tighe of Broadridge to act as the Inspector of Elections to determine 1. The number of shares outstanding entitled to vote. 2. The number of shares represented at the meeting. 3. The existence of a quorum.
Four, the validity and effect of proxies. Finally, to receive and tabulate the votes on the matters to be acted upon at the meeting. Mr. Tighe has executed an affidavit to faithfully execute his duties as the inspector. The secretary will attach the affidavit of the minutes of this meeting. It is anticipated that the results will be reported to me as soon as is practical. Is there any stockholder present who has not filled out an attendance sheet showing the name of the stockholder and the number of shares he or she owns? All stockholders of record who have not submitted proxies should do so now unless they wish to vote in person. If you have previously executed a proxy and now wish to vote in person, the proxy will be returned upon your request.
Right here.
Mr. Tighe, please state the number of shares of common stock present in person or represented by the proxy.
There are present in person or represented by proxy, a majority of the outstanding shares entitled to vote at this meeting.
Legal notice of the meeting having been given and a quorum being present, the meeting is lawfully convened and ready to transact business. The first order of business on the agenda is to elect eight directors to serve until the annual meeting of stockholders of the company to be held in 2020 and until their successors have been duly elected and qualified.
The board of directors, acting upon the recommendation of the Corporate Governance Committee, has nominated the following persons who are named in the company's proxy statement to serve as directors of the company until the annual meeting of stockholders to be held in 2020 and until their successors have been duly elected and qualified. Strauss Zelnick, Michael Dornemann, Roland Hernandez, J Moses, Michael Sheresky, LaVerne Srinivasan, Susan Tolson, and Paul Viera . I hereby present to this meeting the proposal set forth in the proxy statement that these nominees be elected as directors of the company for such annual meeting.
I second the proposal.
If there is a stockholder who does not yet have a ballot who wishes to vote in person, please raise your hand so the Inspector of Election can deliver a ballot to you. The next order of business on the agenda is to cast an advisory vote to approve the compensation of the company's named executive officers.
I hereby present to this meeting the proposal set forth in the proxy statement that the stockholders approve on a non-binding advisory basis the compensation of the company's named executive officers.
I second the proposal.
If there is a stockholder who does not yet have a ballot who wishes to vote in person, please raise your hand so that the Inspector of Elections can deliver a ballot to you. The next order of business on the agenda is to vote upon the proposal to ratify the appointment of Ernst & Young LLP as the company's independent registered public accounting firm for the fiscal year ending March 31st, 2020. I would like to introduce Mark Moran, who is here today representing Ernst & Young and will be available to answer questions after the meeting.
I hereby present the proposal set forth in the proxy statement that the stockholders approve the ratification of the appointment of Ernst & Young LLP as the company's independent registered public accounting firm for the fiscal year ending March 31, 2020.
I second the proposal.
If there is a stockholder who does not yet have a ballot who wishes to vote in person, please raise your hand so that the Inspector of Elections can deliver a ballot to you. Do any stockholders have any questions relating to the business of the meeting? Please make sure that you have completed all necessary information on your ballots and cast your votes as you have intended for the four agenda items. Will the Inspector of Elections please collect the ballots, if any? The ballots having been collected or not submitted, I now declare the polls closed. As I mentioned previously, the Inspector of Elections will tabulate the results of the voting, which will be reported to me as soon as is practical. There being no additional business to be conducted at the meeting, the business of the annual meeting is hereby concluded, and the meeting is adjourned.
We will now open the floor for a general question and answer period. Any stockholder who wants to ask a question must state their name and whether they are a personal stockholder or an authorized representative of a stockholder, in which case such stockholder must also be identified. At this point, I will turn the floor back over to Strauss, our Chairman and CEO.
We'd now like to open up the floor to questions following the rules Mr. Emerson outlined earlier in the meeting. Yes, sir.
My name is Howard Tonebell, shareholder, and I have basically a two-part question. First of all, according to the annual report in the 10-K, we have like over one-and-a-half billion dollars in cash or cash equivalents, and I'd just like to know how does the company plan to utilize the cash? The second part of the question is basically concerning on the international side. According to both the 10-K and the annual report, we have about over 46% of our sales, which is increasing on the international side, and I think I read somewhere in the 10-K that we're especially going to be expanding in China.
I'd just like to know, even though you touched upon it in the 10-K, how is the current tariffs as well as the protests in Hong Kong going to be affecting our expansion in China, and what strategies will we be utilizing over there, as well as how is the effects of Brexit going to be affecting our operations on the British side? Thank you.
Thanks for your question. With regard to our cash balance, and assuming we're able to achieve our guidance for the year, we'll have a greater cash balance, all other things being equal, at the end of the fiscal year. We've always said that we have three uses of the cash. The first is to support organic growth of the company, so the organic growth initiatives. The company's growth in the last 12 or 13 years since this team took over has been largely an organic growth story. The second is to support inorganic growth acquisitions. We've really only done one material acquisition since we took over the company, which was the acquisition of Social Point for about $250 million. We are of the view that in order to be competitive from an operating profit point of view, we need greater scale.
At the same time, we're focused on accretive acquisitions only. However, having a significant cash balance and no debt and a strong P&L does put us in a position where if we are able to find something that is appealing to purchase, we're able to do so. The third is to return capital to the shareholders very selectively and in a disciplined way. In the past 12 months, I guess, we've returned over $300 million to the shareholders through buybacks. That continues to be our approach. With regard to our international approach, yes, our strategy is to build up our international business, and we think there are great opportunities. The biggest opportunities, as you alluded to, we see are in Asia, and then over a longer period of time, probably in India and even Africa.
We're not really penetrated as an economic matter in India and Africa, and we're really only penetrated in a small way in the Middle East. There's a great deal of opportunity in those parts of the world. I think you were right to call out China. We already do a good deal of business in China. We have the number one PC sports title in China, NBA 2K Online, with 46 million registered users. Our products are distributed into China both as approved products and also through Steam in Hong Kong, which is a legitimate channel into China. So far, the Hong Kong protests have had no impact on us. We don't expect that they will have an impact, but I suppose depending on the level of unrest, they could.
We don't have an office in Hong Kong. It's hard to imagine how it would be a problem. The trade discussions in China have not had an influence on us, and tariffs have not had an influence on us, and we would not expect that they would. I won't get political in this conversation. However, I am of the view that we have significant work to do as a country with regard to trade in China. While I might disagree with tactics, I don't disagree at all with the issue at hand, which is that we have a totally liquid market in which foreign countries can trade, and the Chinese market is highly constrained, particularly in the entertainment and media business. I think that ought to change.
With regard to Brexit, we have begun to see some effects of Brexit in terms of recruiting people to work in England. We have a big operation in Scotland, we have a significant operation in England. We definitely have had concerns on the part of our employees. Chris, I think we've talked about that. So far it hasn't had any kind of detrimental impact. It's very hard to know. I don't think we're going to see a hard Brexit, again, at the risk of being a little bit political. It is complicated to have a negotiated Brexit because it requires a lot of multilateral trade agreements, I suspect that's probably what's going to happen.
I think over time, I'm not sure it'll be that big a deal, but as an economic matter, Brexit is not a good thing for the U.K. and will probably be somewhat complicated for us. I don't think it'll really matter, but it could matter a little bit. I do not think we see it as a material risk to our operations at all.
Can I ask a follow-up question?
Sure
concerning China? I know some companies, because of the tariff problem, they've been shifting operations instead of like, for example, shifting out of China and going to, let's say, Vietnam or Malaysia or Central America, et cetera. I'm just curious, has that been any contemplation or plans in terms of strategy for us in terms of shifting out of China to diversify our supply chain, et cetera, down the road?
We don't have a supply chain of that nature. We don't make physical goods. Our physical goods are made by third parties. We make intellectual property. We do have about 150 people on the ground in China, I think. If we had an issue with our labor relations in China, it would be a small matter for us to move elsewhere. We're not a supply chain company. The supply chain of our business is handled by third parties.
Also concerning China, how much is the Chinese government in terms of involving themselves into affairs in our company? Have they been active, or we've pretty much been able to get independence in China? I understand some companies, the Chinese central government has interfered in their operations. I'm just curious whether that's been a problem with us and as well as any infringements in terms of, I think I asked you this question a couple of years ago, whether our properties have been hacked in terms of various hackers in terms of stealing any licenses, et cetera. Has that been any problem?
No, we haven't had any theft of intellectual property. We comply with government regulations in China as you would expect, which is to say we need approval for our products there. We're involved with the government, but the government isn't particularly involved with us as a corporation. We observe the appropriate regulations.
Okay. Thank you very much.
Thank you. Other questions? Okay, thank you all for joining us today. Appreciate you coming.