FORM 6-K
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Report of Foreign Issuer
Pursuant to Rule 13a-16 or 15d-16 of
the Securities Exchange Act of 1934
For the month of May, 1999
RADICA GAMES LIMITED
(Translation of registrant's name into English)
Suite R, 6/F., 2-12 Au Pui Wan Street, Fo Tan, Hong Kong
(Address of principal executive offices)
Indicate by check mark whether the registrant files or will file annual
reports under cover of Form 20-F or 40-F
Form 20-F X Form 40-F
---------- ---------
Indicate by check mark whether the registrant by furnishing the
information contained in this Form is also thereby furnishing the information to
the Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of
1934.
Yes No X
------ ------
If "yes" is marked, indicate below the file number assigned to the
registrant in connection with Rule 12g3-2(b): 82-______________
Contents:
1. Quarterly Report for the Quarter Ended March 31, 1999
2. Press Release dated May 10, 1999
3. Press Release dated May 6, 1999
4. Press Release dated April 26, 1999
5. Press Releases dated April 12, 1999 (3 releases)
6. Press Release dated April 8, 1999
7. Press Release dated April 1, 1999
This Report on Form 6-K shall be deemed to be incorporated by reference
into the Registrant's Registration Statements on Form S-8 (No. 33-86960, No.
333-7000 and No. 333-59737) and on Form F-3 (No. 333-7526 and No. 333- ).
<PAGE>
QUARTERLY REPORT *
For the quarterly period ending March 31, 1999
Commission File Number 0-23696
RADICA GAMES LIMITED
(Exact name of registrant as specified in charter)
Bermuda N/A
(Country of Incorporation) (I.R.S. Employer Identification No.)
Suite R, 6/F., 2-12 Au Pui Wan Street, Fo Tan, Hong Kong
(Address of principal executive offices)
Registrant's telephone number, including area code: (852) 2693 2238
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes x No ____
Indicate the number of shares outstanding of each of the issuer's
classes of common stock, as of the latest practicable date.
Class Outstanding at March 31, 1999
- ---------------------------------------- -----------------------------
Common Stock, par value $0.01 per share 18,732,094
- ------------------------
* As a foreign private issuer, the registrant is not required to file reports
on Form 10-Q. It intends to make voluntary quarterly reports to its stockholders
which generally follow the Form 10-Q format. Such reports, of which this is one,
are furnished to the Commission pursuant to Form 6-K.
2
<PAGE>
PART I -- FINANCIAL INFORMATION
-------------------------------
Item 1. Financial Statements
- -----------------------------
RADICA GAMES LIMITED
FORM 6-K
The accompanying consolidated financial statements have been prepared
by the Company, without audit, and reflect all adjustments which are, in the
opinion of management, necessary for a fair statement of the results for the
interim periods. The statements have been prepared in accordance with the
regulations of the Securities and Exchange Commission (the "SEC"), but omit
certain information and footnote disclosures necessary to present the statements
in accordance with generally accepted accounting principles in the United States
of America.
These financial statements should be read in conjunction with the
financial statements, accounting policies and notes included in the Form 20F for
the year ended October 31, 1998 as filed with the Securities and Exchange
Commission. Management believes that the disclosures are adequate to make the
information presented herein not misleading.
3
<PAGE>
<TABLE>
<CAPTION>
RADICA GAMES LIMITED
CONSOLIDATED BALANCE SHEETS
ASSETS
March 31, December 31,
-------------- -------------
(US Dollars in thousands, except share data) 1999 1998
-------------- -------------
(unaudited) (unaudited)
<S> <C> <C>
Current Assets:
Cash and cash equivalents $ 44,277 $ 47,527
Accounts receivable, net of allowances for doubtful accounts
of $448 ($446 at Dec. 31, 1998) and estimated customer
returns of $610 ($1,077 at Dec. 31, 1998) 12,966 14,860
Inventories, net of provision of $2,228 ($2,437 at Dec. 31, 1998) (Note 3) 19,482 20,294
Prepaid expenses and other current assets 2,171 1,796
Deferred income taxes (Note 6) 3,766 3,754
-------------- -------------
Total current assets 82,662 88,231
-------------- -------------
Investment in affiliated company 463 703
-------------- -------------
Property, plant and equipment, net (Note 4) 16,388 16,500
-------------- -------------
Intangible assets, net (Note 5) 2,375 2,750
-------------- -------------
Deferred income taxes, noncurrent (Note 6) 6 6
-------------- -------------
Total assets $ 101,894 $ 108,190
============== =============
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities:
Accounts payable $ 5,791 $ 6,911
Accrued warranty expenses 1,600 2,500
Accrued payroll and employee benefits 737 2,688
Accrued advertising expenses 1,171 1,308
Accrued sales expenses 3,591 3,598
Commissions payable 275 764
Accrued other expenses 3,788 2,534
Income taxes payable 324 2,152
-------------- -------------
Total current liabilities 17,277 22,455
-------------- -------------
Shareholders' equity:
Common stock
par value $0.01 each, 100,000,000 shares authorized,
18,732,094 shares outstanding (18,896,694 at Dec. 31, 1998) (Note 7) 187 189
Additional paid-in capital 7,356 9,382
Retained earnings 77,110 76,215
Cumulative translation adjustment (36) (51)
-------------- -------------
Total shareholders' equity 84,617 85,735
-------------- -------------
Total liabilities and shareholders' equity $ 101,894 $ 108,190
============== =============
<FN>
See accompanying notes to consolidated financial statements.
</FN>
</TABLE>
4
<PAGE>
<TABLE>
<CAPTION>
RADICA GAMES LIMITED
CONSOLIDATED STATEMENTS OF OPERATIONS
(US Dollars in thousands, except per share data) Three months ended March 31,
-------------------------------
1999 1998
-------------- --------------
(unaudited) (unaudited)
<S> <C> <C>
REVENUES:
Net sales $ 17,906 $ 27,973
Cost of sales 9,126 12,152
-------------- --------------
Gross profit 8,780 15,821
-------------- --------------
OPERATING EXPENSES:
Selling, general and administrative expenses 4,051 6,405
Research and development 1,040 647
Depreciation and amortization 936 466
-------------- --------------
Total operating expenses 6,027 7,518
-------------- --------------
OPERATING INCOME 2,753 8,303
OTHER INCOME 112 108
SHARE OF LOSS OF AFFILIATED COMPANY 240 46
NET INTEREST INCOME 618 477
-------------- --------------
INCOME BEFORE INCOME TAXES 3,243 8,842
PROVISION FOR INCOME TAXES (Note 6) 89 14
-------------- --------------
NET INCOME $ 3,154 $ 8,828
============== ==============
EARNINGS PER SHARE - BASIC: (Note 8)
Net earnings per share $ 0.17 $ $ 0.43
============== ==============
Average number of shares outstanding 18,954,712 20,378,811
============== ==============
EARNINGS PER SHARE - ASSUMING DILUTION: (Note 8)
Net earnings per share and dilutive potential common stock $ 0.16 $ $ 0.41
============== ==============
Average number of shares and
dilutive potential common stock outstanding 20,004,552 21,677,908
============== ==============
<FN>
See accompanying notes to consolidated financial statements.
</FN>
</TABLE>
5
<PAGE>
<TABLE>
<CAPTION>
RADICA GAMES LIMITED
CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY
(unaudited)
(US dollars in thousands)
Common stock
------------ Additional Cumulative Total
Number paid-in Retained translation shareholders'
of shares Amount capital earnings adjustment equity
----------- ----------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C>
Balance at December 31, 1998 18,896,694 $ 189 $ 9,382 $ 76,215 $ (51) $ 85,735
Cancellation of repurchased stock (334,800) (4) (2,250) (2,259) -- (4,513)
Stock options exercised 170,200 2 224 -- -- 226
Net income -- -- -- 3,154 -- 3,154
Foreign currency translation -- -- -- -- 15 15
----------- ----------- ----------- ----------- ----------- -----------
Balance at March 31, 1999 18,732,094 $ 187 $ 7,356 $ 77,110 $ (36) $ 84,617
=========== =========== =========== =========== =========== ===========
<FN>
See accompanying notes to consolidated financial statements.
</FN>
</TABLE>
6
<PAGE>
<TABLE>
<CAPTION>
RADICA GAMES LIMITED
CONSOLIDATED STATEMENTS OF CASH FLOWS
(US dollars in thousands)
Three months ended March 31,
---------------------------------
1999 1998
-------------- -------------
(unaudited) (unaudited)
<S> <C> <C>
Cash flow from operating activities:
Net income $ 3,154 $ 8,828
Adjustments to reconcile net income to net cash
provided by operating activities:
Deferred income taxes (12) -
Depreciation 561 466
Amortization 375 -
Share of loss of affiliated company 240 45
Loss on disposal and write off of
property, plant and equipment 6 1
Changes in assets and liabilities:
Accounts receivable 1,909 (2,432)
Inventories 812 (4,770)
Prepaid expenses and other current assets (375) 402
Accounts payable (1,120) 2,959
Accrued payroll and employee benefits (1,951) (825)
Commissions payable (489) 300
Accrued advertising expenses (137) 1,636
Accrued sales expenses (7) 717
Accrued warranty expenses (900) 420
Accrued other expenses 1,254 270
Income taxes payable (1,828) (83)
-------------- -------------
Net cash provided by operating activities 1,492 7,934
-------------- -------------
Cash flow from investing activities:
Decrease in short-term investments - 5,012
Proceeds from sale of property, plant and equipment 15 12
Purchase of property, plant and equipment (470) (1,971)
-------------- -------------
Net cash (used in) provided by investing activities (455) 3,053
-------------- -------------
Cash flow from financing activities:
Repurchase of common stock (4,513) (12,116)
Funds from stock options exercised 226 717
-------------- -------------
Net cash used in financing activities (4,287) (11,399)
-------------- -------------
Net decrease in cash and cash equivalents $ (3,250) $ (412)
Cash and cash equivalents:
Beginning of period 47,527 41,977
-------------- -------------
End of period $ 44,277 $ 41,565
============== =============
Supplementary disclosures of cash flow information:
Cash paid during the period:
Interest $ - $ 61
Income taxes $ 1,980 $ 97
<FN>
See accompanying notes to consolidated financial statements.
</FN>
</TABLE>
7
<PAGE>
RADICA GAMES LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
(US dollars in thousands)
1. ORGANIZATION AND BASIS OF FINANCIAL STATEMENTS
The consolidated financial statements include the accounts of the Company
and all subsidiaries. Investments in affiliates, owned more than 20 percent
but not in excess of 50 percent, are recorded using the equity method. All
significant intra-group transactions and balances have been eliminated on
consolidation.
The Company designs, develops, manufactures and distributes a variety of
electronic handheld and mechanical games.
The accompanying financial statements have been prepared in accordance with
accounting principles generally accepted in the United States of America
and are presented in US dollars as the Company's sales are predominantly
denominated in US dollars.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Cash and cash equivalents - Cash and cash equivalents include cash on hand,
cash accounts, interest-bearing savings accounts, and time certificates of
deposit with a maturity at purchase date of three months or less.
Inventories - Inventories are stated at the lower of cost, determined by
the weighted average method, or market. Provision for potentially obsolete
or slow-moving inventory is made based on management's analysis of
inventory levels and future expected sales.
Depreciation and amortization of property, plant and equipment -
Depreciation is provided on the straight-line method at rates based upon
the estimated useful lives of the property, generally not more than seven
years except for leasehold land and buildings which are 50 years or where
shorter, the remaining term of the lease, by equal annual instalments.
Costs of leasehold improvements and leased assets are amortized over the
life of the related asset or the term of the lease, whichever is shorter.
Upon sale or retirement, the costs and related accumulated depreciation or
amortization are eliminated from the respective accounts and any resulting
gain or loss is included in income.
Intangible assets - Intangible assets primarily represent the excess of the
purchase price of acquisition of a business over the fair value of the net
assets acquired. Intangible assets also represent cost allocated to brand
names. Such assets are amortized on a straight-line basis over the period
estimated to be benefited, but not to exceed 40 years. The carrying value
of intangible assets is periodically reviewed by the Company and
impairments are recognized when there is a permanent diminution in value.
The Company policy is to charge a full year of amortization in the year of
acquisition.
Mold costs - The Company expenses all mold costs in the year of purchase or
for internally produced molds, in the year of construction.
8
<PAGE>
RADICA GAMES LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)-- (Continued)
(US dollars in thousands)
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
Revenue recognition - Revenues are recognized as sales when merchandise is
shipped. The Company permits the return of damaged or defective products
and accepts limited amounts of product returns in certain other instances.
Accordingly, the Company provides allowances for the estimated amounts of
these returns at the time of revenue recognition, based on historical
experience adjusted for known trends.
Investments - Debt securities which the Company has both the positive
intent and ability to hold to maturity are classified as held-to-maturity
and carried at amortized cost. Debt securities which might be sold prior to
maturity are classified as available-for-sale and carried at approximate
fair value. Any material unrealized gains and losses related to
available-for-sale investments, net of applicable taxes, are reported in
other comprehensive income. The Company determines the appropriate
classification of securities at the time of purchase and evaluates such
classification as of each balance sheet date.
Income taxes - Income taxes are provided based on an asset and liability
approach for financial accounting and reporting of income taxes. Deferred
income tax liabilities or benefits are recorded to reflect the tax
consequences in future years of differences between the tax basis of assets
and liabilities and the financial reporting amounts at each year end. A
valuation allowance is recognized if it is more likely than not that some
portion of, or all of, a deferred tax asset will not be realized.
Advertising - The production costs of advertising are expensed by the
Company the first time the advertising takes place. Advertising costs
associated with customer benefit programs are accrued as the related
revenues are recognized.
Foreign currency translation - Assets and liabilities of foreign currency
are translated into US dollars using year-end exchange rates. Revenues and
expenses of foreign currency are translated into US dollars using average
monthly exchange rates. The impact of exchange rate changes is shown as
"Cumulative Translation Adjustment" in shareholders' equity. Net gains
(losses) from foreign exchange transactions of $54 and $(34) for the three
months ended March 31, 1999 and 1998 respectively, are included in selling,
general and administrative expenses.
Post-retirement and post-employment benefits - The Company does not provide
post-retirement benefits other than pensions to employees and
post-employment benefits are immaterial.
Warranty - Future warranty costs are provided for at the time of revenue
recognition based on management's estimate by reference to historical
experience adjusted for known trends.
9
<PAGE>
RADICA GAMES LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)-- (Continued)
(US dollars in thousands)
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
Stock options - The Company continues to follow Accounting Principles Board
Opinion No. 25, "Accounting for Stock Issued to Employees", in accounting
for its stock options. As a result, no compensation expense has been
recognized as the exercise price of the Company's employee stock options
equals the market price of the underlying stock at the date of grant. Pro
forma disclosures of the effect on net income and earnings per share as if
the Company had accounted for its employee stock options under the fair
value method prescribed by Statement of Financial Accounting Standards
("SFAS") No. 123, "Accounting for Stock-Based Compensation", are shown in
note 9.
Comprehensive income - Comprehensive income includes both net income and
other comprehensive income (loss). Other comprehensive income (loss) for
the three months ended March 31, 1999 and 1998 of $15 and $(1), represented
foreign currency translation adjustments. Accumulated other comprehensive
loss included in the accompanying condensed consolidated balance sheets as
of March 31, 1999 and December 31, 1998 was $36 and $51, consisting of the
accumulated foreign currency translation adjustment.
Earnings per share - Earnings per share is based on the weighted average
number of shares of common stock and dilutive potential common stock
outstanding. Dilutive potential common stock results from dilutive stock
options. The effect of such dilutive potential common stock on net income
per share is computed using the treasury stock method.
Use of estimates - The preparation of financial statements in conformity
with generally accepted accounting principles requires the use of
estimates. Actual results could differ from those estimates.
3. INVENTORIES
Inventories by major categories are summarized as follows:
March 31, December 31,
1999 1998
-------------- ------------
Raw materials $ 3,813 $ 4,580
Work in progress 4,006 6,731
Finished goods 11,663 8,983
-------------- ------------
$ 19,482 $ 20,294
============== ============
10
<PAGE>
RADICA GAMES LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)-- (Continued)
(US dollars in thousands)
4. PROPERTY, PLANT AND EQUIPMENT
Property, plant and equipment consists of the following:
March 31, December 31,
1999 1998
--------------- --------------
Land and buildings $ 11,958 $ 11,958
Plant and machinery 5,834 5,777
Furniture and equipment 4,428 4,191
Leasehold improvements 2,304 2,192
--------------- --------------
Total $ 24,524 $ 24,118
Less: Accumulated depreciation and
amortization (8,136) (7,618)
--------------- --------------
Total $ 16,388 $ 16,500
=============== ==============
5. INTANGIBLE ASSETS
The intangible assets of $2,375 on the balance sheet at March 31, 1999
represent a portion of the acquisition price allocated to brand name and
goodwill with regards the assets and business of KidActive, LLC, dba Girl
Tech(TM) acquired during the quarter ended June 30, 1998. KidActive, LLC,
dba Girl Tech(TM) was a development stage enterprise and had not traded
prior to the Company's acquisition of its assets. The Company purchased the
assets and business of KidActive, LLC, dba Girl Tech(TM) for $2,400 in cash
plus 190,094 shares, a total of $6,000. Of this $4,500 was capitalised as
goodwill and brand name and $1,500 was written off immediately as purchased
research and development. It is management's opinion that the amounts
capitalized of $4,500 represent the fair value assigned to the intangible
assets acquired. This cost is being amortized over a three year fiscal
period on a straight-line basis. Accumulated amortization was $2,125 and
$1,750 at March 31, 1999 and December 31, 1998, respectively.
Intangible assets are as follows:
March 31, December 31,
1999 1998
-------------- -------------
At cost:
Brand name $ 1,000 $ 1,000
Goodwill 3,500 3,500
-------------- -------------
Total 4,500 4,500
Less: Accumulated amortization (2,125) (1,750)
-------------- -------------
Total $ 2,375 $ 2,750
============== =============
11
<PAGE>
RADICA GAMES LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)-- (Continued)
(US dollars in thousands)
6. INCOME TAXES
The components of income before income taxes are as follows:
Three months ended March 31,
-------------------------------------------
1999 1998
------------------- ------------------
United States $ 1,295 $ 3,085
International 1,948 5,757
------------------- ------------------
$ 3,243 $ 8,842
=================== ==================
As the Company's subsidiary in the People's Republic of China ("PRC") is a
sino-foreign joint venture enterprise, it was eligible for an exemption
from income tax for two years starting from the first profitable year of
operations and thereafter a 50 percent relief from income tax for the
following three years under the Income Tax Law of the PRC. That subsidiary
had its first profitable year of operations in the year ended December 31,
1997 and is being taxed at a 12% rate from January 1, 1999. In addition,
under the existing processing arrangement and in accordance with the
current tax regulations in the PRC, manufacturing income generated in the
PRC is not subject to PRC income taxes.
The provision (credit) for income taxes consists of the following:
Three months ended March 31,
-----------------------------------------
1999 1998
----------------- ----------------
United States
Federal tax $ 17 $ 25
State tax 2 1
----------------- ----------------
$ 19 $ 26
----------------- ----------------
International
Current income tax $ 70 $ (12)
----------------- ----------------
Total provision for income tax $ 89 $ 14
================= ================
12
<PAGE>
RADICA GAMES LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)-- (Continued)
(US dollars in thousands)
6. INCOME TAXES (Continued)
A reconciliation between the provision for income taxes computed by
applying the statutory tax rates in the United States for the three months
ended March 31, 1999 and 1998 to income before income taxes and the actual
provision for income taxes is as follows:
Three months ended March 31,
-------------------------------
1999 1998
----------- -----------
US statutory rate 34% 34%
----------- -----------
Provision for income taxes at
statutory rate on income for the period $ 1,103 $ 3,006
State taxes 2 1
International rate differences (497) (1,936)
Accounting (gains) losses for which
deferred income tax cannot be recognized (424) 673
Decrease in valuation allowance - (1,703)
Other (95) (27)
----------- -----------
Income tax provision $ 89 $ 14
=========== ===========
Deferred income taxes reflect the net tax effect of temporary differences
between the amounts of assets and liabilities for income tax purposes
compared with the respective amounts for financial statement purposes. At
March 31, 1999 and December 31, 1998 deferred income taxes comprised:
March 31, December 31,
1999 1998
---------- ------------
Deferred tax assets (liabilities):
Excess of tax over financial
reporting depreciation $ (79) $ (79)
Advertising allowances 398 445
Bad debt allowances 152 151
Inventory reserves 35 44
Tax losses 1,714 1,714
Sales allowances and returns reserves 1,319 1,665
Other 233 (180)
---------- ------------
$ 3,772 $ 3,760
========== ============
13
<PAGE>
RADICA GAMES LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)--(Continued)
(US dollars in thousands, except share and per share data)
7. COMMON STOCK
On December 22, 1997, the Board adopted a plan authorizing the Company to
repurchase up to one million shares of its common stock. In 1998, the Board
adopted further plans authorizing the Company to repurchase up to another
two million additional shares of its common stock.
During the three months ended March 31, 1999, the Company repurchased
334,800 shares at an average price of $13.43 per share under these
programs. All repurchased shares were cancelled. On April 12, 1999 the
Company announced the approval by the Board of Directors of an additional
one million share repurchase plan.
8. EARNINGS PER SHARE
The following information shows the numbers used in computing earnings per
share and the effect on income and the weighted average number of shares of
dilutive potential common stock:
Three months ended March 31, 1999
----------------------------------------
Earnings
Numerator Denominator per share
----------- ----------- -----------
Basic earnings per share:
Net income $ 3,154 18,954,712 $ 0.17
=========== ===========
Effective of dilutive options 1,049,840
----------
Diluted earnings per share:
Net income, assuming
all dilutive options exercised $ 3,154 20,004,552 $ 0.16
=========== =========== ===========
Options on 327,000 shares of common stock were not included in computing
diluted earnings per share since their effects were antidilutive.
14
<PAGE>
RADICA GAMES LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)--(Continued)
(US dollars in thousands, except per share data)
9. STOCK OPTIONS
The Company's 1994 Stock Option Plan (the "Stock Option Plan") provided for
options to be granted for the purchase of an aggregate of 1,600,000 shares
of common stock at per share prices not less than 100% of the fair market
value at the date of grant as determined by the Compensation Committee of
the Board of Directors. Following approval at the annual shareholders
meetings in April 1997 and 1998, the Stock Option Plan's aggregated common
stock increased by 400,000 and 800,000 respectively. In total, the Stock
Option Plan's aggregate common stock increased to 2,800,000 shares
available for options. Options under this plan are generally exercisable
ratably over five years from the date of grant unless otherwise provided.
Option activity for the three months ended March 31, 1999:-
Weighted average
Number exercise price
of shares per share
--------- ---------
(in thousands)
Outstanding at December 31, 1998 2,041 $ 6.58
Options granted 16 13.81
Options exercised (171) 1.33
--------------
Outstanding at March 31, 1999 1,886 $ 7.12
==============
Exercisable at March 31, 1999 272 $ 3.62
15
<PAGE>
RADICA GAMES LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)--(Continued)
(US dollars in thousands, except per share data)
9. STOCK OPTIONS (Continued)
The following is additional information relating to options outstanding as
of March 31, 1999:
<TABLE>
<CAPTION>
Options Outstanding Options exercisable
--------------------------------------------------- -------------------------------
Weighted average
Weighted average remaining Weighted average
Exercise Number exercise price contractual Number exercise price
price range of shares per share life (years) of shares per share
----------- --------- --------- ------------ --------- ---------
(in thousands) (in thousands)
<S> <C> <C> <C> <C> <C>
$ 1.090 to 2.000 666 $ 1.32 7.0 151 $ 1.36
$ 2.001 to 4.000 392 3.51 8.1 90 3.48
$ 4.001 to 6.000 8 5.00 8.3 - -
$ 6.001 to 8.000 50 6.72 8.3 2 8.00
$ 8.001 to 10.000 5 8.60 8.4 1 9.00
$ 10.001 to 12.000 321 10.99 9.6 - -
$ 12.001 to 14.000 57 13.02 9.0 9 12.89
$ 14.001 to 16.000 135 14.82 9.5 5 15.60
$ 16.001 to 18.000 151 16.89 9.2 13 17.54
$ 18.001 to 19.750 101 19.10 9.1 1 18.00
============== ---------
1,886 $ 7.12 8.2 272 $ 3.62
============== =========
</TABLE>
Pro forma information regarding net income and earnings per share is
required by SFAS No. 123, and has been determined as if the Company had
accounted for its employee stock options under the fair value method of
SFAS No. 123. The weighted average fair value of stock options at date of
grant of $5.46 and $8.06 per option for the three months ended March 31,
1999 and 1998, respectively, were estimated using the Black-Scholes option
pricing model with the following weighted average assumptions:
Three months ended March 31,
------------------------------
1999 1998
------------ -----------
Expected life of options 5 years 5 years
Risk-free interest rate 5.1% 6.5%
Expected volatility of underlying stock 35% 50%
Dividends 0% 0%
The Black-Scholes option pricing model requires the input of highly
subjective assumptions, including the expected volatility of stock price.
Because changes in subjective input assumptions can materially affect the
fair value estimate, in management's opinion, the existing model does not
necessarily provide a reliable single measure of the fair value of the
stock options.
16
<PAGE>
RADICA GAMES LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)--(Continued)
(US dollars in thousands, except per share data)
9. STOCK OPTIONS (Continued)
If the Company had accounted for its stock option plans by recording
compensation expenses based on the fair value at grant date for such awards
consistent with the method of SFAS No. 123, the Company's net income and
earnings per share would have been reduced to the pro forma amounts as
follows:
Three months ended March 31,
------------------------------
1999 1998
------------- -----------
Pro forma net income $ 2,874 $ 8,697
Pro forma earnings per share:
Basic 0.15 0.43
Diluted 0.14 0.40
10. CONCENTRATIONS OF CREDIT RISK AND MAJOR CUSTOMERS
Accounts receivable of the Company are subject to a concentration of credit
risk with customers in the retail sector. This risk is limited due to the
large number of customers composing the Company's customer base and their
geographic dispersion, though the Company has three United States customers
which accounted for more than thirty-five percent, sixteen percent and
twelve percent of net sales in the three months ended March 31, 1999 and
four United States customers which accounted for more than thirty-one
percent, fifteen percent, eleven percent and ten percent of net sales in
the three months ended March 31, 1998. The Company performs ongoing credit
evaluations of its customers' financial condition and, generally, requires
no collateral from its customers.
11. ESTIMATED FAIR VALUE OF FINANCIAL INSTRUMENTS
The estimated fair value of financial instruments is made in accordance
with the requirements of SFAS No. 107, "Disclosures about Fair Value of
Financial Instruments". The estimated fair value amounts have been
determined by the Company, using available market information and
appropriate valuation methodologies. The estimates presented herein are not
necessarily indicative of the amounts that the Company could realize in a
current market exchange.
The carrying amounts of cash and short-term investments, accounts
receivable and accounts payable are reasonable estimates of their fair
value.
17
<PAGE>
RADICA GAMES LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)--(Continued)
(US dollars in thousands)
12. COMMITMENTS AND CONTINGENCIES
The Company leases certain warehouses and equipment under operating leases.
Total expense for the operating leases was $112 and $93 for the three
months ended March 31, 1999 and 1998, respectively.
At March 31, 1999, the Company was obligated under operating leases
requiring future minimum lease payments as follows:
Operating leases
----------------
1999 $ 190
2000 249
2001 134
2002 108
2003 106
Thereafter 586
----------------
Total minimum lease payments $ 1,373
================
At March 31, 1999, certain leasehold land and buildings with a net book
value of $4,842 and bank balances of $3,871 were pledged to secure general
banking facilities including overdraft and trade facilities granted to the
Company.
13. RETIREMENT PLAN
The Company has defined contribution retirement plans covering
substantially all employees in Hong Kong. Under these plans, eligible
employees may contribute amounts through payroll deductions which are 5% or
more of individual salary, supplemented by employer contributions ranging
from 5% to 10% of individual salary depending on the years of service. The
expenses related to these plans were $43 and $30 for the three months ended
March 31, 1999 and 1998, respectively.
18
<PAGE>
RADICA GAMES LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)--(Continued)
(US dollars in thousands)
14. SEGMENT INFORMATION
Effective the first quarter of 1999, the Company adopted the Financial
Accounting Standards Board's Statement of Financial Accounting Standards
No. 131, "Disclosures about Segments of an Enterprise and Related
Information" (SFAS 131). The adoption of SFAS 131 did not affect results of
operations or financial position, but did affect the disclosure of segment
information. As a result of this change, certain reclassifications have
been made to prior periods amounts to comply with the requirements of SFAS
131.
The Company operates in one principal industry segment: the design,
development, manufacture and distribution of a variety of electronic and
mechanical handheld and tabletop games. The Company evaluates performance
and allocates based on income or loss from operations before income taxes.
The accounting policies of the reportable segments are the same as those
described in the summary of significant accounting policies.
Information about the Company's operations in different geographic areas is
set forth in the table below. Segment sales and operating income before
taxes are attributed to countries based on the location of customers, while
identifiable assets are reported based on their location.
Income before Identifiable
Net Sales income taxes Assets
---------------------------------------------
Three months ended March 31,
March 31, 1999 1999
------------------------------ ------------
United States and Canada $ 17,391 $ 3,183 $ 29,166
China and Asia Pacific 263 40 72,383
Europe and other countries 252 20 345
------------- ----------- ------------
$ 17,906 $ 3,243 $ 101,894
============= =========== ============
Three months ended December 31,
March 31, 1998 1998
------------------------------ ------------
United States and Canada $ 27,087 $ 8,471 $ 34,508
China and Asia Pacific 752 332 73,153
Europe and other countries 134 39 529
------------- ----------- ------------
$ 27,973 $ 8,842 $ 108,190
============= =========== ============
19
<PAGE>
RADICA GAMES LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)--(Continued)
(US dollars in thousands)
15. VALUATION AND QUALIFYING ACCOUNTS
<TABLE>
<CAPTION>
Balance at Charged Release Balance
beginning for the of at end
of period period provision of period
------------- ------------- ------------- -------------
<S> <C> <C> <C> <C>
Quarter ended March 31, 1999
Allowances for doubtful accounts $ 446 $ 2 $ - $ 448
Estimated customer returns 1,077 302 (769) 610
Provision for inventories 2,437 - (209) 2,228
------------- ------------- ------------- -------------
Total $ 3,960 $ 304 $ (978) $ 3,286
============= ============= ============= =============
Quarter ended March 31, 1998
Allowances for doubtful accounts $ 1,028 $ - $ (119) $ 909
Estimated customer returns 2,783 - (760) 2,023
Provision for inventories 2,922 - (805) 2,117
------------- ------------- ------------- -------------
Total $ 6,733 $ - $ (1,684) $ 5,049
============= ============= ============= =============
</TABLE>
20
<PAGE>
Item 2. Management's Discussion and Analysis of Financial Condition and Results
of Operations
- --------------------------------------------------------------------------------
The following discussion should be read in conjunction with the
attached financial statements and notes thereto, and with the audited financial
statements, accounting policies and notes included in the Company's Annual
Report on Form 20-F for the year ended October 31, 1998 as filed with the United
States Securities and Exchange Commission.
RESULTS OF OPERATIONS -- QUARTER ENDED MARCH 31, 1999
COMPARED TO THE SAME PERIOD ENDED IN 1998
The following table sets forth items from the Company's Consolidated
Statements of Operations as a percentage of net revenues:
Three months ended March 31,
----------------------------
1999 1998
----------- -----------
Net revenues 100.0% 100.0%
Cost of sales 51.0% 43.4%
Gross margin 49.0% 56.6%
Selling, general and administrative 22.6% 22.9%
Research and development 5.8% 2.3%
Depreciation and amortization 5.2% 1.7%
Operating income 15.4% 29.7%
Other income 0.6% 0.4%
Share of loss of affiliated company 1.3% 0.2%
Interest income, net 3.4% 1.7%
Income before income taxes 18.1% 31.6%
Provision for income taxes 0.5% 0.1%
Net income 17.6% 31.5%
After tax profit for the first quarter ended March 31, 1999 was $3.2
million or $0.16 per fully diluted share versus $8.8 million or $0.41 per fully
diluted share for the same period last year. Total revenues for the first
quarter ended March 31, 1999 were $17.9 million, compared to $28 million for the
same period in 1998.
21
<PAGE>
The following table sets out the percentages of sales achieved from
each category of products:
<TABLE>
<CAPTION>
Three months ended March 31,
---------------------------------------------------------------------------
1999 1998
------------------------------------ -----------------------------------
% of Units No. of % of Units No. of
Product Lines Net Sales Sold Models Net Sales Sold Models
------------- --------- ---- ------ --------- ---- ------
(in thousands) (in thousands)
<S> <C> <C> <C> <C> <C> <C>
Fishing/Hunting games 34.7% 548 7 58.6% 1,327 5
Combat games 7.3% 98 5 2.8% 58 2
Sports games 7.8% 97 9 3.6% 90 7
Casino games
-- Handheld 11.2% 474 29 10.8% 799 46
-- Tabletop 1.4% 30 10 1.1% 37 12
Heritage games 11.1% 222 9 7.1% 172 12
Extreme games 5.9% 95 3 0.5% 9 1
Girl Tech games 3.9% 53 4 - - -
ODM products 16.7% 562 16 15.5% 908 12
--------- ------------- --------- ---------- ------------- --------
Total 100.0% 2,179 92 100.0% 3,400 97
========= ============= ========= ========== ============= ========
</TABLE>
The gross profit for the first quarter decreased to $8.8 million from
$15.8 million in the same period of fiscal 1998 and the gross margin decreased
to 49% from 56.6% for the same period last year. The decrease in gross margin
for the quarter was the result of lower pricing for the Hasbro Group as part of
a new long-term contract between the two companies, together with the effect of
licenses paid for use in NASCAR(R) Racer and sales of lower price point items
such as Sport Bass Fishin'(TM), Pocket Solitaire(TM), Pocket Checkers(TM) and
Pocket Tic Tac Toe(TM).
Operating income for the first quarter ended March 31, 1999 decreased
to $2.8 million from $8.3 million for the same period last year. Operating
expenses decreased to $6 million in the first quarter ended March 31, 1999 from
$7.5 million in the same period in 1998, due to a decrease in variable sales
related costs offset by research and development, amortization of intangible
assets with regards Girl Tech(R), and increased salaries due to certain
management additions. The operating margin was 15.4% during the quarter compared
to 29.7% during the same period last year.
22
<PAGE>
The following table lays out the changes in operating expenses for the major
expense categories.
Three months ended March 31,
-------------------------------------
1999 1998
--------------- ----------------
(dollars in thousands)
Advertising and promotion expenses $ 937 $ 2,044
Commissions 476 884
Indirect salaries and wages 1,692 1,426
Research and development expenses 1,040 647
CAPITAL RESOURCES AND LIQUIDITY
- -------------------------------
Cash and cash equivalents totaled $44.3 million at March 31, 1999, a
decrease of $3.2 million from December 31, 1998. Working capital at March 31,
1999 was $65.4 million, a $0.4 million decrease from working capital of $65.8
million at December 31, 1998. The decrease in working capital is due primarily
to an increase in net income offset by the repurchase of 334,800 shares at an
average price of $13.43 per share during the period.
There were no short-term borrowings at March 31, 1999 or December 31,
1998.
During the quarter ended March 31, 1999, 334,800 shares were
repurchased at an average price of $13.43. On April 12, 1999 the Company
announced the approval by the Board of Directors of an additional one million
share repurchase plan.
The Company believes that its existing cash and cash equivalents and
cash generated from operations are sufficient to satisfy the current anticipated
working capital needs of its core business.
The foregoing discussion contains forward-looking statements that
involve risks and uncertainties that could cause actual results
to differ materially from projected results as a result of
various factors including those set forth in the Company's Annual
Report on Form 20-F for year ended October 31, 1998, as filed
with the Securities and Exchange Commission. In particular, see
"Item 1. Description of Business - Risk Factors" in such Report
on Form 20-F.
Item 3. Qualitative and Quantitative Disclosures About Market Risk
- -------------------------------------------------------------------
Not applicable.
23
<PAGE>
PART II -- OTHER INFORMATION
- ----------------------------
Item 1. Legal Proceedings
- --------------------------
None.
Item 2. Changes in Securities and Use of Proceeds
- --------------------------------------------------
None.
Item 3. Defaults Upon Senior Securities
- ----------------------------------------
None.
Item 4. Submission of Matters to a Vote of Security Holders
- ------------------------------------------------------------
At the Company's annual meeting of shareholders held on April 12, 1999,
the shareholders of the Company elected the management nominees, who were named
in the Company's Proxy Statement dated March 15, 1999, to serve as directors for
the period until the next annual meeting of shareholders or until his or her
respective successor is elected or appointed in accordance with applicable law
and the Company's bye-laws. Immediately following the annual meeting of
shareholders, the board of directors consisted of nine members: Robert E.
Davids, Jon N. Bengtson, Patrick Feely, David C.W. Howell, Siu Wing Lam, James
O'Toole, Millens W. Taft, Peter Thigpen and Henry Hai-Lin Hu. At such meeting,
the shareholders also re-appointed Deloitte Touche Tohmatsu as independent
auditor and authorized the directors to fix the independent auditor's
remuneration.
The shareholder votes were as follows:
Against/
For Withhold Abstain
--- -------- -------
Election of Directors
---------------------
Robert E. Davids 17,605,694 54,263
Jon Bengtson 17,606,224 53,733
Patrick Feely 17,606,224 53,733
David C.W. Howell 17,606,224 53,733
Siu Wing Lam 17,606,224 53,733
James O'Toole 17,606,224 53,733
Millens W. Taft 17,606,224 53,733
Peter Thigpen 17,606,224 53,733
Henry Hai-Lin Hu 17,606,224 53,733
Reappointment of Auditor
------------------------
Deloitte Touche Tohmatsu 17,552,261 54,631 53,065
24
<PAGE>
Item 5. Other Information
- --------------------------
None.
Item 6. Exhibits and Reports on Form 8-K
- -----------------------------------------
(a) Exhibits
None.
(b) Reports on Form 8-K
None.
25
<PAGE>
Pursuant to the requirements of Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
RADICA GAMES LIMITED
Date: May 21, 1999 /S/ David C.W. Howell
--------------------- ---------------------------------
David C.W. Howell
President Asia Operations
Chief Financial Officer
RADICA(R) GAMES LIMITED
REPORTS FIRST QUARTER RESULTS
FOR IMMEDIATE RELEASE CONTACT: PATRICK S. FEELY
MAY 10TH, 1999 PRESIDENT & CEO
(LOS ANGELES, CALIFORNIA)
(626) 744 1150
DAVID C.W. HOWELL
PRESIDENT ASIA OPERATIONS
& CFO
(HONG KONG)
(852) 2688 4201
(HONG KONG) Radica Games Limited (NASDAQ RADA) reported today an after tax
profit of $3.2 million for the first quarter ended March 31, 1999 or $0.16 per
fully diluted share versus $8.8 million or $0.41 per fully diluted share for the
same period last year. Total revenues for the first quarter ended March 31, 1999
were $17.9 million, compared to $28 million for the same period in 1998.
"1999 represents a return to normal seasonality patterns for Radica. Radica's
results during the first and second quarters of 1998 were unusually strong due
to timing of key product introductions last year," said Pat Feely, Chief
Executive Officer.
The gross profit for the first quarter decreased to $8.8 million from $15.8
million in the same period of fiscal 1998 and the gross margin decreased to 49%
from 56.6% for the same period last year. The decrease in gross margin for the
quarter was the result of lower pricing for the Hasbro Group as part of a new
long-term contract previously announced between the two companies, together with
the effect of licenses paid for use in NASCAR(R) Racer and sales of lower price
point items such as Sport Bass Fishin'(TM), Pocket Solitaire(TM), Pocket
Checkers(TM) and Pocket Tic Tac Toe(TM).
Operating income for the first quarter ended March 31, 1999 decreased to $2.8
million from $8.3 million for the same period last year. Operating expenses
decreased to $6 million in the first quarter ended March 31, 1999 from $7.5
million in the same period in 1998, due to a decrease in variable sales related
costs offset by research and development, amortization of intangible assets with
regards Girl Tech(R), and increased salaries due to certain management
additions. The operating margin was 15.4% during the quarter compared to 29.7%
during the same period last year.
Between September 22, 1998 and April 14, 1999, the Company repurchased one
million shares at an average price of $11.98 completing the third million share
repurchase plan previously announced on September 22, 1998. Of this one million
shares, 334,800 shares were repurchased during the quarter ended March 31, 1999
at an average price of $13.43. On April 12, 1999 the Company announced the
approval by the Board of Directors of an additional one million-share repurchase
plan.
<PAGE>
"We are very pleased with the retail sales rates of several of our new 1999
products such as Buckmaster(R) Deer Huntin'(TM), the Girl Tech(R) Password
Journal(TM) and Sport Bass Fishin'(TM). We look forward to the introduction of a
strong lineup of new products during the rest of the year including our recently
announced Tiger Woods Ultimate Golf(TM)," said Feely.
The foregoing discussion contains forward-looking statements
that involve risks and uncertainties that could cause actual
results to differ materially from projected results.
Forward-looking statements include statements about efforts
to attract or prospects for additional or increased
business, new product introductions and other statements of
a non-historical nature. Actual results may differ from
projected results due to various Risk Factors, including
Risks of Manufacturing in China, Dependence on Product
Appeal and New Product Introductions, and Dependence on
Major Customers, as set forth in the Company's Annual Report
on Form 20-F for the fiscal year ended October 31, 1998, as
filed with the Securities and Exchange Commission. See "Item
1. Description of Business -- Risk Factors" in such report
on Form 20-F.
Radica Games Limited (Radica) is a Bermuda company headquartered in Hong Kong
(NASDAQ - RADA). Radica is a leading developer, manufacturer and distributor of
electronic handheld and table top games. Radica has subsidiaries in the U.S.A.,
Canada and the U.K., and a factory in Dongguan, Southern China. More information
about Radica can be found on the Internet at "www.radicagames.com" and about
Girl Tech at "www.girltech.com."
-- END --
<PAGE>
RADICA GAMES LIMITED
CONSOLIDATED STATEMENTS OF OPERATIONS
(US Dollars in thousands, THREE MONTHS ENDED
except per share data) MARCH 31,
----------------------------
1999 1998
------------ ------------
(unaudited) (unaudited)
REVENUES:
Net sales $ 17,906 $ 27,973
Cost of sales (9,126) (12,152)
------------ ------------
Gross profit 8,780 15,821
------------ ------------
OPERATING EXPENSES:
Selling, general and administrative expenses (4,051) (6,405)
Research and development (1,040) (647)
Depreciation and amortization (936) (466)
------------ ------------
Total operating expenses (6,027) (7,518)
------------ ------------
OPERATING INCOME 2,753 8,303
OTHER INCOME 112 108
SHARE OF LOSS OF AFFILIATED COMPANY (240) (46)
NET INTEREST INCOME 618 477
------------ ------------
INCOME BEFORE INCOME TAXES 3,243 8,842
PROVISION FOR INCOME TAXES (89) (14)
------------ ------------
NET INCOME $ 3,154 $ 8,828
============ ============
EARNINGS PER SHARE - BASIC:
Net earnings per share $ 0.17 $ 0.43
============ ============
Average number of shares outstanding 18,954,712 20,378,811
============ ============
EARNINGS PER SHARE - ASSUMING DILUTION:
Net earnings per share and
dilutive potential common stock $ 0.16 $ 0.41
============ ============
Average number of shares and dilutive
potential common stock outstanding 20,004,552 21,677,908
============ ============
<PAGE>
<TABLE>
<CAPTION>
RADICA GAMES LIMITED
CONSOLIDATED BALANCE SHEETS
ASSETS
MARCH 31, DECEMBER 31,
--------- ------------
(US Dollars in thousands, except share data) 1999 1998
--------- ------------
(unaudited) (unaudited)
<S> <C> <C>
CURRENT ASSETS:
Cash and cash equivalents $ 44,277 $ 47,527
Accounts receivable, net of allowances for doubtful accounts
of $448 ($446 at Dec. 31, 1998) and estimated customer
returns of $610 ($1,077 at Dec. 31, 1998) 12,966 14,860
Inventories, net of provision of $2,228 ($2,437 at Dec. 31, 1998) 19,482 20,294
Prepaid expenses and other current assets 2,171 1,796
Deferred income taxes 3,766 3,754
--------- ---------
TOTAL CURRENT ASSETS 82,662 88,231
--------- ---------
INVESTMENT IN AFFILIATED COMPANY 463 703
--------- ---------
PROPERTY, PLANT AND EQUIPMENT, NET 16,388 16,500
--------- ---------
INTANGIBLE ASSETS, NET 2,375 2,750
--------- ---------
DEFERRED INCOME TAXES, NONCURRENT 6 6
--------- ---------
TOTAL ASSETS $ 101,894 $ 108,190
========= =========
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable 7,391 9,411
Accrued payroll and employee benefits 737 2,688
Accrued expenses 8,825 8,204
Income taxes payable 324 2,152
--------- ---------
TOTAL CURRENT LIABILITIES 17,277 22,455
--------- ---------
SHAREHOLDERS' EQUITY:
Common stock
par value $0.01 each, 100,000,000 shares authorized,
18,732,094 shares outstanding (18,896,694 at Dec. 31, 1998) 187 189
Additional paid-in capital 7,356 9,382
Retained earnings 77,110 76,215
Cumulative translation adjustment (36) (51)
--------- ---------
TOTAL SHAREHOLDERS' EQUITY 84,617 85,735
--------- ---------
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $ 101,894 $ 108,190
========= =========
</TABLE>
RADICA GAMES LIMITED
ANNOUNCES
NEW AUSTRALIAN INFRINGEMENT SETTLEMENT
FOR IMMEDIATE RELEASE CONTACT: PATRICK S. FEELY
MAY 6TH, 1999 PRESIDENT & CEO
(LOS ANGELES, CALIFORNIA)
(626) 744 1150
DAVID C.W. HOWELL
PRESIDENT ASIA OPERATIONS
& CFO
(HONG KONG)
(852) 2688 4201
(Hong Kong) Radica Games Limited (NASDAQ RADA) announced today that it had
successfully obtained a final settlement in litigation against a large
Australian toys and games retailer in the form of cash, receipt of all stock of
infringing product and written undertakings from the retailer confirming
Radica's exclusive rights in Bass Fishin'(TM) and Lake Trout Fishin'(TM) and
agreeing not to import, sell, offer for sale or distribute any further copies of
counterfeit Fishing Games.
Bass Fishin'(TM) and Lake Trout Fishin'(TM) are popular virtual fishing games
sold by Radica around the world.
"Radica will continue to defend its intellectual property throughout the world",
said Patrick S. Feely, Radica's CEO.
Radica Games Limited ("Radica") is a Bermuda company headquartered in Hong Kong
(NASDAQ - RADA). Radica is a leading developer, manufacturer and distributor of
electronic handheld and tabletop games. Radica has subsidiaries in the U.S.A.,
Canada and the U.K., and a factory in Dongguan, Southern China. More information
about Radica can be found on the Internet at "www.radicagames.com".
--END--
RADICA(R) GAMES LIMITED AND HASBRO(R)
ANNOUNCE TWO NEW AGREEMENTS
FOR IMMEDIATE RELEASE CONTACT: PATRICK S. FEELY
APRIL 26, 1999 PRESIDENT & CEO
(LOS ANGELES, CALIFORNIA)
(626) 744 1150
DAVID C. W. HOWELL
PRESIDENT ASIA OPERATIONS
& CFO
(HONG KONG)
(852) 2688 4201
(HONG KONG) Radica Games Limited (NASDAQ RADA) announced today that the Company
and the Hasbro Games Group (AMEX HAS) have signed two new agreements. The first,
a new original design and manufacturing ("ODM") agreement and the second, a
license agreement allowing Radica to continue to sell high end versions of
Yahtzee(TM), Connect Four(TM) and Battleship(TM) under its Monte Carlo brand
name.
The new ODM agreement is a three-year agreement, which automatically extends to
a fourth year unless notice is given prior to the expiration of the third year.
The agreement establishes purchasing terms for all product built and designed
for Hasbro and guarantees Radica exclusive manufacturing rights for the first
two years of production of any new product.
"These agreements are indicative of the continued strong and cooperative
relationship between our two companies," said Pat Feely, Radica's Chief
Executive Officer.
The foregoing discussion contains forward-looking statements
that involve risks and uncertainties that could cause actual
results to differ materially from projected results.
Forward-looking statements include statements about efforts
to attract or prospects for additional or increased
business, new product introductions and other statements of
a non-historical nature. Actual results may differ from
projected results due to various Risk Factors, including
Risks of Manufacturing in China, Dependence on Product
Appeal and New Product Introductions, and Dependence on
Major Customers, as set forth in the Company's Annual Report
on Form 20-F for the fiscal year ended October 31, 1998, as
filed with the Securities and Exchange Commission. See "Item
1. Description of Business -- Risk Factors" in such report
on Form 20-F.
Radica is a leading developer, manufacturer and distributor of handheld and
table top games with subsidiaries in the U.S.A., Canada and the United Kingdom.
Radica USA Limited, headquartered in Dallas, Texas, is a subsidiary of Radica
Games Limited (RADICA), a Bermuda company headquartered in Hong Kong (NASDAQ -
RADA).
-- END --
RADICA GAMES LIMITED
ANNOUNCES MANAGEMENT SUCCESSION
FOR IMMEDIATE RELEASE CONTACT: PATRICK S. FEELY
APRIL 12, 1999 PRESIDENT & COO
(LOS ANGELES, CALIFORNIA)
(626) 744 1150
DAVID C.W. HOWELL
PRESIDENT ASIA OPERATIONS
& CFO
(HONG KONG)
(852) 2688 4201
(Hong Kong) Radica Games Limited (NASDAQ RADA) announced today implementation of
a succession plan. Robert Davids, Radica's long time Chief Executive Officer has
passed the CEO title to Pat Feely, Radica's President and Chief Operating
Officer. Davids will become Chairman of the Executive Committee of the Board of
Directors, will remain as vice chairman of the Board and will carry the
additional title of CEO - Emeritus.
Feely joined Radica in 1996 as a member of the Board of Directors and was named
President and Chief Operating Officer in 1997.
"I am looking forward to the challenge of leading Radica to new heights. The
Company has been well positioned through Bob Davids' leadership to move
successfully into the future," said Feely.
"Pat Feely and the Radica Team are well prepared to lead our company. After
twelve years in Asia I want to be able to spend more time with my family and
have the flexibility to pursue my personal interests," said Davids.
Radica Games Limited (Radica) is a Bermuda company headquartered in Hong Kong
(NASDAQ-RADA). Radica is a leading developer, manufacturer and distributor of
electronic handheld and tabletop games. Radica has subsidiaries in the U.S.A.,
Canada and the U. K., and a factory in Dongguan, Southern China. More
information about Radica can be found on the Internet at www.radicagames.com.
-- END --
RADICA GAMES LIMITED
ANNOUNCES NEW SHARE REPURCHASE PLAN
FOR IMMEDIATE RELEASE CONTACT: PATRICK S. FEELY
APRIL 12, 1999 PRESIDENT & COO
(LOS ANGELES, CALIFORNIA)
(626) 744 1150
DAVID C.W. HOWELL
PRESIDENT ASIA OPERATIONS
& CFO
(HONG KONG)
(852) 2688 4201
(Hong Kong) Radica Games Limited (NASDAQ RADA) announced today that its Board of
Directors has increased the amount of the Company's Common Stock authorized for
purchase under the Company's previously announced purchase program. The new
authorization will permit the Company to purchase up to an additional 1.0
million shares. Between February 26, 1999 and March 30, 1999, the Company
purchased 334,800 shares at an average price of $13.43.
Purchases may be made from time to time by the Company in the open market or in
block purchases or in privately negotiated transactions depending on market
conditions and other factors. "We believe the buy-back of our shares is an
attractive opportunity for the Company, is a good investment of corporate funds
and is in the best interest of our stockholders," stated Pat Feely, Radica's
President and Chief Operating Officer.
Radica Games Limited (Radica) is a Bermuda company headquartered in Hong Kong
(NASDAQ-RADA). Radica is a leading developer, manufacturer and distributor of
electronic handheld and tabletop games. Radica has subsidiaries in the U.S.A.,
Canada and the U. K., and a factory in Dongguan, Southern China. More
information about Radica can be found on the Internet at www.radicagames.com.
-- END --
RADICA(R) GAMES LIMITED
ANNOUNCES CROSSWORD GAMES AGREEMENT
FOR IMMEDIATE RELEASE CONTACT: PATRICK S. FEELY
APRIL 12, 1999 PRESIDENT & COO
(LOS ANGELES, CALIFORNIA)
(626) 744 1150
DAVID C.W. HOWELL
PRESIDENT ASIA OPERATIONS
& CFO
(HONG KONG)
(852) 2688 4201
LUC LE COTTIER
PRESIDENT
LEXIBOOK
(FRANCE)
(33) 169 189 257
(HONG KONG) Radica Games Limited (NASDAQ RADA) announced today an agreement with
Lexibook of Orsay, France covering exclusive manufacturing rights and U.S. and
Canadian distribution rights for a line of crossword games created by Lexibook.
Radica intends to introduce "Crossword Challenge" as part of its Monte Carlo
line of games for specialty retailers this Fall.
Additional products are planned for 2000.
"We are delighted to enter into a partnership with Lexibook in the crossword
business. This venture will combine Lexibook's outstanding games with Radica's
manufacturing expertise and U.S. distribution prowess," said Bob Davids, CEO of
Radica Games Ltd.
"Our electronic crosswords are exciting, unique products, already well known
throughout Europe. Radica is best equipped to assure success in the USA and
Canada, thanks to the team's dynamism, it's manufacturing competence and strong
distribution. We are confident in the success of our partnership," said Luc Le
Cottier, President of Lexibook
The foregoing discussion contains forward-looking statements
that involve risks and uncertainties that could cause actual
results to differ materially from projected results.
Forward-looking statements include statements about efforts
to attract or prospects for additional or increased
business, new product introductions and other statements of
a non-historical nature. Actual results may differ from
projected results due to various Risk Factors, including
Risks of Manufacturing in China, Dependence on Product
Appeal and New Product Introductions, and Dependence on
Major Customers, as set forth in the Company's Annual Report
on Form 20-F for the fiscal year ended October 31, 1998, as
filed with the Securities and Exchange Commission. See "Item
1. Description of Business -- Risk Factors" in such report
on Form 20-F.
<PAGE>
2
Radica Games Limited ("Radica") is a Bermuda company headquartered in Hong Kong
(NASDAQ - RADA). Radica is a leading developer, manufacturer and distributor of
electronic handheld and tabletop games. Radica has subsidiaries in the U.S.A.,
Canada and the U.K., and a factory in Dongguan, Southern China. More information
about Radica can be found on the Internet at "www.radicagames.com".
-- END --
RADICA GAMES LIMITED
ANNOUNCES
AUSTRALIAN INFRINGEMENT SETTLEMENT
FOR IMMEDIATE RELEASE CONTACT: PATRICK S. FEELY
APRIL 8, 1999 PRESIDENT & COO
(LOS ANGELES, CALIFORNIA)
(626) 744 1150
DAVID C.W. HOWELL
PRESIDENT ASIA OPERATIONS
& CFO
(HONG KONG)
(852) 2688 4201
(Hong Kong) Radica Games Limited (NASDAQ RADA) announced today that it had
successfully obtained a final settlement from an Australian toys and games
retailer in the form of written undertakings, the retailer confirming Radica's
exclusive rights in Bass Fishin'(TM) and Lake Trout Fishin'(TM) (together
referred to as "Fishing Games") and agreeing not to sell, offer for sale or
promote any further copies of counterfeit Fishing Games.
Bass Fishin'(TM) and Lake Trout Fishin'(TM) are popular virtual fishing games
sold by Radica around the world.
"Radica intends to vigorously defend its intellectual property rights
worldwide," said Robert Davids, Radica's CEO.
Radica Games Limited ("Radica") is a Bermuda company headquartered in Hong Kong
(NASDAQ - RADA). Radica is a leading developer, manufacturer and distributor of
electronic handheld and tabletop games. Radica has subsidiaries in the U.S.A.,
Canada and the U.K., and a factory in Dongguan, Southern China. More information
about Radica can be found on the Internet at "www.radicagames.com".
--END--
RADICA GAMES LIMITED
ANNOUNCES TIGER WOODS LICENSE AGREEMENT
FOR IMMEDIATE RELEASE CONTACT: PATRICK S. FEELY
APRIL 1, 1999 PRESIDENT & COO
(LOS ANGELES, CALIFORNIA)
(626) 744 1150
DAVID C.W. HOWELL
PRESIDENT ASIA OPERATIONS
& CFO
(HONG KONG)
(852) 2688 4201
(Hong Kong) Radica (NASDAQ RADA) has entered into an exclusive worldwide
licensing agreement with Nike, Inc. for the rights to market Tiger Woods branded
electronic handheld games. The Company said it plans to introduce its first
Tiger Woods product during the Fall of 1999. Additional new products are
currently planned for introduction in 2000.
Bob Davids, Radica's CEO said, "Tiger Woods is the most exciting new star in
sports today. Radica is thrilled to be developing innovative new products that
will feature the Tiger Woods name. This license provides another example of
Radica's strategy to broaden its array of important game properties."
"Pairing Tiger Woods and Radica is a win for everyone," said Michealene Cristini
Risley, President of Fresh Water Spigot who brought Nike and Radica together.
"Consumers will be attracted to these great products in large part because of
Tiger, but won't be able to put them down because of Radica's innovation - I
can't think of a more natural fit."
New Tiger Woods Ultimate Golf(TM) is shaped like a golf club and has swing
sensors that measure swing velocity and direction. This breakthrough game
simulates the actual experience of playing a round of golf. You play a full
18-hole round of golf by electronically selecting the right club for each shot
and then executing an actual golf swing correctly. Swing errors can lead to
slices, hooks and shanks, just like the real sport. Also to be introduced is
Tiger Woods Power Golf. This lower priced game fits into your pocket and can be
taken anywhere.
The foregoing discussion contains forward-looking statements
that involve risks and uncertainties that could cause actual
results to differ materially from projected results.
Forward-looking statements include statements about efforts
to attract or prospects for additional or increased
business, new product introductions and other statements of
a non-historical nature. Actual results may differ from
projected results due to various Risk Factors, including
Risks of Manufacturing in China, Dependence on Product
Appeal and New Product Introductions, and Dependence on
Major Customers, as set forth in the Company's Annual Report
on Form 20-F for the fiscal year ended October 31, 1998, as
filed with the Securities and Exchange Commission. See "Item
1. Description of Business -- Risk Factors" in such report
on Form 20-F.
<PAGE>
Fresh Water Spigot is a licensing firm specializing in partnering sports and
entertainment properties with technology companies.
Radica Games Limited (Radica) is a Bermuda company headquartered in Hong Kong
(NASDAQ-RADA). Radica is a leading developer, manufacturer and distributor of
electronic handheld and tabletop games. Radica has subsidiaries in the U.S.A.,
Canada and the U. K., and a factory in Dongguan, Southern China. More
information about Radica can be found on the Internet at www.radicagames.com.
-- END --
