RADICA GAMES LIMITED
REPORTS FIRST QUARTER RESULTS
FOR IMMEDIATE RELEASE CONTACT: PATRICK S. FEELY
MAY 15, 2000 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 total revenues for
the first quarter ended March 31, 2000 were $16.7 million, compared to $17.9
million for the same period in 1999. After tax loss was $2.2 million for the
first quarter ended March 31, 2000 or $0.12 per fully diluted share versus an
after tax profit of $3.2 million or $0.16 per fully diluted share for the same
period last year.
The Company also announced that in the second quarter it expects sales to be
below Q1 levels and that it expects to take charges of approximately $10 million
as a result of a reorganization plan and provisions related to changes in its
handheld games business segment. The Company expects that these actions will
result in savings of approximately $3.5 million in fiscal year 2001.
"As we reported last month, the handheld games market has been very soft during
2000. During the last several weeks, we have made a complete analysis of the
effects of this trend on our business and have decided to make adjustments in
our organization, staffing levels and provisions related to certain handheld
game related assets. These moves will result in significant decreases in our
costs structure going forward as well as an organization more focused on the
highest potential business segments for the future," said Pat Feely, Radica's
President and CEO.
"We see outstanding opportunities for the future in our video game controllers
business segment resulting from new video game platforms coming in future months
such as the Sony PlayStation(R) 2, which was officially announced at the E3 show
last week. We are also encouraged by the potential of our XaviX(TM)
technology-based PlayTV(TM) product line and the continuing strength of our Girl
Tech(TM) products at retail. The potential growth in these areas coupled with
the restructuring of our handheld business should yield real benefits in the
future," 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 December 31, 1999, as filed
with the Securities and Exchange Commission. See "Item 1. Description of
Business -- Risk Factors" in such report on Form 20-F.
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Radica Games Limited (Radica) is a Bermuda company headquartered in Hong Kong
(NASDAQ-RADA). Radica is a leading developer, manufacturer and distributor of a
diverse line of electronic products including handheld and tabletop games,
high-tech toys, video game controllers and peripherals, and Internet enabled
appliances. 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.
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RADICA GAMES LIMITED
CONSOLIDATED STATEMENTS OF OPERATIONS
(US Dollars in thousands, Three months ended
except per share data) March 31,
-------------------------------------
2000 1999
---------------- ----------------
(unaudited) (unaudited)
<S> <C> <C
REVENUES:
Net sales $ 16,722 $ 17,906
Cost of sales (12,039) (9,126)
---------------- ----------------
Gross profit 4,683 8,780
---------------- ----------------
OPERATING EXPENSES:
Selling, general and administrative expenses (4,750) (4,051)
Research and development (1,373) (1,040)
Depreciation and amortization (1,380) (936)
---------------- ----------------
Total operating expenses (7,503) (6,027)
---------------- ----------------
OPERATING (LOSS) INCOME (2,820) 2,753
OTHER INCOME 319 112
SHARE OF LOSS OF AFFILIATED COMPANY - (240)
NET INTEREST INCOME 320 618
---------------- ----------------
(LOSS) INCOME BEFORE INCOME TAXES (2,181) 3,243
PROVISION FOR INCOME TAXES (11) (89)
---------------- ----------------
NET (LOSS) INCOME $ (2,192) $ 3,154
================ ================
(LOSS) EARNINGS PER SHARE - BASIC:
Net (loss) earnings per share $ (0.12) $ 0.17
================ ================
Average number of shares outstanding 17,607,396 18,954,712
================ ================
(LOSS) EARNINGS PER SHARE - ASSUMING DILUTION:
Net (loss) earnings per share and
dilutive potential common stock $ (0.12) $ 0.16
================ ================
Average number of shares and dilutive
potential common stock outstanding 17,607,396 20,004,552
================ ================
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RADICA GAMES LIMITED
CONSOLIDATED BALANCE SHEETS
ASSETS
March 31, December 31,
-------------------- --------------------
(US Dollars in thousands, except share data) 2000 1999
-------------------- --------------------
(unaudited)
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CURRENT ASSETS:
Cash and cash equivalents $ 30,521 $ 32,159
Accounts receivable, net of allowances for doubtful accounts
of $530 ($389 at Dec. 31, 1999) and estimated customer
returns of $92 ($624 at Dec. 31, 1999) 11,268 23,750
Inventories, net of provision of $3,183 ($2,339 at Dec. 31, 1999) 26,964 24,625
Prepaid expenses and other current assets 3,586 4,752
Income taxes receivable 337 1,257
Deferred income taxes 3,667 3,667
-------------------- --------------------
TOTAL CURRENT ASSETS 76,343 90,210
-------------------- --------------------
PROPERTY, PLANT AND EQUIPMENT, NET 18,349 17,523
-------------------- --------------------
INTANGIBLE ASSETS, NET 14,864 14,351
-------------------- --------------------
DEFERRED INCOME TAXES, NONCURRENT 11 11
-------------------- --------------------
TOTAL ASSETS $ 109,567 $ 122,095
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LIABILITIES AND SHAREHOLDERS' EQUITY
<S> <C> <C>
CURRENT LIABILITIES:
Short term borrowings 378 1,464
Accounts payable 7,992 12,029
Notes payable due within one year 12,345 1,399
Accrued payroll and employee benefits 2,441 2,511
Accrued expenses 2,801 7,614
Income taxes payable 51 70
-------------------- --------------------
TOTAL CURRENT LIABILITIES 26,008 25,087
-------------------- --------------------
NOTES PAYABLE DUE AFTER ONE YEAR -- 10,946
-------------------- --------------------
TOTAL LIABILITIES 26,008 36,033
-------------------- --------------------
SHAREHOLDERS' EQUITY:
Common stock
par value $0.01 each, 100,000,000 shares authorized,
17,616,194 shares outstanding (17,639,594 at Dec. 31, 1999) 176 176
Additional paid-in capital 1,788 1,757
Retained earnings 81,560 84,100
Cumulative translation adjustment 35 29
-------------------- --------------------
TOTAL SHAREHOLDERS' EQUITY 83,559 86,062
-------------------- --------------------
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $ 109,567 $ 122,095
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