Radica Games Limited Reports First Quarter Sales Growth of 48%

May 20, 2002, 01:00 ET from Radica Games Limited

    HONG KONG, May 20 /PRNewswire-FirstCall/ --
 Radica Games Limited (Nasdaq:   RADA) announced today its results for the first
 quarter of 2002.  Sales for the quarter increased by 48.3% to $17.5 million
 from $11.8 million in the first quarter of 2001.  The company reported a
 significantly reduced net loss of $1.6 million or $.09 per share for the
 quarter compared to a net loss of $3.7 million or $.21 per share in the first
 quarter of 2001.
     "Results for the quarter exceeded our expectations and are consistent with
 the steady progress we have shown during each of the last four quarters as
 well as our goal to return to profitability for 2002.  We are particularly
 pleased with the strength of our Gamester line of video game accessories (VGA)
 and our ODM/OEM manufacturing business.  We expect these two sectors to
 deliver continued impressive growth for the rest of the year on top of solid
 results in the rest of our business," said Pat Feely, Radica's CEO.
     Revenues for the quarter were comprised of 39.0% Electronic Games
 (Handheld Games and Play TV(TM)), 11.5% Girls' Electronics (Girl Tech(R) and
 Barbie(TM)), 20.9% VGA and 28.6% ODM/OEM/Sourcing compared to 46.3%, 19.5%,
 13.1% and 21.1% for the same period in 2001.  This represents sales growth of
 14.1% for Electronic Games and Girls' Electronics, 138.2% for VGA and 101.0%
 for ODM/OEM/Sourcing.
     "This week at the Electronic Entertainment Expo in Los Angeles we will be
 showing some of our most exciting new products for our Gamester(TM) video game
 accessory and Play TV product lines," Feely said.  "Of particular importance
 will be our recently introduced Floodlight(TM) for Game Boy Advance(TM).  This
 proprietary product is a breakthrough in the large category of Game Boy
 illumination and in less than two months is one of the fastest selling lights
 in the industry.  We will also be showing our new Play TV Boxing(TM) and Play
 TV Baseball 2(TM) products as well as our line of licensed Men In Black II and
 Lotus racing products for the Gamester brand.  We hope many of our
 shareholders will be able to attend the show."
     Gross margin for the quarter was 33.9% compared to 26.7% in Q1 of 2001 as
 a result of gains from the continued cost reduction program offset by a higher
 mix of lower margin ODM/OEM and Sourcing product sales compared to Q1 2001.
     Operating expenses for the quarter were $7.4 million compared to
 $6.9 million in Q1 of 2001.  The increase in expenditure was as a result of an
 increase in advertising expenditure over Q1 2001, plus the effect of foreign
 exchange movements in the UK.  R&D costs decreased by $0.3 million.
     Effective in 2002, the Company adopted the Statement of Financial
 Accounting Standard No. 142, "Goodwill and Other Intangible Assets".  As a
 result of the adoption of this statement, goodwill and other indefinite life
 intangibles are no longer being amortized.  Amortization of these assets in
 the first quarter of 2001 amounted to $0.2 million.  Removing this
 amortization and its related tax effect would have resulted in a net loss of
 $3.5 million in the first quarter of 2001.
     At March 31, 2002 the Company had $23.4 million of cash compared to
 $25.8 million at December 31, 2001 and net assets of $61.6 million.  Long-term
 debt declined by $0.9 million from December 31, 2001.  Inventories increased
 to $19.1 million from $17.2 million at December 31, 2001 to support second
 quarter sales.  Receivables were at $11.5 million at March 31, 2002 compared
 to $17.3 million at December 31, 2001.
 
     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, 2000, as filed with the Securities and Exchange Commission.  See "Item 3.
 Key Information - 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 a diverse line of electronic products including handheld and
 tabletop games, high-tech toys and video game accessories.  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 .
 
 
                              RADICA GAMES LIMITED
                     CONSOLIDATED STATEMENTS OF OPERATIONS
 
     (US Dollars in thousands,                    Three months ended March 31,
      except per share data)                           2002          2001
                                                    (unaudited)   (unaudited)
 
     REVENUES:
     Net Sales                                        $17,503        $11,773
     Cost of Sales                                    (11,575)        (8,631)
     Gross Profit                                       5,928          3,142
 
     OPERATING EXPENSES:
     Selling, general and administrative expenses      (5,688)        (4,551)
     Research and development                          (1,033)        (1,315)
     Depreciation and amortization                       (719)        (1,003)
     Total operating expenses                          (7,440)        (6,869)
 
     OPERATING LOSS                                    (1,512)        (3,727)
 
     OTHER INCOME                                          15              9
 
     NET INTEREST INCOME                                    1             26
 
     LOSS BEFORE INCOME TAXES                          (1,496)        (3,692)
 
     PROVISION FOR INCOME TAXES                           (79)           (32)
 
     NET LOSS                                         $(1,575)       $(3,724)
 
     BASIC AND DILUTED LOSS PER SHARE                  $(0.09)        $(0.21)
 
     BASIC AND DILUTED WEIGHTED AVERAGE
      NUMBER OF SHARES                             17,667,315     17,565,878
 
 
                              RADICA GAMES LIMITED
                          CONSOLIDATED BALANCE SHEETS
 
                                                     March 31,    December 31,
     (US Dollars in thousands, except share data)      2002           2001
                                                    (unaudited)
     CURRENT ASSETS:
     Cash and cash equivalents                        $23,364        $25,810
     Accounts receivable, net of
      allowances for doubtful accounts
      of $1,802 ($2,207 at Dec. 31, 2001)              11,484         17,290
     Inventories, net of provision
      of $3,468 ($3,997 at Dec. 31, 2001)              19,089         17,179
     Prepaid expenses and other current assets          2,532          2,283
     Income taxes receivable                              931            931
     Deferred income taxes                                168            168
 
         Total current assets                          57,568         63,661
 
     PROPERTY, PLANT AND EQUIPMENT, NET                15,730         16,310
 
     INTANGIBLE ASSETS, NET                             9,866          9,971
 
     DEFERRED INCOME TAXES, NONCURRENT                  1,880          1,887
 
         Total assets                                 $85,044        $91,829
 
     LIABILITIES AND SHAREHOLDERS' EQUITY
 
     CURRENT LIABILITIES:
     Short term borrowings                               $846           $846
     Accounts payable                                   7,379         10,101
     Current portion of long-term debt                  3,648          3,648
     Accrued payroll and employee benefits                654            943
     Accrued expenses                                   9,641         10,907
     Income taxes payable                                 322            507
 
         Total current liabilities                     22,490         26,952
 
     LONG-TERM DEBT                                       913          1,825
 
         Total liabilities                             23,403         28,777
 
     SHAREHOLDERS' EQUITY:
     Common stock
      par value $0.01 each, 100,000,000 shares
      authorized, 17,693,886 shares
      outstanding (17,646,740 at Dec. 31, 2001)           177            176
     Additional paid-in capital                         1,639          1,549
     Warrants to acquire common stock                     445            445
     Retained earnings                                 59,437         61,012
     Accumulated other comprehensive income               (57)          (130)
 
         Total shareholders' equity                    61,641         63,052
 
         Total liabilities and shareholders' equity   $85,044        $91,829
 
                     MAKE YOUR OPINION COUNT -  Click Here
                http://tbutton.prnewswire.com/prn/11690X54268827
 
 

SOURCE Radica Games Limited
    HONG KONG, May 20 /PRNewswire-FirstCall/ --
 Radica Games Limited (Nasdaq:   RADA) announced today its results for the first
 quarter of 2002.  Sales for the quarter increased by 48.3% to $17.5 million
 from $11.8 million in the first quarter of 2001.  The company reported a
 significantly reduced net loss of $1.6 million or $.09 per share for the
 quarter compared to a net loss of $3.7 million or $.21 per share in the first
 quarter of 2001.
     "Results for the quarter exceeded our expectations and are consistent with
 the steady progress we have shown during each of the last four quarters as
 well as our goal to return to profitability for 2002.  We are particularly
 pleased with the strength of our Gamester line of video game accessories (VGA)
 and our ODM/OEM manufacturing business.  We expect these two sectors to
 deliver continued impressive growth for the rest of the year on top of solid
 results in the rest of our business," said Pat Feely, Radica's CEO.
     Revenues for the quarter were comprised of 39.0% Electronic Games
 (Handheld Games and Play TV(TM)), 11.5% Girls' Electronics (Girl Tech(R) and
 Barbie(TM)), 20.9% VGA and 28.6% ODM/OEM/Sourcing compared to 46.3%, 19.5%,
 13.1% and 21.1% for the same period in 2001.  This represents sales growth of
 14.1% for Electronic Games and Girls' Electronics, 138.2% for VGA and 101.0%
 for ODM/OEM/Sourcing.
     "This week at the Electronic Entertainment Expo in Los Angeles we will be
 showing some of our most exciting new products for our Gamester(TM) video game
 accessory and Play TV product lines," Feely said.  "Of particular importance
 will be our recently introduced Floodlight(TM) for Game Boy Advance(TM).  This
 proprietary product is a breakthrough in the large category of Game Boy
 illumination and in less than two months is one of the fastest selling lights
 in the industry.  We will also be showing our new Play TV Boxing(TM) and Play
 TV Baseball 2(TM) products as well as our line of licensed Men In Black II and
 Lotus racing products for the Gamester brand.  We hope many of our
 shareholders will be able to attend the show."
     Gross margin for the quarter was 33.9% compared to 26.7% in Q1 of 2001 as
 a result of gains from the continued cost reduction program offset by a higher
 mix of lower margin ODM/OEM and Sourcing product sales compared to Q1 2001.
     Operating expenses for the quarter were $7.4 million compared to
 $6.9 million in Q1 of 2001.  The increase in expenditure was as a result of an
 increase in advertising expenditure over Q1 2001, plus the effect of foreign
 exchange movements in the UK.  R&D costs decreased by $0.3 million.
     Effective in 2002, the Company adopted the Statement of Financial
 Accounting Standard No. 142, "Goodwill and Other Intangible Assets".  As a
 result of the adoption of this statement, goodwill and other indefinite life
 intangibles are no longer being amortized.  Amortization of these assets in
 the first quarter of 2001 amounted to $0.2 million.  Removing this
 amortization and its related tax effect would have resulted in a net loss of
 $3.5 million in the first quarter of 2001.
     At March 31, 2002 the Company had $23.4 million of cash compared to
 $25.8 million at December 31, 2001 and net assets of $61.6 million.  Long-term
 debt declined by $0.9 million from December 31, 2001.  Inventories increased
 to $19.1 million from $17.2 million at December 31, 2001 to support second
 quarter sales.  Receivables were at $11.5 million at March 31, 2002 compared
 to $17.3 million at December 31, 2001.
 
     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, 2000, as filed with the Securities and Exchange Commission.  See "Item 3.
 Key Information - 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 a diverse line of electronic products including handheld and
 tabletop games, high-tech toys and video game accessories.  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 .
 
 
                              RADICA GAMES LIMITED
                     CONSOLIDATED STATEMENTS OF OPERATIONS
 
     (US Dollars in thousands,                    Three months ended March 31,
      except per share data)                           2002          2001
                                                    (unaudited)   (unaudited)
 
     REVENUES:
     Net Sales                                        $17,503        $11,773
     Cost of Sales                                    (11,575)        (8,631)
     Gross Profit                                       5,928          3,142
 
     OPERATING EXPENSES:
     Selling, general and administrative expenses      (5,688)        (4,551)
     Research and development                          (1,033)        (1,315)
     Depreciation and amortization                       (719)        (1,003)
     Total operating expenses                          (7,440)        (6,869)
 
     OPERATING LOSS                                    (1,512)        (3,727)
 
     OTHER INCOME                                          15              9
 
     NET INTEREST INCOME                                    1             26
 
     LOSS BEFORE INCOME TAXES                          (1,496)        (3,692)
 
     PROVISION FOR INCOME TAXES                           (79)           (32)
 
     NET LOSS                                         $(1,575)       $(3,724)
 
     BASIC AND DILUTED LOSS PER SHARE                  $(0.09)        $(0.21)
 
     BASIC AND DILUTED WEIGHTED AVERAGE
      NUMBER OF SHARES                             17,667,315     17,565,878
 
 
                              RADICA GAMES LIMITED
                          CONSOLIDATED BALANCE SHEETS
 
                                                     March 31,    December 31,
     (US Dollars in thousands, except share data)      2002           2001
                                                    (unaudited)
     CURRENT ASSETS:
     Cash and cash equivalents                        $23,364        $25,810
     Accounts receivable, net of
      allowances for doubtful accounts
      of $1,802 ($2,207 at Dec. 31, 2001)              11,484         17,290
     Inventories, net of provision
      of $3,468 ($3,997 at Dec. 31, 2001)              19,089         17,179
     Prepaid expenses and other current assets          2,532          2,283
     Income taxes receivable                              931            931
     Deferred income taxes                                168            168
 
         Total current assets                          57,568         63,661
 
     PROPERTY, PLANT AND EQUIPMENT, NET                15,730         16,310
 
     INTANGIBLE ASSETS, NET                             9,866          9,971
 
     DEFERRED INCOME TAXES, NONCURRENT                  1,880          1,887
 
         Total assets                                 $85,044        $91,829
 
     LIABILITIES AND SHAREHOLDERS' EQUITY
 
     CURRENT LIABILITIES:
     Short term borrowings                               $846           $846
     Accounts payable                                   7,379         10,101
     Current portion of long-term debt                  3,648          3,648
     Accrued payroll and employee benefits                654            943
     Accrued expenses                                   9,641         10,907
     Income taxes payable                                 322            507
 
         Total current liabilities                     22,490         26,952
 
     LONG-TERM DEBT                                       913          1,825
 
         Total liabilities                             23,403         28,777
 
     SHAREHOLDERS' EQUITY:
     Common stock
      par value $0.01 each, 100,000,000 shares
      authorized, 17,693,886 shares
      outstanding (17,646,740 at Dec. 31, 2001)           177            176
     Additional paid-in capital                         1,639          1,549
     Warrants to acquire common stock                     445            445
     Retained earnings                                 59,437         61,012
     Accumulated other comprehensive income               (57)          (130)
 
         Total shareholders' equity                    61,641         63,052
 
         Total liabilities and shareholders' equity   $85,044        $91,829
 
                     MAKE YOUR OPINION COUNT -  Click Here
                http://tbutton.prnewswire.com/prn/11690X54268827
 
 SOURCE  Radica Games Limited