Hong Kong-based Radica Games has reported a loss for the first quarter ended March 31, 2006, and the video game accessory and and electronic games manufacturer blamed the loss on an overall slump in sales for the period, especially in the once hot all-in-one 'TV game' sector.
The company, which reported a profit of $10.5 million in 2005, compared to $3.5 million a year prior, posted a net loss for the quarter of $1 million, compared to a net profit of $0.5 million during the same period in 2005. Sales for the company decreased by 18 percent to $18.5 million from last year's $22.5 million.
The company attributed the lower sales to expected reductions in weakening business areas, including declines of $2.4 million in plug and play TV games (Radica makes titles including a
Tetris TV game and multiple Sega Genesis-licensed products, plus football and baseball titles), $0.7 million in video game accessories (the company manufactures Gamester accessories, including a PSP media station and Xbox/PS2 controllers), and $0.8 million of manufacturing services revenues during the quarter.
"We feel very positively about our prospects for 2006,” commented Pat Feely, Radica's CEO. “Point of sale retail movement at our top North American accounts is off to a strong start and was 21 percent above last year in unit sales through April in total, and even excluding 20Q was up by 4 percent.” 20Q is the company's 'artificial intelligence' electronic title which asks 20 questions to identify the object you're thinking of.
Radica Games
recently announced that it was pursuing a possible sale, and that financial advisement firm Navigant Capital Advisors, LLC had been brought on to assist the company in exploring unspecified strategic alternatives to enhance shareholder value. It is unknown at this time if the loss reported will in any way affect Radica's plans in this regard, as the company stated in April that any such decision would likely take several months to finalize.
