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Radica Shows Loss, Despite 'TV Game' Sales

Officials from Hong Kong based peripheral manufacturer Radica Games, makers of both the Play TV line of all-in-one 'TV games' and the Gamester branded console and handhel...
Officials from Hong Kong based peripheral manufacturer Radica Games, makers of both the Play TV line of all-in-one 'TV games' and the Gamester branded console and handheld peripherals, have announced the company’s financial results for the second quarter ended June 30th. During this period, the company reported a somewhat disappointing net loss of $3.4 million, or $0.18 per diluted share, compared to a net profit of $0.2 million, or $0.01 per diluted share, in the previous quarter. This makes the company’s net loss for the year to date $2.9 million, compared to $0.9 million for the same period in 2004. In particular, Radica recorded a non-cash charge of $6.0 million for the impairment of the remaining goodwill associated with its video game accessories product line, Gamester. This part of Radica’s business, which includes PlayStation 2, Xbox, Game Boy Advance and PSP controllers, screen guards, and other accessories, has been declining as the current generation of consoles nears it end, but CEO Pat Feely commented of the company's future in console peripherals: "We still believe in the viability of our VGA business and are hopeful this product line will again achieve acceptable profitability levels in future years." In better news for the company, sales for the quarter increased by 66 percent to $31.1 million, from $18.8 million for the same period in 2004, largely thanks to the growth of the company's TV games, which include the 20Q series. Compared to the sales for the same period in 2004, branded sales grew by 73 percent, with U.S. branded sales increasing by 47 percent, European sales increasing by 174 percent and other international sales increasing by 106 percent. Pat Feely, Radica's CEO additionally commented, "Operationally this was the strongest second quarter at Radica in seven years. Our strategy of focusing on electronic entertainment products has hit the sweet spot of the industry. With products like 20Q, World Poker Tour and Cube World, Radica is leading the thriving market for electronic games and gadgets targeted at casual adult gamers. It is not only an exciting market segment for today's market but also one that we believe has strong growth potential for the future."

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