[UPDATE2][05-19-00 12:26 PM ET] WHAT DID THEY KNOW AND WHEN DID THEY KNOW IT?...ON MARCH 22, THE DAY BEFORE SAID 23 MARCH 2000 ("RABINS-KAPLAN CONFERENCE CALL") ("RABINS-KAPLAN") FORMALLY ISSUED THE FOLLOWING (TSE:NKC) TIMELY DISCLOSURE (NASD OTC:NKCIF) SEC RULE 10B-5 GOVERNED PRESS RELEASE[1.]...
[1.] Issues of Fact:
03/22/2000
NEWKIDCO INTERNATIONAL INC. ANNOUNCES YEAR END 1999 RESULTS RECORD FOURTH QUARTER REVENUE AND NET INCOME REPORTED
-Industry Tracking Towards a Strong Year 2000-
BURLINGTON, MA (March 22, 2000) - NewKidCo International Inc. (OTC BB: NKCIF; TSE: NKC), one of the leading children's video game publishers, announced today consolidated audited results for the twelve months ended December 31, 1999.
In accordance with Canadian GAAP, for the twelve months ended December 31, 1999, the Company reported revenue of US$22.6 million versus US$2.5 million for the twelve months ended December 31, 1998. The Company reported net income of US$2.8 million of which income of US$0.5 million or US$.03 per share was from continuing operations, for the twelve months ended December 31, 1999, versus a loss of US$9.7 million for the twelve months ended December 31, 1998, of which a loss of US$1.0 million or US$.07 per share was from continuing operations.
In accordance with U.S. GAAP, for the twelve months ended December 31, 1999, the Company reported revenue of US$22.0 million versus US$2.3 million for the twelve months ended December 31, 1998. The Company reported net income of US$1.8 million of which a loss of US$0.4 million or US$.03 per share was from continuing operations, for the twelve months ended December 31, 1999, versus a loss of US$9.8 million for the twelve months ended December 31, 1998, of which a loss of US$1.6 million or US$.12 per share was from continuing operations.
In accordance with Canadian GAAP, for the three months ended December 31, 1999, the Company reported revenue of US$12.2 million versus US$2.5 million for the three months ended December 31, 1998. The Company reported net income of US$0.8 million of which income of US$0.3 million or US$.02 per share was from continuing operations, for the three months ended December 31, 1999, versus a loss of US$3.4 million for the three months ended December 31, 1998, of which a loss of US$0.5 million or US$.04 per share was from continuing operations.
In accordance with U.S. GAAP, for the three months ended December 31, 1999, the Company reported revenue of US$12.2 million versus US$2.3 million for the three months ended December 31, 1998. The Company reported net income of US$0.9 million of which income of US$0.4 million or US$.03 per share was from continuing operations, for the three months ended December 31, 1999, versus a loss of US$2.8 million for the three months ended December 31, 1998, of which income of US$0.1 million or US$.01 per share was from continuing operations.
The difference in the net income/loss from continuing operations reported under Canadian GAAP and U.S. GAAP arises primarily from the difference in the accounting treatment of the acquisition by the Company of NewKidCo, LLC. This acquisition was completed during the second quarter of 1999. In addition, there are differences in the method used to translate the financial statements from a Canadian dollar reporting currency to a U.S dollar reporting currency under Canadian GAAP and U.S. GAAP. The Company's decision to change its reporting currency reflects the fact that a significant amount of the Company's business is conducted in U.S. dollars.
Richard Rabins, Chief Executive Officer of NewKidCo International Inc. stated, "1999 was an exciting year for NewKidCo in which we saw ten new titles released, a strong holiday season selling period, and significant new relationships developed with our platform licensors, distribution channel and character licensors. In the past year, we saw our titles receive market acceptance in the young children's video game entertainment segment of the market in which we operate, and in which we have a leading position.
"As previously announced, we have forged an Internet venture with a technology partner to develop a new company, NEWKIDGAMES.COM, to further expand our market penetration as we continue to obtain new licenses and develop new titles for existing and new platforms. NEWKIDGAMES.COM intends to deliver compelling children's video style games to the web. In the U.S. alone, there are approximately 43 million children in the under twelve-year-old marketplace. Analyst projections are that this age group's use of the Internet will grow from the current 25% in 1999 to over 50% by 2003. The international marketplace is anticipated to grow, over time, to be even larger. We intend to launch this exciting new web site later this year.
"During 1999, we entered into several multi-year, multi-platform agreements with some of the top children's character licensors. The Company has also recently extended it's distribution agreement with Mattel, Inc. for North American retail sales rights for a one-year term.
"We strengthened our management team with the additions of Sam Goldberg as Executive Vice President of Publishing, and Paul Samulski as Vice President of Product and Creative Development, both veterans of our industry.
"We believe that the industry is poised for strong growth as evidenced by recent announcements by the top manufacturers of console systems for their next generation 128 bit product offerings. Manufacturers of the next generation systems boast that their products have much improved graphics, ease of use, compatibility with many existing systems and other capabilities. The analyst community anticipates that these "family oriented" consoles will have a huge impact on the entertainment industry. Additionally, it is expected that next generation consoles, in the future, will allow consumers to surf the Internet. We believe that we will be very well positioned for this trend with our Internet initiative in place.
"For the year 2000 we anticipate significant growth as we launch additional titles into the marketplace scheduled for release in the latter part of the year. These titles will primarily be in the high volume entertainment sector for kids. Additionally, we anticipate international sales of titles in 2000, a first for NewKidCo," concluded Mr. Rabins.
The Company secured a line of operating demand credit in February 2000, which provides additional working capital, and we believe our current fundraising efforts will provide expansion capital for significant growth in the upcoming year.
The Company also is a beneficial owner of 351,850 shares in SoftQuad Software Inc., a Canadian company. It is expected that NewKidCo International will have conversion rights to an equal number of The American Sports Machine, Inc. (Nasdaq: AMRR) [anticipated to be renamed SoftQuad Software Inc. per press release dated March 2, 2000] publicly traded shares, subject to certain lock up and securities law restrictions relating to their resale.
Hank Kaplan, President of NewKidCo, LLC, commented, "We believe that the coming year will bring the Company growth by virtue of our extensive product lineup which features several of today's most recognizable and popular children's characters. For the year 2000, we plan to release an additional twelve titles into the marketplace, all supported by quality development, extensive consumer advertising, aggressive marketing initiatives and broad distribution, both domestically and internationally."
A Conference call to discuss the information disclosed in this press release is scheduled for Thursday, March 23, 2000 at 9:00 AM EST. To access the call please dial 800-523-6069 or go online to www.vcall.com
About NewKidCo International Inc.
NewKidCo International Inc. (OTC BB: NKCIF; TSE: NKC) publishes video games for young children on "next generation" game console systems. NewKidCo's mission is to become the leading provider in the children's video game category with such licensed properties as Sesame Street© from Children's Television Workshop©, Winnie The Pooh©, Doug, Disney Classic characters and Mulan from Disney, Dragon Tales from Sony Pictures Consumer Products, Tom & Jerry© from Warner Bros. and Hello Kitty© from Sanrio. NewKidCo's products are sold nationwide through the retail channel. To learn more, visit newkidco.com.
Investor Relations:
Mona Walsh, Focus Partners, 212-752-9445, mw@focuspartners.com
Richard Rabins, NewKidCo International Inc., (781) 229-2924 x103, richard@newkidco.com..." [emphasis added] Source: 22 March 2000 NewKidCo Company Press Release
---
(WallStreetRadio.com Newswires(tm)).
|
