NewKidCo Announces Year End 2001 Results
NEW YORK--(BUSINESS WIRE)--May 8, 2002--NewKidCo International Inc. (OTCBB:NKCIF - news; TSE:NKC - news) today announced fourth quarter and year- end results, under Canadian GAAP and in U.S. Dollars.
2001 Highlights:
Increased Gross Margins to 41% in Fiscal 2001 from 12% in Fiscal 2000.
Decreased G&A (overhead) by over $1.7 million, a reduction of 47.3%.
Strengthened Management by a number of significant changes and additions.
Generated $17.7 million in net revenues in a challenging retail environment.
Successfully extended the Ubi Soft European distribution agreement and began distribution in Japan.
Launched eight new titles, bringing the total current library to 28 titles.
Negotiated fiscally prudent new licensing agreements with Little League Baseball, Dr. Seuss, and Nickelodeon's Dora the Explorer, which will all result in new titles shipping in Fiscal 2002.
Entered into a long-term alliance for product development with CineGroupe, that will further improve gross margins, and assure timely delivery of new titles.
Expended significant management effort to conclude (in 2002) a major capitalization and improvement of the Company's balance sheet, resulting in:
Additional equity of $7.1 million
Elimination and exercise of over 11 million warrants
Substantial Reduction of the Company's debt.
Positioned the Company, both financially and operationally, for significant growth going forward.
FINANCIAL REVIEW
For the twelve months ended December 31, 2001 the Company reported revenue of $17.7 million versus $26.0 million for the twelve months ended December 31, 2000. The company reported a net loss of $11.7 million (which included a one time charge of $10.0 million for a write-down of impaired assets and goodwill and interest charges related to the issuance of common shares and warrants) for the twelve months ended December 31, 2001, versus a net loss of $7.7 million for the twelve months ended December 31, 2000. The loss from operations (excluding interest charges), for the twelve months ended December 31, 2001 of $1.1 million was significantly improved over the $6.4 million loss for the twelve months ended December 31, 2000. This improvement is a result of the strong commitment by the company to operate more efficiently and focus on licenses that show positive performance and cash flow. This is evidenced by the break even cash flow from operations vs. the $3.0 million cash flow deficiency in 2000.
Revenues for the fourth quarter were $10.3 million versus $18.3 million for the fourth quarter of 2000. The net loss from operations was $2.7 million in the fourth quarter of 2001 (including a one-time charge of $1.2 million for a write-down of impaired assets and goodwill and interest charges related to the issuance of common shares and warrants), vs. operating profit of $2.0 million in the fourth quarter of 2000. The reduction in fourth quarter 2001 revenues was directly related to management reducing the number of new titles it released in the fourth quarter of 2001, due to the lack of installed bases on next generation platforms.
"We are pleased to have completed the capital restructuring and introduction of our new management team and are confident that the company has invested appropriately to achieve improved results in 2002. We now have the product line and the needed capital to take advantage of the huge industry growth," stated Arthur Levine, President and Chief Operating Officer. "With our new licensing opportunities represented by Dora the Explorer, Dr. Seuss and Little League Baseball we believe we are well positioned to have a successful 2002 and beyond. Beginning with June, 2002 when we will introduce Tom and Jerry on PlayStation 2, NewKidCo will have an array of new releases on next generation platforms throughout the balance of the year."
"Clearly with the substantial improvement in Gross Margins, along with the dramatic reduction in fixed overheads, increased revenues in 2002 will result in increased profitability," stated Arthur Levine.
NewKidCo International Inc. (TSE:NKC - news; OTCBB:NKCIF - news), headquartered in New York, New York, publishes children's video games based on popular licensed characters, for interactive entertainment game systems from Sony Computer Entertainment, Nintendo and Microsoft. NewKidCo publishes and distributes their products directly in North America and in Europe through distribution partner, Ubi Soft Entertainment SA. For more information please visit www.newkidco.com.
Forward-looking statements in this release are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Investors are cautioned that all forward-looking statements involve risk and uncertainties, including without limitation risks of intellectual property rights and litigation, risks in technology development and commercialization, risks in product development and market acceptance of and demand for the Company's products, risks of downturns in economic conditions generally, risks associated with competition and competitive pricing pressures, risks associated with foreign sales, risks associated with the sell-through of products in the sales channels, risks associated with customer concentration and other risks detailed in the Company's filings with the Securities and Exchange Commission.
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Contact:
NewKidCo Public Relations:
Brenda Ciccone
Bender/Helper Impact
Tel: 310-477-4647 x264
Fax: 310-478-7914
Email: brenda_ciccone@bhimpact.com
or
NewKidCo Investor Relations:
Al Turano
TKO International
Tel: 866-934-6633
Fax: 303-850-7912
Email: tkoint@webaccess.net |
