NewKidCo International Inc. Announces Q3 Results
Tuesday December 3, 1:05 pm ET
NEW YORK--(BUSINESS WIRE)--Dec. 3, 2002--NewKidCo International Inc. (OTCBB:NKCIF - News; TSE:NKC - News) today announced its 3rd Quarter 2002 results. The company incurred a loss from operations for the three months ended September 30th, 2002 of $2.4 million versus a loss of $607 thousand for the same period last year. The loss from operations for the nine months was $5.7 million versus income for the same period last year of $29 thousand.
The significantly lower than expected revenues and profits were a result of the continued delay in two titles: Little League Baseball 2002 for Game Boy® Advance and Tom & Jerry War of the Whiskers for PlayStation® 2 which shipped in October and November, respectively. The Game Boy Advance market has become extremely difficult over the past several months and it negatively impacted revenue in the third quarter and will continue to impact results in the fourth quarter as new titles ship. In addition, the company recognized the negative impact of large customer deductions due to the poor sell through, price erosion and related markdowns on the various titles it previously shipped.
In addition to announcing these results the company has continued with significant restructuring efforts which include the following:
Completion of a private placement of $1 million in debt which will become convertible on receipt of all necessary shareholder and regulatory approvals into Series C Preferred Shares used to move ahead with key product lines.
Distribution agreement with Jack of All Games (a wholly owned subsidiary of Take Two Interactive Software, Inc.) to enable the company to achieve greater share of the market in children's video games.
The write down of $7.8 million of impaired and selected assets primarily in the area of licensing and development fees. These write downs relate primarily to projects not slated to go forward at this time.
Refocusing NewKidCo's core business on four popular children's properties to help achieve consistent profitability and positive cash flow
Continued reduction of fixed overhead by reducing headcount and other cost cutting measures.
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 through Jack of All Games (a wholly owned subsidiary of Take Two Interactive Software, Inc.) in North and Latin America in Europe through distribution partner, Ubi Soft Entertainment SA and in Japan through distribution partner Success Corp. 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 International Inc.
Investor Relations
Arthur Levine/Barry Fried, 212/581-1555
Fax: 212/265-1620
Email: Arthur@newkidco.com
or
Bender/Helper Impact
Public Relations
Brenda Ciccone, 310/477-4647 x264
Fax: 310/478-7914
Email: brenda_ciccone@bhimpact.com
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Source: NewKidCo International Inc. |
