Radica Games (RADA) Message Board

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Non-Tech : Radica Games (RADA)

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To: Jonathan Bird who wrote (2560)	2/12/1998 10:41:00 PM
From: mod	Read Replies (1) of 7111

Jonathan, I agree that Radica's OEM business with Hasbro is in jeopardy. It would now be like Hasbro using Mattel to design and manufacture a line of toys for them. Now, the good news is the margins are low on the Hasbro OEM line (ASP=$4.64) versus the Sports games (ASP=$11.13). So if Radica can make (and sell!) more of their higher-margin games, the loss of the Hasbro business will not have much, if any, negative effect. Another concern, if you believe Radica will lose the Hasbro OEM business eventually, is how much of the factory expansion was planned to be used for Hasbro? Hasbro accounted for fully 28% of the units manufactured last year (though only 18% of the revenue). Radica may end up with more factory than they need, absent the Hasbro business. Factory space in Shenzhen is cheap, so this may not be a big issue, though. Dennis

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