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Non-Tech : Radica Games (RADA) -- Ignore unavailable to you. Want to Upgrade?

To: Gary105 who wrote (1553)	12/30/1997 11:28:00 AM
From: Ron Harvey	Read Replies (2) \| Respond to of 7111

<< That would put the quarterly average around 2000 which would approximate Q3 .>> Gary, This assumes that production is almost instantly booked as sales. Is that the case? Isn't there some time lapse between production, shipping, distribution, and cash for product? If so, wouldn't a January slowdown make itself felt in February and March? Ron

To: Gary105 who wrote (1553)	12/30/1997 12:05:00 PM
From: Wayne	Respond to of 7111

Gary, I've not yet put my pencil to paper for Q1 but just running a string of numbers on the old HPcalculator tells me that we can be more optimisic than what Q3 97' was. For now I think $0.50 is going to be in reach of Radica's grasp for Q1 98. Consider that weekly capacity/revenues in Q1 is still close to Q4 97'. When I get my pencil sharpened, I will base the numbers on less than 60% Gross Margins due to less use of provisional inventory (made up 3.7% of margin in Q4) as well as, Q1 and Q2 have historically ran with a larger mix of OEM product that is lower margin. Top of my head, I am guessing 52%- 54% Gross Margin. So $0.50 is IMO, a reasonable number at this point. Construction cost should start to show up in Q1 as well. But the whole project is only around $0.15/share and should not be viewed as a loss of earnings. Radica should make this and more back on the added capacity by year end, as well as, still have the value of the construction. May impact Q1 by $0.05-0.07/share. But for now $0.34 seems to low considering what Q4 did and no real downturn in capacity. I can't see cutting the estimated Q1 to half of Q4 due to a 16% drop in shipments (2 weeks for the holiday). If I am not mistaken, the product still gets sold it just ships at a later date so in the longer haul, the revenue for the 2-3 weeks are not lost just shifted in this year to Q2 if my history on this yearly event is correct. Perhaps DAVID can follow up on this for anything that needs to be clarified. All, IMO. Wayne

To: Gary105 who wrote (1553)	12/31/1997 7:39:00 PM
From: Tensane 1	Read Replies (1) \| Respond to of 7111

Gary- I value your analysis, but I feel that your projections may be too low forQ1 and for the year, but if your projections come true, it's still a pretty good return. Here's my take on 1998. I think that we'll see Q1 with EPS in the .50/share range. My reasoning is that in the CC, we were running at full bore, and the quarter was half over, the customer HAS to re-fill empty shelves. As for the Chinese New Year, didn't they have one last year also? Why would this be a factor? It may fall in this quarter or next quarter, but over the next 2 combined quarters, it should still be the same as last year. Q2 should be another blowout-why?--New Products. NASCAR will be a huge hit and I love the way the company has increased their distribution in fishing games by adding games that are slightly different but the same winning concept. Two things happen here---less out of stocks because you have more shelf space and more initial sales due to first orders. Deep Sea should see a great amount of sales based on last year. Heck, it wasnt in the stores for but a short while and it moved to #12 of all hand held games sold.(Do you think the stores will give it more space?) I think so. I look at EPS in the .50/share area. In Q3,the manufacturing space increase should give us another blowout quarter. Hopefully, NASCAR will be getting re-orders and we'll start to see early X-mas buildup. Based on last year's sell through, we should see more shelf space. Increased production=increased economy of scale and more to the bottom line. I also think we'll see another major license anounced in January, which will help for this quarter. I think .75/share is not out of line. 100% increased production comes into play for the fourth quarter. X-mas sales based on last year sell through and new items, should give us another blowout--$1.25 conservatively. Add this up and you have $3/share for the year. Now for the issue of trailing PE. Can the Wall Street gurus keep ignoring this stock? I think we're going to get some analyists following soon, which should help to give it a higher trailing PE. Can a stock with 100% increase in income trade for a trailig PE of 10? I don't think so. If I just discovered this stock and it just had another great year and great products, I might be tempted to pay 25 times earnings(still only about industry average). You can add up the numbers yourself, because I don't want to be looked at as a hypster, I'm just giving you a very plausable future. And what about the momentum players? We won't even think about them for now. I may be way overestimating, maybe we will only see a trailing PE of 10 and only get a double from here, but maybe, just maybe.......I'll be right. Anyone else's opinion is greatly accepted. Just some food for thought- Happy New year-----I've got a feeling it will be. Kevin