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

To: Gary105 who wrote (2019)	1/17/1998 6:03:00 PM
From: Wayne	Read Replies (5) \| Respond to of 7111

SHORT THIS! $1.70 TO $1.85 52 WK. TRAILING EPS POST Q1 98', REPORTING IN ABOUT 8 WEEKS..... Q2 should be very close to Q1 numbers and may even, for the first time, beat Q1 due to most of the Chinese New Year falling into Q1 vs. the usual Q2. Also supporting this state- ment is the comment at Q4 conference call, that Radica will be building it's work force up with the return of workers from the holiday. So, for all practical purposes, Radica is currently operating at their lowest level of workers and unit/week from now to the return of the work force at the start of Q2. If I understand correctly, the sales of New Years are not lost, just shipped later, again a possible plus for Q2. If this proves to be reasonably accurate, post Q2 suggest 52 week trailing earnings of $2.05 to $2.20 per share and equates to $1.00 per share in the first half of the year. Radica will have the capacity in Q3 and Q4 to follow through with the usual 70-80% revenue being made in Q3 and Q4. FWIW, ALL IMO and, TAKE WITH A GRAIN OF SALT!! Estimate for Q1 1998 $25,000,000 REVENUE... Based on 300,000 units per week vs. Q4 400,000 units per week. I choose this method in hopes of better accuracy then using # of workers. CC indicated levels were 300,000units/week and I would assume the first thing to be cut was overtime, then workforce. The number of workers are, for the most part, the same as at CC. Also accounts for 10 weeks vs. 12 weeks of sales in Q1. 54-56% GROSS MARGIN... Down from Q4, mainly due to assumed less use of written down inventory from 1995-96. This should effect the Casino line and as expected will bump the margins down. This was 3.6% of Q4's 60% GM so 56% seems reasonable. $14,000,000 NET REVENUE... Based on 56% GM 20% OPERATING EXSPENCES... As a % of revenue. * 17-19% SG&A... As a % of revenue. Up from 15% in Q4 but less then Q1 97 19.5%. Radica is doing it better but there may be some cost for advertisement and increased commissions. *$600,000 TO $700,000 R&D... Has increased from a year ago due to new games and new categories of games. I do not think R&D can be done as a % of revenue and gut felling is that it will not be as high as Q4 was. $800,000 OTHER INCOME AND INTREST... Could go higher due to Radica must have more cash on deposit than ever, as well as, higher interest rates on their accounts over seas. This is Q4 rounded off. $9,550,000 NET INCOME... This does not factor in Tax or any cost of expansion. Taxes were covered by David some time back and I am of the impression that they will be negligible this quarter. Cost of expansion is about $0.15 eps on the year so 3.5 cents per quarter to 5 cents over 3 quarters to its completion by Q4. 20,680,000 COMMON SHARES... Due to options this number now varies but it was thought that it should be returning closer to normal in Q1. Does not account for any stock buy backs as well. $0.46 EPS Q1 1998 $1.70 52 WEEK TRAILING EPS POST Q1 This is my conservative numbers for what I feel we will see in the first and possible weakest quarter of the year. A little more Gross margin or this or that goes a long ways in EPS. $0.45 TO $0.60 is my total range... I will stay closer to the $0.45- $0.55 range due to not knowing how much the mix of OEM vs. Radica label may have shifted from Q4 to Q1. Some, I suspect, but Radica has more to offer then in past years and I would guess that there is less and less shift back and forth to OEM through the seasons. $0.50 is my if I had to pick a single number and not push my luck. Room for some up side I think. So $0.50 is my vote this quarter. FWIW, ALL IMO and, TAKE WITH A GRAIN OF SALT!! Hope I miss by as much as last time. Best to all, Wayne