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

To: Jay Tice who wrote (2201)	1/25/1998 10:59:00 PM
From: j rector	Respond to of 7111

Jay, I am not in Wayne's league, but I think you probably need to compare margins in Q4 97 (60%) to Q1 98 and ignore Q1 97. I think in the CC they said that 6% of the margin was due to sale of written down inventory, of which they have sold most. I think Wayne is looking at about 55% for this Q, which is probably about right give or take 2-3%. Just my take. j.

To: Jay Tice who wrote (2201)	1/25/1998 11:04:00 PM
From: Wayne	Read Replies (1) \| Respond to of 7111

Dennis, Thanks for the info on # of fishing fools and their incomes. Nice to see fresh information from time to time. I think Radica sold over 4 million units of fishing games in 1997, 1996 was no where near 1997. Would be interested to see how Deep Sea in 97' relates to original Bass in 96' as they both were just getting started around Christmas, for all practical reasons. I think unit sales for Deep Sea may have been close to what Bass in 96 was. Would make for a very strong outlook in 1998 for Deep Sea as well as the rest. Perhaps David could confirm this when he gets back. Might be a good indication to this year. Wayne

To: Jay Tice who wrote (2201)	1/26/1998 12:28:00 AM
From: Wayne	Read Replies (1) \| Respond to of 7111

Jay, Per my notes: Q4 1996 Gross Margins were 45% Q1 1997 Gross Margins were 43% Q2 1997 Gross Margins were 44.5 % Q3 1997 Gross Margins were 51.8 % Q4 1997 Gross Margins were 60 % Q1 1998 Gross Margins estimate 53-54% There was a couple of % drop in Q4 to Q1 97 that I think was due to OEM mix increasing in Q1 vs. Q4 last year. Also, Q4 97 was 3.7% of the 60% due to writen down inventory. There may still be some to use up but don't know for sure so will call it gone and be happy to see it if there is still some in Q1. In 1996 OEM sales accounted for 24.1% and in 1997 that fell to 18.6%. This being said, I still think we should see a larger mix of OEM in the first half then the second, and some adjustment on Gross Margin from the 60% of Q4. Radica has improved margins over the past couple of years. This is fact. However, I think we should compare Q1 to Q1 and looking at the evolution of Radica, assume better margins then Q1 1997. This is keeping apples with apples and will make it easier sort seasonal shifts at a later date. I hope we see about 53-54% Gross Margins. The wild card is OEM mix and maybe some poss. offset by old stock in the casino games. Just my opinion, Wayne