FORM 6-K
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Report of Foreign Issuer
Pursuant to Rule 13a-16 or 15d-16 of
the Securities Exchange Act of 1934
For the month of February, 2006
Commission File Number: 0-23696
RADICA GAMES LIMITED
(Translation of registrant's name into English)
Suite V, 6/F., 2-12 Au Pui Wan Street, Fo Tan, Hong Kong
(Address of principal executive offices)
Indicate by check mark whether the registrant files or will file annual
reports under cover of Form 20-F or 40-F
Form 20-F X Form 40-F
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Indicate by check mark if the registrant is submitting the Form 6-K in
paper as permitted by Regulation S-T Rule 101(b)(1): ______
Indicate by check mark if the registrant is submitting the Form 6-K in
paper as permitted by Regulation S-T Rule 101(b)(7): ______
Indicate by check mark whether the registrant by furnishing the
information contained in this Form is also thereby furnishing the information to
the Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of
1934.
Yes No X
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If "Yes" is marked, indicate below the file number assigned to the
registrant in connection with Rule 12g3-2(b): 82- _________________
Contents:
1. Press Release dated January 6, 2006.
2. Press Release dated February 13, 2006.
This Report on Form 6-K shall be deemed to be incorporated by reference into the
Registrant's Registration Statements on Form S-8 (No. 33-86960, No. 333-7000,
No. 333-59737, 333-61260 and 333-122248) and on Form F-3 (No. 333-7526 and No.
333-79005).
SIGNATURE
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Pursuant to the requirements of Securities Exchange Act of 1934, the registrant
has duly caused this report to be signed on its behalf by the undersigned,
thereunto duly authorized.
RADICA GAMES LIMITED
Date: February 15, 2006 /s/ Craig D. Storey
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Craig D. Storey
Chief Accounting Officer
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RADICA GAMES LIMITED
ANNOUNCES QUARTERLY CASH DIVIDEND
FOR IMMEDIATE RELEASE CONTACT: PATRICK S. FEELY
JANUARY 6, 2006 CHIEF EXECUTIVE OFFICER
(LOS ANGELES, CALIFORNIA)
(626) 744 1150
DAVID C.W. HOWELL
CHIEF FINANCIAL OFFICER
(HONG KONG)
(852) 2688 4201
(HONG KONG) Radica Games Limited (NASDAQ: RADA) announced today that its Board
of Directors has declared a quarterly dividend of $0.05 per share. This
represents a $0.005 per share or 11.1% increase from the prior quarter's
dividend.
The dividend will be payable on January 31, 2006, to shareholders of record as
of January 16, 2006.
ABOUT RADICA GAMES LIMITED
Radica Games Limited (Radica) is a Bermuda company headquartered in Hong Kong
(NASDAQ: RADA). Radica is a leading developer, manufacturer and distributor of a
diverse line of electronic entertainment products including electronic games,
youth electronics, video game accessories and high-tech toys. Radica has
subsidiaries in the U.S.A., Canada and the U.K., and a factory in Dongguan,
Southern China. More information about Radica can be found on the Internet at
www.radicagames.com.
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RADICA GAMES LIMITED
REPORTS 2005 FOURTH QUARTER AND
FULL YEAR RESULTS
FOR IMMEDIATE RELEASE CONTACT: PATRICK S. FEELY
FEBRUARY 13, 2006 CHIEF EXECUTIVE OFFICER
(LOS ANGELES, CALIFORNIA)
(626) 744 1150
DAVID C.W. HOWELL
CHIEF FINANCIAL OFFICER
(HONG KONG)
(852) 2688 4201
HIGHLIGHTS:
o Record full-year sales of $162.8 million, up 31.9% over the prior year.
o Full-year diluted EPS was $0.54 per share compared to $0.18 per share in
2004.
o Full-year diluted EPS, before goodwill impairment charges incurred in 2005
and 2004, increased by 133% over the prior year to $0.84 per share.
o Q4 2005 sales grew from Q4 2004 by 5.1% led by growth in its electronic
games product lines partially offset by declines in video game accessories
(VGA) and manufacturing services.
o Q4 diluted EPS was $0.18 per share, an increase of 80% over Q4 of 2004 of
$0.10 per share before the goodwill impairment charge.
(HONG KONG) Radica Games Limited (NASDAQ: RADA) announced today its results for
the fourth quarter and the financial year ended December 31, 2005. The Company
reported a net profit for the quarter of $3.5 million or $0.18 per diluted share
compared to a net loss of $(1.6) million or $(0.09) per diluted share in Q4 2004
which included a goodwill impairment charge of $3.5 million or $(0.19) per
share. Earnings per share increased by 80% when compared to Q4 2004 results of
$1.9 million, or $0.10 per share, excluding the 2004 goodwill impairment charge.
Net profit for the year was $10.5 million or $0.54 per diluted share compared to
$3.5 million or $0.18 per diluted share for 2004. For comparative purposes it is
useful to take into account that the Company incurred goodwill impairment
charges in Q2 of 2005 of $6.0 million and in Q4 of 2004 of $3.5 million both
related to its VGA business, which is now fully written off the balance sheet.
Excluding these charges in both years for comparative purposes, net profits
would have been $16.5 million, or $0.84 per share, compared to $7.0 million or
$0.36 per share. This represents an increase of 133% in earnings per diluted
share.
Sales for Q4 2005 increased by 5.1% to $45.7 million from $43.5 million for the
same period in 2004. Sales increases in the quarter compared to Q4 2004 were
primarily due to increases in Electronic Games, including the Company's popular
20Q game, but were offset by lower VGA sales resulting from the current video
game platform transition, as well as a decrease in Manufacturing Services sales,
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consistent with the Company's strategic direction to emphasize its own branded
products. Additionally, in 2005 the Company experienced acceleration in the
timing of shipments to certain customers who ordered a larger percentage of
shipments directly from our China warehouse in Q3 rather than waiting until Q4
to order from our domestic U.S. and U.K. warehouses. Sales for the year
increased by 31.9% to $162.8 million from $123.4 million in 2004 due to growth
in the core Electronic Games and Youth Electronics branded product lines.
Increases in the year were also partially offset by declines in the VGA business
and a decline in Manufacturing Services. Compared to sales in 2004, North
American sales for the year grew by 34.1%, with European sales increasing by
37.7% and other international sales increasing by 37.6%.
Pat Feely, Radica's Chief Executive Officer, said, "We were very pleased with
our performance this year. First of all, we set an all time record for sales at
Radica. Additionally, and most importantly, we delivered on the bottom line with
an operating margin, excluding the goodwill impairment charge, of 10% in a very
difficult cost environment. We also substantially resolved the manufacturing
issues that plagued us in 2004 and delivered consistently on-time to our
customers in spite of a 32% increase in sales. On top of that, we improved our
balance sheet with lower inventory than 2004 in spite of our large sales
increase. These accomplishments also contributed to a 33% increase in cash and
securities as well as an 11% increase in our dividend announced recently.
Finally, our product lines sold through well at retail and this has positioned
us for continued growth in 2006."
The following table shows the detailed revenue comparisons for the quarter:
Three months ended December 31, Twelve months ended December 31,
---------------------------------- ----------------------------------
Product Lines 2005 2004 2005 2004
--------------- ---------------- --------------- ----------------
(US Dollars in thousands)
Electronic Games $ 35,808 $ 28,849 $ 125,965 $ 80,640
Youth Electronics 5,459 5,765 17,868 17,038
Other Toys 947 1,268 2,839 3,490
Video Game Accessories 2,504 5,653 7,266 12,840
Manufacturing Services 1,019 1,968 8,841 9,391
--------------- ---------------- --------------- ----------------
TOTAL $ 45,737 $ 43,503 $ 162,779 $ 123,399
=============== ================ =============== ================
Gross profit margin for the quarter increased from 35.1% to 41.5%, an increase
of 640 basis points over the same period last year. Gross profit margin for the
year increased from 33.9% to 37.4%, an increase of 350 basis points. The
increases in gross margins during the year and quarter related primarily to
improved sales mix of higher margin products (in particular a reduced percentage
of lower margin VGA and Arcade Legends product lines as well as less
Manufacturing Services) together with lower air freight and outsourced
manufacturing costs.
Operating expenses for the quarter decreased to $17.2 million from $18.0 million
for the same period last year. Increases in variable selling expenses,
advertising costs, incentive compensation, R&D expenses and certain
administrative costs, including legal and executive redundancy costs, during the
quarter were less than the $3.5 million goodwill impairment charged to operating
expenses during the same quarter last year. For the full year, operating
expenses increased to $50.9 million from $39.5 million in 2004. The increase was
due to the additional goodwill impairment charges in 2005,
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together with an increase in variable expenses, including selling expenses and
incentive compensation, resulting from the increase in sales and profits, and
increases in R&D expenses as well as certain administrative costs including
legal and executive redundancy costs.
At December 31, 2005 the Company had $53.3 million in cash and investment
securities, and net assets of $98.4 million as compared to $40.1 million and
$91.1 million, respectively, at December 31, 2004. There was no debt at December
31, 2005 and December 31, 2004. Inventories at December 31, 2005 decreased to
$21.4 million from $26.8 million at December 31, 2004, resulting from improved
inventory planning and sales of closeout items. Receivables increased to $18.7
million from $18.4 million at December 31, 2004 reflecting increased sales for
the period.
On January 6, 2006, the Company declared a first quarter dividend for fiscal
2006 of $0.05 per share, which was paid on January 31, 2006 and represented an
11.1% increase over the prior dividend rate.
The foregoing discussion contains forward-looking statements that
involve risks and uncertainties that could cause actual results
to differ materially from projected results. Forward-looking
statements include statements about efforts to attract or
prospects for additional or increased business, new product
introductions and other statements of a non-historical nature.
Actual results may differ from projected results due to various
Risk Factors, including Risks of Manufacturing in China,
Dependence on Product Appeal and New Product Introductions, and
Dependence on Major Customers, as set forth in the Company's
Annual Report on Form 20-F for the fiscal year ended December 31,
2004, as filed with the Securities and Exchange Commission. See
"Item 3. Key Information -- Risk Factors" in such report on Form
20-F.
Radica Games Limited (Radica) is a Bermuda company headquartered in Hong Kong
(NASDAQ: RADA). Radica is a leading developer, manufacturer and distributor of a
diverse line of electronic entertainment products including electronic games,
youth electronics, video game accessories and high-tech toys. Radica has
subsidiaries in the U.S.A., Canada, the U.K. and Macau, and a factory in
Dongguan, Southern China. More information about Radica can be found on the
Internet at www.radicagames.com.
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RADICA GAMES LIMITED
CONSOLIDATED STATEMENTS OF OPERATIONS
(US dollars in thousands, Three months ended December 31, Twelve months ended December 31,
except per share data) ------------------------------ --------------------------------
2005 2004 2005 2004
------------- ------------- ------------- -------------
(unaudited) (unaudited) (unaudited)
Revenues:
Net sales $ 45,737 $ 43,503 $ 162,779 $ 123,399
Cost of goods sold
(exclusive of items shown separately below) (26,760) (28,241) (101,927) (81,576)
------------- ------------- ------------- -------------
Gross profit 18,977 15,262 60,852 41,823
------------- ------------- ------------- -------------
Operating expenses:
Selling, general and administrative expenses (15,096) (12,605) (37,979) (30,071)
Research and development (1,545) (1,440) (4,908) (4,164)
Depreciation and amortization (563) (393) (1,984) (1,693)
Impairment of goodwill - (3,536) (6,015) (3,536)
------------- ------------- ------------- -------------
Total operating expenses (17,204) (17,974) (50,886) (39,464)
------------- ------------- ------------- -------------
Operating income (loss) 1,773 (2,712) 9,966 2,359
Net interest and other income 342 383 1,075 1,519
Foreign currency gain, net 362 371 135 417
------------- ------------- ------------- -------------
Profit (loss) before income taxes 2,477 (1,958) 11,176 4,295
Credit (provision) for income tax 1,010 365 (644) (839)
------------- ------------- ------------- -------------
Net profit (loss) $ 3,487 $ (1,593) $ 10,532 $ 3,456
============= ============= ============= =============
Net earnings (loss) per share:
Basic $ 0.18 $ (0.09) $ 0.55 $ 0.19
============= ============= ============= =============
Diluted $ 0.18 $ (0.09) $ 0.54 $ 0.18
============= ============= ============= =============
Weighted average number of common and
common equivalent shares:
Basic 19,068,151 18,733,412 18,993,263 18,653,471
============= ============= ============= =============
Diluted 19,710,935 18,733,412 19,663,314 19,525,757
============= ============= ============= =============
Cash dividends declared per share
(4.5 cents declared and paid for each
quarter ended March 31, June 30, Sept 30,
and December 31, 2005; 4 cents per quarter $ 0.045 $ 0.040 $ 0.180 $0.160
in 2004 ============= ============= ============= =============
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RADICA GAMES LIMITED
CONSOLIDATED BALANCE SHEETS
(US dollars in thousands, except per share data) December 31, December 31,
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2005 2004
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(unaudited)
ASSETS
Current assets:
Cash and cash equivalents $ 37,358 $ 27,614
Investment securities 15,928 12,456
Accounts receivable, net of allowances for doubtful accounts of $165
($148 as at December 31, 2004) 18,703 18,359
Inventories 21,420 26,818
Prepaid expenses and other current assets 4,196 3,374
Income taxes receivable 479 168
Deferred income taxes 3,237 1,850
----------------- -----------------
Total current assets 101,321 90,639
Property, plant and equipment, net 14,542 11,480
Goodwill - 6,015
Other assets 833 854
Deferred income taxes, noncurrent 572 953
----------------- -----------------
Total assets $ 117,268 $ 109,941
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LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 8,636 $ 11,840
Accrued payroll and employee benefits 3,833 1,486
Accrued expenses 5,987 5,251
Income taxes payable 417 287
----------------- -----------------
Total current liabilities 18,873 18,864
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Total liabilities 18,873 18,864
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Shareholders' equity:
Common stock
par value $0.01 each, 100,000,000 shares authorized,
19,080,004 shares outstanding (18,738,112 as at
December 31, 2004) 191 187
Additional paid-in capital 6,122 4,610
Retained earnings 93,025 85,909
Deferred compensation (203) -
Accumulated other comprehensive (loss) income (740) 371
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Total shareholders' equity 98,395 91,077
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Total liabilities and shareholders' equity $ 117,268 $ 109,941
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