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Mega Brands Q1 loss US$9.6M as sales slump 12 per cent to $79.1M |
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Written by THE CANADIAN PRESS
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Sunday, 11 May 2008 |
MONTREAL - Toy maker Mega Brands Inc. (TSX:MB) suffered a US$9.6-million first-quarter loss amid "lower sales and cost pressures."
The Montreal-based toy maker, reporting in U.S. dollars, said Thursday its sales declined to $79.1 million compared with $90.1 million in the first three months of 2007, on lower shipments of movie-related licensed products and magnetic construction toys.
The $9.6-million net loss, worth 26 cents per share, compared with a loss of $23.9 million or 73 cents per share in the year-ago period, which included $35.2 million in magnetic toy recall costs.
"The first quarter of 2008 came in as we expected with lower sales and cost pressures," president and CEO Marc Bertrand said in a release.
"Through the execution of our value enhancement plan, we are taking concrete actions to address both our top line growth and the cost increases that we and others are facing."
Included in the first-quarter results were charges of $35.2 million, pegged at 69 cents per share, related to voluntary product recalls and other charges.
Sales of its Magnetix brand, which has been the subject of several safety recalls, declined as expected. The company plans to launch its new MagNext magnetic toy, which will replace Magnetix, in North America at the end of the second quarter.
"The response to MagNext has been great from kids, from the trade and the media at toy fairs," Bertrand said.
The toys will carry a safety seal from an independent toy testing laboratory, he added.
"Children's safety is our No. 1 priority. We are committed to creating the highest safety standards in the toy industry and passionate about our ambitious goal of zero defects."
The planned sale of the company's stationery and activities business is under way, but Mega Brands said it will not comment further until there are material developments.
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Last Updated ( Sunday, 11 May 2008 )
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