- Consolidated sales up 14%
- Toys sales up 10%
- Stationery & Activities sales up 26%
MONTREAL, May 10, 2012 /PRNewswire/ - MEGA Brands Inc. (TSX: MB) announced its financial results today for the first quarter ended March 31, 2012. (All figures are expressed in US dollars.)
Consolidated net sales in the first quarter increased 14% to $58.2 million compared to $51.0 million in the corresponding 2011 period.
- Toy sales increased 10% compared to the first quarter of 2011, driven by higher product shipments in the Preschool and Boys construction categories. Toys sales have increased year-over-year in nine of the last ten quarters.
- Sales of Stationery and Activities products were up 26%, the fourth consecutive quarter of year-over-year growth in this segment.
- On a geographical basis, sales were 21% higher in North America and 2% in international markets compared to the first quarter of 2011.
Earnings before interest, taxes, depreciation and amortization (''EBITDA'') improved by $1.7 million to $(2.2) million compared to $(3.9) million in the first quarter of 2011. EBITDA is a supplementary financial measure.
Net loss improved to $8.5 million or $0.52 basic and diluted per share compared to a net loss of $9.3 million or $0.57 per basic and diluted share in the first quarter of 2011. The Corporation's business is seasonal and historically the first quarter is the period with the lowest sales of the year and negative profitability.
''Our first quarter results show good sales growth, particularly in North America, and our key profitability metrics have improved compared to last year,'' said Marc Bertrand, President and CEO. ''Our top priority for the rest of the year is to capitalize on the strong momentum we have built in our brands.''
Conference Call
A conference call will be held at 9:00 a.m. today to discuss the results and business outlook. Participants may listen to the call by dialing 1 (888) 231-8191 or (647) 427-7450. For those unable to participate, a replay will be available until May 17, 2012. The replay phone number is (514) 807-9274 or 1 (855) 859-2056, access code 71875755.
About MEGA Brands
MEGA Brands Inc. is a trusted family of leading global brands in construction toys, games & puzzles, arts & crafts and stationery. They offer engaging creative experiences for children and families through innovative, well-designed, affordable and high-quality products. Visit http://www.megabrands.com for more information.
The MEGA logo, Mega Bloks, Rose Art, MEGA Puzzles, MEGA Games and Board Dudes are trademarks of MEGA Brands Inc. or its affiliates.
MD&A Filing
This press release should be read in conjunction with the Corporation's Management's Discussion and Analysis (the ''MD&A'') as well as the unaudited consolidated financial statements and notes for the three-month periods ended March 31, 2012 and 2011. The Corporation will file these documents today via SEDAR. The MD&A, financial statements and notes will be posted today on the Corporation's Web site.
Supplementary Financial Measures
The Corporation reports its financial results in accordance with International Financial Reporting Standards (''IFRS''). However, the Corporation believes that certain non-IFRS measures provide useful information to investors regarding its financial condition and results of operations. A reconciliation of supplementary financial measures with IFRS financial statements is provided in the Corporation's MD&A for the three-month period ended March 31, 2012, which is available at www.sedar.com and on the Corporation's Web site.
Forward-Looking Statements
All statements in this press release that do not directly and exclusively relate to historical facts constitute "forward-looking information" within the meaning of applicable Canadian securities laws These statements represent the Corporation's intentions, plans, expectations and beliefs. Readers are cautioned not to place undue reliance on these forward-looking statements. Forward-looking information and statements are based on a number of assumptions and involve risks, uncertainties and other factors that could cause actual results to differ materially from those expressed or implied by them, including, but not limited to risks, assumptions and uncertainties described in the Corporation's MD&A for the year ended December 31, 2011, which are available at www.sedar.com and on the Corporation's Web site. The Corporation disclaims any intention or obligation to publicly update or revise any forward-looking information, whether as a result of new information, future events or otherwise, other than as required by applicable law.
Unaudited Interim Consolidated Income Statements | |||
(in thousands of US dollars, except per share amounts) | |||
Three-month periods ended March 31, |
|||
2012 | 2011 | ||
$ | $ | ||
Net sales | 58,187 | 51,036 | |
Cost of sales | 38,756 | 33,224 | |
Gross profit | 19,431 | 17,812 | |
Marketing and advertising expenses | 2,848 | 2,864 | |
Research and development expenses | 4,056 | 3,276 | |
Other selling, distribution and administrative expenses | 18,458 | 17,910 | |
Contingent consideration on business acquisition | 96 | 168 | |
Loss (gain) on foreign currency translation | (905) | 121 | |
Loss from operations | (5,122) | (6,527) | |
Financial expenses | 4,423 | 4,673 | |
Loss before income taxes | (9,545) | (11,200) | |
Income taxes | |||
Current | (1,012) | (1,451) | |
Deferred | - | (485) | |
(1,012) | (1,936) | ||
Net loss | (8,533) | (9,264) | |
Loss per share | |||
Basic | (0.52) | (0.57) | |
Diluted | (0.52) | (0.57) | |
Unaudited Interim Consolidated Statements of Comprehensive Loss | |||
(in thousands of US dollars, except per share amounts) | |||
Three-month periods ended March 31, |
|||
2012 | 2011 | ||
$ | $ | ||
Net loss | (8,533) | (9,264) | |
Other comprehensive income (loss): | |||
Cumulative translation adjustment | 1,042 | (566) | |
Other comprehensive income (loss): | 1,042 | (566) | |
Comprehensive loss | (7,491) | (9,830) | |
Consolidated Statements of Financial Position | |||
(in thousands of US dollars) | |||
March 31, | December 31, | ||
2012 | 2011 | ||
(Unaudited) | (Audited) | ||
$ | $ | ||
Assets | |||
Current assets | |||
Cash and cash equivalents | 5,629 | 6,745 | |
Trade and other receivables | 81,293 | 126,359 | |
Inventories | 79,051 | 69,560 | |
Derivative financial instruments | 565 | 904 | |
Prepaid expenses | 10,695 | 13,760 | |
Total current assets | 177,233 | 217,328 | |
Non-current assets | |||
Property, plant and equipment | 36,467 | 32,172 | |
Intangible assets | 23,087 | 23,193 | |
Goodwill | 30,000 | 30,000 | |
Derivative financial instruments | 118 | 231 | |
Total assets | 266,905 | 302,924 | |
Liabilities | |||
Current liabilities | |||
Asset-based credit facility | 29,717 | 37,279 | |
Trade and other payables | 52,810 | 71,762 | |
Income taxes | 4,714 | 5,832 | |
Current portion of long-term debt | 7,313 | 7,013 | |
94,554 | 121,886 | ||
Non-current liabilities | |||
Long-term debt | 103,747 | 105,275 | |
103,747 | 105,275 | ||
Equity | |||
Share capital | 429,007 | 429,007 | |
Warrants | 24,430 | 24,430 | |
Contributed surplus | 3,824 | 3,492 | |
Deficit | (382,855) | (374,322) | |
Accumulated other comprehensive loss | (5,802) | (6,844) | |
Total equity | 68,604 | 75,763 | |
Total liabilities and equity | 266,905 | 302,924 |
Unaudited Consolidated Statement of Changes in Equity | ||||||
(in thousands of US dollars) | ||||||
Share capital | Warrants | Contributed surplus |
Deficit | Accumulated other comprehensive loss |
Total equity | |
$ | $ | $ | $ | $ | $ | |
Balance - December 31, 2010 | 429,007 | 24,430 | 1,982 | (382,652) | (5,260) | 67,507 |
Net loss | - | - | - | (9,264) | - | (9,264) |
Other comprehensive loss | - | - | - | - | (566) | (566) |
Stock-based compensation | - | - | 535 | - | - | 535 |
Balance - March 31, 2011 | 429,007 | 24,430 | 2,517 | (391,916) | (5,826) | 58,212 |
Balance - December 31, 2011 | 429,007 | 24,430 | 3,492 | (374,322) | (6,844) | 75,763 |
Net loss | - | - | - | (8,533) | - | (8,533) |
Other comprehensive income | - | - | - | - | 1,042 | 1,042 |
Stock-based compensation | - | - | 332 | - | - | 332 |
Balance - March 31, 2012 | 429,007 | 24,430 | 3,824 | (382,855) | (5,802) | 68,604 |
Unaudited Consolidated Statements of Cash Flows | |||
(in thousands of US dollars) | |||
Three-month periods ended March 31, |
|||
2012 | 2011 | ||
$ | $ | ||
Operating activities | |||
Net loss | (8,533) | (9,264) | |
Adjustments for: | |||
Depreciation of property, plant and equipment | 2,765 | 2,404 | |
Amortization of intangible assets | 105 | 105 | |
Stock-based compensation | 332 | 535 | |
Financial expenses | 4,423 | 4,673 | |
Income taxes | (1,012) | (1,936) | |
Gain on foreign currency | (762) | (31) | |
(2,682) | (3,514) | ||
Net change in non-cash working capital balances | 23,339 | 22,211 | |
Income taxes recovered (paid) | (272) | 1,312 | |
Interest paid | (446) | (92) | |
Cash flows provided by operating activities | 19,939 | 19,917 | |
Financing activities | |||
Repayment of debentures | (7,267) | - | |
Change in asset-based credit facility | (7,562) | - | |
Repayment of long-term debt | (12) | (14) | |
Cash flows used in financing activities | (14,841) | (14) | |
Investing activities | |||
Acquisition of property, plant and equipment | (6,248) | (8,575) | |
Cash flows used in investing activities | (6,248) | (8,575) | |
Effect of changes in foreign exchange rates on cash and cash equivalents | 34 | (31) | |
Increase (decrease) in cash and cash equivalents | (1,116) | 11,297 | |
Cash and cash equivalents — Beginning of period | 6,745 | 5,277 | |
Cash and cash equivalents — End of period | 5,629 | 16,574 |
SOURCE MEGA BRANDS INC.
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