MEGA Brands reports second quarter 2013 results

• Toy sales up 4%, Stationery & Activities sales up 3%
• EBITDA of $9.8 million compared to $9.2 million
• Basic EPS of $0.18 ($0.10 diluted) compared to $0.10 (loss of $0.12)
• Significant debt reduction of $60.0 million completed, interest expenses reduced
  
  

MONTREAL, Aug. 1, 2013 /PRNewswire/ - MEGA Brands Inc. (TSX: MB) announced its financial results today for the second quarter ended June 30, 2013. (All figures are expressed in US dollars.)

Consolidated net sales in the second quarter increased 4% to $98.1 million compared to $94.5 million in the corresponding 2012 period.

• Sales for the Toys segment increased 4% compared to the second quarter of 2012, driven by higher product shipments in Preschool & Girls construction toys.
• Sales for the Stationery & Activities segment were up 3%, the ninth consecutive quarter of year-over-year growth.
• On a geographical basis, North American sales were 5% higher and international sales were level.

Earnings before interest, taxes, depreciation and amortization (''EBITDA'') increased to $9.8 million compared to $9.2 million in the second quarter of 2012. EBITDA is a supplementary financial measure.

Net earnings were $4.0 million or $0.10 per diluted share ($0.18 per basic share) compared to net earnings of $1.6 million or a loss of $0.12 per diluted share (earnings of $0.10 per basic share) in the second quarter of 2012.

For the six-month period ended June 30, 2013, consolidated net sales increased 7% to $162.6 million compared to $152.7 million in the same period last year, with 9% growth in Toys, 3% in Stationery & Activities, 8% in North America and 4% in International. EBITDA increased to $8.8 million compared to $7.1 million in the corresponding period in 2012. Net loss was $3.2 million or $0.16 per diluted share compared to a net loss of $6.9 million or $0.42 per diluted share in the corresponding period of 2012.

''Our sales for the remainder of the year will be driven by the strength of our MEGA BLOKS Preschool & Girls product offering, several new product launches in Boys & Collectors construction toys, including a major new product line hitting retail by the end of the third quarter, and positive momentum in our Stationery & Activities business.'' said Marc Bertrand, President and CEO. ''Our performance will also be supported by a much-improved financial position, with a trailing net debt-to-EBITDA ratio of 1.1 times, and significantly lower interest expenses than in the comparable period last year,''

The Corporation's business is seasonal and, historically, it has observed a higher level of activity and profitability during the last two quarters of the year compared to the first two quarters.

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 (514) 807-9895. For those unable to participate, a replay will be available until August 8, 2013. The replay phone number is (514) 807-9274 or 1 (855) 859-2056, access code 15959767.

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 June 30, 2013 and 2012. 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- and six-month periods ended June 30, 2013, 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, 2012, 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.

SOURCE MEGA BRANDS INC.