MEGA Brands has announced its financial results for the fourth quarter and full year 2008.
For the full year 2008, the firm reported sales of $447.7 million, down 14.6 per cent from $524.5 million in 2007. Net loss was $458.7 million or $12.53 per share, compared to a net loss of $97.1 million or $2.82 per share in the previous year.
The 2008 results were impacted by Impairment of Goodwill and Intangible Assets and other charges of $404.5 million, which reduced earnings by $11.05 per share.
For the fourth quarter of 2008, net sales were down by 21.6 per cent to $101.0 million compared to $128.8 million in the same period in 2007. Net loss was $323.3 million or $8.83 per share, compared to a net loss of $66.2 million or $1.81 per share in the fourth quarter of 2007.
The fourth quarter results were also impacted by Impairment of Goodwill and Intangible Assets and other charges of $234.4 million which reduced earnings by $6.40 per share.
Marc Bertrand, president and chief executive officer commented: “Consumer products companies were affected by the dramatic decline in the global economy during the fourth quarter of last year and Mega Brands was no exception. We experienced lower-than-
expected sales and took additional charges resulting from the extremely weak retail environment, including restructuring charges and write-offs of bad debt.”
Despite the lower results, progress was made in many areas. Actions taken in 2008 have reduced annual expenses by more than $30 million.
Significant supply chain improvements have also been made, and the firm’s year-end inventories were reduced to $65 million, $26 million lower than 2007.
Mega ended 2008 with cash and cash equivalents of $49.4 million, compared to $8.5 million at the end of 2007. As of March 31st, 2009, cash and cash equivalents were substantially at the same level as at the end of 2008.
Bertrand added: “For 2009, we are planning for an even more challenging retail environment than last year. One of our first priorities this year is to preserve cash and
“On the product side, our focus is on basics, lower price points and working closely with our customers to deliver winning programs at retail. With great innovation and exciting new licences, our product lines are in tune with the times, offering the best value for consumers and retailers in an uncertain economy.”