Excluding recall-related items, net income per diluted share for the first quarter 2009 was 11 cents compared with the first quarter 2008 of 16 cents.
Net sales for the first quarter 2009 decreased by 7.5 per cent to $86.3 million compared with net sales of $93.3 million year-on-year. Unfavorable fluctuations in foreign currency exchange rates reduced 2009 first quarter consolidated net sales by approximately six per cent.
For the first quarter 2009, net sales of the mother, infant and toddler products category increased 2.4 per cent year-on-year and net sales of the pre-school, youth and adult products category decreased by 17.3 per cent, which included $1.2 million of sales from discontinued product lines in 2008.
Selling, general and administrative expenses decreased to $29.7 million, or 34.5 per cent of net sales, compared with $37.9 million, or 40.6 per cent of net sales year-on-year, primarily due to the impact of the company’s operating cost reduction plan.
Curt Stoelting, CEO of RC2 commented: “First quarter sales continued to be negatively impacted by conservative retailer ordering and unfavorable foreign currency exchange translation. For the quarter, our international sales increased 19 per cent in local currencies but, due to unfavorable foreign currency exchange rates, declined by nine per cent when stated in U.S. dollars. During the first quarter 2009, retail sell-through exceeded shipments in many product lines.
“Net sales in our mother, infant and toddler products category increased by over two per cent in the first quarter, which is a good result considering the current economic conditions.
“Excluding discontinued product lines, comparable net sales in our pre-school, youth and adult category declined 15 per cent in the first quarter with softness across almost all product lines. On the positive side, sales of our Thomas & Friends Wooden Railway product line increased when compared with the prior year.
“Even in these difficult economic times we are planning to expand our Caring Corners product line and extend our highly successful American Red Cross, Lamaze, John Deere and The First Years product lines. In 2010, we anticipate improved economic conditions and have exciting new product launches planned for Chuggington, Thomas & Friends Wooden Railway and Dinosaur Train, an all new pre-school licensed property, which will soon be broadcast on PBS Kids. We also expect growth in 2010 in our mother, infant and toddler products category.”