RC2 profits hit by charges - ToyNews

RC2 profits hit by charges

Following its preliminary results last month, firm reports Q4 net loss of $212.4 million.
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For the full year 2008, the company reported a net loss of $205.8 million, or $11.82 per share, compared with net income for 2007 of $21.7 million, or $1.05 per diluted share.

The loss was mainly due to charges of $215.8 million after-tax to write down the value of goodwill and other intangible assets.

Net sales for the fourth quarter decreased by approximately 12 per cent to $121.7 million compared with net sales of $138.6 million for the fourth quarter a year ago. Unfavorable fluctuations in foreign currency exchange rates reduced 2008 fourth quarter consolidated net sales by approximately 5 per cent.

Net sales for the full year 2008 decreased approximately 11 per cent to $437.0 million compared with net sales of $489.0 million for the full year 2007.

Curt Stoelting, CEO of RC2 commented, “Fourth quarter sales and profits were negatively impacted by declines in holiday spending, conservative retailer ordering and unfavorable foreign currency exchange translation.

"For the quarter, our international sales increased in local currencies but, due to unfavorable foreign currency exchange rates, declined by 15 per cent when stated in U.S. dollars. North American net sales from continuing product lines as adjusted for recall-related items declined 7 per cent in the quarter."

The firm expects 2009 sales and profits to be flat or slightly up compared to 2008.

Stoelting concluded: “Although the global business climate is expected to remain difficult throughout 2009, we believe that our strategic focus, cost reduction plans, low debt levels, and experienced, proven management team will allow RC2 to navigate these tough times while building toward sustainable growth in the future.”

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