RC2 returns to profit in fourth quarter

Firm reports improved results for the fourth quarter and year ended December 31st 2009.
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Profit for the quarter was $8.3 million compared with a net loss of $212.4 million year-on-year. Sales for the period slipped slightly to $121.3 million compared with $121.7 million in Q4 2008.

For the full year, profit was $27 million compared with a loss of $205.8 million in the full year 2008. Sales for the full year dipped by 3.6 per cent to $421.1 million compared with $437 million in 2008.

International sales, which increased by 12.6 per cent in the fourth quarter and decreased by 8.9 per cent in the full year results, were essentially flat in both periods after excluding the impact of fluctuations in foreign currency exchange rates.

Net sales in the mother, infanct and toddler category comprised 43.5 per cent of the firm's total annual sales, increased by 4.3 per cent during the quarter and 2.7 per cent for the full year versus prior year periods.

Curt Stoelting, CEO of RC2 commented: "Based on these trends and recent new product launched, we expect additional organic growth in our mom, infant and toddler products category in 2010 and 2011.

"Net sales in our pre-school, youth and adult products category declines by 2.9 per cent and eight per cent during the fourth quarter and 2009 full year, respectively, due to declines in our Take Along and agricultural product lines, which offset growth in our Super Why and Thomas & Friends Wooden Railway product lines."

The firm expects 2010 to continue to be a challenging economic environment and anticipates organic sales growth in the mother, infant and toddler category.

It also expects the year to be one of transition for the pre-school, youth and adult categories, as it ends sales of the Take Along Thomas & Friends die-cast line and launches a number of new pre-school lines including Thomas and Friends Early Engineers in many markets, Dinosaur Train in North America and Chuggington in international markets.

Stoelting continued: "Our newly introduced Chuggington train-play+ lines have been well received at the Hong Kong, UK, Nuremberg and New York toy fairs.

"Additionally, the initial ratings for the Chuggington television show on Playhouse Disney are encouraging, adding to our confidence for US Chuggington product sales in 2011."

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