RC2 streamlines business focus

RC2 Corporation has sold its collectible trading card and die-cast sports collectibles business in order to better concentrate on its infant and children's toy products.
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The issued and outstanding capital stock of RC2 South has been sold to FCS Enterprises. The sold businesses generated approximately $16 million in net sales for the 12 months ended October 31st 2006.

"We feel that divesting of the trading card and sports collectibles business is consistent with our strategic focus to achieve sustainable growth and to concentrate our efforts on our higher growth infant products and children's toy categories," said Curt Stoelting, CEO of RC2.

The net assets of the businesses sold were approximately $17 million, including $16m of goodwill. The company expects to record an after-tax loss on this transaction of $10 million in the fourth quarter of 2006, while it will also negatively impact diluted earnings per share. However, the firm will use $7m of net proceeds from the sale to pay down debt.



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