Net sales for the fourth quarter increased six per cent to $107.3 million compared to $101 million in the corresponding period in 2008.
This increase is the first positive variance in year-on-year net sales since the first quarter of 2007.
Mega Brands also reported net earnings for the full year 2009 of $10.7 million compared to a net loss of $323.3 million in 2008.
The net sales reported for the full year decreased to $338.9 million compared to $447.7 million in 2008.
"We are pleased with the improving trends in our business, with higher sales, lower expenses and improved gross margin in the fourth quarter compared to the same period in 2008," said Marc Bertrand, President and CEO.
"With the completion of the recapitalization transaction, the company now has the liquidity and capital resources to pursue its business plan and we are fully focused on strengthening our brands, improving financial performance and building value."
Response from retailers to its 2010 product lines at toy fairs in Asia, Europe and the US was favourable and Mega Brands expects increased shelf space to drive sales.
Continued margin improvement is also anticipated from actions completed under the Value Enhancement Plan which have reduced operating expenses and increased global supply chain efficiency.
Bertrand added: "Our pre-school assortment is stronger than ever, with MEGA BLOKS basics leading the way and our Thomas & Friends products already performing well at retail.
"This year we will also benefit from media buzz surrounding the 65th anniversary of the Thomas & Friends brand, the tenth anniversary of Dora the Explorer, and of course, the 25th anniversary of Mega Bloks.
"In boys, shipments of our Iron Man II construction line began in the first quarter and we are expanding our successful Halo Wars assortment and adding new innovations in Battle Strikers. Later in the year, we look forward to the launch of our Dragons Universe which has already received strong listings from retailers around the world."