Press release from PR Newswire
MEGA Brands reports fourth quarter and 2013 results
Wednesday, March 05, 2014
MEGA Brands reports fourth quarter and 2013 results00:01 EST Wednesday, March 05, 2014
MONTREAL, March 5, 2014 /PRNewswire/ - MEGA Brands Inc. (TSX: MB) announced today its financial results for the fourth quarter and full year ended December 31, 2013. (All figures are expressed in US dollars.)
Full year 2013
- Consolidated net sales decreased 4% to $404.7 million in 2013, compared to $420.3 million in 2012.
- Net earnings increased 25% to $20.8 million or $0.93 per diluted share, compared to $16.6 million or $0.84 per diluted share in 2012.
Net sales decreased 5% in the Toys segment while net sales for Stationery & Activities increased 1%. On a geographic segment basis, net sales decreased 3% in North America and 5% in International. Adjusted earnings before interest, taxes, depreciation and amortization (''EBITDA'') was $47.0 million compared to $49.2 million in 2012.
- Consolidated net sales decreased 21% to $101.2 million, compared to $127.5 million in the fourth quarter of 2012.
- Net earnings were $1.4 million or $0.04 per diluted share, compared to $4.0 million or $0.01 per diluted share in the same 2012 period.
Net sales were down 24% in the Toys segment and 3% in Stationery & Activities. On a geographic segment basis, North American net sales decreased 20% and International net sales decreased 23%. Adjusted EBITDA was $8.9 million compared to $13.9 million in the fourth quarter of 2012.
Adjusted EBITDA is a supplementary financial measure and readers are cautioned that this measures does not have standardized meaning and is unlikely to be comparable to similar measures used by other issuers.
Several factors contributed to the decline in the Corporation's fourth quarter shipments, including a difficult retail environment which affected the performance of the entire toy industry, particularly in products for boys. The Corporation also faced a difficult comparison with the fourth quarter of 2012, which saw an 18% net sales increase compared to the previous year.
2013 highlights The MEGA BLOKS First Builders product line had a year of record growth and the retail performance of the Call of Duty line equaled or bettered the sell through of any previous MEGA BLOKS product launch. According to NPD Group, the Call of Duty product line was the top-selling new brand in the construction toy category during the fourth quarter despite limited availability.
The Corporation ended 2013 in a strong financial position, with long-term debt reduced 48% to $59.3 million compared to $113.0 million at the end of 2012, cash on hand of $16.4 million compared to $8.0 million the previous year, and no borrowings against our working capital facility. The Corporation also completed a three-year program during which it invested over $30 million to increase efficiency and production capacity in its Montreal facility.
About MEGA Brands MEGA Brands Inc. is a trusted family of leading global brands in construction toys, games & puzzles, arts & crafts and stationery. They offer engaging creative experiences for children and families through innovative, well-designed, affordable and high-quality products. Visit http://www.megabrands.com for more information.
The MEGA logo, Mega Bloks, Rose Art, MEGA Puzzles, MEGA Games and Board Dudes are trademarks of MEGA Brands Inc. or its affiliates.
MD&A Filing This press release should be read in conjunction with the Corporation's Management's Discussion and Analysis (the ''MD&A'') as well as the audited consolidated financial statements and notes for the year ended December 31, 2013. The Corporation will file these documents today via SEDAR. The MD&A, financial statements and notes will be posted today on the Corporation's Web site.
Supplementary Financial Measures The Corporation reports its financial results in accordance with International Financial Reporting Standards (''IFRS''). However, the Corporation believes that certain non-IFRS measures provide useful information to investors regarding its financial condition and results of operations. Readers are cautioned that non-IFRS financial measures do not have standardized meaning and are unlikely to be comparable to similar measures used by other issuers. A reconciliation of supplementary financial measures with IFRS financial statements is provided in the Corporation's MD&A for the year ended December 31, 2013, which is available at www.sedar.com and on the Corporation's Web site.
Forward-Looking Statements All statements in this press release that do not directly and exclusively relate to historical facts constitute "forward-looking information" within the meaning of applicable Canadian securities laws These statements represent the Corporation's intentions, plans, expectations and beliefs. Readers are cautioned not to place undue reliance on these forward-looking statements. Forward-looking information and statements are based on a number of assumptions and involve risks, uncertainties and other factors that could cause actual results to differ materially from those expressed or implied by them, including, but not limited to risks, assumptions and uncertainties described in the Corporation's MD&A for the year ended December 31, 2013, which are available at www.sedar.com and on the Corporation's Web site. The Corporation disclaims any intention or obligation to publicly update or revise any forward-looking information, whether as a result of new information, future events or otherwise, other than as required by applicable law.
Consolidated Income Statements (in thousands of US dollars, except per share amounts)
|Three-month periods ended December 31,||Twelve-month periods ended December 31,|
|Cost of sales||65,485||79,396||255,702||262,452|
|Marketing and advertising expenses||6,359||7,703||18,231||16,937|
|Research and development expenses||3,817||4,405||15,389||16,218|
|Other selling, distribution and administrative expenses||21,269||25,184||84,059||87,830|
|Contingent consideration on business acquisition||87||96||347||383|
|Loss (gain) on foreign currency translation||(966)||473||(1,808)||576|
|Earnings from operations||5,161||10,281||32,818||35,875|
|Early redemption of debentures||-||-||2,869||-|
|Earnings before income taxes||2,991||5,765||19,183||18,228|
|Earnings per share|
Consolidated Statements of Comprehensive Income (in thousands of US dollars)
|Three-month periods ended December 31,||Twelve-month periods ended December 31,|
|Other comprehensive income (loss):|
|Items that may be reclassified subsequently to income or loss|
|Cumulative translation adjustment||(69)||(45)||(620)||1,008|
|Items that will not be reclassified subsequently to income or loss|
|Cumulative translation adjustment||(1,841)||(213)||409||91|
|Other comprehensive income (loss):||(1,910)||(258)||(211)||1,099|
Consolidated Statements of Financial Position (in thousands of US dollars)
|December 31, 2013||December 31, 2012|
|Cash and cash equivalents||16,417||8,018|
|Trade and other receivables||116,740||130,541|
|Derivative financial instruments||-||113|
|Total current assets||195,174||193,821|
|Property, plant and equipment||46,385||39,817|
|Trade and other payables||54,231||62,638|
|Derivative financial instruments||1,037||-|
|Current portion of long-term debt||1,844||8,023|
|Derivative financial instruments||58||206|
|Accumulated other comprehensive loss||(5,956)||(5,745)|
|Total liabilities and equity||293,908||286,409|
Consolidated Statement of Changes in Equity (in thousands of US dollars)
|Share capital||Warrants||Contributed surplus||Deficit||Accumulated other comprehensive loss||Total equity|
|Balance - December 31, 2011||429,007||24,430||3,492||(374,322)||(6,844)||75,763|
|Other comprehensive loss||-||-||-||-||1,099||1,099|
|Balance - December 31, 2012||431,893||24,029||4,478||(357,736)||(5,745)||96,919|
|Other comprehensive loss||-||-||-||-||(211)||(211)|
|Balance - December 31, 2013||502,193||8,485||5,851||(336,962)||(5,956)||173,611|
Consolidated Statements of Cash Flows (in thousands of US dollars)
|Twelve-month periods, ended December 31|
|Depreciation of property, plant and equipment||13,387||12,476|
|Amortization of intangible assets||422||422|
|Early redemption of debentures||2,869||-|
|Loss on foreign currency||459||2,316|
|Net change in non-cash working capital balances||(7,709)||14,406|
|Income taxes paid (recovered)||1,695||(1,473)|
|Cash flows provided by operating activities||35,412||51,998|
|Repayment of debentures||(60,368)||(7,411)|
|Change in asset-based credit facility||-||(37,279)|
|Issuance of long-term debt||216||4,524|
|Repayment of long-term debt||(750)||(220)|
|Issuance of capital stock||54,135||2,337|
|Cash flows used in financing activities||(6,767)||(31,458)|
|Acquisition of property, plant and equipment||(20,228)||(19,234)|
|Cash flows used in investing activities||(20,228)||(19,234)|
|Effect of changes in foreign exchange rates on cash and cash equivalents||(18)||(33)|
|Increase in cash and cash equivalents||8,399||1,273|
|Cash and cash equivalents ? Beginning of year||8,018||6,745|
|Cash and cash equivalents ? End of year||16,417||8,018|
SOURCE MEGA Brands Inc.
For further information: <p> </p> <p> Peter Ferrante<br/> Chief Financial Officer<br/> Tel: (514) 333-5555 ext. 2283 </p>