MONTREAL — The Canadian Press Published on Friday, Jun. 27, 2008 3:01PM EDT Last updated on Monday, Mar. 30, 2009 3:58PM EDT
The chairman of Mega Brands Inc. offered “sincere and humble apologies” to shareholders Friday for the family-run toymaker's poor financial results last year.
“As a significant shareholder and this company's biggest fan, believe me, I fully share your disappointment and your pain,” Vic Bertrand Sr. said at the company's annual meeting.
Montreal-based Mega Brands broke a 22-year string of profitable results by losing $97.1-million (U.S.) in 2007 because of lower sales, higher costs and yet another recall of its magnetic toys.
Bertrand assured investors that steps have been taken to turn the company's fortunes around so it can generate a profit this year.
Key to the recovery plan is the introduction this summer of MagNext, a magnetic toy that replaces the Magnetix line, which was plagued with three recalls in 18 months.
One child died and several were seriously injured after ingesting Magnetix magnets.
The new product has been certified to be completely safe, shareholders were told, because its magnets are moulded into plastic casings and can't be swallowed.
Mega Brands also expects to benefit from operational efficiencies, slated to generate $12-million in annualized cost savings beginning in the second half of 2008.
An overhaul of manufacturing and distribution systems should produce annual cash flow savings of $15-million to $30-million.
Mega Brands shares, which peaked at $30 in 2006 and were worth $21.50 a year ago, traded Friday afternoon at $3.92, off a penny on the TSX session.
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