Mega Brands reports lower Q4 net earnings of $1.4 million

MONTREAL – Mega Brands Inc. (TSX:MB), the company that makes Mega Bloks construction sets and Rose Art craft products, says that its fourth-quarter sales and profit were down sharply from a year earlier.

The Montreal-based company, which recently received a friendly takeover offer from Mattel Inc., said its overall sales were down 21 per cent in the October-December period.

Mega Brands’ net sales fell 21 per cent in the quarter to US$101.2 million, compared with US$127.5 million in the same quarter of 2012, the company announced early Wednesday.

Toy sales were especially weak, both because the comparable period in 2012 was unusually strong and because of a difficult retail environment that affected the entire toy industry last fall.

Mega Brands said its net sales were down 24 per cent in the toys segment and three per cent in stationery & activities.

On a geographic basis, North American net sales fell 20 per cent and International sale fell 23 per cent.

Its net earnings, reported in U.S. currency, came in at $1.4 million, down from just over $4 million a year earlier.

Earnings per share was six cents, down from 24 cents, before dilution. On a diluted basis, which factors in securities that can be converted to shares, the profit was four cents per share in the fourth quarter of 2013, up from one cent per share in the comparable period of 2012.

The Montreal-based company issued the results less than a week after Mattel’s takeover offer, which values Mega Brands at US$460 million, including debt that Mattel will assume or repay.

Mattel — maker of Barbie dolls, Hot Wheels cars and numerous other toys — has said Mega Brands will help it expand in two of the fastest-growing product segments: construction sets and arts and crafts.

Mega Brands produces a variety of construction toys, games and puzzles, arts and crafts and stationery. Its brand names include MEGA, Mega Bloks, Rose Art, MEGA Puzzles, MEGA Games and Board Dudes.