Zindart 1st Quarter: Revenues Down to $28.3 Million On Toy Industry Weakness; Corgi Division Turns in Strong Performance
SAN FRANCISCO--(BUSINESS WIRE)--August 13, 2001--Zindart Limited (Nasdaq:ZNDT) today announced financial results for the first quarter, ended June 30, 2001.
Net sales for the first quarter were $28.3 million compared to $35.3 million for the first quarter of last year. Net loss for the quarter was $2.6 million or $0.29 per share diluted against a profit of $0.6 million or $0.07 per share diluted for the first quarter last year.
Toy Industry Slowdown
The deterioration in revenues and the subsequent losses were centered in Zindart's manufacturing division, which the company believes resulted principally from a slump in the toy industry which continues to adversely affect the sector.
Zindart chairman Peter A. J. Gardiner said that the manufacturing division is actively focused on adding customers and expanding sales in new product categories outside of the toy industry, but these initiatives have not yet produced a sufficient revenue stream to offset slimmer orders from traditional customers.
Corgi Growth on Track
Corgi Classics once again turned in a solid performance, with revenues, product introductions, and, most importantly, its penetration of the U.S. market on plan. A leader in the die-cast replica model collectibles market, Corgi has increased its penetration of high-end toy retailers in the U.S. as well as adding toy, hobby and collector specialty outlets. "Unsung Heroes," a new line of precision-engineered models of equipment used by U.S. military personnel in Vietnam, has done very well in the American market, as has a series of replica 007 cars from the James Bond movies, which were relaunched and are selling well, worldwide. A senior executive for the U.S. has been recruited to launch a direct marketing effort and initiatives are underway to enter the mass merchandising and gift channels.
Hua Yang Profitable
Six months ago, Hua Yang, the company's printing subsidiary, streamlined its marketing and sales efforts to concentrate on direct sales to publishers in the United States and Europe. This strategy allowed Hua Yang to attract several new customers and maintain profitability.
Strategic Focus Pays Off
"Our new strategy, based on an intense focus on direct sales to new markets and new customers, is already showing favorable results for Corgi and Hua Yang," Gardiner said. "We must now accelerate the same process at Zindart Manufacturing, not only to sustain and improve margins, but to offset the decline Zindart has experienced in toy industry sales."
New Financing Supporting Branding Initiative
As previously announced, Zindart completed two financings in fiscal 2001, which has allowed the company to begin funding its new marketing initiatives. Gardiner said management intends to steadily reduce debt as a part of building increased shareholder value.
About Zindart
Zindart's operating divisions include Corgi Classics Limited, Hua Yang Printing Holdings Company Limited and Zindart Manufacturing. Corgi Classics Limited produces a high quality line of die-cast replica items sold through retail channels in the U.K., where Corgi holds a large share of its market, and in the U.S. Hua Yang Printing Holdings Company is a producer of quality books and specialty packaging. Zindart Manufacturing provides both product design and quality turnkey manufacturing for well-known multi-national companies that offer branded products requiring rapid, high volume delivery. |
