Grand Toys International Announces Record Sales and Earnings for Third
Quarter
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MONTREAL, Nov. 8 /PRNewswire/ -- Grand Toys International, Inc.
(NASDAQ:GRIN) today announced record results for its third quarter ended
September 30, 1999.
Net sales for the third quarter of 1999 increased 18% to $9.9 million from
$8.4 million in the third quarter of 1998. The Company reported net earnings
of $679,806 for the third quarter, a 59% increase from net earnings of
$426,502 in the third quarter of 1998. Earnings per share for the quarter
were $0.30 per basic share compared to $0.27 per basic share in the comparable
period of 1998. Earnings per share for the third quarter of 1999 are based on
a weighted average of 2,248,800 common shares outstanding during the quarter,
a 43% increase over the weighted average common shares outstanding during the
third quarter of 1998. Common shares outstanding reached 3,069,391 at the end
of the third quarter due to the exercise of options and warrants. The
exercise of options and warrants resulted in receipt by the Company of in
excess of $8.0 million in new equity capital.
For the nine month period ended September 30, 1999, Grand achieved record
net sales of $27.3 million, a 44% increase over sales of $19.0 million during
the comparable period of 1998. Net earnings for the nine month period
increased 73% to $1,158,443, or $0.64 per basic share, based on a weighted
average of 1,804,591 common shares outstanding, compared to $669,551, or
$0.42 per basic share, for the first nine months of 1998, based on a weighted
average of 1,577,597 common shares outstanding for the year ago period.
Commenting on the results, Steve Altro, Chairman, said, "The recently
concluded third quarter marked considerable financial progress for Grand Toys.
Our balance sheet was strengthened considerably by the receipt of
approximately $8.0 million in cash from the exercise of options and warrants
during the quarter, bringing our stockholders' equity to approximately
$13.4 million, a 338% increase over stockholders' equity at the close of
1998. The substantial increase in the number of common shares outstanding
should improve the liquidity of the trading market for our shares, to the
benefit of our stockholders. We also announced a new three year $17.5 million
credit facility. Working capital grew to $12.7 million at the end of the
quarter from $3.1 million at June 30, 1999, over a 400% increase. With the
infusion of cash, the Company was largely debt free at the close of the third
quarter, with the strongest balance sheet in its history, permitting us
substantial freedom to act on opportunities that may present themselves in the
future."
Mr. Altro continued, "Product lines that sold well in the third quarter
included Furby, which is under license through calendar 1999, WCW Wrestling
and our Intex inflatables. Commissions on inflatable sales also boosted our
gross margin in the quarter to 42.1% of sales compared to 32.5% of sales in
the year ago period. This benefited EBITDA, which increased to 14.8% of sales
from 10.8% in the year ago quarter. We continued to add a variety of new
licenses to our product portfolio in the quarter including Jellabies(TM),
Sonic The Hedgehog(TM) and POKEMON. Although initial sales of the Jellabies
product line and our POKEMON candy and stationery will be realized in the
fourth quarter, sales generated from these licenses, as well as sales from the
Sonic The Hedgehog license, will be more fully reflected in 2000."
"With ample capital resources, we will continue to focus on our growth and
U.S. acquisition strategy, which includes adding new product licenses and
owning more of the products that we distribute. The recent increase in the
Company's market capitalization is expected to open up additional
opportunities for our acquisition program. With strong performance from our
current portfolio of products, new licenses for 2000 and a committed
management team, we look forward to reporting on Grand Toy's progress in the
months ahead," concluded Mr. Altro.
Founded in 1960, Grand Toys International, Inc. is a premier licensee and
distributor of a wide variety of toys and ancillary items in Canada and since
January 1, 1999, a manufacturer and distributor in the U.S.
This news release contains certain forward-looking statements within the
meaning of the Private Securities Litigation Reform Act of 1995, and is
subject to risk and uncertainties that could cause actual results to differ
materially. Such risks and uncertainties include, but are not limited to,
those related to business conditions and the financial strength of the retail
industry, particularly for toy and toy-related products; the level of consumer
spending for such products; the effect of currency translations; the ability
of the Company to successfully obtain its products from suppliers; and the
success of advertising, marketing and promotional campaigns.
Note: Further information on Grand Toys International, Inc. is available
through the Company's website on the World Wide Web at grand.com .
To receive additional information on Grand Toys International, Inc., via
fax, at no charge, dial 1-800-PRO-INFO and enter code GRIN.
Grand Toys International, Inc.
Financial Highlights
(in US$)
Three Months Ended Nine Months Ended
September 30 September 30,
1999 1998 1999 1998
Net sales $9,945,009 $8,442,696 $27,343,077 $18,980,164
Cost of goods
sold 5,754,489 5,699,667 17,822,728 12,067,665
Gross profit 4,190,520 2,743,029 9,520,349 6,912,500
42.1% 32.5% 34.8% 36.4%
Operating expenses 2,717,733 1,828,550 6,673,403 5,385,272
EBITDA 1,472,787 914,479 2,846,946 1,527,228
14.8% 10.8% 10.4% 8.0%
Interest expense 149,376 274,484 403,417 401,731
Depreciation and
amortization 90,723 70,691 301,928 152,965
Earnings before
income taxes 1,232,668 569,304 2,141,600 972,532
Income taxes 552,882 142,802 983,157 302,981
Net earnings $679,806 $426,502 $ 1,158,443 $669,551
Earnings per share,
basic $0.30 $0.27 $0.64 $0.42
Earnings per share,
diluted $0.30 $0.25 $0.64 $0.39
Weighted average common
shares outstanding,
basic 2,248,800 1,577,597 1,804,591 1,577,597
September 30, December 31,
1999 1998
Balance Sheet Data:
Total assets $23,845,520 $13,889,317
Working capital $12,681,886 $3,394,528
Total stockholders'equity $13,378,880 $3,961,727
Note: EBITDA is Earnings Before Interest, Taxes, Depreciation &
Amortization
SOURCE Grand Toys International, Inc.
-0- 11/08/1999
/CONTACT: Ken Cieply, Executive Vice President & CFO of Grand Toys
International, Inc., 514-685-2180, General info., Alison Ziegler, Analysts,
Vanessa Schwartz, ext. 227, Media, Deanne Eagle, all of The Financial
Relations Board, 212-661-8030/
/Web site: grand.com / |
