MONTREAL, March 18 /CNW Telbec/ - MEGA Brands Inc. (TSX: MB) (the
"Company") announced today that as part of its decision to explore the sale of
its Stationery and Activities business previously announced on March 5, 2008,
the Company is requesting amendments to its Credit Agreement.
"The response from stakeholders to our decision to explore the sale of
our Stationery and Activities business has been positive. Our objective in
requesting amendments to our Credit Agreement is to ensure an orderly process
that will maximize the value of these assets," stated Marc Bertrand, President
and CEO of MEGA Brands.
As part of discussions with its lending group, MEGA Brands is disclosing
certain preliminary unaudited financial information for the fourth quarter
ended December 31, 2007. The Company has not completed its closing procedure
for the fourth quarter and full-year 2007 financial statements and the
finalization of key estimates is outstanding, including the impairment tests
on intangible assets and goodwill. Consequently, the information disclosed
today is subject to change. The Company expects to announce audited fourth
quarter and full-year 2007 financial results before markets open on March 31,
For the 2007 fourth quarter, the Company expects earnings from operations
to be impacted by charges totaling approximately $30 million. They consist
principally of approximately $18 million for charges related to the Magtastik
and MagnaMan recall announced on March 17, 2008 and additional charges related
to the Magnetix recall announced on April 19, 2007. The charges also include a
write off of approximately $7 million of Magnetix-related intangibles and
fixed assets in anticipation of the launch of its new MagNext product line in
2008. The remaining $5 million of charges represents a reserve for outstanding
and potential claims against the Company.
Most of the cash flow impact resulting from these charges has been
incurred. The Company expects the future cash impact of such charges to be
approximately $5 million.
Conference Call Advisory
An analyst conference call will be held at 8:30 a.m. on March 31, 2008 to
discuss the fourth quarter and full-year 2007 financial results. Participants
may listen to the call by dialing 1 (800) 732-9303.
For those unable to participate, a replay will be available until
April 8, 2008. The replay phone number is 1 (416) 640-1917, access code
About MEGA Brands
MEGA Brands is a trusted family of leading global brands in construction
toys, games & puzzles, arts & crafts and stationery. We offer engaging
creative experiences for children and families through innovative,
well-designed, affordable and high-quality products that deliver on our
Creativity to the Rescue promise. For more information, please visit
The MEGA logo, Creativity to the Rescue, MEGA BLOKS, ROSE ART, MAGNETIX,
BOARD DUDES and MAGNEXT are trademarks of MEGA Brands Inc. or its affiliates.
All statements in this press release that do not directly and exclusively
relate to historical facts constitute "forward-looking statements". These
statements represent the Corporation's intentions, plans, expectations and
beliefs. In certain instances, these statements require us to make assumptions
and there is significant risk that these assumptions may not be correct.
Furthermore, these statements are subject to risks, uncertainties and other
factors, many of which are beyond the Corporation's control. The Corporation
disclaims any intention or obligation to publicly update or revise any
forward-looking statements, whether as a result of new information, future
events or otherwise, other than as required by applicable legislation. Readers
are cautioned not to place undue reliance on these forward-looking statements.
More information about the risks that could cause our actual results to
significantly differ from our current expectations can be found in the "Risks
and Uncertainties" section of our 2006 and third quarter 2007 MD&A. Investors
should also be aware that the Company has not yet finalized its results for
the fourth quarter and full year 2007 and that the Company's expectations
regarding charges referred to in this press release reflect management's
estimates based upon the information available at the time made. These
estimates could differ materially from actual results if the information on
which the estimates were based ultimately proves to be incorrect or
For further information:
For further information: Analysts and investors: Eric Phaneuf, (514)
333-5555 x2538, email@example.com; Media: Harold Chizick, (514) 333-5555