MONTREAL, June 27 /CNW Telbec/ - MEGA Brands Inc.(TSX: MB) today reported
on the progress to date in the implementation of the corporation's Value
Enhancement Plan during the Annual Meeting of Shareholders held in Montreal.
"The actions we are taking are designed to restore sales growth,
profitability and financial flexibility," stated President and CEO Marc
Bertrand. "Our absolute priority is to restore the value of the company."
Cost reduction actions under the Efficiencies initiative have been
implemented and are expected to generate $12 million of annualized cost
savings beginning in the second half of 2008.
Implementation of actions under the Operations and Supply Chain
initiative is underway following an assessment and recommendations by an
external supply chain consultancy. As previously disclosed, the objective of
this initiative is annual cash flow savings of $15-30 million.
The Products and Customers initiative targets margin improvement, mainly
through increased sales of higher margin products and price adjustments to
offset cost inflation. The Corporation is launching several new product lines
in the second half of 2008 and believes that its overall product assortment in
the boys 5+ category is stronger than in 2007, as reflected in higher listings
Management also reported that it was in the process of evaluating bids
for its Stationery and Activities business and that the sale process is
progressing as expected.
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 MEGA Brands' 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 MEGA Brands' control. These factors include
and are not restricted to: financing and interest rate matters, difficulty in
predicting consumer preferences and development and acceptance of new
products, risks related with product recalls, litigation and its inherent
uncertainty, realization of synergies, international operations, insurance
coverage, growth or profitability, dependence on a few large customers,
fluctuations in the price of plastic resins and other raw materials,
fluctuations in currency rates, seasonality of toy and stationery industries,
risks related to licensed products, retail environment, and construction toy
litigation, as well as risks related to the successful implementation of the
Value Enhancement Plan and the successful sale of our Stationery and
Activities business. The words "believe", "estimate", "expect", "intend",
"anticipate", "foresee", "plan", and similar expressions and variations
thereof, identify certain of such forward-looking statements, which speak only
as of the date on which they are made. MEGA Brands 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. You 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 MEGA
Brands' 2007 annual MD&A and Q1 2008 MD&A..
For further information:
For further information: Analysts and Investors: Eric Phaneuf, (514)
333-5555 ext. 2538, firstname.lastname@example.org; Media: Harold Chizick, (514)
333-5555 x2338, email@example.com