Montreal, Canada-based toyco Mega Brands has closed a finance deal worth approximately US$70 million to help fuel production and marketing efforts for Q3 and announced its Q2 results.
Net sales in Q2 decreased 12.4% to US$99.8 million, compared to US$114.5 million in 2007. Lower sales in toys, stationery and activities product line, combined with product additional recall charges, led to the drop.
While preschool product sales were up, a decrease in the shipment of licensed toys in the the Boys 5-plus category caused Mega Brands toys to drop to US$44.3 million from US$54.5 million in Q2 2007. The segment’s sales were bolstered in 2007 by items based on hit movie properties Spider-Man 3 and Pirates of the Caribbean.
President and CEO Marc Bertrand says that new product launches in Q3 and Q4 should improve the outlook for the company.
Mega Brands also announces that subsequent to the closing of the second quarter financial statements, it has reached an agreement in principle with its insurers for the recovery of an additional US$8.7 million related to the settlement of 2006′s magnetic toy recall lawsuits.