RC2 profits in ’09
By Staff -- Gifts and Dec, 2/19/2010 9:51:00 AM
OAK BROOK, Ill.—RC2 pulled in a profit in 2009, despite sales declines for its toy-centric preschool, youth and adult products business.
Net income for the year ended Dec. 31, 2009, was $27.0 million, or $1.39 per diluted share, as compared with a net loss of $205.8 million, or $11.82 per diluted share, in 2008. Net sales slipped 3.6 percent to $421.1 million compared with net sales of $437.0 million in 2008. Unfavorable fluctuations in foreign currency exchange rates reduced the 2009 full year consolidated net sales comparisons by approximately 3 percent.
The tally followed a fourth quarter in which net income rose to $8.3 million, or $0.38 per diluted share, as compared with a net loss of $212.4 million, or $12.32 per diluted share, for the fourth quarter 2008. The period saw net sales decrease incrementally to $121.3 million compared with net sales of $121.7 million for the fourth quarter a year ago. Favorable fluctuations in foreign currency exchange rates benefited the fourth quarter 2009 consolidated net sales comparisons by approximately 3 percent.
The fourth quarter sales results "were in-line with prior year results and our expectations," said RC2 CEO Curt Stoelting, with sales for the company's mom, infant and toddler products category up 4.3 percent during the quarter and by 2.7 percent for the full year and sales for its toy-focused preschool, youth and adult products business down 2.9 percent for the quarter and 8 percent for the year.
The drop off in the preschool, youth and adult business was due to "declines in our Take Along and agricultural product lines, which offset growth in our Super WHY! and Thomas & Friends Wooden Railway product lines,” he said.
Stoelting added that 2010 will be “a year of transition” for the company’s preschool, youth and adult products category as the impact of efforts like launching a new Thomas & Friends Early Engineers line, plus debut assortments for new properties like Dinosaur Train and Chuggington won’t be fully felt until next year. “Based on the successful launch of new preschool product lines in 2010, we expect strong organic growth in our preschool, youth and adult products category in 2011,” he said.
“We anticipate a continued challenging economic environment in 2010. However, we are encouraged by recent sales trends and remain focused on our long-term strategic goals, which include both organic growth and growth through acquisition,” Stoelting concluded.
The company’s preliminary outlook for full year 2010 net income and diluted earnings per share is in the range of approximately $30 to $32 million and $1.35 to $1.45, respectively. Due to the transition taking place in the preschool, youth and adult products category, overall net sales and profits in the first half of 2010 are expected to be lower than in 2009.
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