November 14, 2005 11:05 AM US Eastern Timezone
Corgi International Ltd. (Nasdaq:CRGI) Announces Second Quarter Results; Progress Made in Cost Cutting and Corporate Restructuring
HONG KONG--(BUSINESS WIRE)--Nov. 14, 2005--Corgi International Limited (NASDAQ:CRGI) today announced results of operations for the second quarter of fiscal year 2006, ended September 30, 2005. Revenues from continuing operations for the quarter were $10.2 million, compared to $11.5 million for the same quarter in the previous year. Gross profit for the second quarter was $4.0 million versus $5.2 million in the same quarter in the previous year. Net loss from continuing operations for the quarter ended September 30, 2005 was $0.7 million, or $0.07 loss per share, compared to a net loss of $1.1 million, or $0.11 loss per share, in the same quarter of the previous year. Net income from discontinued operations was $296,000 or $0.03 per share for the quarter ended September 30, 2005, compared to net income of $34,000 for the quarter ended September 30, 2004.
For the six months ended September 30, 2005, revenue was $20.7 million compared to $20.6 million for the six months ended September 30, 2004. Gross profit was $7.7 million for the six months versus $8.8 million in the previous year. Net loss for the six months from continuing operations was $2.2 million or $0.23 loss per share versus $2.9 million or $0.31 loss per share in the previous year. Net income from discontinued operations was $111,000 for the six months ended September 30, 2005 or $0.02 per share versus a $5,000 loss for the six months ended September 30, 2004.
George Volanakis, the company's CEO, commented on the results, "We are pleased that our cost cutting efforts are starting to show results. SG&A expenses have decreased $1.3 million compared to last year, all of which was realized in the second quarter."
During the first-half of FY2006, Corgi has experienced a decrease in gross margin due to price increases effected by suppliers of collectible products that the company has as not yet been able to pass through to customers. "We see this as a temporary situation," said Volanakis, "with gradually increasing margins and sales for the balance of the year through implementation of price increases and sales of higher margin 50th anniversary collectible products."
For the six months ended September 2005, Corgi spent $4.0 million in cash including $1.1 million for fixed asset (tooling) purchases and $0.8 million for the repayment of bank debt. As part of its cost containment and working capital improvement efforts, the company reduced inventories by $0.7 million during the six-month period.
In the quarter ended September 30, 2005, several new licensing agreements were announced. On October 19, 2005, the company reported that it had signed a license agreement to produce exclusive die-cast replicas featuring Wallace & Gromit, the legendary British clay characters and stars of the new film, "The Curse of the Were-Rabbit." The three-year deal covers distribution of collectibles for the franchise in the U.S., UK and Ireland. "Being associated with a high-profile movie and a franchise that has a large and growing brand following is an exciting opportunity for the company," noted Volanakis.
On September 26, 2005, the company announced it had acquired a license from Marvel Entertainment, Inc. to produce limited quantity, high-end metal figurines of Marvel Comic Book Superstars; including Spider-Man, Captain America, Hulk and Thor, as well as other heroes and villains made famous in Marvel comics.
Several management changes were recently announced. On September 27, 2005, the company appointed George Volanakis CEO. Mr. Volanakis was formerly the President and CEO of Zindart's Corgi division, and prior to that had held senior positions at various international toy companies for over 35 years.
On October 27, 2005, the company announced that Chris Franklin was named General Manager, Far East Operations and Sourcing, a newly-created position. Volanakis commented, "We expect that Chris will be making significant efficiency improvements to our manufacturing operation. This will benefit existing customers and contribute to generating new business as well."
On October 26, 2005, the company announced it had changed its corporate name from Zindart Limited (NASDAQ:ZNDT) to Corgi International Limited (NASDAQ: CRGI) reflecting the company's focus on further strengthening its franchise for die-cast collectible products and children's toy lines. The company's symbol on NASDAQ has changed to CRGI. In announcing the name change, Volanakis said, "Corgi is one of the oldest and most renowned brands in the collectibles market, with collectors and fans worldwide. Our name change leverages that franchise by giving us a visible platform on which to create broader awareness of our brand and make it clearer to collectors and investors what our core businesses and growth areas are."
About Corgi International
Corgi International, based in Hong Kong, sells die-cast collectible products under its own brand. In the U.S. the branded company is known as Corgi USA. Corgi also produces high quality die-cast and plastic products for multi-national companies that market collectible or gift items worldwide. The company has a high volume manufacturing operation in China and sales offices worldwide.
Retailers and consumers interested in more information can call 1-800-800-CORGI, or visit the company's website at:
http://www.corgi-international.com.