The restructuring plans of toy company Mega Brands Inc. helped it to report strong growth in first quarter profit. Mega Brands Inc. reported a profit of US$98.2-million (US$2.28 a share) as compared to a loss of US$25.9-million (US71¢) during the first quarter in the year 2009.
The Company was able to settle debt worth US$140.3-million due to recapitalization plan that helped cut down the total debts by US$290-million.
The revenues generated by the Company improved by 12.9% at US$49.1-million as it reported much better sales in North American as well as international markets It also benefitted from higher demand for construction toys in the preschool and boys categories.
The Company also reported that all of its key performance indicators were in the positive territory during the quarter and it posted better sales, lower operating expenses and improved overall margins. Marc Bertrand, Chief Executive of Mega Brands Inc. was also very happy with the Company's show during the performance during the quarter.
The Company had revealed on March 30 that it had completed a recapitalization plan that had cut down the debt faced by the Company significantly. It also issued 300 million new shares and another 230 million warrants for new capital and financing.
Fairfax Financial Holdings Ltd. Was the biggest investor in the Company and purchased 65 million shares for 20% control in the Company.
The Company was under a lot of pressure since 2006 as a result of a child getting killed and a lot of children were injured after swallowing small magnets that detached from their toys.