Please replace the release with the following corrected version due
to multiple revisions to net loss from continuing operations
figures in the first graph. The corrected release reads: ZINDART
FIRST QUARTER RESULTS: CORGI REVENUES GROW 12% OVER FIRST QUARTER
OF PRIOR YEAR; COMPANY MOVES TO REDUCE OVERHEAD EXPENSES Zindart
Limited (Nasdaq:ZNDT) today announced results of operations for the
first quarter of fiscal year 2006, ended June 30, 2005. Revenues
from continuing operations for the quarter were $10.4 million,
compared to $9.2 million for the same quarter in the previous year.
Net loss from continuing operations for the quarter ended June 30,
2005 was $1.5 million, or $0.15 per share, compared to a loss of
$1.9 million, or $0.20 per share, in the same quarter of the
previous year. Net loss from discontinued operations was $0.19
million for the quarter ended June 30, 2005, compared to $0.04
million for the quarter ended June 30, 2004. Peter Gardiner,
Chairman and CEO, Zindart, stated, "We are initiating several new
strategic efforts to lower variable costs through industrial
engineering efforts, implementing various efforts to reduce fixed
costs through restructuring and shifting our customer strategy to
focus on fewer, larger customers. Zindart is also evaluating how we
can bring more of Corgi's die-cast production in-house in an effort
to capture significant gross profits currently lost to third-party
manufacturers." Gardiner continued: "Zindart's supply chain
management initiatives, implemented in both its manufacturing and
Corgi divisions, are already beginning to generate results. We are
seeing improved inventory turnover. We have also set up a new,
state-of-the-art warehousing and distribution center at Corgi's
European headquarters in Leicester, England, and the manufacturing
division has hired a supply chain management professional to drive
key inventory management and operations planning initiatives."
Corgi's first quarter operating results were in line with
management's expectations for the division. The net loss margin has
improved to 10 percent, compared to 15 percent in the first quarter
of the prior year. Stronger results are anticipated by the fourth
quarter, when many of the division's strategies are expected to
come to fruition, Gardiner said. During the summer, Corgi released
a line of 12 high quality, replica Batman(R) vehicles in
coordination with Warner Bros.' promotional activities for its
blockbuster movie, "Batman Begins." These products did well at
retail and Corgi continues to sell a wide range of Batman related
products. In addition, Corgi is developing several line extensions
for Streakerz(TM), a popular line of micro racing cars that speed
around their own miniature track at high speeds; and a new infant
product, Go Go Rollers, intended to serve as a baby's first set of
toy cars. Zindart recently released its proxy statement to its
shareholders, which included a proposed special resolution to
change the name of the listed entity to "Corgi International
Limited." The resolution is scheduled to be voted on at Zindart's
annual general meeting scheduled for Sept. 27, 2005. "We are now in
a place where we have completed the necessary changes in the
company's organization structure to allow this exciting name
change," Gardiner said. "We believe this will spur additional
trading activity." About Zindart Zindart's current divisions
include Corgi Classics Limited and Zindart Manufacturing. Corgi
Classics Limited develops and markets high-quality lines of
die-cast collectible products sold through retail channels in
Europe, Canada, Mexico, the United States and elsewhere. Zindart
Manufacturing provides both product design and high quality turnkey
manufacturing for multi-national companies requiring rapid,
high-volume production of intricate die-cast and plastic
promotional items, collectibles and gift items. Founded in 1978,
Zindart is based in Hong Kong with offices in the United States and
the United Kingdom. Zindart has a website at www.zindart.com.
Collectors can find more information at www.corgiclassics.com or by
calling 1-800-800 CORGI. Because the Zindart Board of Directors is
exploring a sale of the Zindart Manufacturing division and the sale
of Zindart's Hua Yang Printing division in May 2004, revenues for
both quarters ended June 30, 2004 and 2005 reported above reflect
only the results of Zindart's Corgi and Corporate operating
divisions. Operating results of Zindart Manufacturing division and
Hua Yang Printing have been reclassified in Zindart's financial
statements and reported as losses from discontinued operations for
both quarters ended June 30, 2004 and 2005. Certain statements in
this release are forward-looking. These statements are subject to
risks and uncertainties that could cause actual results to differ
materially from those anticipated. Such risks and uncertainties
include, in addition to those discussed above and without
limitation, changes in market demand for Zindart's products,
changes in economic conditions, dependence on certain customers and
other risks described in the company's annual report on Form 20-F
for the fiscal year ended March 31, 2005. The company undertakes no
obligation to revise these forward-looking statements to reflect
subsequent events or circumstances. -0- *T ZINDART LIMITED AND
SUBSIDIARIES Condensed Consolidated Balance Sheets (In thousands)
(Unaudited) (Unaudited) As of June As of As of June 30, March 31,
30, 2005 2005 2004 ASSETS Current assets: Cash and cash equivalents
$ 4,769 $ 7,012 $ 12,686 Available-for-sale investments 6 25 184
Trade accounts receivable, net 5,408 6,579 15,286 Other assets
10,652 10,666 23,782 Assets of discontinued operations 31,911
29,243 -- ----------- ------- ----------- Total current assets
52,746 53,525 51,938 Property, plant, and equipment, net 7,117
7,933 21,560 Other long term assets 1,851 1,874 2,656 Goodwill
35,312 35,312 35,726 ----------- ------- ----------- Total assets $
97,026 $98,644 $ 111,880 =========== ======= ===========
LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities:
Short-term debt $ 2,636 $ 3,876 $ 13,414 Trade accounts payable
3,593 4,450 12,987 Other current liabilities 3,675 3,264 15,005
Liabilities of discontinued operations 26,444 23,073 -- -----------
------- ----------- Total current liabilities 36,348 34,663 41,406
Long-term liabilities -- 235 1,076 ----------- ------- -----------
Total liabilities 36,348 34,898 42,482 ----------- -------
----------- Minority interests 673 693 1,816 ----------- -------
----------- Stockholders' equity: Common stock 623 623 602
Additional paid-in capital 40,229 40,229 39,473 Retained earnings
17,940 19,590 25,784 Accumulated other comprehensive income 1,213
2,611 1,723 ----------- ------- ----------- Total stockholders'
equity 60,005 63,053 67,582 ----------- ------- ----------- Total
liabilities and stockholders' equity $ 97,026 $98,644 $ 111,880
=========== ======= =========== ZINDART LIMITED AND SUBSIDIARIES
Condensed Consolidated Statements of Operations (In thousands,
except share data) Three months ended June 30, (Unaudited)
(Unaudited) 2005 2004 ----------- ----------- Net sales $ 10,433 $
9,173 Cost of goods sold (6,704) (5,645) ----------- -----------
Gross profit 3,729 3,528 Selling, general, and administrative
expenses (5,800) (5,736) ----------- ----------- Operating loss
(2,071) (2,208) Other income (expense): Interest income 30 13
Interest expense (193) (191) Other income 600 138 -----------
----------- Loss before income taxes and minority interests (1,634)
(2,248) Income tax benefit 169 394 ----------- ----------- Loss
from continuing operations (1,465) (1,854) Loss from discontinued
operations (185) (39) Gain on disposal of discontinued operations
-- 984 ----------- ----------- Net loss (1,650) (909) ===========
=========== Loss per common share: Basic: Loss from continuing
operations $ (0.15) $ (0.20) (loss) Income from discontinued
operations (0.02) 0.10 ----------- ----------- Net loss $ (0.17) $
(0.10) =========== =========== Diluted: Loss from continuing
operations $ (0.15) $ (0.20) (loss) Income from discontinued
operations (0.02) 0.10 ----------- ----------- Net loss $ (0.17) $
(0.10) =========== =========== Weighted average number of common
shares outstanding: Basic 9,636,943 9,201,783 ===========
=========== Diluted 9,636,943 9,201,783 =========== =========== *T
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