MONTREAL — Mega Brands Inc., a Montreal-based toymaker, is shutting down a New Jersey plant and shifting more work to China after reporting a $US11 million loss and falling sales last quarter.
The company said Friday it will streamline its operations further in addition to the $7 million to $10 million from the integration of Mega Brands America last year.
Specifically, the company will:
- Shut down the Woodridge, N.J. plant next month.
- Consolidate the Woodridge and California-based Board Dudes distribution centres at operations in Seattle.
- Expand Mega Brands' operations and supplier base in China.
The moves are expected to produce material cost savings and manufacturing efficiencies, the company said.
The impact of the streamlining on Mega Brands' workforce was not revealed.
''The overall health of our business is good, with leading brands, strong category positions and growth opportunities worldwide,'' Marc Bertrand, president and chief executive, said before stock markets opened. ''Through the successful implementation of this plan, our financial performance will measure up to the potential of our company.''
In its financial report, Mega Brands said it lost $11 million or 31 cents a share for the three months ended Sept. 30. That compared with a profit of $18 million or 56 cents for the same 2006 period.
Sales at the company, which reports in U.S. dollars, fell to $184.1 million from $201.8 million.
The company said its sales drop was primarily due to production delays in Asia that resulted in at least $15 million of orders not shipped, as well as lower shipments of Magnetix products, which were recalled earlier this year over safety concerns.
