BRYAN, Ohio, April 15, 2005 (PRIMEZONE) -- The Ohio Art Company, (Pink Sheets:OART), today announced operating results for the fourth quarter and for the fiscal year ended January 31, 2005.
Net sales, excluding discontinued operations, decreased approximately 4% from $5,744,000 for the quarter ended January 31, 2004 to $5,497,000 for the quarter ended January 31, 2005. Net sales, before discontinued operations, decreased approximately 19% from $24,176,000 for the year ended January 31, 2004, to $19,696,000 for the year ended January 31, 2005.
The Company's results in fiscal 2005 were one of our most disappointing operational performances in recent history, as all four operating units reported lower volumes. Furthermore, our new toy product introduction, ETO(tm), did not perform well at the retail level leaving the Company with higher than projected year-end inventory.
Net loss after taxes and discontinued operations for the year ended January 31, 2005 amounted to $3,682,000, or $4.20 per share on 876,000 average shares outstanding, compared to a net loss of $447,000, or $.51 per share on 874,000 average shares outstanding, for the year ended January 31, 2004.
Toy operating losses in fiscal 2005 exceeded fiscal 2004 losses, while the Diversified Products segments recorded a small operating loss compared to an operating profit in fiscal 2004. Gross margins were adversely impacted in all segments, except the Strydel injection molding division due to competitive pressures and raw material price inflation, which could not be passed on to our customers during the year.
For the quarter ended January 31, 2005, net loss after taxes and discontinued operations amounted to $1,049,000, or $1.20 per share on 876,000 average shares outstanding versus net income of $102,000, or $.12 per share on 875,000 average shares outstanding, for the three months ended January 31, 2004.
On February 28, 2005, the Company's organized employees agreed to a new three-year contract that expires February 14, 2008.
On April 1, 2005, certain assets of Strydel, Inc., the Company's injection molding facility located in Stryker, Ohio, were sold to a Michigan injection molding firm for cash.
Established in 1908 and headquartered in Bryan, Ohio, The Ohio Art Company manufactures and markets the world famous Etch A Sketch(r) drawing toy, as well as a complete line of toys that enhance and provide development, creativity, and positive reinforcement. Product lines include "Making Creativity Fun" activity toys, such as Etch A Sketch(r), Betty Spaghetty(r) Fashion doll, A.R.M. 4000XL(tm) water toy, Magna Doodle(, and ETO(tm), an electronic drawing toy. In addition, the Company's Diversified Products Division manufactures specialty plastic and lithographed products for the automotive, photographic, food container, and specialty premium markets.
The forward-looking statements contained in this release are based upon various assumptions and certain risks and uncertainties could cause actual results to differ materially from those stated. For a discussion of factors that may affect actual results, investors should refer to the Company's most recent Form 10-K filed with the SEC. The Company assumes no obligation to update any forward-looking statements contained in this release.
THE OHIO ART COMPANY AND SUBSIDIARIES
(Thousands Except Per Share Data)
Year Ended Three Months Ended
---------- ------------------
1/31/05 1/31/04 1/31/05 1/31/04
------- ------ ------- -------
Net Sales $ 19,696 $ 24,176 $ 5,497 $ 5,744
Income (Loss)
Before Income
Taxes (3,791) (516) (1,236) 116
Provision for
(Benefit From)
Income Taxes (144) (193) (144) 95
Net Income
(Loss) Before
Discontinued
Operations (3,647) (323) (1,092) 21
Net Income
(Loss) From
Discontinued
Operations (35) (124) 43 81
Net Income
(Loss) After
Discontinued
Operations (3,682) (447) (1,049) 102
Net Income
(Loss) Per Share
Before
Discontinued
Operations (4.16) (.37) (1.25) .02
Net Income
(Loss) Per Share
After
Discontinued
Operations (4.20) (.51) (1.20) .12
Average Shares
Outstanding 876 874 876 875