BRYAN, Ohio, Nov. 30, 2005 (PRIMEZONE) -- The Ohio Art Company, (Pink Sheets:OART), today announced operating results for the third quarter and nine months ended October 31, 2006.
Net sales, excluding discontinued operations, increased approximately 3% from $14,199,000 for the nine months ended October 31, 2004 to $14,674,000 for the nine months ended October 31, 2005. For the three-month period, net sales decreased approximately 3% from $7,534,000 for the quarter ended October 31, 2004 to $7,298,000 for the quarter ended October 31, 2005.
Although year-to-date sales rose slightly due mainly to increased international toy shipments, lackluster demand for new toy offerings in the first three quarters of fiscal 2006 hindered the company's ability to return to profitability as year-to-date sales did not reach the breakeven point. The Diversified Products Division's year-to-date sales trailed last year's results by approximately 2%.
Net loss, after taxes and discontinued operations, for the nine months ended October 31, 2005 amounted to $842,000 or $.96 per share on 875,000 average shares outstanding compared to a net loss of $2,633,000 or $3.01 per share on 876,000 average shares outstanding during the nine months ended October 31, 2004.
Gross profit margins for fiscal 2006 year-to-date results were down primarily due to write-downs on discontinued toy products and reduced gross margins on international toy shipments. The Diversified Products Division operated at a breakeven net profit level for the first nine months while also experiencing improved gross margins resulting from a price increase implemented earlier in fiscal 2006.
Net income, after taxes and discontinued operations, for the third quarter October 31, 2005 amounted to $269,000 or $.31 per share on 874,000 average shares outstanding versus a net loss of $158,000 or $.18 per share on 876,000 average shares outstanding during the quarter ended October 31, 2004.
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), Magna Doodle(r), and electronic drawing toys such as Etch A Sketch(r) Wired(tm). In addition, the company's Diversified Products segment manufactures lithographed products for the 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. 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)
Nine Months Ended Three Months Ended
10/31/05 10/31/04 10/31/05 10/31/04
Net Sales $ 14,674 $ 14,199 $ 7,298 $ 7,534
Income (Loss) Before
Income Taxes (1,954) (2,541) 275 (109)
Provision For (Benefit From) 2 14 -- 8
Income Taxes
Net Income (Loss) Before (1,956) (2,555) 275 (117)
Discontinued Operations
Net Income (Loss) From 1,114 (78) (6) (41)
Discontinued Operations
Net Income (Loss) After (842) (2,633) 269 (158)
Discontinued Operations
Net Income (Loss) Per Share (2.24) (2.92) .31 (.13)
Before Discontinued
Operations
Net Income (Loss) Per Share (.96) (3.01) .31 (.18)
After Discontinued
Operations
Average Shares Outstanding 875 876 874 876
* Unaudited and subject to year-end adjustments.