EX-99.1 2 f50990exv99w1.htm EX-99.1 exv99w1
Exhibit 99.1
December 31, 2008
Corgi International Limited Announces Financial Results for the Six Months Ended September 30, 2008
Company Sells Two of its Divisions and Implements Staff and Facility Reductions
HONG KONG—(BUSINESS WIRE)—Corgi International Limited (Nasdaq GM:CRGI) today reported its unaudited financial results for the six months ended September 30, 2008. Total net revenue for the six-month period was $10.5 million, a decrease of $32.7 million from the unaudited pro forma results of operations for the six months ended September 30, 2007. The significant reduction in revenue was the result of the sale of the Cards Inc Trading Cards division and the Corgi Die-cast division in April 2008, the delay of the Harry Potter movie 6 and the difficulty in the credit markets in securing sufficient production financing. The net loss for the six-month period ended September 30, 2008 was $6.4 million, a deterioration of $2.8 million from the unaudited pro forma net loss of $3.6 million for the six months ended September 30, 2007.
Significant inventory write downs and transaction costs associated with the sale of the Corgi and Cards divisions amounted to over $3 million dollars in one-time charges. The proceeds from sale of the divisions were used to reduce approximately $20 million dollars of the company’s current liabilities. In addition, as reported in the company’s Form 20-F filing for year ending March 31, 2008, the company reported a $24 million impairment charge of its goodwill and intangibles relating to the sold divisions.
“Our revenue reduction and further losses in the first half of our current fiscal year 2009 was directly impacted by the sale of two of our divisions, our constraints on working capital, the extremely difficult credit markets and the postponement of the Harry Potter movie from November 2008 to July of 2009,” commented Michael Cookson, Chief Executive Officer of Corgi International Limited. “These results have required the company to place its two United Kingdom subsidiaries into Administration and liquidation. The company will continue to operate its United States and Hong Kong entities and has recently announced a new European partner, Re:creation Limited as its United Kingdom and European distributor. We are focused on achieving profitability next year. To that end, we have recently reduced our staff by over 80% and have consolidated our worldwide operations into two offices.”
Corgi International Limited
CONSOLIDATED BALANCE SHEET
(US dollars in thousands)
                 
    Unaudited   Unaudited
    As of   As of
    September 30, 2008   September 30, 2007
     
ASSETS
                
 
                
Current assets:
                
Cash
     625     $ 1,116  
Accounts receivable, net
     5,601       20,962  
Income tax receivable
     0       453  
Inventory
     2,088       16,583  
Prepaid expenses and other assets
     1,758       5,783  
Deferred tax asset
     0       728  
     
 
                
Total current assets
     10,072       45,624  
 
                
Property, plant and equipment, net
     176       300  

 

 

                 
    Unaudited   Unaudited
    As of   As of
    September 30, 2008   September 30, 2007
     
Tooling costs, net
     465       5,118  
Goodwill
     0       14,639  
Intangible assets
     967       11,443  
Notes Receivable, Long Term
     1,234       93  
     
Total assets
     12,914       77,217  
     
 
                
LIABILITIES AND STOCKHOLDERS’ EQUITY
                
Current liabilities:
                
Accrued expenses
     6,592       10,991  
Trade accounts payable
     13,833       19,624  
Short term debt
     7,634       17,775  
Current portion long term debt
     0       98  
     
 
                
Total current liabilities
     28,059       48,488  
 
                
Long term debt, net of current portion
     0       660  
 
                
Total liabilities
     28,059       49,148  
     
 
                
Total stockholders’ equity
     (15,145 )     28,069  
     
 
                
Total liabilities and stockholders’ equity
     12,914       77,217  
     
Corgi International Limited
CONSOLIDATED STATEMENT OF OPERATIONS
(US dollars in thousands)
                 
    Unaudited     Unaudited  
    Pro Forma Combined     Actual  
    Six Months     Six Months  
    Ended September 30, 2008     Ended September 30, 2007  
Sales
   $ 10,508     $ 43,271  
 
                
Cost of goods sold
     (5,910 )     (27,605 )
 
            
 
                
Gross profit
     4,598       15,666  
 
                
Selling, general, and administrative expenses
     (10,713 )     (18,529 )
 
            
 
                
Operating income (loss)
     (6,115 )     (2,863 )
 
                
Other income (expense):
                

 

 

                 
    Unaudited     Unaudited  
    Pro Forma Combined     Actual  
    Six Months     Six Months  
    Ended September 30, 2008     Ended September 30, 2007  
Interest income
     39          
 
                
Interest (expense)
     (634 )     (783 )
Other income (expense)
     238       —  
 
            
 
                
Income (loss) before income taxes
     (6,472 )     (3,646 )
 
                
Income tax benefit (expense)
     7       (6 )
 
            
 
                
Net income (loss)
   $ (6,465 )   $ (3,652 )
 
            
 
                
Loss per common share:
                
Basic
     -0.51       -0.34  
Diluted
     -0.51       -0.34  
 
                
Weighted average number of common shares outstanding:
                
Basic
     12,793,341       10,851,769  
Diluted
     12,793,341       10,851,769  
About Corgi International
Corgi International Limited is a global Pop Culture company, which develops and markets innovative and high-quality licensed and non-licensed toys, gifts and collectables distributed via direct, specialty, hobby, collector and mass retail channels worldwide. Marketed under the brand names Master Replicas, PopCo and H2go, the Company’s line of products range from premium entertainment prop replicas and limited edition memorabilia to traditional toys and gift merchandise. The Company holds varying licenses for many of entertainment’s highest grossing franchises including Harry Potter, Star Trek, Nintendo, and The Beatles, amongst others.
The Company is headquartered in Hong Kong, with operations in Walnut Creek, California, USA.
“Safe Harbor” Statement under the U.S. Private Securities Litigation Reform Act of 1995: Certain statements contained in this press release may be 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, without limitation, changes in market demand for Corgi International products, changes in economic conditions, dependence on certain customers and licensing partners, and other risks described in the Company’s annual report on Form 20-F for the fiscal year ended March 31, 2008. The Company undertakes no obligation to update these forward-looking statements to reflect subsequent events or circumstances.
Contact:
For Corgi International Limited information:
Jack Lawrence
Chief Operating Officer and Chief Financial Officer
Phone: (925) 979-1500