1. Ramtin Soroush
Mark Villamin
Chung Long Wong
Sean Young
BUSM 1100 – 002
Langara College
March 29, 2009
2. History
1967: Created by Victor and Rita Bertrand. Named Ritvik
Toys Inc.
1998: Amalgamated with Ritvik Holdings Inc.
2002: Name changed to MEGA Bloks Inc.
2006: Name changes to MEGA Brands Inc. after
acquisition of various other brand names
3. What do they do?
Market products under various brand names
Invest 3-4% of sales to drive innovation
Manufactures and distributes toys as well as office
supplies for children and businesses
4. MEGA Brands’ International Divisional Structure
President & CEO - Marc Bertrand
Chief Innovation Officer - Vic Bertrand
Executive VP & CFO - Alain Tanguay
Executive VP & Chief Operations Officer - Anthony Bazan
President, Toys - Gerardo Yepez Reyna
President, Stationery & Activities - Al Hunyadi
Executive VP & Chief Marketing Officer - Kathleen
Campisano
VP International - Michel Moggio
5. Social Responsibility Programs
Developed safety standards
Worked with leading safety testing authorities
Implemented a zero-defects program
Planned safety programs
6. Defensive Stance
Subject of 2 voluntary product recalls
Uncooperative with government
Violated the terms of one of the recalls
Improper follow-up after recall
7. Size and Location
6000 employees
Based in Canada
Have influence worldwide
Outsourced manufacturing in China
8. Industry and Competitors
Toy industry
Because of MEGA Bloks, their natural competitor is Lego
Other top competitors are Hasbro and Mattel
9. Customers and Benefits/Value Provided
Customers are families with young children
Contribute to development of growing children
Their mission benefits and places children first
10. Special Employee Program
Created in year 2007
Extended training for qualified young employees
Create and maintain existing jobs
Sufficiently funded
11. Capital Structure
Stocks: Common Stocks
Bonds: None
Utilize Equity Financing
Primary Capital needs are flexible, varying depending on
the situation
12. Growing? Profitable?
Sales of stationery and activity branches
Relocated/outsourced manufacturing
Partnership with Intertek
multi-year licensing deal with Nickelodeon
and Viacom consumer products
licensing pact with Marvel
Net Loss of: $97,136
13. Short-Term Solvency and Activity Ratio
Solvency and Activity Ratio
12.00
10.00
8.00
Ratio
6.00
Short-Term Solvency
Activity
4.00
2.00
0.00
2006 2005 2004 2003
Years
14. Solvency & Activity Comparison 2006
Short-Term and Activity Comparison
7
6
5
4
Industry Average
Ratio
Mega Brands
3
2
1
0
Short-Term Solvency Activity
15. Profitability Ratios
Profitability Ratios
50.0%
45.0%
40.0%
35.0%
30.0%
Percentage
25.0%
Return on Equity %
20.0% Return on Sales %
15.0%
10.0%
5.0%
0.0%
2006 2005 2004 2003
Year
16. Profitability Comparison 2006
Profitability
16.00%
14.00%
12.00%
10.00%
PErcantage
Industry Average
8.00%
Mega Brands
6.00%
4.00%
2.00%
0.00%
Return on Equity % Return on Sales %
17. Earnings per share
Earnings per share
$1.40
$1.20
$1.00
$0.80
Dollar
Earnings per share
$0.60
$0.40
$0.20
$0.00
2006 2005 2004 2003
Years
18. Earnings per share Comparison 2006
Earning per Share
$1.80
$1.60
$1.40
$1.20
$1.00
Dollar
$0.80
$0.60
$0.40
$0.20
$0.00
Industry Average Mega Brands
19. Long-term Solvency
Long-Term Solvency Ratio
$2.50
$2.00
$1.50
Dollar ratio
Long-Term Solvency
$1.00
$0.50
$0.00
2006 2005 2004 2003
Years
20. Long-term Solvency Comparison 2006
Long-Term Solvency Comparison
$2.50
$2.00
$1.50 Industry Average
Dollar
Mega Brand
$1.00
$0.50
$0.00
21. Conclusion
MEGA Brands’ long journey
Implementation of safety protocols
Employee programs
Growth
Ratios
Return to competitive status