MEGA brands

Ramtin SoroushMark Villamin

Chung Long WongSean Young

BUSM 1100 – 002Langara CollegeMarch 29, 2009

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

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

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

Social Responsibility Programs Developed safety standards

Worked with leading safety testing authorities

Implemented a zero-defects program

Planned safety programs

Defensive Stance Subject of 2 voluntary product recalls

Uncooperative with government

Violated the terms of one of the recalls

Improper follow-up after recall

Size and Location 6000 employees

Based in Canada

Have influence worldwide

Outsourced manufacturing in China

Industry and Competitors

Toy industry

Because of MEGA Bloks, their natural competitor is Lego

Other top competitors are Hasbro and Mattel

Customers and Benefits/Value Provided

Customers are families with young children

Contribute to development of growing children

Their mission benefits and places children first

Special Employee Program Created in year 2007

Extended training for qualified young employees

Create and maintain existing jobs

Sufficiently funded

Capital Structure Stocks: Common Stocks

Bonds: None

Utilize Equity Financing

Primary Capital needs are flexible, varying depending on the situation

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

Short-Term Solvency and Activity Ratio

0.00

2.00

4.00

6.00

8.00

10.00

12.00

2006 2005 2004 2003

Rat

io

Years

Solvency and Activity Ratio

Short-Term Solvency

Activity

Solvency & Activity Comparison 2006

0

1

2

3

4

5

6

7

Short-Term Solvency Activity

Rat

io

Short-Term and Activity Comparison

Industry Average

Mega Brands

Profitability Ratios

0.0%

5.0%

10.0%

15.0%

20.0%

25.0%

30.0%

35.0%

40.0%

45.0%

50.0%

2006 2005 2004 2003

Pe

rce

nta

ge

Year

Profitability Ratios

Return on Equity %

Return on Sales %

Profitability Comparison 2006

0.00%

2.00%

4.00%

6.00%

8.00%

10.00%

12.00%

14.00%

16.00%

Return on Equity % Return on Sales %

PEr

can

tage

Profitability

Industry Average

Mega Brands

Earnings per share

$0.00

$0.20

$0.40

$0.60

$0.80

$1.00

$1.20

$1.40

2006 2005 2004 2003

Do

llar

Years

Earnings per share

Earnings per share

Earnings per share Comparison 2006

$0.00

$0.20

$0.40

$0.60

$0.80

$1.00

$1.20

$1.40

$1.60

$1.80

Industry Average Mega Brands

Do

llar

Earning per Share

Long-term Solvency

$0.00

$0.50

$1.00

$1.50

$2.00

$2.50

2006 2005 2004 2003

Do

llar

rati

o

Years

Long-Term Solvency Ratio

Long-Term Solvency

Long-term Solvency Comparison 2006

$0.00

$0.50

$1.00

$1.50

$2.00

$2.50

Do

llar

Long-Term Solvency Comparison

Industry Average

Mega Brand

Conclusion MEGA Brands’ long journey

Implementation of safety protocols

Employee programs

Growth

Ratios

Return to competitive status