UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
--------------------------------------------
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(D) OF
THE SECURITIES EXCHANGE ACT OF 1934
August 11, 1999
THE OHIO ART COMPANY
(Exact Name of Registrant as Specified in Charter)
Ohio
(State of Other Jurisdiction of Incorporation)
001-07162 34-4319140
(Commission File Number) (IRS Employer Identification No.)
ONE TOY STREET
BRYAN, OHIO 43506
(Address, including zip code, of
Registrant's Principal Executive Offices)
(419) 636-3141
(Registrant's Telephone Number, including area code)
<PAGE>
ITEM 5. OTHER EVENTS
(a) On May 7, 1999, the Company issued a press release
reporting its operating results for its fourth
quarter and year-ended January 31, 1999
(b) On May 21, 1999, the Company issued a press release
reporting its operating results for the first quarter
of 1999.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
(a) EXHIBITS
Exhibit
Number Description
------ -----------
99.1 Press Release dated May 7, 1999.
99.2 Press Release dated May 21, 1999.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
registrant certifies that it has reasonable grounds to believe that it meets all
of the requirements for filing on Form 8-K and has duly caused this registration
statement to be signed on its behalf by the undersigned, thereunto duly
authorized on August 6, 1999.
THE OHIO ART COMPANY
By: /s/ William C. Killgallon
-----------------------------------
William C. Killgallon
Chairman of the Board and
Principal Executive Officer
Exhibit 99.1
For: THE OHIO ART COMPANY Contact: RON COMO & ASSOCIATES, INC.
One Toy Street 330 East 46th St., Suite 7C
P.O. Box 111 New York, NY 10017
Bryan, OH 43506 Tel: (212) 557-4140
Paul R. McCusty
Vice President Finance May 7, 1999
Tel: (419) 636-3141 Immediate Release
THE OHIO ART COMPANY REPORTS OPERATING RESULTS FOR
THE FOURTH QUARTER AND YEAR ENDED JANUARY 31, 1999
BRYAN, OHIO, MAY 7TH - The Ohio Art Company, (ASE-OAR), today announced
operating results for the fourth quarter and for the year ended January 31,
1999.
Net sales for the year ended January 31, 1999 increased approximately 27% from
$36,291,000 for the year ended December 31, 1997 to $45,937,000 for the year
ended January 31, 1999. The Diversified Products Division reported record sales
on a volume increase of approximately 9%. Both the International and Domestic
Toy Divisions experienced sales increases in excess of 25%. Betty Spaghetty(R)
fashion doll shipments were a major contributing factor to the favorable toy
sales comparisons. For the three month period, net sales decreased approximately
15% from $11,940,000 for the quarter ended December 31, 1997 to $10,109,000 for
the quarter ended January 31, 1999.
Net loss for the fourth quarter ended January 31, 1999 amounted to $2,183,000,
or $2.51 per share on 867,000 average shares outstanding, compared to a net loss
of $1,285,000 or $1.43 per share, on 895,000 average shares outstanding during
the quarter ended December 31, 1997, as unforeseen and substantial order
cancellations in mid-quarter by major toy retailers occurred too late to adjust
committed spending levels and, particularly, too late to cancel advertising
commitments made during the summer months.
This is the first time in 15 years that the Company has reported a loss, after
having reported a profit for the first nine months of operation, because toy
retailers, without advance notice, unpredictably reduced historical toy
inventory levels instead of pursuing incremental sales during the holiday
season.
Net loss for the year ended January 31, 1999 amounted to $1,827,000 or $2.10 per
share on 869,000 average shares outstanding, versus a net loss of $5,144,000 or
$5.68 per share, on 905,000 average shares outstanding during the year ended
December 31, 1997. The Diversified Products Division experienced record profits
surpassing the 1996 level.
In March, 1999 the Company and its Bryan, Ohio manufacturing employees concluded
a new three-year contract.
Our existing lenders have indicated that they will not be extending their loan
commitments and for that reason, the Company has not yet filed its Form 10-K.
The American Stock Exchange has suspended trading of the Company's stock pending
filing of the Form 10-K. We are in the process of discussing financing with new
lenders. Until we sign a commitment with new lenders, our borrowings will be
shown as short-term in our financial statements. We expect to complete
negotiations with a new lender within 45 days.
This statement with respect to the Company's ability to obtain new lending
commitments may be regarded as a forward-looking statement within the meaning of
the Private Securities Litigation Reform Act of 1995.
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), Glitter Writer(R), Zooper(TM) Sounds Etch A
Sketch(R), Betty Spaghetty(R) doll, and Spray FX Power Airbrush(TM). 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 OHIO ART COMPANY AND SUBSIDIARIES
(Thousands Except Per Share Data)
Year Ended Three Months Ended
1/31/99 12/31/97 1/31/99 12/31/97
Net Sales $45,937 $36,291 $10,109 $11,940
Loss Before Taxes 1,697 5,880 2,053 735
Provision for Taxes (Credit) 130 (736) 130 550
Net Loss 1,827 5,144 2,183 1,285
Net Loss Per Share 2.10 5.68 2.51 1.43
Average Shares Outstanding 869 905 867 895
Exhibit 99.2
For: THE OHIO ART COMPANY Contact: RON COMO & ASSOCIATES, INC.
One Toy Street 330 East 46th St., Suite 7C
Bryan, OH 43506 New York, NY 10017
Paul R. McCusty Tel: (212) 557-4140
Vice President Finance
Tel: (419) 636-3141 May 21, 1999
Immediate Release
THE OHIO ART COMPANY REPORTS OPERATING RESULTS FOR
THE FIRST QUARTER OF 1999
BRYAN, Ohio--(BUSINESS WIRE)--May 21, 1999--The Ohio Art Company (ASE-OAR),
today announced operating results for the first quarter ended April 30, 1999.
Net sales increased significantly to $10,497,000 for the quarter ended April 30,
1999, compared to $6,286,000 for the quarter ended April 30, 1998, led by both
domestic and international demand for the company's Betty Spaghetty(R) mix and
match fashion doll. Domestic shipments of Water T-Ball(TM), an outdoor water
toy, also contributed to the record first quarter sales comparisons. The
Diversified Products Division reported flat shipments for the quarter.
The Company experienced net income for the first quarter amounting to $91,000 or
$.11 per share, on 865,000 average shares outstanding, compared to a net loss of
$908,000, or $1.02 per share, on 892,000 average shares outstanding during the
quarter ended April 30, 1998. This is only the third time in the past two
decades that the company has reported net income in the first quarter of
operation. A combination of increased toy volume at higher average gross margins
and reduced overhead contributed positively to this performance.
Pending resolution of bank financing issues reported earlier in the month, the
Board of Directors decided not to declare a regular quarterly dividend.
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), Glitter Writer(R), Zooper(TM) Sounds Etch A
Sketch(R), Betty Spaghetty(R) doll, and Spray FX Power Airbrush(TM). 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 OHIO ART COMPANY AND SUBSIDIARIES (*)
(Thousands Except Per Share Data)
Three Months Ended
4/30/99 4/30/98
Net Sales $ 10,497 $ 6,286
Income (Loss) Before income Taxes 91 (908)
Income Taxes 0 0
Net Income (Loss) 91 (908)
Net Income (Loss) Per Share .11 (1.02)
Average Shares Outstanding 865 892
(*) Unaudited and subject to year-end adjustments.
