Janex rebounds like a Power Ranger.

Janex International Inc. makes electric toothbrushes, flashlights and coin banks, among other things.

But its versions of these products come emblazoned with Mighty Morphin Power Rangers, Lion King and Batman characters, as well as other characters that children crave.

The products are selling like hot cakes. Janex's revenues more than doubled last year. They surged because Janex has been able to get licenses for some of the most popular characters around. Furthermore, the products are functional yet appeal to children, and they are made of quality materials, sources say.

"The customer sees it is not a piece of junk, even though it could be inexpensive in price," says Chuck Miller, a buyer with Paramus, N.J.-based Toys R Us.

Janex was founded in 1986 as a Chatsworth-based company called With Design in Mind that manufactured and designed novelty gifts, such as a spherical ball that plays the national anthem of 24 different countries at the touch of a finger and a bottle that sprays a mist over tanning bodies at regular intervals. It went public in 1991.

But its founders, Barry Benjamin and Steve Zuloff, were booted out of the company in 1992 when they were suspected of illegal dealings, and last year they were both convicted of tax evasion and securities fraud, says Chief Financial Officer Michael Manahan.

Tough times for gift firm

After the founders were forced to resign, Manahan, who was then vice president of finance, was promoted to his current position, and Sheldon Morick, who previously was executive vice president of sales and marketing, was appointed as CEO.

At that point the company was losing money and sales. It reported a net loss of $4.6 million, or $1.23 a share, during 1992, vs. a net loss of $427,000, or 19 cents a share a year earlier. Its sales were $3.6 million vs. $6.8 million a year earlier.

Since the company's novelty gift business had been a flop anyway, the officials shut down virtually all operations and turned the company into a shell, Manahan says.

Next it began developing some of its own children's products, but wasn't too successful at it. Then, in October 1993, it acquired MJL Marketing Inc., an Eatontown, N.J.-based company that designed and distributed functional children's products with licensed characters on them.

MJL was reporting about $5 million in annual revenues at the time, and the acquisition price was $2.8 million, Manahan said.

With Design in Mind posted revenues of $1.5 million that year.

The combined companies' name was subsequently changed to Janex, which was the name on MJL's products.

Back in the black

Last year the new company, which has most of its products manufactured in China, just took off. It reported net income of $1.2 million, or 25 cents a share, on sales of $13.1 million. In 1993, when it was basically a shell company, it lost $2.9 million on sales of $1.5 million. Its stock closed at $3.06 a share April 12, compared with a 52-week high of $5.50 and a low of $1.56

Janex officials "have a knack for acquiring the stronger, more viable licenses," says Chuck Smith, a merchandising manager for Troy, Mich.-based K mart.

During 1994 Janex secured the rights to the Mighty Morphin Power Rangers and Lion King characters, among others, Manahan says. This year it got rights to Pocahontas (a character in an upcoming Disney film), Spiderman, Gargoyles, X-men and Batman, CEO Morick adds.

"They get all the key licenses because they're known for making a good product," says Toys R Us' Miller.

For one, they attach raised figures to their products, while other companies simply affix stickers with the characters on them, Miller says.

Dan Lesnick, who was formerly a panner in MJL but is now executive vice president at Janex, has been responsible for developing the products, Morick says.

Furthermore, some products can be carried in other departments besides toys. For instance, the company's chalkboards can be found in the stationery department or with minifans in housewares, says Leo Crowley, an independent sales representative for Janex in Boston.

Usually, companies that make products displayed in departments such as these don't have as much opportunity to secure character licenses. Thus, Janex has an advantage in distributing products there, Crowley says.

Morick adds that he encourages the company's dozen sales representatives to venture "beyond their frame of reference, which is the toy department."

Selling to grocery/drug stores

Janex representatives also have begun landing the products in nontraditional venues such as Albertson's grocery stores and Walgreen's drag Stores, Morick says.

The fact that Janex actually hires independent sales representatives has helped to propel sales, Manahan adds. MJL officials tried to handle sales to retailers themselves, and weren't able to do as good a job, he says.

Janex has also tried to spread its business around. Prior to the acquisition, three major customers accounted for 82 percent of it. That's down to 46 percent, he said. And, in an effort to live up to the "international" in its name, Janex has begun distributing about 5 percent of its products in Europe, Asia and South America, Manahan says.

SPOTLIGHT

Janex International Inc.

Business: Manufactures, designs and distributes children's products that depict licensed characters

Headquarters: Woodland Hills Year founded: 1986 No. of employees then: 3 No. of employees now: 9 1993 revenues: $1.6 million 1994 revenues: $13.1 million 1993 loss: $2.9 million 1994 profit: $1.2 million Officers: Sheldon Morick, chairman, chief executive officer; Michael Manahan, vice president, chief financial officer