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UNIVERSAL MATCHBOX GROUP REPORTS FOURTH QUARTER AND FULL YEAR 1991 POSITIVE RESULTS

 UNIVERSAL MATCHBOX GROUP REPORTS FOURTH QUARTER AND FULL YEAR
 1991 POSITIVE RESULTS
 NEW YORK, Feb. 21 /PRNewswire/ -- Universal Matchbox Group Ltd. (NYSE: UMG) today reported a turnaround in results for the year ended Dec. 31, 1991. Net income of $1.6 million or $0.17 per share was achieved as compared to a net loss of $16.6 million or $1.70 per share in 1990.
 Net sales for the fourth quarter decreased 14.7 percent to $51.9 million from $60.9 million in the fourth quarter of 1990. For the full year, net sales decreased 16.6 percent to $167.5 million compared with $200.9 million in 1990. The decline was attributed to the general softness of worldwide toy markets, less proportion in sales of promotional products, a significant drop in close-out sales and greater selectivity in the extension of credit.
 Despite the drop in sales, gross profit as a percentage of sales improved to 44.4 percent in 1991 compared to 40.7 percent in 1990 and operating income rose to $6.5 million in 1991 versus a break-even year in 1990. David C.W. Yeh, chairman and chief executive officer attributed the improved results to the reduction in manufacturing costs, tightened control on overhead and more efficient asset utilization.
 Interest expense for the year decreased to $6.3 million from $9.6 million last year as a result of improved cash flow management and lower interest rates. Net income of $1.6 million in 1991 included $1.0 million of foreign exchange gain as compared with an exchange loss of $1.6 million in 1990. There was other income of $0.8 million in 1991 versus an expense of $3.8 million in 1990 which represented primarily accounts receivable writeoffs.
 Yeh said, "We are committed to the continued improvement of the Group's performance. We believe the 1991 results have proven that the strategies taken were correct and will provide a strong foundation for growth."
 Universal Matchbox Group Ltd. is one of the world's leading toy companies. The company designs, manufactures and markets toys in more than 120 countries. The company is also a contract manufacturer for other major international toy companies.
 UNIVERSAL MATCHBOX GROUP LTD. AND SUBSIDIARIES
 Consolidated Statement of Income
 (In thousands of U.S. dollars except per share data)
 Period ended Three months Year ended
 Dec. 31 1991 1990 1991 1990
 Net sales $ 51,929 $ 60,904 $167,530 $200,897
 Cost of sales 29,418 36,409 93,179 119,229
 Gross profit 22,511 24,495 74,351 81,668
 Advertising & promotion
 expenses 4,544 6,605 13,947 18,264
 Other selling, general
 and administrative exp. 14,790 19,245 53,927 64,794
 Restructuring (income)
 expenses -- (63) -- (1,402)
 Operating income (loss) 3,177 (1,292) 6,477 12
 Interest expense 1,247 2,206 6,285 9,587
 Loss (gain) on
 foreign exchange 1,033 1,621 (1,019) 1,577
 Other expense (income) 219 4,715 (826) 3,763
 Income (loss) before income
 taxes and extraord. item 678 (9,834) 2,037 (14,915)
 Provision for income taxes 316 3,947 1,439 4,979
 Income (loss) before
 extraordinary item 362 (13,781) 598 (19,894)
 Extraordinary item -
 utilization of net operating
 loss carryforwards 741 2,700 1,030 3,286
 Net income (loss) 1,103 (11,081) 1,628 (16,608)
 Earnings per share:
 Income (loss) before
 extraordinary item 0.03 (1.41) 0.06 (2.04)
 Extraordinary item 0.06 0.28 0.11 0.34
 Net income (loss) 0.09 (1.13) 0.17 (1.70)
 Weighted average common
 share and common share
 equivalents outstanding 11,827 9,750 9,750 9,750
 Weighted average common shares and common share equivalents for the three months ended Dec. 31, 1991 include the shares that would be issued upon conversion of the company's series A and series B convertible preferred stocks. These shares have been excluded from the earnings per share calculation for the remaining periods presented since the effect of conversion would be anti-dilutive.
 CONSOLIDATED CONDENSED BALANCE SHEET
 (In thousands of U.S. dollars)
 12/31/91 12/31/90
 ASSETS
 Accounts receivable $38,095 $ 39,805
 Inventories 29,517 30,878
 Other current assets 20,147 23,943
 Non-current assets 32,547 37,074
 Total 120,306 131,700
 Liabilities and shareholders' equity
 Short-term bank borrowings 33,059 45,504
 Accounts payable 7,460 6,239
 Other current liabilities 16,240 15,600
 Non-current liabilities 12,055 16,296
 Subordinated convertible notes
 due 1992 2,500 2,500
 Shareholders' equity 48,992 45,561
 Total 120,306 131,700
 -0- 2/21/92
 /CONTACT: Philip Y. Sardoff of Green Lind & McNulty, Inc., 908-686-7500 for Universal Matchbox Group/
 (UMG) CO: Universal Matchbox Group Ltd. ST: New York IN: REA SU: ERN


SH-OS -- NY037 -- 1425 02/21/92 13:53 EST
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