With Design In Mind Loses $4.6 Million in Fiscal Year

With Design In Mind International Inc., citing restructuring expenses and costs associated with an investigation of alleged embezzlement by its former officers, reported a loss of $4.6 million on sharply lower sales of $3.6 million for its fiscal year that ended Sept. 30.

The Chatsworth marketer of toys and novelty gift items posted a loss of $427,000 on sales of $6.8 million in its previous fiscal year. But for the latest fiscal year, the company was battered by the weak economy and a variety of costly events.

The company discontinued its gift-ware product line, and revenue decreased $2.2 million from a joint venture with Sega Enterprises that sold Sega optical kits for an arcade game. With Design said Sega has ceased production of the game, and no sales from the joint venture are expected in fiscal 1993.

In addition, With Design’s bottom line was hurt by $458,000 in costs and reserves associated with the investigation of and lawsuit against its former top officers. The company settled the suit last month and the former officers, without admitting guilt, paid cash of $250,000 and returned stock presently valued at more than $1 million. Expenses in fiscal 1992 also included $450,000 for the write-down in value of assets related to the firm’s MicroTheatre video product.

Despite the huge loss, Sheldon F. Morick, president and chief executive officer, said the company is continuing its restructuring and development of a new juvenile product line, which is expected to be shipped in April. Morick added that as of Sept. 30, the company had $3.7 million in cash and certificates of deposit.