I am no businessman but I can read these numbers and they are not pretty.

Corgi International Limited (Nasdaq:CRGI) Announces Third Quarter Results
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Corgi International Limited CRGI today announced results of operations for the third quarter of fiscal year 2006, ended December 31, 2005. Net sales for the quarter were $7.5 million, compared to $12.2 million for the same quarter in the previous year. Gross profit for the third quarter of fiscal year 2006 was $2.3 million, compared to $4.6 million in the same quarter in the previous year. Net loss for the third quarter of fiscal year 2006 was $5.9 million, or $0.60 loss per share (basic and diluted), compared to a net loss of $2.0 million, or $0.21 loss per share (basic and diluted), in the same quarter of the previous year.

Management has been proceeding in an effort to dispose of Zindart Manufacturing Limited, the company's manufacturing division. The estimated loss on disposal will be approximately $3.5 million (including related goodwill impairment charges of $0.4 million) if the sale is successfully concluded. In accordance with Financial Accounting Standard 144, a $3.5 million write-down of the disposal group was recognized during the third quarter of fiscal year 2006 to reflect the estimated fair value thereof. Losses from discontinued operations for the third quarter of fiscal year 2006 reflect this write-down, offset by approximately $69,000 in income from such operations. Loss from discontinued operations in the third quarter of fiscal year 2005 was $585,000. The sale is targeted to close by the end of March, subject to certain conditions.

For the nine months ended December 31, 2005, net sales were $28.1 million, compared to $32.9 million for the same period in 2004. Gross profit for the first nine months of fiscal year 2006 was $10.0 million, compared to $13.4 million for the same period in the previous year. Net loss for the first nine months of fiscal year 2006 was $8.0 million, or $0.82 per share (basic and diluted), compared to a net loss of $3.9 million, or $0.42 per share (basic and diluted), for the same period in the previous year.

George Volanakis, the company's Chief Executive Officer, said, "We are continuing with our cost-cutting efforts, which are showing results. In the third quarter of fiscal 2006, selling, general and administrative expenses were $4.8 million, compared with $6.2 million in the third quarter of fiscal 2005. For the year to date, selling, general and administrative expenses have decreased by $2.7 million compared to last year."

Mr. Volanakis continued, "The poor sales performance in the third quarter of fiscal 2006 was largely due to later than normal receipt of collectible orders in the UK and slower than planned delivery of stock from the Orient to Corgi's UK operation. Most of the third quarter shortfall should be recovered in the fourth quarter."

"Corgi is expecting significant growth in its European and Australasia businesses, as well as significant incremental business from our new iCar product in the U.S. and U.K.," he added. The iCar is an iPod accessory that adds a visual element to digital music. The detailed replicas of the Cadillac Escalade and Nissan 240SX move to the music and colored lights illuminate various parts of the cars as the high-quality speakers broadcast music from all iPods and other MP3 players. The iCar also comes with its own "in store" demonstrable sample music.

Volanakis concluded, "We also expect new business will come in upcoming quarters from other new toy products and the 50th anniversary products. We believe the introduction of new products and the focus on higher margin offerings, combined with our cost-cutting efforts, will be reflected in improved operating performance in upcoming quarters."

About Corgi International

Corgi International, based in Hong Kong, sells die-cast collectible products under its own brand. In the U.S., the company is known as Corgi USA. Corgi also produces high quality die-cast and plastic products for multi-national companies that market collectible or gift items worldwide. Corgi has a high-volume manufacturing operation in China and sales offices worldwide. Retailers and consumers interested in more information can call 1-800-800-CORGI, or visit the company's website at: http://www.corgi-international.com.

Cautionary note regarding forward-looking statements

Certain statements in this release are forward-looking. These statements are subject to risks and uncertainties that could cause actual results to differ materially from those anticipated. Such risks and uncertainties include, without limitation, timing of product shipments, the timing and availability of cost-reduction measures, changes in market demand for Corgi products, changes in economic conditions, dependence on certain customers and other risks described in the company's annual report on Form 20-F for the fiscal year ended March 31, 2005. The company undertakes no obligation to revise these forward-looking statements to reflect subsequent events or circumstances.

Tables to follow

CORGI INTERNATIONAL LIMITED AND SUBSIDIARIES
Condensed Consolidated Balance Sheets
(In thousands)

(Unaudited) (Unaudited)
As of As of As of
December March December
31, 31, 31,
2005 2005 2004

ASSETS
Current assets:
Cash and cash equivalents 3,503 $ 7,012 $ 9,600
Available-for-sale investments 6 25 25
Trade accounts receivable, net 3,914 6,579 14,358
Other assets 10,051 10,666 21,526
Assets of discontinued operations 24,250 29,243 --
----------- ------- -----------
Total current assets 41,724 53,525 45,509
Property, plant, and equipment, net 6,800 7,933 21,943
Other long term assets 1,821 1,874 2,865
Goodwill 35,312 35,312 35,726
----------- ------- -----------
Total assets 85,657 $98,644 $ 106,043
=========== ======= ===========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Short-term debt and current
installments of long-term debt 3,139 $ 3,876 $ 14,347
Trade accounts payable 3,323 4,450 13,203
Other current liabilities 4,299 3,264 10,370
Liabilities of discontinued operations 21,448 23,073 --
----------- ------- -----------
Total current liabilities 32,209 34,663 37,920
Long-term liabilities -- 235 1,381
----------- ------- -----------
Total liabilities 32,209 34,898 39,301
----------- ------- -----------
Minority interests 105 693 708
----------- ------- -----------
Stockholders' equity:
Common stock 625 623 621
Additional paid-in capital 40,280 40,229 39,975
Retained earnings 11,645 19,590 22,757
Accumulated other comprehensive income 793 2,611 2,681
----------- ------- -----------
Total stockholders' equity 53,343 63,053 66,034
----------- ------- -----------
Total liabilities and stockholders'
equity 85,657 $98,644 $ 106,043
=========== ======= ===========

CORGI INTERNATIONAL LIMITED AND SUBSIDIARIES
Condensed Consolidated Statements of Operations
(In thousands, except share data)

Three months ended
December 31,
(Unaudited) (Unaudited)
2005 2004

Net sales $ 7,450 $ 12,249
Cost of goods sold (5,132) (7,614)
----------- -----------
Gross profit 2,318 4,635
Selling, general, and administrative expenses (4,788) (6,160)
----------- -----------
Operating loss (2,470) (1,525)
Other income (expense):
Interest income 15 40
Interest expense (127) (174)
Other income (loss) 64 (359)
----------- -----------
Loss before income taxes and
minority interests (2,518) (2,018)
Income tax benefit 65 207
----------- -----------
Loss from continuing operations (2,453) (1,811)
Income (loss) from discontinued operations,
net of tax (including gain on disposal
of $984 in 2004) (3,426) (585)
----------- -----------
Loss before extraordinary items (5,879) (2,396)
Extraordinary gain, net of nil tax -- 418
----------- -----------
Net loss (5,879) (1,978)
=========== ===========
Loss per common share:
Basic:
Loss from continuing operations $ (0.25)$ (0.19)
Income (loss) from discontinued operations (0.35) (0.06)
Extraordinary gain -- 0.04
----------- -----------
Net loss $ (0.60)$ (0.21)
=========== ===========
Diluted:
Loss from continuing operations $ (0.25)$ (0.19)
Income (loss) from discontinued operations (0.35) (0.06)
Extraordinary gain -- 0.04
----------- -----------
Net loss $ (0.60)$ (0.21)
=========== ===========
Weighted average number of common shares
outstanding:
Basic 9,671,943 9,603,954
=========== ===========
Diluted 9,671,943 9,603,954
=========== ===========

CORGI INTERNATIONAL LIMITED AND SUBSIDIARIES
Condensed Consolidated Statements of Operations
(In thousands, except share data)

Nine months ended
December 31,
(Unaudited) (Unaudited)
2005 2004
----------- -----------

Net sales $ 28,102 $ 32,882
Cost of goods sold (18,056) (19,477)
----------- -----------
Gross profit 10,046 13,405
Selling, general, and administrative expenses (15,520) (18,215)
----------- -----------
Operating loss (5,474) (4,810)
Other income (expense):
Interest income 70 83
Interest expense (474) (516)
Other income (loss) 776 (212)
----------- -----------
Loss before income taxes and
minority interests (5,102) (5,455)
Income tax benefit 472 707
----------- -----------
Loss from continuing operations (4,630) (4,748)
Income from discontinued operations, net of
tax (including gain on disposal
of $984 in 2004) (3,315) 394
----------- -----------
Loss before extraordinary items (7,945) (4,354)
Extraordinary gain, net of nil tax -- 418
----------- -----------
Net loss (7,945) (3,936)
=========== ===========
Loss per common share:
Basic:
Loss from continuing operations $ (0.48)$ (0.50)
Income from discontinued operations (0.34) 0.04
Extraordinary gain -- 0.04
----------- -----------
Net loss $ (0.82)$ (0.42)
=========== ===========
Diluted:
Loss from continuing operations $ (0.48)$ (0.50)
Income from discontinued operations (0.34) 0.04
Extraordinary gain -- 0.04
----------- -----------
Net loss $ (0.82)$ (0.42)
=========== ===========
Weighted average number of common shares
outstanding:
Basic 9,653,379 9,440,371
Diluted 9,653,379 9,440,371
=========== ===========

Contact Information: Adam Friedman Associates Adam Friedman, 212-981-2529, ext 18 adam@adam-friedman.com

© 2006 BusinessWire

No, they are not circling the drain, they are reorganizing their company due to an impending merger. Corgi International Limited (Nasdaq: CRGI - News) has entered into a letter of intent to acquire the outstanding shares of Cards Inc. Limited and an agreement to merge with Master Replicas Inc. in a stock-for-stock merger transaction. The closings of the acquisitions are expected to occur in the fourth quarter of 2006, after receipt of shareholder approval and satisfaction of other closing conditions.

The company, which will retain the Corgi name, will produce a wide variety of product categories, and will feature collectible products from licenses, on a combined basis, for nine of the ten highest grossing film franchises of all time, including Batman, James Bond, Disney Classics, Harry Potter, Lord of the Rings, Pirates of the Caribbean, Star Trek, Star Wars, and Spiderman.

Cards Inc., headquartered in Watford, England, specializes in creating licensed collectibles, gifts and toys. Master Replicas Inc., with headquarters in Walnut Creek, California, develops and markets movie replicas and high-end pop culture collectibles.

Corgi, which was formerly Zindart entirely, is going through transitition. Corgi is tryng to spin-off the Zindart manufacturing operation, which produces some die-cast for Jada and Hot Wheels. These are only quarterly results. Some of the results are due to the fuel situation, which inturn affected consumers buying habits in general. Product delays probably also contributed. Every company has experienced ups and downs during the same period Corgi did.

Corgi International Limited (Nasdaq: CRGI) is one of the oldest and most renowned global brands in the collectibles market. Its core business is die-cast memorabilia and children's toy lines. Corgi also manufactures high quality die-cast and plastic products for multinational companies that market collectible or gift items globally. The company has manufacturing operations in China and its products are sold in 30 countries throughout the world.

Corgi International's goal is to be the leading supplier of collectible die-cast models, including trucks, buses, cars and airplanes through its Corgi Classics brand, and the leading manufacturer of high-quality die-cast and injection-molded collectibles and collectible holiday ornaments. Zindart Manufacturing's strategy calls for continuous strengthening of its relationships with its multi-national customers and increasing and diversifying its customer base.

Corgi International is a corporate holding company based and domiciled in Hong Kong SAR, Peoples Repulic of China. Operating entities include Corgi Classics Limited, Corgi's UK-based sales and marketing organization, Corgi USA, Corgi's US-based sales and marketing organization, and Zindart Manufacturing Limited, an OEM manufacturer with operations in Hong Kong and Dongguan, PRC. Zindart Manufacturing produces the majority of the Corgi branded products, although Corgi also sources from several other PRC-based manufacturers.

DaveP, thanks for that explanation. What a relief!
John, now I can get back to worrying about that killer Asteroid that may hit us.......

Wait doesn't Code 3 have the license for Star Wars and Some of those others?

Licensing is not limited to one party, unless there is an exclusivity aggreement, like Code 3 and Corgi can both produce Mack and Seagrave vehicles, Code 3 and Kenner can produce Star Wars items.