mayjunpreview2000 by Commarts

Equity Marketing, Inc . An nual Report

••••

To Oull SHARtHO LPEllS )

In many ways, 1998 was the mott d1fftcull year

formers but were not drivlnq meanlnq lul sales traffic into 1ton!'1. The11e lacton con1rtbu1ed to

performance fell 1t9nlflcantly 1hort of expecta1ion1 and our five-year record of qrowth WH We rHponded with a number of

our organb.atlon and set u1 back on a path of

performance of our retail llne of NASCAR lapel

lncludlnq

Inventory write-down1. concenlon1 and dl1-

pins. which we launched late In the )'<ar and

k:ou n t1 to retallen and lncrea1es In provt1tons

IOld p rimarily through di rect re1ponte - a new

accompanytnq Annual Report on form 10-X. 1he

for bad deb!. and prompted u1 to dtteontl nue

d l1trlbu tlon channel for u1

company potted a net lots of approximately

nearly all or our llcenaed product llnet

haw decided to exit the retall lapel pin bus!. -

$6 0 million. or 80 98 per share

1tep1 de1lgned to redefine our 1tra1eqy. realign

Also In 1998. we were dlaappoln ted with thf

these 1998 charqe1 , which are detailed in the

or •l.SS per dtluted share, In 1997

tn Equity Markettncf1 h1atory •• ou.r ftnanct&l

interrupted

approximately $S 7 mtlllon. or •0.90 pe r diluted share. compared to net Income or 89 6 million.

In llqh t of our 1998 experience, we are no lonqer

Alt houg h our consu mer product• busln e11 rep-

pur1ulnq new rvent movie licenses for ou r con -

Consequently. we

nea, howrver. we wtll continue to

our

NASCAR rtlatlon1hlp to drvelop t rafflc -qen eratlnq p romottonal p roq ram1 for cllen11

1998 was Indeed a

resented only 27 percent of 1998'1 net revenues.

lsumer p roduct• b u1ine11 WhUe 11cented p rop -

watenhed year - a Uy turnlnq point 1n the

ii accounted fo r nearly all of the 1998 earnlnqs

~rtles

rted to major motion pictures will contin-

To simplify and more clearly define our 1harp-

evolution of our company - and I am confident

decline. This wa1 due primarily to softer - tha n -

ue to play a central role tn ou r p romotions

en ed con1umer productl focus , we decided at

that we have eme rged as a more focused , dl.ct-

expected 1alu of our toy lines based on

acttvltles. our con1umer product• rocu1 will be

the end of 1998 to consolidate our former Equity

growth and p rofltabUlty

pllned and enugtzed orqantzation. rn cowr

Columbia/TrlStar·1 Godzflfa

and Universal

on untque, niche produc11 that are baH:d on

Toys. Equity Sports and Equity Collectibles bwl-

our pla.ns for the future In more detaU later

Studios' Babf Pig t" rhc City - two movie• that

brands thal we own or on licensed -everqreen -

ness untt1 Into one dJvl1ton . Equity Consumer

F'lrst , a look back to 1998

received tremendous pre- release pu blicity but

p ropertle1 with enduring consumer a ppeal. ruch

did not meet their box office expectations and .

as Scooby-Doo"" Our Headliner-. brand of col-

therefore. Impacted our toy 1a.les

lectible ftguri n H . which we added In 1998 u

RtVlEWINO

1998 )

Durinq the

Total revenue. for 1998 reached a record high of

year. our con1umer p roducll business also wu

pan of our acqulsltton of Corinthian Markettng .

f159 l mllllon . representinq an 8 8 percent

affected by Inventory cut backs by mass- market

Inc , and ou r Tub Tf"ts. ch tldren '1 ba th coloring

increase over 1997

Excluding the Impact of

retallen. which contributed to lower saJes of

line. which we alto acqulred In 1998. are good

certain reatructurtnq and other charqe1, !he

va.rtou1 Equity toy lines th at were 1teady per-

exa mple1 of the type• of bra nded produc11 that

company would have repon ed nel Income of

Our ot her dtvl1ton. Equity Promotio:u. which represented 73 percen t of the year·• net revenues, w .. a 1teady performer tn 1998

In fact .

tn the fourth quarter of the )'<ar. we recorded promotion• reven ue• ol 858 4- million - our belt qua rter ever.

representing

a 29 pe rcent

will be part of our 1trategy movlnq forward

•

Equity Promotfons h'u tarrttd an nctlltnr ~putat!on for cnatfng lmagl"attw. high-Impact promotional solutions lhar dlffermrlarc our clft"ts' bra"ds, motfllatc rh~r cwtomas and dcUwr measuNbl• lmprowmenrs In th~r flna"ctal pafonnanct. Th• majority of our~sourctsar.dtdlcattdtoth1growtho(thlscor.busl"tss.

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C 0 M M U N I C A T I 0 N

A R T S

Wendell Minor Left: Farmer on 4020, interior spread for the book Heartland by Diane Siebert. "While I was working on the paintings for Mojave , I asked my editor if Diane Siebert would be interested in writing a poem about the rural Midwest. Siebert immediately responded with Heartland. This book represents my family ' s farming history in Illinois . I returned home with a sketch book and trusty Nikonâ&#x20AC;˘ to gather inspiration by traveling throughout the countryside. This trip proved to be so successful that I have continued the practice with every book project since." Al Cetta, art director; Pam Hastings, editor; HarperCollins, publisher. 321/4 X 201/2, acrylic on Masoniteâ&#x20AC;˘ panel. One (formerly titled Lily Pads), interior spread for the book A Lucky Thing. "This image is one in a series for fourteen witty poems by Alice Schertle. All the poems deal with the creative process of writing and observing the natural world. The book opens with an image of a girl writing a poem in a barn loft. A sheet of paper drifts out the window. In each subsequent image the sheet of paper appears and visually ties the poems together." Michael Farmer, art director; Linda Zuckerman, editor; Browndeer Press/Harcourt, publisher. 18 X 103/4, watercolor on cold-pressed paper. This page: Flag Barn. "Yankee magazine used this image for their July issue cover. It is a detail from a painting originally done for the cover of Heartland. I repainted the detail as a larger original for Yankee ' s use. This image has subsequently been used on a coffee mug, greeting card, mousepad, T-shirt, etc., and has become one of my signature paintings." J. Porter, art director. 9 X 12, acrylic on Masonite panel. Limited-edition poster for Springdale Graphics. " Martha's Vineyard represents one of a series of three personal paintings produced as limited-edition posters. I'm fascinated by the abstract shapes of man-made objects and their relationship to the environment. I find Charles Sheeler and Edward Hopper very inspirational to that end ." Janine Mayhew, art director. 23 X 131/2, acrylic on Masonite panel.

C 0 M M U N I C A T I 0 N

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TAEMEYONTAIME THN NOMICOS LINES

TRA YELLING WITH NOMICOS LINES

travrx1xwi(ovra> rov ard.<o µat;.

c began tnversin1 the AtgUn sea with wling """'" over. hundred

yurs ago. Sina the beginning we have always responded to the latat

technology in

p~nger

lines, from

the earli<r wling ships, to steam bo&ls, to the m"5t conkmpol'll)' ships and hydrofoils available today.

u1nize1 ro µcyaloin'po 6irruo 01iv6t<nK row "'1<7ltW µ&<a~li rou,, <10(6iVOOJJ< n/V 00mrd"1TO d.ir&rptl)Y G· 1nJ.or<JJv y1a Kl a.iroA.aU. acre rl( 61aK0Ki{ aa,.

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•vingachi<vedthelargcst network of connections betW«n the islands, you .,. able to choose from numtrous combinations of vacation spots to enjoy to the utmost your holidays.

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HE BOUGHT 20 POLKA CDs ONLINE. HIS TASTE MAY BE QUESTIONABLE. BUT ARE

HIS ETHICS?

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COMMUNICATION

ARTS

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DEVELO PASSION

The New York Peer AIDS Education Coalition fights !he spread of HIV/AtDS among street-oriented New York City youth up to age 24

who are at greatest risk. We work collectively to create a safe, nurturing environment that promotes self-determination and community. In their outreach, our Peer Educators distribute safer-sex supplies and encourage, teach and empower other al -risk youth to save their own lives. NYPAEC is committed to the crucial work of reaching out to our communities with dignity. Brigitte Alexander M.O., Brian Berk, LaOedra Brown , Lourdes Follins, Maya Iwata, Samuel Johnson Ill. Carena Jones , Chatina Jones, Oes'ree McGraw, Shelia Mullan , Randy Sell.

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