With Design Reports $1.2-Million Quarterly Loss

With Design in Mind International Inc., a troubled Chatsworth toy and novelty gift company whose two top executives were ousted in June amid allegations of misconduct, reported a large loss and decline in sales in its latest quarter.

With Design lost $1.24 million in its fiscal third quarter ended June 30, while sales fell 72%, to $521,126. A year earlier, it lost $424,406 on sales of $1.88 million.

Sheldon F. Morick, With Design’s newly appointed president and chief executive, said the drop in overall sales reflected the end of revenues from its sale of a patented optical system to Sega Enterprises Ltd., for use in Sega’s “Hologram Time Traveler” arcade video game. The company also took $217,000 in write-downs of some of its gift products, and another $112,000 in write-downs of equipment and product development costs.

With Design’s nine-month loss was $2.76 million, in contrast with a $683,181 loss a year before. Sales fell 19%, to $2.9 million from $3.59 million.

Two months ago Steve Zuloff, chairman and chief executive of With Design, and Barry R. Benjamin, president and chief financial officer, resigned pending a board investigation into alleged misconduct. To date, the company has declined to discuss the nature of the alleged misconduct.