MEGA BRANDS REPORTS SECOND QUARTER 2010 RESULTS

MEGA Brands Inc. (TSX: MB) announced today its financial results for the second quarter and six months ended June 30, 2010. (All figures are expressed in US dollars.)

Net sales increased 12% to $78.8 million compared to $70.1 million in the second quarter of 2009. Net earnings were $1.2 million or nil per diluted share compared to a net loss of $13.3 million or $0.36 per diluted share in the second quarter of 2009.

Net sales were higher in both North America and International, led by a solid increase in Toys shipments and stable sales of Stationery and Activities products. The growth in toy sales reflects a continued strong performance in the Preschool category, increased sales in the Boys category led by Halo, Iron Man 2, initial shipments of Dragons Universe and a steady performance in Games and Puzzles.

‘‘We are pleased to report a third consecutive quarter of year-over-year improvement in net sales and gross margins, and a positive outlook for the balance of 2010,’’ said Marc Bertrand, President and CEO.

‘‘For the second half of the year, we are well-positioned with more shelf space at retail, the launch of Thomas & Friends in international markets in the third quarter and the full global roll-out of our exciting Dragons Universe product line supported by TV advertising in North America beginning this month.’’ For the six-month period ended June 30, 2010, net sales are up 13% to $127.9 million compared to $113.7 million in the same period last year. Net earnings were $99.4 million or $0.53 per diluted share compared to a loss of $39.2 million or $(1.07) per diluted share in the corresponding period of 2009. In the first quarter of 2010, the Corporation recognized a non-cash gain on settlement of debt which increased net earnings by $0.68 per diluted share.

MD&A Filing

This press release should be read in conjunction with the Corporation’s Management’s Discussion and Analysis (the ‘‘MD&A’’) as well as the unaudited consolidated financial statements and notes for the three- and six-month periods ended June 30, 2010 and 2009. The Corporation will file these documents today via SEDAR. The MD&A, financial statements and notes will be posted today on the Corporation’s Web site.

Conference Call

A conference call will be held at 9:00 a.m. today to discuss the results and business outlook. Participants may listen to the call by dialing (647) 427-7450 or 1 (888) 231-8191. For those unable to participate, a replay will be available until August 20, 2010. The replay phone number is (416) 849-0833 or (514) 807- 9274, access code 92430083.