DSI Toys designs, develops, markets and distributes high quality, value-priced toys and children's consumer electronics. The Company's core product categories are (i) juvenile audio products, including walkie-talkies, pre-school audio products, pre-teen audio products and musical toys; (ii) girls' toys, including dolls, play sets and accessories; and (iii) boys' toys, including radio control vehicles, action figures and western and military
action toys. Founded in 1970, the Company historically was principally a supplier of non-proprietary toys to deep discount stores and regional drug store chains. With the addition of new senior management personnel in 1990, the Company began to market its expanding product line to major toy retailers by emphasizing innovative packaging and developing in-house brands. Further, in fiscal 1993, the Company began to emphasize the development and marketing of proprietary products, consisting of toys developed by the Company incorporating concepts licensed from outside inventors, products designed in-
house, products for which the Company owns the mold and products incorporating
well-known trademarks licensed to the Company.