Children's book publisher Trudy Corp., which has struggled financially since a failed merger several years ago, posted earnings of $101,626 for the second quarter ended September 30, 2001, compared to a net loss of $149,523 in last year's second period. Sales at the company jumped 311%, to $1.3 million. For the six-month period, revenues rose 171%, to $1.7 million, and the net loss was reduced to $70,012 from $491,767.

In its filing with the Securities and Exchange Commission, Trudy attributed the improvement in the quarter to its decision to reformat its existing content—which is mainly "books plus" products released under the Soundprints imprint, for sale through mass merchants and warehouse clubs. The company also benefited in the quarter from a new direct-mail campaign and lower discounts to customers.

Despite the gains made in the quarter, Trudy still faces liquidity problems. The company has a working capital deficiency of $14.9 million and has been funded recently by loans from its chairman, William Burnham, and another shareholder, including a $475,000 bridge loan made in August. In October, Trudy borrowed $100,000 from Burnham. The publisher hopes that continued increased sales will help ease its liquidity problems, and also noted that it expects to be able to continue to borrow money from its shareholders, albeit at lower levels than in the past. The company is also continuing to explore merger opportunities.