RC2 recalls five more Thomas & Friends wooden toys

Oak Brook-based RC2 Corp., the designer of collectible toys, said it's voluntarily recalling 269,000 Chinese-made Thomas & Friends Wooden Railway products, the second such move in three months, because lead in the paint may exceed government levels.

The shares fell the most in seven weeks. The recall affects 200,000 toys in the U.S. and 69,000 more outside the country, RC2 said today in a statement. No injuries or illnesses have been reported, the toymaker said.

RC2's announcement follows a recall of 21 million toys by Mattel Inc., the world's toymaker, since August, including about 2.8 million for lead. RC2 said it retested 1,500 Thomas products after the recall of 1.5 million wooden railroad toys in June. It has also implemented a toy-safety system.

The company said today in a regulatory filing it will incur costs of $13 million to $14 million after taxes for the returns, legal costs from lawsuits and other recall-related items.

The recalled Thomas toys were made before April 30, 2007, the company said. Lead may be toxic if ingested by children and can cause brain damage and learning problems.

The June recall represented about 4 percent of wooden railway unit sales in the U.S., RC2 said at the time.

About 80 percent of the world's toys are made in China, the world's biggest exporter of consumer products. The country has faced pressure from global regulators to strengthen safety checks after products from contaminated toothpaste to tainted pet food were recalled.

RC2 fell $2.49, or 8.6 percent, to $26.50 as of 4 p.m. New York time in Nasdaq Stock Market composite trading. The stock has slumped 40 percent this year.