MALIBU, Calif.--(BUSINESS WIRE)--JAKKS Pacific, Inc. (NASDAQ: JAKK) reported results for the Company’s second quarter and first six months ended June 30, 2011.
Net sales for the second quarter of 2011 were $131.9 million, compared to $123.3 million reported in the comparable period last year; and net sales for the six months were $204.3 million, compared to $200.6 million in 2010. Net income for the second quarter was $4.2 million, or $0.16 per diluted share, compared to $3.0 million, or $0.11 per diluted share, reported in the second quarter of 2010. The net loss reported for the six month period was $6.3 million, or $0.23 per diluted share, compared to a loss for the first six months of 2010 of $2.2 million, or $0.08 per diluted share which included a tax benefit adjustment of $4.9 million, or $0.18 per diluted share. Excluding the tax benefit the 2010 six month loss would have been $7.1 million or $0.26 per diluted share.
“Today we are excited to have announced in a separate release a global content distribution agreement with Nickelodeon, the leading children’s entertainment network for worldwide broadcast rights to the new original animated entertainment franchise Monsuno™,” remarked Stephen Berman, CEO and President of JAKKS Pacific. “This represents a milestone for our Company in developing a proprietary entertainment property such as Monsuno, which was initiated by JAKKS Pacific and has been developed in a joint venture with Dentsu Entertainment USA, FremantleMedia Enterprises and The Topps Company. In addition to having the exclusive worldwide rights to the toy line we are manufacturing based on the animated series, which is expected to have its initial broadcast in Spring 2012, we anticipate that this property will cross over into multiple entertainment and licensing opportunities, and represents an important achievement for the Company in its development and exploitation of children’s content and proprietary properties.”
“Our results for the second quarter reflect our commitment to tightening controls on our overall business and creating and delivering diverse products that are well received by our customers and consumers. We began shipping some of our new toys, electronics and Halloween costumes for the second half of the year with the bulk expected to ship during the third and fourth quarter,” Mr. Berman also noted.
“We are also pleased to announce that our Board of Directors has authorized a regular quarterly cash dividend of 10 cents per common share, payable to holders of the Company’s common stock,” Mr. Berman continued. “The first such quarterly dividend of 10 cents per common share is payable October 3, 2011 to shareholders of record as of September 15, 2011.” Mr. Berman noted, “The adoption by JAKKS Board of a quarterly dividend policy reflects the Company’s history of generating substantial cash flow and its strong balance sheet, as well as the Board’s confidence in our long-term outlook, and demonstrates its commitment to enhancing shareholder value.”
“We continue to maintain tight reins on our overall business and work to achieve growth in earnings despite the challenging economic and retail environments,” commented Joel Bennett. “We remain confident we will achieve our earnings guidance for this year in the range of $1.32 to $1.35 per diluted share on net sales of $770 to $775 million.”
Operations used cash of $14.6 million for the first six months of 2011 with inventory and accounts receivable at seasonal highs, and as of June 30, 2011, the Company’s working capital was $372.8 million, including cash and equivalents and marketable securities of $247.1 million.
Conference Call
JAKKS Pacific will webcast its second quarter earnings conference call at 9:00a.m. ET (6:00a.m. PT) today. To listen to the live webcast, go to investors.jakks.com, and click on the earnings webcast link under Events and Presentations at least 10 minutes prior to register, download and install any necessary audio software. A telephonic playback can be accessed by calling (888) 203-1112, or (719) 325-4745 for international callers, pass code “8400231,” and will be available from approximately one hour after the call concludes, through July 20, 2011.
About JAKKS Pacific, Inc.
JAKKS Pacific, Inc. (NASDAQ: JAKK) is a leading designer and marketer of toys and consumer products, with a wide range of products that feature some of the most popular brands and children's toy licenses in the world. JAKKS’ diverse portfolio includes Action Figures, Electronics, Dolls, Dress-Up, Role Play, Halloween Costumes, Kids Furniture, Vehicles, Plush, Art Activity Kits, Seasonal Products, Infant/Pre-School, Construction Toys and Pet Toys sold under various proprietary brands including JAKKS Pacific®, Creative Designs International™, Road Champs®, Funnoodle®, JAKKS Pets™, Plug It In & Play TV Games™, Kids Only!™, Tollytots® and Disguise™. JAKKS is an award-winning licensee of several hundred nationally and internationally known trademarks including Disney®, Nickelodeon®, Warner Bros.®, Ultimate Fighting Championship®, Hello Kitty®, Graco®, Cabbage Patch Kids® and Pokémon®. www.jakks.com
This press release may contain forward-looking statements (within the meaning of the Private Securities Litigation Reform Act of 1995) that are based on current expectations, estimates and projections about JAKKS Pacific's business based partly on assumptions made by its management. These statements are not guarantees of future performance and involve risks, uncertainties and assumptions that are difficult to predict. Therefore, actual outcomes and results may differ materially from what is expressed or forecasted in such statements due to numerous factors, including, but not limited to, those described above, changes in demand for JAKKS' products, product mix, the timing of customer orders and deliveries, the impact of competitive products and pricing, and difficulties with integrating acquired businesses. Continued payment of the quarterly cash dividend will depend on depend on many factors, including, but not limited to, JAKKS' earnings, financial condition, business development needs, and is at the discretion of the Board of Directors. The forward-looking statements contained herein speak only as of the date on which they are made, and JAKKS undertakes no obligation to update any of them to reflect events or circumstances after the date of this release.
© 2011 JAKKS Pacific, Inc. All rights reserved.
| JAKKS Pacific, Inc. and Subsidiaries | ||||||||||||||||||
| Condensed Consolidated Balance Sheets | ||||||||||||||||||
| June 30, | December 31, | |||||||||||||||||
| 2011 | 2010 | |||||||||||||||||
| (In thousands) | ||||||||||||||||||
| ASSETS | ||||||||||||||||||
| Current assets: | ||||||||||||||||||
| Cash and cash equivalents | $ | 246,846 | $ | 278,346 | ||||||||||||||
| Marketable securities | 210 | 207 | ||||||||||||||||
| Accounts receivable, net | 109,327 | 122,476 | ||||||||||||||||
| Inventory, net | 55,257 | 43,230 | ||||||||||||||||
| Income taxes receivable | 18,871 | 19,052 | ||||||||||||||||
| Deferred income taxes | 23,882 | 23,576 | ||||||||||||||||
| Prepaid expenses and other current assets | 34,109 | 25,275 | ||||||||||||||||
| Total current assets | 488,502 | 512,162 | ||||||||||||||||
| Property and equipment | 79,162 | 76,150 | ||||||||||||||||
| Less accumulated depreciation and amortization | 58,506 | 59,204 | ||||||||||||||||
| Property and equipment, net | 20,656 | 16,946 | ||||||||||||||||
| Goodwill | 6,988 | 6,988 | ||||||||||||||||
| Trademarks & other assets, net | 38,044 | 38,388 | ||||||||||||||||
| Deferred income taxes | 58,856 | 58,848 | ||||||||||||||||
| Investment in joint venture | 1,846 | 74 | ||||||||||||||||
| Total assets | $ | 614,892 | $ | 633,406 | ||||||||||||||
| LIABILITIES AND STOCKHOLDERS' EQUITY | ||||||||||||||||||
| Current liabilities: | ||||||||||||||||||
| Accounts payable and accrued expenses | $ | 89,390 | $ | 90,389 | ||||||||||||||
| Reserve for sales returns and allowances | 16,888 | 28,378 | ||||||||||||||||
| Income taxes payable | 9,382 | 6,143 | ||||||||||||||||
| Total current liabilities | 115,660 | 124,910 | ||||||||||||||||
| Long term debt | 90,823 | 89,458 | ||||||||||||||||
| Other liabilities | 1,579 | 1,625 | ||||||||||||||||
| Income taxes payable | 4,497 | 5,005 | ||||||||||||||||
| Total liabilities | 212,559 | 220,998 | ||||||||||||||||
| Stockholders' equity: | ||||||||||||||||||
| Common stock, $.001 par value | 27 | 28 | ||||||||||||||||
| Additional paid-in capital | 293,082 | 302,425 | ||||||||||||||||
| Treasury Stock | - | (5,641 | ) | |||||||||||||||
| Retained earnings | 113,549 | 119,884 | ||||||||||||||||
| Accumulated other comprehensive income (loss) | (4,325 | ) | (4,288 | ) | ||||||||||||||
| 402,333 | 412,408 | |||||||||||||||||
| Total liabilities and stockholders' equity | $ | 614,892 | $ | 633,406 | ||||||||||||||
| JAKKS Pacific, Inc. and Subsidiaries | |||||||||||||||||||||||||||||
| Second Quarter Earnings Announcement, 2011 | |||||||||||||||||||||||||||||
| Condensed Statements of Income (Unaudited) | |||||||||||||||||||||||||||||
| Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||||||||||
| 2011 | 2010 | 2011 | 2010 | ||||||||||||||||||||||||||
| (In thousands, expect per share data) | (In thousands, expect per share data) | ||||||||||||||||||||||||||||
| Net sales | $ | 131,930 | $ | 123,255 | $ | 204,253 | $ | 200,600 | |||||||||||||||||||||
| Less cost of sales | |||||||||||||||||||||||||||||
| Cost of goods | 70,552 | 66,359 | 110,371 | 108,886 | |||||||||||||||||||||||||
| Royalty expense | 14,070 | 11,402 | 20,936 | 19,408 | |||||||||||||||||||||||||
| Amortization of tools and molds | 2,216 | 2,265 | 3,583 | 3,844 | |||||||||||||||||||||||||
| Cost of sales | 86,838 | 80,026 | 134,890 | 132,138 | |||||||||||||||||||||||||
| Gross profit | 45,092 | 43,229 | 69,363 | 68,462 | |||||||||||||||||||||||||
| Direct selling expenses | 9,646 | 7,855 | 17,811 | 16,650 | |||||||||||||||||||||||||
| Selling, general and administrative expenses | 30,595 | 31,026 | 59,841 | 58,951 | |||||||||||||||||||||||||
| Depreciation and amortization | 2,853 | 3,074 | 4,503 | 5,215 | |||||||||||||||||||||||||
| Income (loss) from operations | 1,998 | 1,274 | (12,792 | ) | (12,354 | ) | |||||||||||||||||||||||
| Other income (expense): | |||||||||||||||||||||||||||||
| Income from video game joint venture | 6,000 | 6,000 | 6,000 | 6,000 | |||||||||||||||||||||||||
| Equity in net income (loss) of joint venture | (8 | ) | 1 | ||||||||||||||||||||||||||
| Interest income | 122 | 95 | 227 | 152 | |||||||||||||||||||||||||
| Interest expense, net of benefit | (2,025 | ) | (3,007 | ) | (4,065 | ) | (4,204 | ) | |||||||||||||||||||||
| Income (loss) before provision (benefit) for income taxes | 6,087 | 4,362 | (10,629 | ) | (10,406 | ) | |||||||||||||||||||||||
| Provision (benefit) for income taxes | 1,847 | 1,387 | (4,294 | ) | (8,224 | ) | |||||||||||||||||||||||
| Net income (loss) | $ | 4,240 | $ | 2,975 | $ | (6,335 | ) | $ | (2,182 | ) | |||||||||||||||||||
| Earnings (loss) per share | $ | 0.16 | $ | 0.11 | $ | (0.23 | ) | $ | (0.08 | ) | |||||||||||||||||||
| Shares used in earnings (loss) per share | 27,096 | 27,672 | 27,095 | 27,388 | |||||||||||||||||||||||||