SANTA MONICA, Calif.--(BUSINESS WIRE)--JAKKS Pacific, Inc. (NASDAQ: JAKK) today reported financial results for the third quarter ended September 30, 2023.
Third Quarter 2023 Overview
- Net sales were $309.7 million, a year-over-year decrease of 4%
- Toys/Consumer Products were $246.0 million, a year-over-year decrease of 9%
- Costumes were $63.7 million, a year-over-year increase of 19%
- Costumes year-to-date are $122.3 million, a year-over-year decrease of 9%
- Gross margin of 34.5%, up 600 basis points vs. Q3 2022
- Gross profit of $107.0 million, up 16% compared to $91.9 million in Q3 2022
- Year-to-date gross profit of $189.6 million, up 4% compared to $182.7 million in 2022
- Operating income of $62.4 million (20.1% of net sales) in Q3 2023 vs. $53.7 million (16.7% of net sales) in Q3 2022
- Year-to-date operating income of $74.4 million (12.7% of net sales) vs. $76.7 million (11.6% of net sales) for the comparable period in 2022
- Net income attributable to common stockholders of $47.8 million or $4.53 per diluted share, compared to net income attributable to common stockholders of $30.3 million or $2.96 per diluted share in Q3 2022
- Adjusted net income attributable to common stockholders (a non-GAAP measure) of $50.1 million or $4.75 per diluted share, compared to adjusted net income attributable to common stockholders of $39.0 million or $3.80 per diluted share in Q3 2022
- Adjusted EBITDA (a non-GAAP measure) of $67.1 million vs. $59.4 million in Q3 2022
- Trailing twelve month Adjusted EBITDA of $74.5 million (10.4% of trailing twelve months net sales) down from $93.5 million (11.0% of net sales) in the trailing twelve months ended September 2022.
Management Commentary
"Although we have seen activity at retail slowing, our business continued to perform well throughout the third quarter. Retail sell-through at our Top 3 accounts in the US were down low single digits on a year-to-date basis, while our inventory at those accounts is down over 20% year-over-year" said Stephen Berman, CEO of JAKKS Pacific. "A more predictable supply-chain and lower promotional activity than last year has resulted in significantly improved product margins, building on the continued rigor and collaboration between our development and sourcing teams. Of note, our Action Play & Collectibles business was up 43% in the quarter, and with $184.1 million shipped through Q3, is up 37% compared to last year. We are looking forward to the holiday season and have recently finished great customer meetings previewing our Fall 2024 product line. We are exceeding our own internal expectations for the full-year and are carefully navigating towards the end of the year given the persistent uncertainty about consumer behavior.
"Also in the quarter, we saw our Costumes business seasonality returning to more traditional levels and catching up on a year-to-date basis. Although down 9% in year-to-date shipping vs. 2022, globally, we remain +24% vs. the same period in 2021, along with significantly improved margins. Our view of 2023 Halloween shopping in the US was that it was a bit softer overall. We see that in our data and in referencing syndicated market data. The latter suggests we have retained and expanded our market leadership position, but final syndicated data won't be available until later this month.
"Finally, during the third quarter, we officially opened our new office and internally operated warehouse in Italy to better serve that market and Southern Europe broadly starting in 2024. We are very focused on maximizing our presence across the EU given the current strength of our product line. We nonetheless continue to proactively manage our owned inventory, increasing our internal discipline around turns and maximizing our cash position. Our Q3 ending inventory level of $68.8 million is the lowest Q3 level since 2020, down 37% from this time last year. We are always striving to improve our internal operations to remain competitive and the partner of choice for our customers, licensors and vendors.
It is gratifying to see the team continue to deliver exceptional, consistent results. Everyone in our company remains 100% focused on delivering great toys, costumes and other consumer products relevant to today's children. Our evergreen category assortment and product lines have never been stronger, which continue to enhance our financial position and resilience."
Third Quarter 2023 Results
Net sales for the third quarter of 2023 were $309.7 million, down 4% versus $323.0 million last year. The Toys/Consumer Products segment sales were down 9% globally (-10% North America; -4% International) and sales of Disguise costumes were up 19% compared to last year (23% North America; -13% International) as Halloween customers ordering reverted to more traditional seasonality.
Year-to-date Toys/Consumer Products sales were down 13% over the comparable 2022 period. Year-to-date the Costumes segment was down 9% over the comparable 2022 period.
Year-to-date adjusted net income attributable to common stockholders was $59.4 million ($5.66 per diluted share), compared to $57.5 million ($5.68 per diluted share) in the first nine months of 2022. Year-to-date adjusted EBITDA of $86.6 million (14.8% of net sales) declined from $88.5 million (13.3% of net sales) in the comparable 2022 period.
Balance Sheet Highlights
The Company's cash and cash equivalents (including restricted cash) totaled $96.4 million as of September 30, 2023 compared to $76.6 million as of September 30, 2022, and $85.5 million as of December 31, 2022.
Total debt was zero, compared to $67.7 million as of September 30, 2022, and $67.2 million as of December 31, 2022. Total debt included the amount outstanding under the Company's term loan, net of unamortized discounts and issuance costs.
Inventory was $68.8 million, compared to $109.2 million as of September 30, 2022 and $80.6 million in total inventory as of December 31, 2022.
Use of Non-GAAP Financial Information
In addition to the preliminary results reported in accordance with U.S. GAAP included in this release, the Company has provided certain non-GAAP financial information including Adjusted EBITDA which is a non-GAAP metric that excludes various items that are detailed in the financial tables and accompanying footnotes reconciling GAAP to non-GAAP results contained in this release. Management believes that the presentation of these non-GAAP financial measures provides useful information to investors because the information may allow investors to better evaluate ongoing business performance and certain components of the Company's results. In addition, the Company believes that the presentation of these financial measures enhances an investor's ability to make period-to-period comparisons of the Company's operating results. This information should be considered in addition to the results presented in accordance with GAAP, and should not be considered a substitute for the GAAP results. The Company has reconciled the non-GAAP financial information included in this release to the nearest GAAP measures. See the attached "Reconciliation of Non-GAAP Financial Information." "Total liquidity" is calculated as cash and cash equivalents, plus availability under the Company's $67.5 million revolving credit facility.
Conference Call Live Webcast
JAKKS Pacific, Inc. invites analysts, investors and media to listen to the teleconference scheduled for 5:00 p.m. ET / 2:00 p.m. PT on November 1, 2023. A live webcast of the call will be available on the "Investor Relations" page of the Company's website at www.jakks.com/investors. To access the call by phone, please go to this link (3Q23 Registration link), and you will be provided with dial in details. To avoid delays, we encourage participants to dial into the conference call fifteen minutes ahead of the scheduled start time. A replay of the webcast will also be available for a limited time at (www.jakks.com/investors).
About JAKKS Pacific, Inc.
JAKKS Pacific, Inc. is a leading designer, manufacturer and marketer of toys and consumer products sold throughout the world, with its headquarters in Santa Monica, California. JAKKS Pacific's popular proprietary brands include Fly Wheels®, Perfectly Cute®, ReDo® Skateboard Co., AirTitans®, Sky Ball®, JAKKS Wild Games, Moose Mountain®, Maui®, SportsZone, Kids Only!, Xtreme Power Dozer®, Disguise®, WeeeDo®, Ami Amis and a wide range of entertainment-inspired products featuring premier licensed properties. Through JAKKS Cares, the company's commitment to philanthropy, JAKKS is helping to make a positive impact on the lives of children. Visit us at www.jakks.com and follow us on Instagram (@jakkspacific.toys), X (@JAKKStoys), and Facebook (@jakkspacific.toys).
Forward Looking Statements
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 Pacific's products, product mix, the timing of customer orders and deliveries, the impact of competitive products and pricing, or that the Recapitalization transaction or any future transactions will result in future growth or success of JAKKS. 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.
| JAKKS Pacific, Inc. and Subsidiaries | ||||||||||||||||
| Condensed Consolidated Balance Sheets (Unaudited) | ||||||||||||||||
September 30, | December 31, | |||||||||||||||
2023 | 2022 | 2022 | ||||||||||||||
(In thousands) | ||||||||||||||||
| Assets | ||||||||||||||||
| Current assets: | ||||||||||||||||
| Cash and cash equivalents | $ | 96,252 | $ | 76,418 | $ | 85,297 | ||||||||||
| Restricted cash | 195 | 178 | 193 | |||||||||||||
| Accounts receivable, net | 206,751 | 204,856 | 102,771 | |||||||||||||
| Inventory | 68,832 | 109,171 | 80,619 | |||||||||||||
| Prepaid expenses and other assets | 6,721 | 11,124 | 6,331 | |||||||||||||
| Total current assets | 378,751 | 401,747 | 275,211 | |||||||||||||
| Property and equipment | 135,821 | 131,918 | 130,437 | |||||||||||||
| Less accumulated depreciation and amortization | 121,193 | 116,558 | 115,575 | |||||||||||||
| Property and equipment, net | 14,628 | 15,360 | 14,862 | |||||||||||||
| Operating lease right-of-use assets, net | 25,743 | 22,154 | 19,913 | |||||||||||||
| Deferred income tax assets, net | 57,856 | - | 57,804 | |||||||||||||
| Goodwill | 35,083 | 35,083 | 35,083 | |||||||||||||
| Intangibles and other assets, net | 2,220 | 2,770 | 2,469 | |||||||||||||
| Total assets | $ | 514,281 | $ | 477,114 | $ | 405,342 | ||||||||||
| Liabilities, Preferred Stock and Stockholders' Equity | ||||||||||||||||
| Current liabilities: | ||||||||||||||||
| Accounts payable | $ | 94,409 | $ | 77,126 | $ | 33,687 | ||||||||||
| Accounts payable - Meisheng (related party) | 27,977 | 28,301 | 9,820 | |||||||||||||
| Accrued expenses | 65,609 | 73,723 | 37,998 | |||||||||||||
| Reserve for sales returns and allowances | 43,512 | 59,216 | 51,877 | |||||||||||||
| Income taxes payable | 17,422 | 14,084 | 8,165 | |||||||||||||
| Short term operating lease liabilities | 6,415 | 10,515 | 10,746 | |||||||||||||
| Short term debt, net | - | 2,475 | 25,529 | |||||||||||||
| Total current liabilities | 255,344 | 265,440 | 177,822 | |||||||||||||
| Long term operating lease liabilities | 19,283 | 12,555 | 9,863 | |||||||||||||
| Accrued expenses - long term | 3,750 | - | - | |||||||||||||
| Debt, non-current portion, net | - | 65,195 | 41,622 | |||||||||||||
| Preferred stock derivative liability | 28,586 | 23,347 | 21,918 | |||||||||||||
| Income taxes payable | 2,994 | 66 | 2,929 | |||||||||||||
| Deferred income tax liabilities, net | - | 53 | - | |||||||||||||
| Total liabilities | 309,957 | 366,656 | 254,154 | |||||||||||||
| Preferred stock accrued dividends | 5,608 | 4,128 | 4,490 | |||||||||||||
| Stockholders' equity: | ||||||||||||||||
| Common stock, $.001 par value | 10 | 10 | 10 | |||||||||||||
| Additional paid-in capital | 277,546 | 274,040 | 275,187 | |||||||||||||
| Accumulated deficit | (62,744 | ) | (149,987 | ) | (112,018 | ) | ||||||||||
| Accumulated other comprehensive loss | (16,808 | ) | (18,594 | ) | (17,482 | ) | ||||||||||
| Total JAKKS Pacific, Inc. stockholders' equity | 198,004 | 105,469 | 145,697 | |||||||||||||
| Non-controlling interests | 712 | 861 | 1,001 | |||||||||||||
| Total stockholders' equity | 198,716 | 106,330 | 146,698 | |||||||||||||
| Total liabilities, preferred stock and stockholders' equity | $ | 514,281 | $ | 477,114 | $ | 405,342 | ||||||||||
| Supplemental Balance Sheet and Cash Flow Data (Unaudited) | ||||||||||||||||
September 30, | ||||||||||||||||
| Key Balance Sheet Data: | 2023 | 2022 | ||||||||||||||
| Accounts receivable days sales outstanding (DSO) | 61 | 58 | ||||||||||||||
| Inventory turnover (DSI) | 31 | 44 | ||||||||||||||
Nine Months Ended
| ||||||||||||||||
| Condensed Cash Flow Data: | 2023 | 2022 | ||||||||||||||
| (In thousands) | ||||||||||||||||
| Cash flows provided by operating activities | $ | 89,421 | $ | 75,261 | ||||||||||||
| Cash flows used in investing activities | (7,427 | ) | (8,087 | ) | ||||||||||||
| Cash flows used in financing activities and other | (71,037 | ) | (35,910 | ) | ||||||||||||
| Increase (Decrease) in cash, cash equivalents and restricted cash | $ | 10,957 | $ | 31,264 | ||||||||||||
| Capital expenditures | $ | (7,464 | ) | $ | (8,089 | ) | ||||||||||
JAKKS Pacific, Inc. and Subsidiaries | |||||||||||||||||||||||
Condensed Consolidated Statements of Operations (Unaudited) | |||||||||||||||||||||||
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
2023 | 2022 | ? (%) | 2023 | 2022 | ? (%) | ||||||||||||||||||
| (In thousands, except per share data) | (In thousands, except per share data) | ||||||||||||||||||||||
| Net sales | $ | 309,744 | $ | 322,998 | (4 | )% | $ | 584,161 | $ | 664,301 | (12 | )% | |||||||||||
| Less: Cost of sales | |||||||||||||||||||||||
| Cost of goods | 149,052 | 174,334 | (15 | ) | $ | 293,512 | 368,242 | (20 | ) | ||||||||||||||
| Royalty expense | 51,141 | 52,868 | (3 | ) | 95,074 | 106,262 | (11 | ) | |||||||||||||||
| Amortization of tools and molds | 2,566 | 3,885 | (34 | ) | 5,955 | 7,079 | (16 | ) | |||||||||||||||
| Cost of sales | 202,759 | 231,087 | (12 | ) | 394,541 | 481,583 | (18 | ) | |||||||||||||||
| Gross profit | 106,985 | 91,911 | 16 | 189,620 | 182,718 | 4 | |||||||||||||||||
| Direct selling expenses | 10,684 | 8,397 | 27 | 22,405 | 20,137 | 11 | |||||||||||||||||
| General and administrative expenses | 33,821 | 29,400 | 15 | 92,492 | 84,067 | 10 | |||||||||||||||||
| Depreciation and amortization | 81 | 373 | (78 | ) | 276 | 1,547 | (82 | ) | |||||||||||||||
| Selling, general and administrative expenses | 44,586 | 38,170 | 17 | 115,173 | 105,751 | 9 | |||||||||||||||||
| Intangibles impairment | - | - | - | - | 300 | nm | |||||||||||||||||
| Income from operations | 62,399 | 53,741 | 16 | 74,447 | 76,667 | (3 | ) | ||||||||||||||||
| Other income (expense): | |||||||||||||||||||||||
| Loss from joint ventures | - | - | - | (565 | ) | - | nm | ||||||||||||||||
| Other income (expense), net | (52 | ) | 251 | nm | 424 | 520 | (18 | ) | |||||||||||||||
| Change in fair value of preferred stock derivative liability | (793 | ) | (7,449 | ) | (89 | ) | (6,668 | ) | (2,065 | ) | 223 | ||||||||||||
| Loss on debt extinguishment | - | - | - | (1,023 | ) | - | nm | ||||||||||||||||
| Interest income | 384 | 55 | nm | 587 | 64 | nm | |||||||||||||||||
| Interest expense | (1,436 | ) | (4,350 | ) | (67 | ) | (5,741 | ) | (8,889 | ) | (35 | ) | |||||||||||
| Income before provision for income taxes | 60,502 | 42,248 | 43 | 61,461 | 66,297 | (7 | ) | ||||||||||||||||
| Provision for income taxes | 12,381 | 11,572 | 7 | 12,476 | 13,323 | (6 | ) | ||||||||||||||||
| Net income | 48,121 | 30,676 | 57 | 48,985 | 52,974 | (8 | ) | ||||||||||||||||
| Net loss attributable to non-controlling interests | (11 | ) | (17 | ) | (35 | ) | (289 | ) | (470 | ) | (39 | ) | |||||||||||
| Net income attributable to JAKKS Pacific, Inc. | $ | 48,132 | $ | 30,693 | 57 | % | $ | 49,274 | $ | 53,444 | (8 | )% | |||||||||||
| Net income attributable to common stockholders | $ | 47,754 | $ | 30,336 | 57 | % | $ | 48,156 | $ | 52,390 | (8 | )% | |||||||||||
| Earnings per share - basic | $ | 4.77 | $ | 3.13 | $ | 4.85 | $ | 5.44 | |||||||||||||||
| Shares used in earnings per share - basic | 10,021 | 9,695 | 9,922 | 9,624 | |||||||||||||||||||
| Earnings per share - diluted | $ | 4.53 | $ | 2.96 | $ | 4.58 | $ | 5.18 | |||||||||||||||
| Shares used in earnings per share - diluted | 10,542 | 10,260 | 10,503 | 10,111 | |||||||||||||||||||
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
2023 | 2022 | ? bps | 2023 | 2022 | ? bps | ||||||||||||||||||
Fav/(Unfav) | Fav/(Unfav) | ||||||||||||||||||||||
| Net sales | 100.0 | % | 100.0 | % | - | 100.0 | % | 100.0 | % | - | |||||||||||||
| Less: Cost of sales | |||||||||||||||||||||||
| Cost of goods | 48.2 | 54.0 | 580 | 50.2 | 55.4 | 520 | |||||||||||||||||
| Royalty expense | 16.5 | 16.3 | (20 | ) | 16.3 | 16.0 | (30 | ) | |||||||||||||||
| Amortization of tools and molds | 0.8 | 1.2 | 40 | 1.0 | 1.1 | 10 | |||||||||||||||||
| Cost of sales | 65.5 | 71.5 | 600 | 67.5 | 72.5 | 500 | |||||||||||||||||
| Gross profit | 34.5 | 28.5 | 600 | 32.5 | 27.5 | 500 | |||||||||||||||||
| Direct selling expenses | 3.5 | 2.6 | (90 | ) | 3.8 | 3.0 | (80 | ) | |||||||||||||||
| General and administrative expenses | 10.9 | 9.1 | (180 | ) | 15.9 | 12.7 | (320 | ) | |||||||||||||||
| Depreciation and amortization | - | 0.1 | 10 | 0.1 | 0.2 | 10 | |||||||||||||||||
| Selling, general and administrative expenses | 14.4 | 11.8 | (260 | ) | 19.8 | 15.9 | (390 | ) | |||||||||||||||
| Intangibles impairment | - | - | - | - | - | - | |||||||||||||||||
| Income from operations | 20.1 | 16.7 | 340 | 12.7 | 11.6 | 110 | |||||||||||||||||
| Other income (expense): | |||||||||||||||||||||||
| Loss from joint ventures | - | - | (0.1 | ) | - | ||||||||||||||||||
| Other income (expense), net | - | 0.1 | 0.1 | - | |||||||||||||||||||
| Change in fair value of preferred stock derivative liability | (0.3 | ) | (2.3 | ) | (1.1 | ) | (0.3 | ) | |||||||||||||||
| Loss on debt extinguishment | - | - | (0.2 | ) | - | ||||||||||||||||||
| Interest income | 0.1 | - | 0.1 | - | |||||||||||||||||||
| Interest expense | (0.4 | ) | (1.4 | ) | (1.0 | ) | (1.3 | ) | |||||||||||||||
| Income before provision for income taxes | 19.5 | 13.1 | 10.5 | 10.0 | |||||||||||||||||||
| Provision for income taxes | 4.0 | 3.6 | 2.1 | 2.0 | |||||||||||||||||||
| Net income | 15.5 | 9.5 | 8.4 | 8.0 | |||||||||||||||||||
| Net loss attributable to non-controlling interests | - | - | - | - | |||||||||||||||||||
| Net income attributable to JAKKS Pacific, Inc. | 15.5 | % | 9.5 | % | 8.4 | % | 8.0 | % | |||||||||||||||
| Net income attributable to common stockholders | 15.4 | % | 9.4 | % | 8.2 | % | 7.9 | % | |||||||||||||||
| JAKKS Pacific, Inc. and Subsidiaries | |||||||||||||||||
| Reconciliation of Non-GAAP Financial Information (Unaudited) |
Reconciliation of GAAP to Non-GAAP measures:
This press release and accompanying schedules provide certain information regarding Adjusted EBITDA and Adjusted Net Income (Loss), which may be considered non-GAAP financial measures under the rules of the Securities and Exchange Commission. The non-GAAP financial measures included in the press release are reconciled to the corresponding GAAP financial measures below, as required under the rules of the Securities and Exchange Commission regarding the use of non-GAAP financial measures. We define Adjusted EBITDA as income (loss) from operations before depreciation, amortization and adjusted for certain non-recurring and non-cash charges, such as reorganization expenses and restricted stock compensation expense. Net income (loss) is similarly adjusted and tax-effected to arrive at Adjusted Net Income (Loss). Adjusted EBITDA and Adjusted Net Income (Loss) are not recognized financial measures under GAAP, but we believe that they are useful in measuring our operating performance. We believe that the use of the non-GAAP financial measures enhances an overall understanding of the Company's past financial performance, and provides useful information to the investor by comparing our performance across reporting periods on a consistent basis.
Investors should not consider these measures in isolation or as a substitute for net income, operating income, or any other measure for determining the Company's operating performance that is calculated in accordance with GAAP. In addition, because these measures are not calculated in accordance with GAAP, they may not necessarily be comparable to similarly titled measures employed by other companies.
Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||||||||||||||
2023 | 2022 | ? ($) | 2023 | 2022 | ? ($) | |||||||||||||||||||||||
| (In thousands) | (In thousands) | |||||||||||||||||||||||||||
| EBITDA and Adjusted EBITDA | ||||||||||||||||||||||||||||
| Net income | $ | 48,121 | $ | 30,676 | $ | 17,445 | $ | 48,985 | $ | 52,974 | $ | (3,989 | ) | |||||||||||||||
| Interest expense | 1,436 | 4,350 | (2,914 | ) | 5,741 | 8,889 | (3,148 | ) | ||||||||||||||||||||
| Interest income | (384 | ) | (55 | ) | (329 | ) | (587 | ) | (64 | ) | (523 | ) | ||||||||||||||||
| Provision for income taxes | 12,381 | 11,572 | 809 | 12,476 | 13,323 | (847 | ) | |||||||||||||||||||||
| Depreciation and amortization | 4,398 | 4,258 | 140 | 7,982 | 8,626 | (644 | ) | |||||||||||||||||||||
| EBITDA | 65,952 | 50,801 | 15,151 | 74,597 | 83,748 | (9,151 | ) | |||||||||||||||||||||
| Adjustments: | ||||||||||||||||||||||||||||
| Loss from joint ventures (JAKKS Pacific, Inc. - 51%) | - | - | - | 276 | - | 276 | ||||||||||||||||||||||
| Loss from joint ventures (Meisheng - 49%) | - | - | - | 289 | - | 289 | ||||||||||||||||||||||
| Other (income) expense, net | 52 | (251 | ) | 303 | (424 | ) | (520 | ) | 96 | |||||||||||||||||||
| Restricted stock compensation expense | 2,025 | 1,411 | 614 | 5,970 | 3,436 | 2,534 | ||||||||||||||||||||||
| Change in fair value of preferred stock derivative liability | 793 | 7,449 | (6,656 | ) | 6,668 | 2,065 | 4,603 | |||||||||||||||||||||
| Employee Retention Credit/gov't employment support | - | - | - | - | (249 | ) | 249 | |||||||||||||||||||||
| Molds and tooling capitalization | (1,751 | ) | - | (1,751 | ) | (1,751 | ) | - | (1,751 | ) | ||||||||||||||||||
| Loss on debt extinguishment | - | - | - | 1,023 | - | 1,023 | ||||||||||||||||||||||
| Adjusted EBITDA | $ | 67,071 | $ | 59,410 | $ | 7,661 | $ | 86,648 | $ | 88,480 | $ | (1,832 | ) | |||||||||||||||
| Adjusted EBITDA/Net sales % | 21.7 | % | 18.4 | % | 330 bps | 14.8 | % | 13.3 | % | 150 bps | ||||||||||||||||||
Trailing Twelve Months Ended
| ||||||||||||||||||||||||||||
2023 | 2022 | ? ($) | ||||||||||||||||||||||||||
| (In thousands) | ||||||||||||||||||||||||||||
| TTM EBITDA and TTM Adjusted EBITDA | ||||||||||||||||||||||||||||
| TTM Net income | $ | 87,094 | $ | 49,821 | $ | 37,273 | ||||||||||||||||||||||
| Interest expense | 8,035 | 11,090 | (3,055 | ) | ||||||||||||||||||||||||
| Interest income | (650 | ) | (67 | ) | (583 | ) | ||||||||||||||||||||||
| Provision for (benefit from) income taxes | (41,855 | ) | 13,263 | (55,118 | ) | |||||||||||||||||||||||
| Depreciation and amortization | 9,934 | 10,012 | (78 | ) | ||||||||||||||||||||||||
| TTM EBITDA | 62,558 | 84,119 | (21,561 | ) | ||||||||||||||||||||||||
| Adjustments: | ||||||||||||||||||||||||||||
| Loss from joint ventures (JAKKS Pacific, Inc. - 51%) | 276 | - | 276 | |||||||||||||||||||||||||
| Loss from joint ventures (Meisheng - 49%) | 289 | - | 289 | |||||||||||||||||||||||||
| Other (income) expense, net | (701 | ) | (710 | ) | 9 | |||||||||||||||||||||||
| Restricted stock compensation expense | 7,616 | 4,149 | 3,467 | |||||||||||||||||||||||||
| Change in fair value of convertible senior notes | - | (76 | ) | 76 | ||||||||||||||||||||||||
| Change in fair value of preferred stock derivative liability | 5,239 | 6,272 | (1,033 | ) | ||||||||||||||||||||||||
| Employee Retention Credit/gov't employment support | - | (249 | ) | 249 | ||||||||||||||||||||||||
| Molds and tooling capitalization | (1,751 | ) | - | (1,751 | ) | |||||||||||||||||||||||
| Loss on debt extinguishment | 1,023 | - | 1,023 | |||||||||||||||||||||||||
| TTM Adjusted EBITDA | $ | 74,549 | $ | 93,505 | $ | (18,956 | ) | |||||||||||||||||||||
| TTM Adjusted EBITDA/TTM Net sales % | 10.4 | % | 11.0 | % | -59 bps | |||||||||||||||||||||||
Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||||||||||||||
2023 | 2022 | ? ($) | 2023 | 2022 | ? ($) | |||||||||||||||||||||||
(In thousands, except per share data) | (In thousands, except per share data) | |||||||||||||||||||||||||||
| Adjusted net income (loss) attributable to common stockholders | ||||||||||||||||||||||||||||
| Net income attributable to common stockholders | $ | 47,754 | $ | 30,336 | $ | 17,418 | $ | 48,156 | $ | 52,390 | $ | (4,234 | ) | |||||||||||||||
| Restricted stock compensation expense | 2,025 | 1,411 | 614 | 5,970 | 3,436 | 2,534 | ||||||||||||||||||||||
| Change in fair value of preferred stock derivative liability | 793 | 7,449 | (6,656 | ) | 6,668 | 2,065 | 4,603 | |||||||||||||||||||||
| Loss on debt extinguishment | - | - | - | 1,023 | - | 1,023 | ||||||||||||||||||||||
| Employee Retention Credit/gov't employment support | - | - | - | - | (249 | ) | 249 | |||||||||||||||||||||
| Loss from joint ventures (JAKKS Pacific, Inc. - 51%) | - | - | - | 276 | - | 276 | ||||||||||||||||||||||
| 2021 BSP Term Loan prepayment penalty | - | 525 | (525 | ) | 150 | 525 | (375 | ) | ||||||||||||||||||||
| Molds and Tooling capitalization | (1,751 | ) | - | (1,751 | ) | (1,751 | ) | - | (1,751 | ) | ||||||||||||||||||
| Tax impact of additional charges | 1,268 | (697 | ) | 1,965 | (1,079 | ) | (697 | ) | (382 | ) | ||||||||||||||||||
| Adjusted net income attributable to common stockholders | $ | 50,089 | $ | 39,024 | $ | 11,065 | $ | 59,413 | $ | 57,470 | $ | 1,943 | ||||||||||||||||
| Adjusted earnings per share - basic | $ | 5.00 | $ | 4.03 | $ | 0.97 | $ | 5.99 | $ | 5.97 | $ | 0.02 | ||||||||||||||||
| Shares used in adjusted earnings per share - basic | 10,021 | 9,695 | 326 | 9,922 | 9,624 | 298 | ||||||||||||||||||||||
| Adjusted earnings per share - diluted | $ | 4.75 | $ | 3.80 | $ | 0.95 | $ | 5.66 | $ | 5.68 | $ | (0.02 | ) | |||||||||||||||
| Shares used in adjusted earnings per share - diluted | 10,542 | 10,260 | 282 | 10,503 | 10,111 | 392 | ||||||||||||||||||||||
| JAKKS Pacific, Inc. and Subsidiaries | ||||||||||||||||||||||
| Net Sales by Division and Geographic Region | ||||||||||||||||||||||
| (In thousands) | QTD Q3 | (In thousands) | YTD Q3 | |||||||||||||||||||
| Divisions | 2023 | 2022 | 2021 | % Change
|
| Divisions | 2023 | 2022 | 2021 | % Change
|
| |||||||||||
| Toys/Consumer Products | $ | 246,004 | $ | 269,607 | $ | 172,952 | -8.8 | % | 55.9 | % | Toys/Consumer Products | $ | 461,831 | $ | 529,590 | $ | 334,365 | -12.8 | % | 58.4 | % | |
| Dolls, Role-Play/Dress Up | 139,177 | 190,452 | 112,050 | -26.9 | % | 70.0 | % | Dolls, Role-Play/Dress Up | 246,689 | 354,644 | 206,483 | -30.4 | % | 71.8 | % | |||||||
| Action Play & Collectibles | 93,717 | 65,752 | 37,587 | 42.5 | % | 74.9 | % | Action Play & Collectibles | 184,134 | 134,620 | 73,614 | 36.8 | % | 82.9 | % | |||||||
| Outdoor/Seasonal Toys | 13,110 | 13,403 | 23,315 | -2.2 | % | -42.5 | % | Outdoor/Seasonal Toys | 31,008 | 40,326 | 54,268 | -23.1 | % | -25.7 | % | |||||||
| Costumes | $ | 63,740 | $ | 53,391 | $ | 64,005 | 19.4 | % | -16.6 | % | Costumes | 122,330 | 134,711 | 98,787 | -9.2 | % | 36.4 | % | ||||
| Total | $ | 309,744 | $ | 322,998 | $ | 236,957 | -4.1 | % | 36.3 | % | Total | $ | 584,161 | $ | 664,301 | $ | 433,152 | -12.1 | % | 53.4 | % | |
| (In thousands) | QTD Q3 | (In thousands) | YTD Q3 | |||||||||||||||||||
| Regions | 2023 | 2022 | 2021 | % Change
|
| Regions | 2023 | 2022 | 2021 | % Change
|
| |||||||||||
| United States | $ | 244,931 | $ | 253,854 | $ | 199,136 | -3.5 | % | 27.5 | % | United States | $ | 461,561 | $ | 543,388 | $ | 363,317 | -15.1 | % | 49.6 | % | |
| Europe | 31,676 | 38,075 | 20,836 | -16.8 | % | 82.7 | % | Europe | 58,476 | 65,911 | 38,103 | -11.3 | % | 73.0 | % | |||||||
| Canada | 11,453 | 12,804 | 8,094 | -10.6 | % | 58.2 | % | Canada | 22,306 | 21,720 | 12,403 | 2.7 | % | 75.1 | % | |||||||
| Latin America | 15,319 | 9,504 | 4,503 | 61.2 | % | 111.1 | % | Latin America | 27,590 | 15,712 | 8,123 | 75.6 | % | 93.4 | % | |||||||
| Asia | 3,192 | 4,294 | 2,635 | -25.7 | % | 63.0 | % | Asia | 6,403 | 8,733 | 6,214 | -26.7 | % | 40.5 | % | |||||||
| Australia & New Zealand | 2,692 | 3,941 | 1,490 | -31.7 | % | 164.5 | % | Australia & New Zealand | 6,056 | 7,014 | 3,927 | -13.7 | % | 78.6 | % | |||||||
| Middle East & Africa | 481 | 526 | 263 | -8.6 | % | 100.0 | % | Middle East & Africa | 1,769 | 1,823 | 1,065 | -3.0 | % | 71.2 | % | |||||||
| Total | $ | 309,744 | $ | 322,998 | $ | 236,957 | -4.1 | % | 36.3 | % | Total | $ | 584,161 | $ | 664,301 | $ | 433,152 | -12.1 | % | 53.4 | % | |
| (In thousands) | QTD Q3 | (In thousands) | YTD Q3 | |||||||||||||||||||
| Regions | 2023 | 2022 | 2021 | % Change
|
| Regions | 2023 | 2022 | 2021 | % Change
|
| |||||||||||
| North America | $ | 256,384 | $ | 266,658 | $ | 207,230 | -3.9 | % | 28.7 | % | North America | $ | 483,867 | $ | 565,108 | $ | 375,720 | -14.4 | % | 50.4 | % | |
| International | 53,360 | 56,340 | 29,727 | -5.3 | % | 89.5 | % | International | 100,294 | 99,193 | 57,432 | 1.1 | % | 72.7 | % | |||||||
| Total | $ | 309,744 | $ | 322,998 | $ | 236,957 | -4.1 | % | 36.3 | % | Total | $ | 584,161 | $ | 664,301 | $ | 433,152 | -12.1 | % | 53.4 | % | |
Contacts
JAKKS Pacific Investor Relations
(424) 268-9567
Lucas Natalini
investors@jakks.net
