JAKKS Pacific Reports Fourth Quarter and Full-Year 2023 Financial Results
- Gross profit dollars increased by 6% compared to 2022, marking the third consecutive annual increase.
- Fourth Quarter 2023 net sales were $127.4 million, a 3% decrease year-over-year.
- Gross margin improved to 26.5%, up 480 basis points from Q4 2022.
- Net loss attributable to common stockholders was $11.3 million, compared to net income of $37.6 million in Q4 2022.
- Full-year 2023 net sales were $711.6 million, an 11% decrease from the previous year.
- Gross profit for the full year was $223.4 million, up 6% from last year.
- Operating income decreased by 3% to $59.1 million compared to $61.0 million in 2022.
- Cash flows from operating activities were $66.4 million, down from $86.1 million in 2022.
- Total debt was eliminated in the first half of 2023, with cash and cash equivalents at $72.6 million.
- The Toys/Consumer Products segment saw a 1% increase in sales globally, while Costumes segment sales were down 40% in Q4 2023.
- Inventory decreased by 35% to $52.6 million compared to $80.6 million in 2022.
- Net loss attributable to common stockholders in Q4 2023 was $11.3 million, a significant decrease from the net income of $37.6 million in Q4 2022.
- Full-year 2023 net sales decreased by 11% compared to the previous year.
- Operating income declined by 3% to $59.1 million in 2023.
- Cash flows from operating activities decreased to $66.4 million in 2023 from $86.1 million in 2022.
Insights
The reported financial results of JAKKS Pacific, Inc. indicate a mixed performance for the fourth quarter and full-year 2023. A key highlight is the increase in gross profit dollars by 6%, marking the third consecutive annual increase. This suggests a strengthening of the company's profitability despite a decrease in net sales by 11% compared to the previous year. However, the company's net income has significantly decreased, from $90.0 million in 2022 to $36.9 million in 2023, which may concern investors regarding the company's bottom line performance.
Another significant development is the elimination of all long-term debt in the first half of 2023, which is a positive indicator of the company's financial health and may contribute to reduced financial risk. The reduction in inventory by 35% is also noteworthy, as it could imply better inventory management and potentially lower carrying costs. However, the decrease in cash flows from operating activities and a reduction in cash and cash equivalents could raise questions about the company's liquidity and cash management strategies.
From an investment perspective, stakeholders may need to weigh the improved gross margins against the backdrop of declining sales and net income. The improved landed product cost and reduced inventory obsolescence expense are positive indicators for operational efficiency, yet the overall profitability and revenue generation capacity of the company need careful monitoring.
The financial results of JAKKS Pacific, Inc. also provide insights into consumer behavior and market trends. The 40% decrease in sales of Costumes and a 10% decrease in Toys/Consumer Products sales year-over-year suggest a shift in consumer demand or market saturation. However, the company's performance in Costumes was 22% higher than in 2021, indicating recovery from the pandemic-era demand fluctuations.
The late holiday toy season and the company's ability to achieve positive year-over-year retail sales results in Q4 with two of their top three US Toys/Consumer Products customers reveal resilience in consumer spending in this segment. Nonetheless, the cautious approach of customers moving into the new year could signal a potential slowdown in the market.
Understanding the dynamics of the post-COVID recalibration in the Costumes segment and the flat performance in North America for the Toys/Consumer Products segment is critical for forecasting future trends and adjusting business strategies. The company's inventory reduction at retail accounts suggests a strategic move to align with current market demands and reduce overstock risks.
The financial results of JAKKS Pacific, Inc. reflect broader economic conditions, such as consumer confidence, disposable income levels and retail industry trends. The downward trend in net sales might be indicative of macroeconomic pressures affecting discretionary spending. However, the increase in gross margin suggests that the company has been successful in implementing cost-saving measures and possibly benefiting from a normalized supply chain.
The company's decision to eliminate long-term debt is a prudent fiscal move, particularly in an environment where interest rates may be rising and it could shield the company from higher interest expenses in the future. This strategic financial management is crucial for maintaining competitiveness and ensuring long-term sustainability.
Additionally, the late holiday toy season and its impact on Q4 results may reflect changing consumer behaviors and the need for retailers to adapt to a more dynamic sales calendar. The company's acknowledgment of a tentative market outlook suggests that they are aware of potential economic headwinds and are preparing accordingly.
Full-year Gross Profit Dollars up
SANTA MONICA, Calif., Feb. 29, 2024 (GLOBE NEWSWIRE) -- JAKKS Pacific, Inc. (NASDAQ: JAKK) today reported financial results for the fourth quarter ended December 31, 2023.
Fourth Quarter 2023
- Net sales were
$127.4 million , a year-over-year decrease of3% - Gross margin of
26.5% , up 480 basis points vs. Q4 2022, led by improved landed product cost and reduced inventory obsolescence expense - Gross profit of
$33.7 million , up18% compared to$28.6 million in Q4 2022 - Net loss attributable to common stockholders of
$11.3 million (or$1.12 per diluted share), compared to net income attributable to common stockholders of$37.6 million or ($3.66 per diluted share) in Q4 2022 - Adjusted net loss attributable to common stockholders (a non-GAAP measure) of
$10.5 million (or$1.04 per diluted share), compared to adjusted net loss attributable to common stockholders of$13.9 million (or$1.42 per diluted share) in Q4 2022 - Adjusted EBITDA (a non-GAAP measure) of
$(10.9) million vs.$(12.1) million in Q4 2022
Full-Year 2023
- Net sales were
$711.6 million compared to$796.2 million last year, an11% decrease - Gross margin of
31.4% compared to26.5% last year - Gross profit of
$223.4 million , up6% compared to$211.3 million last year, and the highest dollar level since 2015 - Operating income of
$59.1 million compared to$61.0 million last year; a3% decrease - Net income attributable to common stockholders of
$36.9 million , down from a net income attributable to common stockholders of$90.0 million in 2022 - Adjusted net income attributable to common stockholders of
$48.9 million ($4.62 per diluted share), up from adjusted net income attributable to common stockholders of$43.6 million ($4.29 per diluted share) in 2022 - Adjusted EBITDA of
$75.7 million , down1% versus$76.4 million in 2022 - Cash flows provided by operating activities of
$66.4 million , down from$86.1 million in 2022 - Cash used in financing activities of
$70.4 million , eliminating all long-term debt in the first half of 2023 - End of year cash and cash equivalents of
$72.6 million , down from$85.5 million in 2022
Management Commentary
“For the third consecutive year we have met or exceeded our key financial full-year targets,” said Stephen Berman, CEO of JAKKS Pacific. “The year began with the challenge of revenue comparisons with a 2022 hit-driven blockbuster product line, but we also saw opportunities for gross margin improvements with a normalized supply chain. Gross and operating margins improved year-over-year despite a
“The holiday toy season came late this year, but we were pleased with the results. Two of our top three US Toys/Consumer Products customers achieved positive year-over-year retail sales results in Q4 despite challenging comparisons from the prior year. Our aggregate end-of-year inventory at retail at those three accounts is also down by a high single digit percentage compared to last year. Although customers are tentatively moving into the new year, we believe our core businesses remain on solid footing.”
Fourth Quarter and Full-Year 2023 Results
Net sales for the fourth quarter of 2023 were
Full-year Toys/Consumer Products sales were down
Balance Sheet Highlights
The Company’s cash and cash equivalents (including restricted cash) totaled
Total debt was zero, compared to
Inventory was
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
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 February 29, 2024. 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 (4Q23 Registration link) , and you will be provided with dial in details. To avoid delays, we encourage participants to dial into the conference call five 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: AirTitans®, Ami Amis™, Disguise®, Fly Wheels®, JAKKS Wild Games™, Moose Mountain®, Maui®, Perfectly Cute®, ReDo® Skateboard Co., Sky Ball®, SportsZone™, Xtreme Power Dozer®, and WeeeDo®, as well as a wide range of entertainment-inspired products featuring premier licensed properties. Through our products and our charitable donations, 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), Twitter (@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) | |||||||||||||
| December 31, | |||||||||||||
| 2023 | 2022 | ||||||||||||
| (In thousands) | |||||||||||||
| Assets | |||||||||||||
| Current assets: | |||||||||||||
| Cash and cash equivalents | $ | 72,350 | $ | 85,297 | |||||||||
| Restricted cash | 204 | 193 | |||||||||||
| Accounts receivable, net | 123,797 | 102,771 | |||||||||||
| Inventory | 52,647 | 80,619 | |||||||||||
| Prepaid expenses and other assets | 6,374 | 6,331 | |||||||||||
| Total current assets | 255,372 | 275,211 | |||||||||||
| Property and equipment | 135,956 | 130,437 | |||||||||||
| Less accumulated depreciation and amortization | 121,357 | 115,575 | |||||||||||
| Property and equipment, net | 14,599 | 14,862 | |||||||||||
| Operating lease right-of-use assets, net | 23,592 | 19,913 | |||||||||||
| Deferred income tax assets, net | 68,143 | 57,804 | |||||||||||
| Goodwill | 35,083 | 35,083 | |||||||||||
| Intangibles and other assets, net | 2,162 | 2,469 | |||||||||||
| Total assets | $ | 398,951 | $ | 405,342 | |||||||||
| Liabilities, Preferred Stock and Stockholders' Equity | |||||||||||||
| Current liabilities: | |||||||||||||
| Accounts payable | $ | 42,177 | $ | 33,687 | |||||||||
| Accounts payable - Meisheng (related party) | 12,259 | 9,820 | |||||||||||
| Accrued expenses | 45,102 | 37,998 | |||||||||||
| Reserve for sales returns and allowances | 38,531 | 51,877 | |||||||||||
| Income taxes payable | 3,785 | 8,165 | |||||||||||
| Short term operating lease liabilities | 7,380 | 10,746 | |||||||||||
| Short term debt, net | - | 25,529 | |||||||||||
| Total current liabilities | 149,234 | 177,822 | |||||||||||
| Long term operating lease liabilities | 16,666 | 9,863 | |||||||||||
| Accrued expenses - long term | 3,746 | - | |||||||||||
| Debt, non-current portion, net | - | 41,622 | |||||||||||
| Preferred stock derivative liability | 29,947 | 21,918 | |||||||||||
| Income taxes payable | 3,245 | 2,929 | |||||||||||
| Deferred income tax liabilities, net | - | - | |||||||||||
| Total liabilities | 202,838 | 254,154 | |||||||||||
| Preferred stock accrued dividends | 5,992 | 4,490 | |||||||||||
| Stockholders' equity: | |||||||||||||
| Common stock, $.001 par value | 10 | 10 | |||||||||||
| Additional paid-in capital | 278,642 | 275,187 | |||||||||||
| Accumulated deficit | (73,612 | ) | (112,018 | ) | |||||||||
| Accumulated other comprehensive loss | (15,627 | ) | (17,482 | ) | |||||||||
| Total JAKKS Pacific, Inc. stockholders' equity | 189,413 | 145,697 | |||||||||||
| Non-controlling interests | 708 | 1,001 | |||||||||||
| Total stockholders' equity | 190,121 | 146,698 | |||||||||||
| Total liabilities, preferred stock and stockholders' equity | $ | 398,951 | $ | 405,342 | |||||||||
| Supplemental Balance Sheet and Cash Flow Data (Unaudited) | |||||||||||||
| December 31, | |||||||||||||
| Key Balance Sheet Data: | 2023 | 2022 | |||||||||||
| Accounts receivable days sales outstanding (DSO) | 89 | 72 | |||||||||||
| Inventory turnover (DSI) | 52 | 72 | |||||||||||
| Twelve Months Ended December 31, | |||||||||||||
| Condensed Cash Flow Data: | 2023 | 2022 | |||||||||||
| Cash flows provided by operating activities | $ | 66,404 | $ | 86,099 | |||||||||
| Cash flows used in investing activities | (8,907 | ) | (10,387 | ) | |||||||||
| Cash flows used in financing activities and other | (70,433 | ) | (35,554 | ) | |||||||||
| Increase (Decrease) in cash, cash equivalents and restricted cash | $ | (12,936 | ) | $ | 40,158 | ||||||||
| Capital expenditures | $ | (8,906 | ) | $ | (10,389 | ) | |||||||
| JAKKS Pacific, Inc. and Subsidiaries | |||||||||||||||||||||||||
| Condensed Consolidated Statements of Operations (Unaudited) | |||||||||||||||||||||||||
| Three Months Ended December 31, | Twelve Months Ended December 31, | ||||||||||||||||||||||||
| 2023 | 2022 | Δ (%) | 2023 | 2022 | Δ (%) | ||||||||||||||||||||
| (In thousands, except per share data) | (In thousands, except per share data) | ||||||||||||||||||||||||
| Net sales | $ | 127,396 | $ | 131,886 | (3 | )% | $ | 711,557 | $ | 796,187 | (11 | )% | |||||||||||||
| Less: Cost of sales | |||||||||||||||||||||||||
| Cost of goods | 68,866 | 81,355 | (15 | ) | 362,378 | 449,597 | (19 | ) | |||||||||||||||||
| Royalty expense | 22,533 | 20,371 | 11 | 117,607 | 126,633 | (7 | ) | ||||||||||||||||||
| Amortization of tools and molds | 2,264 | 1,592 | 42 | 8,219 | 8,671 | (5 | ) | ||||||||||||||||||
| Cost of sales | 93,663 | 103,318 | (9 | ) | 488,204 | 584,901 | (17 | ) | |||||||||||||||||
| Gross profit | 33,733 | 28,568 | 18 | 223,353 | 211,286 | 6 | |||||||||||||||||||
| Direct selling expenses | 14,582 | 13,153 | 11 | 36,987 | 33,290 | 11 | |||||||||||||||||||
| General and administrative expenses | 34,401 | 30,752 | 12 | 126,893 | 114,819 | 11 | |||||||||||||||||||
| Depreciation and amortization | 90 | 360 | (75 | ) | 366 | 1,907 | (81 | ) | |||||||||||||||||
| Selling, general and administrative expenses | 49,073 | 44,265 | 11 | 164,246 | 150,016 | 9 | |||||||||||||||||||
| Intangibles impairment | - | - | - | - | 300 | nm | |||||||||||||||||||
| Income from operations | (15,340 | ) | (15,697 | ) | (2 | ) | 59,107 | 60,970 | (3 | ) | |||||||||||||||
| Other income (expense): | |||||||||||||||||||||||||
| Loss from joint ventures | - | - | - | (565 | ) | - | nm | ||||||||||||||||||
| Other income (expense), net | 139 | 277 | (50 | ) | 563 | 797 | (29 | ) | |||||||||||||||||
| Change in fair value of preferred stock derivative liability | (1,361 | ) | 1,429 | nm | (8,029 | ) | (636 | ) | nm | ||||||||||||||||
| Loss on debt extinguishment | - | - | - | (1,023 | ) | - | nm | ||||||||||||||||||
| Interest income | 757 | 63 | nm | 1,344 | 127 | nm | |||||||||||||||||||
| Interest expense | (710 | ) | (2,294 | ) | (69 | ) | (6,451 | ) | (11,183 | ) | (42 | ) | |||||||||||||
| Income (loss) before provision for (benefit from) income taxes | (16,515 | ) | (16,222 | ) | 2 | 44,946 | 50,075 | (10 | ) | ||||||||||||||||
| Provision for (benefit from) income taxes | (5,643 | ) | (54,331 | ) | (90 | ) | 6,833 | (41,008 | ) | nm | |||||||||||||||
| Net income (loss) | (10,872 | ) | 38,109 | nm | 38,113 | 91,083 | (58 | ) | |||||||||||||||||
| Net income (loss) loss attributable to non-controlling interests | (4 | ) | 140 | nm | (293 | ) | (330 | ) | (11 | ) | |||||||||||||||
| Net income (loss) attributable to JAKKS Pacific, Inc. | $ | (10,868 | ) | $ | 37,969 | nm | % | $ | 38,406 | $ | 91,413 | (58 | )% | ||||||||||||
| Net income (loss) attributable to common stockholders | $ | (11,252 | ) | $ | 37,607 | nm | % | $ | 36,904 | $ | 89,997 | (59 | )% | ||||||||||||
| Earnings (loss) per share - basic | $ | (1.12 | ) | $ | 3.86 | $ | 3.70 | $ | 9.33 | ||||||||||||||||
| Shares used in earnings (loss) per share - basic | 10,084 | 9,732 | 9,962 | 9,651 | |||||||||||||||||||||
| Earnings (loss) per share - diluted | $ | (1.12 | ) | $ | 3.66 | $ | 3.48 | $ | 8.86 | ||||||||||||||||
| Shares used in earnings (loss) per share - diluted | 10,084 | 10,263 | 10,590 | 10,155 | |||||||||||||||||||||
| Three Months Ended December 31, | Twelve Months Ended December 31, | ||||||||||||||||||||||||
| 2023 | 2022 | Δ bps | 2023 | 2022 | Δ bps | ||||||||||||||||||||
| Fav/(Unfav) | Fav/(Unfav) | ||||||||||||||||||||||||
| Net sales | 100.0 | % | 100.0 | % | - | 100.0 | % | 100.0 | % | - | |||||||||||||||
| Less: Cost of sales | |||||||||||||||||||||||||
| Cost of goods | 54.0 | 61.7 | 770 | 50.9 | 56.5 | 560 | |||||||||||||||||||
| Royalty expense | 17.7 | 15.4 | (230 | ) | 16.5 | 15.9 | (60 | ) | |||||||||||||||||
| Amortization of tools and molds | 1.8 | 1.2 | (60 | ) | 1.2 | 1.1 | (10 | ) | |||||||||||||||||
| Cost of sales | 73.5 | 78.3 | 480 | 68.6 | 73.5 | 490 | |||||||||||||||||||
| Gross profit | 26.5 | 21.7 | 480 | 31.4 | 26.5 | 490 | |||||||||||||||||||
| Direct selling expenses | 11.4 | 10.0 | (140 | ) | 5.2 | 4.2 | (100 | ) | |||||||||||||||||
| General and administrative expenses | 27.0 | 23.3 | (370 | ) | 17.8 | 14.4 | (340 | ) | |||||||||||||||||
| Depreciation and amortization | 0.1 | 0.3 | 20 | 0.1 | 0.2 | 10 | |||||||||||||||||||
| Selling, general and administrative expenses | 38.5 | 33.6 | (490 | ) | 23.1 | 18.8 | (430 | ) | |||||||||||||||||
| Intangibles impairment | - | - | - | - | - | - | |||||||||||||||||||
| Income from operations | (12.0 | ) | (11.9 | ) | (10 | ) | 8.3 | 7.7 | 60 | ||||||||||||||||
| Other income (expense): | |||||||||||||||||||||||||
| Loss from joint ventures | - | - | (0.1 | ) | - | ||||||||||||||||||||
| Other income (expense), net | 0.1 | 0.2 | 0.1 | 0.1 | |||||||||||||||||||||
| Change in fair value of preferred stock derivative liability | (1.1 | ) | 1.1 | (1.1 | ) | (0.1 | ) | ||||||||||||||||||
| Loss on debt extinguishment | - | - | (0.1 | ) | - | ||||||||||||||||||||
| Interest income | 0.6 | - | 0.2 | - | |||||||||||||||||||||
| Interest expense | (0.6 | ) | (1.7 | ) | (0.9 | ) | (1.4 | ) | |||||||||||||||||
| Income (loss) before provision for (benefit from) income taxes | (13.0 | ) | (12.3 | ) | 6.4 | 6.3 | |||||||||||||||||||
| Provision for (benefit from) income taxes | (4.5 | ) | (41.2 | ) | 1.0 | (5.2 | ) | ||||||||||||||||||
| Net income (loss) | (8.5 | ) | 28.9 | 5.4 | 11.5 | ||||||||||||||||||||
| Net income (loss) loss attributable to non-controlling interests | - | 0.1 | - | - | |||||||||||||||||||||
| Net income (loss) attributable to JAKKS Pacific, Inc. | (8.5 | )% | 28.8 | % | 5.4 | % | 11.5 | % | |||||||||||||||||
| Net income (loss) attributable to common stockholders | (8.8 | )% | 28.5 | % | 5.2 | % | 11.3 | % | |||||||||||||||||
| 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 December 31, | Twelve Months Ended December 31, | |||||||||||||||||||||||||
| 2023 | 2022 | Δ ($) | 2023 | 2022 | Δ ($) | |||||||||||||||||||||
| (In thousands) | (In thousands) | |||||||||||||||||||||||||
| EBITDA and Adjusted EBITDA | ||||||||||||||||||||||||||
| Net income | $ | (10,872 | ) | $ | 38,109 | $ | (48,981 | ) | $ | 38,113 | $ | 91,083 | $ | (52,970 | ) | |||||||||||
| Interest expense | 710 | 2,294 | (1,584 | ) | 6,451 | 11,183 | (4,732 | ) | ||||||||||||||||||
| Interest income | (757 | ) | (63 | ) | (694 | ) | (1,344 | ) | (127 | ) | (1,217 | ) | ||||||||||||||
| Provision for income taxes | (5,643 | ) | (54,331 | ) | 48,688 | 6,833 | (41,008 | ) | 47,841 | |||||||||||||||||
| Depreciation and amortization | 2,354 | 1,952 | 402 | 10,336 | 10,578 | (242 | ) | |||||||||||||||||||
| EBITDA | (14,208 | ) | (12,039 | ) | (2,169 | ) | 60,389 | 71,709 | (11,320 | ) | ||||||||||||||||
| Adjustments: | ||||||||||||||||||||||||||
| Loss from joint ventures (JAKKS Pacific, Inc. - | - | - | - | 276 | - | 276 | ||||||||||||||||||||
| Loss from joint ventures (Meisheng - | - | - | - | 289 | - | 289 | ||||||||||||||||||||
| Other (income) expense, net | (139 | ) | (277 | ) | 138 | (563 | ) | (797 | ) | 234 | ||||||||||||||||
| Restricted stock compensation expense | 2,057 | 1,646 | 411 | 8,027 | 5,082 | 2,945 | ||||||||||||||||||||
| Change in fair value of preferred stock derivative liability | 1,361 | (1,429 | ) | 2,790 | 8,029 | 636 | 7,393 | |||||||||||||||||||
| 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 | ||||||||||||||||||||
| Adjusted EBITDA | $ | (10,929 | ) | $ | (12,099 | ) | $ | 1,170 | $ | 75,719 | $ | 76,381 | $ | (662 | ) | |||||||||||
| Adjusted EBITDA/Net sales % | (8.6 | )% | (9.2 | )% | 60 bps | 10.6 | % | 9.6 | % | 100 bps | ||||||||||||||||
| JAKKS Pacific, Inc. and Subsidiaries | ||||||||||||||||||||||||||
| Reconciliation of Non-GAAP Financial Information (Unaudited) | ||||||||||||||||||||||||||
| Three Months Ended December 31, | Twelve Months Ended December 31, | |||||||||||||||||||||||||
| 2023 | 2022 | Δ ($) | 2023 | 2022 | Δ ($) | |||||||||||||||||||||
| (In thousands, except per share data) | (In thousands, except per share data) | |||||||||||||||||||||||||
| Adjusted net income (loss) attributable to common stockholders | ||||||||||||||||||||||||||
| Net income (loss) attributable to common stockholders | $ | (11,252 | ) | $ | 37,607 | $ | (48,859 | ) | $ | 36,904 | $ | 89,997 | $ | (53,093 | ) | |||||||||||
| Restricted stock compensation expense | 2,057 | 1,646 | 411 | 8,027 | 5,082 | 2,945 | ||||||||||||||||||||
| Change in fair value of preferred stock derivative liability | 1,361 | (1,429 | ) | 2,790 | 8,029 | 636 | 7,393 | |||||||||||||||||||
| Loss on debt extinguishment | - | - | - | 1,023 | - | 1,023 | ||||||||||||||||||||
| Employee Retention Credit/gov't employment support | - | - | - | - | (249 | ) | 249 | |||||||||||||||||||
| Loss from joint ventures (JAKKS Pacific, Inc. - | - | - | - | 276 | - | 276 | ||||||||||||||||||||
| 2021 BSP Term Loan prepayment penalty | - | - | - | 150 | 525 | (375 | ) | |||||||||||||||||||
| Molds and Tooling capitalization | - | - | - | (1,751 | ) | - | (1,751 | ) | ||||||||||||||||||
| Valuation allowance release/adjustments | (2,577 | ) | (51,178 | ) | 48,601 | (2,577 | ) | (51,178 | ) | 48,601 | ||||||||||||||||
| Tax impact of additional charges | (96 | ) | (511 | ) | 415 | (1,175 | ) | (1,208 | ) | 33 | ||||||||||||||||
| Adjusted net income (loss) attributable to common stockholders | $ | (10,507 | ) | $ | (13,865 | ) | $ | 3,358 | $ | 48,906 | $ | 43,605 | $ | 5,301 | ||||||||||||
| Adjusted earnings (loss) per share - basic | $ | (1.04 | ) | $ | (1.42 | ) | $ | 0.38 | $ | 4.91 | $ | 4.52 | $ | 0.39 | ||||||||||||
| Shares used in adjusted earnings (loss) per share - basic | 10,084 | 9,732 | 352 | 9,962 | 9,651 | 311 | ||||||||||||||||||||
| Adjusted earnings (loss) per share - diluted | $ | (1.04 | ) | $ | (1.42 | ) | $ | 0.38 | $ | 4.62 | $ | 4.29 | $ | 0.32 | ||||||||||||
| Shares used in adjusted earnings (loss) per share - diluted | 10,084 | 9,732 | 352 | 10,590 | 10,155 | 435 | ||||||||||||||||||||
| JAKKS Pacific, Inc. and Subsidiaries | |||||||||||||||||||||||
| Net Sales by Division and Geographic Region | |||||||||||||||||||||||
| (In thousands) | QTD Q4 | (In thousands) | FY | ||||||||||||||||||||
| Divisions | 2023 | 2022 | 2021 | % Change 2023 v 2022 | % Change 2022 v 2021 | Divisions | 2023 | 2022 | 2021 | % Change 2023 v 2022 | % Change 2022 v 2021 | ||||||||||||
| Toys/Consumer Products | $ | 118,855 | $ | 117,727 | $ | 179,152 | 1.0 | % | -34.3 | % | Toys/Consumer Products | $ | 580,686 | $ | 647,317 | $ | 513,517 | -10.3 | % | 26.1 | % | ||
| Dolls, Role-Play/Dress Up | 73,272 | 68,937 | 116,877 | 6.3 | % | -41.0 | % | Dolls, Role-Play/Dress Up | 319,962 | 423,581 | 323,360 | -24.5 | % | 31.0 | % | ||||||||
| Action Play & Collectibles | 35,312 | 38,909 | 41,164 | -9.2 | % | -5.5 | % | Action Play & Collectibles | 219,446 | 173,529 | 114,778 | 26.5 | % | 51.2 | % | ||||||||
| Outdoor/Seasonal Toys | 10,272 | 9,881 | 21,111 | 4.0 | % | -53.2 | % | Outdoor/Seasonal Toys | 41,279 | 50,207 | 75,379 | -17.8 | % | -33.4 | % | ||||||||
| Costumes | $ | 8,541 | $ | 14,159 | $ | 8,812 | -39.7 | % | 60.7 | % | Costumes | 130,870 | 148,870 | 107,599 | -12.1 | % | 38.4 | % | |||||
| Total | $ | 127,396 | $ | 131,886 | $ | 187,964 | -3.4 | % | -29.8 | % | Total | $ | 711,557 | $ | 796,187 | $ | 621,116 | -10.6 | % | 28.2 | % | ||
| (In thousands) | QTD Q4 | (In thousands) | FY | ||||||||||||||||||||
| Regions | 2023 | 2022 | 2021 | % Change 2023 v 2022 | % Change 2022 v 2021 | Regions | 2023 | 2022 | 2021 | % Change 2023 v 2022 | % Change 2022 v 2021 | ||||||||||||
| United States | $ | 96,304 | $ | 100,907 | $ | 148,876 | -4.6 | % | -32.2 | % | United States | $ | 557,865 | $ | 644,295 | $ | 512,193 | -13.4 | % | 25.8 | % | ||
| Europe | 17,988 | 19,437 | 22,322 | -7.5 | % | -12.9 | % | Europe | 76,464 | 85,348 | 60,425 | -10.4 | % | 41.2 | % | ||||||||
| Latin America | 4,434 | 2,626 | 4,483 | 68.8 | % | -41.4 | % | Latin America | 32,024 | 18,338 | 12,606 | 74.6 | % | 45.5 | % | ||||||||
| Canada | 4,686 | 4,795 | 5,596 | -2.3 | % | -14.3 | % | Canada | 26,992 | 26,515 | 17,999 | 1.8 | % | 47.3 | % | ||||||||
| Asia | 2,140 | 1,698 | 3,018 | 26.0 | % | -43.7 | % | Asia | 8,543 | 10,431 | 9,232 | -18.1 | % | 13.0 | % | ||||||||
| Australia & New Zealand | 1,486 | 1,822 | 2,496 | -18.4 | % | -27.0 | % | Australia & New Zealand | 7,542 | 8,836 | 6,423 | -14.6 | % | 37.6 | % | ||||||||
| Middle East & Africa | 358 | 601 | 1,173 | -40.4 | % | -48.8 | % | Middle East & Africa | 2,127 | 2,424 | 2,238 | -12.3 | % | 8.3 | % | ||||||||
| Total | $ | 127,396 | $ | 131,886 | $ | 187,964 | -3.4 | % | -29.8 | % | Total | $ | 711,557 | $ | 796,187 | $ | 621,116 | -10.6 | % | 28.2 | % | ||
| (In thousands) | QTD Q4 | (In thousands) | FY | ||||||||||||||||||||
| Regions | 2023 | 2022 | 2021 | % Change 2023 v 2022 | % Change 2022 v 2021 | Regions | 2023 | 2022 | 2021 | % Change 2023 v 2022 | % Change 2022 v 2021 | ||||||||||||
| North America | $ | 100,990 | $ | 105,702 | $ | 154,472 | -4.5 | % | -31.6 | % | North America | $ | 584,857 | $ | 670,810 | $ | 530,192 | -12.8 | % | 26.5 | % | ||
| International | 26,406 | 26,184 | 33,492 | 0.8 | % | -21.8 | % | International | 126,700 | 125,377 | 90,924 | 1.1 | % | 37.9 | % | ||||||||
| Total | $ | 127,396 | $ | 131,886 | $ | 187,964 | -3.4 | % | -29.8 | % | Total | $ | 711,557 | $ | 796,187 | $ | 621,116 | -10.6 | % | 28.2 | % | ||
CONTACT:
JAKKS Pacific Investor Relations
(424) 268-9567
Lucas Natalini
FAQ
What was the percentage change in gross profit dollars compared to 2022?
How much were the net sales for the fourth quarter of 2023?
What was the gross margin in Q4 2023 compared to Q4 2022?
What was the net loss attributable to common stockholders in Q4 2023?
How did full-year 2023 net sales compare to the previous year?
What was the operating income in 2023 compared to 2022?
What was the cash flows from operating activities in 2023?
How much was the total debt as of December 31, 2023?
What was the change in inventory from 2022 to 2023?
