Jakks Pacific Inc (JAKK) SEC Filing 10-K Annual report for the fiscal year ending Sunday, December 31, 2017

Jakks Pacific Inc

CIK: 1009829 Ticker: JAKK

Exhibit 99.1

JAKKS Pacific Reports Fourth Quarter and Full Year 2017 Financial Results

2017 Results Show Impact of Shifts in Consumer Shopping
2018 Outlook Anticipates Sales Growth and Return to Profitability

SANTA MONICA, Calif.--(BUSINESS WIRE)--February 22, 2018--JAKKS Pacific, Inc. [NASDAQ: JAKK] today reported financial results for the fourth quarter and full-year ended December 31, 2017.

Fourth Quarter 2017 Overview vs. Same Period Last Year:

  • Net sales were $136.6 million compared to $167.0 million reported in the prior year period.
  • Gross margin was 22.1%, down from 31.2%.
  • Net loss attributable to JAKKS was $30.4 million, or $1.33 per basic and diluted share vs. net loss of $7.6 million, or $0.47 per basic and diluted share in 2016.
  • Adjusted EBITDA was negative $6.8 million, compared to positive $4.0 million in 2016. See note below on “Use of Non-GAAP Financial Information.”
  • Retail inventories of JAKKS products ended 2017 significantly below year-ago levels, allowing the company to enter the year with relatively clean shelves.

Management Commentary
Stephen Berman, JAKKS Pacific Chairman and Chief Executive Officer, stated: “A number of factors contributed to a soft fourth quarter, including the bankruptcy of Toys R Us, as well as the continued decline of some legacy product lines that were not fully offset by new launches. Some of the shifts we saw last year in consumer habits – buying more online and less in stores, and less interest in some film licenses, were even more pronounced in 2017. That being said, we did see a number of product lines with sales growth and improved performance in the quarter. As we look to 2018, we will continue to expand our retail private label programs and exclusive product initiatives and we are excited to launch a number of new major licenses. Moreover, we have positioned ourselves well for the future with our investments in skincare and cosmetics, as well as augmented reality and content to cater to the needs of the young, modern consumer.”

Mr. Berman continued, “We have taken several aggressive steps so that our core brands and new products can allow us to grow sales and return to profitability in 2018, paving the way for further growth in the years beyond.”

Progress on Strategic Initiatives
JAKKS continues to make steady progress on long-term strategic initiatives.

  • Creating a strong portfolio of owned intellectual properties: In 2017, JAKKS successfully launched multiple properties across many categories, many of which are positioned to have great extension programs for 2018 - including Squish-Dee-Lish and Real Workin’ Buddies. Additionally, JAKKS entered the games category with the release of Pull My Finger, an innovative action game, paving the way for more games to come.
  • Entering new categories: With production currently underway and initial distribution partners secured, early shipments of C’est Moi reformulated skincare and cosmetic products began in January 2018, which the Company expects will have significantly higher margins than its toy business. In addition, Studio JP is in development of a new franchise which will be comprised of original animated content created specifically for digital distribution, an app featuring augmented reality and a line of toys slated for a Fall 2018 launch. Also, the Company will begin shipments of Morf, an outdoor sports action product.
  • Broadening geographic reach: The Company continues to execute on its geographic expansion strategy with newly established sales offices in France and Italy building momentum. JAKKS Mexico continues to grow, and the Company plans further investment in the market in 2018 to support local distribution.
  • Increasing portion of sales to online retailers: Despite a decrease in overall sales, JAKKS increased sales to online retailers, both in dollars and as a percentage of sales in 2017.

The following information was filed by Jakks Pacific Inc (JAKK) on Thursday, February 22, 2018 as an 8K 2.02 statement, which is an earnings press release pertaining to results of operations and financial condition. It may be helpful to assess the quality of management by comparing the information in the press release to the information in the accompanying 10-K Annual Report statement of earnings and operation as management may choose to highlight particular information in the press release.

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Financial Statements, Disclosures and Schedules

Inside this 10-K Annual Report

Document And Entity Information
Consolidated Balance Sheets
Consolidated Balance Sheets (parenthetical)
Consolidated Statements Of Cash Flows
Consolidated Statements Of Cash Flows (parenthetical)
Consolidated Statements Of Comprehensive Income (loss)
Consolidated Statements Of Operations
Consolidated Statements Of Stockholders' Equity
Accrued Expenses
Accrued Expenses (detail)
Accrued Expenses (tables)
Business Combinations
Business Combinations - Additional Information (detail)
Business Segments, Geographic Data, Sales By Product Group And Major Customers
Business Segments, Geographic Data, Sales By Product Group And Major Customers (tables)
Business Segments, Geographic Data, Sales By Product Group And Major Customers - Additional Information (detail)
Changes In Carrying Amount Of Goodwill (detail)
Commitments (tables)
Commitments - Additional Information (detail)
Common Stock, Preferred Stock And Warrant - Additional Information (detail)
Common Stock, Preferred Stock And Warrants
Components Of Deferred Tax Assets/(liabilities) (detail)
Components Of Income (loss) Before Provision For Income Taxes (detail)
Concentration Of Credit Risk
Concentration Of Credit Risk - Additional Information (detail)
Convertible Senior Notes
Convertible Senior Notes (detail)
Convertible Senior Notes (parenthetical) (detail)
Convertible Senior Notes (tables)
Convertible Senior Notes - Additional Information (detail)
Credit Facility
Credit Facility - Additional Information (detail)
Employee Benefits Plan
Employee Benefits Plan - Additional Information (detail)
Financial Assets Measured At Fair Value On Recurring Basis (detail)
Future Amortization Expenses (detail)
Future Annual Minimum Royalty Guarantees (detail)
Future Minimum Guaranteed Amount (detail)
Goodwill (tables)
Goodwill - Additional Information (detail)
Income Taxes
Income Taxes (tables)
Income Taxes - Additional Information (detail)
Information By Geographic Area (detail)
Information By Segment And Reconciliation To Reported Amounts (detail)
Information Of Utps Affecting Effective Tax Rate, If Recognized (detail)
Intangible Assets
Intangible Assets (detail)
Intangible Assets (tables)
Intangible Assets - Additional Information (detail)
Inventory Valued At Lower Of Cost (first-in, First-out) Or Market, Net Of Inventory Obsolescence Reserve (detail)
Joint Ventures
Joint Ventures - Additional Information (detail)
Key Component Of Convertible Senior Notes (detail)
Leases (tables)
Leases - Additional Information (detail)
Net Sales To Major Customers (detail)
Principal Industry
Principal Industry - Additional Information (detail)
Property And Equipment, Estimated Useful Lives (detail)
Provision (benefit) For Income Taxes (detail)
Quarterly Financial Data (detail)
Reconciliation For Significant Differences In Tax At Statutory And Effective Rates (detail)
Reconciliation Of Beginning And Ending Balances Of Assets Measured At Fair Value On Recurring Basis Using Significant Unobservable Inputs (level 3) (detail)
Reconciliation Of Weighted Average Shares Used In Computation Of Basic And Diluted Earnings Per Share (detail)
Related Party Transactions
Related Party Transactions - Additional Information (detail)
Schedule Ii-valuation And Qualifying Accounts
Schedule Of Minimum Annual Lease Payments (detail)
Selected Quarterly Financial Data (unaudited)
Selected Quarterly Financial Data (unaudited) (tables)
Share-based Payments
Share-based Payments (tables)
Share-based Payments - Additional Information (detail)
Subsequent Events
Subsequent Events - Additional Information (detail)
Summary Of Restricted Stock Award Activity (detail)
Summary Of Rsu Award Activity (detail)
Summary Of Significant Accounting Policies
Summary Of Significant Accounting Policies (policies)
Summary Of Significant Accounting Policies (tables)
Summary Of Significant Accounting Policies - Additional Information (detail)
Supplemental Information To Consolidated Statements Of Cash Flows
Supplemental Information To Consolidated Statements Of Cash Flows - Additional Information (detail)
Total Share-based Compensation Expense And Related Tax Benefits Recognized (detail)
Valuation And Qualifying Accounts (detail)
Ticker: JAKK
CIK: 1009829
Form Type: 10-K Annual Report
Accession Number: 0001157523-18-000578
Submitted to the SEC: Fri Mar 16 2018 4:02:54 PM EST
Accepted by the SEC: Fri Mar 16 2018
Period: Sunday, December 31, 2017
Industry: Games Toys And Childrens Vehicles No Dolls And Bicycles

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