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Jakks Pacific Inc (JAKK) SEC Filing 10-Q Quarterly report for the period ending Sunday, March 31, 2019

Jakks Pacific Inc

CIK: 1009829 Ticker: JAKK

Exhibit 99.1

JAKKS Pacific Reports First Quarter 2019 Financial Results

SANTA MONICA, Calif.--(BUSINESS WIRE)--May 9, 2019--JAKKS Pacific, Inc. [NASDAQ: JAKK] today reported financial results for the first quarter ended March 31, 2019.

First Quarter 2019 Overview vs. Same Period Last Year

  • Net sales for the first quarter were $70.8 million compared to $93.0 million reported in the comparable period in 2018. Sales in the 2019 first quarter were negatively impacted, as expected, by the Toys “R” Us liquidation in March of 2018 and the success of Incredibles 2 last year, as well as the late Easter in 2019.
  • Gross margin was 20.2%, compared to 24.7% in the first quarter of 2018.
  • Net loss attributable to JAKKS Pacific was $29.2 million, or $1.24 per diluted share. This compares to a net loss attributable to JAKKS Pacific of $36.2 million, or $1.57 per diluted share, reported in the comparable period in 2018.
  • Adjusted EBITDA was negative $17.1 million, compared to Adjusted EBITDA of negative $14.6 million in the 2018 first quarter. See note below on “Use of Non-GAAP Financial Information.”

Management Commentary

“As expected, our results for the first quarter showed the impact of the loss of Toys “R” Us as a significant customer, and the impact of a later Easter holiday,” said Stephen Berman, CEO of JAKKS Pacific. “In addition, the timing of certain key new product launches tied to major theatrical film releases has, as expected, significantly shifted our revenue to the second half of the year. Several licensed properties that drove our sales in the first half of last year saw declines, notably The Incredibles 2, Moana, and Tsum Tsum, in addition to declines in Squish Dee Lish, our own property. Still, we are pleased with the success we have seen so far with such licenses as Godzilla, Harry Potter, Fancy Nancy and Aladdin, and our evergreen lines in Moose Mountain and Kids Only.

“We are looking forward to stronger sales in the second half of the year, which should benefit from a strong slate of entertainment content, notably Frozen 2, as well as Toy Story 4, the 30th Anniversary of the release of Disney’s The Little Mermaid, and Disney’s Gigantosaurus animated TV series. In addition, we expect strong contributions from products based on some of our own IP, including TP Blaster: Sheet Storm, Slap Ninja, Pinata Fiesta and Power Dozer. Consistent with our strategy, we continue to see our sales through online channels increase as a percent of total sales, which we expect will help us in a shifting retail landscape.”

Cash and Cash Equivalents

The Company’s cash and cash equivalents (including restricted cash) totaled $47.4 million as of March 31, 2019 compared to $58.2 million as of December 31, 2018 and $46.8 million as of March 31, 2018.

2019 Outlook

Our goal for 2019 is to grow sales by approximately 5% on a year-over-year basis with improved levels of Adjusted EBITDA compared to 2018.

Expression of Interest from Hong Kong Meisheng Cultural Company Limited

As previously announced in the Current Report on Form 8-K dated February 26, 2019, we engaged in extensive negotiations with Hong Kong Meisheng Cultural Company Limited ("Meisheng") regarding its proposed $50 million equity infusion into the Company, resulting in Meisheng owning 51% of the Company's outstanding shares, which was also the subject of extensive negotiations with an ad hoc group of holders (the "Ad Hoc Group") of the 4.875% convertible senior notes due 2020 (the "Notes") issued by the Company and Oasis Investments II Master Fund Ltd. ("Oasis") with respect to the Meisheng proposal and extension of maturities of the Company’s convertible senior notes. The Company is currently awaiting the receipt by Meisheng of certain approvals to advance such transactions, including approvals from Chinese regulatory bodies, and as a result, no executed and binding agreements related to those transactions have been reached with Meisheng, any member of the Ad Hoc Group, any other holders of the Notes or Oasis. The foregoing is only a summary of the latest discussions and is not intended to be a complete description of all of the terms and conditions thereof, including the potential significant additional dilution that could occur as a result of these transactions. No assurance can be given that the ongoing discussions will result in consummation of a transaction with Meisheng, the holders of the Notes or Oasis, or that even if a transaction is consummated that its final terms will resemble the terms described in the Current Report on Form 8-K dated February 26, 2019.


The following information was filed by Jakks Pacific Inc (JAKK) on Thursday, May 9, 2019 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-Q Quarterly Report statement of earnings and operation as management may choose to highlight particular information in the press release.

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Inside Jakks Pacific Inc's 10-Q Quarterly Report:

Financial Statements, Disclosures and Schedules

Inside this 10-Q Quarterly Report

Document And Entity Information
Condensed Consolidated Balance Sheets
Condensed Consolidated Balance Sheets (Parenthetical)
Condensed Consolidated Statements Of Cash Flows
Condensed Consolidated Statements Of Cash Flows (Parenthetical)
Condensed Consolidated Statements Of Operations And Comprehensive Loss
Condensed Consolidated Statements Of Stockholders' Equity
- Inventory Valued At Lower Of Cost (First-In, First-Out) Or Market, Net Of Inventory Obsolescence Reserve (Detail)
Basis Of Presentation
Basis Of Presentation (Policies)
Basis Of Presentation Basis Of Presentation (Details)
Business Segments, Geographic Data, And Sales By Major Customers
Business Segments, Geographic Data, And Sales By Major Customers (Tables)
Business Segments, Geographic Data, And Sales By Major Customers - Additional Information (Detail)
Business Segments, Geographic Data, And Sales By Major Customers - Information By Geographic Area (Detail)
Business Segments, Geographic Data, And Sales By Major Customers - Information By Segment And Reconciliation To Reported Amounts (Detail)
Business Segments, Geographic Data, And Sales By Major Customers - Net Sales To Major Customers (Detail)
Common Stock And Preferred Stock
Common Stock And Preferred Stock - Additional Information (Detail)
Comprehensive Loss
Comprehensive Loss (Tables)
Comprehensive Loss - Components Of Comprehensive Loss (Detail)
Convertible Senior Notes
Convertible Senior Notes (Detail)
Convertible Senior Notes (Tables)
Convertible Senior Notes - Additional Information (Detail)
Credit Facilities
Credit Facilities - Additional Information (Detail)
Fair Value Measurements
Fair Value Measurements (Tables)
Fair Value Measurements - Financial Assets Measured At Fair Value On Recurring Basis (Detail)
Fair Value Measurements - Reconciliation Of Beginning And Ending Balances Of Assets Measured At Fair Value On Recurring Basis Using Significant Unobservable Inputs (Level 3) (Detail)
Goodwill
Goodwill - Additional Information (Detail)
Income Taxes
Income Taxes - Additional Information (Detail)
Intangible Assets (Detail)
Intangible Assets Other Than Goodwill
Intangible Assets Other Than Goodwill (Tables)
Inventory
Inventory (Tables)
Joint Ventures
Joint Ventures - Additional Information (Detail)
Leases
Leases (Details)
Leases (Tables)
Leases - Schedule Of Future Minimum Lease Payments (Details)
Liquidity
Liquidity - Additional Information (Detail)
Litigation And Contingencies
Loss Per Share
Loss Per Share (Tables)
Loss Per Share - Additional Information (Detail)
Loss Per Share - Reconciliation Of Weighted Average Shares Used In Computation Of Income (Loss) Per Share (Detail)
Revenue Recognition And Reserve For Sales Returns And Allowances
Revenue Recognition And Reserve For Sales Returns And Allowances - Additional Information (Detail)
Share-Based Payments
Share-Based Payments (Tables)
Share-Based Payments - Additional Information (Detail)
Share-Based Payments - Summary Of Restricted Stock Award Activity (Detail)
Share-Based Payments - Summary Of Restricted Stock Unit Activity (Detail)
Share-Based Payments - Total Share-Based Compensation Expense And Related Tax Benefits Recognized (Detail)

Material Contracts, Statements, Certifications & more

Jakks Pacific Inc provided additional information to their SEC Filing as exhibits

Ticker: JAKK
CIK: 1009829
Form Type: 10-Q Quarterly Report
Accession Number: 0001628280-19-006440
Submitted to the SEC: Thu May 09 2019 12:17:02 PM EST
Accepted by the SEC: Thu May 09 2019
Period: Sunday, March 31, 2019
Industry: Games Toys And Childrens Vehicles No Dolls And Bicycles

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