Document and Entity Information
Document and Entity Information - USD ($) | 12 Months Ended | ||
Dec. 31, 2015 | Mar. 14, 2016 | Jun. 30, 2015 | |
Document Information [Line Items] | |||
Document Type | 10-K | ||
Amendment Flag | false | ||
Document Period End Date | Dec. 31, 2015 | ||
Document Fiscal Year Focus | 2,015 | ||
Document Fiscal Period Focus | FY | ||
Trading Symbol | JAKK | ||
Entity Registrant Name | JAKKS PACIFIC INC | ||
Entity Central Index Key | 1,009,829 | ||
Current Fiscal Year End Date | --12-31 | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Current Reporting Status | Yes | ||
Entity Voluntary Filers | No | ||
Entity Filer Category | Accelerated Filer | ||
Entity Common Stock, Shares Outstanding | 20,340,388 | ||
Entity Public Float | $ 195,081,288 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Dec. 31, 2015 | Dec. 31, 2014 |
Current assets | ||
Cash and cash equivalents | $ 102,528 | $ 71,525 |
Marketable securities | 220 | |
Accounts receivable, net of allowance for uncollectible accounts of $3,264 and $2,714 in 2014 and 2015, respectively | 163,387 | 234,516 |
Inventory, net | 60,544 | 78,827 |
Income tax receivable | 24,008 | 24,008 |
Deferred income taxes | 3,358 | |
Prepaid expenses and other | 31,901 | 25,139 |
Total current assets | 382,368 | 437,593 |
Property and equipment | ||
Office furniture and equipment | 15,141 | 14,440 |
Molds and tooling | 86,307 | 87,360 |
Leasehold improvements | 10,640 | 5,280 |
Total | 112,088 | 107,080 |
Less accumulated depreciation and amortization | 93,653 | 95,984 |
Property and equipment, net | 18,435 | 11,096 |
Deferred tax asset | 446 | |
Intangibles, net | 42,185 | 48,904 |
Other long term assets | 8,959 | 10,389 |
Investment in DreamPlay LLC | 7,000 | 7,000 |
Goodwill, net | 44,199 | 44,492 |
Trademarks, net | 2,308 | 2,308 |
Total assets | 505,900 | 561,782 |
Current liabilities | ||
Accounts payable | 34,986 | 56,113 |
Accrued expenses | 54,081 | 86,974 |
Reserve for sales returns and allowances | 17,267 | 24,477 |
Income taxes payable | 21,067 | 23,784 |
Deferred income taxes | 2,739 | |
Total current liabilities | 130,140 | 191,348 |
Convertible senior notes, net | 215,000 | 215,000 |
Other liabilities | 5,155 | 1,874 |
Income taxes payable | 2,199 | 2,496 |
Deferred income taxes | 5,980 | |
Total liabilities | $ 352,494 | $ 416,698 |
Commitments and Contingencies | ||
Stockholders' equity | ||
Preferred shares, $.001 par value; 5,000,000 shares authorized; nil outstanding | ||
Common stock, $.001 par value; 100,000,000 shares authorized; 22,682,295 and 21,153,878 shares issued and outstanding in 2014 and 2015, respectively | $ 21 | $ 23 |
Treasury stock at cost; 3,112,840 and 3,660,201 shares in 2014 and 2015, respectively | (28,322) | (24,000) |
Additional paid-in capital | 194,743 | 202,051 |
Accumulated deficit | (3,391) | (26,645) |
Accumulated other comprehensive loss | (10,051) | (6,835) |
Total JAKKS Pacific, Inc.'s stockholders' equity | 153,000 | 144,594 |
Non-controlling interests | 406 | 490 |
Total stockholders' equity | 153,406 | 145,084 |
Total liabilities and stockholders' equity | $ 505,900 | $ 561,782 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands | Dec. 31, 2015 | Dec. 31, 2014 |
Accounts receivable, allowance for uncollectible accounts | $ 2,714 | $ 3,264 |
Preferred shares, par value | $ 0.001 | $ 0.001 |
Preferred shares, shares authorized | 5,000,000 | 5,000,000 |
Preferred shares, outstanding | 0 | 0 |
Common stock, par value | $ 0.001 | $ 0.001 |
Common stock, shares authorized | 100,000,000 | 100,000,000 |
Common stock, shares issued | 21,153,878 | 22,682,295 |
Common stock, shares outstanding | 21,153,878 | 22,682,295 |
Treasury stock, shares | 3,660,201 | 3,112,840 |
Consolidated Statements of Oper
Consolidated Statements of Operations - USD ($) shares in Thousands, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Net Sales | $ 745,741 | $ 810,060 | $ 632,925 |
Cost of sales | 517,172 | 574,253 | 477,146 |
Gross profit | 228,569 | 235,807 | 155,779 |
Selling, general and administrative expenses | 198,039 | 204,480 | 200,311 |
Income (loss) from operations | 30,530 | 31,327 | (44,532) |
Change in fair value of business combination liability | 5,642 | 5,932 | 6,000 |
Profit from video game joint venture | 2,701 | ||
Income (loss) from joint ventures | 60 | 314 | (3,148) |
Interest income | 62 | 112 | 327 |
Interest expense | (12,402) | (12,461) | (9,942) |
Income (loss) before provision for income taxes | 26,593 | 25,224 | (51,295) |
Provision for income taxes | 3,423 | 3,715 | 2,611 |
Net income (loss) | 23,170 | 21,509 | (53,906) |
Net loss attributable to non-controlling interests | (84) | ||
Net income (loss) attributable to JAKKS Pacific, Inc. | $ 23,254 | $ 21,509 | $ (53,906) |
Basic earnings (loss) per share | $ 1.20 | $ 1.03 | $ (2.43) |
Basic weighted number of shares | 19,435 | 20,948 | 22,200 |
Diluted earnings (loss) per share | $ 0.71 | $ 0.70 | $ (2.43) |
Diluted weighted number of shares | 43,321 | 41,516 | 22,200 |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Income (Loss) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Net income (loss) | $ 23,170 | $ 21,509 | $ (53,906) |
Other comprehensive income (loss): | |||
Foreign currency translation adjustment | (3,216) | (2,986) | 366 |
Comprehensive income (loss) | 19,954 | 18,523 | (53,540) |
Less: Comprehensive loss attributable to non-controlling interests | (84) | ||
Comprehensive income (loss) attributable to JAKKS Pacific, Inc. | $ 20,038 | $ 18,523 | $ (53,540) |
Consolidated Statements of Stoc
Consolidated Statements of Stockholders' Equity - USD ($) shares in Thousands | Total | Common Stock | Treasury Stock | Additional Paid-in Capital | Retained Earnings (Accumulated Deficit) | Accumulated Other Comprehensive Income (Loss) | JAKKS Pacific Inc.'s Stockholders' Equity | Non- Controlling Interests |
Beginning Balance (in shares) at Dec. 31, 2012 | 21,969 | |||||||
Beginning Balance at Dec. 31, 2012 | $ 207,220,000 | $ 22,000 | $ 202,577,000 | $ 8,836,000 | $ (4,215,000) | $ 207,220,000 | ||
Excess tax deficiency on stock options and vesting of restricted stock | (160,000) | (160,000) | (160,000) | |||||
Restricted stock grants (in shares) | 707 | |||||||
Restricted stock grants | 1,085,000 | $ 1,000 | 1,084,000 | 1,085,000 | ||||
Dividends declared | (3,084,000) | (3,084,000) | (3,084,000) | |||||
Retirement of restricted stock (in shares) | (7) | |||||||
Retirement of restricted stock | (34,000) | (34,000) | (34,000) | |||||
Repurchase of equity component of convertible notes | (2,802,000) | (2,802,000) | (2,802,000) | |||||
Net income (loss) | (53,906,000) | (53,906,000) | (53,906,000) | |||||
Foreign currency translation adjustment | 366,000 | 366,000 | 366,000 | |||||
Ending Balance (in shares) at Dec. 31, 2013 | 22,669 | |||||||
Ending Balance at Dec. 31, 2013 | 148,685,000 | $ 23,000 | 200,665,000 | (48,154,000) | (3,849,000) | 148,685,000 | ||
Excess tax deficiency on stock options and vesting of restricted stock | (85,000) | (85,000) | (85,000) | |||||
Restricted stock grants (in shares) | 65 | |||||||
Restricted stock grants | 1,473,000 | $ 1,000 | 1,472,000 | 1,473,000 | ||||
Dividends declared | 0 | |||||||
Retirement of restricted stock (in shares) | (52) | |||||||
Retirement of restricted stock | (2,000) | $ (1,000) | (1,000) | (2,000) | ||||
Prepaid forward purchase contract | (24,000,000) | $ (24,000,000) | (24,000,000) | |||||
Contributions from non-controlling interests | 490,000 | $ 490,000 | ||||||
Net income (loss) | 21,509,000 | 21,509,000 | 21,509,000 | |||||
Foreign currency translation adjustment | (2,986,000) | (2,986,000) | (2,986,000) | |||||
Ending Balance (in shares) at Dec. 31, 2014 | 22,682 | |||||||
Ending Balance at Dec. 31, 2014 | 145,084,000 | $ 23,000 | (24,000,000) | 202,051,000 | (26,645,000) | (6,835,000) | 144,594,000 | 490,000 |
Restricted stock grants (in shares) | 71 | |||||||
Restricted stock grants | 1,562,000 | $ 1,000 | 1,561,000 | 1,562,000 | ||||
Dividends declared | 0 | |||||||
Retirement of restricted stock (in shares) | (52) | |||||||
Retirement of restricted stock | (1,000) | $ (1,000) | (1,000) | |||||
Repurchase of common stock | (13,193,000) | $ (1,000) | (13,192,000) | (13,193,000) | ||||
Repurchase of common stock (in shares) | (1,547) | |||||||
Retirement of treasury stock | $ (1,000) | 8,870,000 | (8,869,000) | |||||
Net income (loss) | 23,170,000 | 23,254,000 | 23,254,000 | (84,000) | ||||
Foreign currency translation adjustment | (3,216,000) | (3,216,000) | (3,216,000) | |||||
Ending Balance (in shares) at Dec. 31, 2015 | 21,154 | |||||||
Ending Balance at Dec. 31, 2015 | $ 153,406,000 | $ 21,000 | $ (28,322,000) | $ 194,743,000 | $ (3,391,000) | $ (10,051,000) | $ 153,000,000 | $ 406,000 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Cash flows from operating activities | |||
Net income (loss) | $ 23,170 | $ 21,509 | $ (53,906) |
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities: | |||
Depreciation and amortization | 20,902 | 21,883 | 24,599 |
Share-based compensation expense | 1,562 | 1,473 | 1,085 |
Loss on disposal of property and equipment | 47 | 18 | 3,060 |
Change in fair value of business combination liability | (5,642) | (5,932) | (6,000) |
Gain on extinguishment of convertible notes | (84) | ||
(Income) loss from joint ventures | (1,017) | (314) | 3,148 |
Deferred income taxes | (329) | (371) | (129) |
Changes in operating assets and liabilities, net of acquisitions | |||
Accounts receivable | 71,129 | (133,293) | 4,232 |
Inventory | 18,283 | (32,043) | 12,906 |
Prepaid expenses and other | (7,513) | 2,534 | (6,367) |
Accounts payable | (21,127) | 30,838 | (12,518) |
Accrued expenses | (26,234) | 23,820 | 16,283 |
Income taxes payable | (3,014) | 2,921 | 5,750 |
Reserve for sales returns and allowances | (7,210) | (6,897) | (2,999) |
Other liabilities | 3,281 | (5,147) | (11,324) |
Excess tax deficiency from share-based compensation | (85) | (160) | |
Total adjustments | 43,118 | (100,595) | 31,482 |
Net cash provided by (used in) operating activities | 66,288 | (79,086) | (22,424) |
Cash flows from investing activities | |||
Purchases of property and equipment | (18,327) | (10,453) | (10,129) |
Change in other assets | (4,149) | (2,766) | (135) |
Contributions to joint venture | (1,636) | ||
Distributions from joint venture | 60 | 332 | 1,149 |
(Purchases) sale of marketable securities | 220 | (2) | |
Net cash used in investing activities | (22,196) | (12,887) | (10,753) |
Cash flows from financing activities | |||
Common stock surrendered | (1) | (2) | (34) |
Common stock repurchased | (13,193) | (24,000) | |
Proceeds from (repayment of) credit facility borrowings | (70,710) | ||
Credit facility costs | (188) | (1,851) | |
Dividends paid | (3,084) | ||
Proceeds from issuance of convertible notes | 115,000 | 100,000 | |
Bank fees related to convertible notes | (4,594) | (4,179) | |
Retirement of senior convertible notes | (39,000) | (61,000) | |
Proceeds from issuance of common shares of non-controlling interests | 490 | ||
Net cash provided by (used in) financing activities | (13,382) | 46,043 | (39,007) |
Net increase (decrease) in cash and cash equivalents | 30,710 | (45,930) | (72,184) |
Effect of foreign currency translation | 293 | 384 | (66) |
Cash and cash equivalents, beginning of year | 71,525 | 117,071 | 189,321 |
Cash and cash equivalents, end of year | 102,528 | 71,525 | 117,071 |
Cash paid (refunded) during the period for: | |||
Interest | 10,198 | 8,964 | 4,408 |
Income taxes | $ 7,832 | $ 945 | $ (4,644) |
Principal Industry
Principal Industry | 12 Months Ended |
Dec. 31, 2015 | |
Principal Industry | Note 1—Principal Industry JAKKS Pacific, Inc. (the “Company”) is engaged in the development, production and marketing of consumer products, including toys and related products, electronic products, pet toys and related products, and other consumer products, many of which are based on highly-recognized character and entertainment licenses. The Company commenced its primary business operations in July 1995 through the purchase of substantially all of the assets of a Hong Kong toy company. The Company markets its product lines domestically and internationally. The Company was incorporated under the laws of the State of Delaware in January 1995. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2015 | |
Summary of Significant Accounting Policies | Note 2—Summary of Significant Accounting Policies Principles of consolidation These consolidated financial statements include the accounts of the Company, its wholly owned subsidiaries, and its majority owned joint venture. All intercompany transactions have been eliminated. The Company entered into a joint venture with Meisheng Culture & Creative Corp., for the purpose of providing certain JAKKS licensed and non-licensed toys and consumer products to agreed upon territories of the People’s Republic of China. The joint venture will include a subsidiary in the Shanghai Free Trade Zone that is expected to sell, distribute and market these products, which can include dolls, plush, role play products, action figures, costumes, seasonal items, technology and app-enhanced toys and many more, based on top entertainment licenses and JAKKS’ own proprietary brands. The Company owns fifty-one percent of the joint venture. Cash and cash equivalents The Company considers all highly liquid investments with an original maturity of three months or less, when acquired, to be cash equivalents. The Company maintains its cash in bank deposits which, at times, may exceed federally insured limits. The Company has not experienced any losses in such accounts. The Company believes it is not exposed to any significant credit risk of cash and cash equivalents. Cash and cash equivalents are maintained at financial institutions and, at times, balances may exceed federally insured limits. The Company has never experienced any losses related to these balances. Accounts Receivable and Allowance for Doubtful Accounts Credit is granted to customers on an unsecured basis. Credit limits and payment terms are established based on extensive evaluations made on an ongoing basis throughout the fiscal year of the financial performance, cash generation, financing availability, and liquidity status of each customer. Customers are reviewed at least annually, with more frequent reviews performed as necessary, depending upon the customer’s financial condition and the level of credit being extended. For customers who are experiencing financial difficulties, management performs additional financial analyses before shipping to those customers on credit. The Company uses a variety of financial arrangements to ensure collectability of accounts receivable of customers deemed to be a credit risk, including requiring letters of credit, purchasing various forms of credit insurance with unrelated third parties, or requiring cash in advance of shipment. The Company records an allowance for doubtful accounts based upon management’s assessment of the business environment, customers’ financial condition, historical collection experience, accounts receivable aging, customer disputes, and the collectability of specific customer accounts. Use of estimates The preparation of consolidated financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the dates of the consolidated financial statements, and the reported amounts of revenue and expenses during the reporting periods. Actual future results could differ from those estimates. Revenue recognition Revenue is recognized upon the shipment of goods to customers or their agents, depending upon terms, provided there are no uncertainties regarding customer acceptance, the sales price is fixed or determinable and collectability is reasonably assured. Generally the Company does not allow product returns. It provides its customers a negotiated allowance for breakage or defects, which is recorded when the related revenue is recognized. However, the Company does make occasional exceptions to this policy and consequently accrues a return allowance based upon historic return amounts and management estimates. The Company occasionally grants credits to facilitate markdowns and sales of slow moving merchandise. These credits are recorded as a reduction of gross sales at the time of the sale. The Company’s reserve for sales returns and allowances decreased by $7.2 million from $24.5 million as of December 31, 2014 to $17.3 million as of December 31, 2015. This decrease was primarily due to certain customers taking their year-end allowances related to 2014 and 2015 during 2015, as well as reduced markdown allowances in 2015. Fair value measurements Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. In determining fair value, the Company uses various methods including market, income and cost approaches. Based upon these approaches, the Company often utilizes certain assumptions that market participants would use in pricing the asset or liability, including assumptions about risk and/or the risks inherent in the inputs to the valuation technique. These inputs can be readily observable, market-corroborated, or unobservable inputs. The Company utilizes valuation techniques that maximize the use of observable inputs and minimize the use of unobservable inputs. Based upon observable inputs used in the valuation techniques, the Company is required to provide information according to the fair value hierarchy. The fair value hierarchy ranks the quality and reliability of the information used to determine fair values into three broad levels as follows: Level 1: Valuations for assets and liabilities traded in active markets from readily available pricing sources for market transactions involving identical assets or liabilities. Level 2: Valuations for assets and liabilities traded in less active dealer or broker markets. Valuations are obtained from third-party pricing services for identical or similar assets or liabilities. Level 3: Valuations incorporate certain assumptions and projections in determining the fair value assigned to such assets or liabilities. In instances where the determination of the fair value measurement is based upon inputs from different levels of the fair value hierarchy, the level in the fair value hierarchy within which the entire fair value measurement falls is based upon the lowest level input that is significant to the fair value measurement in its entirety. The Company’s assessment of the significance of a particular input to the fair value measurement in its entirety requires judgment, and considers factors specific to the asset or liability. The following table summarizes the Company’s financial assets measured at fair value on a recurring basis as of December 31 (in thousands): Fair Value Measurements Carrying Amount as of As of December 31, 2014 December 31, 2014 Level 1 Level 2 Level 3 Cash equivalents $ 12,166 $ 12,166 $ — $ — Marketable securities 220 220 — — $ 12,386 $ 12,386 $ — $ — Fair Value Measurements Carrying Amount as of As of December 31, 2015 December 31, 2015 Level 1 Level 2 Level 3 Cash equivalents $ 13,218 $ 13,218 $ — $ — Marketable securities — — — — $ 13,218 $ 13,218 $ — $ — The Company’s accounts receivable, accounts payable and accrued expenses represent financial instruments. The carrying value of these financial instruments is a reasonable approximation of fair value. The fair value of the 4.25% convertible senior notes payable due 2018 as of December 31, 2014 and 2015 was $96.3 million and $102.0 million respectively, based upon the most recent quoted market prices, and the fair value of the 4.875% convertible senior notes payable due 2020 as of December 31, 2014 and 2015 was $100.9 million and $112.3 million, respectively, based upon the most recent quoted market prices. The fair values of the convertible senior notes are considered to be Level 2 measurements on the fair value hierarchy. For the years ended December 31, 2014 and 2015, there was no impairment to the value of the Company’s non-financial assets. Inventory Inventory, which includes the ex-factory cost of goods, capitalized warehouse costs and in-bound freight and duty, is valued at the lower of cost (first-in, first-out) or market, net of inventory obsolescence reserve, and consists of the following (in thousands): December 31, 2014 2015 Raw materials $ 1,040 $ 3,717 Finished goods 77,787 56,827 $ 78,827 $ 60,544 Property and equipment Property and equipment are stated at cost and are being depreciated using the straight-line method over their estimated useful lives as follows: Office equipment 5 years Automobiles 5 years Furniture and fixtures 5 - 7 years Leasehold improvements Shorter of length of lease or 10 years The Company uses the usage method as its depreciation methodology for molds and tools used in the manufacturing of its products, which is more closely correlated to production of goods. The Company believes that the usage method more accurately matches costs with revenues. Furthermore, the useful estimated life of molds and tools is two years. For the years ended December 31, 2013, 2014, and 2015, the Company’s aggregate depreciation expense related to property and equipment was $11.8 million, $10.4 million, and $10.9 million, respectively. Other Comprehensive Income (Loss) Other comprehensive income (loss) includes all changes in equity from non-owner sources. The Company accounts for other comprehensive income in accordance with Accounting Standards Codification (“ASC”) ASC 220, “Comprehensive Income.” All the activity in other comprehensive income (loss) and all amounts in accumulated other comprehensive income (loss) relate to foreign currency translation adjustments. Advertising Production costs of commercials and programming are charged to operations in the period during which the production is first aired. The costs of other advertising, promotion and marketing programs are charged to operations in the period incurred. Advertising expense for the years ended December 31, 2013, 2014 and 2015, was approximately $10.1 million, $19.3 million, and $15.8 million, respectively. The Company also participates in cooperative advertising arrangements with certain customers, whereby it allows a discount from invoiced product amounts in exchange for customer purchased advertising that features the Company’s products. Typically, these discounts range from 1% to 6% of gross sales, and are generally based upon product purchases or specific advertising campaigns. Such amounts are accrued when the related revenue is recognized or when the advertising campaign is initiated. These cooperative advertising arrangements are accounted for as direct selling expenses. Income taxes The Company does not file a consolidated return with its foreign subsidiaries. The Company files federal and state returns and its foreign subsidiaries file returns in their respective jurisdictions. Deferred taxes are provided on an asset and liability method whereby deferred tax assets are recognized as deductible temporary differences and operating loss and tax credit carry-forwards and deferred tax liabilities are recognized for taxable temporary differences. Temporary differences are the differences between the reported amounts of assets and liabilities and their tax basis. Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion or all of the deferred tax assets will not be realized. Deferred tax assets and liabilities are adjusted for the effects of changes in tax laws and rates on the date of enactment. Foreign Currency Translation Exposure The Company’s reporting currency is the US dollar. The translation of its net investment in subsidiaries with non-US dollar functional currencies subjects the Company to currency exchange rate fluctuations in its results of operations and financial position. Assets and liabilities of subsidiaries with non-US dollar functional currencies are translated into US dollars at year-end exchange rates. Income, expense, and cash flow items are translated at average exchange rates prevailing during the year. The resulting currency translation adjustments are recorded as a component of accumulated other comprehensive loss/gain within stockholders’ equity. The Company’s primary currency translation exposures in 2013, 2014 and 2015 were related to its net investment in entities having functional currencies denominated in the Hong Kong dollar. Foreign Currency Transaction Exposure Currency exchange rate fluctuations may impact the Company’s results of operations and cash flows. The Company’s currency transaction exposures include gains and losses realized on unhedged inventory purchases and unhedged receivables and payables balances that are denominated in a currency other than the applicable functional currency. Gains and losses on unhedged inventory purchases and other transactions associated with operating activities are recorded in the components of operating income in the consolidated statement of operations. Inventory purchase transactions denominated in the Hong Kong dollar were the primary transactions that caused foreign currency transaction exposure for the Company in 2013, 2014 and 2015. Accounting for the impairment of finite-lived tangible and intangible assets Long-lived assets with finite lives, which include property and equipment and intangible assets other than goodwill, are evaluated for impairment when events or changes in circumstances indicate that the carrying amount of the assets may not be recoverable through the estimated undiscounted future cash flows from the use of these assets. When any such impairment exists, the related assets will be written down to fair value. Finite-lived intangible assets consist primarily of product technology rights, acquired backlog, customer relationships, product lines and license agreements. These intangible assets are amortized over the estimated economic lives of the related assets. There were no impairments for years ended December 31, 2013, 2014 and 2015. Goodwill and other indefinite-lived intangible assets Goodwill and indefinite-lived intangible assets are not amortized, but are tested for impairment at least annually at the reporting unit level. Losses in value are recorded when material impairment has occurred in the underlying assets or when the benefits of the identified intangible assets are realized. Indefinite-lived intangible assets other than goodwill consist of trademarks. The carrying value of goodwill and trademarks are based upon cost, which is subject to management’s current assessment of fair value. Management evaluates fair value recoverability using both objective and subjective factors. Objective factors include cash flows and analysis of recent sales and earnings trends. Subjective factors include management’s best estimates of projected future earnings and competitive analysis and the Company’s strategic focus. For the years ended December 31, 2013, 2014 and 2015, there was no impairment to the value of the Company's goodwill or trademarks. Share-based Compensation The Company measures all employee share-based compensation awards using a fair value method and records such expense in its consolidated financial statements. The Company recorded $1.1 million, $1.5 million, and $1.6 million of restricted stock expense, in 2013, 2014, and 2015, respectively. See Note 17 for further details relating to share based compensation. Earnings per share The following table is a reconciliation of the weighted-average shares used in the computation of basic and diluted earnings per share (“EPS”) for the periods presented (in thousands, except per share data): 2013 Weighted Average Loss Shares Per Share Basic EPS Loss available to common stockholders $ (53,906 ) 22,200 $ (2.43 ) Effect of dilutive securities: Assumed conversion of convertible senior notes — — Options and warrants — — Unvested restricted stock grants — — Diluted EPS Loss available to common stockholders plus assumed exercises and conversion $ (53,906 ) 22,200 $ (2.43 ) 2014 Weighted Average Income Shares Per Share Basic EPS Income available to common stockholders $ 21,509 20,948 $ 1.03 Effect of dilutive securities: Assumed conversion of convertible senior notes 7,345 20,388 Options and warrants — — Unvested restricted stock grants — 180 Diluted EPS Income available to common stockholders plus assumed exercises and conversion $ 28,854 41,516 $ 0.70 2015 Weighted Average Income Shares Per Share Basic EPS Income available to common stockholders $ 23,254 19,435 $ 1.20 Effect of dilutive securities: Assumed conversion of convertible senior notes 7,385 23,369 Options and warrants — — Unvested performance stock grants — 347 Unvested restricted stock grants — 170 Diluted EPS Income available to common stockholders plus assumed exercises and conversion $ 30,639 43,321 $ 0.71 Basic earnings per share is calculated using the weighted average number of common shares outstanding during the period. Diluted earnings per share is calculated using the weighted average number of common shares and common share equivalents outstanding during the period (which consist of warrants, options and convertible debt to the extent they are dilutive). For the years ended December 31, 2013, 2014 and 2015, the convertible notes interest and related common share equivalent of 10,037,523, nil and nil, respectively, were excluded from the diluted earnings per share calculation because they were anti-dilutive. Potentially dilutive stock options and warrants of 1,627,144, 1,601,272 and 1,518,596 for the years ended December 31, 2013, 2014, and 2015, respectively, were excluded from the computation of diluted earnings per share since they would have been anti-dilutive. Potentially dilutive restricted stock of 111,195, nil and nil for the years ended December 31, 2013, 2014 and 2015, respectively, were excluded from the computation of diluted earnings per share since they would have been anti-dilutive. The Company is also party to a prepaid forward contract to purchase 3,112,840 shares of its common stock that are to be delivered over a settlement period in 2020. The number of shares to be delivered under the prepaid forward contract has been removed from the weighted-average basic and diluted shares outstanding. Any dividends declared and paid on the shares underlying the forward contract are to be reverted back to the Company based on the contractual terms of the forward contract. Debt with Conversion and Other Options In July 2013, the Company sold an aggregate of $100.0 million principal amount of 4.25% Convertible Senior Notes due 2018 (the “2018 Notes”). The 2018 Notes are senior unsecured obligations of the Company paying interest semi-annually in arrears on August 1 and February 1 of each year at a rate of 4.25% per annum and will mature on August 1, 2018. The initial conversion rate for the 2018 Notes will be 114.3674 shares of the Company’s common per $1,000 principal amount of notes, equivalent to an initial conversion price of approximately $8.74 per share of common stock, subject to adjustment in certain events. Holders of the 2018 Notes may convert their notes upon the occurrence of specified events. Upon conversion, the 2018 Notes will be settled in shares of the Company’s common stock. In June 2014, the Company sold an aggregate of $115.0 million principal amount of 4.875% Convertible Senior Notes due 2020 (the “2020 Notes”). The 2020 Notes are senior unsecured obligations of the Company paying interest semi-annually in arrears on June 1 and December 1 of each year at a rate of 4.875% per annum and will mature on June 1, 2020. The initial conversion rate for the 2020 Notes will be 103.7613 shares of our common per $1,000 principal amount of notes, equivalent to an initial conversion price of approximately $9.64 per share of common stock, subject to adjustment in certain events. Holders of the 2020 Notes may convert their notes upon the occurrence of specified events. Upon conversion, the 2020 Notes will be settled in shares of the Company’s common stock. The Company received net proceeds of approximately $110.4 million from the offering of which $24.0 million was used to repurchase 3.1 million shares of the Company’s common stock under a prepaid forward purchase contract. In January 2016 the Company repurchased $2.0 million of the 2020 Notes. In June 2014, the Company effectively repurchased 3,112,840 shares of its common stock at an average cost of $7.71 per share for an aggregate amount of $24.0 million pursuant to a prepaid forward share repurchase agreement entered into with Merrill Lynch International (“ML”). These repurchased shares are treated as retired for basic and diluted EPS purposes although they remain legally outstanding. The Company reflects the aggregate purchase price of its common shares repurchased as a reduction to stockholders’ equity allocated to treasury stock. Any dividends declared and paid on the shares underlying the forward contract are to be reverted back to the Company based on the contractual terms of the forward contract. Reclassifications Certain reclassifications were made to the prior year consolidated financial statements to conform to current year presentation. Recent Accounting Pronouncements In May 2014, the FASB issued Accounting Standards Update No. 2014-09, Revenue from Contracts with Customers (“ASU 2014-09”), which supersedes nearly all existing revenue recognition guidance under U.S. GAAP. The core principle of ASU 2014-09 is to recognize revenues when promised goods or services are transferred to customers in an amount that reflects the consideration to which an entity expects to be entitled for those goods or services. ASU 2014-09 defines a five step process to achieve this core principle and, in doing so, more judgment and estimates may be required within the revenue recognition process than are required under existing U.S. GAAP. The standard is effective for annual periods beginning after December 15, 2017, and interim periods therein, using either of the following transition methods: (i) a full retrospective approach reflecting the application of the standard in each prior reporting period with the option to elect certain practical expedients, or (ii) a retrospective approach with the cumulative effect of initially adopting ASU 2014-09 recognized at the date of adoption (which includes additional footnote disclosures). The Company is currently evaluating the impact of our pending adoption of ASU 2014-09 on our consolidated financial statements and has not yet determined the method by which we will adopt the standard in 2018. In August 2014, the FASB amended the FASB Accounting Standards Codification and amended Subtopic 205-40, “Presentation of Financial Statements — Going Concern.” This amendment prescribes that an entity’s management should evaluate whether there are conditions or events, considered in the aggregate, that raise substantial doubt about the entity’s ability to continue as a going concern within one year after the date that the financial statements are issued. The amendments will become effective for the Company’s annual and interim reporting periods beginning January 1, 2017. Upon adoption the Company will use this guidance to evaluate going concern. In April 2015, the FASB issued Accounting Standards Update 2015-03, “Imputation of Interest (Subtopic 835-30): Simplifying the Presentation of Debt Issuance Costs” (“ASU 2015-03”). ASU 2015-03 requires an entity to present debt issuance costs related to a recognized debt liability in the balance sheet as a direct deduction from the carrying amount of the debt liability, consistent with debt discounts. The recognition and measurement guidance for debt issuance costs are not affected by the amendments in this update. The amendment will be effective for our annual and interim reporting periods beginning January 1, 2016 and should be applied on a retrospective basis. The adoption of ASU 2015-03 will not have any impact on our results of operations, but will result in debt issuance costs being presented as a direct reduction from the carrying amount of debt liabilities. In July 2015, the FASB issued Accounting Standards Update 2015-11, “Inventory (Topic 330): Simplifying the Measurement of Inventory” (“ASU 2015-11”). ASU 2015-11 requires inventory accounted for under the FIFO or average cost method to be measured using the lower of cost and net realizable value. The amendments are effective prospectively for fiscal years and for interim periods beginning after December 15, 2016. The Company is currently evaluating the impact of the pending adoption of ASU 2015-11 on the consolidated financial statements. In August 2015, the FASB issued Accounting Standards Update 2015-15, “Imputation of Interest (Subtopic 835-30): Presentation and Subsequent Measurement of Debt Issuance Costs Associated with Line-of-Credit Arrangements” (“ASU 2015-15”). ASU 2015-15 codifies an SEC staff announcement that entities are permitted to defer and present debt issuance costs related to line-of-credit arrangements as assets. The announcements were effective upon issuance. The adoption of ASU 2015-15 does not have any impact on The Company’s consolidated financial statements. In November 2015, the FASB issued Accounting Standards Update. 2015-17, “Balance Sheet Classification of Deferred Taxes” (“ASU 2015-17”). ASU 2015-17 requires that deferred tax liabilities and assets be classified as noncurrent in a classified statement of financial position. This ASU is effective for financial statements issued for fiscal years beginning after December 15, 2016, and interim periods within those fiscal years. The Company is currently evaluating the impact that ASU 2015-17 will have on its financial position or financial statement disclosures. In February 2016, the FASB issued Accounting Standards Update 2016-02, “Leases” (“ASU 2016-02”). ASU 2016-02 establishes a right-of-use (“ROU”) model that requires a lessee to record a ROU asset and a lease liability on the balance sheet for all leases with terms longer than 12 months. Leases will be classified as either finance or operating, with classification affecting the pattern of expense recognition in the income statement. ASU 2016-02 is effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. Early adoption is permitted. A modified retrospective transition approach is required for lessees for capital and operating leases existing at, or entered into after, the beginning of the earliest comparative period presented in the financial statements, with certain practical expedients available. The Company is currently evaluating the impact of the pending adoption of this new standard on its financial statements. |
Business Segments, Geographic D
Business Segments, Geographic Data, Sales by Product Group and Major Customers | 12 Months Ended |
Dec. 31, 2015 | |
Business Segments, Geographic Data, Sales by Product Group and Major Customers | Note 3—Business Segments, Geographic Data, Sales by Product Group and Major Customers The Company is a worldwide producer and marketer of children’s toys and other consumer products, principally engaged in the design, development, production, marketing and distribution of its diverse portfolio. The Company’s reportable segments are Traditional Toys and Electronics, and Role Play, Novelty and Seasonal Toys, each of which includes worldwide sales. The Traditional Toys and Electronics segment includes action figures, vehicles, playsets, plush products, dolls, accessories, electronic products, construction toys, infant and pre-school toys, foot to floor ride-on vehicles, wagons and pet products and related products. The Role Play, Novelty and Seasonal segment includes role play and dress-up products, novelty toys, seasonal and outdoor products, indoor and outdoor kids’ furniture and Halloween and everyday costume play. Segment performance is measured at the operating income level. All sales are made to external customers and general corporate expenses have been attributed to the various segments based upon sales volumes. Segment assets are comprised of accounts receivable and inventories, net of applicable reserves and allowances, goodwill, molds and tooling and other assets. Results are not necessarily those that would be achieved were each segment an unaffiliated business enterprise. Information by segment and a reconciliation to reported amounts as of December 31, 2014 and 2015 and for the three years in the period ended December 31, 2015 are as follows (in thousands): Years Ended December 31, 2013 2014 2015 Net Sales Traditional Toys and Electronics $ 320,565 $ 408,426 $ 437,683 Role Play, Novelty and Seasonal Toys 312,360 401,634 308,058 $ 632,925 $ 810,060 $ 745,741 Years Ended December 31, 2013 2014 2015 Operating Income (Loss) Traditional Toys and Electronics $ (25,286 ) $ 10,654 $ 13,588 Role Play, Novelty and Seasonal Toys (19,246 ) 20,673 16,942 $ (44,532 ) $ 31,327 $ 30,530 Years Ended December 31, 2013 2014 2015 Depreciation and Amortization Expense Traditional Toys and Electronics $ 12,475 $ 11,159 $ 10,911 Role Play, Novelty and Seasonal Toys 8,939 7,812 7,949 $ 21,414 $ 18,971 $ 18,860 December 31, 2014 2015 Assets Traditional Toys and Electronics $ 313,380 $ 326,199 Role Play, Novelty and Seasonal Toys 248,402 179,701 $ 561,782 $ 505,900 Information regarding the Company’s operations in different geographical areas is presented below on the basis the Company uses to manage its business. Net revenues are categorized based upon location of the customer, while long-lived assets are categorized based upon the location of the Company’s assets. Tools, dies and molds represent a substantial portion of the long-lived assets included in the United States with a net book value of $8.8 million in 2014 and $10.2 million in 2015 and substantially all of these assets are located in China. The following tables present information about the Company by geographic area as of December 31, 2014 and 2015 and for each of the three years in the period ended December 31, 2015 (in thousands): December 31, 2014 2015 Long-lived Assets China $ 8,816 $ 10,172 United States 1,689 7,702 Hong Kong 591 561 $ 11,096 $ 18,435 Years Ended December 31, 2013 2014 2015 Net Sales by Geographic Area United States $ 524,193 $ 653,497 $ 542,101 Europe 48,585 67,027 117,313 Canada 25,125 33,040 32,587 Hong Kong 6,721 2,746 1,675 Other 28,301 53,750 52,065 $ 632,925 $ 810,060 $ 745,741 Major Customers Net sales to major customers were as follows (in thousands, except for percentages): 2013 2014 2015 Percentage of Percentage of Percentage of Amount Net Sales Amount Net Sales Amount Net Sales Wal-Mart $ 135,223 21.4 % $ 165,777 20.5 % $ 163,333 21.9 % Target 98,770 15.6 124,257 15.3 96,766 13.0 Toys ‘R’ Us 68,074 10.8 93,926 11.6 71,150 9.5 $ 302,067 47.8 % $ 383,960 47.4 % $ 331,249 44.4 % No other customer accounted for more than 10% of the Company’s total net sales. As of December 31, 2014 and 2015, the Company’s three largest customers accounted for approximately 29.8% and 56.2%, respectively, of net accounts receivable. The concentration of the Company’s business with a relatively small number of customers may expose the Company to material adverse effects if one or more of its large customers were to experience financial difficulty. The Company performs ongoing credit evaluations of its top customers and maintains an allowance for potential credit losses. |
Joint Ventures
Joint Ventures | 12 Months Ended |
Dec. 31, 2015 | |
Joint Ventures | Note 4—Joint Ventures The Company owns a fifty percent interest in a joint venture (“Pacific Animation Partners”) with the U.S. entertainment subsidiary of a leading Japanese advertising and animation production company. The joint venture was created to develop and produce a boys’ animated television show, which it licensed worldwide for television broadcast as well as consumer products. The Company produced toys based upon the television program under a license from the joint venture which also licensed certain other merchandising rights to third parties. The Company is responsible for fifty percent of the operating expenses of the joint venture. The Company’s investment is being accounted for using the equity method. The joint venture completed and delivered 65 episodes of the show, which began airing in February 2012, and has since ceased production of the television show. For the years ended December 31, 2013, 2014 and 2015, the Company recognized a loss from the joint venture of $3.1 million, a gain of $0.3 million and a gain of $0.1 million, respectively, including producer fees and royalty income from the joint venture in the amount of $0.3 million, $0.2 million and nil, respectively. As of December 31, 2014 and 2015, the balance of the investment in the Pacific Animation Partners joint venture includes the following components (in thousands): December 31, December 31, 2014 2015 Capital contributions $ 3,856 $ — Equity in cumulative net loss (3,856 ) — Investment in joint venture $ — $ — In September 2012, the Company entered into a joint venture (“DreamPlay Toys”) with NantWorks LLC (“NantWorks”) in which it owns a fifty percent interest. Pursuant to the operating agreement of DreamPlay Toys, the Company paid to NantWorks cash in the amount of $8.0 million and issued NantWorks a warrant to purchase 1.5 million shares of the Company’s common stock at a value of $7.0 million in exchange for the exclusive right to arrange for the provision of the NantWorks recognition technology platform for toy products. The Company has classified these rights as an intangible asset, which are being amortized over the anticipated revenue stream from the exploitation of these rights. The joint venture entered into a Toy Services Agreement, as amended, with a current expiration date of October 1, 2018, to develop and produce toys utilizing recognition technologies owned by NantWorks. Pursuant to the terms of the amended Toy Services Agreement, NantWorks is entitled to receive a renewal fee of $0.4 million per year and a minimum annual preferred return in the amount of $0.5 million based upon net sales of DreamPlay Toys product sales and third-party license fees. The Company retains the financial risk of the joint venture and is responsible for the day-to-day operations, including development, sales and distribution, for which it is entitled to receive any remaining profit or is responsible for any losses. The results of operations of the joint venture are consolidated with the Company’s results. Sales of DreamPlay Toys products commenced in the third quarter of 2013. In addition, in 2012, the Company invested $7.0 million in cash in exchange for a five percent economic interest in a related entity, DreamPlay LLC, which will exploit the recognition technologies in non-toy consumer product categories. NantWorks has the right to repurchase the Company’s interest for $7.0 million. The Company has classified this investment as a long term asset on its balance sheet. The Company’s investment is being accounted for using the cost method. As of December 31, 2015, the Company determined the value of this investment will be realized and that no impairment has occurred. In November 2014, the Company entered into a joint venture with Meisheng Culture & Creative Corp., for the purpose of providing certain JAKKS licensed and non-licensed toys and consumer products to agreed-upon territories of the People’s Republic of China. The joint venture will include a subsidiary in the Shanghai Free Trade Zone that is expected to sell, distribute and market these products, which can include dolls, plush, role play products, action figures, costumes, seasonal items, technology and app-enhanced toys and many more, based on top entertainment licenses and JAKKS’ own proprietary brands. The Company owns fifty-one percent of the joint venture. The results of operations of the joint venture are consolidated with the Company's results. Only minimal expenses were incurred in 2014 and the non-controlling interest’s share of the losses from the joint venture for the year ended December 31, 2014 and 2015 was nominal and $84,000, respectively. |
Business Combinations
Business Combinations | 12 Months Ended |
Dec. 31, 2015 | |
Business Combinations | Note 5—Business Combinations The Company acquired the following entities to further enhance its existing product lines and to continue diversification into other toy categories and seasonal businesses: In July 2012, the Company acquired all of the stock of Maui, Inc., an Ohio corporation, Kessler Services, Inc., a Nevada corporation, and A.S. Design Limited, a Hong Kong corporation (collectively, “Maui”). The cash consideration totaled $36.2 million. In addition, the Company agreed to pay an earn-out of up to an aggregate amount of $18.0 million in cash over the three calendar years following the acquisition based upon the achievement of certain financial performance criteria, which was accrued and recorded as goodwill as of December 31, 2012. In 2013, 2014 and 2015, Maui did not achieve the minimum prescribed earn-out targets, therefore the reversals of the earn-out of $6.0 million, $5.9 million and $5.6 million, respectively, was recorded as other income. Maui is a leading manufacturer and distributor of spring and summer activity toys and impulse toys and was included in the Company’s results of operations from the date of acquisition. In September 2012, the Company acquired all of the stock of JKID, LTD., a United Kingdom corporation for an initial cash consideration of $1.1 million and deferred cash payments of $5.5 million payable in five semi-annual payments of $1.1 million each. In addition, the Company agreed to pay additional compensation of up to an aggregate amount of $4.4 million in cash over the two year period of 2015 through 2016, based upon the achievement of certain financial performance criteria, which will be accrued and charged to expense when and if it is earned. JKID is the developer of augmented reality technology that enhances the play patterns of toys and consumer products. |
Goodwill
Goodwill | 12 Months Ended |
Dec. 31, 2015 | |
Goodwill | Note 6—Goodwill The changes in the carrying amount of goodwill for the years ended December 31, 2014 and 2015 are as follows (in thousands): Traditional Toys and Electronics Role Play, Novelty and Seasonal Toys Total Balance, January 1, 2014: Goodwill $ 25,265 $ 19,611 $ 44,876 Adjustments to goodwill for foreign currency translation (384 ) — (384 ) Balance December 31, 2014 $ 24,881 $ 19,611 $ 44,492 Balance, January 1, 2015: Goodwill $ 24,881 $ 19,611 $ 44,492 Adjustments to goodwill for foreign currency translation (293 ) — (293 ) Balance December 31, 2015: $ 24,588 $ 19,611 $ 44,199 The Company assesses goodwill and indefinite-lived intangible assets for impairment on an annual basis by reviewing relevant qualitative and quantitative factors. More frequent evaluations may be required if the Company experiences changes in its business climate or as a result of other triggering events that take place. If carrying value exceeds fair value, a possible impairment exists and further evaluation is performed. The Company assessed its goodwill for impairment as of October 1, 2015 for each of its reporting units by evaluating qualitative factors, including, but not limited to, the performance of each reporting unit, general economic conditions, access to capital, the industry and competitive environment, the interest rate environment. The Company prepared step-one of its impairment model. The valuation of goodwill involves a high degree of judgment and uncertainty related to key assumptions. Due to the subjective nature of the impairment analysis, significant changes in the assumptions used to develop the estimate could materially affect the conclusion regarding the future cash flows necessary to support the valuation of goodwill. Based on the Company’s assessment, it determined that the fair value of its reporting units were not less than the carrying amounts. As such, the Company determined there was no impairment to be recorded. |
Intangible Assets Other Than Go
Intangible Assets Other Than Goodwill | 12 Months Ended |
Dec. 31, 2015 | |
Intangible Assets Other Than Goodwill | Note 7—Intangible Assets Other Than Goodwill Intangible assets other than goodwill consist primarily of licenses, product lines, customer relationships and trademarks. Amortized intangible assets are included in intangibles in the accompanying balance sheets. Trademarks are disclosed separately in the accompanying balance sheets. Debt offering costs from the issuance of the Company’s convertible senior notes are included in other long term assets in the accompanying balance sheets. Intangible assets and debt issuance costs are as follows (in thousands, except for weighted useful lives): December 31, 2014 December 31, 2015 Weighted Useful Lives Gross Carrying Amount Accumulated Amortization Net Amount Gross Carrying Amount Accumulated Amortization Net Amount (Years) Amortized Intangible Assets: Licenses 4.96 $ 91,488 $ (85,113 ) $ 6,375 $ 91,488 $ (86,994 ) $ 4,494 Product lines 5.74 66,594 (27,235 ) 39,359 67,794 (32,077 ) 35,717 Customer relationships 5.21 9,348 (7,831 ) 1,517 9,348 (8,391 ) 957 Trade names 5.00 3,000 (1,450 ) 1,550 3,000 (2,050 ) 950 Non-compete/ Employment contracts 3.90 3,333 (3,230 ) 103 3,333 (3,266 ) 67 Total amortized intangible assets 173,763 (124,859 ) 48,904 174,963 (132,778 ) 42,185 Deferred Costs: Debt issuance costs 3.77 14,923 (6,418 ) 8,505 11,433 (4,782 ) 6,651 Unamortized Intangible Assets: Trademarks 2,308 ― 2,308 2,308 ― 2,308 $ 190,994 $ (131,277 ) $ 59,717 $ 188,704 $ (137,560 ) $ 51,144 For the years ended December 31, 2013, 2014, and 2015, the Company’s aggregate amortization expense related to intangible assets and deferred costs was $10.6 million, $10.5 million, and $10.0 million, respectively. The Company currently estimates continuing future amortization expense to be approximately (in thousands): 2016 $ 11,780 2017 10,589 2018 7,667 2019 5,255 2020 4,592 Thereafter 8,953 $ 48,836 |
Concentration of Credit Risk
Concentration of Credit Risk | 12 Months Ended |
Dec. 31, 2015 | |
Concentration of Credit Risk | Note 8—Concentration of Credit Risk Financial instruments that subject the Company to concentration of credit risk are cash and cash equivalents and accounts receivable. Cash equivalents consist principally of short-term money market funds. These instruments are short-term in nature and bear minimal risk. To date, the Company has not experienced losses on these instruments. The Company performs ongoing credit evaluations of its customers’ financial conditions, but does not require collateral to support domestic customer accounts receivable. Most goods shipped FOB Hong Kong or China are secured with irrevocable letters of credit. As of December 31, 2014 and 2015, the Company’s three largest customers accounted for approximately 29.8% and 56.2%, respectively, of net accounts receivable. The concentration of the Company’s business with a relatively small number of customers may expose the Company to material adverse effects if one or more of its large customers were to experience financial difficulty. The Company performs ongoing credit evaluations of its top customers and maintains an allowance for potential credit losses. |
Accrued Expenses
Accrued Expenses | 12 Months Ended |
Dec. 31, 2015 | |
Accrued Expenses | Note 9—Accrued Expenses Accrued expenses consist of the following (in thousands): 2014 2015 Royalties $ 34,378 $ 21,599 Sales commissions 1,914 1,132 Bonuses 6,200 6,275 Professional fees 2,780 2,535 Acquisition earn-out 6,831 ― Salaries and employee benefits 149 185 Interest expense 2,675 2,333 Unearned revenue 1,379 1,720 Molds and tools 2,093 2,669 Reorganization costs 1,626 90 Media expense 5,846 ― Inventory liabilities 6,898 6,754 Goods in transit 3,743 2,736 Preference claims 1,017 ― Other 9,445 6,053 $ 86,974 $ 54,081 In addition to royalties currently payable on the sale of licensed products during the quarter, the Company records a liability as Accrued Royalties for the estimated shortfall in achieving minimum royalty guarantees pursuant to certain license agreements (Note 16). The Company incurred reorganization charges in the fourth quarter of 2009 and 2013 to consolidate and stream-line its existing business functions. Reorganization charges relate to the termination of lease obligations, one-time severance termination benefits, property and equipment impairments and other contract terminations and are accounted for in accordance with “Exit and Disposal Cost Obligations” ASC 420-10. These rental property reorganization charges relate to the Company's Traditional Toys and Electronics segment. The components of the rental property reorganization charges are as follows (in thousands): Accrued Balance Accrued Balance December 31, 2014 Accrual Payments December 31, 2015 2013 lease abandonment costs $ 1,258 $ ― $ (1,168 ) $ 90 2009 lease abandonment costs 368 ― (368 ) ― Total reorganization charges $ 1,626 $ ― $ (1,536 ) $ 90 |
Related Party Transactions
Related Party Transactions | 12 Months Ended |
Dec. 31, 2015 | |
Related Party Transactions | Note 10—Related Party Transactions A director of the Company is a partner in a law firm that acts as counsel to the Company. The Company incurred legal fees and expenses to the law firm in the amount of approximately $3.0 million in 2013, $2.4 million in 2014 and $3.1 million in 2015. As of December 31, 2014 and 2015, legal fees and reimbursable expenses of $0.6 million and $1.6 million, respectively, were payable to this law firm. The owner of Nantworks, the Company’s DreamPlay Toys joint venture partner, beneficially owns 25.2% of the Company’s outstanding common stock, which includes 1.5 million shares underlying out-of-the-money stock warrants. Pursuant to the joint venture agreements, the Company is obligated to pay Nantworks a preferred return on joint venture sales. For the years ended December 31, 2013, 2014 and 2015, preferred returns of $188,000, $821,939 and $718,767, respectively, were earned and payable to Nantworks. Pursuant to the amended Toy Services Agreement, Nantworks is entitled to receive a renewal fee in the amount $1.2 million payable in installments of $0.8 million paid on the effective date of the renewal in 2015 and $0.2 million on or before each of August 1, 2016 and 2017. As of December 31, 2014 and 2015, the Company has a receivable from Nantworks in the amount of $0.6 million and $0.6 million, respectively. In addition, the Company previously leased office space from Nantworks. Rent expense, including common area maintenance and parking, for the years ended December 31, 2013, 2014 and 2015 was $0.8 million, $1.3 million and $0.1 million, respectively. |
Credit Facility
Credit Facility | 12 Months Ended |
Dec. 31, 2015 | |
Credit Facility | Note 11—Credit Facility In March 2014, the Company and its domestic subsidiaries entered into a secured credit facility with General Electric Capital Corporation (the “GE Loan Agreement”). The GE Loan Agreement, as amended, provides for a $75.0 million revolving credit facility subject to availability based on prescribed advance rates on certain accounts receivable and inventory. The amounts outstanding under the revolving credit facility are payable in full upon maturity of the revolving credit facility on March 27, 2019. The revolving credit facility is secured by a security interest in favor of the lender covering a substantial amount of the assets of the Company. The amount outstanding on the revolving credit facility as of December 31, 2014 and 2015 is nil and nil, respectively. The total borrowing capacity as of December 31, 2014 and 2015 was approximately $67.1 million and $55.5 million, respectively. The Company’s ability to borrow under the GE Loan Agreement is also subject to its ongoing compliance with certain financial covenants, including that the Company and its domestic subsidiaries maintain a fixed charge coverage ratio of at least 1.2:1.0 based on the trailing four quarters. The GE Loan Agreement allows the Company to borrow under the revolving credit facility at LIBOR or at a base rate, plus applicable margins of 225 basis point spread over LIBOR and 125 basis point spread on base rate loans. In addition to standard fees, the revolving credit facility has an unused line fee based on the unused amount of the credit facility, ranging from 25 to 50 basis points. As of December 31, 2015, the rate on the revolving credit facility was 2.25%. The GE Loan Agreement also contains customary events of default, including a cross default provision and a change of control provision. In the event of a default, all of the obligations of the Company and its subsidiaries under the GE Loan Agreement may be declared immediately due and payable. For certain events of default relating to insolvency and receivership, all outstanding obligations become due and payable. As of December 31, 2015, the Company has outstanding letters of credit in the aggregate amount of $23.2 million. As of December 31, 2015, the Company was in compliance with the financial covenants under the GE Loan Agreement. |
Convertible Senior Notes
Convertible Senior Notes | 12 Months Ended |
Dec. 31, 2015 | |
Convertible Senior Notes | Note 12—Convertible Senior Notes Convertible senior notes consist of the following (in thousands): December 31, 2014 2015 4.25% Convertible senior notes (due 2018) $ 100,000 $ 100,000 4.875% Convertible senior notes (due 2020) 115,000 115,000 $ 215,000 $ 215,000 In November 2009, the Company sold an aggregate of $100.0 million principal amount of the 2014 Notes. The 2014 Notes, which were senior unsecured obligations of the Company, paid cash interest semi-annually at a rate of 4.50% per annum and matured on November 1, 2014. In July 2013, the Company repurchased an aggregate of $61.0 million principal amount of these notes at par plus accrued interest with a portion of the net proceeds from the issuance of $100.0 million principal amount of 4.25% convertible senior notes due 2018 resulting in a gain on extinguishment of $0.1 million. The remainder of these notes were redeemed at par at maturity on November 1, 2014. ASC 470-20, “Debt with Conversion and Other Options,” requires the issuer of certain convertible debt instruments that may be settled in cash (or other assets) upon conversion to separately account for the liability (debt) and equity (conversion option) components of the instrument in a manner that reflects the issuer's non-convertible debt borrowing rate. In accordance with ASC 470-20, the Company allocated $13.7 million of the $100.0 million principal amount of the 2014 Notes to the equity component, which represents a discount to the debt that was being amortized to interest expense through November 1, 2014. Interest expense associated with the amortization of the discount was $2.0 million, $0.9 million, and nil for December 31, 2013, 2014 and 2015. The Company repurchased $61.0 million of the 2014 Notes during the year ended December 31, 2013 as discussed below, with $2.8 million of the price allocated to the repurchase of the related equity component. In addition, approximately $2.2 million of the unamortized debt discount and $0.6 million of debt issuance costs were written off in connection with the repurchase of the 2014 Notes. The remaining aggregate $39.0 million of principal amount of the 2014 Notes were redeemed at par at maturity on November 1, 2014. The balance of the discount was nil at December 31, 2014 and December 31, 2015. In July 2013, the Company sold an aggregate of $100.0 million principal amount of the 2018 Notes. The 2018 Notes are senior unsecured obligations of the Company paying interest semi-annually in arrears on August 1 and February 1 of each year at a rate of 4.25% per annum and will mature on August 1, 2018. The initial conversion rate for the 2018 Notes will be 114.3674 shares of the Company’s common per $1,000 principal amount of notes, equivalent to an initial conversion price of approximately $8.74 per share of common stock, subject to adjustment in certain events. Holders of the 2018 Notes may convert their notes upon the occurrence of specified events. Upon conversion, the 2018 Notes will be settled in shares of the Company’s common stock. The Company used $61.0 million of the approximate $96.0 million in net proceeds from the offering to repurchase at par $61.0 million principal amount of the 2014 Notes. The remainder of the net proceeds will be used for general corporate purposes. In June 2014, the Company sold an aggregate of $115.0 million principal amount of 4.875% Convertible Senior Notes due 2020 (the “2020 Notes”). The 2020 Notes are senior unsecured obligations of the Company paying interest semi-annually in arrears on June 1 and December 1 of each year at a rate of 4.875% per annum and will mature on June 1, 2020. The initial conversion rate for the 2020 Notes will be 103.7613 shares of our common per $1,000 principal amount of notes, equivalent to an initial conversion price of approximately $9.64 per share of common stock, subject to adjustment in certain events. Holders of the 2020 Notes may convert their notes upon the occurrence of specified events. Upon conversion, the 2020 Notes will be settled in shares of the Company’s common stock. The Company received net proceeds of approximately $110.4 million from the offering of which $24.0 million was used to repurchase 3.1 million shares of the Company’s common stock under a prepaid forward purchase contract and $39.0 million was used to redeem at par the remaining outstanding principal amount of the 2014 Notes at maturity on November 1, 2014. The remainder of the net proceeds will be used for general corporate purposes. In January 2016 the Company repurchased $2.0 million of the 2020 Notes. Key components of the 4.50% convertible senior notes due 2014 consist of the following (in thousands): Years Ended December 31, 2013 2014 2015 Contractual interest expense on the coupon $ 3,356 $ 1,463 $ ― Amortization of debt discount and debt issuance costs recognized as interest expense 2,030 1,140 ― $ 5,386 $ 2,603 $ ― Key components of the 4.25% convertible senior notes due 2018 consist of the following (in thousands): December 31, 2014 2015 Principal amount of notes $ 100,000 $ 100,000 Net carrying amount of the 2018 convertible notes $ 100,000 $ 100,000 Years Ended December 31, 2013 2014 2015 Contractual interest expense $ 1,771 $ 4,250 $ 4,250 Amortization of debt issuance costs recognized as interest expense 421 835 836 $ 2,192 $ 5,085 $ 5,086 Key components of the 4.875% convertible senior notes due 2020 consist of the following (in thousands): December 31, 2014 2015 Principal amount of notes $ 115,000 $ 115,000 Net carrying amount of the 2020 convertible notes $ 115,000 $ 115,000 Years Ended December 31, 2013 2014 2015 Contractual interest expense $ — $ 3,135 $ 5,606 Amortization of debt issuance costs recognized as interest expense — 473 811 $ — $ 3,608 $ 6,417 |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2015 | |
Income Taxes | Note 13—Income Taxes The Company does not file a consolidated return with its foreign subsidiaries. The Company files federal and state returns and its foreign subsidiaries file returns in their respective jurisdiction. For the years ended 2013, 2014 and 2015, the provision for income taxes, which included federal, state and foreign income taxes, was an expense of $2.6 million, $3.7 million, and $3.4 million reflecting effective tax provision rates of (5.1%), 14.7% and 12.9%, respectively. For the year ended 2013 and 2014, provision for income taxes includes federal, state and foreign income taxes at effective tax rates of (5. l %) and 14.7%. Exclusive of discrete items, the effective tax provision rate would be (5.8%) in 2013 and 13.6% in 2014. The decrease in the effective rate absent discrete items was primarily due to the foreign rate differential between the United States and Hong Kong. The rate exclusive of discrete items can be materially impacted by the proportion of Hong Kong earnings to consolidated earnings. The 2015 tax expense of $3.4 million included a discrete tax expense of $0.9 million primarily comprised of return to provision adjustments. Absent these discrete tax expenses, the Company’s effective tax rate for 2015 was 9.5%; primarily due to a full valuation allowance on the Company’s United States deferred tax assets and the foreign rate differential, and is impacted by the proportion of Hong Kong earnings to overall earnings and is expected to vary depending on the level of consolidated earnings. For years ended 2014 and 2015, the Company had net deferred tax liabilities of approximately $2.6 million and $2.3 million, respectively, related to foreign jurisdictions. Provision for income taxes reflected in the accompanying consolidated statements of operations are comprised of the following (in thousands): 2013 2014 2015 Federal $ (1,862 ) $ (4 ) $ — State and local (390 ) 287 708 Foreign 4,894 3,887 3,044 Total Current 2,642 4,170 3,752 APIC (160 ) (84 ) — Deferred 129 (371 ) (329 ) Total $ 2,611 $ 3,715 $ 3,423 The components of deferred tax assets/(liabilities) are as follows (in thousands): 2014 2015 Net deferred tax assets/(liabilities): Current: Reserve for sales allowances and possible losses $ 1,034 $ 797 Accrued expenses 8,231 1,252 Prepaid royalties 16,322 13,869 Accrued royalties 5,029 4,178 Inventory 4,065 3,495 State income taxes (8,206 ) (7,231 ) Other 709 487 Gross current 27,184 16,847 Valuation allowance (23,826 ) (19,586 ) Net current 3,358 (2,739 ) Long Term: Federal and state net operating loss carryforwards 29,383 37,473 Property and equipment 4,542 4,039 Original issue discount interest (13,561 ) (10,419 ) Goodwill and intangibles 43,269 36,990 Share based compensation 2,309 2,487 Other 11,037 11,228 Gross long-term 76,979 81,798 Valuation allowance (82,959 ) (81,352 ) Net long-term (5,980 ) 446 Total net deferred tax assets/(liabilities) $ (2,622 ) $ (2,293 ) Provision for income taxes varies from the U.S. federal statutory rate. The following reconciliation shows the significant differences in the tax at statutory and effective rates: 2013 2014 2015 Federal income tax expense 35.0 % 35.0 % 35.0 % State income tax expense, net of federal tax effect 6.2 ― 1.0 Effect of differences in U.S. and Foreign statutory rates 4.8 (14.1 ) (9.4 ) Uncertain tax positions 0.4 ― 0.3 Earn out adjustments ― ― (7.4 ) Provision to return ― ― 12.2 Other 4.3 (0.4 ) 1.6 Foreign deemed dividend (45.3 ) ― 1.7 Foreign tax credit 21.4 ― (0.5 ) Valuation allowance (31.9 ) (5.8 ) (21.6 ) (5.1 )% 14.7 % 12.9 % Deferred taxes result from temporary differences between tax bases of assets and liabilities and their reported amounts in the consolidated financial statements. The temporary differences result from costs required to be capitalized for tax purposes by the U.S. Internal Revenue Code (“IRC”), and certain items accrued for financial reporting purposes in the year incurred but not deductible for tax purposes until paid. The Company has established a full valuation allowance on net deferred tax assets in the United States since, in the opinion of management, it is not more likely than not that the U.S. net deferred tax assets will be realized. The components of income (loss) before provision (benefit) for income taxes are as follows (in thousands): 2013 2014 2015 Domestic $ (66,470 ) $ 5,358 $ 11,692 Foreign 15,175 19,866 14,901 $ (51,295 ) $ 25,224 $ 26,593 The Company has approximately $252 million of cumulative undistributed earnings of non-U.S. subsidiaries for which U.S. taxes have not been provided as of December 31, 2015. These earnings are intended to be permanently reinvested outside the U.S. If future events necessitate that these earnings should be repatriated to the U.S., an additional tax expense and related liability may be required. The determination of the amount of unrecognized U.S. deferred tax liability for undistributed earnings of non-U.S. subsidiaries is not practicable. The Company also does not provide deferred taxes on foreign currency translation adjustments under the indefinite reversal exception. The Company uses a recognition threshold and measurement process for recording in the consolidated financial statements uncertain tax positions (“UTP”) taken or expected to be taken in a tax return. $1.8 million of additional UTPs related to Hong Kong mold depreciation were recognized in 2015. In addition, approximately $2.1 million of California audit and R&D Credit based UTPs became de-recognized during 2015, due to the closing of a California income tax audit. These items were included in the 2015 income tax provision. During 2014, approximately $44,000 of the liability for UTP was de-recognized. Current interest on uncertain income tax liabilities is recognized as interest expense and penalties are recognized in selling, general and administrative expenses in the consolidated statement of operations. During 2013, the Company recognized $120,000 of current year interest expense relating to UTPs. During 2014, the Company recognized $150,000 of current year interest expense relating to UTPs. During 2015, the Company did not recognize any current year interest expense relating to UTPs. The following table provides further information of UTPs that would affect the effective tax rate, if recognized, as of December 31, 2015 (in millions): Balance, January 1, 2013 $ 4.8 Current year additions 0.3 Current year reduction due to lapse of applicable statute of limitations (2.5 ) Balance, December 31, 2013 2.6 Current year additions — Current year reduction due to lapse of applicable statute of limitations (0.1 ) Balance, December 31, 2014 2.5 Current year additions 1.8 Current year reduction due to audit settlement (2.1 ) Balance, December 31, 2015 $ 2.2 Tax years 2012 through 2014 remain subject to examination in the United States. The tax years 2010 through 2014 are generally still subject to examination in the various states. The tax years 2009 through 2014 are still subject to examination in Hong Kong. In the normal course of business, the Company is audited by federal, state, and foreign tax authorities. The U.S. Internal Revenue Service is not currently examining any of the tax years. Management assesses the available positive and negative evidence to estimate if sufficient future taxable income will be generated to use the existing deferred tax assets by jurisdiction. A significant piece of objective negative evidence evaluated was the cumulative loss incurred over the three-year period ended December 31, 2015. Such objective evidence limits the ability to consider other subjective evidence such as the Company’s projections for future growth. The Company is required to establish a valuation allowance for the U.S. deferred tax assets and record a charge to income if Management determines, based upon available evidence at the time the determination is made, that it is more likely than not that some portion or all of the deferred tax assets may not be realized. For the three-year period ended December 31, 2015, the Company was in a cumulative pre-tax loss position in the U.S. On the basis of this evaluation, as of December 31, 2015, a valuation allowance of $100.9 million has been recorded against the U.S. deferred tax assets that more likely than not will not be realized. For the year ended December 31, 2015, the valuation allowance decreased by $5.9 million from $106.8 million at December 31, 2014 to $100.9 million at December 31, 2015. The net deferred tax liabilities of $2.3 million represent the net deferred tax liabilities in the foreign jurisdiction, where the Company is in a cumulative income position. The amount of the deferred tax asset considered realizable, however, could be adjusted if estimates of future taxable income during the carryforward period are reduced or increased, or if objective negative evidence in the form of cumulative losses is no longer present and additional weight may be given to subjective evidence such as the Company’s projections for growth. At December 31, 2015, the Company had U.S. federal net operating loss carryforwards, or "NOLs," of approximately $76 million, which will begin to expire in 2031. At December 31, 2015, the Company's state NOLs were mainly from California. The majority of the approximately $110 million of California NOLs will begin to expire in 2031. At December 31, 2015, the Company had foreign tax credit carryforwards of approximately $12.6 million, which will begin to expire in 2022. At December 31, 2015, the Company had federal research and development tax credit carryforwards ("credit carryforwards") of approximately $0.5 million, which will begin to expire in 2029. At December 31, 2015, the Company had state research and development tax credits of approximately $140,000, which carry forward indefinitely. Utilization of certain NOLs and research credit carryforwards may be subject to an annual limitation due to ownership change limitations set forth in Sections 382 and 383 of the Internal Revenue Code of 1986, as amended, and comparable state income tax laws. Any future annual limitation may result in the expiration of NOLs and credit carryforwards before utilization. |
Leases
Leases | 12 Months Ended |
Dec. 31, 2015 | |
Leases | Note 14—Leases The Company leases office, warehouse and showroom facilities and certain equipment under operating leases. Rent expense for the years ended December 31, 2013, 2014 and 2015 totaled $14.4 million, $13.0 million, and $11.5 million, respectively. Including leases abandoned during 2013 and 2014, the following is a schedule of minimum annual lease payments (in thousands). 2016 $ 12,729 2017 12,524 2018 9,248 2019 5,995 2020 3,997 Thereafter 11,892 $ 56,385 |
Common Stock, Preferred Stock a
Common Stock, Preferred Stock and Warrants | 12 Months Ended |
Dec. 31, 2015 | |
Common Stock, Preferred Stock and Warrants | Note 15—Common Stock, Preferred Stock and Warrants The Company has 105,000,000 authorized shares of stock consisting of 100,000,000 shares of $.001 par value common stock and 5,000,000 shares of $.001 par value preferred stock. On December 31, 2014 shares issued and outstanding were 22,682,295, and on December 31, 2015, shares issued and outstanding were 21,153,878. All issuances of common stock, including those issued pursuant to stock option and warrant exercises, restricted stock grants and acquisitions, are issued from the Company’s authorized but not issued and outstanding shares. During 2013, the Company declared a cash dividend of $0.07 per share to shareholders of record as of market close on March 15, 2013 and June 14, 2013. Cash paid for these dividends were approximately $1.5 million and $1.5 million, respectively. In July 2013, the dividend plan was suspended. In January 2014, the Company issued an aggregate of 531,993 shares of restricted stock at a value of approximately $3.6 million to two executive officers, which vest, subject to certain company financial performance criteria, over a one to three year period. In addition, an aggregate of 78,150 shares of restricted stock were issued to its five non-employee directors, which vested in January 2015, at an aggregate value of approximately $0.5 million. In June 2014, the Company effectively repurchased 3,112,840 shares of its common stock at an average cost of $7.71 per share for an aggregate amount of $24.0 million pursuant to a prepaid forward share repurchase agreement entered into with Merrill Lynch International (“ML”). These repurchased shares are treated as retired for basic and diluted EPS purposes although they remain legally outstanding. The Company reflects the aggregate purchase price of its common shares repurchased as a reduction to stockholders’ equity allocated to treasury stock. No shares have been delivered to the Company by ML as of December 31, 2015. In January 2015, the Company issued an aggregate of 525,734 shares of restricted stock at a value of approximately $3.6 million to two executive officers, which vest, subject to certain company financial performance criteria and market conditions, over a one to three year period. In addition, an aggregate of 73,855 shares of restricted stock were issued to its five non-employee directors, which vest in January 2016, at an aggregate value of approximately $0.5 million. In April 2015, the Company issued an aggregate of 135,234 shares of restricted stock at a value of approximately $0.9 million to an executive officer, which vests subject to certain company financial performance criteria and market conditions, over a one to three year period. In June 2015, the Board of Directors authorized the repurchase of up to an aggregate of $30.0 million of the Company’s outstanding common stock and/or convertible notes (collectively, “securities”). The Company intends to retire any repurchased securities. As of December 31, 2015, the Company repurchased 1,547,361 shares of its common stock at an aggregate value of $13.2 million, of which 1,000,000 shares have been retired and cancelled. No convertible notes have been repurchased as of December 31, 2015. No dividend was declared or paid in 2014 and 2015. |
Commitments
Commitments | 12 Months Ended |
Dec. 31, 2015 | |
Commitments | Note 16—Commitments The Company has entered into various license agreements whereby the Company may use certain characters and intellectual properties in conjunction with its products. Generally, such license agreements provide for royalties to be paid at 1% to 20% of net sales with minimum guarantees and advance payments. In the event the Company determines that a shortfall in achieving the minimum guarantee is likely, a liability is recorded for the estimated short fall and charged to royalty expense. Future annual minimum royalty guarantees as of December 31, 2015 are as follows (in thousands): 2016 $ 32,427 2017 28,696 2018 17,659 2019 10 $ 78,792 The Company has entered into employment and consulting agreements with certain executives expiring through December 31, 2018. The aggregate future annual minimum guaranteed amounts due under those agreements as of December 31, 2015 are as follows (in thousands): 2016 $ 6,869 2017 5,324 2018 1,315 $ 13,508 |
Share-Based Payments
Share-Based Payments | 12 Months Ended |
Dec. 31, 2015 | |
Share-Based Payments | Note 17—Share-Based Payments Under its 2002 Stock Award and Incentive Plan (“the Plan”), which incorporated its Third Amended and Restated 1995 Stock Option Plan, the Company has reserved 6,525,000 shares of its common stock for issuance upon the exercise of options granted under the Plan, as well as for the awarding of other securities. Under the Plan, employees (including officers), non-employee directors and independent consultants may be granted options to purchase shares of common stock and other securities (Note 15). The vesting of these options and other securities may vary, but typically vest on a step-up basis over a maximum period of 4 years. Restricted shares typically vest in the same manner, with the exception of certain awards vesting over one to two years. Share-based compensation expense is recognized on a straight-line basis over the requisite service period. As of December 31, 2015, 708,123 shares were available for future grant. Additional shares may become available to the extent that options or shares of restricted stock presently outstanding under the Plan terminate or expire. Restricted Stock Under the Plan, share-based compensation payments may include the issuance of shares of restricted stock. Restricted stock award grants are based upon employment contracts, which vary by individual and year, and are subject to vesting conditions. Non-employee directors each receive grants of restricted stock at a value of $100,000 annually which vest after one year – this amount is prorated if a director is appointed within the year. In addition, at the discretion of Management and approval of the Board, non-executive employees also may receive restricted stock awards, which occurs approximately once per year. During 2013, the Company issued a total of 996,990 shares of restricted stock, of which, 285,543 shares of restricted stock (with performance based vesting measures) were issued to two executive officers and were subsequently forfeited based upon the Company not meeting certain financial targets for the year. 54,227 shares were granted to its non-employee directors. The remaining 657,220 shares of restricted stock were granted to non-executive employees. The Company cancelled 4,582 shares of restricted stock due to various non-executive employees departing from the Company prior to shares vesting completely. Also during 2013, certain employees, including an executive officer, surrendered an aggregate of 7,540 shares of restricted stock at a value of less than $0.1 million to cover income taxes on the vesting of shares. As of December 31, 2013, 721,752 shares of the restricted stock remained unvested, representing a weighted average grant date fair value of $5.0 million. During 2014, the Company issued a total of 610,143 shares of restricted stock; of which 531,993 shares of restricted stock (with performance based vesting measures) were issued to two executive officers and were subsequently forfeited based upon the Company not meeting certain financial targets for the year. A total of 78,150 shares were granted to its non-employee directors. The Company cancelled 12,658 shares of restricted stock due to various non-executive employees departing from the Company prior to shares vesting completely. Also during 2014, certain employees, including an executive officer, surrendered an aggregate of 51,877 shares of restricted stock at a value of less than $0.1 million to cover income taxes due on the vesting of restricted shares. As of December 31, 2014, 568,057 shares of the restricted stock remained unvested, representing a weighted average grant date fair value of $3.7 million. During 2015, the Company issued a total of 734,823 shares of restricted stock; of which 660,968 shares of restricted stock (with performance based vesting measures) were issued to two executive officers. Of the 660,968 shares, a total of 612,221 were subsequently forfeited based upon the Company not meeting certain financial targets for the year. A total of 73,855 shares were granted to its non-employee directors. The Company cancelled 51,633 shares of restricted stock due to various non-executive employees departing from the Company prior to shares vesting completely. Also during 2015, certain employees, including an executive officer, surrendered an aggregate of 52,024 shares of restricted stock for a nominal amount to cover income taxes due on the vesting of restricted shares. As of December 31, 2015, 411,409 shares of the restricted stock remained unvested, representing a weighted average grant date fair value of $2.7 million. The following table summarizes the restricted stock award activity, annually, for the years ended December 31, 2013, 2014 and 2015: Restricted and Performance Based Stock Awards (RSA) Number of Shares Weighted Average Fair Value Outstanding, December 31, 2012 95,315 $ 16.75 Awarded 996,990 $ 8.38 Released (80,428 ) $ 16.46 Forfeited (290,125 ) $ 12.61 Outstanding, December 31, 2013 721,752 $ 6.88 Awarded 610,143 $ 6.72 Released (219,187 ) $ 7.99 Forfeited (544,651 ) $ 6.61 Outstanding, December 31, 2014 568,057 $ 6.54 Awarded 734,823 $ 6.81 Released (227,616 ) $ 6.60 Forfeited (663,855 ) $ 6.77 Outstanding, December 31, 2015 411,409 $ 6.61 As of December 31, 2015, there was $1.8 million of total unrecognized compensation cost related to non-vested restricted stock awards, which is expected to be recognized over a weighted-average period of 1.85 years. The following table summarizes the total share-based compensation expense and related tax benefits recognized (in thousands): Year Ended December 31, 2013 2014 2015 Restricted stock compensation expense $ 1,085 $ 1,473 $ 1,562 Tax benefit related to restricted stock compensation $ — $ — $ — Stock Options Share-based compensation cost is measured at the grant date, based on the estimated fair value of the award, and is recognized as expense over the employee's requisite service period. For the three years in the period ending December 31, 2015, the Company incurred no expense related to stock options previously awarded. The Company uses the Black-Scholes method of valuation for share-based option awards. In valuing the stock options, the Black-Scholes model incorporates assumptions about stock volatility, expected term of stock options, and risk free interest rate. The valuation is reduced by an estimate of stock option forfeitures. Stock option activity pursuant to the Plan is summarized as follows: Weighted Average Number Exercise of Shares Price Outstanding, December 31, 2012 134,644 $ 19.82 Canceled (7,500 ) $ 13.39 Outstanding, December 31, 2013 127,144 $ 20.20 Canceled (52,144 ) $ 19.50 Outstanding, December 31, 2014 75,000 $ 20.69 Canceled (75,000 ) $ 20.69 Outstanding, December 31, 2015 - Non-Employee Stock Warrants In 2012, the Company granted 1,500,000 stock warrants with an exercise price of $16.28 per share and a five year term to a third party as partial consideration for the exclusive right to use certain recognition technology in connection with the Company’s toy products. The exercise price of the 2012 stock warrants is equal to the volume-weighted average price of the Company’s common stock over the five trading days preceding the date of grant. All warrants vested upon grant and are exercisable over the term of the warrants. At December 31, 2013, 2014 and 2015 all such stock warrants remained outstanding with an exercise price of $16.28 per share and an expiration date of September 12, 2017. The Company measures the fair value of the warrants granted on the measurement date. The fair value of the 2012 stock warrant is capitalized as an intangible asset and will be amortized to expense in the consolidated statements of operations when the related product is released and the related net sales are recognized, which commenced in the third quarter of 2013. |
Employee Benefits Plan
Employee Benefits Plan | 12 Months Ended |
Dec. 31, 2015 | |
Employee Benefits Plan | Note 18—Employee Benefits Plan The Company sponsors for its U.S. employees, a defined contribution plan under Section 401(k) of the Internal Revenue Code. The Plan provides that employees may defer up to 50% of their annual compensation subject to annual dollar limitations, and that the Company will make a matching contribution equal to 100% of each employee’s deferral, up to 5% of the employee’s annual compensation. Company matching contributions, which vest immediately, totaled $2.1 million, $1.9 million, and $2.2 million for the years ended December 31, 2013, 2014 and 2015, respectively. |
Supplemental Information to Con
Supplemental Information to Consolidated Statements of Cash Flows | 12 Months Ended |
Dec. 31, 2015 | |
Supplemental Information to Consolidated Statements of Cash Flows | Note 19—Supplemental Information to Consolidated Statements of Cash Flows In 2013, certain employees – including an executive officer, surrendered an aggregate of 7,540 shares of restricted stock at a value of less than $0.1 million to cover their income taxes due on the 2013 vesting of the restricted shares granted them in 2009, 2010, 2011 and 2012. Additionally, the Company recognized a $0.2 million excess tax deficiency from the vesting of restricted stock. In 2014, certain employees – including an executive officer, surrendered an aggregate of 51,877 shares of restricted stock at a value of less than $0.1 million to cover their income taxes due on the 2014 vesting of the restricted shares granted them in 2013 and prior. Additionally, the Company recognized a $0.1 million excess tax deficiency from the vesting of restricted stock. In 2015, certain employees – including an executive officer, surrendered an aggregate of 52,024 shares of restricted stock for a nominal amount to cover their income taxes due on the 2015 vesting of the restricted shares granted them in 2014 and prior. Additionally, the Company recognized a nominal excess tax benefit from the vesting of restricted stock. |
Selected Quarterly Financial Da
Selected Quarterly Financial Data (Unaudited) | 12 Months Ended |
Dec. 31, 2015 | |
Selected Quarterly Financial Data (Unaudited) | Note 20—Selected Quarterly Financial Data (Unaudited) Selected unaudited quarterly financial data for the years 2014 and 2015 are summarized below. The Company has derived this data from the unaudited consolidated interim financial statements that, in the Company's opinion, have been prepared on substantially the same basis as the audited financial statements contained elsewhere in this report and include all normal recurring adjustments necessary for a fair presentation of the financial information for the periods presented. These unaudited quaterly results should be read in conjunction with the financial statements and notes thereto included elsewhere in this report. The operating results in any quarter are not necessarily indicative of the results that may be expected for any future period. 2014 2015 First Second Third Fourth First Second Third Fourth Quarter Quarter Quarter Quarter Quarter Quarter Quarter Quarter (in thousands, except per share data) Net sales $ 82,510 $ 124,172 $ 349,362 $ 254,016 $ 114,201 $ 131,106 $ 337,027 $ 163,407 Gross profit $ 23,555 $ 37,818 $ 94,737 $ 79,697 $ 35,378 $ 39,287 $ 104,329 $ 49,575 Income (loss) from operations $ (14,924 ) $ (4,819 ) $ 43,812 $ 7,258 $ (4,199 ) $ (3,008 ) $ 44,628 $ (6,891 ) Income (loss) before provision (benefit) for income taxes $ (16,789 ) $ (7,772 ) $ 45,807 $ 3,978 $ (7,154 ) $ (4,414 ) $ 47,239 $ (9,078 ) Net income (loss) $ (16,305 ) $ (9,053 ) $ 44,069 $ 2,798 $ (7,581 ) $ (5,727 ) $ 45,864 $ (9,386 ) Basic earnings (loss) per share $ (0.74 ) $ (0.43 ) $ 2.33 $ 0.14 $ (0.40 ) $ (0.30 ) $ 2.47 $ (0.50 ) Weighted average shares outstanding 22,003 21,276 18,897 19,570 19,090 19,108 18,559 18,781 Diluted earnings (loss) per share $ (0.74 ) $ (0.43 ) $ 1.03 $ 0.11 $ (0.40 ) $ (0.30 ) $ 1.12 $ (0.50 ) Weighted average shares and equivalents outstanding 22,003 21,276 45,152 44,060 19,090 19,108 42,562 18,781 Quarterly and year-to-date computations of income (loss) per share amounts are made independently. Therefore, the sum of the per share amounts for the quarters may not agree with the per share amounts for the year. |
Litigation
Litigation | 12 Months Ended |
Dec. 31, 2015 | |
Litigation | Note 21—Litigation On July 25, 2013, a purported class action lawsuit was filed in the United States District Court for the Central District of California captioned Melot v. JAKKS Pacific, Inc. et al., Case No. CV13-05388 (JAK) against Stephen G. Berman, Joel M. Bennett (collectively the “Individual Defendants”), and the Company (collectively, “Defendants”). On July 30, 2013, a second purported class action lawsuit was filed containing similar allegations against Defendants captioned Dylewicz v. JAKKS Pacific, Inc. et al., Case No. CV13-5487 (OON). The two cases (collectively, the “Class Action”) were consolidated on December 2, 2013 under Case No. CV13-05388 JAK (SSx) and lead plaintiff and lead counsel appointed. On January 17, 2014, Plaintiff filed a consolidated class action complaint (the “First Amended Complaint”) against Defendants which alleged that the Company violated Section 10(b) of the Securities Exchange Act and Rule 10b-5 promulgated thereunder by making false and/or misleading statements concerning Company financial projections and performance as part of its public filings and earnings calls from July 17, 2012 through July 17, 2013. Specifically, the First Amended Complaint alleged that the Company’s forward looking statements, guidance and other public statements were false and misleading for allegedly failing to disclose (i) certain alleged internal forecasts, (ii) the Company's alleged quarterly practice of laying off and rehiring workers, (iii) the Company's alleged entry into license agreements with guaranteed minimums the Company allegedly knew it was unable to meet; and (iv) allegedly poor performance of the Monsuno and Winx lines of products after their launch. The First Amended Complaint also alleged violations of Section 20(a) of the Exchange Act by Messrs. Berman and Bennett. The First Amended Complaint sought compensatory and other damages in an undisclosed amount as well as attorneys’ fees and pre-judgment and post-judgment interest. The Company filed a motion to dismiss the First Amended Complaint on February 17, 2014, and the motion was granted, with leave to replead. A Second Amended Complaint (“SAC”) was filed on July 8, 2014 and it set forth similar allegations to those in the First Amended Complaint about discrepancies between internal projections and public forecasts and the other allegations except that the claim with respect to guaranteed minimums that the Company allegedly knew it was unable to meet was eliminated. The Company filed a motion to dismiss the SAC and that motion was granted with leave to replead. A Third Amended Complaint (“TAC”) was filed on March 23, 2015 with similar allegations. The Company filed a motion to dismiss the TAC and that motion was argued on July 22, 2015; after argument it was taken on submission and a decision has not been issued. The foregoing is a summary of the pleadings and is subject to the text of the pleadings which are on file with the Court. We believe that the claims in the Class Action are without merit, and we intend to defend vigorously against them. However, because the Class Action is in a preliminary stage, we cannot assure you as to its outcome, or that an adverse decision in such action would not have a material adverse effect on our business, financial condition or results of operations. On February 25, 2014, a shareholder derivative action was filed in the Central District of California by Advanced Advisors, G.P. against the Company, nominally, and against Messrs. Berman, Bennett, Miller, Skala, Glick, Ellin, Almagor, Poulsen and Reilly and Ms. Brodsky (Advanced Partners, G.P., v. Berman, et al., CV14-1420 (DSF)).On March 6, 2014, a second shareholder derivative action alleging largely the same claims against the same defendants was filed in the Central District of California by Louisiana Municipal Police Employees Retirement System (Louisiana Municipal Police Employees Retirement System v, Berman et al., CV14-1670 (GHF). On April 17, 2014, the cases were consolidated under Case No. 2:14-01420-JAK (SSx) (the “Derivative Action”). On April 30, 2014, a consolidated amended complaint (“CAC”) was filed, which alleged (i) a claim for contribution under Sections 10(b) and 21(D) of the Securities Exchange Act related to allegations made in the Class Action; (ii) derivative and direct claims for alleged violations of Section 14 of the Exchange Act and Rule 14a-9 promulgated thereunder related to allegedly misleading statements about Mr. Berman’s compensation plan in the Company’s October 25, 2013 proxy statement; (iii) derivative claims for breaches of fiduciary duty related to the Company’s response to an unsolicited indication of interest from Oaktree Capital, stock repurchase, standstill agreement with the Clinton Group, and decisions related to the NantWorks joint venture; and (iv) claims against Messrs. Berman and Bennett for breach of fiduciary duty related to the Class Action. The CAC seeks compensatory damages, pre-judgment and post-judgment interest, and declaratory and equitable relief. The foregoing is a summary of the CAC and is subject to the text of the CAC, which is on file with the Court. A motion to dismiss the CAC or, in the alternative, to stay the CAC, was filed in May 2014. The Court granted the motion in part and denied the motion in part with leave for plaintiff to file an amended pleading. Plaintiff declined to do so. Accordingly, claims i, ii and iv have been dismissed and only the elements of claim iii not relating to the NantWorks joint venture remain. Thus, there are no surviving claims against Messrs. Poulsen, Reilly and Bennett and Ms. Brodsky and the Court approved the parties’ stipulation to strike their names as defendants in the CAC. Pleadings in response to the CAC were filed on October 30, 2014, which are on file with the Court. The matter was referred to mediation by the Court and the parties, at the mediation, reached an agreement in principle to resolve the action. Thereafter the parties entered into a memorandum of such agreement, subject to Court approval. A motion was filed seeking preliminary approval of the settlement and establishment of the procedure for final approval of the settlement; preliminary approval of the settlement was granted and a hearing regarding final approval of the proposed settlement and attorneys’ fees in connection therewith took place on November 2, 2015. At the hearing, the Judge indicated that he would approve the settlement with a formal order, and that he would take the attorneys’ fee issue under advisement. We are a party to, and certain of our property is the subject of, various pending claims and legal proceedings that routinely arise in the ordinary course of our business, but we do not believe that any of these claims or proceedings will have a material effect on our business, financial condition or results of operations. |
Schedule II-Valuation And Quali
Schedule II-Valuation And Qualifying Accounts | 12 Months Ended |
Dec. 31, 2015 | |
Schedule II-Valuation And Qualifying Accounts | JAKKS PACIFIC, INC. AND SUBSIDIARIES SCHEDULE II—VALUATION AND QUALIFYING ACCOUNTS YEARS ENDED DECEMBER 31, 2013, 2014 and 2015 Allowances are deducted from the assets to which they apply, except for sales returns and allowances. Balance at Charged to Balance Beginning Costs and at End of Period Expenses Deductions of Period (In thousands) Year ended December 31, 2013: Allowance for: Uncollectible accounts $ 2,536 $ 541 $ (149 ) $ 2,928 Reserve for potential product obsolescence 9,951 16,257 (16,721 ) 9,487 Reserve for sales returns and allowances 34,373 37,727 (40,726 ) 31,374 $ 46,860 $ 54,525 $ (57,596 ) $ 43,789 Year ended December 31, 2014: Allowance for: Uncollectible accounts $ 2,928 $ 1,545 $ (1,209) $ 3,264 Reserve for potential product obsolescence 9,487 5,524 (7,134) 7,877 Reserve for sales returns and allowances 31,374 44,741 (51,638) 24,477 $ 43,789 $ 51,810 $ (59,981) $ 35,618 Year ended December 31, 2015: Allowance for: Uncollectible accounts $ 3,264 $ (143 ) $ (407 ) $ 2,714 Reserve for potential product obsolescence 7,877 1,511 (1,337 ) 8,051 Reserve for sales returns and allowances 24,477 42,507 (49,717 ) 17,267 $ 35,618 $ 43,875 $ (51,461 ) $ 28,032 |
Summary of Significant Accoun30
Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2015 | |
Principles of consolidation | Principles of consolidation These consolidated financial statements include the accounts of the Company, its wholly owned subsidiaries, and its majority owned joint venture. All intercompany transactions have been eliminated. The Company entered into a joint venture with Meisheng Culture & Creative Corp., for the purpose of providing certain JAKKS licensed and non-licensed toys and consumer products to agreed upon territories of the People’s Republic of China. The joint venture will include a subsidiary in the Shanghai Free Trade Zone that is expected to sell, distribute and market these products, which can include dolls, plush, role play products, action figures, costumes, seasonal items, technology and app-enhanced toys and many more, based on top entertainment licenses and JAKKS’ own proprietary brands. The Company owns fifty-one percent of the joint venture. |
Cash and cash equivalents | Cash and cash equivalents The Company considers all highly liquid investments with an original maturity of three months or less, when acquired, to be cash equivalents. The Company maintains its cash in bank deposits which, at times, may exceed federally insured limits. The Company has not experienced any losses in such accounts. The Company believes it is not exposed to any significant credit risk of cash and cash equivalents. Cash and cash equivalents are maintained at financial institutions and, at times, balances may exceed federally insured limits. The Company has never experienced any losses related to these balances. |
Accounts Receivable and Allowance for Doubtful Accounts | Accounts Receivable and Allowance for Doubtful Accounts Credit is granted to customers on an unsecured basis. Credit limits and payment terms are established based on extensive evaluations made on an ongoing basis throughout the fiscal year of the financial performance, cash generation, financing availability, and liquidity status of each customer. Customers are reviewed at least annually, with more frequent reviews performed as necessary, depending upon the customer’s financial condition and the level of credit being extended. For customers who are experiencing financial difficulties, management performs additional financial analyses before shipping to those customers on credit. The Company uses a variety of financial arrangements to ensure collectability of accounts receivable of customers deemed to be a credit risk, including requiring letters of credit, purchasing various forms of credit insurance with unrelated third parties, or requiring cash in advance of shipment. The Company records an allowance for doubtful accounts based upon management’s assessment of the business environment, customers’ financial condition, historical collection experience, accounts receivable aging, customer disputes, and the collectability of specific customer accounts. |
Use of estimates | Use of estimates The preparation of consolidated financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the dates of the consolidated financial statements, and the reported amounts of revenue and expenses during the reporting periods. Actual future results could differ from those estimates. |
Revenue recognition | Revenue recognition Revenue is recognized upon the shipment of goods to customers or their agents, depending upon terms, provided there are no uncertainties regarding customer acceptance, the sales price is fixed or determinable and collectability is reasonably assured. Generally the Company does not allow product returns. It provides its customers a negotiated allowance for breakage or defects, which is recorded when the related revenue is recognized. However, the Company does make occasional exceptions to this policy and consequently accrues a return allowance based upon historic return amounts and management estimates. The Company occasionally grants credits to facilitate markdowns and sales of slow moving merchandise. These credits are recorded as a reduction of gross sales at the time of the sale. The Company’s reserve for sales returns and allowances decreased by $7.2 million from $24.5 million as of December 31, 2014 to $17.3 million as of December 31, 2015. This decrease was primarily due to certain customers taking their year-end allowances related to 2014 and 2015 during 2015, as well as reduced markdown allowances in 2015. |
Fair value measurements | Fair value measurements Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. In determining fair value, the Company uses various methods including market, income and cost approaches. Based upon these approaches, the Company often utilizes certain assumptions that market participants would use in pricing the asset or liability, including assumptions about risk and/or the risks inherent in the inputs to the valuation technique. These inputs can be readily observable, market-corroborated, or unobservable inputs. The Company utilizes valuation techniques that maximize the use of observable inputs and minimize the use of unobservable inputs. Based upon observable inputs used in the valuation techniques, the Company is required to provide information according to the fair value hierarchy. The fair value hierarchy ranks the quality and reliability of the information used to determine fair values into three broad levels as follows: Level 1: Valuations for assets and liabilities traded in active markets from readily available pricing sources for market transactions involving identical assets or liabilities. Level 2: Valuations for assets and liabilities traded in less active dealer or broker markets. Valuations are obtained from third-party pricing services for identical or similar assets or liabilities. Level 3: Valuations incorporate certain assumptions and projections in determining the fair value assigned to such assets or liabilities. In instances where the determination of the fair value measurement is based upon inputs from different levels of the fair value hierarchy, the level in the fair value hierarchy within which the entire fair value measurement falls is based upon the lowest level input that is significant to the fair value measurement in its entirety. The Company’s assessment of the significance of a particular input to the fair value measurement in its entirety requires judgment, and considers factors specific to the asset or liability. The following table summarizes the Company’s financial assets measured at fair value on a recurring basis as of December 31 (in thousands): Fair Value Measurements Carrying Amount as of As of December 31, 2014 December 31, 2014 Level 1 Level 2 Level 3 Cash equivalents $ 12,166 $ 12,166 $ — $ — Marketable securities 220 220 — — $ 12,386 $ 12,386 $ — $ — Fair Value Measurements Carrying Amount as of As of December 31, 2015 December 31, 2015 Level 1 Level 2 Level 3 Cash equivalents $ 13,218 $ 13,218 $ — $ — Marketable securities — — — — $ 13,218 $ 13,218 $ — $ — The Company’s accounts receivable, accounts payable and accrued expenses represent financial instruments. The carrying value of these financial instruments is a reasonable approximation of fair value. The fair value of the 4.25% convertible senior notes payable due 2018 as of December 31, 2014 and 2015 was $96.3 million and $102.0 million respectively, based upon the most recent quoted market prices, and the fair value of the 4.875% convertible senior notes payable due 2020 as of December 31, 2014 and 2015 was $100.9 million and $112.3 million, respectively, based upon the most recent quoted market prices. The fair values of the convertible senior notes are considered to be Level 2 measurements on the fair value hierarchy. For the years ended December 31, 2014 and 2015, there was no impairment to the value of the Company’s non-financial assets. |
Inventory | Inventory Inventory, which includes the ex-factory cost of goods, capitalized warehouse costs and in-bound freight and duty, is valued at the lower of cost (first-in, first-out) or market, net of inventory obsolescence reserve, and consists of the following (in thousands): December 31, 2014 2015 Raw materials $ 1,040 $ 3,717 Finished goods 77,787 56,827 $ 78,827 $ 60,544 |
Property and equipment | Property and equipment Property and equipment are stated at cost and are being depreciated using the straight-line method over their estimated useful lives as follows: Office equipment 5 years Automobiles 5 years Furniture and fixtures 5 - 7 years Leasehold improvements Shorter of length of lease or 10 years The Company uses the usage method as its depreciation methodology for molds and tools used in the manufacturing of its products, which is more closely correlated to production of goods. The Company believes that the usage method more accurately matches costs with revenues. Furthermore, the useful estimated life of molds and tools is two years. For the years ended December 31, 2013, 2014, and 2015, the Company’s aggregate depreciation expense related to property and equipment was $11.8 million, $10.4 million, and $10.9 million, respectively. |
Other Comprehensive Income (Loss) | Other Comprehensive Income (Loss) Other comprehensive income (loss) includes all changes in equity from non-owner sources. The Company accounts for other comprehensive income in accordance with Accounting Standards Codification (“ASC”) ASC 220, “Comprehensive Income.” All the activity in other comprehensive income (loss) and all amounts in accumulated other comprehensive income (loss) relate to foreign currency translation adjustments. |
Advertising | Advertising Production costs of commercials and programming are charged to operations in the period during which the production is first aired. The costs of other advertising, promotion and marketing programs are charged to operations in the period incurred. Advertising expense for the years ended December 31, 2013, 2014 and 2015, was approximately $10.1 million, $19.3 million, and $15.8 million, respectively. The Company also participates in cooperative advertising arrangements with certain customers, whereby it allows a discount from invoiced product amounts in exchange for customer purchased advertising that features the Company’s products. Typically, these discounts range from 1% to 6% of gross sales, and are generally based upon product purchases or specific advertising campaigns. Such amounts are accrued when the related revenue is recognized or when the advertising campaign is initiated. These cooperative advertising arrangements are accounted for as direct selling expenses. |
Income taxes | Income taxes The Company does not file a consolidated return with its foreign subsidiaries. The Company files federal and state returns and its foreign subsidiaries file returns in their respective jurisdictions. Deferred taxes are provided on an asset and liability method whereby deferred tax assets are recognized as deductible temporary differences and operating loss and tax credit carry-forwards and deferred tax liabilities are recognized for taxable temporary differences. Temporary differences are the differences between the reported amounts of assets and liabilities and their tax basis. Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion or all of the deferred tax assets will not be realized. Deferred tax assets and liabilities are adjusted for the effects of changes in tax laws and rates on the date of enactment. |
Foreign Currency Translation Exposure | Foreign Currency Translation Exposure The Company’s reporting currency is the US dollar. The translation of its net investment in subsidiaries with non-US dollar functional currencies subjects the Company to currency exchange rate fluctuations in its results of operations and financial position. Assets and liabilities of subsidiaries with non-US dollar functional currencies are translated into US dollars at year-end exchange rates. Income, expense, and cash flow items are translated at average exchange rates prevailing during the year. The resulting currency translation adjustments are recorded as a component of accumulated other comprehensive loss/gain within stockholders’ equity. The Company’s primary currency translation exposures in 2013, 2014 and 2015 were related to its net investment in entities having functional currencies denominated in the Hong Kong dollar. |
Foreign Currency Transaction Exposure | Foreign Currency Transaction Exposure Currency exchange rate fluctuations may impact the Company’s results of operations and cash flows. The Company’s currency transaction exposures include gains and losses realized on unhedged inventory purchases and unhedged receivables and payables balances that are denominated in a currency other than the applicable functional currency. Gains and losses on unhedged inventory purchases and other transactions associated with operating activities are recorded in the components of operating income in the consolidated statement of operations. Inventory purchase transactions denominated in the Hong Kong dollar were the primary transactions that caused foreign currency transaction exposure for the Company in 2013, 2014 and 2015. |
Accounting for the impairment of finite-lived tangible and intangible assets | Accounting for the impairment of finite-lived tangible and intangible assets Long-lived assets with finite lives, which include property and equipment and intangible assets other than goodwill, are evaluated for impairment when events or changes in circumstances indicate that the carrying amount of the assets may not be recoverable through the estimated undiscounted future cash flows from the use of these assets. When any such impairment exists, the related assets will be written down to fair value. Finite-lived intangible assets consist primarily of product technology rights, acquired backlog, customer relationships, product lines and license agreements. These intangible assets are amortized over the estimated economic lives of the related assets. There were no impairments for years ended December 31, 2013, 2014 and 2015. |
Goodwill and other indefinite-lived intangible assets | Goodwill and other indefinite-lived intangible assets Goodwill and indefinite-lived intangible assets are not amortized, but are tested for impairment at least annually at the reporting unit level. Losses in value are recorded when material impairment has occurred in the underlying assets or when the benefits of the identified intangible assets are realized. Indefinite-lived intangible assets other than goodwill consist of trademarks. The carrying value of goodwill and trademarks are based upon cost, which is subject to management’s current assessment of fair value. Management evaluates fair value recoverability using both objective and subjective factors. Objective factors include cash flows and analysis of recent sales and earnings trends. Subjective factors include management’s best estimates of projected future earnings and competitive analysis and the Company’s strategic focus. For the years ended December 31, 2013, 2014 and 2015, there was no impairment to the value of the Company's goodwill or trademarks. |
Share-based Compensation | Share-based Compensation The Company measures all employee share-based compensation awards using a fair value method and records such expense in its consolidated financial statements. The Company recorded $1.1 million, $1.5 million, and $1.6 million of restricted stock expense, in 2013, 2014, and 2015, respectively. See Note 17 for further details relating to share based compensation. |
Earnings per share | Earnings per share The following table is a reconciliation of the weighted-average shares used in the computation of basic and diluted earnings per share (“EPS”) for the periods presented (in thousands, except per share data): 2013 Weighted Average Loss Shares Per Share Basic EPS Loss available to common stockholders $ (53,906 ) 22,200 $ (2.43 ) Effect of dilutive securities: Assumed conversion of convertible senior notes — — Options and warrants — — Unvested restricted stock grants — — Diluted EPS Loss available to common stockholders plus assumed exercises and conversion $ (53,906 ) 22,200 $ (2.43 ) 2014 Weighted Average Income Shares Per Share Basic EPS Income available to common stockholders $ 21,509 20,948 $ 1.03 Effect of dilutive securities: Assumed conversion of convertible senior notes 7,345 20,388 Options and warrants — — Unvested restricted stock grants — 180 Diluted EPS Income available to common stockholders plus assumed exercises and conversion $ 28,854 41,516 $ 0.70 2015 Weighted Average Income Shares Per Share Basic EPS Income available to common stockholders $ 23,254 19,435 $ 1.20 Effect of dilutive securities: Assumed conversion of convertible senior notes 7,385 23,369 Options and warrants — — Unvested performance stock grants — 347 Unvested restricted stock grants — 170 Diluted EPS Income available to common stockholders plus assumed exercises and conversion $ 30,639 43,321 $ 0.71 Basic earnings per share is calculated using the weighted average number of common shares outstanding during the period. Diluted earnings per share is calculated using the weighted average number of common shares and common share equivalents outstanding during the period (which consist of warrants, options and convertible debt to the extent they are dilutive). For the years ended December 31, 2013, 2014 and 2015, the convertible notes interest and related common share equivalent of 10,037,523, nil and nil, respectively, were excluded from the diluted earnings per share calculation because they were anti-dilutive. Potentially dilutive stock options and warrants of 1,627,144, 1,601,272 and 1,518,596 for the years ended December 31, 2013, 2014, and 2015, respectively, were excluded from the computation of diluted earnings per share since they would have been anti-dilutive. Potentially dilutive restricted stock of 111,195, nil and nil for the years ended December 31, 2013, 2014 and 2015, respectively, were excluded from the computation of diluted earnings per share since they would have been anti-dilutive. The Company is also party to a prepaid forward contract to purchase 3,112,840 shares of its common stock that are to be delivered over a settlement period in 2020. The number of shares to be delivered under the prepaid forward contract has been removed from the weighted-average basic and diluted shares outstanding. Any dividends declared and paid on the shares underlying the forward contract are to be reverted back to the Company based on the contractual terms of the forward contract. |
Debt with Conversion and Other Options | Debt with Conversion and Other Options In July 2013, the Company sold an aggregate of $100.0 million principal amount of 4.25% Convertible Senior Notes due 2018 (the “2018 Notes”). The 2018 Notes are senior unsecured obligations of the Company paying interest semi-annually in arrears on August 1 and February 1 of each year at a rate of 4.25% per annum and will mature on August 1, 2018. The initial conversion rate for the 2018 Notes will be 114.3674 shares of the Company’s common per $1,000 principal amount of notes, equivalent to an initial conversion price of approximately $8.74 per share of common stock, subject to adjustment in certain events. Holders of the 2018 Notes may convert their notes upon the occurrence of specified events. Upon conversion, the 2018 Notes will be settled in shares of the Company’s common stock. In June 2014, the Company sold an aggregate of $115.0 million principal amount of 4.875% Convertible Senior Notes due 2020 (the “2020 Notes”). The 2020 Notes are senior unsecured obligations of the Company paying interest semi-annually in arrears on June 1 and December 1 of each year at a rate of 4.875% per annum and will mature on June 1, 2020. The initial conversion rate for the 2020 Notes will be 103.7613 shares of our common per $1,000 principal amount of notes, equivalent to an initial conversion price of approximately $9.64 per share of common stock, subject to adjustment in certain events. Holders of the 2020 Notes may convert their notes upon the occurrence of specified events. Upon conversion, the 2020 Notes will be settled in shares of the Company’s common stock. The Company received net proceeds of approximately $110.4 million from the offering of which $24.0 million was used to repurchase 3.1 million shares of the Company’s common stock under a prepaid forward purchase contract. In January 2016 the Company repurchased $2.0 million of the 2020 Notes. In June 2014, the Company effectively repurchased 3,112,840 shares of its common stock at an average cost of $7.71 per share for an aggregate amount of $24.0 million pursuant to a prepaid forward share repurchase agreement entered into with Merrill Lynch International (“ML”). These repurchased shares are treated as retired for basic and diluted EPS purposes although they remain legally outstanding. The Company reflects the aggregate purchase price of its common shares repurchased as a reduction to stockholders’ equity allocated to treasury stock. Any dividends declared and paid on the shares underlying the forward contract are to be reverted back to the Company based on the contractual terms of the forward contract. |
Reclassifications | Reclassifications Certain reclassifications were made to the prior year consolidated financial statements to conform to current year presentation. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements In May 2014, the FASB issued Accounting Standards Update No. 2014-09, Revenue from Contracts with Customers (“ASU 2014-09”), which supersedes nearly all existing revenue recognition guidance under U.S. GAAP. The core principle of ASU 2014-09 is to recognize revenues when promised goods or services are transferred to customers in an amount that reflects the consideration to which an entity expects to be entitled for those goods or services. ASU 2014-09 defines a five step process to achieve this core principle and, in doing so, more judgment and estimates may be required within the revenue recognition process than are required under existing U.S. GAAP. The standard is effective for annual periods beginning after December 15, 2017, and interim periods therein, using either of the following transition methods: (i) a full retrospective approach reflecting the application of the standard in each prior reporting period with the option to elect certain practical expedients, or (ii) a retrospective approach with the cumulative effect of initially adopting ASU 2014-09 recognized at the date of adoption (which includes additional footnote disclosures). The Company is currently evaluating the impact of our pending adoption of ASU 2014-09 on our consolidated financial statements and has not yet determined the method by which we will adopt the standard in 2018. In August 2014, the FASB amended the FASB Accounting Standards Codification and amended Subtopic 205-40, “Presentation of Financial Statements — Going Concern.” This amendment prescribes that an entity’s management should evaluate whether there are conditions or events, considered in the aggregate, that raise substantial doubt about the entity’s ability to continue as a going concern within one year after the date that the financial statements are issued. The amendments will become effective for the Company’s annual and interim reporting periods beginning January 1, 2017. Upon adoption the Company will use this guidance to evaluate going concern. In April 2015, the FASB issued Accounting Standards Update 2015-03, “Imputation of Interest (Subtopic 835-30): Simplifying the Presentation of Debt Issuance Costs” (“ASU 2015-03”). ASU 2015-03 requires an entity to present debt issuance costs related to a recognized debt liability in the balance sheet as a direct deduction from the carrying amount of the debt liability, consistent with debt discounts. The recognition and measurement guidance for debt issuance costs are not affected by the amendments in this update. The amendment will be effective for our annual and interim reporting periods beginning January 1, 2016 and should be applied on a retrospective basis. The adoption of ASU 2015-03 will not have any impact on our results of operations, but will result in debt issuance costs being presented as a direct reduction from the carrying amount of debt liabilities. In July 2015, the FASB issued Accounting Standards Update 2015-11, “Inventory (Topic 330): Simplifying the Measurement of Inventory” (“ASU 2015-11”). ASU 2015-11 requires inventory accounted for under the FIFO or average cost method to be measured using the lower of cost and net realizable value. The amendments are effective prospectively for fiscal years and for interim periods beginning after December 15, 2016. The Company is currently evaluating the impact of the pending adoption of ASU 2015-11 on the consolidated financial statements. In August 2015, the FASB issued Accounting Standards Update 2015-15, “Imputation of Interest (Subtopic 835-30): Presentation and Subsequent Measurement of Debt Issuance Costs Associated with Line-of-Credit Arrangements” (“ASU 2015-15”). ASU 2015-15 codifies an SEC staff announcement that entities are permitted to defer and present debt issuance costs related to line-of-credit arrangements as assets. The announcements were effective upon issuance. The adoption of ASU 2015-15 does not have any impact on The Company’s consolidated financial statements. In November 2015, the FASB issued Accounting Standards Update. 2015-17, “Balance Sheet Classification of Deferred Taxes” (“ASU 2015-17”). ASU 2015-17 requires that deferred tax liabilities and assets be classified as noncurrent in a classified statement of financial position. This ASU is effective for financial statements issued for fiscal years beginning after December 15, 2016, and interim periods within those fiscal years. The Company is currently evaluating the impact that ASU 2015-17 will have on its financial position or financial statement disclosures. In February 2016, the FASB issued Accounting Standards Update 2016-02, “Leases” (“ASU 2016-02”). ASU 2016-02 establishes a right-of-use (“ROU”) model that requires a lessee to record a ROU asset and a lease liability on the balance sheet for all leases with terms longer than 12 months. Leases will be classified as either finance or operating, with classification affecting the pattern of expense recognition in the income statement. ASU 2016-02 is effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. Early adoption is permitted. A modified retrospective transition approach is required for lessees for capital and operating leases existing at, or entered into after, the beginning of the earliest comparative period presented in the financial statements, with certain practical expedients available. The Company is currently evaluating the impact of the pending adoption of this new standard on its financial statements. |
Summary of Significant Accoun31
Summary of Significant Accounting Policies (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Financial Assets Measured at Fair Value on Recurring Basis | The following table summarizes the Company’s financial assets measured at fair value on a recurring basis as of December 31 (in thousands): Fair Value Measurements Carrying Amount as of As of December 31, 2014 December 31, 2014 Level 1 Level 2 Level 3 Cash equivalents $ 12,166 $ 12,166 $ — $ — Marketable securities 220 220 — — $ 12,386 $ 12,386 $ — $ — Fair Value Measurements Carrying Amount as of As of December 31, 2015 December 31, 2015 Level 1 Level 2 Level 3 Cash equivalents $ 13,218 $ 13,218 $ — $ — Marketable securities — — — — $ 13,218 $ 13,218 $ — $ — |
Net of Inventory Obsolescence Reserve | Inventory, which includes the ex-factory cost of goods, capitalized warehouse costs and in-bound freight and duty, is valued at the lower of cost (first-in, first-out) or market, net of inventory obsolescence reserve, and consists of the following (in thousands): December 31, 2014 2015 Raw materials $ 1,040 $ 3,717 Finished goods 77,787 56,827 $ 78,827 $ 60,544 |
Property and Equipment, Estimated Useful Lives | Property and equipment are stated at cost and are being depreciated using the straight-line method over their estimated useful lives as follows: Office equipment 5 years Automobiles 5 years Furniture and fixtures 5 - 7 years Leasehold improvements Shorter of length of lease or 10 years |
Reconciliation of the Weighted-Average Shares Used in Computation of Basic and Diluted Earnings Per Share | The following table is a reconciliation of the weighted-average shares used in the computation of basic and diluted earnings per share (“EPS”) for the periods presented (in thousands, except per share data): 2013 Weighted Average Loss Shares Per Share Basic EPS Loss available to common stockholders $ (53,906 ) 22,200 $ (2.43 ) Effect of dilutive securities: Assumed conversion of convertible senior notes — — Options and warrants — — Unvested restricted stock grants — — Diluted EPS Loss available to common stockholders plus assumed exercises and conversion $ (53,906 ) 22,200 $ (2.43 ) 2014 Weighted Average Income Shares Per Share Basic EPS Income available to common stockholders $ 21,509 20,948 $ 1.03 Effect of dilutive securities: Assumed conversion of convertible senior notes 7,345 20,388 Options and warrants — — Unvested restricted stock grants — 180 Diluted EPS Income available to common stockholders plus assumed exercises and conversion $ 28,854 41,516 $ 0.70 2015 Weighted Average Income Shares Per Share Basic EPS Income available to common stockholders $ 23,254 19,435 $ 1.20 Effect of dilutive securities: Assumed conversion of convertible senior notes 7,385 23,369 Options and warrants — — Unvested performance stock grants — 347 Unvested restricted stock grants — 170 Diluted EPS Income available to common stockholders plus assumed exercises and conversion $ 30,639 43,321 $ 0.71 |
Business Segments, Geographic32
Business Segments, Geographic Data, Sales by Product Group and Major Customers (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Information by Segment and Reconciliation to Reported Amounts | Information by segment and a reconciliation to reported amounts as of December 31, 2014 and 2015 and for the three years in the period ended December 31, 2015 are as follows (in thousands): Years Ended December 31, 2013 2014 2015 Net Sales Traditional Toys and Electronics $ 320,565 $ 408,426 $ 437,683 Role Play, Novelty and Seasonal Toys 312,360 401,634 308,058 $ 632,925 $ 810,060 $ 745,741 Years Ended December 31, 2013 2014 2015 Operating Income (Loss) Traditional Toys and Electronics $ (25,286 ) $ 10,654 $ 13,588 Role Play, Novelty and Seasonal Toys (19,246 ) 20,673 16,942 $ (44,532 ) $ 31,327 $ 30,530 Years Ended December 31, 2013 2014 2015 Depreciation and Amortization Expense Traditional Toys and Electronics $ 12,475 $ 11,159 $ 10,911 Role Play, Novelty and Seasonal Toys 8,939 7,812 7,949 $ 21,414 $ 18,971 $ 18,860 December 31, 2014 2015 Assets Traditional Toys and Electronics $ 313,380 $ 326,199 Role Play, Novelty and Seasonal Toys 248,402 179,701 $ 561,782 $ 505,900 |
Information by Geographic Area | million in 2015 and substantially all of these assets are located in China. The following tables present information about the Company by geographic area as of December 31, 2014 and 2015 and for each of the three years in the period ended December 31, 2015 (in thousands): December 31, 2014 2015 Long-lived Assets China $ 8,816 $ 10,172 United States 1,689 7,702 Hong Kong 591 561 $ 11,096 $ 18,435 Years Ended December 31, 2013 2014 2015 Net Sales by Geographic Area United States $ 524,193 $ 653,497 $ 542,101 Europe 48,585 67,027 117,313 Canada 25,125 33,040 32,587 Hong Kong 6,721 2,746 1,675 Other 28,301 53,750 52,065 $ 632,925 $ 810,060 $ 745,741 |
Net Sales to Major Customers | Net sales to major customers were as follows (in thousands, except for percentages): 2013 2014 2015 Percentage of Percentage of Percentage of Amount Net Sales Amount Net Sales Amount Net Sales Wal-Mart $ 135,223 21.4 % $ 165,777 20.5 % $ 163,333 21.9 % Target 98,770 15.6 124,257 15.3 96,766 13.0 Toys ‘R’ Us 68,074 10.8 93,926 11.6 71,150 9.5 $ 302,067 47.8 % $ 383,960 47.4 % $ 331,249 44.4 % |
Joint Ventures (Tables)
Joint Ventures (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Balance of Investment in Joint Venture | As of December 31, 2014 and 2015, the balance of the investment in the Pacific Animation Partners joint venture includes the following components (in thousands): December 31, December 31, 2014 2015 Capital contributions $ 3,856 $ — Equity in cumulative net loss (3,856 ) — Investment in joint venture $ — $ — |
Goodwill (Tables)
Goodwill (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Changes in Carrying Amount of Goodwill | The changes in the carrying amount of goodwill for the years ended December 31, 2014 and 2015 are as follows (in thousands): Traditional Toys and Electronics Role Play, Novelty and Seasonal Toys Total Balance, January 1, 2014: Goodwill $ 25,265 $ 19,611 $ 44,876 Adjustments to goodwill for foreign currency translation (384 ) — (384 ) Balance December 31, 2014 $ 24,881 $ 19,611 $ 44,492 Balance, January 1, 2015: Goodwill $ 24,881 $ 19,611 $ 44,492 Adjustments to goodwill for foreign currency translation (293 ) — (293 ) Balance December 31, 2015: $ 24,588 $ 19,611 $ 44,199 |
Intangible Assets Other Than 35
Intangible Assets Other Than Goodwill (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Intangible Assets and Debt Issuance Costs | Intangible assets and debt issuance costs are as follows (in thousands, except for weighted useful lives): December 31, 2014 December 31, 2015 Weighted Useful Lives Gross Carrying Amount Accumulated Amortization Net Amount Gross Carrying Amount Accumulated Amortization Net Amount (Years) Amortized Intangible Assets: Licenses 4.96 $ 91,488 $ (85,113 ) $ 6,375 $ 91,488 $ (86,994 ) $ 4,494 Product lines 5.74 66,594 (27,235 ) 39,359 67,794 (32,077 ) 35,717 Customer relationships 5.21 9,348 (7,831 ) 1,517 9,348 (8,391 ) 957 Trade names 5.00 3,000 (1,450 ) 1,550 3,000 (2,050 ) 950 Non-compete/ Employment contracts 3.90 3,333 (3,230 ) 103 3,333 (3,266 ) 67 Total amortized intangible assets 173,763 (124,859 ) 48,904 174,963 (132,778 ) 42,185 Deferred Costs: Debt issuance costs 3.77 14,923 (6,418 ) 8,505 11,433 (4,782 ) 6,651 Unamortized Intangible Assets: Trademarks 2,308 ― 2,308 2,308 ― 2,308 $ 190,994 $ (131,277 ) $ 59,717 $ 188,704 $ (137,560 ) $ 51,144 |
Future Amortization Expenses | The Company currently estimates continuing future amortization expense to be approximately (in thousands): 2016 $ 11,780 2017 10,589 2018 7,667 2019 5,255 2020 4,592 Thereafter 8,953 $ 48,836 |
Accrued Expenses (Tables)
Accrued Expenses (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Accrued Expenses | Accrued expenses consist of the following (in thousands): 2014 2015 Royalties $ 34,378 $ 21,599 Sales commissions 1,914 1,132 Bonuses 6,200 6,275 Professional fees 2,780 2,535 Acquisition earn-out 6,831 ― Salaries and employee benefits 149 185 Interest expense 2,675 2,333 Unearned revenue 1,379 1,720 Molds and tools 2,093 2,669 Reorganization costs 1,626 90 Media expense 5,846 ― Inventory liabilities 6,898 6,754 Goods in transit 3,743 2,736 Preference claims 1,017 ― Other 9,445 6,053 $ 86,974 $ 54,081 |
Components of Rental Property Reorganization Charges | The components of the rental property reorganization charges are as follows (in thousands): Accrued Balance Accrued Balance December 31, 2014 Accrual Payments December 31, 2015 2013 lease abandonment costs $ 1,258 $ ― $ (1,168 ) $ 90 2009 lease abandonment costs 368 ― (368 ) ― Total reorganization charges $ 1,626 $ ― $ (1,536 ) $ 90 |
Convertible Senior Notes (Table
Convertible Senior Notes (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Convertible Senior Notes | Convertible senior notes consist of the following (in thousands): December 31, 2014 2015 4.25% Convertible senior notes (due 2018) $ 100,000 $ 100,000 4.875% Convertible senior notes (due 2020) 115,000 115,000 $ 215,000 $ 215,000 |
4.50% Convertible senior notes (due 2014) | |
Components of Convertible Senior Notes | Key components of the 4.50% convertible senior notes due 2014 consist of the following (in thousands): Years Ended December 31, 2013 2014 2015 Contractual interest expense on the coupon $ 3,356 $ 1,463 $ ― Amortization of debt discount and debt issuance costs recognized as interest expense 2,030 1,140 ― $ 5,386 $ 2,603 $ ― |
4.25% Convertible Senior Notes (due 2018) | |
Components of Convertible Senior Notes | Key components of the 4.25% convertible senior notes due 2018 consist of the following (in thousands): December 31, 2014 2015 Principal amount of notes $ 100,000 $ 100,000 Net carrying amount of the 2018 convertible notes $ 100,000 $ 100,000 Years Ended December 31, 2013 2014 2015 Contractual interest expense $ 1,771 $ 4,250 $ 4,250 Amortization of debt issuance costs recognized as interest expense 421 835 836 $ 2,192 $ 5,085 $ 5,086 |
4.875% Convertible Senior Notes (due 2020) | |
Components of Convertible Senior Notes | Key components of the 4.875% convertible senior notes due 2020 consist of the following (in thousands): December 31, 2014 2015 Principal amount of notes $ 115,000 $ 115,000 Net carrying amount of the 2020 convertible notes $ 115,000 $ 115,000 Years Ended December 31, 2013 2014 2015 Contractual interest expense $ — $ 3,135 $ 5,606 Amortization of debt issuance costs recognized as interest expense — 473 811 $ — $ 3,608 $ 6,417 |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Provision for Income Tax | Provision for income taxes reflected in the accompanying consolidated statements of operations are comprised of the following (in thousands): 2013 2014 2015 Federal $ (1,862 ) $ (4 ) $ — State and local (390 ) 287 708 Foreign 4,894 3,887 3,044 Total Current 2,642 4,170 3,752 APIC (160 ) (84 ) — Deferred 129 (371 ) (329 ) Total $ 2,611 $ 3,715 $ 3,423 |
Components of Deferred Tax Assets (Liabilities) | The components of deferred tax assets/(liabilities) are as follows (in thousands): 2014 2015 Net deferred tax assets/(liabilities): Current: Reserve for sales allowances and possible losses $ 1,034 $ 797 Accrued expenses 8,231 1,252 Prepaid royalties 16,322 13,869 Accrued royalties 5,029 4,178 Inventory 4,065 3,495 State income taxes (8,206 ) (7,231 ) Other 709 487 Gross current 27,184 16,847 Valuation allowance (23,826 ) (19,586 ) Net current 3,358 (2,739 ) Long Term: Federal and state net operating loss carryforwards 29,383 37,473 Property and equipment 4,542 4,039 Original issue discount interest (13,561 ) (10,419 ) Goodwill and intangibles 43,269 36,990 Share based compensation 2,309 2,487 Other 11,037 11,228 Gross long-term 76,979 81,798 Valuation allowance (82,959 ) (81,352 ) Net long-term (5,980 ) 446 Total net deferred tax assets/(liabilities) $ (2,622 ) $ (2,293 ) |
Significant Differences in Tax at Statutory and Effective Rates | Provision for income taxes varies from the U.S. federal statutory rate. The following reconciliation shows the significant differences in the tax at statutory and effective rates: 2013 2014 2015 Federal income tax expense 35.0 % 35.0 % 35.0 % State income tax expense, net of federal tax effect 6.2 ― 1.0 Effect of differences in U.S. and Foreign statutory rates 4.8 (14.1 ) (9.4 ) Uncertain tax positions 0.4 ― 0.3 Earn out adjustments ― ― (7.4 ) Provision to return ― ― 12.2 Other 4.3 (0.4 ) 1.6 Foreign deemed dividend (45.3 ) ― 1.7 Foreign tax credit 21.4 ― (0.5 ) Valuation allowance (31.9 ) (5.8 ) (21.6 ) (5.1 )% 14.7 % 12.9 % |
Income (Loss) Before Provision (benefit) for Income Tax | The components of income (loss) before provision (benefit) for income taxes are as follows (in thousands): 2013 2014 2015 Domestic $ (66,470 ) $ 5,358 $ 11,692 Foreign 15,175 19,866 14,901 $ (51,295 ) $ 25,224 $ 26,593 |
Effective Tax Rate | The following table provides further information of UTPs that would affect the effective tax rate, if recognized, as of December 31, 2015 (in millions): Balance, January 1, 2013 $ 4.8 Current year additions 0.3 Current year reduction due to lapse of applicable statute of limitations (2.5 ) Balance, December 31, 2013 2.6 Current year additions — Current year reduction due to lapse of applicable statute of limitations (0.1 ) Balance, December 31, 2014 2.5 Current year additions 1.8 Current year reduction due to audit settlement (2.1 ) Balance, December 31, 2015 $ 2.2 |
Leases (Tables)
Leases (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Minimum Annual Lease Payments | Including leases abandoned during 2013 and 2014, the following is a schedule of minimum annual lease payments (in thousands). 2016 $ 12,729 2017 12,524 2018 9,248 2019 5,995 2020 3,997 Thereafter 11,892 $ 56,385 |
Commitments (Tables)
Commitments (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Future Annual Minimum Guaranteed Amount | The aggregate future annual minimum guaranteed amounts due under those agreements as of December 31, 2015 are as follows (in thousands): 2016 $ 6,869 2017 5,324 2018 1,315 $ 13,508 |
Royalty Payments | |
Future Annual Minimum Guaranteed Amount | Future annual minimum royalty guarantees as of December 31, 2015 are as follows (in thousands): 2016 $ 32,427 2017 28,696 2018 17,659 2019 10 $ 78,792 |
Share-Based Payments (Tables)
Share-Based Payments (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Restricted Stock Award Activity | The following table summarizes the restricted stock award activity, annually, for the years ended December 31, 2013, 2014 and 2015: Restricted and Performance Based Stock Awards (RSA) Number of Shares Weighted Average Fair Value Outstanding, December 31, 2012 95,315 $ 16.75 Awarded 996,990 $ 8.38 Released (80,428 ) $ 16.46 Forfeited (290,125 ) $ 12.61 Outstanding, December 31, 2013 721,752 $ 6.88 Awarded 610,143 $ 6.72 Released (219,187 ) $ 7.99 Forfeited (544,651 ) $ 6.61 Outstanding, December 31, 2014 568,057 $ 6.54 Awarded 734,823 $ 6.81 Released (227,616 ) $ 6.60 Forfeited (663,855 ) $ 6.77 Outstanding, December 31, 2015 411,409 $ 6.61 |
Total Share-Based Compensation Expense and Related Tax Benefits Recognized | The following table summarizes the total share-based compensation expense and related tax benefits recognized (in thousands): Year Ended December 31, 2013 2014 2015 Restricted stock compensation expense $ 1,085 $ 1,473 $ 1,562 Tax benefit related to restricted stock compensation $ — $ — $ — |
Stock Option Activity Pursuant to Plan | Stock option activity pursuant to the Plan is summarized as follows: Weighted Average Number Exercise of Shares Price Outstanding, December 31, 2012 134,644 $ 19.82 Canceled (7,500 ) $ 13.39 Outstanding, December 31, 2013 127,144 $ 20.20 Canceled (52,144 ) $ 19.50 Outstanding, December 31, 2014 75,000 $ 20.69 Canceled (75,000 ) $ 20.69 |
Selected Quarterly Financial 42
Selected Quarterly Financial Data (Unaudited) (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Quarterly Financial Data | Selected unaudited quarterly financial data for the years 2014 and 2015 are summarized below. The Company has derived this data from the unaudited consolidated interim financial statements that, in the Company's opinion, have been prepared on substantially the same basis as the audited financial statements contained elsewhere in this report and include all normal recurring adjustments necessary for a fair presentation of the financial information for the periods presented. These unaudited quaterly results should be read in conjunction with the financial statements and notes thereto included elsewhere in this report. The operating results in any quarter are not necessarily indicative of the results that may be expected for any future period. 2014 2015 First Second Third Fourth First Second Third Fourth Quarter Quarter Quarter Quarter Quarter Quarter Quarter Quarter (in thousands, except per share data) Net sales $ 82,510 $ 124,172 $ 349,362 $ 254,016 $ 114,201 $ 131,106 $ 337,027 $ 163,407 Gross profit $ 23,555 $ 37,818 $ 94,737 $ 79,697 $ 35,378 $ 39,287 $ 104,329 $ 49,575 Income (loss) from operations $ (14,924 ) $ (4,819 ) $ 43,812 $ 7,258 $ (4,199 ) $ (3,008 ) $ 44,628 $ (6,891 ) Income (loss) before provision (benefit) for income taxes $ (16,789 ) $ (7,772 ) $ 45,807 $ 3,978 $ (7,154 ) $ (4,414 ) $ 47,239 $ (9,078 ) Net income (loss) $ (16,305 ) $ (9,053 ) $ 44,069 $ 2,798 $ (7,581 ) $ (5,727 ) $ 45,864 $ (9,386 ) Basic earnings (loss) per share $ (0.74 ) $ (0.43 ) $ 2.33 $ 0.14 $ (0.40 ) $ (0.30 ) $ 2.47 $ (0.50 ) Weighted average shares outstanding 22,003 21,276 18,897 19,570 19,090 19,108 18,559 18,781 Diluted earnings (loss) per share $ (0.74 ) $ (0.43 ) $ 1.03 $ 0.11 $ (0.40 ) $ (0.30 ) $ 1.12 $ (0.50 ) Weighted average shares and equivalents outstanding 22,003 21,276 45,152 44,060 19,090 19,108 42,562 18,781 |
Principal Industry - Additional
Principal Industry - Additional Information (Detail) | 12 Months Ended |
Dec. 31, 2015 | |
Nature Of Operations [Line Items] | |
Primary business operation commenced date | 1995-07 |
Summary of Significant Accoun44
Summary of Significant Accounting Policies - Additional Information (Detail) - USD ($) $ / shares in Units, $ in Thousands | 1 Months Ended | 12 Months Ended | |||||
Jan. 31, 2016 | Jun. 30, 2014 | Jul. 31, 2013 | Dec. 31, 2015 | Dec. 31, 2014 | Nov. 01, 2014 | Dec. 31, 2013 | |
Significant Accounting Policies [Line Items] | |||||||
Reserve for sales returns and allowances | $ 17,267 | $ 24,477 | |||||
Decrease reserve for sales returns and allowances | (7,210) | (6,897) | $ (2,999) | ||||
Depreciation expense | 10,900 | 10,400 | 11,800 | ||||
Advertising expenses | 15,800 | 19,300 | 10,100 | ||||
Restricted stock compensation expense | $ 1,562 | 1,473 | 1,085 | ||||
Prepaid forward contract, settlement year | 2,020 | ||||||
Repurchase of notes | 39,000 | $ 61,000 | |||||
Repurchase of common stock under prepaid forward repurchase agreement, shares | 3,112,840 | ||||||
Repurchase of common stock, average price per share | $ 7.71 | ||||||
Payment for repurchase of common stock | $ 24,000 | $ 13,193 | $ 24,000 | ||||
Convertible Senior Notes | |||||||
Significant Accounting Policies [Line Items] | |||||||
Potentially dilutive securities excluded from computation of diluted earnings per common share | 0 | 0 | 10,037,523 | ||||
Options and Warrants | |||||||
Significant Accounting Policies [Line Items] | |||||||
Potentially dilutive securities excluded from computation of diluted earnings per common share | 1,518,596 | 1,601,272 | 1,627,144 | ||||
Restricted Stock | |||||||
Significant Accounting Policies [Line Items] | |||||||
Potentially dilutive securities excluded from computation of diluted earnings per common share | 0 | 0 | 111,195 | ||||
Minimum | |||||||
Significant Accounting Policies [Line Items] | |||||||
Discount on invoiced amount of products | 1.00% | ||||||
Maximum | |||||||
Significant Accounting Policies [Line Items] | |||||||
Discount on invoiced amount of products | 6.00% | ||||||
Molds and tools | |||||||
Significant Accounting Policies [Line Items] | |||||||
Property and equipment useful life | 2 years | ||||||
4.25% Convertible Senior Notes (due 2018) | |||||||
Significant Accounting Policies [Line Items] | |||||||
Convertible senior note payable, fair value | $ 102,000 | $ 96,300 | |||||
Debt instrument, interest rate | 4.25% | 4.25% | 4.25% | ||||
Debt instrument, maturity year | 2,018 | 2,018 | |||||
Long term debt, face amount | $ 100,000 | ||||||
Debt instrument, maturity date | Aug. 1, 2018 | ||||||
Frequency of interest payment | Semi-annually | ||||||
Conversion rate in share per $1000 principal amount of notes | 114.3674 | ||||||
Debt instrument, conversion rate | $ 8.74 | ||||||
Net proceeds from debt instrument | $ 96,000 | ||||||
4.875% Convertible Senior Notes (due 2020) | |||||||
Significant Accounting Policies [Line Items] | |||||||
Convertible senior note payable, fair value | $ 112,300 | $ 100,900 | |||||
Debt instrument, interest rate | 4.875% | 4.875% | 4.875% | ||||
Debt instrument, maturity year | 2,020 | 2,020 | |||||
Long term debt, face amount | $ 115,000 | ||||||
Debt instrument, maturity date | Jun. 1, 2020 | ||||||
Frequency of interest payment | Semi-annually | ||||||
Conversion rate in share per $1000 principal amount of notes | 103.7613 | ||||||
Debt instrument, conversion rate | $ 9.64 | ||||||
Net proceeds from debt instrument | $ 110,400 | ||||||
Repurchase of notes | $ 39,000 | ||||||
Repurchase of common stock under prepaid forward repurchase agreement, shares | 3,100,000 | ||||||
Payment for repurchase of common stock | $ 24,000 | ||||||
4.875% Convertible Senior Notes (due 2020) | Subsequent Event | |||||||
Significant Accounting Policies [Line Items] | |||||||
Repurchase of notes | $ 2,000 | ||||||
Payment for repurchase of common stock | $ 2,000 | ||||||
Meisheng Culture & Creative Corp. | |||||||
Significant Accounting Policies [Line Items] | |||||||
Percentage of ownership interest in joint venture | 51.00% |
Financial Assets Measured at Fa
Financial Assets Measured at Fair Value on Recurring Basis (Detail) - USD ($) $ in Thousands | Dec. 31, 2015 | Dec. 31, 2014 |
Fair Value Measurements, Level 1 | ||
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items] | ||
Assets measured at fair value on recurring basis | $ 13,218 | $ 12,386 |
Cash Equivalents | Fair Value Measurements, Level 1 | ||
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items] | ||
Assets measured at fair value on recurring basis | 13,218 | 12,166 |
Marketable Securities | Fair Value Measurements, Level 1 | ||
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items] | ||
Assets measured at fair value on recurring basis | 220 | |
Carrying Amount | ||
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items] | ||
Assets measured at fair value on recurring basis | 13,218 | 12,386 |
Carrying Amount | Cash Equivalents | ||
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items] | ||
Assets measured at fair value on recurring basis | $ 13,218 | 12,166 |
Carrying Amount | Marketable Securities | ||
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items] | ||
Assets measured at fair value on recurring basis | $ 220 |
Inventory Valued at Lower of Co
Inventory Valued at Lower of Cost (First-in, First-out) or Market, Net of Inventory Obsolescence Reserve (Detail) - USD ($) $ in Thousands | Dec. 31, 2015 | Dec. 31, 2014 |
Inventory [Line Items] | ||
Raw materials | $ 3,717 | $ 1,040 |
Finished goods | 56,827 | 77,787 |
Inventory, net | $ 60,544 | $ 78,827 |
Property and Equipment, Estimat
Property and Equipment, Estimated Useful Lives (Detail) | 12 Months Ended |
Dec. 31, 2015 | |
Office Equipment | |
Finite-Lived Intangible Assets [Line Items] | |
Property and equipment useful life | 5 years |
Automobiles | |
Finite-Lived Intangible Assets [Line Items] | |
Property and equipment useful life | 5 years |
Furniture and Fixtures | Minimum | |
Finite-Lived Intangible Assets [Line Items] | |
Property and equipment useful life | 5 years |
Furniture and Fixtures | Maximum | |
Finite-Lived Intangible Assets [Line Items] | |
Property and equipment useful life | 7 years |
Leasehold Improvements | |
Finite-Lived Intangible Assets [Line Items] | |
Property and equipment useful life | Shorter of length of lease or 10 years |
Reconciliation of Weighted Aver
Reconciliation of Weighted Average Shares Used in Computation of Basic and Diluted Earnings Per Share (Detail) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2015 | Sep. 30, 2015 | Jun. 30, 2015 | Mar. 31, 2015 | Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Earnings Per Share Disclosure [Line Items] | |||||||||||
Income (Loss) available to common stockholders | $ 23,254 | $ 21,509 | $ (53,906) | ||||||||
Effect of dilutive securities, assumed conversion of convertible senior notes | 7,385 | 7,345 | |||||||||
Income (Loss) available to common stockholders plus assumed exercises and conversion | $ 30,639 | $ 28,854 | $ (53,906) | ||||||||
Earnings per share - basic, Weighted Average Shares | |||||||||||
Weighted Average Shares, available to common stockholders | 18,781 | 18,559 | 19,108 | 19,090 | 19,570 | 18,897 | 21,276 | 22,003 | 19,435 | 20,948 | 22,200 |
Effect of dilutive securities: | |||||||||||
Assumed conversion of convertible senior notes | 23,369 | 20,388 | |||||||||
Options and warrants | 0 | 0 | 0 | ||||||||
Earnings per share - diluted, Weighted Average Shares | |||||||||||
Income (Loss) available to common stockholders plus assumed exercises and conversion, weighted average shares | 18,781 | 42,562 | 19,108 | 19,090 | 44,060 | 45,152 | 21,276 | 22,003 | 43,321 | 41,516 | 22,200 |
Earnings per share - basic | |||||||||||
Net income (loss) available to common stockholders, per-share | $ (0.50) | $ 2.47 | $ (0.30) | $ (0.40) | $ 0.14 | $ 2.33 | $ (0.43) | $ (0.74) | $ 1.20 | $ 1.03 | $ (2.43) |
Earnings per share - diluted | |||||||||||
Income (Loss) available to common stockholders plus assumed exercises and conversion, per-share | $ (0.50) | $ 1.12 | $ (0.30) | $ (0.40) | $ 0.11 | $ 1.03 | $ (0.43) | $ (0.74) | $ 0.71 | $ 0.70 | $ (2.43) |
Options and Warrants | |||||||||||
Earnings Per Share Disclosure [Line Items] | |||||||||||
Effect of dilutive securities, Options, warrants,unvested restricted stock grants and unvested performance stock grants | $ 0 | $ 0 | $ 0 | ||||||||
Restricted Stock | |||||||||||
Earnings Per Share Disclosure [Line Items] | |||||||||||
Effect of dilutive securities, Options, warrants,unvested restricted stock grants and unvested performance stock grants | $ 0 | $ 0 | $ 0 | ||||||||
Effect of dilutive securities: | |||||||||||
Unvested stock grants | 170 | 180 | |||||||||
Performance Stock | |||||||||||
Earnings Per Share Disclosure [Line Items] | |||||||||||
Effect of dilutive securities, Options, warrants,unvested restricted stock grants and unvested performance stock grants | $ 0 | ||||||||||
Effect of dilutive securities: | |||||||||||
Unvested stock grants | 347 |
Information by Segment and Reco
Information by Segment and Reconciliation to Reported Amounts (Detail) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2015 | Sep. 30, 2015 | Jun. 30, 2015 | Mar. 31, 2015 | Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Segment Reporting Information [Line Items] | |||||||||||
Net Sales | $ 163,407 | $ 337,027 | $ 131,106 | $ 114,201 | $ 254,016 | $ 349,362 | $ 124,172 | $ 82,510 | $ 745,741 | $ 810,060 | $ 632,925 |
Operating Income (Loss) | (6,891) | $ 44,628 | $ (3,008) | $ (4,199) | 7,258 | $ 43,812 | $ (4,819) | $ (14,924) | 30,530 | 31,327 | (44,532) |
Depreciation and Amortization Expense | 18,860 | 18,971 | 21,414 | ||||||||
Assets | 505,900 | 561,782 | 505,900 | 561,782 | |||||||
Traditional Toys and Electronics | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Net Sales | 437,683 | 408,426 | 320,565 | ||||||||
Operating Income (Loss) | 13,588 | 10,654 | (25,286) | ||||||||
Depreciation and Amortization Expense | 10,911 | 11,159 | 12,475 | ||||||||
Assets | 326,199 | 313,380 | 326,199 | 313,380 | |||||||
Role Play, Novelty and Seasonal Toys | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Net Sales | 308,058 | 401,634 | 312,360 | ||||||||
Operating Income (Loss) | 16,942 | 20,673 | (19,246) | ||||||||
Depreciation and Amortization Expense | 7,949 | 7,812 | $ 8,939 | ||||||||
Assets | $ 179,701 | $ 248,402 | $ 179,701 | $ 248,402 |
Business Segments, Geographic50
Business Segments, Geographic Data, Sales by Product Group and Major Customers - Additional Information (Detail) $ in Millions | 12 Months Ended | |
Dec. 31, 2015USD ($)Customer | Dec. 31, 2014USD ($)Customer | |
Segment Reporting Information [Line Items] | ||
Percentage of net sales accounted from customer description | No other customer accounted for more than 10% of the Company's total net sales. | |
Number of major customers | Customer | 3 | 3 |
United States | ||
Segment Reporting Information [Line Items] | ||
Tools, dyes and molds | $ | $ 10.2 | $ 8.8 |
Net Accounts Receivable | Three Largest Customers | Customer Concentration Risk | ||
Segment Reporting Information [Line Items] | ||
Percentage of net accounts receivable accounted for by three largest customers | 56.20% | 29.80% |
Information by Geographic Area
Information by Geographic Area (Detail) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2015 | Sep. 30, 2015 | Jun. 30, 2015 | Mar. 31, 2015 | Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Revenues from External Customers and Long-Lived Assets [Line Items] | |||||||||||
Long-lived Assets | $ 18,435 | $ 11,096 | $ 18,435 | $ 11,096 | |||||||
Net Sales | 163,407 | $ 337,027 | $ 131,106 | $ 114,201 | 254,016 | $ 349,362 | $ 124,172 | $ 82,510 | 745,741 | 810,060 | $ 632,925 |
China | |||||||||||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||||||||||
Long-lived Assets | 10,172 | 8,816 | 10,172 | 8,816 | |||||||
United States | |||||||||||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||||||||||
Long-lived Assets | 7,702 | 1,689 | 7,702 | 1,689 | |||||||
Net Sales | 542,101 | 653,497 | 524,193 | ||||||||
Hong Kong | |||||||||||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||||||||||
Long-lived Assets | $ 561 | $ 591 | 561 | 591 | |||||||
Net Sales | 1,675 | 2,746 | 6,721 | ||||||||
Europe | |||||||||||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||||||||||
Net Sales | 117,313 | 67,027 | 48,585 | ||||||||
Canada | |||||||||||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||||||||||
Net Sales | 32,587 | 33,040 | 25,125 | ||||||||
Other | |||||||||||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||||||||||
Net Sales | $ 52,065 | $ 53,750 | $ 28,301 |
Net Sales to Major Customers (D
Net Sales to Major Customers (Detail) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Revenue, Major Customer [Line Items] | |||
Net sales to major customer | $ 331,249 | $ 383,960 | $ 302,067 |
Wal-Mart | |||
Revenue, Major Customer [Line Items] | |||
Net sales to major customer | 163,333 | 165,777 | 135,223 |
Target | |||
Revenue, Major Customer [Line Items] | |||
Net sales to major customer | 96,766 | 124,257 | 98,770 |
Toys 'R' Us | |||
Revenue, Major Customer [Line Items] | |||
Net sales to major customer | $ 71,150 | $ 93,926 | $ 68,074 |
Net Sales | Customer Concentration Risk | |||
Revenue, Major Customer [Line Items] | |||
Percentage of Net Sales from major customer | 44.40% | 47.40% | 47.80% |
Net Sales | Wal-Mart | Customer Concentration Risk | |||
Revenue, Major Customer [Line Items] | |||
Percentage of Net Sales from major customer | 21.90% | 20.50% | 21.40% |
Net Sales | Target | Customer Concentration Risk | |||
Revenue, Major Customer [Line Items] | |||
Percentage of Net Sales from major customer | 13.00% | 15.30% | 15.60% |
Net Sales | Toys 'R' Us | Customer Concentration Risk | |||
Revenue, Major Customer [Line Items] | |||
Percentage of Net Sales from major customer | 9.50% | 11.60% | 10.80% |
Joint Ventures - Additional Inf
Joint Ventures - Additional Information (Detail) shares in Millions | 1 Months Ended | 12 Months Ended | |||
Sep. 30, 2012USD ($)shares | Dec. 31, 2015USD ($)Project | Dec. 31, 2014USD ($) | Dec. 31, 2013USD ($) | Dec. 31, 2012USD ($) | |
Schedule of Equity Method Investments [Line Items] | |||||
Equity in net income/(loss) of joint venture | $ 100,000 | $ 300,000 | $ (3,100,000) | ||
Investment in DreamPlay LLC | 7,000,000 | 7,000,000 | |||
Non-controlling interest's share of losses | $ (84,000) | ||||
Pacific Animation Partners Joint Venture | |||||
Schedule of Equity Method Investments [Line Items] | |||||
Percentage of ownership interest in joint venture | 50.00% | ||||
Investment in joint venture, percentage share of operating expenses | 50.00% | ||||
Number of episodes for which production completed | Project | 65 | ||||
Episode show airing beginning date | 2012-02 | ||||
Producer fees and royalty income from joint venture | $ 0 | 200,000 | $ 300,000 | ||
DreamPlay Toys | |||||
Schedule of Equity Method Investments [Line Items] | |||||
Percentage of ownership interest in joint venture | 50.00% | ||||
Equity in net income/(loss) of joint venture | 500,000 | ||||
Cash paid to Nant Works for joint venture | $ 8,000,000 | 400,000 | |||
Issue of warrants (in shares) | shares | 1.5 | ||||
Issue of warrants | $ 7,000,000 | ||||
Joint venture toy service agreement expiration date | Oct. 1, 2018 | ||||
Investment in DreamPlay LLC | $ 7,000,000 | ||||
Percentage of ownership interest in joint venture | 5.00% | ||||
Impairment charges | $ 0 | ||||
China Joint Venture | |||||
Schedule of Equity Method Investments [Line Items] | |||||
Percentage of ownership interest in joint venture | 51.00% | ||||
Non-controlling interest's share of losses | $ (84,000) | $ (84,000) |
Balance of Investment in Joint
Balance of Investment in Joint Venture (Detail) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Schedule of Equity Method Investments [Line Items] | |||
Equity in cumulative net loss | $ (1,017) | $ (314) | $ 3,148 |
Pacific Animation Partners Joint Venture | |||
Schedule of Equity Method Investments [Line Items] | |||
Capital contributions | 3,856 | ||
Equity in cumulative net loss | (3,856) | ||
Investment in joint venture | $ 0 | $ 0 |
Business Combinations - Additio
Business Combinations - Additional Information (Detail) $ in Millions | 1 Months Ended | 12 Months Ended | |||
Sep. 30, 2012USD ($)Installment | Jul. 31, 2012USD ($) | Dec. 31, 2015USD ($) | Dec. 31, 2014USD ($) | Dec. 31, 2013USD ($) | |
Business Acquisition [Line Items] | |||||
Other income | $ 5.6 | $ 5.9 | $ 6 | ||
Maui, Inc. | |||||
Business Acquisition [Line Items] | |||||
Business acquisition, cash paid | $ 36.2 | ||||
Business acquisition maximum additional earn-out payment | $ 18 | ||||
Additional earn-out payment period | 3 years | ||||
JKID, LTD. | |||||
Business Acquisition [Line Items] | |||||
Business acquisition, cash paid | $ 1.1 | ||||
Business acquisition maximum additional earn-out payment | $ 4.4 | ||||
Additional earn-out payment period | 2 years | ||||
Business acquisition, deferred cash payment | $ 5.5 | ||||
Business acquisition, deferred cash payment in installment | $ 1.1 | ||||
Number of semi-annual payment of deferred cash payment | Installment | 5 |
Changes in Carrying Amount of G
Changes in Carrying Amount of Goodwill (Detail) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | |
Goodwill [Line Items] | ||
Balance at beginning of the period | $ 44,492 | $ 44,876 |
Adjustments to goodwill for foreign currency translation | (293) | (384) |
Goodwill Ending Balance | 44,199 | 44,492 |
Traditional Toys and Electronics | ||
Goodwill [Line Items] | ||
Balance at beginning of the period | 24,881 | 25,265 |
Adjustments to goodwill for foreign currency translation | (293) | (384) |
Goodwill Ending Balance | 24,588 | 24,881 |
Role Play, Novelty and Seasonal Toys | ||
Goodwill [Line Items] | ||
Balance at beginning of the period | 19,611 | 19,611 |
Goodwill Ending Balance | $ 19,611 | $ 19,611 |
Goodwill - Additional Informati
Goodwill - Additional Information (Detail) | 12 Months Ended |
Dec. 31, 2015USD ($) | |
Goodwill [Line Items] | |
Goodwill impairment | $ 0 |
Intangible Assets and Debt Issu
Intangible Assets and Debt Issuance Costs (Detail) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2014 | Dec. 31, 2015 | |
Acquired Intangible Assets by Major Class [Line Items] | ||
Intangible assets, gross carrying amount | $ 190,994 | $ 188,704 |
Intangible assets, accumulated amortization | (131,277) | (137,560) |
Intangible assets, net amount | 59,717 | 51,144 |
Trademarks, net | 2,308 | 2,308 |
Amortized Intangible Assets, Gross Carrying Amount | 173,763 | 174,963 |
Amortized Intangible Assets, Accumulated Amortization | (124,859) | (132,778) |
Amortized Intangible Assets, Net Amount | $ 48,904 | 42,185 |
4.50% Convertible senior notes | ||
Acquired Intangible Assets by Major Class [Line Items] | ||
Deferred Costs, Weighted Useful Lives (Years) | 3 years 9 months 7 days | |
Deferred Costs, Gross Carrying Amount | $ 14,923 | 11,433 |
Deferred Costs, Accumulated Amortization | (6,418) | (4,782) |
Deferred Costs, Net Amount | $ 8,505 | 6,651 |
Licenses | ||
Acquired Intangible Assets by Major Class [Line Items] | ||
Weighted Useful Lives (Years) | 4 years 11 months 16 days | |
Amortized Intangible Assets, Gross Carrying Amount | $ 91,488 | 91,488 |
Amortized Intangible Assets, Accumulated Amortization | (85,113) | (86,994) |
Amortized Intangible Assets, Net Amount | $ 6,375 | 4,494 |
Product Lines | ||
Acquired Intangible Assets by Major Class [Line Items] | ||
Weighted Useful Lives (Years) | 5 years 8 months 27 days | |
Amortized Intangible Assets, Gross Carrying Amount | $ 66,594 | 67,794 |
Amortized Intangible Assets, Accumulated Amortization | (27,235) | (32,077) |
Amortized Intangible Assets, Net Amount | $ 39,359 | 35,717 |
Customer relationships | ||
Acquired Intangible Assets by Major Class [Line Items] | ||
Weighted Useful Lives (Years) | 5 years 2 months 16 days | |
Amortized Intangible Assets, Gross Carrying Amount | $ 9,348 | 9,348 |
Amortized Intangible Assets, Accumulated Amortization | (7,831) | (8,391) |
Amortized Intangible Assets, Net Amount | $ 1,517 | 957 |
Trade Name | ||
Acquired Intangible Assets by Major Class [Line Items] | ||
Weighted Useful Lives (Years) | 5 years | |
Amortized Intangible Assets, Gross Carrying Amount | $ 3,000 | 3,000 |
Amortized Intangible Assets, Accumulated Amortization | (1,450) | (2,050) |
Amortized Intangible Assets, Net Amount | $ 1,550 | 950 |
Non-compete/Employment contracts | ||
Acquired Intangible Assets by Major Class [Line Items] | ||
Weighted Useful Lives (Years) | 3 years 10 months 24 days | |
Amortized Intangible Assets, Gross Carrying Amount | $ 3,333 | 3,333 |
Amortized Intangible Assets, Accumulated Amortization | (3,230) | (3,266) |
Amortized Intangible Assets, Net Amount | $ 103 | $ 67 |
Intangible Assets Other Than 59
Intangible Assets Other Than Goodwill - Additional Information (Detail) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Finite-Lived and Indefinite-Lived Intangible Assets [Line Items] | |||
Amortization expense | $ 10 | $ 10.5 | $ 10.6 |
Future Amortization Expense (De
Future Amortization Expense (Detail) $ in Thousands | Dec. 31, 2015USD ($) |
Expected Amortization Expense [Line Items] | |
2,016 | $ 11,780 |
2,017 | 10,589 |
2,018 | 7,667 |
2,019 | 5,255 |
2,020 | 4,592 |
Thereafter | 8,953 |
Intangible Assets And Debt Issuance Cost , Total | $ 48,836 |
Concentration of Credit Risk -
Concentration of Credit Risk - Additional Information (Detail) - Customer | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | |
Concentration Risk [Line Items] | ||
Number of major customers | 3 | 3 |
Net Accounts Receivable | Three Largest Customers | Customer Concentration Risk | ||
Concentration Risk [Line Items] | ||
Percentage of net accounts receivable accounted for by three largest customers | 56.20% | 29.80% |
Accrued Expenses (Detail)
Accrued Expenses (Detail) - USD ($) $ in Thousands | Dec. 31, 2015 | Dec. 31, 2014 |
Schedule of Accrued Liabilities [Line Items] | ||
Royalties | $ 21,599 | $ 34,378 |
Sales commissions | 1,132 | 1,914 |
Bonuses | 6,275 | 6,200 |
Professional fees | 2,535 | 2,780 |
Acquisition earn-out | 6,831 | |
Salaries and employee benefits | 185 | 149 |
Interest expense | 2,333 | 2,675 |
Unearned revenue | 1,720 | 1,379 |
Molds and tools | 2,669 | 2,093 |
Reorganization costs | 90 | 1,626 |
Media expense | 5,846 | |
Inventory liabilities | 6,754 | 6,898 |
Goods in transit | 2,736 | 3,743 |
Preference claims | 1,017 | |
Other | 6,053 | 9,445 |
Accrued expenses | $ 54,081 | $ 86,974 |
Components of Rental Property R
Components of Rental Property Reorganization Charges (Detail) $ in Thousands | 12 Months Ended |
Dec. 31, 2015USD ($) | |
Schedule of Accrued Liabilities [Line Items] | |
Accrued Balance | $ 1,626 |
Accrual | 0 |
Payments | (1,536) |
Accrued Balance | 90 |
2013 lease abandonment costs | |
Schedule of Accrued Liabilities [Line Items] | |
Accrued Balance | 1,258 |
Accrual | 0 |
Payments | (1,168) |
Accrued Balance | 90 |
2009 lease abandonment costs | |
Schedule of Accrued Liabilities [Line Items] | |
Accrued Balance | 368 |
Accrual | 0 |
Payments | $ (368) |
Related Party Transactions - Ad
Related Party Transactions - Additional Information (Detail) - USD ($) shares in Millions | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Related Party Transactions | |||
Related Party Transaction [Line Items] | |||
Legal fees and expenses | $ 3,100,000 | $ 2,400,000 | $ 3,000,000 |
Legal fees and reimbursable expense, payable | $ 1,600,000 | 600,000 | |
Nantworks | |||
Related Party Transaction [Line Items] | |||
Percentage of ownership interest in joint venture | 25.20% | ||
Shares underlying out of money warrants | 1.5 | ||
Preferred return earned | $ 718,767 | 821,939 | 188,000 |
Rent expense including common area maintenance and parking | 100,000 | 1,300,000 | $ 800,000 |
Related party, receivable | 600,000 | $ 600,000 | |
Renewal fee payable | 1,200,000 | ||
Renewal fee paid | 800,000 | ||
Renewal fee payable on or before each of August 1, 2016 | 200,000 | ||
Renewal fee payable in 2017 | $ 200,000 |
Credit Facility - Additional In
Credit Facility - Additional Information (Detail) - USD ($) | 1 Months Ended | 12 Months Ended | |
Mar. 31, 2014 | Dec. 31, 2015 | Dec. 31, 2014 | |
Line of Credit Facility [Line Items] | |||
Letters of credit outstanding aggregate amount | $ 23,200,000 | ||
GE Loan Agreement | |||
Line of Credit Facility [Line Items] | |||
Line of credit facility maximum borrowing capacity | $ 75,000,000 | $ 55,500,000 | $ 67,100,000 |
Line of credit facility, maturity date | Mar. 27, 2019 | ||
Amount of credit facility outstanding | $ 0 | $ 0 | |
Rate of credit facility | 2.25% | ||
GE Loan Agreement | London Interbank Offered Rate (LIBOR) | |||
Line of Credit Facility [Line Items] | |||
Applicable margin spread over base rate | 2.25% | ||
GE Loan Agreement | Base Rate | |||
Line of Credit Facility [Line Items] | |||
Applicable margin spread over base rate | 1.25% | ||
GE Loan Agreement | Minimum | |||
Line of Credit Facility [Line Items] | |||
Fixed charge coverage ratio | 120.00% | ||
Percentage of fee for unused amount of credit facility | 0.25% | ||
GE Loan Agreement | Maximum | |||
Line of Credit Facility [Line Items] | |||
Percentage of fee for unused amount of credit facility | 0.50% |
Convertible Senior Notes (Detai
Convertible Senior Notes (Detail) - USD ($) $ in Thousands | Dec. 31, 2015 | Dec. 31, 2014 |
Debt Instrument [Line Items] | ||
Convertible senior notes | $ 215,000 | $ 215,000 |
4.25% Convertible Senior Notes (due 2018) | ||
Debt Instrument [Line Items] | ||
Convertible senior notes | 100,000 | 100,000 |
4.875% Convertible Senior Notes (due 2020) | ||
Debt Instrument [Line Items] | ||
Convertible senior notes | $ 115,000 | $ 115,000 |
Convertible Senior Notes (Paren
Convertible Senior Notes (Parenthetical) (Detail) | 12 Months Ended | |||
Dec. 31, 2015 | Dec. 31, 2014 | Jun. 30, 2014 | Jul. 31, 2013 | |
4.25% Convertible Senior Notes (due 2018) | ||||
Debt Instrument [Line Items] | ||||
Debt instrument, maturity year | 2,018 | 2,018 | ||
Debt instrument, interest rate | 4.25% | 4.25% | 4.25% | |
4.875% Convertible Senior Notes (due 2020) | ||||
Debt Instrument [Line Items] | ||||
Debt instrument, maturity year | 2,020 | 2,020 | ||
Debt instrument, interest rate | 4.875% | 4.875% | 4.875% |
Convertible Senior Notes - Addi
Convertible Senior Notes - Additional Information (Detail) - USD ($) $ / shares in Units, $ in Thousands | Nov. 01, 2014 | Jan. 31, 2016 | Jun. 30, 2014 | Jul. 31, 2013 | Nov. 30, 2009 | Dec. 31, 2015 | Dec. 31, 2014 | Nov. 01, 2014 | Dec. 31, 2013 |
Debt Instrument [Line Items] | |||||||||
Gain on debt extinguishment | $ 84 | ||||||||
Debt discount | (2,802) | ||||||||
Payment for repurchase of common stock | $ 24,000 | $ 13,193 | $ 24,000 | ||||||
Repurchase of common stock under prepaid forward repurchase agreement, shares | 3,112,840 | ||||||||
Repayments of debt | 39,000 | 61,000 | |||||||
4.50% Convertible senior notes (due 2014) | |||||||||
Debt Instrument [Line Items] | |||||||||
Long term debt, face amount | $ 100,000 | ||||||||
Frequency of interest payment | Semi-annually | ||||||||
Debt instrument, maturity date | Nov. 1, 2014 | ||||||||
Debt instrument, interest rate | 4.50% | ||||||||
Debt discount | $ 13,700 | ||||||||
Interest expenses associated with amortization of equity component | $ 0 | $ 900 | 2,000 | ||||||
Debt issuance cost written off amount | 600 | ||||||||
Repurchase of related equity component | 2,800 | ||||||||
Debt discount written off amount | $ 2,200 | ||||||||
Repayments of debt | $ 39,000 | ||||||||
Debt instrument repurchase amount | $ 61,000 | ||||||||
4.25% Convertible Senior Notes (due 2018) | |||||||||
Debt Instrument [Line Items] | |||||||||
Long term debt, face amount | $ 100,000 | ||||||||
Frequency of interest payment | Semi-annually | ||||||||
Debt instrument, maturity date | Aug. 1, 2018 | ||||||||
Debt instrument, interest rate | 4.25% | 4.25% | 4.25% | ||||||
Gain on debt extinguishment | $ 100 | ||||||||
Conversion rate in share per $1000 principal amount of notes | 114.3674 | ||||||||
Debt instrument, conversion rate | $ 8.74 | ||||||||
Net proceeds from debt instrument | $ 96,000 | ||||||||
4.875% Convertible Senior Notes (due 2020) | |||||||||
Debt Instrument [Line Items] | |||||||||
Long term debt, face amount | $ 115,000 | ||||||||
Frequency of interest payment | Semi-annually | ||||||||
Debt instrument, maturity date | Jun. 1, 2020 | ||||||||
Debt instrument, interest rate | 4.875% | 4.875% | 4.875% | ||||||
Conversion rate in share per $1000 principal amount of notes | 103.7613 | ||||||||
Debt instrument, conversion rate | $ 9.64 | ||||||||
Net proceeds from debt instrument | $ 110,400 | ||||||||
Payment for repurchase of common stock | $ 24,000 | ||||||||
Repurchase of common stock under prepaid forward repurchase agreement, shares | 3,100,000 | ||||||||
Repayments of debt | $ 39,000 | ||||||||
4.875% Convertible Senior Notes (due 2020) | Subsequent Event | |||||||||
Debt Instrument [Line Items] | |||||||||
Payment for repurchase of common stock | $ 2,000 | ||||||||
Repayments of debt | $ 2,000 |
Key Component of Convertible Se
Key Component of Convertible Senior Notes (Detail) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Debt Instrument [Line Items] | |||
Convertible senior notes, net | $ 215,000 | $ 215,000 | |
4.50% Convertible senior notes (due 2014) | |||
Debt Instrument [Line Items] | |||
Contractual interest expense on the coupon | 1,463 | $ 3,356 | |
Amortization of debt discount and debt issuance costs recognized as interest expense | 1,140 | 2,030 | |
Amortization of Deferred Charges, Total | 2,603 | 5,386 | |
4.25% Convertible Senior Notes (due 2018) | |||
Debt Instrument [Line Items] | |||
Contractual interest expense | 4,250 | 4,250 | 1,771 |
Amortization of debt discount and debt issuance costs recognized as interest expense | 836 | 835 | 421 |
Amortization of Deferred Charges, Total | 5,086 | 5,085 | $ 2,192 |
Principal amount of notes | 100,000 | 100,000 | |
Convertible senior notes, net | 100,000 | 100,000 | |
4.875% Convertible Senior Notes (due 2020) | |||
Debt Instrument [Line Items] | |||
Contractual interest expense | 5,606 | 3,135 | |
Amortization of debt discount and debt issuance costs recognized as interest expense | 811 | 473 | |
Amortization of Deferred Charges, Total | 6,417 | 3,608 | |
Principal amount of notes | 115,000 | 115,000 | |
Convertible senior notes, net | $ 115,000 | $ 115,000 |
Income Taxes - Additional Infor
Income Taxes - Additional Information (Detail) - USD ($) | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Income Taxes [Line Items] | |||
Provision (benefit) for income taxes | $ 3,423,000 | $ 3,715,000 | $ 2,611,000 |
Effective income tax rate | 12.90% | 14.70% | (5.10%) |
Effective income tax rate, exclusive of discrete items | 9.50% | 13.60% | (5.80%) |
Discrete tax benefit (expenses) | $ 900,000 | ||
Net deferred tax liabilities | 2,293,000 | $ 2,622,000 | |
Deferred tax assets, undistributed earnings of foreign subsidiaries | 252,000,000 | ||
Unrecognized tax positions, recognized | 1,800,000 | $ 300,000 | |
Valuation allowance | 100,900,000 | 106,800,000 | |
Increase (decrease) in valuation allowance | (5,900,000) | ||
U.S. federal net operating loss carryforwards | $ 76,000,000 | ||
U.S. federal net operating loss carryforwards, expiration period | Dec. 31, 2031 | ||
Foreign tax credit carryforwards | $ 12,600,000 | ||
Foreign tax credit carryforwards, expiration year | 2,022 | ||
Federal research and development tax credit carryforwards | $ 500,000 | ||
Federal research and development tax credit carryforwards, expiration year | 2,029 | ||
State research and development tax credit carryforwards | $ 140,000 | ||
Interest Expense | |||
Income Taxes [Line Items] | |||
Interest expense relating to UTPs | 0 | 150,000 | $ 120,000 |
State Of California | |||
Income Taxes [Line Items] | |||
U.S. federal net operating loss carryforwards | $ 110,000,000 | ||
U.S. federal net operating loss carryforwards, expiration period | Dec. 31, 2031 | ||
Reserve for depreciation | |||
Income Taxes [Line Items] | |||
De-recognized UTP | $ 2,100,000 | $ 44,000 |
Provision (Benefit) for Income
Provision (Benefit) for Income Taxes (Detail) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Income Taxes [Line Items] | |||
Federal | $ (4) | $ (1,862) | |
State and local | $ 708 | 287 | (390) |
Foreign | 3,044 | 3,887 | 4,894 |
Total Current | 3,752 | 4,170 | 2,642 |
APIC | (84) | (160) | |
Deferred | (329) | (371) | 129 |
Total | $ 3,423 | $ 3,715 | $ 2,611 |
Components of Deferred Tax Asse
Components of Deferred Tax Assets/(Liabilities) (Detail) - USD ($) $ in Thousands | Dec. 31, 2015 | Dec. 31, 2014 |
Current: | ||
Reserve for sales allowances and possible losses | $ 797 | $ 1,034 |
Accrued expenses | 1,252 | 8,231 |
Prepaid royalties | 13,869 | 16,322 |
Accrued royalties | 4,178 | 5,029 |
Inventory | 3,495 | 4,065 |
State income taxes | (7,231) | (8,206) |
Other | 487 | 709 |
Gross current | 16,847 | 27,184 |
Valuation allowance | (19,586) | (23,826) |
Net current assets | 3,358 | |
Net current liabilities | (2,739) | |
Long Term: | ||
Federal and state net operating loss carry forwards | 37,473 | 29,383 |
Property and equipment | 4,039 | 4,542 |
Original issue discount interest | (10,419) | (13,561) |
Goodwill and intangibles | 36,990 | 43,269 |
Share based compensation | 2,487 | 2,309 |
Other | 11,228 | 11,037 |
Gross long-term | 81,798 | 76,979 |
Valuation allowance | (81,352) | (82,959) |
Net long-term liabilities | (5,980) | |
Net long-term assets | 446 | |
Total net deferred tax assets/(liabilities) | $ (2,293) | $ (2,622) |
Reconciliation for Significant
Reconciliation for Significant Differences in Tax at Statutory and Effective Rates (Detail) | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Reconciliation of Statutory Federal Tax Rate [Line Items] | |||
Federal income tax expense | 35.00% | 35.00% | 35.00% |
State income tax expense, net of federal tax effect | 1.00% | 6.20% | |
Effect of differences in U.S. and Foreign statutory rates | (9.40%) | (14.10%) | 4.80% |
Uncertain tax positions | 0.30% | 0.40% | |
Earn out adjustments | (7.40%) | ||
Provision to return | 12.20% | ||
Other | 1.60% | (0.40%) | 4.30% |
Foreign deemed dividend | 1.70% | (45.30%) | |
Foreign tax credit | (0.50%) | 21.40% | |
Valuation allowance | (21.60%) | (5.80%) | (31.90%) |
Effective income tax rate | 12.90% | 14.70% | (5.10%) |
Components of Income (Loss) Bef
Components of Income (Loss) Before Provision (Benefit) for Income Taxes (Detail) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2015 | Sep. 30, 2015 | Jun. 30, 2015 | Mar. 31, 2015 | Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Schedule of Components of Income Before Income Tax Expense (Benefit) [Line Items] | |||||||||||
Domestic | $ 11,692 | $ 5,358 | $ (66,470) | ||||||||
Foreign | 14,901 | 19,866 | 15,175 | ||||||||
Income (loss) before provision for income taxes | $ (9,078) | $ 47,239 | $ (4,414) | $ (7,154) | $ 3,978 | $ 45,807 | $ (7,772) | $ (16,789) | $ 26,593 | $ 25,224 | $ (51,295) |
Information of UTPs Affecting E
Information of UTPs Affecting Effective Tax Rate, if Recognized (Detail) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Significant Change in Unrecognized Tax Benefits is Reasonably Possible [Line Items] | |||
Beginning Balance | $ 2.5 | $ 2.6 | $ 4.8 |
Current year additions | 1.8 | 0.3 | |
Current year reduction due to lapse of applicable statute of limitations | (0.1) | (2.5) | |
Current year reduction due to audit settlement | (2.1) | ||
Ending Balance | $ 2.2 | $ 2.5 | $ 2.6 |
Leases - Additional Information
Leases - Additional Information (Detail) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Leases Disclosure [Line Items] | |||
Operating leases rent expense | $ 11.5 | $ 13 | $ 14.4 |
Schedule of Minimum Annual Leas
Schedule of Minimum Annual Lease Payments (Detail) $ in Thousands | Dec. 31, 2015USD ($) |
Operating Leased Assets [Line Items] | |
2,016 | $ 12,729 |
2,017 | 12,524 |
2,018 | 9,248 |
2,019 | 5,995 |
2,020 | 3,997 |
Thereafter | 11,892 |
Operating Leases, Future Minimum Payments Due, Total | $ 56,385 |
Common Stock and Preferred Stoc
Common Stock and Preferred Stock - Additional Information (Detail) | Jun. 14, 2013USD ($) | Mar. 15, 2013USD ($) | Apr. 30, 2015USD ($)shares | Jan. 31, 2015USD ($)ExecutiveOfficersDirectorshares | Jun. 30, 2014USD ($)$ / sharesshares | Jan. 31, 2014USD ($)ExecutiveOfficersDirectorshares | Dec. 31, 2015USD ($)$ / sharesshares | Dec. 31, 2014USD ($)$ / sharesshares | Dec. 31, 2013USD ($)$ / shares | Jun. 30, 2015USD ($) |
Class of Stock [Line Items] | ||||||||||
Common stock, shares authorized | 100,000,000 | 100,000,000 | ||||||||
Preferred shares, shares authorized | 5,000,000 | 5,000,000 | ||||||||
Total number of shares authorized | 105,000,000 | |||||||||
Common stock, par value | $ / shares | $ 0.001 | $ 0.001 | ||||||||
Preferred shares, par value | $ / shares | $ 0.001 | $ 0.001 | ||||||||
Common stock, shares issued | 21,153,878 | 22,682,295 | ||||||||
Common stock, shares outstanding | 21,153,878 | 22,682,295 | ||||||||
Dividends declared, per share | $ / shares | $ 0.07 | |||||||||
Cash dividend paid | $ | $ 1,500,000 | $ 1,500,000 | $ 0 | $ 0 | $ 3,084,000 | |||||
Number of executive officers | ExecutiveOfficers | 2 | 2 | ||||||||
Number of non-employee directors | Director | 5 | 5 | ||||||||
Common stock repurchased, shares | 3,112,840 | |||||||||
Repurchase of common stock, average price per share | $ / shares | $ 7.71 | |||||||||
Common stock repurchased, value | $ | $ 24,000,000 | $ 24,000,000 | ||||||||
Securities | ||||||||||
Class of Stock [Line Items] | ||||||||||
Common stock repurchased, shares | 1,547,361 | |||||||||
Common stock repurchased, value | $ | $ 13,200,000 | |||||||||
Common stock retired and cancelled | 1,000,000 | |||||||||
Debt instrument repurchase amount | $ | $ 0 | |||||||||
Minimum | Restricted Stock | ||||||||||
Class of Stock [Line Items] | ||||||||||
Vesting period | 1 year | |||||||||
Maximum | Restricted Stock | ||||||||||
Class of Stock [Line Items] | ||||||||||
Vesting period | 2 years | |||||||||
Maximum | Securities | ||||||||||
Class of Stock [Line Items] | ||||||||||
Stock repurchase, authorized amount | $ | $ 30,000,000 | |||||||||
Executive officer | ||||||||||
Class of Stock [Line Items] | ||||||||||
Restricted stock issued, shares | 135,234 | 525,734 | 531,993 | |||||||
Restricted stock issued, value | $ | $ 900,000 | $ 3,600,000 | $ 3,600,000 | |||||||
Executive officer | Minimum | Restricted Stock | ||||||||||
Class of Stock [Line Items] | ||||||||||
Vesting period | 1 year | 1 year | 1 year | |||||||
Executive officer | Maximum | Restricted Stock | ||||||||||
Class of Stock [Line Items] | ||||||||||
Vesting period | 3 years | 3 years | 3 years | |||||||
Non-employee directors | ||||||||||
Class of Stock [Line Items] | ||||||||||
Restricted stock issued, shares | 73,855 | 78,150 | ||||||||
Restricted stock issued, value | $ | $ 500,000 | $ 500,000 | ||||||||
Non-employee directors | Restricted Stock | ||||||||||
Class of Stock [Line Items] | ||||||||||
Shares of restricted stock, vesting date | 2016-01 | 2015-01 |
Commitments - Additional Inform
Commitments - Additional Information (Detail) | 12 Months Ended |
Dec. 31, 2015 | |
Minimum | |
Commitments and Contingencies Disclosure [Line Items] | |
Royalties percentage of net sales | 1.00% |
Maximum | |
Commitments and Contingencies Disclosure [Line Items] | |
Royalties percentage of net sales | 20.00% |
Future Annual Minimum Royalty G
Future Annual Minimum Royalty Guarantees (Detail) $ in Thousands | Dec. 31, 2015USD ($) |
Commitments and Contingencies Disclosure [Line Items] | |
2,016 | $ 32,427 |
2,017 | 28,696 |
2,018 | 17,659 |
2,019 | 10 |
Future minimum royalty payments, total | $ 78,792 |
Future Minimum Guaranteed Amoun
Future Minimum Guaranteed Amount (Detail) $ in Thousands | Dec. 31, 2015USD ($) |
Commitments and Contingencies Disclosure [Line Items] | |
2,016 | $ 6,869 |
2,017 | 5,324 |
2,018 | 1,315 |
Accounts payable | $ 13,508 |
Share-Based Payments - Addition
Share-Based Payments - Additional Information (Detail) | 1 Months Ended | 12 Months Ended | |||||
Apr. 30, 2015 | Jan. 31, 2015 | Jan. 31, 2014 | Dec. 31, 2015USD ($)shares | Dec. 31, 2014USD ($)shares | Dec. 31, 2013USD ($)shares | Dec. 31, 2012$ / Warrantsshares | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Shares available for future grant | 708,123 | ||||||
Awarded | 734,823 | 610,143 | 996,990 | ||||
Restricted stock surrendered, in values | $ | $ 1,000 | $ 2,000 | $ 34,000 | ||||
Restricted stock, unvested | 411,409 | 568,057 | 721,752 | 95,315 | |||
Forfeited | 663,855 | 544,651 | 290,125 | ||||
Unrecognized compensation, non-vested restricted stock awards | $ | $ 1,800,000 | ||||||
Unrecognized compensation, non-vested restricted stock awards expected recognized period | 1 year 10 months 6 days | ||||||
Recognition Technology in Connection with Toy Products | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Number of stock warrants granted to third party in connection with acquisition | 1,500,000 | ||||||
Exercise price of warrants | $ / Warrants | 16.28 | ||||||
Warrants exercisable term | 5 years | ||||||
Stock Option And Award Plans | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Reserved shares of common stock for future issuance | 6,525,000 | ||||||
Stock Options | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Vesting period | 4 years | ||||||
Restricted Stock | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Awarded | 734,823 | 610,143 | 996,990 | ||||
Shares of restricted stock cancelled | 51,633 | 4,582 | |||||
Restricted stock surrendered, (in shares) | 52,024 | 51,877 | 7,540 | ||||
Restricted stock, unvested | 411,409 | 568,057 | 721,752 | ||||
Weighted average grant date fair value | $ | $ 2,700,000 | $ 3,700,000 | $ 5,000,000 | ||||
Restricted Stock | Non-employee directors | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Restricted stock grants | $ | $ 100,000 | ||||||
Awarded | 73,855 | 78,150 | 54,227 | ||||
Restricted Stock | Executive officer | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Awarded | 531,993 | 285,543 | |||||
Shares of restricted stock issued | 660,968 | ||||||
Forfeited | 612,221 | ||||||
Restricted Stock | Non-executive employees | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Awarded | 657,220 | ||||||
Shares of restricted stock issued | 12,658 | ||||||
Restricted Stock | Minimum | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Vesting period | 1 year | ||||||
Restricted Stock | Minimum | Executive officer | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Vesting period | 1 year | 1 year | 1 year | ||||
Restricted Stock | Maximum | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Vesting period | 2 years | ||||||
Restricted stock surrendered, in values | $ | $ 100,000 | $ 100,000 | |||||
Restricted Stock | Maximum | Executive officer | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Vesting period | 3 years | 3 years | 3 years |
Summary of Restricted Stock Awa
Summary of Restricted Stock Award Activity (Detail) - $ / shares | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Number of Shares | |||
Outstanding at beginning of period | 568,057 | 721,752 | 95,315 |
Awarded | 734,823 | 610,143 | 996,990 |
Released | (227,616) | (219,187) | (80,428) |
Forfeited | (663,855) | (544,651) | (290,125) |
Outstanding at end of period | 411,409 | 568,057 | 721,752 |
Weighted Average Fair Value | |||
Outstanding at beginning of period | $ 6.54 | $ 6.88 | $ 16.75 |
Awarded | 6.81 | 6.72 | 8.38 |
Released | 6.60 | 7.99 | 16.46 |
Forfeited | 6.77 | 6.61 | 12.61 |
Outstanding at end of period | $ 6.61 | $ 6.54 | $ 6.88 |
Total Share-Based Compensation
Total Share-Based Compensation Expense and Related Tax Benefits Recognized (Detail) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Restricted stock compensation expense | $ 1,562 | $ 1,473 | $ 1,085 |
Restricted Stock | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Tax benefit (deficiency) related to restricted stock compensation | $ 0 | $ 0 | $ 0 |
Stock Option Activity (Detail)
Stock Option Activity (Detail) - $ / shares | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Number of Shares | |||
Options outstanding at beginning of period | 75,000 | 127,144 | 134,644 |
Canceled | (75,000) | (52,144) | (7,500) |
Options outstanding at end of period | 75,000 | 127,144 | |
Weighted Average Exercise Price | |||
Options outstanding at beginning of period | $ 20.69 | $ 20.20 | $ 19.82 |
Canceled | $ 20.69 | 19.50 | 13.39 |
Options outstanding at end of year | $ 20.69 | $ 20.20 |
Employee Benefits Plan - Additi
Employee Benefits Plan - Additional Information (Detail) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Schedule of Employee Benefit Plans [Line Items] | |||
Maximum percentage of employee gross pay for defined contribution plan under Section 401(k) | 50.00% | ||
Employer matching contribution for defined contribution plan under Section 401(k) | 5.00% | ||
Total company matching contributions | $ 2.2 | $ 1.9 | $ 2.1 |
Supplemental Information to C87
Supplemental Information to Consolidated Statements of Cash Flows - Additional Information (Detail) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Cash Flow Supplemental Disclosures [Line Items] | |||
Restricted stock surrendered, in values | $ 1 | $ 2 | $ 34 |
Restricted Stock Vested | |||
Cash Flow Supplemental Disclosures [Line Items] | |||
Tax benefit (deficiency) related to restricted stock compensation | $ (100) | $ (200) | |
employees - including an executive officer | |||
Cash Flow Supplemental Disclosures [Line Items] | |||
Restricted stock surrendered, (in shares) | 52,024 | 51,877 | 7,540 |
employees - including an executive officer | Maximum | |||
Cash Flow Supplemental Disclosures [Line Items] | |||
Restricted stock surrendered, in values | $ 100 | $ 100 |
Quarterly Financial Data (Detai
Quarterly Financial Data (Detail) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2015 | Sep. 30, 2015 | Jun. 30, 2015 | Mar. 31, 2015 | Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Quarterly Financial Information [Line Items] | |||||||||||
Net Sales | $ 163,407 | $ 337,027 | $ 131,106 | $ 114,201 | $ 254,016 | $ 349,362 | $ 124,172 | $ 82,510 | $ 745,741 | $ 810,060 | $ 632,925 |
Gross profit | 49,575 | 104,329 | 39,287 | 35,378 | 79,697 | 94,737 | 37,818 | 23,555 | 228,569 | 235,807 | 155,779 |
Income (loss) from operations | (6,891) | 44,628 | (3,008) | (4,199) | 7,258 | 43,812 | (4,819) | (14,924) | 30,530 | 31,327 | (44,532) |
Income (loss) before provision (benefit) for income taxes | (9,078) | 47,239 | (4,414) | (7,154) | 3,978 | 45,807 | (7,772) | (16,789) | 26,593 | 25,224 | (51,295) |
Net income (loss) | $ (9,386) | $ 45,864 | $ (5,727) | $ (7,581) | $ 2,798 | $ 44,069 | $ (9,053) | $ (16,305) | $ 23,254 | $ 21,509 | $ (53,906) |
Basic earnings (loss) per share | $ (0.50) | $ 2.47 | $ (0.30) | $ (0.40) | $ 0.14 | $ 2.33 | $ (0.43) | $ (0.74) | $ 1.20 | $ 1.03 | $ (2.43) |
Weighted average shares outstanding | 18,781 | 18,559 | 19,108 | 19,090 | 19,570 | 18,897 | 21,276 | 22,003 | 19,435 | 20,948 | 22,200 |
Diluted earnings (loss) per share | $ (0.50) | $ 1.12 | $ (0.30) | $ (0.40) | $ 0.11 | $ 1.03 | $ (0.43) | $ (0.74) | $ 0.71 | $ 0.70 | $ (2.43) |
Weighted average shares and equivalents outstanding | 18,781 | 42,562 | 19,108 | 19,090 | 44,060 | 45,152 | 21,276 | 22,003 | 43,321 | 41,516 | 22,200 |
Valuation and Qualifying Accoun
Valuation and Qualifying Accounts (Detail) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Valuation and Qualifying Accounts Disclosure [Line Items] | |||
Balance at Beginning of Period | $ 35,618 | $ 43,789 | $ 46,860 |
Charged to Costs and Expenses | 43,875 | 51,810 | 54,525 |
Deductions | (51,461) | (59,981) | (57,596) |
Balance at End of Period | 28,032 | 35,618 | 43,789 |
Uncollectible accounts | |||
Valuation and Qualifying Accounts Disclosure [Line Items] | |||
Balance at Beginning of Period | 3,264 | 2,928 | 2,536 |
Charged to Costs and Expenses | (143) | 1,545 | 541 |
Deductions | (407) | (1,209) | (149) |
Balance at End of Period | 2,714 | 3,264 | 2,928 |
Reserve for potential product obsolescence | |||
Valuation and Qualifying Accounts Disclosure [Line Items] | |||
Balance at Beginning of Period | 7,877 | 9,487 | 9,951 |
Charged to Costs and Expenses | 1,511 | 5,524 | 16,257 |
Deductions | (1,337) | (7,134) | (16,721) |
Balance at End of Period | 8,051 | 7,877 | 9,487 |
Reserve for sales returns and allowances | |||
Valuation and Qualifying Accounts Disclosure [Line Items] | |||
Balance at Beginning of Period | 24,477 | 31,374 | 34,373 |
Charged to Costs and Expenses | 42,507 | 44,741 | 37,727 |
Deductions | (49,717) | (51,638) | (40,726) |
Balance at End of Period | $ 17,267 | $ 24,477 | $ 31,374 |