Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Sep. 30, 2017 | Nov. 09, 2017 | |
Document Information [Line Items] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Sep. 30, 2017 | |
Document Fiscal Year Focus | 2,017 | |
Document Fiscal Period Focus | Q3 | |
Trading Symbol | JAKK | |
Entity Registrant Name | JAKKS PACIFIC INC | |
Entity Central Index Key | 1,009,829 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Accelerated Filer | |
Entity Common Stock, Shares Outstanding | 26,987,430 |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Sep. 30, 2017 | Dec. 31, 2016 |
Current assets | ||
Cash and cash equivalents | $ 45,411 | $ 86,064 |
Restricted cash | 3,400 | |
Accounts receivable, net of allowance for uncollectible accounts of $13,271 and $2,864 in 2017 and 2016, respectively | 224,103 | 173,599 |
Inventory, net | 80,144 | 75,435 |
Income taxes receivable | 1,770 | 1,204 |
Prepaid expenses and other assets | 16,490 | 17,077 |
Total current assets | 371,318 | 353,379 |
Property and equipment | ||
Office furniture and equipment | 14,991 | 14,345 |
Molds and tooling | 111,704 | 103,128 |
Leasehold improvements | 10,918 | 10,927 |
Total | 137,613 | 128,400 |
Less accumulated depreciation and amortization | 116,987 | 105,559 |
Property and equipment, net | 20,626 | 22,841 |
Intangible assets, net | 23,566 | 33,111 |
Other long term assets | 2,108 | 2,156 |
Investment in DreamPlay, LLC | 7,000 | |
Goodwill, net | 35,344 | 43,208 |
Trademarks, net | 300 | 2,608 |
Total assets | 453,262 | 464,303 |
Current liabilities | ||
Accounts payable | 98,392 | 51,741 |
Accrued expenses | 54,924 | 38,645 |
Reserve for sales returns and allowances | 12,975 | 16,424 |
Short term debt | 2,000 | 10,000 |
Convertible senior notes, net | 21,030 | |
Total current liabilities | 189,321 | 116,810 |
Convertible senior notes, net | 132,231 | 203,007 |
Other liabilities | 4,620 | 5,004 |
Income taxes payable | 1,195 | 2,248 |
Deferred income taxes, net | 2,033 | 2,034 |
Total liabilities | 329,400 | 329,103 |
Commitments and contingencies | ||
Stockholders' equity | ||
Preferred stock, $.001 par value; 5,000,000 shares authorized; nil outstanding | ||
Common stock, $.001 par value; 100,000,000 shares authorized; 26,987,430 and 19,376,773 shares issued and outstanding in 2017 and 2016, respectively | 27 | 19 |
Treasury stock, at cost; 3,112,840 shares | (24,000) | (24,000) |
Additional paid-in capital | 214,691 | 177,624 |
Accumulated deficit | (54,820) | (2,148) |
Accumulated other comprehensive loss | (13,079) | (17,207) |
Total JAKKS Pacific, Inc. stockholders' equity | 122,819 | 134,288 |
Non-controlling interests | 1,043 | 912 |
Total stockholders' equity | 123,862 | 135,200 |
Total liabilities and stockholders' equity | $ 453,262 | $ 464,303 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Thousands | Sep. 30, 2017 | Dec. 31, 2016 |
Accounts receivable, allowance for uncollectible accounts | $ 13,271 | $ 2,864 |
Preferred stock, par value | $ 0.001 | $ 0.001 |
Preferred stock, shares authorized | 5,000,000 | 5,000,000 |
Preferred stock, 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 | 26,987,430 | 19,376,773 |
Common stock, shares outstanding | 26,987,430 | 19,376,773 |
Treasury stock, shares | 3,112,840 | 3,112,840 |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS) - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Net Sales | $ 262,413 | $ 302,791 | $ 476,483 | $ 539,577 |
Cost of sales | 200,632 | 207,858 | 350,962 | 368,661 |
Gross profit | 61,781 | 94,933 | 125,521 | 170,916 |
Selling, general and administrative expenses | 55,991 | 60,520 | 149,563 | 151,419 |
Goodwill and other intangibles impairment | 13,536 | 13,536 | ||
Income (loss) from operations | (7,746) | 34,413 | (37,578) | 19,497 |
Income from joint ventures | 105 | 861 | ||
Other income | 110 | 207 | 292 | 282 |
Write-off of investment in DreamPlay, LLC | (7,000) | (7,000) | ||
Interest income | 12 | 12 | 26 | 46 |
Interest expense | (2,027) | (3,020) | (7,496) | (9,466) |
Income (loss) before provision for income taxes | (16,651) | 31,612 | (51,651) | 11,220 |
Provision for income taxes | 918 | 1,083 | 890 | 2,219 |
Net income (loss) | (17,569) | 30,529 | (52,541) | 9,001 |
Net income (loss) attributable to non-controlling interests | 45 | (83) | 131 | 173 |
Net income (loss) attributable to JAKKS Pacific, Inc. | $ (17,614) | $ 30,612 | $ (52,672) | $ 8,828 |
Earnings (loss) per share - basic | $ (0.77) | $ 1.91 | $ (2.53) | $ 0.53 |
Shares used in earnings (loss) per share - basic | 22,772 | 16,044 | 20,848 | 16,561 |
Earnings (loss) per share - diluted | $ (0.77) | $ 0.82 | $ (2.53) | $ 0.36 |
Shares used in earnings (loss) per share - diluted | 22,772 | 39,504 | 20,848 | 39,916 |
Comprehensive income (loss) | $ (15,907) | $ 28,161 | $ (48,413) | $ 2,975 |
Comprehensive income (loss) attributable to JAKKS Pacific, Inc. | $ (15,952) | $ 28,244 | $ (48,544) | $ 2,802 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | Dec. 31, 2016 | |
Cash flows from operating activities | |||||
Net income (loss) | $ (17,569) | $ 30,529 | $ (52,541) | $ 9,001 | |
Adjustments to reconcile net income (loss) to net cash used in operating activities: | |||||
Provision for doubtful accounts | 11,018 | ||||
Depreciation and amortization | 18,414 | 16,898 | |||
Write-off and amortization of debt issuance costs | 1,682 | 1,877 | |||
Share-based compensation expense | 2,253 | 1,254 | |||
Gain on disposal of property and equipment | (23) | ||||
Intangibles impairment | 0 | 5,248 | 0 | ||
Write-off of investment in DreamPlay, LLC | 7,000 | 7,000 | |||
Goodwill impairment | 8,288 | 0 | 8,288 | 0 | |
Gain on extinguishment of convertible senior notes | (114) | (69) | |||
Deferred income taxes | (1) | (29) | |||
Changes in operating assets and liabilities, net of acquisitions: | |||||
Accounts receivable | (61,522) | (108,870) | |||
Inventory | (4,709) | (14,520) | |||
Income taxes receivable | (566) | 573 | |||
Prepaid expenses and other assets | 458 | 4,428 | |||
Accounts payable | 47,518 | 61,832 | |||
Accrued expenses | 16,279 | 5,946 | |||
Reserve for sales returns and allowances | (3,449) | (888) | |||
Income taxes payable | (1,053) | 1,850 | |||
Other liabilities | (382) | 55 | |||
Total adjustments | 46,339 | (29,663) | |||
Net cash used in operating activities | (6,202) | (20,662) | |||
Cash flows from investing activities | |||||
Purchases of property and equipment | (10,464) | (11,239) | |||
Proceeds from sale of property and equipment | 24 | ||||
Change in other assets | (200) | ||||
Net cash used in investing activities | (10,440) | (11,439) | |||
Cash flows from financing activities | |||||
Repurchase of common stock | (13,505) | ||||
Repurchase of common stock for employee tax withholding | (12) | (844) | |||
Repayment of credit facility borrowings | (8,000) | ||||
Repurchase of convertible senior notes | (35,614) | (2,626) | |||
Proceeds from issuance of common stock | 19,311 | ||||
Net cash used in financing activities | (24,315) | (16,975) | |||
Net decrease in cash, cash equivalents, and restricted cash | (40,957) | (49,076) | |||
Effect of foreign currency translation | 3,704 | (5,290) | |||
Cash, cash equivalents, and restricted cash, beginning of period | 86,064 | 102,528 | $ 102,528 | ||
Cash, cash equivalents, and restricted cash, end of period | $ 48,811 | $ 48,162 | 48,811 | 48,162 | $ 86,064 |
Cash paid during the period for: | |||||
Income taxes | 1,669 | 203 | |||
Interest | $ 5,727 | $ 7,010 |
Basis of Presentation
Basis of Presentation | 9 Months Ended |
Sep. 30, 2017 | |
Basis of Presentation | Note 1 — Basis of Presentation The accompanying unaudited interim consolidated financial statements included herein have been prepared by the Company, without audit, pursuant to the rules and regulations of the Securities and Exchange Commission (the “SEC”). Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America have been condensed or omitted pursuant to such rules and regulations. However, the Company believes that the disclosures are adequate to prevent the information presented from being misleading. These financial statements should be read in conjunction with Management’s Discussion and Analysis of Financial Condition and Results of Operations and the financial statements and the notes thereto included in the Company’s Annual Report on Form 10-K, which contains audited financial information for the three years in the period ended December 31, 2016. The information provided in this report reflects all adjustments (consisting solely of normal recurring items) that are, in the opinion of management, necessary to present fairly the financial position and the results of operations for the periods presented. Interim results are not necessarily, especially given seasonality, indicative of results to be expected for a full year. The consolidated financial statements include the accounts of JAKKS Pacific, Inc. and its wholly-owned subsidiaries (collectively, “the Company”). The consolidated financial statements also include the accounts of DreamPlay Toys, LLC, a joint venture with NantWorks LLC, JAKKS Meisheng Trading (Shanghai) Limited, a joint venture with Meisheng Cultural & Creative Corp., Ltd., and JAKKS Meisheng Animation (HK) Limited, a joint venture with Hong Kong Meisheng Cultural Company Limited. Certain prior period amounts have been reclassified for consistency with the current period presentation. In May 2014, the FASB issued ASU 2014-09, “Revenue from Contracts with Customers (Topic 606)”, which supersedes the revenue recognition requirements in ASC 605, “Revenue Recognition”, and most industry-specific guidance. Under the new model, recognition of revenue occurs when a customer obtains control of promised goods or services in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. In addition, the new standard requires that reporting companies disclose the nature, amount, timing, and uncertainty of revenue and cash flows arising from contracts with customers. In August 2015, the FASB issued ASU 2015-14, “Revenue from Contracts with Customers – Deferral of the Effective Date”, which defers the effective date of ASU 2014-09 to annual reporting periods beginning after December 15, 2017, and interim periods therein. In 2016, the FASB issued ASU 2016-08, “Principal versus Agent Considerations (Reporting Revenue Gross versus Net)”, ASU 2016-10, “Identifying Performance Obligations and Licensing”, and ASU 2016-12, “Revenue from Contracts with Customers - Narrow-Scope Improvements and Practical Expedients”. Entities have the choice to adopt these updates 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 these standards recognized at the date of the adoption. The Company is in the process of evaluating the impact of these changes, which includes a review of existing contracts with customers, an evaluation of the specific terms of those contracts and the appropriate treatment under the new standards, and a comparison of that new treatment to the Company’s existing accounting policies to identify differences. The Company expects to complete its evaluation in the fourth quarter and anticipates adopting this ASU on January 1, 2018 using the modified retrospective approach. However, the Company may opt for the full retrospective method depending on the final outcome of its evaluation. In January 2016, the FASB issued ASU 2016-01, “Financial Instruments - Overall: Recognition and Measurement of Financial Assets and Financial Liabilities”. The new guidance is intended to improve the recognition and measurement of financial instruments. The ASU is effective for fiscal years and interim periods within those years beginning after December 15, 2017. The Company is currently assessing the potential impact of this ASU on its consolidated financial statements. In February 2016, the FASB issued ASU 2016-02, “Leases”. 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 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 consolidated financial statements. In August 2016, the FASB issued ASU 2016-15, “Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments”. The new guidance is intended to reduce diversity in practice in how transactions are classified in the statement of cash flows. This ASU is effective for fiscal years, and for interim periods within those fiscal years, beginning after December 15, 2017. The adoption of this standard is not expected to have a material impact on the Company’s consolidated financial statements. In October 2016, the FASB issued ASU 2016-16, “Income Taxes (Topic 740): Intra-Entity Transfers of Assets Other than Inventory”. The amendments in this ASU reduce the complexity in the accounting standards by allowing the recognition of current and deferred income taxes for an intra-entity asset transfer, other than inventory, when the transfer occurs. Historically, recognition of the income tax consequence was not recognized until the asset was sold to an outside party. This ASU is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2017. Early adoption is permitted. The Company expects the impact of this ASU to be immaterial to its consolidated financial statements. In November 2016, the FASB issued ASU 2016-18, “Statement of Cash Flows (Topic 230): Restricted Cash”. The update requires that amounts generally described as restricted cash or restricted cash equivalents be included with cash and cash equivalents when reconciling the beginning-of-period and end-of-period total amounts shown on the statement of cash flows. The new standard will be effective for fiscal years beginning after December 15, 2017, including interim periods within those fiscal years, and early adoption is permitted. The Company early adopted this standard during the second quarter of 2017. Restricted cash is now included as a component of cash, cash equivalents, and restricted cash on the Company’s consolidated statements of cash flows. The inclusion of restricted cash increased the ending balance of the consolidated statements of cash flows by $3.4 million and $2.7 million for the nine months ended September 30, 2017 and 2016, respectively. In May 2017, the FASB issued ASU 2017-09, “Compensation—Stock Compensation (Topic 718): Scope of Modification Accounting”, which clarifies when to account for a change to the terms or conditions of a share-based payment award as a modification. Under the new guidance, modification accounting is required only if the fair value, vesting conditions, or the classification of the award (as equity or liability) changes as a result of the change in terms or conditions. ASU 2017-09 is effective for fiscal years beginning after December 15, 2017, including interim periods within those fiscal years. The Company is currently evaluating the impact of the adoption of ASU 2017-09 on its consolidated financial statements. |
Business Segments, Geographic D
Business Segments, Geographic Data, and Sales by Major Customers | 9 Months Ended |
Sep. 30, 2017 | |
Business Segments, Geographic Data, and Sales by Major Customers | Note 2 — Business Segments, Geographic Data, and Sales by 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 of products. The Company has aligned its operating segments into three segments that reflect the management and operation of the business. The Company’s segments are (i) U.S. and Canada, (ii) International, and (iii) Halloween. The U.S. and Canada segment includes action figures, vehicles, play sets, plush products, dolls, electronic products, construction toys, infant and pre-school toys, role play and everyday costume play, foot to floor ride-on vehicles, wagons, novelty toys, seasonal and outdoor products, kids’ indoor and outdoor furniture, and related products, primarily within the United States and Canada. Within the International segment, the Company markets and sells its toy products in markets outside of the U.S. and Canada, primarily in the European, Asia Pacific, and Latin and South American regions. Within the Halloween segment, the Company markets and sells Halloween costumes and accessories and everyday costume play products, primarily in the U.S. and Canada. 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 relative sales volumes. Segment assets are primarily comprised of accounts receivable and inventories, net of applicable reserves and allowances, goodwill and other assets. Certain assets which are not tracked by operating segment and/or that benefit multiple operating segments have been allocated on the same basis. Results are not necessarily those which would be achieved if each segment was an unaffiliated business enterprise. Information by segment and a reconciliation to reported amounts for the three and nine months ended September 30, 2017 and 2016 and as of September 30, 2017 and December 31, 2016 are as follows (in thousands): Three Months Ended Nine Months Ended 2017 2016 2017 2016 Net Sales U.S. and Canada $ 154,046 $ 188,381 $ 295,098 $ 350,320 International 50,141 57,333 87,583 97,454 Halloween 58,226 57,077 93,802 91,803 $ 262,413 $ 302,791 $ 476,483 $ 539,577 Three Months Ended Nine Months Ended 2017 2016 2017 2016 Income (Loss) from Operations U.S. and Canada $ (6,760 ) $ 24,865 $ (24,155 ) $ 16,966 International (735 ) 6,876 (3,986 ) 4,371 Halloween (251 ) 2,672 (9,437 ) (1,840 ) $ (7,746 ) $ 34,413 $ (37,578 ) $ 19,497 Three Months Ended Nine Months Ended 2017 2016 2017 2016 Depreciation and Amortization Expense U.S. and Canada $ 5,682 $ 5,787 $ 13,107 $ 12,097 International 1,811 1,800 3,693 3,354 Halloween 808 619 1,614 1,447 $ 8,301 $ 8,206 $ 18,414 $ 16,898 September 30, December 31, Assets U.S. and Canada $ 154,117 $ 286,512 International 242,057 138,497 Halloween 57,088 39,294 $ 453,262 $ 464,303 The following tables present information about the Company by geographic area as of September 30, 2017 and December 31, 2016 and for the three and nine months ended September 30, 2017 and 2016 (in thousands): September 30, December 31, Long-lived Assets China $ 14,148 $ 15,710 United States 6,067 6,587 Hong Kong 411 544 $ 20,626 $ 22,841 Three Months Ended Nine Months Ended 2017 2016 2017 2016 Net Sales by Customer Area United States $ 199,064 $ 229,850 $ 367,694 $ 416,034 Europe 33,640 43,446 56,537 67,611 Canada 11,062 12,709 18,086 22,412 Hong Kong 397 1,184 784 1,861 Other 18,250 15,602 33,382 31,659 $ 262,413 $ 302,791 $ 476,483 $ 539,577 Major Customers Net sales to major customers for the three and nine months ended September 30, 2017 and 2016 were as follows (in thousands, except for percentages): Three Months Ended September 30, Nine Months Ended September 30, 2017 2016 2017 2016 Amount Percentage of Net Sales Amount Percentage of Net Sales Amount Percentage of Net Sales Amount Percentage of Net Sales Wal-Mart $ 66,138 25.2 % $ 72,996 24.1 % $ 108,781 22.8 % $ 139,806 25.9 % Target 44,295 16.9 50,008 16.5 77,476 16.3 76,948 14.3 Toys 'R' Us 15,290 5.8 19,624 6.5 34,021 7.1 38,088 7.0 $ 125,723 47.9 % $ 142,628 47.1 % $ 220,278 46.2 % $ 254,842 47.2 % At September 30, 2017 and December 31, 2016, the Company’s three largest customers accounted for approximately 42.6% and 35.8%, 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. On September 18, 2017, Toys “R” Us, Inc. announced that certain of its U.S. subsidiaries and its Canadian subsidiary voluntarily filed for relief under Chapter 11 of the Bankruptcy Code in the U.S. and that its Canadian subsidiary also began parallel proceedings under the Companies’ Creditors Arrangement Act (“CCAA”) in Canada. On September 25, 2017, Toys “R” Us, Inc. announced that it had closed on $3.1 billion of debtor-in-possession financing to support its ongoing liquidity needs. While the Company believes there was an impact to sales in the quarter due to the uncertainty caused by the filing, it is not able to estimate an amount. The Company has resumed shipping to Toys “R” Us for the 2017 holiday season and continues to monitor the Toys “R” Us bankruptcy reorganization progress and its overall credit exposure to this customer. |
Inventory
Inventory | 9 Months Ended |
Sep. 30, 2017 | |
Inventory | Note 3 — Inventory Inventory, which includes the ex-factory cost of goods, in-bound freight, duty and capitalized warehouse costs, is valued at the lower of cost (first-in, first-out) or net realizable value, net of inventory obsolescence reserve, and consists of the following (in thousands): September 30, December 31, Raw materials $ 5,729 $ 5,204 Finished goods 74,415 70,231 $ 80,144 $ 75,435 During the first quarter of 2017, the Company adopted ASU 2015-11, “Simplifying the Measurement of Inventory (Topic 330)”. The amendments, which apply to inventory that is measured using any method other than the last-in, first-out (LIFO) or retail inventory method, require that entities measure inventory at the lower of cost or net realizable value. ASU 2015-11 is effective for fiscal years, and interim periods within those years, beginning after December 15, 2016 and should be applied on a prospective basis. The adoption of ASU 2015-11 did not have a material impact on the Company’s consolidated financial statements. |
Revenue Recognition and Reserve
Revenue Recognition and Reserve for Sales Returns and Allowances | 9 Months Ended |
Sep. 30, 2017 | |
Revenue Recognition and Reserve for Sales Returns and Allowances | Note 4 — Revenue Recognition and Reserve for Sales Returns and Allowances 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 and not contingent upon resale. 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 occurrence. The Company also participates in cooperative advertising arrangements with some customers, whereby it allows a discount from invoiced product amounts in exchange for customer purchased advertising that features the Company’s products. Generally, these discounts range from 1% to 10% 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. The Company’s reserve for sales returns and allowances amounted to $13.0 million as of September 30, 2017, compared to $16.4 million as of December 31, 2016. This decrease is primarily due to timing with certain customers takin g |
Credit Facility
Credit Facility | 9 Months Ended |
Sep. 30, 2017 | |
Credit Facility | Note 5 — Credit Facility In March 2014, the Company and its domestic subsidiaries entered into a secured credit facility with General Electric Capital Corporation (“GECC”). The loan agreement, as amended and subsequently assigned to Wells Fargo Bank, N.A. pursuant to its acquisition of GECC, provides for a $75.0 million revolving credit facility subject to availability based on prescribed advance rates on certain accounts receivable and inventory (the “WF Loan Agreement”). The amounts outstanding under the credit facility are payable in full upon maturity of the facility on March 27, 2019, and the credit facility is secured by a security interest in favor of the lender covering a substantial amount of the assets of the Company. As of September 30, 2017, the amount of outstanding borrowings was $2.0 million and outstanding stand-by letters of credit totaled $27.7 million which in the aggregate exceeded the borrowing base availability under the credit line by $3.4 million and was funded by the Company resulting in restricted cash of $3.4 million. Such funds will become unrestricted when and as the excess borrowing capacity under the credit line increases to minimum levels. As of December 31, 2016, the amount of outstanding borrowings was $10.0 million and outstanding stand-by letters of credit totaled $28.2 million; the total excess borrowing capacity was $12.1 million. The Company’s ability to borrow under the WF Loan Agreement is also subject to its ongoing compliance with certain financial covenants, including the maintenance by the Company of a fixed charge coverage ratio of at least 1.25:1.0 based on the trailing four fiscal quarters in the event minimum excess availability under the facility is not achieved. As of September 30, 2017 and December 31, 2016, the Company was in compliance with the financial covenants under the WF Loan Agreement. The Company may borrow funds 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 facility has a stand-by letter of credit fee of 225 basis points and an unused credit line fee, which ranges from 25 to 50 basis points. As of September 30, 2017 and December 31, 2016, the interest rate on the credit facility was approximately 3.49% and 3.01%, respectively. The WF 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 WF 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. |
Convertible Senior Notes
Convertible Senior Notes | 9 Months Ended |
Sep. 30, 2017 | |
Convertible Senior Notes | Note 6 — Convertible Senior Notes 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 and still current conversion rate for the 2018 Notes is 114.3674 shares of JAKKS common stock 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. Upon conversion, the 2018 Notes will be settled in shares of the Company’s common stock. Holders of the 2018 Notes may require that the Company repurchase for cash all or some of their notes upon the occurrence of a fundamental change (as defined in the 2018 Notes). In 2016, the Company repurchased and retired an aggregate of approximately $6.1 million principal amount of the 2018 Notes. In addition, approximately $0.1 million of the unamortized debt issuance costs were written off and a nominal gain was recognized in conjunction with the retirement of the 2018 Notes. During the first quarter of 2017, the Company exchanged and retired $39.1 million principal amount of the 2018 Notes at par for $24.1 million in cash and approximately 2.9 million shares of its common stock. During the second quarter of 2017, the Company exchanged and retired $12.0 million principal amount of the 2018 Notes at par for $11.6 million in cash and 112,400 shares of its common stock, and approximately $0.1 million of the unamortized debt issuance costs were written off and a $0.1 million gain was recognized in conjunction with the exchange and retirement of the 2018 Notes. In August 2017, the Company agreed with Oasis Management and Oasis Investments II Master Fund Ltd., the holder of approximately $21.5 million face amount of its 4.25% Convertible Senior Notes due in 2018, to extend the maturity date of these notes to November 1, 2020. In addition, the interest rate was reduced to 3.25% per annum and the conversion rate was increased to 328.0302 shares of the Company's common stock per $1,000 principal amount of notes, among other things. After execution of a definitive agreement for the modification and final approval by the other members of the Company's Board of Directors and Oasis' Investment Committee the transaction closed on November 7, 2017. Accordingly, as this debt was refinanced after September 30, 2017 however prior to the report issuance date of November 9, 2017, this $21.5 million has been classified as long term debt with the remaining principal amount of $21.2 million classified as short term debt. 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 and still current conversion rate for the 2020 Notes is 103.7613 shares of the Company’s common stock 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. Upon conversion, the 2020 Notes will be settled in shares of the Company’s common stock. Holders of the 2020 Notes may require that the Company repurchase for cash all or some of their notes upon the occurrence of a fundamental change (as defined in the 2020 Notes). In January 2016, the Company repurchased and retired an aggregate of $2.0 million principal amount of the 2020 Notes. In addition, approximately $0.1 million of the unamortized debt issuance costs were written off and a $0.1 million gain was recognized in conjunction with the retirement of the 2020 Notes. The fair value of the 2018 Notes as of September 30, 2017 and December 31, 2016 was approximately $41.4 million and $83.7 million, respectively, based upon the most recent quoted market price. The fair value of the 2020 Notes as of September 30, 2017 and December 31, 2016 was approximately $88.6 million and $89.3 million, respectively, based upon the most recent quoted market price. The fair value of the convertible senior notes is considered to be a Level 2 measurement on the fair value hierarchy. Convertible senior notes consist of the following (in thousands): September 30, 2017 December 31, 2016 Principal Amount Debt Issuance Costs Net Principal Amount Debt Issuance Costs Net 4.25% convertible senior notes (due 2018) $ 42,728 $ 298 $ 42,430 $ 93,865 $ 1,098 $ 92,767 4.875% convertible senior notes (due 2020) 113,000 2,169 110,831 113,000 2,760 110,240 Total $ 155,728 $ 2,467 $ 153,261 $ 206,865 $ 3,858 $ 203,007 Amortization expense classified as interest expense related to debt issuance costs was $0.4 million and $0.4 million for the three months ended September 30, 2017 and 2016, respectively, and $1.5 million and $1.5 million for the nine months ended September 30, 2017 and 2016, respectively. |
Income Taxes
Income Taxes | 9 Months Ended |
Sep. 30, 2017 | |
Income Taxes | Note 7 — Income Taxes The Company’s income tax expense of $0.9 million for the three months ended September 30, 2017 reflects an effective tax rate of (5.5%). The Company’s income tax expense of $1.1 million for the three months ended September 30, 2016 reflects an effective tax rate of 3.4%. The majority of the tax expense for the three months ended September 30, 2017 and 2016 relate to foreign income taxes. The Company’s income tax expense of $0.9 million for the nine months ended September 30, 2017 reflects an effective tax rate of (1.7%). The Company’s income tax expense of $2.2 million for the nine months ended September 30, 2016 reflects an effective tax rate of 19.8%. The majority of the tax expense for the nine months ended September 30, 2017 primarily relates to foreign income taxes, partially offset by favorable discrete items. The majority of the tax expense for the nine months ended September 30, 2016 relates to foreign taxes. During the first quarter of 2017, the Company adopted ASU 2016-09, “Improvement to Employee Share-Based Payment Accounting,” which simplifies several aspects of the accounting for share-based payments, including . Under the new standard, all excess tax benefits and tax deficiencies will be recognized as income tax expense or benefit in the income statement as discrete items in the reporting period in which they occur. No discrete tax expense was recognized related to this during the third quarter of 2017. |
Earnings (Loss) Per Share
Earnings (Loss) Per Share | 9 Months Ended |
Sep. 30, 2017 | |
Earnings (Loss) Per Share | Note 8 — Earnings (Loss) Per Share The following table is a reconciliation of the weighted average shares used in the computation of earnings (loss) per share for the periods presented (in thousands, except per share data): Three Months Ended September 30, 2017 2016 Income (Loss) Weighted Average Shares Per-Share Income (Loss) Weighted Average Shares Per-Share Earnings (loss) per share — basic Net income (loss) available to common stockholders $ (17,614 ) 22,772 $ (0.77 ) $ 30,612 16,044 $ 1.91 Effect of dilutive securities: Convertible senior notes — — 1,840 23,081 Unvested performance stock grants — — — 164 Unvested restricted stock grants — — — 215 Earnings (loss) per share — diluted Net income (loss) available to common stockholders plus assumed exercises and conversion $ (17,614 ) 22,772 $ (0.77 ) $ 32,452 39,504 $ 0.82 Nine Months Ended September 30, 2017 2016 Income (Loss) Weighted Average Shares Per-Share Income (Loss) Weighted Average Shares Per-Share Earnings (loss) per share — basic Net income (loss) available to common stockholders $ (52,672 ) 20,848 $ (2.53 ) $ 8,828 16,561 $ 0.53 Effect of dilutive securities: Convertible senior notes — — 5,557 23,123 Unvested performance stock grants — — — 115 Unvested restricted stock grants — — — 117 Earnings (loss) per share — diluted Net income (loss) available to common stockholders plus assumed exercises and conversion $ (52,672 ) 20,848 $ (2.53 ) $ 14,385 39,916 $ 0.36 Basic earnings (loss) 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, restricted stock awards, restricted stock units and convertible debt to the extent they are dilutive). The weighted average number of common shares outstanding excludes shares repurchased pursuant to a prepaid forward share repurchase agreement (see Note 9). Common share equivalents that could potentially dilute basic earnings per share in the future, which were excluded from the computation of diluted earnings per share due to being anti-dilutive, totaled 20,215,325 and 25,495,045 for the three months ended September 30, 2017 and 2016, respectively, and 21,502,935 and 25,265,072 for the nine months ended September 30, 2017 and 2016, respectively. |
Common Stock and Preferred Stoc
Common Stock and Preferred Stock | 9 Months Ended |
Sep. 30, 2017 | |
Common Stock and Preferred Stock | Note 9 — Common Stock and Preferred Stock In June 2014, the Company effectively repurchased 3,112,840 shares of its common stock 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 earnings per share purposes although they remain legally outstanding. The Company reflects the aggregate purchase price as a reduction to stockholders’ equity classified as Treasury Stock. No shares have been delivered to the Company by ML as of September 30, 2017. In June 2015, and as subsequently increased, the Board of Directors authorized the repurchase of an aggregate of $35.0 million of the Company’s outstanding common stock and/or convertible senior notes (collectively, “securities”). During 2015, the Company repurchased and retired 1,547,361 shares of its common stock at an aggregate value of $13.2 million. During 2016, the Company repurchased and retired 1,766,284 shares of its common stock at an aggregate value of $13.5 million, and also repurchased and retired $2.0 million principal amount of its 2020 Notes at a cost of $1.9 million and $6.1 million principal amount of its 2018 Notes at a cost of $6.1 million. As of December 31, 2016, the Company completed the repurchase authorization. In January 2016, the Company issued an aggregate of 449,120 shares of restricted stock at a value of approximately $3.6 million to two executive officers, all of which were forfeited because certain company financial performance criteria and market conditions were not met. In addition, an aggregate of 62,710 shares of restricted stock at an aggregate value of approximately $0.5 million were issued to its five non-employee directors, which vested in January 2017. In March 2016, the Company issued an aggregate of 134,058 shares of restricted stock at a value of approximately $0.9 million to an executive officer, all of which were forfeited because certain company financial performance criteria and market conditions were not met. In October 2016, the Company issued an aggregate of 2,463 shares of restricted stock at a nominal value to a non-employee director, which vested on January 1, 2017. In January and February 2017, the Company issued an aggregate of 873,787 shares of restricted stock at a value of approximately $4.5 million to two executive officers, which vest, subject to certain company financial performance criteria and market conditions, over a three year period. In addition, an aggregate of 94,102 shares of restricted stock at an aggregate value of approximately $0.5 million were issued to its five non-employee directors, which vest in January 2018. In January and February 2017, the Company issued an aggregate of 2,865,000 shares of its common stock at a value of $15.1 million to holders of its 2018 convertible senior notes as partial consideration for the exchange at par of $39.1 million principal amount of such notes. In March 2017, the Company entered into an agreement to issue 3,660,891 shares of its common stock at an aggregate price of $19.3 million to a Hong Kong affiliate of its China joint venture partner. After their shareholder and China regulatory approval, the transaction closed on April 27, 2017. Upon the closing, the Company added a representative of Meisheng as a non-employee director and issued 13,319 shares of restricted stock at a value of $0.1 million, which vest in January 2018. In June 2017, the Company issued an aggregate of 112,400 shares of its common stock at a value of approximately $0.4 million to holders of its 2018 convertible senior notes as partial consideration for the exchange at par of $11.6 million principal amount of such notes. 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. |
Joint Ventures
Joint Ventures | 9 Months Ended |
Sep. 30, 2017 | |
Joint Ventures | Note 10 — 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 joint venture produced 65 episodes of the show, which began airing in February 2012, and has since ceased production of the television show. For the three and nine months ended September 30, 2017, the Company recognized nil for funds received related to the joint venture. For the three and nine months ended September 30, 2016, the Company recognized nil and $0.7 million of income for funds received related to the joint venture. As of September 30, 2017 and December 31, 2016, the balance of the investment in the Pacific Animation Partners joint venture is nil. For the three and nine months ended September 30, 2017, respectively, the Company recognized nil and $0.1 million of income for funds received related to a former video game joint venture in partial settlement of amounts owed to the Company when our joint venture partner was liquidated pursuant to their 2012 bankruptcy filing. For the three and nine months ended September 30, 2016, respectively, the Company recognized nil and $0.2 million of income for funds received related to a former video game joint venture in partial settlement of amounts owed to the Company when our joint venture partner was liquidated pursuant to their 2012 bankruptcy filing. 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 utilize the NantWorks recognition technology platform for toy products. The Company had classified these rights as an intangible asset, which was being amortized over the anticipated revenue stream from the exploitation of these rights. However, the Company has abandoned the use of the technology in connection with its toy products and no future sales are anticipated, and the Company recorded an impairment charge to income of $2.9 million to write off the remaining unamortized technology rights during the quarter ended September 30, 2017 (see Note 12). The Company retains the financial risk of the joint venture and is responsible for the day-to-day operations, which are expected to be nominal in future periods. The results of operations of the joint venture are consolidated with the Company’s results. The owner of NantWorks beneficially owns less than 10% of the Company’s outstanding common stock. 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, that was expected to monetize the exploitation of the recognition technologies in non-toy consumer product categories. Adoption of the technology has been inadequate to establish a commercially viable market for the technology. As of September 30, 2017, the Company determined the value of this investment will not be realized and that full impairment of the value has occurred. Accordingly, the Company recorded an impairment charge of $7.0 million during the quarter ended September 30, 2017. In November 2014, the Company entered into a joint venture with Meisheng Cultural & Creative Corp., Ltd., 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 includes a subsidiary in the Shanghai Free Trade Zone that sells, distributes and markets these products, which include dolls, plush, role play products, action figures, costumes, seasonal items, technology and app-enhanced toys, based on top entertainment licenses and JAKKS’ own proprietary brands. The Company owns fifty-one percent of the joint venture and consolidates the joint venture since control rests with the Company. The non-controlling interest’s share of the income (loss) from the joint venture for the three months ended September 30, 2017 and 2016 was $45,000 and ($83,000), respectively, and for the nine months ended September 30, 2017 and 2016 was $256,000 and $173,000, respectively. In October 2016, the Company entered into a joint venture with Hong Kong Meisheng Cultural Company Limited, a Hong Kong-based subsidiary of Meisheng (“HK Meisheng”), for the purpose of creating and developing original, multiplatform content for children including new short-form series and original shows. JAKKS and HK Meisheng each own fifty percent of the joint venture and will jointly own the content. JAKKS will retain merchandising rights for kids’ consumer products in all markets except China, which Meisheng will oversee through the Company’s existing distribution joint venture. The non-controlling interest’s share of the loss from the joint venture for the three and nine months ended September 30, 2017 was nil and $125,000, respectively. As of April 27, 2017, Hong Kong Meisheng Cultural Company Limited beneficially owns more than 10% of the Company’s outstanding common stock. |
Goodwill
Goodwill | 9 Months Ended |
Sep. 30, 2017 | |
Goodwill | Note 11 — Goodwill The changes to the carrying amount of goodwill as of September 30, 2017 are summarized as follows (in thousands): Total Balance, December 31, 2016 $ 43,208 Impairment (8,288 ) Adjustments to goodwill for foreign currency translation 424 Balance, September 30, 2017 $ 35,344 In January 2017, the FASB issued ASU 2017-04, “Simplifying the Test for Goodwill Impairment”, which removes Step 2 from the goodwill impairment test. ASU 2017-04 requires that if a reporting unit’s carrying value exceeds its fair value, an impairment charge would be recognized for the excess amount, not to exceed the carrying amount of goodwill. ASU 2017-04 will be effective for interim and annual reporting periods beginning after December 15, 2019. Early application is permitted after January 1, 2017. The Company early adopted ASU 2017-04 in the third quarter of 2017. The Company applies a fair value-based impairment test to the carrying value of goodwill and indefinite-lived intangible assets on an annual basis, and if certain events or circumstances indicate that an impairment loss may have been incurred, on an interim basis. Goodwill impairment exists when the estimated fair value of goodwill is less than its carrying value. Based on several factors that have occurred since the Company’s April 1 assessment, the Company determined that the fair values of its reporting units should be retested for potential impairment. Based on the retesting performed by a third-party valuation consultant as of September 30, 2017, it was determined that the fair values of two of its three reporting units were less than their respective carrying amounts. Accordingly, a charge of $8.3 million for goodwill impairment was recorded during the three and nine months ended September 30, 2017. No impairment was recorded during the three and nine months ended September 30, 2016. |
Intangible Assets Other Than Go
Intangible Assets Other Than Goodwill | 9 Months Ended |
Sep. 30, 2017 | |
Intangible Assets Other Than Goodwill | Note 12 — 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. Intangible assets as of September 30, 2017 and December 31, 2016 include the following (in thousands, except for weighted useful lives): September 30, 2017 December 31, 2016 Weighted Useful Lives Gross Carrying Amount Accumulated Amortization Net Amount Gross Carrying Amount Accumulated Amortization Net Amount (Years) Amortized Intangible Assets: Licenses 5.81 $ 20,130 $ (18,307 ) $ 1,823 $ 20,130 $ (17,248 ) $ 2,882 Product lines 5.07 33,858 (12,115 ) 21,743 50,093 (20,634 ) 29,459 Customer relationships 4.90 3,152 (3,152 ) — 3,152 (2,755 ) 397 Trade names 5.00 3,000 (3,000 ) — 3,000 (2,650 ) 350 Non-compete agreements 5.00 200 (200 ) — 200 (177 ) 23 Total amortized intangible assets $ 60,340 $ (36,774 ) $ 23,566 $ 76,575 $ (43,464 ) $ 33,111 Unamortized Intangible Assets: Trademarks $ 300 $ — $ 300 $ 2,608 $ — $ 2,608 During the three and nine months ended September 30, 2017, the Company recorded impairment charges of $2.9 million to write off the remaining unamortized technology rights related to DreamPlay, LLC which were included in Product lines, and $2.3 million to write down several underutilized trademarks and trade names that were determined to have no value. No impairment charges were recorded during the three and nine months ended September 30, 2016. |
Comprehensive Income (Loss)
Comprehensive Income (Loss) | 9 Months Ended |
Sep. 30, 2017 | |
Comprehensive Income (Loss) | Note 13 — Comprehensive Income (Loss) The table below presents the components of the Company’s comprehensive income (loss) for the three and nine months ended September 30, 2017 and 2016 (in thousands): Three Months Ended Nine Months Ended 2017 2016 2017 2016 Net Income (Loss) $ (17,569 ) $ 30,529 $ (52,541 ) $ 9,001 Other comprehensive income (loss): Foreign currency translation adjustment 1,662 (2,368 ) 4,128 (6,026 ) Comprehensive income (loss) (15,907 ) 28,161 (48,413 ) 2,975 Less: Comprehensive income (loss) attributable to non-controlling interests 45 (83 ) 131 173 Comprehensive income (loss) attributable to JAKKS Pacific, Inc. $ (15,952 ) $ 28,244 $ (48,544 ) $ 2,802 |
Litigation
Litigation | 9 Months Ended |
Sep. 30, 2017 | |
Litigation | Note 14 — Litigation The Company is a party to, and certain of its property is the subject of, various pending claims and legal proceedings that routinely arise in the ordinary course of its business, but the Company does not believe that any of these claims or proceedings will have a material effect on its business, financial condition or results of operations. |
Share-Based Payments
Share-Based Payments | 9 Months Ended |
Sep. 30, 2017 | |
Share-Based Payments | Note 15 — Share-Based Payments The Company’s 2002 Stock Award and Incentive Plan The following table summarizes the total share-based compensation expense and related tax benefits recognized for the three and nine months ended September 30, 2017 and 2016 (in thousands): Three Months Ended Nine Months Ended 2017 2016 2017 2016 Restricted stock compensation expense $ 793 $ 170 $ 2,253 $ 1,254 Tax benefit related to restricted stock compensation — — — — Restricted stock award activity pursuant to the Plan for the nine months ended September 30, 2017 is summarized as follows: Restricted Stock Awards Number of Shares Weight Average Grant Fair Value Outstanding, December 31, 2016 196,453 $ 7.01 Awarded 981,208 5.15 Released (67,544 ) 8.33 Forfeited (7,715 ) 5.22 Outstanding, September 30, 2017 1,102,402 5.28 As of September 30, 2017, there was $3.0 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 5.4 years. The Company granted Restricted Stock Units (“RSUs”) to certain executive and non-executive personnel during the first quarter of 2017. RSUs are not treated in the same manner as Restricted Stock Awards (“RSAs”) as the Company issues the net after-tax number of shares when the units vest. Vesting of RSUs is predicated upon meeting certain criteria related to service, performance and/or market based conditions. Restricted stock unit activity pursuant to the Plan for the nine months ended September 30, 2017 is summarized as follows: Restricted Stock Units Number of Shares Weight Average Grant Fair Value Outstanding, December 31, 2016 — $ — Awarded 1,001,206 5.15 Released — — Forfeited (37,864 ) 5.15 Outstanding, September 30, 2017 963,342 5.15 As of September 30, 2017, there was $3.7 million of total unrecognized compensation cost related to non-vested restricted stock units, which is expected to be recognized over a weighted-average period of 6.2 years. |
Subsequent Event
Subsequent Event | 9 Months Ended |
Sep. 30, 2017 | |
Subsequent Event | Note 16 — Subsequent Event In August 2017, the Company agreed with Oasis Management and Oasis Investments II Master Fund Ltd., the holder of approximately $21.5 million face amount of its 4.25% Convertible Senior Notes due in 2018, to extend the maturity date of these notes to November 1, 2020. In addition, the interest rate was reduced to 3.25% per annum and the conversion rate was increased to 328.0302 shares of the Company’s common stock per $1,000 principal amount of notes, among other things. After execution of a definitive agreement for the modification and final approval by the other members of the Company’s Board of Directors and Oasis’ Investment Committee the transaction closed on November 7, 2017. After such modification the balance of the face amount of the 2018 Notes is reduced to approximately $21.2 million. |
Business Segments, Geographic22
Business Segments, Geographic Data, and Sales by Major Customers (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Information by Segment and Reconciliation to Reported Amounts | Information by segment and a reconciliation to reported amounts for the three and nine months ended September 30, 2017 and 2016 and as of September 30, 2017 and December 31, 2016 are as follows (in thousands): Three Months Ended Nine Months Ended 2017 2016 2017 2016 Net Sales U.S. and Canada $ 154,046 $ 188,381 $ 295,098 $ 350,320 International 50,141 57,333 87,583 97,454 Halloween 58,226 57,077 93,802 91,803 $ 262,413 $ 302,791 $ 476,483 $ 539,577 Three Months Ended Nine Months Ended 2017 2016 2017 2016 Income (Loss) from Operations U.S. and Canada $ (6,760 ) $ 24,865 $ (24,155 ) $ 16,966 International (735 ) 6,876 (3,986 ) 4,371 Halloween (251 ) 2,672 (9,437 ) (1,840 ) $ (7,746 ) $ 34,413 $ (37,578 ) $ 19,497 Three Months Ended Nine Months Ended 2017 2016 2017 2016 Depreciation and Amortization Expense U.S. and Canada $ 5,682 $ 5,787 $ 13,107 $ 12,097 International 1,811 1,800 3,693 3,354 Halloween 808 619 1,614 1,447 $ 8,301 $ 8,206 $ 18,414 $ 16,898 September 30, December 31, Assets U.S. and Canada $ 154,117 $ 286,512 International 242,057 138,497 Halloween 57,088 39,294 $ 453,262 $ 464,303 |
Information by Geographic Area | The following tables present information about the Company by geographic area as of September 30, 2017 and December 31, 2016 and for the three and nine months ended September 30, 2017 and 2016 (in thousands): September 30, December 31, Long-lived Assets China $ 14,148 $ 15,710 United States 6,067 6,587 Hong Kong 411 544 $ 20,626 $ 22,841 Three Months Ended Nine Months Ended 2017 2016 2017 2016 Net Sales by Customer Area United States $ 199,064 $ 229,850 $ 367,694 $ 416,034 Europe 33,640 43,446 56,537 67,611 Canada 11,062 12,709 18,086 22,412 Hong Kong 397 1,184 784 1,861 Other 18,250 15,602 33,382 31,659 $ 262,413 $ 302,791 $ 476,483 $ 539,577 |
Net Sales to Major Customers | Net sales to major customers for the three and nine months ended September 30, 2017 and 2016 were as follows (in thousands, except for percentages): Three Months Ended September 30, Nine Months Ended September 30, 2017 2016 2017 2016 Amount Percentage of Net Sales Amount Percentage of Net Sales Amount Percentage of Net Sales Amount Percentage of Net Sales Wal-Mart $ 66,138 25.2 % $ 72,996 24.1 % $ 108,781 22.8 % $ 139,806 25.9 % Target 44,295 16.9 50,008 16.5 77,476 16.3 76,948 14.3 Toys 'R' Us 15,290 5.8 19,624 6.5 34,021 7.1 38,088 7.0 $ 125,723 47.9 % $ 142,628 47.1 % $ 220,278 46.2 % $ 254,842 47.2 % |
Inventory (Tables)
Inventory (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Net of Inventory Obsolescence Reserve | Inventory, which includes the ex-factory cost of goods, in-bound freight, duty and capitalized warehouse costs, is valued at the lower of cost (first-in, first-out) or net realizable value, net of inventory obsolescence reserve, and consists of the following (in thousands): September 30, December 31, Raw materials $ 5,729 $ 5,204 Finished goods 74,415 70,231 $ 80,144 $ 75,435 |
Convertible Senior Notes (Table
Convertible Senior Notes (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Convertible Senior Notes | Convertible senior notes consist of the following (in thousands): September 30, 2017 December 31, 2016 Principal Amount Debt Issuance Costs Net Principal Amount Debt Issuance Costs Net 4.25% convertible senior notes (due 2018) $ 42,728 $ 298 $ 42,430 $ 93,865 $ 1,098 $ 92,767 4.875% convertible senior notes (due 2020) 113,000 2,169 110,831 113,000 2,760 110,240 Total $ 155,728 $ 2,467 $ 153,261 $ 206,865 $ 3,858 $ 203,007 |
Earnings (Loss) Per Share (Tabl
Earnings (Loss) Per Share (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Reconciliation of Weighted Average Shares Used in Computation of Earnings (Loss) Per Share | The following table is a reconciliation of the weighted average shares used in the computation of earnings (loss) per share for the periods presented (in thousands, except per share data): Three Months Ended September 30, 2017 2016 Income (Loss) Weighted Average Shares Per-Share Income (Loss) Weighted Average Shares Per-Share Earnings (loss) per share — basic Net income (loss) available to common stockholders $ (17,614 ) 22,772 $ (0.77 ) $ 30,612 16,044 $ 1.91 Effect of dilutive securities: Convertible senior notes — — 1,840 23,081 Unvested performance stock grants — — — 164 Unvested restricted stock grants — — — 215 Earnings (loss) per share — diluted Net income (loss) available to common stockholders plus assumed exercises and conversion $ (17,614 ) 22,772 $ (0.77 ) $ 32,452 39,504 $ 0.82 Nine Months Ended September 30, 2017 2016 Income (Loss) Weighted Average Shares Per-Share Income (Loss) Weighted Average Shares Per-Share Earnings (loss) per share — basic Net income (loss) available to common stockholders $ (52,672 ) 20,848 $ (2.53 ) $ 8,828 16,561 $ 0.53 Effect of dilutive securities: Convertible senior notes — — 5,557 23,123 Unvested performance stock grants — — — 115 Unvested restricted stock grants — — — 117 Earnings (loss) per share — diluted Net income (loss) available to common stockholders plus assumed exercises and conversion $ (52,672 ) 20,848 $ (2.53 ) $ 14,385 39,916 $ 0.36 |
Goodwill (Tables)
Goodwill (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Changes to Carrying Amount of Goodwill | The changes to the carrying amount of goodwill as of September 30, 2017 are summarized as follows (in thousands): Total Balance, December 31, 2016 $ 43,208 Impairment (8,288 ) Adjustments to goodwill for foreign currency translation 424 Balance, September 30, 2017 $ 35,344 |
Intangible Assets Other Than 27
Intangible Assets Other Than Goodwill (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Intangible Assets | Intangible assets as of September 30, 2017 and December 31, 2016 include the following (in thousands, except for weighted useful lives): September 30, 2017 December 31, 2016 Weighted Useful Lives Gross Carrying Amount Accumulated Amortization Net Amount Gross Carrying Amount Accumulated Amortization Net Amount (Years) Amortized Intangible Assets: Licenses 5.81 $ 20,130 $ (18,307 ) $ 1,823 $ 20,130 $ (17,248 ) $ 2,882 Product lines 5.07 33,858 (12,115 ) 21,743 50,093 (20,634 ) 29,459 Customer relationships 4.90 3,152 (3,152 ) — 3,152 (2,755 ) 397 Trade names 5.00 3,000 (3,000 ) — 3,000 (2,650 ) 350 Non-compete agreements 5.00 200 (200 ) — 200 (177 ) 23 Total amortized intangible assets $ 60,340 $ (36,774 ) $ 23,566 $ 76,575 $ (43,464 ) $ 33,111 Unamortized Intangible Assets: Trademarks $ 300 $ — $ 300 $ 2,608 $ — $ 2,608 |
Comprehensive Income (Loss) (Ta
Comprehensive Income (Loss) (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Components of Comprehensive Income (Loss) | The table below presents the components of the Company’s comprehensive income (loss) for the three and nine months ended September 30, 2017 and 2016 (in thousands): Three Months Ended Nine Months Ended 2017 2016 2017 2016 Net Income (Loss) $ (17,569 ) $ 30,529 $ (52,541 ) $ 9,001 Other comprehensive income (loss): Foreign currency translation adjustment 1,662 (2,368 ) 4,128 (6,026 ) Comprehensive income (loss) (15,907 ) 28,161 (48,413 ) 2,975 Less: Comprehensive income (loss) attributable to non-controlling interests 45 (83 ) 131 173 Comprehensive income (loss) attributable to JAKKS Pacific, Inc. $ (15,952 ) $ 28,244 $ (48,544 ) $ 2,802 |
Share-Based Payments (Tables)
Share-Based Payments (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
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 for the three and nine months ended September 30, 2017 and 2016 (in thousands): Three Months Ended Nine Months Ended 2017 2016 2017 2016 Restricted stock compensation expense $ 793 $ 170 $ 2,253 $ 1,254 Tax benefit related to restricted stock compensation — — — — |
Restricted Stock Award Activity | Restricted stock award activity pursuant to the Plan for the nine months ended September 30, 2017 is summarized as follows: Restricted Stock Awards Number of Shares Weight Average Grant Fair Value Outstanding, December 31, 2016 196,453 $ 7.01 Awarded 981,208 5.15 Released (67,544 ) 8.33 Forfeited (7,715 ) 5.22 Outstanding, September 30, 2017 1,102,402 5.28 |
Restricted Stock Unit Activity | Restricted stock unit activity pursuant to the Plan for the nine months ended September 30, 2017 is summarized as follows: Restricted Stock Units Number of Shares Weight Average Grant Fair Value Outstanding, December 31, 2016 — $ — Awarded 1,001,206 5.15 Released — — Forfeited (37,864 ) 5.15 Outstanding, September 30, 2017 963,342 5.15 |
Basis of Presentation - Additio
Basis of Presentation - Additional Information (Detail) - USD ($) $ in Millions | 9 Months Ended | |
Sep. 30, 2017 | Sep. 30, 2016 | |
Basis of Presentation [Line Items] | ||
Increase in restricted cash | $ 3.4 | $ 2.7 |
Business Segments, Geographic31
Business Segments, Geographic Data, and Sales by Major Customers - Additional Information (Detail) $ in Billions | 9 Months Ended | 12 Months Ended | |
Sep. 30, 2017SegmentCustomer | Dec. 31, 2016SegmentCustomer | Sep. 25, 2017USD ($) | |
Segment Reporting Information [Line Items] | |||
Number of reporting segments | Segment | 3 | 3 | |
Number of major customers | Customer | 3 | 3 | |
Toys 'R' Us | |||
Segment Reporting Information [Line Items] | |||
Debtor-in-possession financing | $ | $ 3.1 | ||
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 | 42.60% | 35.80% |
Information by Segment and Reco
Information by Segment and Reconciliation to Reported Amounts (Detail) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | Dec. 31, 2016 | |
Segment Reporting Information [Line Items] | |||||
Net Sales | $ 262,413 | $ 302,791 | $ 476,483 | $ 539,577 | |
Income (Loss) from Operations | (7,746) | 34,413 | (37,578) | 19,497 | |
Depreciation and Amortization Expense | 8,301 | 8,206 | 18,414 | 16,898 | |
Assets | 453,262 | 453,262 | $ 464,303 | ||
U.S. and Canada | |||||
Segment Reporting Information [Line Items] | |||||
Net Sales | 154,046 | 188,381 | 295,098 | 350,320 | |
Income (Loss) from Operations | (6,760) | 24,865 | (24,155) | 16,966 | |
Depreciation and Amortization Expense | 5,682 | 5,787 | 13,107 | 12,097 | |
Assets | 154,117 | 154,117 | 286,512 | ||
International | |||||
Segment Reporting Information [Line Items] | |||||
Net Sales | 50,141 | 57,333 | 87,583 | 97,454 | |
Income (Loss) from Operations | (735) | 6,876 | (3,986) | 4,371 | |
Depreciation and Amortization Expense | 1,811 | 1,800 | 3,693 | 3,354 | |
Assets | 242,057 | 242,057 | 138,497 | ||
Halloween | |||||
Segment Reporting Information [Line Items] | |||||
Net Sales | 58,226 | 57,077 | 93,802 | 91,803 | |
Income (Loss) from Operations | (251) | 2,672 | (9,437) | (1,840) | |
Depreciation and Amortization Expense | 808 | $ 619 | 1,614 | $ 1,447 | |
Assets | $ 57,088 | $ 57,088 | $ 39,294 |
Information by Geographic Area
Information by Geographic Area (Detail) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | Dec. 31, 2016 | |
Revenues from External Customers and Long-Lived Assets [Line Items] | |||||
Long-lived Assets | $ 20,626 | $ 20,626 | $ 22,841 | ||
Net Sales | 262,413 | $ 302,791 | 476,483 | $ 539,577 | |
China | |||||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||||
Long-lived Assets | 14,148 | 14,148 | 15,710 | ||
United States | |||||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||||
Long-lived Assets | 6,067 | 6,067 | 6,587 | ||
Net Sales | 199,064 | 229,850 | 367,694 | 416,034 | |
Hong Kong | |||||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||||
Long-lived Assets | 411 | 411 | $ 544 | ||
Net Sales | 397 | 1,184 | 784 | 1,861 | |
Europe | |||||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||||
Net Sales | 33,640 | 43,446 | 56,537 | 67,611 | |
Canada | |||||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||||
Net Sales | 11,062 | 12,709 | 18,086 | 22,412 | |
Other | |||||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||||
Net Sales | $ 18,250 | $ 15,602 | $ 33,382 | $ 31,659 |
Net Sales to Major Customers (D
Net Sales to Major Customers (Detail) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Revenue, Major Customer [Line Items] | ||||
Net Sales | $ 262,413 | $ 302,791 | $ 476,483 | $ 539,577 |
Wal-Mart | ||||
Revenue, Major Customer [Line Items] | ||||
Net Sales | 66,138 | 72,996 | 108,781 | 139,806 |
Target | ||||
Revenue, Major Customer [Line Items] | ||||
Net Sales | 44,295 | 50,008 | 77,476 | 76,948 |
Toys 'R' Us | ||||
Revenue, Major Customer [Line Items] | ||||
Net Sales | 15,290 | 19,624 | 34,021 | 38,088 |
Major Customer | ||||
Revenue, Major Customer [Line Items] | ||||
Net Sales | $ 125,723 | $ 142,628 | $ 220,278 | $ 254,842 |
Net Sales | Customer Concentration Risk | ||||
Revenue, Major Customer [Line Items] | ||||
Percentage of Net Sales from major customer | 47.90% | 47.10% | 46.20% | 47.20% |
Net Sales | Wal-Mart | Customer Concentration Risk | ||||
Revenue, Major Customer [Line Items] | ||||
Percentage of Net Sales from major customer | 25.20% | 24.10% | 22.80% | 25.90% |
Net Sales | Target | Customer Concentration Risk | ||||
Revenue, Major Customer [Line Items] | ||||
Percentage of Net Sales from major customer | 16.90% | 16.50% | 16.30% | 14.30% |
Net Sales | Toys 'R' Us | Customer Concentration Risk | ||||
Revenue, Major Customer [Line Items] | ||||
Percentage of Net Sales from major customer | 5.80% | 6.50% | 7.10% | 7.00% |
Inventory Valued at Lower of Co
Inventory Valued at Lower of Cost (First-in, First-out) or Net Realizable Value, Net of Inventory Obsolescence Reserve (Detail) - USD ($) $ in Thousands | Sep. 30, 2017 | Dec. 31, 2016 |
Inventory [Line Items] | ||
Raw materials | $ 5,729 | $ 5,204 |
Finished goods | 74,415 | 70,231 |
Inventory, net | $ 80,144 | $ 75,435 |
Revenue Recognition and Reser36
Revenue Recognition and Reserve for Sales Returns and Allowances - Additional Information (Detail) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2017 | Dec. 31, 2016 | |
Revenue Recognition, Multiple-deliverable Arrangements [Line Items] | ||
Reserve for sales returns and allowances | $ 12,975 | $ 16,424 |
Minimum | ||
Revenue Recognition, Multiple-deliverable Arrangements [Line Items] | ||
Discount on invoiced amount of products | 1.00% | |
Maximum | ||
Revenue Recognition, Multiple-deliverable Arrangements [Line Items] | ||
Discount on invoiced amount of products | 10.00% |
Credit Facility - Additional In
Credit Facility - Additional Information (Detail) - USD ($) | 1 Months Ended | 9 Months Ended | 12 Months Ended |
Mar. 31, 2014 | Sep. 30, 2017 | Dec. 31, 2016 | |
Line of Credit Facility [Line Items] | |||
Restricted cash | $ 3,400,000 | ||
GECC | |||
Line of Credit Facility [Line Items] | |||
Line of credit facility maximum borrowing capacity | $ 75,000,000 | $ 12,100,000 | |
Line of credit facility, maturity date | Mar. 27, 2019 | ||
Amount of credit facility outstanding | $ 2,000,000 | 10,000,000 | |
Stand by letters of credit outstanding amount | 27,700,000 | $ 28,200,000 | |
Outstanding borrowings and outstanding stand-by letters of credit exceeded the borrowing base availability | 3,400,000 | ||
Restricted cash | $ 3,400,000 | ||
Rate of credit facility | 3.49% | 3.01% | |
Stand-by letter of credit fee percentage | 2.25% | ||
GECC | London Interbank Offered Rate (LIBOR) | |||
Line of Credit Facility [Line Items] | |||
Applicable margin spread over base rate | 2.25% | ||
GECC | Base Rate | |||
Line of Credit Facility [Line Items] | |||
Applicable margin spread over base rate | 1.25% | ||
GECC | Minimum | |||
Line of Credit Facility [Line Items] | |||
Percentage of unused credit line fee | 0.25% | ||
GECC | Maximum | |||
Line of Credit Facility [Line Items] | |||
Percentage of unused credit line fee | 0.50% | ||
WF Loan Agreement | Minimum | |||
Line of Credit Facility [Line Items] | |||
Fixed charge coverage ratio | 125.00% |
Convertible Senior Notes - Addi
Convertible Senior Notes - Additional Information (Detail) - USD ($) $ / shares in Units, $ in Thousands | 1 Months Ended | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||||||||
Aug. 31, 2017 | Jun. 30, 2017 | Jan. 31, 2016 | Jun. 30, 2014 | Jul. 31, 2013 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | Dec. 31, 2016 | |
Debt Instrument [Line Items] | ||||||||||||
Long term debt, face amount | $ 155,728 | $ 155,728 | $ 206,865 | |||||||||
Gain recognized on retirement of debt | 114 | $ 69 | ||||||||||
Payment for repurchase of convertible notes | 35,614 | 2,626 | ||||||||||
Long term debt | 21,500 | 21,500 | ||||||||||
Long term debt, current | 21,200 | 21,200 | ||||||||||
Amortization of debt issuance costs recognized as interest expense | 400 | $ 400 | 1,500 | $ 1,500 | ||||||||
4.875% Convertible Senior Notes (due 2020) | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Long term debt, face amount | $ 115,000 | $ 113,000 | $ 113,000 | $ 113,000 | ||||||||
Debt instrument, interest rate | 4.875% | 4.875% | 4.875% | 4.875% | ||||||||
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 | |||||||||||
Debt instrument repurchase amount | $ 2,000 | |||||||||||
Write-off of debt issuance costs | 100 | |||||||||||
Gain recognized on retirement of debt | $ 100 | |||||||||||
Convertible senior note payable, fair value | $ 88,600 | $ 88,600 | $ 89,300 | |||||||||
Debt instrument, maturity year | 2,020 | 2,020 | ||||||||||
4.25% Convertible Senior Notes (due 2018) | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Long term debt, face amount | $ 100,000 | $ 42,728 | $ 42,728 | $ 93,865 | ||||||||
Debt instrument, interest rate | 4.25% | 4.25% | 4.25% | 4.25% | ||||||||
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 | |||||||||||
Debt instrument repurchase amount | $ 12,000 | $ 12,000 | $ 39,100 | $ 6,100 | ||||||||
Write-off of debt issuance costs | 100 | 100 | ||||||||||
Gain recognized on retirement of debt | 100 | |||||||||||
Payment for repurchase of convertible notes | 11,600 | 24,100 | ||||||||||
Convertible senior note payable, fair value | $ 41,400 | $ 41,400 | $ 83,700 | |||||||||
Debt instrument, maturity year | 2,018 | 2,018 | ||||||||||
4.25% Convertible Senior Notes (due 2018) | Common Stock | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Debt instrument repurchase amount | $ 11,600 | $ 11,600 | $ 39,100 | |||||||||
Debt instrument shares common stock issued upon conversion | 112,400 | 112,400 | 2,865,000 | |||||||||
After Modification Senior Notes (due 2018) | Oasis Management and Oasis Investments ll Master Fund Ltd. | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Long term debt, face amount | $ 21,500 | |||||||||||
Debt instrument, interest rate | 3.25% | |||||||||||
Debt instrument, maturity date | Nov. 1, 2020 | |||||||||||
Conversion rate in share per $1000 principal amount of notes | 328.0302 | |||||||||||
Long term debt, current | $ 21,200 | $ 21,200 |
Convertible Senior Notes (Detai
Convertible Senior Notes (Detail) - USD ($) $ in Thousands | Sep. 30, 2017 | Dec. 31, 2016 | Jun. 30, 2014 | Jul. 31, 2013 |
Debt Instrument [Line Items] | ||||
Convertible senior notes, principal amount | $ 155,728 | $ 206,865 | ||
Convertible senior notes, debt issuance costs | 2,467 | 3,858 | ||
Convertible senior notes, net of debt issuance costs | 153,261 | 203,007 | ||
4.25% Convertible Senior Notes (due 2018) | ||||
Debt Instrument [Line Items] | ||||
Convertible senior notes, principal amount | 42,728 | 93,865 | $ 100,000 | |
Convertible senior notes, debt issuance costs | 298 | 1,098 | ||
Convertible senior notes, net of debt issuance costs | 42,430 | 92,767 | ||
4.875% Convertible Senior Notes (due 2020) | ||||
Debt Instrument [Line Items] | ||||
Convertible senior notes, principal amount | 113,000 | 113,000 | $ 115,000 | |
Convertible senior notes, debt issuance costs | 2,169 | 2,760 | ||
Convertible senior notes, net of debt issuance costs | $ 110,831 | $ 110,240 |
Convertible Senior Notes (Paren
Convertible Senior Notes (Parenthetical) (Detail) | 9 Months Ended | 12 Months Ended | ||
Sep. 30, 2017 | Dec. 31, 2016 | 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% |
Income Taxes - Additional Infor
Income Taxes - Additional Information (Detail) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Income Taxes [Line Items] | ||||
Provision for (benefit from) income taxes | $ 918,000 | $ 1,083,000 | $ 890,000 | $ 2,219,000 |
Effective income tax rate | 5.50% | 3.40% | 1.70% | 19.80% |
Discrete tax benefit (expenses) | $ 0 |
Reconciliation of Weighted Aver
Reconciliation of Weighted Average Shares Used in Computation of Earnings (Loss) Per Share (Detail) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Earnings Per Share Disclosure [Line Items] | ||||
Net income (loss) available to common stockholders | $ (17,614) | $ 30,612 | $ (52,672) | $ 8,828 |
Effect of dilutive securities, convertible senior notes | 1,840 | 5,557 | ||
Net income (loss) available to common stockholders plus assumed exercises and conversion | $ (17,614) | $ 32,452 | $ (52,672) | $ 14,385 |
Earnings (loss) per share - basic, Weighted Average Shares | ||||
Weighted Average Shares, available to common stockholders | 22,772 | 16,044 | 20,848 | 16,561 |
Effect of dilutive securities: | ||||
Convertible senior notes | 23,081 | 23,123 | ||
Earnings (loss) per share - diluted, Weighted Average Shares | ||||
Net income (loss) available to common stockholders plus assumed exercises and conversion | 22,772 | 39,504 | 20,848 | 39,916 |
Earnings (loss) per share - basic | ||||
Net income (loss) available to common stockholders | $ (0.77) | $ 1.91 | $ (2.53) | $ 0.53 |
Earnings (loss) per share - diluted | ||||
Net income (loss) available to common stockholders | $ (17,614) | $ 30,612 | $ (52,672) | $ 8,828 |
Effect of dilutive securities, convertible senior notes | 1,840 | 5,557 | ||
Net income (loss) available to common stockholders plus assumed exercises and conversion | $ (17,614) | $ 32,452 | $ (52,672) | $ 14,385 |
Net income (loss) available to common stockholders plus assumed exercises and conversion | $ (0.77) | $ 0.82 | $ (2.53) | $ 0.36 |
Performance Stock | ||||
Earnings Per Share Disclosure [Line Items] | ||||
Effect of dilutive securities, unvested stock grants | $ 0 | $ 0 | $ 0 | $ 0 |
Effect of dilutive securities: | ||||
Unvested stock grants | 164 | 115 | ||
Earnings (loss) per share - diluted | ||||
Effect of dilutive securities, unvested stock grants | 0 | $ 0 | 0 | $ 0 |
Restricted Stock | ||||
Earnings Per Share Disclosure [Line Items] | ||||
Effect of dilutive securities, unvested stock grants | 0 | $ 0 | 0 | $ 0 |
Effect of dilutive securities: | ||||
Unvested stock grants | 215 | 117 | ||
Earnings (loss) per share - diluted | ||||
Effect of dilutive securities, unvested stock grants | $ 0 | $ 0 | $ 0 | $ 0 |
Earnings (Loss) Per Share - Add
Earnings (Loss) Per Share - Additional Information (Detail) - shares | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Common Stock Equivalents | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Potentially dilutive securities excluded from computation of diluted earnings per common share | 20,215,325 | 25,495,045 | 21,502,935 | 25,265,072 |
Common Stock and Preferred St44
Common Stock and Preferred Stock - Additional Information (Detail) | Apr. 27, 2017USD ($)shares | Jun. 30, 2017USD ($)shares | Oct. 31, 2016shares | Mar. 31, 2016USD ($)shares | Jan. 31, 2016USD ($)ExecutiveOfficersDirectorshares | Jun. 30, 2014USD ($)shares | Jun. 30, 2017USD ($)shares | Mar. 31, 2017USD ($)ExecutiveOfficersDirectorshares | Sep. 30, 2017USD ($) | Sep. 30, 2016USD ($) | Dec. 31, 2016USD ($)shares | Dec. 31, 2015USD ($)shares | Jun. 30, 2015USD ($) |
Class of Stock [Line Items] | |||||||||||||
Repurchase of common stock, shares | shares | 3,112,840 | ||||||||||||
Repurchase of common stock, value | $ 24,000,000 | ||||||||||||
Repurchase of convertible senior notes | $ 35,614,000 | $ 2,626,000 | |||||||||||
4.875% Convertible Senior Notes (due 2020) | |||||||||||||
Class of Stock [Line Items] | |||||||||||||
Amount of convertible notes repurchased and retired | $ 2,000,000 | ||||||||||||
4.25% Convertible Senior Notes (due 2018) | |||||||||||||
Class of Stock [Line Items] | |||||||||||||
Amount of convertible notes repurchased and retired | $ 12,000,000 | $ 12,000,000 | $ 39,100,000 | $ 6,100,000 | |||||||||
Repurchase of convertible senior notes | 11,600,000 | 24,100,000 | |||||||||||
Common Stock | 4.25% Convertible Senior Notes (due 2018) | |||||||||||||
Class of Stock [Line Items] | |||||||||||||
Amount of convertible notes repurchased and retired | $ 11,600,000 | $ 11,600,000 | $ 39,100,000 | ||||||||||
Common stock shares issued upon conversion of debt instrument | shares | 112,400 | 112,400 | 2,865,000 | ||||||||||
Common stock shares issued upon conversion of debt instrument, value | $ 400,000 | $ 15,100,000 | |||||||||||
Common Stock | Hong Kong Meisheng Cultural Co | |||||||||||||
Class of Stock [Line Items] | |||||||||||||
Common stock issued, shares | shares | 3,660,891 | ||||||||||||
Common stock issued, value | $ 19,300,000 | ||||||||||||
Securities | |||||||||||||
Class of Stock [Line Items] | |||||||||||||
Retirement of common stock (share) | shares | 1,766,284 | 1,547,361 | |||||||||||
Retirement of common stock | $ 13,500,000 | $ 13,200,000 | |||||||||||
Securities | 4.875% Convertible Senior Notes (due 2020) | |||||||||||||
Class of Stock [Line Items] | |||||||||||||
Amount of convertible notes repurchased and retired | 2,000,000 | ||||||||||||
Repurchase of convertible senior notes | 1,900,000 | ||||||||||||
Securities | 4.25% Convertible Senior Notes (due 2018) | |||||||||||||
Class of Stock [Line Items] | |||||||||||||
Amount of convertible notes repurchased and retired | 6,100,000 | ||||||||||||
Repurchase of convertible senior notes | $ 6,100,000 | ||||||||||||
Maximum | Restricted Stock | |||||||||||||
Class of Stock [Line Items] | |||||||||||||
Vesting period | 5 years | ||||||||||||
Maximum | Securities | |||||||||||||
Class of Stock [Line Items] | |||||||||||||
Stock repurchase, authorized amount | $ 35,000,000 | ||||||||||||
Executive officer | |||||||||||||
Class of Stock [Line Items] | |||||||||||||
Restricted stock issued, shares | shares | 134,058 | 449,120 | 873,787 | ||||||||||
Restricted stock issued, value | $ 900,000 | $ 3,600,000 | $ 4,500,000 | ||||||||||
Number of executive officers | ExecutiveOfficers | 2 | 2 | |||||||||||
Executive officer | Restricted Stock | |||||||||||||
Class of Stock [Line Items] | |||||||||||||
Vesting period | 3 years | ||||||||||||
Non-employee directors | |||||||||||||
Class of Stock [Line Items] | |||||||||||||
Restricted stock issued, shares | shares | 2,463 | 62,710 | 94,102 | ||||||||||
Restricted stock issued, value | $ 500,000 | $ 500,000 | |||||||||||
Number of non-employee directors | Director | 5 | 5 | |||||||||||
Non-employee directors | Hong Kong Meisheng Cultural Co | |||||||||||||
Class of Stock [Line Items] | |||||||||||||
Restricted stock issued, shares | shares | 13,319 | ||||||||||||
Restricted stock issued, value | $ 100,000 | ||||||||||||
Non-employee directors | Restricted Stock | |||||||||||||
Class of Stock [Line Items] | |||||||||||||
Shares of restricted stock, vesting date | 2017-01 | 2017-01 | 2018-01 | ||||||||||
Non-employee directors | Restricted Stock | Hong Kong Meisheng Cultural Co | |||||||||||||
Class of Stock [Line Items] | |||||||||||||
Shares of restricted stock, vesting date | 2018-01 |
Joint Ventures - Additional Inf
Joint Ventures - Additional Information (Detail) shares in Millions | 1 Months Ended | 3 Months Ended | 9 Months Ended | ||||||
Sep. 30, 2012USD ($)shares | Sep. 30, 2017USD ($)Project | Sep. 30, 2016USD ($) | Sep. 30, 2017USD ($) | Sep. 30, 2016USD ($) | Apr. 27, 2017 | Dec. 31, 2016USD ($) | Oct. 31, 2016 | Dec. 31, 2012USD ($) | |
Schedule of Equity Method Investments [Line Items] | |||||||||
Equity in net income/(loss) of joint venture | $ 0 | $ 0 | $ 700,000 | $ 700,000 | |||||
Impairment charge | 0 | 5,248,000 | 0 | ||||||
Investment in DreamPlay LLC | $ 7,000,000 | ||||||||
Impairment charges | 7,000,000 | 7,000,000 | |||||||
Net income (loss) attributable to non-controlling interests | $ 45,000 | (83,000) | $ 131,000 | 173,000 | |||||
Pacific Animation Partners Joint Venture | |||||||||
Schedule of Equity Method Investments [Line Items] | |||||||||
Percentage of ownership interest in joint venture | 50.00% | 50.00% | |||||||
Number of episodes for which production completed | Project | 65 | ||||||||
Episode show airing beginning date | 2012-02 | ||||||||
DreamPlay Toys | |||||||||
Schedule of Equity Method Investments [Line Items] | |||||||||
Percentage of ownership interest in joint venture | 50.00% | ||||||||
Cash paid to Nant Works for joint venture | $ 8,000,000 | ||||||||
Issue of warrants (in shares) | shares | 1.5 | ||||||||
Issue of warrants | $ 7,000,000 | ||||||||
Investment in DreamPlay LLC | $ 7,000,000 | ||||||||
Percentage of ownership interest in joint venture | 5.00% | ||||||||
Impairment charges | $ 7,000,000 | ||||||||
DreamPlay Toys | Technology Rights | |||||||||
Schedule of Equity Method Investments [Line Items] | |||||||||
Impairment charge | $ 2,900,000 | $ 2,900,000 | |||||||
NantWorks | Minimum | |||||||||
Schedule of Equity Method Investments [Line Items] | |||||||||
Ownership percentage | 10.00% | 10.00% | |||||||
China Joint Venture | |||||||||
Schedule of Equity Method Investments [Line Items] | |||||||||
Percentage of ownership interest in joint venture | 51.00% | 51.00% | |||||||
Net income (loss) attributable to non-controlling interests | $ 45,000 | (83,000) | $ 256,000 | 173,000 | |||||
Hong Kong Meisheng Cultural Co | |||||||||
Schedule of Equity Method Investments [Line Items] | |||||||||
Percentage of ownership interest in joint venture | 50.00% | ||||||||
Net income (loss) attributable to non-controlling interests | 0 | (125,000) | |||||||
Hong Kong Meisheng Cultural Co | Minimum | |||||||||
Schedule of Equity Method Investments [Line Items] | |||||||||
Ownership percentage | 10.00% | ||||||||
Video game | |||||||||
Schedule of Equity Method Investments [Line Items] | |||||||||
Equity in net income/(loss) of joint venture | $ 100,000 | $ 200,000 | $ 100,000 | $ 200,000 |
Changes to Carrying Amount of G
Changes to Carrying Amount of Goodwill (Detail) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Goodwill [Line Items] | ||||
Balance at beginning of the period | $ 43,208 | |||
Impairment | $ (8,288) | $ 0 | (8,288) | $ 0 |
Adjustments to goodwill for foreign currency translation | 424 | |||
Goodwill Ending Balance | $ 35,344 | $ 35,344 |
Goodwill - Additional Informati
Goodwill - Additional Information (Detail) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Goodwill [Line Items] | ||||
Goodwill impairment | $ 8,288 | $ 0 | $ 8,288 | $ 0 |
Intangible Assets (Detail)
Intangible Assets (Detail) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2017 | Dec. 31, 2016 | |
Acquired Intangible Assets by Major Class [Line Items] | ||
Trademarks, net | $ 300 | $ 2,608 |
Amortized Intangible Assets, Gross Carrying Amount | 60,340 | 76,575 |
Amortized Intangible Assets, Accumulated Amortization | (36,774) | (43,464) |
Amortized Intangible Assets, Net Amount | $ 23,566 | 33,111 |
Licenses | ||
Acquired Intangible Assets by Major Class [Line Items] | ||
Weighted Useful Lives (Years) | 5 years 9 months 22 days | |
Amortized Intangible Assets, Gross Carrying Amount | $ 20,130 | 20,130 |
Amortized Intangible Assets, Accumulated Amortization | (18,307) | (17,248) |
Amortized Intangible Assets, Net Amount | $ 1,823 | 2,882 |
Product Lines | ||
Acquired Intangible Assets by Major Class [Line Items] | ||
Weighted Useful Lives (Years) | 5 years 26 days | |
Amortized Intangible Assets, Gross Carrying Amount | $ 33,858 | 50,093 |
Amortized Intangible Assets, Accumulated Amortization | (12,115) | (20,634) |
Amortized Intangible Assets, Net Amount | $ 21,743 | 29,459 |
Customer relationships | ||
Acquired Intangible Assets by Major Class [Line Items] | ||
Weighted Useful Lives (Years) | 4 years 10 months 25 days | |
Amortized Intangible Assets, Gross Carrying Amount | $ 3,152 | 3,152 |
Amortized Intangible Assets, Accumulated Amortization | $ (3,152) | (2,755) |
Amortized Intangible Assets, Net Amount | 397 | |
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 | $ (3,000) | (2,650) |
Amortized Intangible Assets, Net Amount | 350 | |
Non-compete agreements | ||
Acquired Intangible Assets by Major Class [Line Items] | ||
Weighted Useful Lives (Years) | 5 years | |
Amortized Intangible Assets, Gross Carrying Amount | $ 200 | 200 |
Amortized Intangible Assets, Accumulated Amortization | $ (200) | (177) |
Amortized Intangible Assets, Net Amount | $ 23 |
Intangible Assets Other Than 49
Intangible Assets Other Than Goodwill - Additional Information (Detail) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Acquired Intangible Assets by Major Class [Line Items] | ||||
Impairment charge | $ 0 | $ 5,248 | $ 0 | |
Trademarks and Trade Names | ||||
Acquired Intangible Assets by Major Class [Line Items] | ||||
Impairment charge | $ 2,300 | 2,300 | ||
Technology Rights | DreamPlay Toys | ||||
Acquired Intangible Assets by Major Class [Line Items] | ||||
Impairment charge | $ 2,900 | $ 2,900 |
Components of Comprehensive Inc
Components of Comprehensive Income (Loss) (Detail) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Condensed Statement of Income Captions [Line Items] | ||||
Net income (loss) | $ (17,569) | $ 30,529 | $ (52,541) | $ 9,001 |
Other comprehensive income (loss): | ||||
Foreign currency translation adjustment | 1,662 | (2,368) | 4,128 | (6,026) |
Comprehensive income (loss) | (15,907) | 28,161 | (48,413) | 2,975 |
Less: Comprehensive income (loss) attributable to non-controlling interests | 45 | (83) | 131 | 173 |
Comprehensive income (loss) attributable to JAKKS Pacific, Inc. | $ (15,952) | $ 28,244 | $ (48,544) | $ 2,802 |
Share-Based Payments - Addition
Share-Based Payments - Additional Information (Detail) $ in Millions | 9 Months Ended |
Sep. 30, 2017USD ($) | |
Restricted Stock | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Unrecognized compensation, non-vested restricted stock awards | $ 3 |
Unrecognized compensation, non-vested restricted stock awards expected recognized period | 5 years 4 months 24 days |
Restricted Stock | Minimum | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Vesting period | 1 year |
Restricted Stock | Maximum | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Vesting period | 5 years |
Restricted Stock Units (RSUs) | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Unrecognized compensation, non-vested restricted stock awards | $ 3.7 |
Unrecognized compensation, non-vested restricted stock awards expected recognized period | 6 years 2 months 12 days |
Total Share-Based Compensation
Total Share-Based Compensation Expense and Related Tax Benefits Recognized (Detail) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Restricted stock compensation expense | $ 793 | $ 170 | $ 2,253 | $ 1,254 |
Restricted Stock | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Tax benefit related to restricted stock compensation | $ 0 | $ 0 | $ 0 | $ 0 |
Summary of Restricted Stock Awa
Summary of Restricted Stock Award Activity (Detail) - Restricted Stock | 9 Months Ended |
Sep. 30, 2017$ / sharesshares | |
Number of Shares | |
Outstanding at beginning of period | shares | 196,453 |
Awarded | shares | 981,208 |
Released | shares | (67,544) |
Forfeited | shares | (7,715) |
Outstanding at end of period | shares | 1,102,402 |
Weighted Average Grant Fair Value | |
Outstanding at beginning of period | $ / shares | $ 7.01 |
Awarded | $ / shares | 5.15 |
Released | $ / shares | 8.33 |
Forfeited | $ / shares | 5.22 |
Outstanding at end of period | $ / shares | $ 5.28 |
Summary of Restricted Stock Uni
Summary of Restricted Stock Unit Activity (Detail) - Restricted Stock Units (RSUs) | 9 Months Ended |
Sep. 30, 2017$ / sharesshares | |
Number of Shares | |
Awarded | shares | 1,001,206 |
Released | shares | 0 |
Forfeited | shares | (37,864) |
Outstanding at end of period | shares | 963,342 |
Weighted Average Fair Value | |
Awarded | $ / shares | $ 5.15 |
Released | $ / shares | 0 |
Forfeited | $ / shares | 5.15 |
Outstanding at end of period | $ / shares | $ 5.15 |
Subsequent Events - Additional
Subsequent Events - Additional Information (Detail) - USD ($) $ in Thousands | 1 Months Ended | |||
Aug. 31, 2017 | Jul. 31, 2013 | Sep. 30, 2017 | Dec. 31, 2016 | |
Subsequent Event [Line Items] | ||||
Long term debt, face amount | $ 155,728 | $ 206,865 | ||
Long term debt, current | 21,200 | |||
After Modification Senior Notes (due 2018) | Oasis Management and Oasis Investments ll Master Fund Ltd. | ||||
Subsequent Event [Line Items] | ||||
Long term debt, face amount | $ 21,500 | |||
Long term debt, current | 21,200 | |||
Debt instrument, interest rate | 3.25% | |||
Debt instrument, maturity date | Nov. 1, 2020 | |||
Conversion rate in share per $1000 principal amount of notes | 328.0302 | |||
4.25% Convertible Senior Notes (due 2018) | ||||
Subsequent Event [Line Items] | ||||
Long term debt, face amount | $ 100,000 | $ 42,728 | $ 93,865 | |
Debt instrument, interest rate | 4.25% | 4.25% | 4.25% | |
Debt instrument, maturity date | Aug. 1, 2018 | |||
Conversion rate in share per $1000 principal amount of notes | 114.3674 |