Document And Entity Information
Document And Entity Information - shares | 6 Months Ended | |
Jun. 30, 2022 | Aug. 10, 2022 | |
Document Information Line Items | ||
Entity Registrant Name | JAKKS Pacific, Inc. | |
Trading Symbol | JAKK | |
Document Type | 10-Q | |
Current Fiscal Year End Date | --12-31 | |
Entity Common Stock, Shares Outstanding | 9,723,534 | |
Amendment Flag | false | |
Entity Central Index Key | 0001009829 | |
Entity Current Reporting Status | Yes | |
Entity Filer Category | Non-accelerated Filer | |
Document Period End Date | Jun. 30, 2022 | |
Document Fiscal Year Focus | 2022 | |
Document Fiscal Period Focus | Q2 | |
Entity Small Business | true | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Document Quarterly Report | true | |
Document Transition Report | false | |
Entity File Number | 0-28104 | |
Entity Incorporation, State or Country Code | DE | |
Entity Tax Identification Number | 95-4527222 | |
Entity Address, Address Line One | 2951 28th Street | |
Entity Address, City or Town | Santa Monica | |
Entity Address, State or Province | CA | |
Entity Address, Postal Zip Code | 90405 | |
City Area Code | 424 | |
Local Phone Number | 268-9444 | |
Entity Interactive Data Current | Yes | |
Title of 12(g) Security | Common Stock $.001 Par Value | |
Security Exchange Name | NASDAQ |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Jun. 30, 2022 | Dec. 31, 2021 |
Current assets | ||
Cash and cash equivalents | $ 62,283 | $ 44,521 |
Restricted cash | 0 | 811 |
Accounts receivable, net of allowance for doubtful accounts of $2,795 and $2,626 at June 30, 2022 and December 31, 2021, respectively | 164,020 | 147,394 |
Inventory | 123,666 | 83,954 |
Prepaid expenses and other assets | 14,519 | 10,877 |
Total current assets | 364,488 | 287,557 |
Property and equipment | ||
Office furniture and equipment | 11,990 | 11,967 |
Molds and tooling | 110,025 | 103,102 |
Leasehold improvements | 6,829 | 6,876 |
Total | 128,844 | 121,945 |
Less accumulated depreciation and amortization | 112,601 | 108,796 |
Property and equipment, net | 16,243 | 13,149 |
Operating lease right-of-use assets, net | 24,584 | 16,950 |
Other long term assets | 2,732 | 2,993 |
Intangible assets, net | 507 | 1,015 |
Goodwill | 35,083 | 35,083 |
Trademarks | 0 | 300 |
Total assets | 443,637 | 357,047 |
Current liabilities | ||
Accounts payable | 86,660 | 50,237 |
Accounts payable – Meisheng (related party) | 42,254 | 15,894 |
Accrued expenses | 58,189 | 47,071 |
Reserve for sales returns and allowances | 45,625 | 46,285 |
Income taxes payable | 2,333 | 1,004 |
Short term operating lease liabilities | 10,239 | 10,477 |
Short term debt, net | 2,475 | 2,104 |
Total current liabilities | 247,775 | 173,072 |
Long term operating lease liabilities | 15,406 | 8,039 |
Debt, non-current portion, net of issuance costs and debt discounts | 82,453 | 93,415 |
Preferred stock derivative liability | 15,898 | 21,282 |
Income taxes payable | 215 | 215 |
Deferred income taxes, net | 51 | 51 |
Total liabilities | 361,798 | 296,074 |
Preferred stock accrued dividends, $0.001 par value; 5,000,000 shares authorized; 200,000 shares issued and outstanding at June 30, 2022 and December 31, 2021 | 3,771 | 3,074 |
Stockholders' Equity | ||
Common stock, $0.001 par value; 100,000,000 shares authorized; 9,587,806 and 9,520,817 shares issued and outstanding at June 30, 2022 and December 31, 2021, respectively | 10 | 10 |
Additional paid-in capital | 273,625 | 272,941 |
Accumulated deficit | (180,680) | (203,431) |
Accumulated other comprehensive loss | (15,765) | (12,952) |
Total JAKKS Pacific, Inc. stockholders' equity | 77,190 | 56,568 |
Non-controlling interests | 878 | 1,331 |
Total stockholders' equity | 78,068 | 57,899 |
Total liabilities, preferred stock and stockholders' equity | $ 443,637 | $ 357,047 |
CONDENSED CONSOLIDATED BALANC_2
CONDENSED CONSOLIDATED BALANCE SHEETS (Parentheticals) - USD ($) $ in Thousands | Jun. 30, 2022 | Dec. 31, 2021 |
Statement of Financial Position [Abstract] | ||
Allowance for doubtful accounts (in Dollars) | $ 2,795 | $ 2,626 |
Preferred stock, shares authorized | 5,000,000 | 5,000,000 |
Preferred stock, shares issued | 200,000 | 200,000 |
Preferred stock, shares outstanding | 200,000 | 200,000 |
Preferred stock, par value (in Dollars per share) | $ 0.001 | $ 0.001 |
Common stock, shares authorized | 100,000,000 | 100,000,000 |
Common stock, shares issued | 9,587,806 | 9,520,817 |
Common stock, shares outstanding | 9,587,806 | 9,520,817 |
Common stock, par value (in Dollars per share) | $ 0.001 | $ 0.001 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2022 | Jun. 30, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | |
Net sales | $ 220,422 | $ 112,352 | $ 341,303 | $ 196,195 |
Cost of sales: | ||||
Cost of goods | 159,532 | 80,455 | 250,496 | 138,204 |
Gross profit | 60,890 | 31,897 | 90,807 | 57,991 |
Direct selling expenses | 6,838 | 6,286 | 11,740 | 13,088 |
General and administrative expenses | 29,514 | 23,193 | 54,667 | 44,604 |
Depreciation and amortization | 578 | 597 | 1,174 | 1,201 |
Selling, general and administrative expenses | 36,930 | 30,076 | 67,581 | 58,893 |
Intangibles impairment | 300 | 0 | 300 | 0 |
Income (loss) from operations | 23,660 | 1,821 | 22,926 | (902) |
Other income (expense), net | 183 | 72 | 269 | 127 |
Loss on debt extinguishment | 0 | (7,351) | 0 | (7,351) |
Change in fair value of preferred stock derivative liability | 6,029 | (1,539) | 5,384 | (8,914) |
Change in fair value of convertible senior notes | 0 | (3,797) | 0 | (12,844) |
Interest income | 6 | 4 | 9 | 6 |
Interest expense | (2,337) | (4,370) | (4,539) | (9,245) |
Income (loss) before provision for (benefit from) income taxes | 27,541 | (15,160) | 24,049 | (39,123) |
Provision for (benefit from) income taxes | 1,334 | (100) | 1,751 | (12) |
Net income (loss) | 26,207 | (15,060) | 22,298 | (39,111) |
Net income (loss) attributable to non-controlling interests | (353) | 24 | (453) | 59 |
Net loss attributable to Jakks Pacific, Inc. | 26,560 | (15,084) | 22,751 | (39,170) |
Net income (loss) attributable to common stockholders | $ 26,209 | $ (15,415) | $ 22,054 | $ (39,827) |
Earnings (loss) per share - basic (in Dollars per share) | $ 2.73 | $ (2.48) | $ 2.3 | $ (6.86) |
Shares used in earnings (loss) per share - basic (in Shares) | 9,588,000 | 6,220,000 | 9,588,000 | 5,802,000 |
Earnings (loss) per share - diluted (in Dollars per share) | $ 2.61 | $ (2.48) | $ 2.21 | $ (6.86) |
Shares used in earnings (loss) per share - diluted (in Shares) | 10,037,000 | 6,220,000 | 9,978,000 | 5,802,000 |
Comprehensive income (loss) | $ 24,056 | $ (14,680) | $ 19,485 | $ (38,789) |
Comprehensive income (loss) attributable to JAKKS Pacific, Inc. | 24,409 | (14,704) | 19,938 | (38,848) |
Cost of Sales [Member] | ||||
Cost of sales: | ||||
Cost of goods | 121,850 | 61,489 | 193,908 | 105,538 |
Royalty [Member] | ||||
Cost of sales: | ||||
Cost of goods | 35,704 | 16,784 | 53,394 | 29,295 |
Amortization Of Tools And Mold [Member] | ||||
Cost of sales: | ||||
Cost of goods | $ 1,978 | $ 2,182 | $ 3,194 | $ 3,371 |
CONDENSED CONSOLIDATED STATEM_2
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY - USD ($) $ in Thousands | Common Stock [Member] | Additional Paid-in Capital [Member] | Retained Earnings [Member] | AOCI Including Portion Attributable to Noncontrolling Interest [Member] | Noncontrolling Interest [Member] | Parent [Member] | Total |
Balance, at Dec. 31, 2020 | $ 6 | $ 221,590 | $ (197,423) | $ (12,446) | $ 1,211 | $ 12,938 | $ 11,727 |
Stock-based compensation expense | 382 | 382 | 382 | ||||
Repurchase of common stock for employee tax withholding | (164) | (164) | (164) | ||||
Conversion of convertible senior notes | 5,631 | 5,631 | 5,631 | ||||
Preferred stock accrued dividends | (326) | (326) | (326) | ||||
Net income (loss) | (24,086) | 35 | (24,051) | (24,086) | |||
Foreign currency translation adjustment | (58) | (58) | (58) | ||||
Balance, at Mar. 31, 2021 | 6 | 227,113 | (221,509) | (12,504) | 1,246 | (5,648) | (6,894) |
Balance, at Dec. 31, 2020 | 6 | 221,590 | (197,423) | (12,446) | 1,211 | 12,938 | 11,727 |
Stock-based compensation expense | 765 | ||||||
Net income (loss) | (39,170) | ||||||
Foreign currency translation adjustment | 322 | ||||||
Balance, at Jun. 30, 2021 | 7 | 241,405 | (236,593) | (12,124) | 1,270 | (6,035) | (7,305) |
Balance, at Mar. 31, 2021 | 6 | 227,113 | (221,509) | (12,504) | 1,246 | (5,648) | (6,894) |
Stock-based compensation expense | 383 | 383 | 383 | ||||
Conversion of convertible senior notes | 1 | 14,240 | 14,241 | 14,241 | |||
Preferred stock accrued dividends | (331) | (331) | (331) | ||||
Net income (loss) | (15,084) | 24 | (15,060) | (15,084) | |||
Foreign currency translation adjustment | 380 | 380 | 380 | ||||
Balance, at Jun. 30, 2021 | 7 | 241,405 | (236,593) | (12,124) | 1,270 | (6,035) | (7,305) |
Balance, at Dec. 31, 2021 | 10 | 272,941 | (203,431) | (12,952) | 1,331 | 57,899 | 56,568 |
Stock-based compensation expense | 870 | 870 | 870 | ||||
Repurchase of common stock for employee tax withholding | (644) | (644) | (644) | ||||
Preferred stock accrued dividends | (346) | (346) | (346) | ||||
Net income (loss) | (3,809) | (100) | (3,909) | (3,809) | |||
Foreign currency translation adjustment | (662) | (662) | (662) | ||||
Balance, at Mar. 31, 2022 | 10 | 272,821 | (207,240) | (13,614) | 1,231 | 53,208 | 51,977 |
Balance, at Dec. 31, 2021 | 10 | 272,941 | (203,431) | (12,952) | 1,331 | 57,899 | 56,568 |
Stock-based compensation expense | 2,025 | ||||||
Net income (loss) | 22,751 | ||||||
Foreign currency translation adjustment | (2,813) | ||||||
Balance, at Jun. 30, 2022 | 10 | 273,625 | (180,680) | (15,765) | 878 | 78,068 | 77,190 |
Balance, at Mar. 31, 2022 | 10 | 272,821 | (207,240) | (13,614) | 1,231 | 53,208 | 51,977 |
Stock-based compensation expense | 1,155 | 1,155 | 1,155 | ||||
Preferred stock accrued dividends | (351) | (351) | (351) | ||||
Net income (loss) | 26,560 | (353) | 26,207 | 26,560 | |||
Foreign currency translation adjustment | (2,151) | (2,151) | (2,151) | ||||
Balance, at Jun. 30, 2022 | $ 10 | $ 273,625 | $ (180,680) | $ (15,765) | $ 878 | $ 78,068 | $ 77,190 |
CONDENSED CONSOLIDATED STATEM_3
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2022 | Jun. 30, 2021 | |
Cash flows from operating activities | ||
Net income (loss) | $ 22,298 | $ (39,111) |
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities: | ||
Provision for (recovery of) doubtful accounts | 207 | (1,487) |
Depreciation and amortization | 4,368 | 4,572 |
Payment-in-kind interest | 0 | 1,598 |
Amortization of debt discount | 188 | 1,230 |
Amortization of debt issuance costs | 245 | 829 |
Share-based compensation expense | 2,025 | 765 |
Gain on disposal of property and equipment | (48) | (67) |
Loss on debt extinguishment | 0 | 7,351 |
Intangibles impairment | 300 | 0 |
Change in fair value of convertible senior notes | 0 | 12,844 |
Change in fair value of preferred stock derivative liability | (5,384) | 8,914 |
Changes in operating assets and liabilities: | ||
Accounts receivable | (16,833) | (4,157) |
Inventory | (39,712) | (21,938) |
Prepaid expenses and other assets | (3,538) | (14,322) |
Accounts payable and payable to Meisheng (related party) | 61,151 | 26,864 |
Accrued expenses | 11,118 | (1,731) |
Reserve for sales returns and allowances | (660) | 174 |
Income taxes payable | 1,329 | (513) |
Other liabilities | (505) | (346) |
Total adjustments | 14,251 | 20,580 |
Net cash provided by (used in) operating activities | 36,549 | (18,531) |
Cash flows from investing activities | ||
Purchases of property and equipment | (5,276) | (3,725) |
Proceeds from sale of property and equipment | 2 | 32 |
Net cash used in investing activities | (5,274) | (3,693) |
Cash flows from financing activities | ||
Repurchase of common stock for employee tax withholding | (644) | (164) |
Repayment of credit facility borrowings | (13,000) | 0 |
Proceeds from credit facility borrowings | 13,000 | 0 |
Repayment of 2021 BSP Term Loan | (10,867) | 0 |
Net proceeds from issuance of long term debt | 0 | 96,306 |
Deferred issuance costs | 0 | (2,787) |
Repayment of 2019 Recap Term Loan | 0 | (125,805) |
Net cash used in financing activities | (11,511) | (32,450) |
Net increase (decrease) in cash, cash equivalents and restricted cash | 19,764 | (54,674) |
Effect of foreign currency translation | (2,813) | 322 |
Cash, cash equivalents and restricted cash, beginning of period | 45,332 | 92,693 |
Cash, cash equivalents and restricted cash, end of period | 62,283 | 38,341 |
Supplemental disclosures of cash flow information: | ||
Cash paid for income taxes, net | 228 | 644 |
Cash paid for interest | $ 4,099 | $ 8,664 |
Cash Flow, Supplemental Disclos
Cash Flow, Supplemental Disclosures | 6 Months Ended |
Jun. 30, 2022 | |
Supplemental Cash Flow Elements [Abstract] | |
Cash Flow, Supplemental Disclosures [Text Block] | As of June 30, 2022, there was $4.4 million of property and equipment purchases included in accounts payable. As of June 30, 2021, there was $3.6 million of property and equipment purchases included in accounts payable. |
Basis of Presentation
Basis of Presentation | 6 Months Ended |
Jun. 30, 2022 | |
Accounting Policies [Abstract] | |
Organization, Consolidation and Presentation of Financial Statements Disclosure [Text Block] | Note 1 Basis of Presentation The accompanying unaudited interim condensed 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 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, 2021. 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 condensed consolidated financial statements include the accounts of JAKKS Pacific, Inc. and its wholly-owned subsidiaries (collectively, “the Company”). The condensed 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. In June 2016, the FASB issued Accounting Standards Update (“ASU”) 2016-13, “Financial Instruments-Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments,” which require a financial asset (or a group of financial assets) measured at amortized cost basis to be presented at the net amount expected to be collected. The new standard was initially effective for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years. In November 2019, the FASB issued ASU 2019-10 which deferred the effective date of ASU 2016-13 by three years for Smaller Reporting Companies. As a result, the effective date for the standard is fiscal years beginning after December 15, 2022, and interim periods therein, and early adoption is permitted. The Company is currently evaluating the impact of the adoption of ASU 2016-13 on its condensed consolidated financial statements. In December 2019, the FASB issued ASU 2019-12, “Simplifying the Accounting for Income Taxes,” which simplifies the accounting for income taxes related to the approach for intra-period tax allocation, the methodology for calculating income taxes in an interim period, and the recognition of deferred tax assets for investments. The guidance also reduces complexity in certain areas, including the accounting for transactions that result in a step-up in the tax basis of goodwill and allocating taxes to members of a consolidated group. This new standard is effective for the Company for fiscal years beginning January 1, 2021, with early adoption permitted. The adoption of this standard did not have a material impact on the Company’s condensed consolidated financial statements. In March 2020, the FASB issued ASU 2020-04, “Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting.” In January 2021, the FASB issued ASU 2021-01, “Reference Rate Reform (Topic 848): Scope.” The ASUs provide temporary optional expedients and exceptions for applying U.S. GAAP to contracts, hedging relationships, and other transactions, for a limited period of time, to ease the potential burden of recognizing the effects of reference rate reform on financial reporting. The amendments in ASU 2020-04 apply to contracts, hedging relationships and other transactions that reference the London Inter-Bank Offered Rate ("LIBOR") or another reference rate expected to be discontinued due to the global transition away from LIBOR and certain other interbank offered rates. The new standard is effective for the Company for fiscal years beginning after December 15, 2022, including interim periods within these fiscal years, with early adoption permitted. The Company is currently evaluating the impact that the adoption of this new guidance will have on its condensed consolidated financial statements. In August 2020, the FASB issued ASU 2020-06, “Debt – Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging – Contracts in Entity’s Own Equity (Subtopic 815-40): Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity.” The new guidance eliminates two of the three models in ASC 470-20, which required entities to account for beneficial conversion features and cash conversion features in equity, separately from the host convertible debt or preferred stock. As a result, only conversion features accounted for under the substantial premium model in ASC 470-20 and those that require bifurcation in accordance with ASC 815-15 will be accounted for separately. In addition, the amendments in ASU 2020-06 eliminate some of the requirements in ASC 815-40 related to equity classification. The amendments in ASU 2020-06 further revised the guidance in ASC 260, Earnings Per Share (“EPS”), to address how convertible instruments are accounted for in calculating diluted EPS, and require enhanced disclosures about the terms of convertible instruments and contracts in an entity’s own equity. The new standard is effective for the Company for fiscal years beginning after December 15, 2023, including interim periods within these fiscal years, with early adoption permitted. The Company is currently evaluating the impact that the adoption of this new guidance will have on its condensed consolidated financial statements. In November 2021, the FASB issued ASU 2021-10, “Government Assistance (Topic 832): Disclosures by Business Entities about Government Assistance.” ASU 2021-10 requires annual disclosures that are expected to increase the transparency of transactions involving government grants, including (1) the types of transactions, (2) the accounting for those transactions and (3) the effect of those transactions on an entity’s financial statements. The provisions of ASU 2021-10 are effective for fiscal years beginning after December 31, 2021, with early adoption permitted. The Company adopted ASU 2021-10 during the fiscal period December 31, 2021 (see Note 1 – Basis of Presentation, Note 5 – Debt and Note 18 –Prepaid Expenses and Other Assets, for disclosures related to government assistance received by the Company). Liquidity On January 30, 2020, the World Health Organization (“WHO”) announced a global health emergency because of a new strain of coronavirus originating in Wuhan, China (the “COVID-19 outbreak”) and the risks to the international community as the virus spreads globally beyond its point of origin. In March 2020, the WHO classified the COVID-19 outbreak as a pandemic, based on the rapid increase in exposure globally. The global pandemic continues to be an unpredictable macro event impacting the world at large and by extension, the market for JAKKS products as well as its operations. The Company has navigated the pandemic to date and has expectations of wider vaccinations and reduced pandemic restrictions on mobility and social interactions in the quarters to follow. As such, it is uncertain as to the full magnitude that the pandemic will have on the Company’s financial condition, liquidity, and future results of operations. Management is actively monitoring the global situation and the resulting impact on its financial condition, liquidity, operations, suppliers, industry, and workforce. Given the daily evolution of the COVID-19 outbreak and the global responses to curb its spread, the Company is unable to estimate effects of the COVID-19 outbreak on its future results of operations, financial condition, and liquidity. On March 27, 2020, President Trump signed into law the Coronavirus Aid, Relief and Economic Security Act (“CARES Act”). The CARES Act, among other things, includes provisions relating to refundable payroll tax credits, deferment of employer-side social security payments, net operating loss carryback periods, alternative minimum tax credit refunds, modifications to the net interest deduction limitations and technical corrections to tax depreciation methods for qualified improvement property. On December 27, 2020, President Trump signed into law the Consolidated Appropriations Act of 2021 (“CAA”), which includes many tax and health components, as well as CARES Act extensions and modifications. The Company continues to monitor and explore any relevant government assistance programs that could support either cash liquidity or operating results in the short-medium term. On April 23, 2020, the Small Business Administration issued new guidance that questioned whether a public company with substantial market value and access to capital markets would qualify to participate in the Paycheck Protection Program (“PPP”). Subsequently, on April 28, 2020, the Secretary of the Treasury and Small Business Administrator announced that the government will review all PPP loans of more than $2.0 million for which the borrower applies for forgiveness. If the Company were to be audited and receive an adverse finding in such audit, the Company could be required to return the full amount of the loan, which could reduce its liquidity, and potentially subject it to fines and penalties. On June 12, 2020, the Company received a $6.2 million loan under the PPP within the CARES Act (the “PPP Loan”). The PPP Loan maturity date was June 2, 2022 and was subject to the CARES Act terms which included, among other terms, an interest rate of 1.00% per annum and monthly installment payments of $261,275 commencing on September 27, 2021. The PPP Loan allowed for prepayment at any time prior to maturity with no prepayment penalties. The PPP Loan was subject to events of default and other provisions customary for a loan of this type. The application for the loan required the Company to, in good faith, certify that the current economic uncertainty made the loan request necessary to support the ongoing operations of the Company. This certification further required the Company to take into account its current business activity and its ability to access other sources of liquidity sufficient to support ongoing operations in a manner that is not significantly detrimental to the business. A PPP Loan may be forgiven, partially or in full, if certain conditions are met, principally based on having been disbursed for permissible purposes and maintaining certain average levels of employment and payroll as required by the CARES Act. The forgiveness of the loan was also dependent on the Company having initially qualified for the loan. In June 2021, the Company filed its application for forgiveness of the entirety of its PPP loan. On September 10, 2021, the full amount of the PPP Loan was forgiven. The CARES Act also provided an employee retention credit (“ERC”) which was a refundable tax credit against certain employment taxes of up to $5,000 per employee for eligible employers. The credit is equal to 50% of qualified wages paid to employees during a quarter, capped at $10,000 of qualified wages through year end. The Company became eligible for the credit beginning on March 16, 2020. The CAA extended and expanded the availability of the ERC through June 30, 2021. Subsequently, the American Rescue Plan Act of 2021 ("ARP"), enacted on March 11, 2021, extended and expanded the availability of the ERC through December 31, 2021, however, certain provisions apply only after December 31, 2020. This new legislation amended the employee retention credit to be equal to 70% of qualified wages paid to employees after December 31, 2020, and before January 1, 2022. During calendar year 2021, a maximum of $10,000 in qualified wages for each employee per qualifying calendar quarter may be counted in determining the 70% credit. Therefore, the maximum tax credit that can be claimed by an eligible employer is $7,000 per employee per qualifying calendar quarter of 2021. The Company will qualify for the employee retention credit for quarters where the Company’s operations were partially suspended due to orders from an appropriate governmental authority limiting commerce, travel, or group meetings due to COVID-19. During the three and six months ended June 30, 2021, the Company recorded $0.1 million and $2.0 million, respectively, related to the ERC as an offset within selling, general and administrative expenses on the Company’s condensed consolidated statements of operations and within prepaid expenses and other assets on the Company’s condensed consolidated balance sheet (see Note 18 – Prepaid Expenses and Other Assets). As of June 30, 2022 and December 31, 2021, the Company held cash and cash equivalents, including restricted cash, of $62.3 million and $45.3 million, respectively. Cash, and cash equivalents, including restricted cash held outside of the United States in various foreign subsidiaries totaled $53.5 million and $30.7 million as of June 30, 2022 and December 31, 2021, respectively. The cash and cash equivalents, including restricted cash balances in the Company's foreign subsidiaries have either been fully taxed in the U.S. or tax has been accounted for in connection with the Tax Cuts and Jobs Act, or may be eligible for a full foreign dividends received deduction under such Act, and thus would not be subject to additional U.S. tax should such amounts be repatriated in the form of dividends or deemed distributions. Any such repatriation may result in foreign withholding taxes, which the Company expects would not be significant as of June 30, 2022. The Company’s primary sources of working capital are cash flows from operations and borrowings under its credit facility (see Note 6 - Credit Facilities). Typically, cash flows from operations are impacted by the effect on sales of (1) the appeal of the Company’s products, (2) the success of its licensed brands in motivating consumer purchase of related merchandise, (3) the highly competitive conditions existing in the toy industry and in securing commercially-attractive licenses, (4) dependency on a limited set of large customers, and (5) general economic conditions. A downturn in any single factor or a combination of factors could have a material adverse impact upon the Company’s ability to generate sufficient cash flows to operate the business. In addition, the Company’s business and liquidity are dependent to a significant degree on its vendors and their financial health, as well as the ability to accurately forecast the demand for products. The loss of a key vendor, or material changes in support by them, or a significant variance in actual demand compared to the forecast, can have a material adverse impact on the Company’s cash flows and business. On June 2, 2021, the Company and certain of its subsidiaries, as borrowers, entered into a Credit Agreement (the “JPMorgan ABL Credit Agreement”), with JPMorgan Chase Bank, N.A., as agent and lender for a $67,500,000 senior secured revolving credit facility (the “JPMorgan ABL Facility”). The JPMorgan ABL Credit Agreement replaced the Company’s existing asset-based revolving credit agreement, dated as of March 27, 2014 (the “Wells Fargo ABL Facility,” formerly known as the “Amended ABL Facility” in prior filings), with General Electric Capital Corporation, since assigned to Wells Fargo Bank, National Association. The Company pays a commitment fee (0.25% - 0.375%) based on the unused portion of the revolving credit facility. Any amounts borrowed under the JPMorgan ABL Facility will bear interest at either (i) Eurodollar spread plus 1.50% - 2.00% (determined by reference to an excess availability pricing grid) or (ii) Alternate Base Rate plus 0.50% - 1.00% (determined by reference to an excess availability pricing grid and base rate subject to a 1.00% floor). The JPMorgan ABL Facility matures in June 2026. The JPMorgan ABL Credit Agreement contains negative covenants that, subject to certain exceptions, limit the ability of the Company and its subsidiaries to, among other things, incur additional indebtedness, make restricted payments, pledge their assets as security, make investments, loans, advances, guarantees and acquisitions, undergo fundamental changes and enter into transactions with affiliates. Under certain circumstances the Company is also subject to a springing fixed charge coverage ratio covenant of not less than 1.1 to 1.0, as described in more detail in the JPMorgan ABL Credit Agreement. The JPMorgan ABL Credit Agreement contains events of default that are customary for a facility of this nature, including (subject in certain cases to grace periods and thresholds) nonpayment of principal, interest, fees or other amounts, material inaccuracy of representations and warranties, violation of covenants, cross-default to certain other existing indebtedness, bankruptcy or insolvency events, certain judgment defaults, loss of liens or guarantees and a change of control as specified in the JPMorgan ABL Credit Agreement. If an event of default occurs, the commitments of the lenders to lend under the JPMorgan ABL Credit Agreement may be terminated and the maturity of the amounts owed may be accelerated. The obligations under the JPMorgan ABL Credit Agreement are guaranteed by the Company, the subsidiary borrowers thereunder and certain of the other existing and future direct and indirect subsidiaries of the Company and are secured by substantially all of the assets of the Company, the subsidiary borrowers thereunder and such other subsidiary guarantors, in each case, subject to certain exceptions and permitted liens. On June 2, 2021, the Company and certain of its subsidiaries, as borrowers, entered into a First Lien Term Loan Facility Credit Agreement (the “2021 BSP Term Loan Agreement”) with Benefit Street Partners L.L.C., as Sole Lead Arranger, and BSP Agency, LLC, as agent, for a $99.0 million first-lien secured term loan (the “Initial Term Loan”) and a $19.0 million delayed draw term loan (the “Delayed Draw Term Loan” and collectively, the “2021 BSP Term Loan”). Net proceeds from the issuance of the 2021 BSP Term Loan, after deduction of $2.2 million in closing fees and $0.5 million of other administrative fees paid directly to the lenders, totaled $96.3 million. These fees are being amortized over the life of the 2021 BSP Term Loan on a straight-line basis which approximates the effective interest method. Proceeds from the Initial Term Loan, together with available cash from the Company, were used to repay the Company’s existing term loan (the “2019 Recap Term Loan” formerly known as the “New Term Loan” in prior filings) under the agreement dated as of August 9, 2019 with Cortland Capital Market Services LLC, as agent for certain investor parties. The Delayed Draw Term Loan provision was secured to redeem any of the Company’s outstanding 2023 Convertible Senior Notes (the “New Oasis Notes” or “3.25% convertible senior notes due 2023”), upon its maturity, which, upon repayment of the 2019 Recap Term Loan, accelerated to no later than 91 days from the repayment of the 2019 Recap Term Loan, or September 1, 2021. On July 29, 2021, the Company terminated its Delayed Draw Term Loan option as it determined it had sufficient liquidity to fund any outstanding convertible senior notes that remained upon maturity. Amounts outstanding under the 2021 BSP Term Loan will bear interest at either (i) LIBOR plus 6.50% - 7.00% (determined by reference to a net leverage pricing grid), subject to a 1.00% LIBOR floor, or (ii) base rate plus 5.50% - 6.00% (determined by reference to a net leverage pricing grid), subject to a 2.00% base rate floor. The 2021 BSP Term Loan matures in June 2027. The 2021 BSP Term Loan Agreement contains negative covenants that, subject to certain exceptions, limit the ability of the Company and its subsidiaries to, among other things, incur additional indebtedness, make restricted payments, pledge its assets as security, make investments, loans, advances, guarantees and acquisitions, undergo fundamental changes and enter into transactions with affiliates. Commencing with the fiscal quarter ending June 30, 2021, the Company is required to maintain a Net Leverage Ratio of 4:00x, with step-downs occurring each fiscal year starting with the quarter ending March 31, 2022 through the quarter ending September 30, 2024 in which the Company is required to maintain a Net Leverage Ratio of 3:00x. On April 26, 2022, the Company entered into a First Amendment to the 2021 BSP Term Loan Agreement, to provide, among other things, that the Company must maintain Qualified Cash of at least: (a) at all times after the Closing Date and prior to the First Amendment Effective Date, $20.0 million; (b) at all times during the period commencing on the First Amendment Effective Date through and including June 30, 2022, $15.0 million; and (c) at all times on and after July 1, 2022, through September 30, 2022, $17.5 million; provided, however, that if the Total Net Leverage Ratio exceeded 1.75:1.00 as of the last day of the most recently ended month for which financial statements were required to have been delivered, then the amount set forth in this clause shall be increased to $20.0 million. Notwithstanding the foregoing, the Applicable Minimum Cash Amount shall be reduced by $1.0 million for every $5.0 million principal prepayment or repayment of the Term Loans following the First Amendment Effective Date; provided however, that, the Applicable Minimum Cash Amount shall in no event be reduced below $15.0 million. On June 27, 2022, as permitted by the terms within the 2021 BSP Term Loan Agreement, the Company made a voluntary fee-free $10.0 million prepayment towards the outstanding principal amount of the 2021 BSP Term Loan. The 2021 BSP Term Loan Agreement contains events of default that are customary for a facility of this nature, including (subject in certain cases to grace periods and thresholds) nonpayment of principal, nonpayment of interest, fees or other amounts, material inaccuracy of representations and warranties, violation of covenants, cross-default to certain other existing indebtedness, bankruptcy or insolvency events, certain judgment defaults and a change of control as specified in the 2021 BSP Term Loan Agreement. If an event of default occurs, the maturity of the amounts owed under the 2021 BSP Term Loan Agreement may be accelerated. The obligations under the 2021 BSP Term Loan Agreement are guaranteed by the Company, the subsidiary borrowers thereunder and certain of the other existing and future direct and indirect subsidiaries of the Company and are secured by substantially all of the assets of the Company, the subsidiary borrowers thereunder and such other subsidiary guarantors, in each case, subject to certain exceptions and permitted liens and subject to the priority lien granted under the JPMorgan ABL Credit Agreement. The agent and Sole Lead Arranger under the 2021 BSP Term Loan are affiliates of an affiliate of the Company, which affiliate owned common stock and the 3.25% convertible senior notes due 2023 of the Company at the time of the refinancing, as well as a majority of the Company’s outstanding Series A Preferred Stock giving the affiliates various rights as described in the Company’s public filings. As of June 30, 2022, the Company had $87.6 million of outstanding indebtedness under the 2021 BSP Term Loan Agreement and no outstanding indebtedness under its amended and extended JPMorgan ABL Credit Agreement with JPMorgan Chase aside from utilizing $17.2 million in letters of credit. On June 2, 2021, the Company repaid in full and terminated the First Lien Term Loan Facility Credit Agreement (the “2019 Recap Term Loan Agreement,” formerly known as the “New Term Loan Agreement” in prior filings), dated as of August 9, 2019, with Cortland Capital Market Services LLC, as agent. The Wells Fargo ABL Credit Facility Agreement was also terminated as of June 2, 2021. The Company was in compliance with the financial covenants under the 2021 BSP Term Loan Agreement and the JPMorgan ABL Agreement as of June 30, 2022. The Company’s unaudited interim condensed consolidated financial statements for the three and six months ended June 30, 2022 have been prepared on a going concern basis, which contemplates the realization of assets and the settlement of liabilities and commitments in the normal course of business. The Company believes that cash and cash equivalents, including restricted cash, projected cash flow from operations, and borrowings under the Company’s credit facility are sufficient to meet the Company’s working capital and capital expenditure requirements for the next 12 months. |
Business Segments, Geographic D
Business Segments, Geographic Data, and Sales by Major Customers | 6 Months Ended |
Jun. 30, 2022 | |
Segment Reporting [Abstract] | |
Segment Reporting Disclosure [Text Block] | 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’s segments are (i) Toys/Consumer Products and (ii) Costumes. The Toys/Consumer Products segment includes action figures, vehicles, play sets, plush products, dolls, electronic products, construction toys, infant and pre-school toys, child-sized and hand-held role play toys 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. The Costumes segment, under its Disguise branding, designs, develops, markets and sells a wide range of every-day and special occasion dress-up costumes and related accessories in support of Halloween, Carnival, Children’s Day, Book Day/Week, and every-day/any-day costume play. Segment performance is measured at the operating income (loss) level. All sales are made to external customers and general corporate expenses have been attributed to the 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 six months ended June 30, 2022 and 2021, and as of June 30, 2022 and December 31, 2021 are as follows (in thousands): Three Months Ended Six Months Ended June 30, June 30, 2022 2021 2022 2021 Net Sales Toys/Consumer Products $ 148,860 $ 81,538 $ 259,983 $ 161,413 Costumes 71,562 30,814 81,320 34,782 $ 220,422 $ 112,352 $ 341,303 $ 196,195 Three Months Ended Six Months Ended June 30, June 30, 2022 2021 2022 2021 Income (Loss) from Operations Toys/Consumer Products $ 18,447 $ 4,860 $ 20,454 $ 5,216 Costumes 5,213 (3,039 ) 2,472 (6,118 ) $ 23,660 $ 1,821 $ 22,926 $ (902 ) Three Months Ended Six Months Ended June 30, June 30, 2022 2021 2022 2021 Depreciation and Amortization Expense Toys/Consumer Products $ 2,312 $ 2,525 $ 4,037 $ 4,252 Costumes 244 254 331 320 $ 2,556 $ 2,779 $ 4,368 $ 4,572 June 30, December 31, 2022 2021 Assets Toys/Consumer Products $ 347,006 $ 338,266 Costumes 96,631 18,781 $ 443,637 $ 357,047 Net revenues are categorized based upon location of the customer, while long-lived assets are categorized based upon the location of the Company’s assets. The following tables present information about the Company by geographic area as of June 30, 2022 and December 31, 2021 and for the three and six months ended June 30, 2022 and 2021 (in thousands): June 30, December 31, 2022 2021 Long-lived Assets United States $ 21,647 $ 16,252 China 15,341 11,655 Hong Kong 2,538 770 United Kingdom 1,167 1,270 Mexico 74 79 Canada 60 73 $ 40,827 $ 30,099 Three Months Ended Six Months Ended June 30, June 30, 2022 2021 2022 2021 Net Sales by Customer Area United States $ 192,484 $ 95,265 $ 289,534 $ 164,181 Europe 14,447 9,930 27,836 17,267 Canada 5,537 2,208 8,916 4,309 Latin America 3,823 1,165 6,208 3,620 Asia 2,363 2,164 4,439 3,579 Australia & New Zealand 1,582 1,249 3,073 2,437 Middle East & Africa 186 371 1,297 802 $ 220,422 $ 112,352 $ 341,303 $ 196,195 Major Customers Net sales to major customers for the three and six months ended June 30, 2022 and 2021 were as follows (in thousands, except for percentages): Three Months Ended June 30, Six Months Ended June 30, 2022 2021 2022 2021 Percentage Percentage Percentage Percentage Amount of Net Sales Amount of Net Sales Amount of Net Sales Amount of Net Sales Wal-Mart $ 70,371 31.9 % $ 34,692 30.9 % $ 93,391 27.4 % $ 56,330 28.7 % Target 65,122 29.6 30,575 27.2 100,792 29.5 53,328 27.2 $ 135,493 61.5 % $ 65,267 58.1 % $ 194,183 56.9 % $ 109,658 55.9 % No other customer accounted for more than 10% of the Company's total net sales. 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. |
Inventory
Inventory | 6 Months Ended |
Jun. 30, 2022 | |
Inventory Disclosure [Abstract] | |
Inventory Disclosure [Text Block] | Note 3 Inventory Inventory, which includes the ex-factory cost of goods, capitalized warehouse costs, and in-bound freight and duty, is valued at the lower of cost or net realizable value, net of inventory obsolescence reserve, and consists of the following (in thousands): June 30, December 31, 2022 2021 Raw materials $ 70 $ 106 Finished goods 123,596 83,848 $ 123,666 $ 83,954 As of June 30, 2022 and December 31, 2021, the inventory obsolescence reserve was $10.2 million and $4.6 million, respectively. |
Revenue Recognition and Reserve
Revenue Recognition and Reserve for Sales Returns and Allowances | 6 Months Ended |
Jun. 30, 2022 | |
Revenue from Contract with Customer [Abstract] | |
Revenue from Contract with Customer [Text Block] | Note 4 Revenue Recognition and Reserve for Sales Returns and Allowances The Company’s contracts with customers only include one performance obligation (i.e., sale of the Company’s products). Revenue is recognized in the gross amount at a point in time when delivery is completed and control of the promised goods is transferred to the customers. Revenue is measured as the amount of consideration the Company expects to be entitled to in exchange for those goods. The Company’s contracts do not involve financing elements as payment terms with customers are less than one year. Further, because revenue is recognized at the point in time goods are sold to customers, there are no contract assets or contract liability balances. The Company disaggregates its revenues from contracts with customers by reporting segment: Toys/Consumer Products and Costumes. The Company further disaggregates revenues by major geographic regions (see Note 2 - Business Segments, Geographic Data, and Sales by Major Customers, for further information). The Company offers various discounts, pricing concessions, and other allowances to customers, all of which are considered in determining the transaction price. Certain discounts and allowances are fixed and determinable at the time of sale and are recorded at the time of sale as a reduction to revenue. Other discounts and allowances can vary and are determined at management’s discretion (variable consideration). Specifically, the Company occasionally grants discretionary credits to facilitate markdowns and sales of slow-moving merchandise, and consequently accrues an allowance based on historic credits and management estimates. 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 allowances range from 1% to 20% of gross sales, and are generally based upon product purchases or specific advertising campaigns. Such allowances are accrued when the related revenue is recognized. To the extent these cooperative advertising arrangements provide a distinct benefit at fair value, they are accounted for as direct selling expenses, otherwise they are recorded as a reduction to revenue. Further, while the Company generally does not allow product returns, the Company does make occasional exceptions to this policy and consequently records a sales return allowance based upon historic return amounts and management estimates. These allowances (variable consideration) are estimated using the expected value method and are recorded at the time of sale as a reduction to revenue. The Company adjusts its estimate of variable consideration at least quarterly or when facts and circumstances used in the estimation process may change. The variable consideration is not constrained as the Company has sufficient history on the related estimates and does not believe there is a risk of significant revenue reversal. Sales commissions are expensed when incurred as the related revenue is recognized at a point in time and therefore the amortization period is less than one year. As a result, these costs are recorded as direct selling expenses, as incurred. Shipping and handling activities are considered part of the Company’s obligation to transfer the products and therefore are recorded as direct selling expenses, as incurred. The Company’s reserve for sales returns and allowances amounted to $45.6 million as of June 30, 2022, compared to $46.3 million as of December 31, 2021. |
Debt
Debt | 6 Months Ended |
Jun. 30, 2022 | |
Debt Disclosure [Abstract] | |
Debt Disclosure [Text Block] | Note 5 Debt Convertible senior notes In August 2019, the Company entered into and consummated multiple, binding definitive agreements (collectively, the “Recapitalization Transaction”) among Wells Fargo, Oasis Investments II Master Fund Ltd. and an ad hoc group of holders of the Company’s 4.875% convertible senior notes due 2020 (the “Investor Parties”) to recapitalize the Company’s balance sheet, including the extension to the Company of incremental liquidity and at least three-year extensions of substantially all of the Company’s outstanding convertible debt obligations and revolving credit facility. In connection with the Recapitalization Transaction, the Company issued (i) amended and restated notes with respect to the Company’s $21.6 million Oasis Note issued on November 7, 2017, and the $8.0 million Oasis Note issued on July 26, 2018 (together, the “Existing Oasis Notes”), and (ii) a new $8.0 million convertible senior note having the same terms as such amended and restated notes, or the New Oasis Notes. Interest on the New Oasis Notes is payable on each May 1 and November 1 until maturity and accrues at an annual rate of (i) 3.25% if paid in cash or 5.00% if paid in stock plus (ii) 2.75% payable in kind. The New Oasis Notes mature 91 days after the amounts outstanding under the 2019 Recap Term Loan are paid in full, and in no event later than July 3, 2023. Excluding the impact of the Reverse Stock Split in July of 2020, the New Oasis Notes provide, among other things, that the initial conversion price is $1.00. The conversion price will be reset on each February 9 and August 9, starting on February 9, 2020 (each, a “reset date”) to a price equal to 105% of the 5-day VWAP preceding the applicable reset date. Under no circumstances shall the reset result in a conversion price be below the greater of (i) the closing price on the trading day immediately preceding the applicable reset date and (ii) 30% of the stock price as of the Transaction Agreement Date, or August 7, 2019, and will not be greater than the conversion price in effect immediately before such reset. The Company may trigger a mandatory conversion of the New Oasis Notes if the market price exceeds 150% of the conversion price under certain circumstances. The Company may redeem the New Oasis Notes in cash if a person, entity or group acquires shares of the Company’s Common Stock, par value $0.001 per share (the “Common Stock”), and as a result owns at least 49% of the Company’s issued and outstanding Common Stock. On February 9, 2020, excluding the impact of the Reverse Stock Split, the conversion price of the New Oasis Notes reset to $1.00 per share ($10.00 per share after reverse stock split). On August 9, 2020, the conversion price of the New Oasis Notes reset to $5.647. On February 9, 2021, the conversion price of the New Oasis Notes recalculated and remained unchanged at $5.647. During 2021, $24.0 million of the New Oasis Notes (including $1.2 million in PIK interest) were converted for 4,246,828 shares of common stock. As a result, the Company recorded an increase to additional paid-in capital of $50.8 million. A director of the Company is a portfolio manager at Oasis Management. The Company has elected to measure and present the debt held by Oasis at fair value using Level 3 inputs and as a result, recognized a loss of $3.8 million and $12.8 million for the three and six months ended June 30, 2021, respectively, related to changes in the fair value of the 3.25% convertible senior notes due 2023 (see Note 16 – Fair Value Measurement). On February 5, 2021, Benefit Street Partners and Oasis Investment II Master Funds Ltd, both related parties, entered into a purchase and sale agreement wherein Benefit Street Partners purchased $11.0 million of principal amount, plus all accrued and unpaid interest thereon, of the New Oasis Notes from Oasis Investment II Master Funds Ltd (see Note 17 – Related Party Transactions). The transaction closed on February 8, 2021. Term Loan Term loan consists of the following (in thousands): June 30, 2022 December 31, 2021 Debt Discount/ Debt Discount/ Principal Issuance Net Principal Issuance Net Amount Costs* Amount Amount Costs* Amount 2021 BSP Term Loan $ 87,639 $ (2,711 ) $ 84,928 $ 98,505 $ (2,986 ) $ 95,519 * The term loan was valued using the discounted cash flow method to determine the implied debt discount. The debt discount and issuance costs are amortized over the life of the term loan on a straight-line basis which approximates the effective interest method. On June 2, 2021, the Company and certain of its subsidiaries, as borrowers, entered into the 2021 BSP Term Loan Agreement with Benefit Street Partners L.L.C., as Sole Lead Arranger, and BSP Agency, LLC, as agent, for a $99.0 million Initial Term Loan and a $19.0 million Delay Draw Term Loan. Net proceeds from the issuance of the 2021 BSP Term Loan, after deduction of $2.2 million in closing fees and $0.5 million of other administrative fees paid directly to the lenders, totaled $96.3 million. These fees are amortized over the life of the 2021 BSP Term Loan on a straight-line basis which approximates the effective interest method. Proceeds from the Initial Term Loan, together with available cash from the Company, were used to repay the Company’s 2019 Recap Term Loan under the agreement dated as of August 9, 2019 with Cortland Capital Market Services LLC, as agent for certain investor parties. The Delayed Draw Term Loan provision was designed to provide necessary capital to redeem any of the Company’s outstanding 3.25% convertible senior notes due 2023, upon their maturity, which, upon repayment of the 2019 Recap Term Loan, accelerated to no later than 91 days from the repayment of the 2019 Recap Term Loan, or September 1, 2021. On July 29, the Company terminated its Delayed Draw Term Loan option as it determined it had sufficient liquidity to fund any outstanding convertible senior notes that remained upon maturity. Amounts outstanding under the 2021 BSP Term Loan will bear interest at either (i) LIBOR plus 6.50% - 7.00% (determined by reference to a net leverage pricing grid), subject to a 1.00% LIBOR floor, or (ii) base rate plus 5.50% - 6.00% (determined by reference to a net leverage pricing grid), subject to a 2.00% base rate floor. The 2021 BSP Term Loan matures in June 2027. The 2021 BSP Term Loan Agreement contains negative covenants that, subject to certain exceptions, limit the ability of the Company and its subsidiaries to, among other things, incur additional indebtedness, make restricted payments, pledge its assets as security, make investments, loans, advances, guarantees and acquisitions, undergo fundamental changes and enter into transactions with affiliates. Commencing with the fiscal quarter ending June 30, 2021, the Company is required to maintain a Net Leverage Ratio of 4:00x, with step-downs occurring each fiscal year starting with the quarter ending March 31, 2022 through the quarter ending September 30, 2024 in which the Company is required to maintain a Net Leverage Ratio of 3:00x. On April 26, 2022, the Company entered into a First Amendment to the 2021 BSP Term Loan Agreement, to provide, among other things, that the Company must maintain Qualified Cash of at least: (a) at all times after the Closing Date and prior to the First Amendment Effective Date, $20.0 million; (b) at all times during the period commencing on the First Amendment Effective Date through and including June 30, 2022, $15.0 million; and (c) at all times on and after July 1, 2022, through September 30, 2022, $17.5 million; provided, however, that if the Total Net Leverage Ratio exceeded 1.75:1.00 as of the last day of the most recently ended month for which financial statements were required to have been delivered, then the amount set forth in this clause shall be increased to $20.0 million. Notwithstanding the foregoing, the Applicable Minimum Cash Amount shall be reduced by $1.0 million for every $5.0 million principal prepayment or repayment of the Term Loans following the First Amendment Effective Date; provided however, that, the Applicable Minimum Cash Amount shall in no event be reduced below $15.0 million. On June 27, 2022, as permitted by the terms within the 2021 BSP Term Loan Agreement, the Company made a voluntary fee-free $10.0 million prepayment towards the outstanding principal amount of the 2021 BSP Term Loan. The 2021 BSP Term Loan Agreement contains events of default that are customary for a facility of this nature, including (subject in certain cases to grace periods and thresholds) nonpayment of principal, nonpayment of interest, fees or other amounts, material inaccuracy of representations and warranties, violation of covenants, cross-default to certain other existing indebtedness, bankruptcy or insolvency events, certain judgment defaults and a change of control as specified in the 2021 BSP Term Loan Agreement. If an event of default occurs, the maturity of the amounts owed under the 2021 BSP Term Loan Agreement may be accelerated. The obligations under the 2021 BSP Term Loan Agreement are guaranteed by the Company, the subsidiary borrowers thereunder and certain of the other existing and future direct and indirect subsidiaries of the Company and are secured by substantially all of the assets of the Company, the subsidiary borrowers thereunder and such other subsidiary guarantors, in each case, subject to certain exceptions and permitted liens and subject to the priority lien granted under the JPMorgan ABL Credit Agreement. The agent and Sole Lead Arranger under the 2021 BSP Term Loan are affiliates of an affiliate of the Company, which affiliate, at the time of refinancing, owned common stock and the 3.25% convertible senior notes due 2023 of the Company, as well as the Company’s outstanding Series A Preferred Stock. Amortization expense classified as interest expense related to the $1.0 million of debt issuance costs associated with the issuance of the 2021 BSP Term Loan was $43,584 and $87,167 for the three and six months ended June 30, 2022, respectively. Amortization expense classified as interest expense related to the $2.3 million debt discount associated with the issuance of the 2021 BSP Term Loan was $0.1 million and $0.2 million for the three and six months ended June 30, 2022, respectively. The fair value of the Company’s 2021 BSP Term Loan is considered Level 3 fair value (see Note 16 – Fair Value Measurements for further discussion of the fair value hierarchy) and are measured using the discounted future cash flow method. In addition to the debt terms, the valuation methodology includes an assumption of a discount rate that approximates the current yield on a debt security with comparable risk. This assumption is considered an unobservable input in that it reflects the Company’s own assumptions about the inputs that market participants would use in pricing the asset or liability. The Company believes that this is the best information available for use in the fair value measurement. The estimated fair value of the 2021 BSP Term Loan was $69.1 million and $97.3 million as of June 30, 2022 and December 31, 2021, respectively, compared to a carrying value of $84.9 million and $95.5 million as of June 30, 2022 and December 31, 2021, respectively. As of June 30, 2022, the Company was in compliance with the financial covenants under the 2021 BSP Term Loan Agreement. Loan under Paycheck Protection Program On June 12, 2020, the Company received a $6.2 million PPP Loan under the PPP within the CARES Act. The PPP Loan maturity date was June 2, 2022, and was subject to the CARES Act terms which included, among other terms, an interest rate of 1.00% per annum and monthly installment payments of $261,275 commencing on September 27, 2021. The PPP Loan allowed for prepayment at any time prior to maturity with no prepayment penalties. The PPP Loan was subject to events of default and other provisions customary for a loan of this type. A PPP Loan may be forgiven, partially or in full, if certain conditions are met, principally based on having been disbursed for permissible purposes and maintaining certain average levels of employment and payroll as required by the CARES Act. On September 10, 2021, the full amount of the PPP Loan was forgiven. |
Credit Facilities
Credit Facilities | 6 Months Ended |
Jun. 30, 2022 | |
Credit Facilities [Abstract] | |
Credit Facilities [Text Block] | Note 6 Credit Facilities JPMorgan Chase On June 2, 2021, the Company and certain of its subsidiaries, as borrowers, entered into the JPMorgan ABL Credit Agreement with JPMorgan Chase Bank, N.A., as agent and lender for a $67,500,000 senior secured revolving credit facility. The JPMorgan ABL Credit Agreement replaced the Company’s Wells Fargo ABL Facility, dated as of March 27, 2014, with General Electric Capital Corporation, since assigned to Wells Fargo Bank, National Association. The Company pays a commitment fee (0.25% - 0.375%) based on the unused portion of the revolving credit facility. Any amounts borrowed under the JPMorgan ABL Facility will bear interest at either (i) Eurodollar spread plus 1.50% - 2.00% (determined by reference to an excess availability pricing grid) or (ii) Alternate Base Rate plus 0.50% - 1.00% (determined by reference to an excess availability pricing grid and base rate subject to a 1.00% floor). The JPMorgan ABL Facility matures in June 2026. As of June 30, 2022, the weighted average interest rate on the credit facility with JPMorgan Chase Bank was 1.88%. The JPMorgan ABL Credit Agreement contains negative covenants that, subject to certain exceptions, limit the ability of the Company and its subsidiaries to, among other things, incur additional indebtedness, make restricted payments, pledge their assets as security, make investments, loans, advances, guarantees and acquisitions, undergo fundamental changes and enter into transactions with affiliates. Under certain circumstances the Company is also subject to a springing fixed charge coverage ratio covenant of not less than 1.1 to 1.0, as described in more detail in the JPMorgan ABL Credit Agreement. The JPMorgan ABL Credit Agreement contains events of default that are customary for a facility of this nature, including (subject in certain cases to grace periods and thresholds) nonpayment of principal, interest, fees or other amounts, material inaccuracy of representations and warranties, violation of covenants, cross-default to certain other existing indebtedness, bankruptcy or insolvency events, certain judgment defaults, loss of liens or guarantees and a change of control as specified in the JPMorgan ABL Credit Agreement. If an event of default occurs, the commitments of the lenders to lend under the JPMorgan ABL Credit Agreement may be terminated and the maturity of the amounts owed may be accelerated. The obligations under the JPMorgan ABL Credit Agreement are guaranteed by the Company, the subsidiary borrowers thereunder and certain of the other existing and future direct and indirect subsidiaries of the Company and are secured by substantially all of the assets of the Company, the subsidiary borrowers thereunder and such other subsidiary guarantors, in each case, subject to certain exceptions and permitted liens. As of June 30, 2022, the amount of outstanding borrowings was nil As of June 30, 2022, off-balance sheet arrangements include letters of credit issued by JPMorgan of $17.2 million. Amortization expense classified as interest expense related to the $1.6 million of debt issuance costs associated with the transaction that closed on June 2, 2021 (i.e., JPMorgan ABL Credit Agreement) was $0.1 million and $0.2 million for the three and six months ended June 30, 2022, respectively. As of June 30, 2022, the Company was in compliance with the financial covenants under the JPMorgan ABL Credit Agreement. |
Income Taxes
Income Taxes | 6 Months Ended |
Jun. 30, 2022 | |
Income Tax Disclosure [Abstract] | |
Income Tax Disclosure [Text Block] | Note 7 Income Taxes The Company’s income tax expense of $1.3 million for the three months ended June 30, 2022, reflects an effective tax rate of 4.8%. The Company’s income tax benefit of $0.1 million for the three months ended June 30, 2021, reflects an effective tax rate of 0.7%. The tax expense for the three months ended June 30, 2022, primarily relates to foreign income taxes and discrete items. The tax benefit for the three months ended June 30, 2021 primarily relates to discrete items offset by foreign income taxes. The Company’s income tax expense of $1.8 million for the six months ended June 30, 2022 reflects an effective tax rate of 7.3%. The Company’s income tax benefit of $12,000 for the six months ended June 30, 2021 reflects an effective tax rate of 0.0%. The majority of the tax expense for the six months ended June 30, 2022 relates to foreign income taxes and discrete items. The majority of the tax benefit for the six months ended June 30, 2021 relates to discrete items offset by foreign income taxes. |
Earnings (Loss) Per Share
Earnings (Loss) Per Share | 6 Months Ended |
Jun. 30, 2022 | |
Earnings Per Share [Abstract] | |
Earnings Per Share [Text Block] | 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 Six Months Ended Earnings (loss) per share - basic and diluted 2022 2021 2022 2021 Net income (loss) $ 26,207 $ (15,060 ) $ 22,298 $ (39,111 ) Net income (loss) attributable to non-controlling interests (353 ) 24 (453 ) 59 Net income (loss) attributable to JAKKS Pacific, Inc. 26,560 (15,084 ) 22,751 (39,170 ) Preferred stock dividend 351 331 697 657 Net income (loss) attributable to common stockholders * $ 26,209 $ (15,415 ) $ 22,054 $ (39,827 ) Weighted average common shares outstanding - basic 9,588 6,220 9,588 5,802 Earnings (loss) per share available to common stockholder- basic $ 2.73 $ (2.48 ) $ 2.30 $ (6.86 ) Weighted average common shares outstanding - diluted 10,037 6,220 9,978 5,802 Earnings (loss) per share available to common stockholder- diluted $ 2.61 $ (2.48 ) $ 2.21 $ (6.86 ) * Net income attributable to common stockholders was computed by deducting preferred dividends of $0.4 million and $0.7 million for the three and six months ended June 30, 2022, respectively. Net loss attributable to common stockholders was computed by deducting preferred dividends of $0.3 million and $0.7 million for the three and six months ended June 30, 2021, respectively. Basic earnings (loss) per share is calculated using the weighted average number of common shares outstanding during the period. Diluted earnings (loss) per share is calculated using the weighted average number of common shares and common share equivalents outstanding during the period (which consist of restricted stock awards, restricted stock units and convertible debt to the extent they are dilutive). For the three and six months ended June 30, 2021, the convertible senior notes interest and related weighted common share equivalent of 3,012,120 and 3,430,432, respectively, were excluded from the diluted earnings per share calculation since they would have been anti-dilutive. No restricted stock units were excluded from the computation of diluted earnings per share for the three and six months ended June 30, 2022. Potentially dilutive restricted stock awards and units of 291,187 and 267,631 for the three and six months ended June 30, 2021, respectively, were excluded from the computation of diluted loss per share since they would have been anti-dilutive. |
Common Stock and Preferred Stoc
Common Stock and Preferred Stock | 6 Months Ended |
Jun. 30, 2022 | |
Stockholders' Equity Note [Abstract] | |
Stockholders' Equity Note Disclosure [Text Block] | Note 9 Common Stock and Preferred Stock Common Stock All issuances of common stock, including those issued pursuant to restricted stock or unit grants, are issued from the Company’s authorized but not issued and outstanding shares. During 2021, certain employees, including two executive officers, surrendered an aggregate of 32,846 shares of restricted stock for $0.2 million to cover income taxes due on the vesting of restricted shares. Additionally, an aggregate of 93,352 shares of restricted stock granted in 2018 with a value of approximately $0.5 million was forfeited during 2021. During 2022, certain employees, including two executive officers, surrendered an aggregate of 63,292 shares of restricted stock units for $0.6 million to cover income taxes due on the vesting of restricted shares. Additionally, an aggregate of 11,480 shares of restricted stock granted in 2019 with a value of approximately $0.1 million was forfeited during 2022. No dividend was declared or paid in the three and six months ended June 30, 2022 and 2021. Preferred Stock On August 9, 2019, in connection with the Recapitalization Transaction (see Note 5 - Debt), the Company issued 200,000 shares of Series A Senior Preferred Stock (the “Series A Preferred Stock”), $0.001 par value per share, to the Investor Parties (the “New Preferred Equity”). As of June 30, 2022 and December 31, 2021, 200,000 shares of Series A Preferred Stock were outstanding. Each share of Series A Preferred Stock has an initial value of $100 per share, which is automatically increased for any accrued and unpaid dividends (the “Accreted Value”). The Series A Preferred Stock has the right to receive dividends on a quarterly basis equal to 6.0% per annum, payable in cash or, if not paid in cash, by an automatic accretion of the Series A Preferred Stock. No cash dividends have been declared or paid. For the three and six months ended June 30, 2022, the Company recorded $0.4 million and $0.7 million of preferred stock dividends as an increase in the value of the Series A Preferred Stock, respectively. For the three and six months ended June 30, 2021, the Company recorded $0.3 million and $0.7 million of preferred stock dividends as an increase in the value of the Series A Preferred Stock, respectively. The Series A Preferred Stock has no stated maturity, however, the Company has the right to redeem all or a portion of the Series A Preferred Stock at its Liquidation Preference (as defined below) at any time after payment in full of the 2019 Recap Term Loan. In addition, upon the occurrence of certain change of control type events, holders of the Series A Preferred Stock are entitled to receive an amount (the “Liquidation Preference”), in preference to holders of Common Stock or other junior stock, equal to (i) 20% of the Accreted Value in the case of a certain specified transaction, or (ii) otherwise, 150% of the Accreted value, plus any accrued and unpaid dividends. The Company has the right, but is not required, to repurchase all or a portion of the Series A Preferred Stock at its Liquidation Preference at any time after payment in full of the 2019 Recap Term Loan (see Note 5 - Debt). The Series A Preferred Stock does not have any voting rights, except to the extent required by the Delaware General Corporation Law, except for the exclusive right to elect the Series A Preferred Directors (as described below) and except for certain approval rights over certain transactions (as described below). These approval rights require the prior consent of specified percentages of holders (or in certain cases, all holders) of the Series A Preferred Stock in order for the Company to take certain actions, including the issuance of additional shares of Series A Preferred Stock or parity stock, the issuance of senior stock, certain amendments to the Amended and Restated Certificate of Incorporation, the Certificate of Designations of the Series A Preferred Stock (the “Certificate of Designations”), the Second Amended and Restated By-laws or the Amended and Restated Nominating and Corporate Governance Committee Charter, material changes in the Company’s line of business and certain change of control type transactions. In addition, the Certificate of Designations provides that the approval of at least six directors is required for any related person transaction within the meaning of Item 404 of Regulation S-K under the Securities Act of 1933, as amended, including, without limitation, the adoption of, or any amendment, modification or waiver of, any agreement or arrangement related to any such transaction. The Certificate of Designations also includes restrictions on the ability of the Company to pay dividends on or make distributions with respect to, or redeem or repurchase, shares of Common Stock or other junior stock. In addition, holders of the Series A Preferred Stock have preemptive rights regarding future issuance of Series A Preferred Stock or parity stock. In addition, the Certificate of Designations provides the holders of Series A Preferred Stock certain board representation rights. The Certificate of Designations provides, among other things, that, for so long as at least 50,000 shares of Series A Preferred Stock remain outstanding, (i) the holders of a majority of the outstanding shares of Series A Preferred Stock have the sole right to nominate two candidates to serve as the Series A Preferred Directors and (ii) the holders of shares of Series A Preferred Stock, voting as a separate class, have the right to elect two individuals to serve as the Series A Preferred Directors. From and after (i) the first annual meeting of stockholders occurring after less than 50,000 shares of Series A Preferred Stock remain outstanding, the holders of Series A Preferred Stock will only have the right to nominate and elect one Series A Preferred Director, and (ii) the time no shares of Series A Preferred Stock remain outstanding, the holders of Series A Preferred Stock will no longer have the right to nominate or elect any Series A Preferred Directors. The Series A Preferred Directors (or Director if less than 50,000 Series A Preferred shares are outstanding) serve for terms ending at the annual meeting of stockholders in 2023 and for successive three-year terms thereafter (until no shares of Series A Preferred Stock remain outstanding), the number of directors elected by the holders of the Company’s Common Stock and the number of Series A Preferred Directors is fixed and cannot be amended without the approval of holders of a majority of the outstanding Common Stock and holders of at least 80% of the outstanding shares of Series A Preferred Stock, each voting as a separate class. The Series A Preferred Stock redemption amount is contingent upon certain events with no stated redemption date as of the reporting date, although may become redeemable in the future. In accordance with the SEC guidance within ASC Topic 480, Distinguishing Liabilities from Equity: Classification and Measurement of Redeemable Securities Under ASC 815, Derivatives and Hedging The embedded redemption upon a change of control must be accounted for separately from the Series A Preferred Stock. The redemption provision specifies if certain events that constitute a change of control occur, the Company may be required to settle the Series A Preferred Stock at 150% of its accreted amount. Accordingly, the redemption provision meets the definition of a derivative, and its economic characteristics are not considered clearly and closely related to the economic characteristics of the Series A Preferred Stock, which is considered more akin to a debt instrument than equity. Accordingly, these two embedded derivatives are required to be bundled into a single derivative instrument and accounted for separately from the Series A Preferred Stock at fair value. The Company considers the repurchase option to have no value as the likelihood is remote that this event, within the Company’s control, would ever occur. The liability is accounted for at fair value, with changes in fair value recognized as other income (expense) on the Company's condensed consolidated statements of operations (see Note 16 – Fair Value Measurement). The value of the redemption provision explicitly considered the present value of the potential premium that would be paid related to, and the probability of, an event that would trigger its payment. The probability of a triggering event was based on management’s estimates of the probability of a change of control event occurring. As of June 30, 2022, the Series A Preferred Stock is recorded in temporary equity at the amount of accrued, but unpaid dividends of $3.8 million, and the redemption provision, as a bifurcated derivative, is recorded as a long term liability with an estimated value of $15.9 million. As of December 31, 2021, the Series A Preferred Stock is recorded in temporary equity at the amount of accrued, but unpaid dividends of $3.1 million, and the redemption provision, as a bifurcated derivative, is recorded as a long term liability with an estimated value of $21.3 million. The following table provides a reconciliation of the beginning and ending balances of the Series A Preferred Stock, which is recorded in temporary equity: 2022 2021 Balance, January 1, $ 3,074 $ 1,740 Preferred stock accrued dividends 346 326 Balance, March 31, 3,420 2,066 Preferred stock accrued dividends 351 331 Balance, June 30, $ 3,771 $ 2,397 |
Joint Ventures
Joint Ventures | 6 Months Ended |
Jun. 30, 2022 | |
Equity Method Investments and Joint Ventures [Abstract] | |
Equity Method Investments and Joint Ventures Disclosure [Text Block] | Note 10 Joint Ventures In November 2014, the Company entered into a joint venture with Meisheng Culture & Creative Corp., Ltd., (“MC&C”) 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 loss was $0.4 million and $0.5 million for the three and six months ended June 30, 2022, respectively. The non-controlling interest’s share of the income was $24,000 and $59,000 for the three and six months ended June 30, 2021, respectively. In October 2016, the Company entered into a joint venture with Hong Kong Meisheng Cultural Company Limited ("Meisheng"), a Hong Kong-based subsidiary of Meisheng Culture & Creative Corp., for the purpose of creating and developing original, multiplatform content for children including new short-form series and original shows. JAKKS and 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 Culture & Creative Corp. will oversee through the Company’s existing distribution joint venture. The results of operations of the joint venture are consolidated with the Company's results. The non-controlling interest’s share of the income (loss) from the joint venture for the three and six months ended June 30, 2022 and 2021 was nil |
Goodwill
Goodwill | 6 Months Ended |
Jun. 30, 2022 | |
Disclosure Text Block Supplement [Abstract] | |
Goodwill Disclosure [Text Block] | Note 11 Goodwill 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, on an interim basis, if certain events or circumstances indicate that an impairment loss may have been incurred. Goodwill impairment exists when the estimated fair value of goodwill is less than its carrying value. Based on the Company’s April 1 annual assessment, it determined that the fair values of its reporting units were not less than the carrying amounts. No goodwill impairment was determined to have occurred for the six months ended June 30, 2022 and June 30, 2021. |
Intangible Assets Other Than Go
Intangible Assets Other Than Goodwill | 6 Months Ended |
Jun. 30, 2022 | |
Goodwill (Details) | |
Intangible Assets Disclosure [Text Block] | 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 condensed consolidated balance sheets. Trademarks are disclosed separately in the accompanying condensed consolidated balance sheets. Intangible assets as of June 30, 2022 and December 31, 2021 include the following (in thousands, except for weighted useful lives): June 30, 2022 December 31, 2021 Weighted Gross Accumulated Gross Accumulated Useful Carrying Amortization/ Net Carrying Amortization/ Net Lives Amount Write-off Amount Amount Write-off Amount (Years) Amortized Intangible Assets: Licenses 5.81 $ 20,130 $ (20,130 ) $ — $ 20,130 $ (20,130 ) $ — Product lines 10.36 33,858 (33,351 ) 507 33,858 (32,843 ) 1,015 Customer relationships 4.90 3,152 (3,152 ) — 3,152 (3,152 ) — Trade names 5.00 3,000 (3,000 ) — 3,000 (3,000 ) — Non-compete agreements 5.00 200 (200 ) — 200 (200 ) — Total amortized intangible assets $ 60,340 $ (59,833 ) $ 507 $ 60,340 $ (59,325 ) $ 1,015 Unamortized Intangible Assets: Trademarks $ 300 $ (300 ) $ - $ 300 $ - $ 300 |
Comprehensive Loss
Comprehensive Loss | 6 Months Ended |
Jun. 30, 2022 | |
Stockholders' Equity Note [Abstract] | |
Comprehensive Income (Loss) Note [Text Block] | Note 13 Comprehensive Income (Loss) The table below presents the components of the Company’s comprehensive income (loss) for the three and six months ended June 30, 2022 and 2021 (in thousands): Three Months Ended Six Months Ended June 30, June 30, 2022 2021 2022 2021 Net income (loss) $ 26,207 $ (15,060 ) $ 22,298 $ (39,111 ) Other comprehensive income (loss) Foreign currency translation adjustment (2,151 ) 380 (2,813 ) 322 Comprehensive income (loss) 24,056 (14,680 ) 19,485 (38,789 ) Less: Comprehensive income (loss) attributable to non-controlling interests (353 ) 24 (453 ) 59 Comprehensive income (loss) attributable to JAKKS Pacific, Inc. $ 24,409 $ (14,704 ) $ 19,938 $ (38,848 ) |
Litigation and Contingencies
Litigation and Contingencies | 6 Months Ended |
Jun. 30, 2022 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies Disclosure [Text Block] | Note 14 Litigation and Contingencies 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. The Company accrues for losses when the loss is deemed probable and the liability can reasonably be estimated. Where a liability is probable and there is a range of estimated loss with no best estimate in the range, the Company records the minimum estimated liability related to the claim. As additional information becomes available, the Company assesses the potential liability related to its pending litigation and revises its estimates. In the normal course of business, the Company may provide certain indemnifications and/or other commitments of varying scope to a) its licensors, customers and certain other parties, including against third-party claims of intellectual property infringement, and b) its officers, directors and employees, including against third-party claims regarding the periods in which they serve in such capacities with the Company. The duration and amount of such obligations is, in certain cases, indefinite. The Company's director’s and officer’s liability insurance policy may, however, enable it to recover a portion of any future payments related to its officer, director or employee indemnifications. For the past five years, costs related to director and officer indemnifications have not been significant. Other than certain liabilities recorded in the normal course of business related to royalty payments due to the Company's licensors, no liabilities have been recorded for indemnifications and/or other commitments. |
Share-Based Payments
Share-Based Payments | 6 Months Ended |
Jun. 30, 2022 | |
Share-Based Payment Arrangement [Abstract] | |
Share-Based Payment Arrangement [Text Block] | Note 15 Share-Based Payments The Company’s 2002 Stock Award and Incentive Plan (the “Plan”), as amended, provides for the awarding of stock options, restricted stock and restricted stock units to certain key employees, executive officers and non-employee directors. Current awards under the Plan include grants to executive officers and certain key employees of restricted stock units, with vesting contingent upon (a) the completion of specified service periods ranging from one to four years and/or (b) meeting certain financial performance and/or market-based metrics. Shares for the restricted stock units are not issued until they vest. The Plan is more fully described in Notes 15 and 18 to the consolidated financial statements in the Company’s 2021 Annual Report on Form 10-K. The following table summarizes the total share-based compensation expense recognized for the three and six months ended June 30, 2022 and 2021 (in thousands): Three Months Ended Six Months Ended June 30, June 30, 2022 2021 2022 2021 Share-based compensation expense $ 1,155 $ 383 $ 2,025 $ 765 Restricted Stock Units Restricted stock unit activity (including those with performance-based vesting criteria) for the six months ended June 30, 2022 is summarized as follows: Restricted Stock Units Number of Shares Weighted Average Grant Date Fair Value Outstanding, December 31, 2021 1,073,902 $ 8.62 Granted 318,627 10.16 Vested (130,280 ) 7.34 Forfeited (149,238 ) 14.70 Outstanding, June 30, 2022 1,113,011 8.40 As of June 30, 2022, there was $7.3 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 2.17 years. |
Fair Value Measurements
Fair Value Measurements | 6 Months Ended |
Jun. 30, 2022 | |
Fair Value Disclosures [Abstract] | |
Fair Value Disclosures [Text Block] | Note 16 Fair Value Measurements Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. In determining fair value, the Company uses various methods including market, income and cost approaches. Based upon these approaches, the Company often utilizes certain assumptions that market participants would use in pricing the asset or liability, including assumptions about risk and/or the risks inherent in the inputs to the valuation technique. These inputs can be readily observable, market-corroborated, or unobservable inputs. The Company utilizes valuation techniques that maximize the use of observable inputs and minimize the use of unobservable inputs. Based upon observable inputs used in the valuation techniques, the Company is required to provide information according to the fair value hierarchy. The fair value hierarchy ranks the quality and reliability of the information used to determine fair values into three broad levels as follows: Level 1: Valuations for assets and liabilities traded in active markets from readily available pricing sources for market transactions involving identical assets or liabilities. Level 2: Valuations for assets and liabilities traded in less active dealer or broker markets. Valuations are obtained from third-party pricing services for identical or similar assets or liabilities. Level 3: Valuations incorporate certain assumptions and projections in determining the fair value assigned to such assets or liabilities. In instances where the determination of the fair value measurement is based upon inputs from different levels of the fair value hierarchy, the level in the fair value hierarchy within which the entire fair value measurement falls is based upon the lowest level input that is significant to the fair value measurement in its entirety. The Company’s assessment of the significance of a particular input to the fair value measurement in its entirety requires judgment, and considers factors specific to the asset or liability. The following tables summarize the Company's financial liabilities measured at fair value on a recurring basis as of June 30, 2022 and December 31, 2021 (in thousands): Fair Value Measurements as of June 30, 2022 Carrying Amount as of Level 1 Level 2 Level 3 June 30, 2022 Preferred stock derivative liability $ 15,898 $ — $ — $ 15,898 Fair Value Measurements as of December 31, 2021 Carrying Amount as of Level 1 Level 2 Level 3 December 31, 2021 Preferred stock derivative liability $ 21,282 $ — $ — $ 21,282 The following tables provide a reconciliation of the beginning and ending balances of liabilities measured at fair value on a recurring basis using significant unobservable inputs (Level 3) (in thousands): Preferred stock derivative liability 2022 2021 Balance, January 1, $ 21,282 $ 8,062 Change in fair value (5,384 ) 8,914 Balance, June 30, $ 15,898 $ 16,976 3.25% convertible senior notes due in 2023 2022 2021 Balance, January 1, $ — $ 34,134 Conversion of convertible senior notes — (19,872 ) Change in fair value — 12,844 PIK interest — 285 Balance, June 30, $ — $ 27,391 The Company’s derivative liability is classified within Level 3 of the fair value hierarchy because unobservable inputs were used in estimating the fair value. The fair value of the redemption provision embedded in the Series A Preferred Stock is estimated based on a discounted cash flow model and probability assumptions based on management’s estimates of a change of control event occurring. In subsequent periods, the derivative liability is accounted for at fair value, with changes in fair value recognized as other income (expense) on the Company's condensed consolidated statements of operations. The Company has elected the fair value option of measurement for the 3.25% 2023 Notes, under ASC 815, Derivatives and Hedging. As a result, these notes are re-measured each reporting period using Level 3 inputs (Monte Carlo simulation model and inputs for stock price, risk-free rate and volatility), with changes in fair value reflected in current period earnings in its condensed consolidated statements of operations. The fair value of the Series A Preferred Stock derivative liability is calculated using unobservable inputs (Level 3 fair value measurements). The value of the redemption provision explicitly considered the present value of the potential premium that would be paid related to, and the probability of, an event that would trigger its payment. The probability of a triggering event was based on management’s estimates of the probability of a change of control event occurring. The Company’s accounts receivable, accounts payable, and accrued expenses represent financial instruments. The carrying value of these financial instruments is a reasonable approximation of fair value. |
Related Party Transactions
Related Party Transactions | 6 Months Ended |
Jun. 30, 2022 | |
Related Party Transactions [Abstract] | |
Related Party Transactions Disclosure [Text Block] | Note 17 Related Party Transactions In November 2014, the Company entered into a joint venture with MC&C 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 loss was $0.4 million and $0.5 million for the three and six months ended June 30, 2022, respectively. The non-controlling interest’s share of the income was $24,000 and $59,000 for the three and six months ended June 30, 2021, 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 Culture & Creative Corp, for the purpose of creating and developing original, multiplatform content for children including new short-form series and original shows. JAKKS and 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 Culture & Creative Corp. will oversee through the Company’s existing distribution joint venture. The results of operations of the joint venture are consolidated with the Company’s results. The non-controlling interest’s share of the income (loss) from the joint venture for the three and six months ended June 30, 2022 and 2021 was nil In March 2017, the Company entered into an equity purchase agreement with Meisheng which provided, among other things, that as long as Meisheng and its affiliates hold 10% or more of the issued and outstanding shares of common stock of the Company, Meisheng shall have the right from time to time to designate a nominee (who currently is Mr. Xiaoqiang Zhao) for election to the Company’s board of directors. Meisheng also serves as a significant manufacturer of the Company. For the three and six months ended June 30, 2022, the Company made inventory-related payments to Meisheng of approximately $50.2 million and $65.7 million, respectively. For the three and six months ended June 30, 2021, the Company made inventory-related payments to Meisheng of approximately $21.8 million and $29.2 million, respectively. As of June 30, 2022 and December 31, 2021, amounts due to Meisheng for inventory received by the Company, but not paid totaled $42.3 million and $15.9 million, respectively. A director of the Company is a portfolio manager at Oasis Management (see Note 5 - Debt). A director of the Company is a director at Benefit Street Partners. As of June 30, 2022, Benefit Street Partners held $87.6 million in principal amount of the 2021 BSP Term Loan (see Note 5 - Debt). |
Prepaid Expense and Other Asset
Prepaid Expense and Other Assets | 6 Months Ended |
Jun. 30, 2022 | |
Disclosure Text Block Supplement [Abstract] | |
Other Current Assets [Text Block] | Note 18 Prepaid Expenses and Other Assets Prepaid expenses and other assets as of June 30, 2022 and December 31, 2021 consist of the following (in thousands): June 30, 2022 December 31, 2021 Prepaid expenses $ 7,328 $ 4,151 Royalty advances 3,205 2,619 Government-funded COVID-19 relief 2,528 2,390 Income taxes receivable 1,339 1,527 Other assets 119 190 Prepaid expenses and other assets $ 14,519 $ 10,877 |
Subsequent Events
Subsequent Events | 6 Months Ended |
Jun. 30, 2022 | |
Subsequent Events [Abstract] | |
Subsequent Events [Text Block] | Note 19 Subsequent Events On July 1, 2022, the Company filed a Form S-3 shelf registration statement (File No. 333-266009) with the SEC to register for future issuances, from time to time, up to 2,000,000 shares of common stock, in one or more offerings in amounts, at prices and on the terms that the Company will determine at the time of the offering. On August 1, 2022, the SEC declared the Form S-3 shelf registration filed by the Company to be effective. On August 3, 2022, the Company entered into an agreement (the “Agreement”) to terminate all existing Voting Agreements with each of its Preferred Stockholders. Among other things, the Agreement also provided that the special rights granted to the Preferred Stockholders with respect to the nomination and election of members of the Company’s Board of Directors (the “Board”) and Nominating and Corporate Governance Committee are terminated; and that the Certificate of Designations of the Powers, Preferences and Relative, Participating, Optional and Other Special Rights, and Qualifications, Limitations and Restrictions thereof, of Series A Senior Preferred Stock, the Company’s By-Laws, and the Nominating Committee Charter shall be amended, consistent with the terms of the Agreement, in such manner as is approved by the Board to eliminate such rights. The classification of the Board into three separate classes consisting of Class I, Class II and Class III, each with separate terms, has not, however, been eliminated. |
Business Segments, Geographic_2
Business Segments, Geographic Data, and Sales by Major Customers (Tables) | 6 Months Ended |
Jun. 30, 2022 | |
Segment Reporting [Abstract] | |
Schedule of Segment Reporting Information, by Segment [Table Text Block] | 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 six months ended June 30, 2022 and 2021, and as of June 30, 2022 and December 31, 2021 are as follows (in thousands): Three Months Ended Six Months Ended June 30, June 30, 2022 2021 2022 2021 Net Sales Toys/Consumer Products $ 148,860 $ 81,538 $ 259,983 $ 161,413 Costumes 71,562 30,814 81,320 34,782 $ 220,422 $ 112,352 $ 341,303 $ 196,195 Three Months Ended Six Months Ended June 30, June 30, 2022 2021 2022 2021 Income (Loss) from Operations Toys/Consumer Products $ 18,447 $ 4,860 $ 20,454 $ 5,216 Costumes 5,213 (3,039 ) 2,472 (6,118 ) $ 23,660 $ 1,821 $ 22,926 $ (902 ) Three Months Ended Six Months Ended June 30, June 30, 2022 2021 2022 2021 Depreciation and Amortization Expense Toys/Consumer Products $ 2,312 $ 2,525 $ 4,037 $ 4,252 Costumes 244 254 331 320 $ 2,556 $ 2,779 $ 4,368 $ 4,572 June 30, December 31, 2022 2021 Assets Toys/Consumer Products $ 347,006 $ 338,266 Costumes 96,631 18,781 $ 443,637 $ 357,047 |
Schedule of Revenue from External Customers and Long-Lived Assets, by Geographical Areas [Table Text Block] | Net revenues are categorized based upon location of the customer, while long-lived assets are categorized based upon the location of the Company’s assets. The following tables present information about the Company by geographic area as of June 30, 2022 and December 31, 2021 and for the three and six months ended June 30, 2022 and 2021 (in thousands): June 30, December 31, 2022 2021 Long-lived Assets United States $ 21,647 $ 16,252 China 15,341 11,655 Hong Kong 2,538 770 United Kingdom 1,167 1,270 Mexico 74 79 Canada 60 73 $ 40,827 $ 30,099 Three Months Ended Six Months Ended June 30, June 30, 2022 2021 2022 2021 Net Sales by Customer Area United States $ 192,484 $ 95,265 $ 289,534 $ 164,181 Europe 14,447 9,930 27,836 17,267 Canada 5,537 2,208 8,916 4,309 Latin America 3,823 1,165 6,208 3,620 Asia 2,363 2,164 4,439 3,579 Australia & New Zealand 1,582 1,249 3,073 2,437 Middle East & Africa 186 371 1,297 802 $ 220,422 $ 112,352 $ 341,303 $ 196,195 |
Schedule of Revenue by Major Customers by Reporting Segments [Table Text Block] | Net sales to major customers for the three and six months ended June 30, 2022 and 2021 were as follows (in thousands, except for percentages): Three Months Ended June 30, Six Months Ended June 30, 2022 2021 2022 2021 Percentage Percentage Percentage Percentage Amount of Net Sales Amount of Net Sales Amount of Net Sales Amount of Net Sales Wal-Mart $ 70,371 31.9 % $ 34,692 30.9 % $ 93,391 27.4 % $ 56,330 28.7 % Target 65,122 29.6 30,575 27.2 100,792 29.5 53,328 27.2 $ 135,493 61.5 % $ 65,267 58.1 % $ 194,183 56.9 % $ 109,658 55.9 % |
Inventory (Tables)
Inventory (Tables) | 6 Months Ended |
Jun. 30, 2022 | |
Inventory Disclosure [Abstract] | |
Schedule of Inventory, Current [Table Text Block] | Inventory, which includes the ex-factory cost of goods, capitalized warehouse costs, and in-bound freight and duty, is valued at the lower of cost or net realizable value, net of inventory obsolescence reserve, and consists of the following (in thousands): June 30, December 31, 2022 2021 Raw materials $ 70 $ 106 Finished goods 123,596 83,848 $ 123,666 $ 83,954 |
Debt (Tables)
Debt (Tables) | 6 Months Ended |
Jun. 30, 2022 | |
Debt Disclosure [Abstract] | |
Schedule of Debt [Table Text Block] | Term loan consists of the following (in thousands): June 30, 2022 December 31, 2021 Debt Discount/ Debt Discount/ Principal Issuance Net Principal Issuance Net Amount Costs* Amount Amount Costs* Amount 2021 BSP Term Loan $ 87,639 $ (2,711 ) $ 84,928 $ 98,505 $ (2,986 ) $ 95,519 * The term loan was valued using the discounted cash flow method to determine the implied debt discount. The debt discount and issuance costs are amortized over the life of the term loan on a straight-line basis which approximates the effective interest method. |
Earnings (Loss) Per Share (Tabl
Earnings (Loss) Per Share (Tables) | 6 Months Ended |
Jun. 30, 2022 | |
Earnings Per Share [Abstract] | |
Schedule of Earnings Per Share, Basic and Diluted [Table Text Block] | 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 Six Months Ended Earnings (loss) per share - basic and diluted 2022 2021 2022 2021 Net income (loss) $ 26,207 $ (15,060 ) $ 22,298 $ (39,111 ) Net income (loss) attributable to non-controlling interests (353 ) 24 (453 ) 59 Net income (loss) attributable to JAKKS Pacific, Inc. 26,560 (15,084 ) 22,751 (39,170 ) Preferred stock dividend 351 331 697 657 Net income (loss) attributable to common stockholders * $ 26,209 $ (15,415 ) $ 22,054 $ (39,827 ) Weighted average common shares outstanding - basic 9,588 6,220 9,588 5,802 Earnings (loss) per share available to common stockholder- basic $ 2.73 $ (2.48 ) $ 2.30 $ (6.86 ) Weighted average common shares outstanding - diluted 10,037 6,220 9,978 5,802 Earnings (loss) per share available to common stockholder- diluted $ 2.61 $ (2.48 ) $ 2.21 $ (6.86 ) * Net income attributable to common stockholders was computed by deducting preferred dividends of $0.4 million and $0.7 million for the three and six months ended June 30, 2022, respectively. Net loss attributable to common stockholders was computed by deducting preferred dividends of $0.3 million and $0.7 million for the three and six months ended June 30, 2021, respectively. |
Common Stock and Preferred St_2
Common Stock and Preferred Stock (Tables) | 6 Months Ended |
Jun. 30, 2022 | |
Stockholders' Equity Note [Abstract] | |
Temporary Equity [Table Text Block] | The following table provides a reconciliation of the beginning and ending balances of the Series A Preferred Stock, which is recorded in temporary equity: 2022 2021 Balance, January 1, $ 3,074 $ 1,740 Preferred stock accrued dividends 346 326 Balance, March 31, 3,420 2,066 Preferred stock accrued dividends 351 331 Balance, June 30, $ 3,771 $ 2,397 |
Intangible Assets Other Than _2
Intangible Assets Other Than Goodwill (Tables) | 6 Months Ended |
Jun. 30, 2022 | |
Goodwill (Details) | |
Schedule of Intangible Assets and Goodwill [Table Text Block] | 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 condensed consolidated balance sheets. Trademarks are disclosed separately in the accompanying condensed consolidated balance sheets. Intangible assets as of June 30, 2022 and December 31, 2021 include the following (in thousands, except for weighted useful lives): June 30, 2022 December 31, 2021 Weighted Gross Accumulated Gross Accumulated Useful Carrying Amortization/ Net Carrying Amortization/ Net Lives Amount Write-off Amount Amount Write-off Amount (Years) Amortized Intangible Assets: Licenses 5.81 $ 20,130 $ (20,130 ) $ — $ 20,130 $ (20,130 ) $ — Product lines 10.36 33,858 (33,351 ) 507 33,858 (32,843 ) 1,015 Customer relationships 4.90 3,152 (3,152 ) — 3,152 (3,152 ) — Trade names 5.00 3,000 (3,000 ) — 3,000 (3,000 ) — Non-compete agreements 5.00 200 (200 ) — 200 (200 ) — Total amortized intangible assets $ 60,340 $ (59,833 ) $ 507 $ 60,340 $ (59,325 ) $ 1,015 Unamortized Intangible Assets: Trademarks $ 300 $ (300 ) $ - $ 300 $ - $ 300 |
Comprehensive Loss (Tables)
Comprehensive Loss (Tables) | 6 Months Ended |
Jun. 30, 2022 | |
Stockholders' Equity Note [Abstract] | |
Comprehensive Income (Loss) [Table Text Block] | The table below presents the components of the Company’s comprehensive income (loss) for the three and six months ended June 30, 2022 and 2021 (in thousands): Three Months Ended Six Months Ended June 30, June 30, 2022 2021 2022 2021 Net income (loss) $ 26,207 $ (15,060 ) $ 22,298 $ (39,111 ) Other comprehensive income (loss) Foreign currency translation adjustment (2,151 ) 380 (2,813 ) 322 Comprehensive income (loss) 24,056 (14,680 ) 19,485 (38,789 ) Less: Comprehensive income (loss) attributable to non-controlling interests (353 ) 24 (453 ) 59 Comprehensive income (loss) attributable to JAKKS Pacific, Inc. $ 24,409 $ (14,704 ) $ 19,938 $ (38,848 ) |
Share-Based Payments (Tables)
Share-Based Payments (Tables) | 6 Months Ended |
Jun. 30, 2022 | |
Share-Based Payment Arrangement [Abstract] | |
Share-Based Payment Arrangement, Expensed and Capitalized, Amount [Table Text Block] | The following table summarizes the total share-based compensation expense recognized for the three and six months ended June 30, 2022 and 2021 (in thousands) Three Months Ended Six Months Ended June 30, June 30, 2022 2021 2022 2021 Share-based compensation expense $ 1,155 $ 383 $ 2,025 $ 765 |
Schedule of Nonvested Restricted Stock Units Activity [Table Text Block] | Restricted Stock Units Number of Shares Weighted Average Grant Date Fair Value Outstanding, December 31, 2021 1,073,902 $ 8.62 Granted 318,627 10.16 Vested (130,280 ) 7.34 Forfeited (149,238 ) 14.70 Outstanding, June 30, 2022 1,113,011 8.40 |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 6 Months Ended |
Jun. 30, 2022 | |
Fair Value Disclosures [Abstract] | |
Schedule of Fair Value, Assets and Liabilities Measured on Recurring Basis [Table Text Block] | The following tables summarize the Company's financial liabilities measured at fair value on a recurring basis as of June 30, 2022 and December 31, 2021 (in thousands): Fair Value Measurements as of June 30, 2022 Carrying Amount as of Level 1 Level 2 Level 3 June 30, 2022 Preferred stock derivative liability $ 15,898 $ — $ — $ 15,898 Fair Value Measurements as of December 31, 2021 Carrying Amount as of Level 1 Level 2 Level 3 December 31, 2021 Preferred stock derivative liability $ 21,282 $ — $ — $ 21,282 |
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Table Text Block] | The following tables provide a reconciliation of the beginning and ending balances of liabilities measured at fair value on a recurring basis using significant unobservable inputs (Level 3) (in thousands): Preferred stock derivative liability 2022 2021 Balance, January 1, $ 21,282 $ 8,062 Change in fair value (5,384 ) 8,914 Balance, June 30, $ 15,898 $ 16,976 3.25% convertible senior notes due in 2023 2022 2021 Balance, January 1, $ — $ 34,134 Conversion of convertible senior notes — (19,872 ) Change in fair value — 12,844 PIK interest — 285 Balance, June 30, $ — $ 27,391 |
Prepaid Expense and Other Ass_2
Prepaid Expense and Other Assets (Tables) | 6 Months Ended |
Jun. 30, 2022 | |
Disclosure Text Block Supplement [Abstract] | |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Table Text Block] | Prepaid expenses and other assets as of June 30, 2022 and December 31, 2021 consist of the following (in thousands): June 30, 2022 December 31, 2021 Prepaid expenses $ 7,328 $ 4,151 Royalty advances 3,205 2,619 Government-funded COVID-19 relief 2,528 2,390 Income taxes receivable 1,339 1,527 Other assets 119 190 Prepaid expenses and other assets $ 14,519 $ 10,877 |
Cash Flow, Supplemental Discl_2
Cash Flow, Supplemental Disclosures (Details) - USD ($) $ in Millions | 6 Months Ended | |
Jun. 30, 2022 | Jun. 30, 2021 | |
Supplemental Cash Flow Elements [Abstract] | ||
Purchase of property and equipment incurred | $ 4.4 | $ 3.6 |
Basis of Presentation (Details)
Basis of Presentation (Details) - USD ($) | 3 Months Ended | 6 Months Ended | |||||
Jun. 02, 2021 | Jun. 12, 2020 | Jun. 30, 2022 | Jun. 30, 2022 | Jun. 30, 2021 | Dec. 31, 2021 | Dec. 31, 2020 | |
Basis of Presentation (Details) [Line Items] | |||||||
CARES Act, Description | The CARES Act also provided an employee retention credit (“ERC”) which was a refundable tax credit against certain employment taxes of up to $5,000 per employee for eligible employers. The credit is equal to 50% of qualified wages paid to employees during a quarter, capped at $10,000 of qualified wages through year end. The Company became eligible for the credit beginning on March 16, 2020. The CAA extended and expanded the availability of the ERC through June 30, 2021. Subsequently, the American Rescue Plan Act of 2021 ("ARP"), enacted on March 11, 2021, extended and expanded the availability of the ERC through December 31, 2021, however, certain provisions apply only after December 31, 2020. This new legislation amended the employee retention credit to be equal to 70% of qualified wages paid to employees after December 31, 2020, and before January 1, 2022. During calendar year 2021, a maximum of $10,000 in qualified wages for each employee per qualifying calendar quarter may be counted in determining the 70% credit. Therefore, the maximum tax credit that can be claimed by an eligible employer is $7,000 per employee per qualifying calendar quarter of 2021. The Company will qualify for the employee retention credit for quarters where the Company’s operations were partially suspended due to orders from an appropriate governmental authority limiting commerce, travel, or group meetings due to COVID-19. | ||||||
Increase (Decrease) in Prepaid Expense | $ 100,000 | $ 2,000,000 | |||||
Cash, Cash Equivalents, Restricted Cash, and Restricted Cash Equivalents | 62,283,000 | 62,283,000 | $ 38,341,000 | $ 45,332,000 | $ 92,693,000 | ||
Proceeds from Issuance of Long-Term Debt | 0 | $ 96,306,000 | |||||
Letters of Credit Outstanding, Amount | 17,200,000 | 17,200,000 | |||||
Outside the United States [Member] | |||||||
Basis of Presentation (Details) [Line Items] | |||||||
Cash, Cash Equivalents, Restricted Cash, and Restricted Cash Equivalents | 53,500,000 | 53,500,000 | $ 30,700,000 | ||||
Paycheck Protection Program Loan [Member] | Unsecured Debt [Member] | |||||||
Basis of Presentation (Details) [Line Items] | |||||||
Debt Instrument, Face Amount | $ 6,200,000 | ||||||
Debt Instrument, Interest Rate, Stated Percentage | 1% | ||||||
Debt Instrument, Periodic Payment | $ 261,275 | ||||||
JPMorgan ABL Credit Agreement [Member] | |||||||
Basis of Presentation (Details) [Line Items] | |||||||
Line of Credit Facility, Maximum Borrowing Capacity | $ 67,500,000 | ||||||
Line of Credit Facility, Unused Capacity, Commitment Fee Percentage | 0.25% | ||||||
Letters of Credit Outstanding, Amount | 17,200,000 | 17,200,000 | |||||
JPMorgan ABL Credit Agreement [Member] | Maximum [Member] | |||||||
Basis of Presentation (Details) [Line Items] | |||||||
Line of Credit Facility, Unused Capacity, Commitment Fee Percentage | 0.375% | ||||||
Fixed Charge Coverage Ratio | 1 | ||||||
JPMorgan ABL Credit Agreement [Member] | Minimum [Member] | |||||||
Basis of Presentation (Details) [Line Items] | |||||||
Fixed Charge Coverage Ratio | 1.1 | ||||||
JPMorgan ABL Credit Agreement [Member] | London Interbank Offered Rate (LIBOR) [Member] | Maximum [Member] | |||||||
Basis of Presentation (Details) [Line Items] | |||||||
Debt Instrument, Basis Spread on Variable Rate | 2% | ||||||
JPMorgan ABL Credit Agreement [Member] | London Interbank Offered Rate (LIBOR) [Member] | Minimum [Member] | |||||||
Basis of Presentation (Details) [Line Items] | |||||||
Debt Instrument, Basis Spread on Variable Rate | 1.50% | ||||||
JPMorgan ABL Credit Agreement [Member] | Base Rate [Member] | Maximum [Member] | |||||||
Basis of Presentation (Details) [Line Items] | |||||||
Debt Instrument, Basis Spread on Variable Rate | 1% | ||||||
JPMorgan ABL Credit Agreement [Member] | Base Rate [Member] | Minimum [Member] | |||||||
Basis of Presentation (Details) [Line Items] | |||||||
Debt Instrument, Basis Spread on Variable Rate | 0.50% | ||||||
Initial Term Loan [Member] | |||||||
Basis of Presentation (Details) [Line Items] | |||||||
Debt Instrument, Face Amount | $ 99,000,000 | ||||||
Debt Instrument, Interest Rate, Stated Percentage | 3.25% | ||||||
Proceeds from Issuance of Long-Term Debt | $ 96,300,000 | ||||||
Debt Instrument, Covenant Description | the Company must maintain Qualified Cash of at least: (a) at all times after the Closing Date and prior to the First Amendment Effective Date, $20.0 million; (b) at all times during the period commencing on the First Amendment Effective Date through and including June 30, 2022, $15.0 million; and (c) at all times on and after July 1, 2022, through September 30, 2022, $17.5 million; provided, however, that if the Total Net Leverage Ratio exceeded 1.75:1.00 as of the last day of the most recently ended month for which financial statements were required to have been delivered, then the amount set forth in this clause shall be increased to $20.0 million. Notwithstanding the foregoing, the Applicable Minimum Cash Amount shall be reduced by $1.0 million for every $5.0 million principal prepayment or repayment of the Term Loans following the First Amendment Effective Date; provided however, that, the Applicable Minimum Cash Amount shall in no event be reduced below $15.0 million | ||||||
Initial Term Loan [Member] | London Interbank Offered Rate (LIBOR) [Member] | Maximum [Member] | |||||||
Basis of Presentation (Details) [Line Items] | |||||||
Debt Instrument, Basis Spread on Variable Rate | 7% | ||||||
Initial Term Loan [Member] | London Interbank Offered Rate (LIBOR) [Member] | Minimum [Member] | |||||||
Basis of Presentation (Details) [Line Items] | |||||||
Debt Instrument, Basis Spread on Variable Rate | 6.50% | ||||||
Debt Instrument, Description of Variable Rate Basis | subject to a 1.00% LIBOR floor, or (ii) base rate plus 5.50% - 6.00% (determined by reference to a net leverage pricing grid), subject to a 2.00% base rate floor | ||||||
Delayed Draw Term Loan [Member] | |||||||
Basis of Presentation (Details) [Line Items] | |||||||
Debt Instrument, Face Amount | $ 19,000,000 | ||||||
2021 BSP Term Loan [Member] | |||||||
Basis of Presentation (Details) [Line Items] | |||||||
Debt Instrument, Interest Rate, Stated Percentage | 3.25% | ||||||
Debt Instrument, Description of Variable Rate Basis | subject to a 1.00% LIBOR floor, or (ii) base rate plus 5.50% - 6.00% (determined by reference to a net leverage pricing grid), subject to a 2.00% base rate floor | ||||||
Debt Instrument, Covenant Description | the Company must maintain Qualified Cash of at least: (a) at all times after the Closing Date and prior to the First Amendment Effective Date, $20.0 million; (b) at all times during the period commencing on the First Amendment Effective Date through and including June 30, 2022, $15.0 million; and (c) at all times on and after July 1, 2022, through September 30, 2022, $17.5 million; provided, however, that if the Total Net Leverage Ratio exceeded 1.75:1.00 as of the last day of the most recently ended month for which financial statements were required to have been delivered, then the amount set forth in this clause shall be increased to $20.0 million. Notwithstanding the foregoing, the Applicable Minimum Cash Amount shall be reduced by $1.0 million for every $5.0 million principal prepayment or repayment of the Term Loans following the First Amendment Effective Date; provided however, that, the Applicable Minimum Cash Amount shall in no event be reduced below $15.0 million | ||||||
Long-Term Debt | $ 87,600,000 | $ 87,600,000 | |||||
2021 BSP Term Loan [Member] | Maximum [Member] | |||||||
Basis of Presentation (Details) [Line Items] | |||||||
Debt Instrument, Basis Spread on Variable Rate | 7% | ||||||
2021 BSP Term Loan [Member] | Minimum [Member] | |||||||
Basis of Presentation (Details) [Line Items] | |||||||
Debt Instrument, Basis Spread on Variable Rate | 6.50% | ||||||
Closing Fees [Member] | |||||||
Basis of Presentation (Details) [Line Items] | |||||||
Debt Issuance Costs, Gross | $ 2,200,000 | ||||||
Other Administrative Fees [Member] | |||||||
Basis of Presentation (Details) [Line Items] | |||||||
Debt Issuance Costs, Gross | $ 500,000 |
Business Segments, Geographic_3
Business Segments, Geographic Data, and Sales by Major Customers (Details) - Schedule of Segment Reporting Information, by Segment - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2022 | Jun. 30, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | Dec. 31, 2021 | |
Segment Reporting Information [Line Items] | |||||
Net Sales | $ 220,422 | $ 112,352 | $ 341,303 | $ 196,195 | |
Income (loss) from Operations | 23,660 | 1,821 | 22,926 | (902) | |
Depreciation and Amortization Expense | 2,556 | 2,779 | 4,368 | 4,572 | |
Assets | 443,637 | 443,637 | $ 357,047 | ||
Toys/Consumer Products [Member] | |||||
Segment Reporting Information [Line Items] | |||||
Net Sales | 148,860 | 81,538 | 259,983 | 161,413 | |
Income (loss) from Operations | 18,447 | 4,860 | 20,454 | 5,216 | |
Depreciation and Amortization Expense | 2,312 | 2,525 | 4,037 | 4,252 | |
Assets | 347,006 | 347,006 | 338,266 | ||
Costumes [Member] | |||||
Segment Reporting Information [Line Items] | |||||
Net Sales | 71,562 | 30,814 | 81,320 | 34,782 | |
Income (loss) from Operations | 5,213 | (3,039) | 2,472 | (6,118) | |
Depreciation and Amortization Expense | 244 | $ 254 | 331 | $ 320 | |
Assets | $ 96,631 | $ 96,631 | $ 18,781 |
Business Segments, Geographic_4
Business Segments, Geographic Data, and Sales by Major Customers (Details) - Schedule of Revenue from External Customers and Long-Lived Assets, by Geographical Areas - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2022 | Jun. 30, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | Dec. 31, 2021 | |
Revenues from External Customers and Long-Lived Assets [Line Items] | |||||
Long-lived Assets | $ 40,827 | $ 40,827 | $ 30,099 | ||
Net Sales | 220,422 | $ 112,352 | 341,303 | $ 196,195 | |
UNITED STATES | |||||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||||
Long-lived Assets | 21,647 | 21,647 | 16,252 | ||
Net Sales | 192,484 | 95,265 | 289,534 | 164,181 | |
CHINA | |||||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||||
Long-lived Assets | 15,341 | 15,341 | 11,655 | ||
HONG KONG | |||||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||||
Long-lived Assets | 2,538 | 2,538 | 770 | ||
UNITED KINGDOM | |||||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||||
Long-lived Assets | 1,167 | 1,167 | 1,270 | ||
MEXICO | |||||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||||
Long-lived Assets | 74 | 74 | 79 | ||
CANADA | |||||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||||
Long-lived Assets | 60 | 60 | $ 73 | ||
Net Sales | 5,537 | 2,208 | 8,916 | 4,309 | |
Europe [Member] | |||||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||||
Net Sales | 14,447 | 9,930 | 27,836 | 17,267 | |
Latin America [Member] | |||||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||||
Net Sales | 3,823 | 1,165 | 6,208 | 3,620 | |
Asia [Member] | |||||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||||
Net Sales | 2,363 | 2,164 | 4,439 | 3,579 | |
Australia and New Zealand [Member] | |||||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||||
Net Sales | 1,582 | 1,249 | 3,073 | 2,437 | |
Middle East and Africa [Member] | |||||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||||
Net Sales | $ 186 | $ 371 | $ 1,297 | $ 802 |
Business Segments, Geographic_5
Business Segments, Geographic Data, and Sales by Major Customers (Details) - Schedule of Revenue by Major Customers by Reporting Segments - Revenue Benchmark [Member] - Customer Concentration Risk [Member] - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2022 | Jun. 30, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | |
Wal Mart [Member] | ||||
Revenue, Major Customer [Line Items] | ||||
Net Sales | $ 70,371 | $ 34,692 | $ 93,391 | $ 56,330 |
Percentage of Net Sales from Major Customer | 31.90% | 30.90% | 27.40% | 28.70% |
Target [Member] | ||||
Revenue, Major Customer [Line Items] | ||||
Net Sales | $ 65,122 | $ 30,575 | $ 100,792 | $ 53,328 |
Percentage of Net Sales from Major Customer | 29.60% | 27.20% | 29.50% | 27.20% |
Major Customers [Member] | ||||
Revenue, Major Customer [Line Items] | ||||
Net Sales | $ 135,493 | $ 65,267 | $ 194,183 | $ 109,658 |
Percentage of Net Sales from Major Customer | 61.50% | 58.10% | 56.90% | 55.90% |
Inventory (Details)
Inventory (Details) - USD ($) $ in Millions | Jun. 30, 2022 | Dec. 31, 2021 |
Inventory Disclosure [Abstract] | ||
Inventory Valuation Reserves | $ 10.2 | $ 4.6 |
Inventory (Details) - Schedule
Inventory (Details) - Schedule of Inventory, Current - USD ($) $ in Thousands | Jun. 30, 2022 | Dec. 31, 2021 |
Schedule of Inventory, Current [Abstract] | ||
Raw materials | $ 70 | $ 106 |
Finished goods | 123,596 | 83,848 |
Inventory, net | $ 123,666 | $ 83,954 |
Revenue Recognition and Reser_2
Revenue Recognition and Reserve for Sales Returns and Allowances (Details) - USD ($) $ in Millions | 6 Months Ended | |
Jun. 30, 2022 | Dec. 31, 2021 | |
Revenue Recognition and Reserve for Sales Returns and Allowances (Details) [Line Items] | ||
Sales reserves and allowances | $ 45.6 | $ 46.3 |
Minimum [Member] | ||
Revenue Recognition and Reserve for Sales Returns and Allowances (Details) [Line Items] | ||
Discount on invoiced amount of products | 1% | |
Maximum [Member] | ||
Revenue Recognition and Reserve for Sales Returns and Allowances (Details) [Line Items] | ||
Discount on invoiced amount of products | 20% |
Debt (Details)
Debt (Details) - USD ($) | 1 Months Ended | 3 Months Ended | 6 Months Ended | ||||||||||||
Jun. 02, 2021 | Jun. 12, 2020 | Aug. 31, 2019 | Jun. 30, 2022 | Jun. 30, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | Dec. 31, 2021 | Feb. 09, 2021 | Feb. 05, 2021 | Aug. 09, 2020 | Jul. 09, 2020 | Feb. 09, 2020 | Jul. 26, 2018 | Aug. 31, 2017 | |
Debt (Details) [Line Items] | |||||||||||||||
Common Stock, Par or Stated Value Per Share (in Dollars per share) | $ 0.001 | $ 0.001 | $ 0.001 | ||||||||||||
Paid-in-Kind Interest | $ 0 | $ 1,598,000 | |||||||||||||
Liabilities, Fair Value Adjustment | $ 0 | $ (3,797,000) | 0 | (12,844,000) | |||||||||||
Proceeds from Issuance of Long-Term Debt | 0 | 96,306,000 | |||||||||||||
Amortization of Debt Discount (Premium) | $ 188,000 | 1,230,000 | |||||||||||||
Oasis Management And Oasis Investments ll Master Fund Ltd. [Member] | |||||||||||||||
Debt (Details) [Line Items] | |||||||||||||||
Common Stock, Par or Stated Value Per Share (in Dollars per share) | $ 0.001 | ||||||||||||||
4.875% Convertible Senior Notes Due 2020 [Member] | |||||||||||||||
Debt (Details) [Line Items] | |||||||||||||||
Debt Instrument, Interest Rate, Stated Percentage | 4.875% | ||||||||||||||
3.25% Convertible Senior Notes Due 2023 [Member] | |||||||||||||||
Debt (Details) [Line Items] | |||||||||||||||
Debt Instrument, Interest Rate, Stated Percentage | 3.25% | 3.25% | |||||||||||||
Debt Instrument, Face Amount | $ 8,000,000 | ||||||||||||||
Interest rate if paid cash | 3.25% | ||||||||||||||
Interest rate if paid stock | 5% | ||||||||||||||
Interest rate if paid in-kind | 2.75% | ||||||||||||||
Debt Instrument, Convertible, Conversion Price (in Dollars per share) | $ 1 | $ 5.647 | $ 5.647 | $ 10 | $ 1 | ||||||||||
Debt Instrument, Redemption Price, Percentage | 105% | ||||||||||||||
Debt Instrument, Convertible, Threshold Percentage of Stock Price Trigger | 30% | ||||||||||||||
Debt Instrument, Convertible, Threshold Percentage of Market Price Trigger | 150% | ||||||||||||||
Debt Conversion, Converted Instrument, Amount | 24,000,000 | ||||||||||||||
Paid-in-Kind Interest | $ 1,200,000 | ||||||||||||||
Debt Conversion, Converted Instrument, Shares Issued (in Shares) | 4,246,828 | ||||||||||||||
Adjustments to Additional Paid in Capital, Other | $ 50,800,000 | ||||||||||||||
3.25% Convertible Senior Notes Due 2023 [Member] | Oasis Management And Oasis Investments ll Master Fund Ltd. [Member] | |||||||||||||||
Debt (Details) [Line Items] | |||||||||||||||
Debt Instrument, Face Amount | $ 8,000,000 | $ 21,600,000 | |||||||||||||
3.25% Convertible Senior Notes (due 2020) [Member] | Oasis Management And Oasis Investments ll Master Fund Ltd. [Member] | |||||||||||||||
Debt (Details) [Line Items] | |||||||||||||||
Liabilities, Fair Value Adjustment | $ 3,800,000 | $ 12,800,000 | |||||||||||||
Benefit Street Partners [Member] | |||||||||||||||
Debt (Details) [Line Items] | |||||||||||||||
Debt Instrument, Interest Rate, Stated Percentage | 3.25% | ||||||||||||||
Debt Instrument, Face Amount | $ 11,000,000 | ||||||||||||||
Debt Issuance Costs, Gross | 1,000,000 | $ 1,000,000 | |||||||||||||
Amortization of Debt Issuance Costs | 43,584 | 87,167 | |||||||||||||
Debt Instrument, Unamortized Discount | 2,300,000 | 2,300,000 | |||||||||||||
Amortization of Debt Discount (Premium) | 100,000 | 200,000 | |||||||||||||
Initial Term Loan [Member] | |||||||||||||||
Debt (Details) [Line Items] | |||||||||||||||
Debt Instrument, Interest Rate, Stated Percentage | 3.25% | ||||||||||||||
Debt Instrument, Face Amount | $ 99,000,000 | ||||||||||||||
Proceeds from Issuance of Long-Term Debt | $ 96,300,000 | ||||||||||||||
Debt Instrument, Covenant Description | the Company must maintain Qualified Cash of at least: (a) at all times after the Closing Date and prior to the First Amendment Effective Date, $20.0 million; (b) at all times during the period commencing on the First Amendment Effective Date through and including June 30, 2022, $15.0 million; and (c) at all times on and after July 1, 2022, through September 30, 2022, $17.5 million; provided, however, that if the Total Net Leverage Ratio exceeded 1.75:1.00 as of the last day of the most recently ended month for which financial statements were required to have been delivered, then the amount set forth in this clause shall be increased to $20.0 million. Notwithstanding the foregoing, the Applicable Minimum Cash Amount shall be reduced by $1.0 million for every $5.0 million principal prepayment or repayment of the Term Loans following the First Amendment Effective Date; provided however, that, the Applicable Minimum Cash Amount shall in no event be reduced below $15.0 million | ||||||||||||||
Initial Term Loan [Member] | London Interbank Offered Rate (LIBOR) [Member] | Minimum [Member] | |||||||||||||||
Debt (Details) [Line Items] | |||||||||||||||
Debt Instrument, Basis Spread on Variable Rate | 6.50% | ||||||||||||||
Debt Instrument, Description of Variable Rate Basis | subject to a 1.00% LIBOR floor, or (ii) base rate plus 5.50% - 6.00% (determined by reference to a net leverage pricing grid), subject to a 2.00% base rate floor | ||||||||||||||
Initial Term Loan [Member] | London Interbank Offered Rate (LIBOR) [Member] | Maximum [Member] | |||||||||||||||
Debt (Details) [Line Items] | |||||||||||||||
Debt Instrument, Basis Spread on Variable Rate | 7% | ||||||||||||||
Delayed Draw Term Loan [Member] | |||||||||||||||
Debt (Details) [Line Items] | |||||||||||||||
Debt Instrument, Face Amount | $ 19,000,000 | ||||||||||||||
Paycheck Protection Program Loan [Member] | Unsecured Debt [Member] | |||||||||||||||
Debt (Details) [Line Items] | |||||||||||||||
Debt Instrument, Interest Rate, Stated Percentage | 1% | ||||||||||||||
Debt Instrument, Face Amount | $ 6,200,000 | ||||||||||||||
Monthly payments | $ 261,275 | ||||||||||||||
3.25% Convertible Senior Notes Due 2023 [Member] | |||||||||||||||
Debt (Details) [Line Items] | |||||||||||||||
Equity Method Investment, Ownership Percentage | 49% | ||||||||||||||
Closing Fees [Member] | |||||||||||||||
Debt (Details) [Line Items] | |||||||||||||||
Debt Instrument, Unamortized Discount (Premium), Net | 2,200,000 | ||||||||||||||
Debt Issuance Costs, Gross | 2,200,000 | ||||||||||||||
Other Administrative Fees [Member] | |||||||||||||||
Debt (Details) [Line Items] | |||||||||||||||
Debt Issuance Costs, Gross | $ 500,000 | ||||||||||||||
Secured Debt [Member] | Initial Term Loan [Member] | |||||||||||||||
Debt (Details) [Line Items] | |||||||||||||||
Proceeds from Issuance of Long-Term Debt | 87,600,000 | ||||||||||||||
Secured Debt [Member] | New Term Loan Agreement [Member] | |||||||||||||||
Debt (Details) [Line Items] | |||||||||||||||
Long-Term Debt, Fair Value | 69,100,000 | 69,100,000 | $ 97,300,000 | ||||||||||||
Secured Debt [Member] | Reported Value Measurement [Member] | New Term Loan Agreement [Member] | |||||||||||||||
Debt (Details) [Line Items] | |||||||||||||||
Value of debt outstanding | $ 84,900,000 | $ 84,900,000 | $ 95,500,000 |
Debt (Details) - Schedule of De
Debt (Details) - Schedule of Debt - Secured Debt [Member] - 2021 BSP Term Loan [Member] - USD ($) $ in Thousands | Jun. 30, 2022 | Dec. 31, 2021 | |
Debt (Details) - Schedule of Debt [Line Items] | |||
Principal Amount | $ 87,639 | $ 98,505 | |
Debt Discount/ Issuance Costs | [1] | (2,711) | (2,986) |
Net Amount | $ 84,928 | $ 95,519 | |
[1]The term loan was valued using the discounted cash flow method to determine the implied debt discount. The debt discount and issuance costs are amortized over the life of the term loan on a straight-line basis which approximates the effective interest method. |
Credit Facilities (Details)
Credit Facilities (Details) - USD ($) | 3 Months Ended | 6 Months Ended | |
Jun. 02, 2021 | Jun. 30, 2022 | Jun. 30, 2022 | |
Credit Facilities (Details) [Line Items] | |||
Letters of Credit Outstanding, Amount (in Dollars) | $ 17,200,000 | $ 17,200,000 | |
JPMorgan ABL Credit Agreement [Member] | |||
Credit Facilities (Details) [Line Items] | |||
Line of Credit Facility, Maximum Borrowing Capacity (in Dollars) | $ 67,500,000 | ||
Line of Credit, Current (in Dollars) | |||
Letters of Credit Outstanding, Amount (in Dollars) | 49,000,000 | 49,000,000 | |
Debt Issuance Costs, Gross (in Dollars) | 1,600,000 | 1,600,000 | |
Amortization of Debt Issuance Costs (in Dollars) | $ 100,000 | $ 200,000 | |
JPMorgan ABL Credit Agreement [Member] | Minimum [Member] | |||
Credit Facilities (Details) [Line Items] | |||
Line of Credit Facility, Unused Capacity, Commitment Fee Percentage | 0.25% | ||
Fixed Charge Coverage Ratio | 1.1 | ||
JPMorgan ABL Credit Agreement [Member] | Maximum [Member] | |||
Credit Facilities (Details) [Line Items] | |||
Line of Credit Facility, Unused Capacity, Commitment Fee Percentage | 0.375% | ||
Fixed Charge Coverage Ratio | 1 | ||
JPMorgan ABL Credit Agreement [Member] | London Interbank Offered Rate (LIBOR) [Member] | Minimum [Member] | |||
Credit Facilities (Details) [Line Items] | |||
Debt Instrument, Basis Spread on Variable Rate | 1.50% | ||
JPMorgan ABL Credit Agreement [Member] | London Interbank Offered Rate (LIBOR) [Member] | Maximum [Member] | |||
Credit Facilities (Details) [Line Items] | |||
Debt Instrument, Basis Spread on Variable Rate | 2% | ||
JPMorgan ABL Credit Agreement [Member] | Base Rate [Member] | Minimum [Member] | |||
Credit Facilities (Details) [Line Items] | |||
Debt Instrument, Basis Spread on Variable Rate | 0.50% | ||
JPMorgan ABL Credit Agreement [Member] | Base Rate [Member] | Maximum [Member] | |||
Credit Facilities (Details) [Line Items] | |||
Debt Instrument, Basis Spread on Variable Rate | 1% | ||
General Electric Capital Corporation Loan Agreement [Member] | |||
Credit Facilities (Details) [Line Items] | |||
Line of Credit Facility, Interest Rate During Period | 1.88% |
Income Taxes (Details)
Income Taxes (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2022 | Jun. 30, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | |
Income Tax Disclosure [Abstract] | ||||
Income Tax Expense (Benefit) | $ 1,334 | $ (100) | $ 1,751 | $ (12) |
Effective Income Tax Rate Reconciliation, Percent | (4.80%) | (0.70%) | 7.30% | 0% |
Earnings (Loss) Per Share (Deta
Earnings (Loss) Per Share (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2022 | Jun. 30, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | |
Convertible Debt Securities [Member] | ||||
Earnings (Loss) Per Share (Details) [Line Items] | ||||
Temporary Equity, Dividends, Adjustment | $ 0.4 | $ 0.3 | $ 0.7 | $ 0.7 |
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount | 3,012,120 | 3,430,432 | ||
Restricted Stock [Member] | ||||
Earnings (Loss) Per Share (Details) [Line Items] | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount | 291,187 | 267,631 |
Earnings (Loss) Per Share (De_2
Earnings (Loss) Per Share (Details) - Schedule of Earnings Per Share, Basic and Diluted - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 6 Months Ended | |||||
Jun. 30, 2022 | Mar. 31, 2022 | Jun. 30, 2021 | Mar. 31, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | ||
Schedule of Earnings Per Share, Basic and Diluted [Abstract] | |||||||
Net income (loss) | $ 26,207 | $ (15,060) | $ 22,298 | $ (39,111) | |||
Net income (loss) attributable to non-controlling interests | (353) | 24 | (453) | 59 | |||
Net loss attributable to Jakks Pacific, Inc. | 26,560 | $ (3,809) | (15,084) | $ (24,086) | 22,751 | (39,170) | |
Preferred stock dividend | 351 | 331 | 697 | 657 | |||
Net income (loss) attributable to common stockholders | [1] | $ 26,209 | $ (15,415) | $ 22,054 | $ (39,827) | ||
Weighted average common shares outstanding - basic (in Shares) | 9,588,000 | 6,220,000 | 9,588,000 | 5,802,000 | |||
Earnings (loss) per share available to common stockholder- basic (in Dollars per share) | $ 2.73 | $ (2.48) | $ 2.3 | $ (6.86) | |||
Weighted average common shares outstanding - diluted (in Shares) | 10,037,000 | 6,220,000 | 9,978,000 | 5,802,000 | |||
Earnings (loss) per share available to common stockholder- diluted (in Dollars per share) | $ 2.61 | $ (2.48) | $ 2.21 | $ (6.86) | |||
[1]Net income attributable to common stockholders was computed by deducting preferred dividends of $0.4 million and $0.7 million for the three and six months ended June 30, 2022, respectively. Net loss attributable to common stockholders was computed by deducting preferred dividends of $0.3 million and $0.7 million for the three and six months ended June 30, 2021, respectively. |
Common Stock and Preferred St_3
Common Stock and Preferred Stock (Details) | 3 Months Ended | 6 Months Ended | ||||
Aug. 09, 2019 $ / shares shares | Jun. 30, 2022 USD ($) $ / shares shares | Jun. 30, 2021 USD ($) | Jun. 30, 2022 USD ($) $ / shares shares | Jun. 30, 2021 USD ($) shares | Dec. 31, 2021 USD ($) $ / shares shares | |
Common Stock and Preferred Stock (Details) [Line Items] | ||||||
Temporary Equity, Shares Issued (in Shares) | 200,000 | 200,000 | 200,000 | 200,000 | ||
Temporary Equity, Par or Stated Value Per Share (in Dollars per share) | $ / shares | $ 0.001 | $ 0.001 | $ 0.001 | $ 0.001 | ||
Temporary Equity, Shares Outstanding (in Shares) | 200,000 | 200,000 | 200,000 | |||
Temporary Equity, Initial Value Per Share (in Dollars per share) | $ / shares | $ 100 | |||||
Temporary Equity, Quarterly Dividend Rate | 6% | |||||
Temporary Equity, Number Of Shares Outstanding In Which One Director May Be Elected (in Shares) | 50,000 | |||||
Minimum [Member] | ||||||
Common Stock and Preferred Stock (Details) [Line Items] | ||||||
Temporary Equity, Liquidation Preference Percent Of Accreted Amount | 20% | |||||
Maximum [Member] | ||||||
Common Stock and Preferred Stock (Details) [Line Items] | ||||||
Temporary Equity, Liquidation Preference Percent Of Accreted Amount | 150% | |||||
Redeemable Preferred Stock [Member] | ||||||
Common Stock and Preferred Stock (Details) [Line Items] | ||||||
Dividends | $ | $ 400,000 | $ 300,000 | $ 700,000 | $ 700,000 | ||
Dividends Payable | $ | 3,800,000 | 3,800,000 | $ 3,100,000 | |||
Redeemable Preferred Stock [Member] | Fair Value, Recurring [Member] | Fair Value, Inputs, Level 3 [Member] | ||||||
Common Stock and Preferred Stock (Details) [Line Items] | ||||||
Fair Value, Measurement with Unobservable Inputs Reconciliation, Recurring Basis, Liability Value | $ | $ 15,900,000 | 15,900,000 | $ 21,300,000 | |||
Restricted Stock [Member] | ||||||
Common Stock and Preferred Stock (Details) [Line Items] | ||||||
Stock Issued During Period, Shares, Restricted Stock Award, Forfeited (in Shares) | 93,352 | |||||
Restricted Stock Award, Forfeitures | $ | $ 0.1 | $ 0.5 | ||||
Share-Based Compensation Arrangement by Share-Based Payment Award, Non-Option Equity Instruments, Forfeitures (in Shares) | 11,480 | |||||
Executive Officer [Member] | ||||||
Common Stock and Preferred Stock (Details) [Line Items] | ||||||
Number Of Executive Officers | 2 | 2 | ||||
Executive Officer [Member] | Restricted Stock [Member] | ||||||
Common Stock and Preferred Stock (Details) [Line Items] | ||||||
Number Of Executive Officers | 2 | 2 | ||||
Stock Issued During Period, Shares, Restricted Stock Award, Forfeited (in Shares) | 63,292 | 32,846 | ||||
Restricted Stock Award, Forfeitures | $ | $ 0.6 | $ 0.2 |
Common Stock and Preferred St_4
Common Stock and Preferred Stock (Details) - Schedule of Series A Preferred Stock - USD ($) $ in Thousands | 3 Months Ended | ||||||
Jun. 30, 2022 | Mar. 31, 2022 | Jun. 30, 2021 | Mar. 31, 2021 | Jan. 01, 2022 | Dec. 31, 2021 | Jan. 01, 2021 | |
Stockholders' Equity Note [Abstract] | |||||||
Temporary Equity, Accretion of Dividends | $ 351 | $ 346 | $ 331 | $ 326 | |||
Balance | $ 3,771 | $ 3,420 | $ 2,397 | $ 2,066 | $ 3,074 | $ 3,074 | $ 1,740 |
Joint Ventures (Details)
Joint Ventures (Details) - USD ($) | 3 Months Ended | 6 Months Ended | ||||
Jun. 30, 2022 | Jun. 30, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | Oct. 31, 2016 | Nov. 30, 2014 | |
Joint Ventures (Details) [Line Items] | ||||||
Net Income (Loss) Attributable to Noncontrolling Interest | $ (353,000) | $ 24,000 | $ (453,000) | $ 59,000 | ||
Joint Venture With Meisheng Cultural & Creative Corp. [Member] | ||||||
Joint Ventures (Details) [Line Items] | ||||||
Equity Method Investment, Ownership Percentage | 51% | 51% | 51% | |||
Net Income (Loss) Attributable to Noncontrolling Interest | $ 0.4 | 24,000 | $ 0.5 | $ 59,000 | ||
Hong Kong Meisheng Cultural Co [Member] | ||||||
Joint Ventures (Details) [Line Items] | ||||||
Equity Method Investment, Ownership Percentage | 50% | |||||
Hong Kong Meisheng Cultural Co [Member] | ||||||
Joint Ventures (Details) [Line Items] | ||||||
Net Income (Loss) Attributable to Noncontrolling Interest |
Intangible Assets Other Than _3
Intangible Assets Other Than Goodwill (Details) - Schedule of Intangible Assets and Goodwill - USD ($) | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2022 | Jun. 30, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | Dec. 31, 2021 | |
Intangible Assets Other Than Goodwill (Details) - Schedule of Intangible Assets and Goodwill [Line Items] | |||||
Gross Carrying Amount | $ 60,340,000 | $ 60,340,000 | $ 60,340,000 | ||
Accumulated Amortization | (59,833,000) | (59,833,000) | (59,325,000) | ||
Net Amount | 507,000 | 507,000 | 1,015,000 | ||
Accumulated Amortization | (300,000) | $ 0 | (300,000) | $ 0 | |
Net Amount | 0 | $ 0 | 300,000 | ||
Licensing Agreements [Member] | |||||
Intangible Assets Other Than Goodwill (Details) - Schedule of Intangible Assets and Goodwill [Line Items] | |||||
Weighted Useful Lives | 5 years 9 months 21 days | ||||
Gross Carrying Amount | 20,130,000 | $ 20,130,000 | 20,130,000 | ||
Accumulated Amortization | (20,130,000) | $ (20,130,000) | (20,130,000) | ||
Product Lines [Member] | |||||
Intangible Assets Other Than Goodwill (Details) - Schedule of Intangible Assets and Goodwill [Line Items] | |||||
Weighted Useful Lives | 10 years 4 months 9 days | ||||
Gross Carrying Amount | 33,858,000 | $ 33,858,000 | 33,858,000 | ||
Accumulated Amortization | (33,351,000) | (33,351,000) | (32,843,000) | ||
Net Amount | 507,000 | $ 507,000 | 1,015,000 | ||
Customer Relationships [Member] | |||||
Intangible Assets Other Than Goodwill (Details) - Schedule of Intangible Assets and Goodwill [Line Items] | |||||
Weighted Useful Lives | 4 years 10 months 24 days | ||||
Gross Carrying Amount | 3,152,000 | $ 3,152,000 | 3,152,000 | ||
Accumulated Amortization | (3,152,000) | $ (3,152,000) | (3,152,000) | ||
Trade Names [Member] | |||||
Intangible Assets Other Than Goodwill (Details) - Schedule of Intangible Assets and Goodwill [Line Items] | |||||
Weighted Useful Lives | 5 years | ||||
Gross Carrying Amount | 3,000,000 | $ 3,000,000 | 3,000,000 | ||
Accumulated Amortization | (3,000,000) | $ (3,000,000) | (3,000,000) | ||
Noncompete Agreements [Member] | |||||
Intangible Assets Other Than Goodwill (Details) - Schedule of Intangible Assets and Goodwill [Line Items] | |||||
Weighted Useful Lives | 5 years | ||||
Gross Carrying Amount | 200,000 | $ 200,000 | 200,000 | ||
Accumulated Amortization | (200,000) | (200,000) | (200,000) | ||
Trademarks [Member] | |||||
Intangible Assets Other Than Goodwill (Details) - Schedule of Intangible Assets and Goodwill [Line Items] | |||||
Gross Carrying Amount | $ 300,000 | 300,000 | 300,000 | ||
Accumulated Amortization | $ (300) | ||||
Net Amount | $ 300,000 |
Comprehensive Loss (Details) -
Comprehensive Loss (Details) - Comprehensive Loss - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||||
Jun. 30, 2022 | Mar. 31, 2022 | Jun. 30, 2021 | Mar. 31, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | |
Comprehensive Loss [Abstract] | ||||||
Net loss | $ 26,207 | $ (15,060) | $ 22,298 | $ (39,111) | ||
Other comprehensive income (loss) | ||||||
Foreign currency translation adjustment | (2,151) | $ (662) | 380 | $ (58) | (2,813) | 322 |
Comprehensive loss | 24,056 | (14,680) | 19,485 | (38,789) | ||
Less: Comprehensive income (loss) attributable to non-controlling interests | (353) | 24 | (453) | 59 | ||
Comprehensive loss attributable to JAKKS Pacific, Inc. | $ 24,409 | $ (14,704) | $ 19,938 | $ (38,848) |
Share-Based Payments (Details)
Share-Based Payments (Details) $ in Millions | 6 Months Ended |
Jun. 30, 2022 USD ($) | |
Restricted Stock [Member] | Minimum [Member] | |
Share-Based Payments (Details) [Line Items] | |
Share-Based Compensation Arrangement by Share-Based Payment Award, Award Vesting Period | 1 year |
Restricted Stock [Member] | Maximum [Member] | |
Share-Based Payments (Details) [Line Items] | |
Share-Based Compensation Arrangement by Share-Based Payment Award, Award Vesting Period | 4 years |
Restricted Stock Units (RSUs) [Member] | |
Share-Based Payments (Details) [Line Items] | |
Share-Based Payment Arrangement, Nonvested Award, Cost Not yet Recognized, Amount (in Dollars) | $ 7.3 |
Share-Based Payment Arrangement, Nonvested Award, Cost Not yet Recognized, Period for Recognition | 2 years 2 months 1 day |
Share-Based Payments (Details)
Share-Based Payments (Details) - Share-based Payment Arrangement, Expensed and Capitalized, Amount - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2022 | Jun. 30, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | |
Share-Based Payment Arrangement, Expensed and Capitalized, Amount [Abstract] | ||||
Share-based compensation expense | $ 1,155 | $ 383 | $ 2,025 | $ 765 |
Share-Based Payments (Details_2
Share-Based Payments (Details) - Schedule of Nonvested Restricted Stock Units Activity - Restricted Stock Units (RSUs) [Member] | 6 Months Ended |
Jun. 30, 2022 $ / shares shares | |
Share-Based Payments (Details) - Schedule of Nonvested Restricted Stock Units Activity [Line Items] | |
Outstanding, Number of Shares | shares | 1,073,902 |
Outstanding, Weighted Average Grant Date Fair Value | $ / shares | $ 8.62 |
Awarded, Number of Shares | shares | 318,627 |
Awarded, Weighted Average Grant Date Fair Value | $ / shares | $ 10.16 |
Vested, Number of Shares | shares | (130,280) |
Vested, Weighted Average Grant Date Fair Value | $ / shares | $ 7.34 |
Forfeited, Number of Shares | shares | (149,238) |
Forfeited, Weighted Average Grant Date Fair Value | $ / shares | $ 14.7 |
Outstanding, Number of Shares | shares | 1,113,011 |
Outstanding, Weighted Average Grant Date Fair Value | $ / shares | $ 8.4 |
Fair Value Measurements (Detail
Fair Value Measurements (Details) | Jun. 30, 2022 |
3.25% Convertible Senior Notes Due 2023 [Member] | |
Fair Value Measurements (Details) [Line Items] | |
Debt Instrument, Interest Rate, Stated Percentage | 3.25% |
Fair Value Measurements (Deta_2
Fair Value Measurements (Details) - Schedule of Fair Value, Assets and Liabilities Measured on Recurring Basis - Reported Value Measurement [Member] - Redeemable Preferred Stock [Member] - Fair Value, Recurring [Member] - USD ($) $ in Thousands | Jun. 30, 2022 | Jun. 30, 2021 |
Fair Value Measurements (Details) - Schedule of Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items] | ||
Derivative liability | $ 15,898 | $ 21,282 |
Fair Value, Inputs, Level 1 [Member] | ||
Fair Value Measurements (Details) - Schedule of Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items] | ||
Derivative liability | 0 | 0 |
Fair Value, Inputs, Level 2 [Member] | ||
Fair Value Measurements (Details) - Schedule of Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items] | ||
Derivative liability | 0 | 0 |
Fair Value, Inputs, Level 3 [Member] | ||
Fair Value Measurements (Details) - Schedule of Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items] | ||
Derivative liability | $ 15,898 | $ 21,282 |
Fair Value Measurements (Deta_3
Fair Value Measurements (Details) - Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation - Fair Value, Inputs, Level 3 [Member] - Fair Value, Recurring [Member] - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2022 | Jun. 30, 2021 | |
Redeemable Preferred Stock [Member] | ||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||
Balance | $ 21,282 | $ 8,062 |
Change in fair value | (5,384) | 8,914 |
Balance | 15,898 | 16,976 |
3.25% Convertible Senior Notes Due 2023 [Member] | ||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||
Balance | 0 | 34,134 |
Conversion of convertible senior notes | 0 | (19,872) |
Change in fair value | 0 | 12,844 |
Payment-in-kind interest | 0 | 285 |
Balance | $ 0 | $ 27,391 |
Related Party Transactions (Det
Related Party Transactions (Details) - USD ($) | 3 Months Ended | 6 Months Ended | ||||||
Jun. 02, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | Mar. 31, 2022 | Dec. 31, 2021 | Nov. 30, 2014 | |
Related Party Transactions (Details) [Line Items] | ||||||||
Due to Related Parties | $ 42,254,000 | $ 42,254,000 | $ 15,894,000 | |||||
Proceeds from Issuance of Long-Term Debt | $ 0 | $ 96,306,000 | ||||||
Joint Venture With Meisheng Cultural & Creative Corp. [Member] | ||||||||
Related Party Transactions (Details) [Line Items] | ||||||||
Equity Method Investment, Ownership Percentage | 51% | 51% | 51% | |||||
Joint Venture With Hong Kong Meisheng Cultural Company Limited [Member] | ||||||||
Related Party Transactions (Details) [Line Items] | ||||||||
Equity Method Investment, Ownership Percentage | 50% | |||||||
Joint Venture With Meisheng Cultural & Creative Corp. [Member] | ||||||||
Related Party Transactions (Details) [Line Items] | ||||||||
Income (Loss) from Equity Method Investments | $ 400,000 | $ 24,000 | $ 0.5 | 59,000 | ||||
Joint Venture With Hong Kong Meisheng Cultural Company Limited [Member] | ||||||||
Related Party Transactions (Details) [Line Items] | ||||||||
Income (Loss) from Equity Method Investments | ||||||||
Hong Kong Meisheng Cultural Company Limited [Member] | Inventory Related Payments [Member] | ||||||||
Related Party Transactions (Details) [Line Items] | ||||||||
Related Party Transaction, Amounts of Transaction | 50,200,000 | $ 21,800,000 | 65,700,000 | $ 29,200,000 | ||||
Due to Related Parties | $ 42,300,000 | 42,300,000 | $ 15,900,000 | |||||
Initial Term Loan [Member] | ||||||||
Related Party Transactions (Details) [Line Items] | ||||||||
Proceeds from Issuance of Long-Term Debt | $ 96,300,000 | |||||||
Secured Debt [Member] | Initial Term Loan [Member] | ||||||||
Related Party Transactions (Details) [Line Items] | ||||||||
Proceeds from Issuance of Long-Term Debt | $ 87,600,000 |
Prepaid Expense and Other Ass_3
Prepaid Expense and Other Assets (Details) - Deferred Costs, Capitalized, Prepaid, and Other Assets - USD ($) $ in Thousands | Jun. 30, 2022 | Dec. 31, 2021 |
Deferred Costs, Capitalized, Prepaid, and Other Assets [Abstract] | ||
Prepaid expenses | $ 7,328 | $ 4,151 |
Royalty advances | 3,205 | 2,619 |
Government-funded COVID-19 relief | 2,528 | 2,390 |
Income taxes receivable | 1,339 | 1,527 |
Other assets | 119 | 190 |
Prepaid expenses and other assets | $ 14,519 | $ 10,877 |