Exhibit 99.1
JAKKS Pacific Reports First Quarter 2003 Financial Results
- First Quarter Revenue Increases 13.1% to $67.8 Million -
MALIBU, Calif., April 22 /PRNewswire-FirstCall/ -- JAKKS Pacific, Inc.
(Nasdaq: JAKK), a leading multi-brand company that designs and markets a broad
range of toys and leisure products, today announced results for the three months
ending March 31, 2003.
First quarter net sales increased 13.1% to $67.8 million, compared to
$59.9 million in the comparable period last year. Net income for the period
increased to $6.0 million, or $0.24 per diluted share, compared to $2.2 million,
or $0.11 per diluted share for the first quarter of last year. The Company had
24.9 million diluted shares outstanding in the first quarter of 2003, 23% more
than the 20.2 million diluted shares outstanding in the first quarter of 2002.
First quarter 2002 net income excluding one-time acquisition charges was $7.0
million, or $0.35 per diluted share.
"We are encouraged by our first quarter's growth in sales and we believe
we can still achieve our financial targets for the year, particularly, if there
is an improvement in the overall economy and retail environment," said Jack
Friedman, Chairman and Chief Executive Officer of JAKKS Pacific. "Our first
quarter results demonstrate our ability to successfully integrate new product
lines and expand our channels of distribution through recent acquisitions,
Toymax(R) and Trendmasters(R), through newly licensed products, such as Dragon
Ball Z(R) and through developing new proprietary products such as Tongue
Tape(TM). We remain focused on a growth strategy to develop and acquire
evergreen lines of products that provide retailers and consumers with the good
value they have come to expect from us."
"Overall, retailer and consumer response during the first quarter to our
diversified product lines reinforces our belief that we are well-positioned in a
difficult retail environment. Looking ahead, Go Fly a Kite(R), Funnoodle(R), The
Storm(TM) and Pentech(R) lines should continue to provide strong sales for the
spring, summer and back-to-school seasons," stated Stephen Berman, President and
Chief Operating Officer of JAKKS Pacific. "We are also looking for growth from
our new candy line of flavored tongue strips, Tongue Tape(TM), which continues
to exceed our expectations with mass retailers, and we have begun to roll out
the line in drug store chains, supermarkets and convenience stores. In addition,
we are encouraged by initial results for our Flying Colors(R) line, including
our branded activity toys for Nickelodeon(R), Dora the Explorer(TM) and
SpongeBob SquarePants(TM), and expanded offerings of our Hello Kitty(R)
products, just to name a few."
Mr. Berman added, "We are seeing solid initial results from our new
licenses for the Dragon Ball(R) franchise and Yu Yu Hakusho(R) and retailers are
already looking forward to new introductions of these products. And, relative to
our video game joint venture, we are encouraged by the initial feedback for our
new video game Wrestlemania XIX, and other WWE(TM) wrestling titles slated for
release later this year."
Mr. Berman concluded, "Our financial position remains strong with $135.9
million of working capital, cash in excess of $71 million, or $2.97 per share,
and net stockholder's equity of $362 million, or $14.97 per share. Given the
strength of our balance sheet and $50 million bank line, we remain well
positioned to continue to grow our business through strategic acquisitions and
internal development that will further diversify our product offerings to our
existing and new retail customers."
Anyone interested will be able to listen to the teleconference, scheduled
to begin at 8:30 a.m. EDT (5:30 a.m. PDT) on April 22, via the Internet at
www.jakkspacific.com or www.CompanyBoardroom.com. These websites will host an
archive of the teleconference for 30 days.
A telephonic playback will be available from 11:30 a.m. EDT on April 22nd
through 12:00 a.m. EDT on April 29. Calling 800-642-1687 or 706-645-9291 for
international callers, password "JAKKS Pacific," can access the playback.
JAKKS Pacific, Inc. is a multi-brand company that designs and markets a
broad range of toys and leisure products. The product categories include: Action
Figures, Arts & Crafts Activity Kits, Stationery, Writing Instruments,
Performance Kites, Water Toys, Sports Activity Toys, Vehicles,
Infant/Pre-School, Plush and Dolls. The products are sold under various brand
names including Flying Colors(R), Road Champs(R), Remco(R), Child Guidance(R),
Pentech(R), Trendmasters(R), Toymax(R), Funnoodle(R), and Go Fly a Kite(R). The
Company also participates in a joint venture with THQ Inc. that has exclusive
worldwide rights to publish and market World Wrestling Entertainment(TM) video
games. For further information, visit www.jakkspacific.com.
This press release contains statements that are forward-looking statements
within the meaning of the Private Securities Litigation Reform Act of 1995.
These statements are based on current expectations, estimates and projections
about JAKKS' business based, in part, on assumptions made by its management.
These statements are not guarantees of JAKKS' future performance and involve
risks, uncertainties and assumptions that are difficult to predict. Therefore,
actual outcomes and results may differ materially from what is expressed or
forecasted in such forward-looking statements due to numerous factors,
including, but not limited to, those described above and the following: changes
in demand for JAKKS' products, product mix, the timing of customer orders and
deliveries, the impact of competitive products and pricing and difficulties
encountered in the integration of acquired businesses. The forward-looking
statements contained herein speak only as of the date on which they are made,
and JAKKS does not undertake any obligation to update any forward-looking
statement to reflect events or circumstances after the date of this release.
For further information, please contact: Genna Goldberg of JAKKS Pacific,
Inc., +1-310-455-6235; or John F. Mills of Integrated Corporate Relations,
+1-562-256-7051, for JAKKS Pacific, Inc.
Balance Sheet
JAKKS Pacific, Inc. and Subsidiaries
Condensed Consolidated Balance Sheets
March 31, December 31,
2003 2002
------------ ------------
ASSETS
Current assets:
Cash and cash equivalents $ 71,751,308 $ 68,412,826
Accounts receivable, net 58,906,373 56,195,578
Inventory, net 35,333,231 38,009,747
Notes receivable - officers -- 1,113,000
Prepaid expenses and other current assets 9,091,154 8,616,160
Deferred income taxes 4,445,658 4,445,658
------------ ------------
Total current assets 179,527,724 176,792,969
Property and equipment 40,581,189 39,465,148
Less accumulated depreciation
and amortization 26,743,325 24,639,593
Property and equipment, net 13,837,864 14,825,555
Goodwill, net 189,796,931 189,335,933
Trademarks & other assets, net 20,087,284 19,736,847
Investment in joint venture 2,982,979 8,118,645
------------ ------------
Total assets $406,232,782 $408,809,949
============ ============
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable and accrued expenses $ 37,311,777 $ 41,967,851
Current portion of long term debt 13,021 17,805
Income taxes payable 6,298,379 5,624,532
------------ ------------
Total current liabilities 43,623,177 47,610,188
Long term debt, net of current portion 60,126 59,683
Deferred income taxes 562,948 562,948
623,074 622,631
------------ ------------
Total liabilities 44,246,251 48,232,819
Stockholders' equity:
Common stock, $.001 par value 24,586 24,473
Additional paid-in capital 239,771,908 240,101,458
Treasury Stock, at cost - 412,000
and nil shares, respectively (4,220,773) --
Retained earnings 126,410,810 120,451,199
361,986,531 360,577,130
------------ ------------
Total liabilities and
stockholders' equity $406,232,782 $408,809,949
============ ============
Income Statement
JAKKS Pacific, Inc. and Subsidiaries
First Quarter Earnings Announcement, 2003
Condensed Statements of Operations (Unaudited)
Three Months Ended March 31,
2003 2002
----------- -----------
Net sales $67,759,445 $59,895,490
Less cost of sales:
Cost of goods 36,057,738 28,120,995
Royalty expense 2,714,973 3,336,331
Amortization of tools and molds 1,544,270 1,968,313
Cost of sales 40,316,981 33,425,639
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Gross profit 27,442,464 26,469,851
Direct selling expenses 7,503,741 8,084,841
Selling, general and
administrative expenses 11,833,971 9,885,829
Acquisition shut-down and recall costs -- 6,621,497
Depreciation and amortization 601,178 458,251
Income from operations 7,503,574 1,419,433
Other (income) expense:
Profit from Joint Venture (175,656) (1,296,695)
Interest, net (162,363) (268,595)
Income before provision for income taxes
and minority interest 7,841,593 2,984,723
Provision for income taxes 1,881,982 805,875
Income before minority interest 5,959,611 2,178,848
Minority interest -- 22,747
----------- -----------
Net income $ 5,959,611 $ 2,156,101
=========== ===========
Earnings per share - diluted $0.24 $0.11
Shares used in earnings
per share - diluted 24,917,384 20,236,265