Exhibit 99.1
JAKKS Pacific Reports Record First Quarter 2005 Results;
First Quarter Net Sales Increase 82% and Net Income Increases by 166%;
JAKKS Named Toy Vendor of the Year by Wal-Mart
MALIBU, Calif.--(BUSINESS WIRE)--April 20, 2005--JAKKS Pacific(R),
Inc. (NASDAQ:JAKK), a leading multi-brand company that designs and
markets a broad range of toys, writing instruments and other consumer
products, today announced results for the first quarter ended March
31, 2005.
First quarter 2005 net sales were $134.7 million, an 82% increase
from the $74.0 million recorded in the comparable period last year.
Net income for the first quarter was $10.1 million, or $0.34 per
diluted share, compared to $3.8 million, or $0.15 per diluted share,
reported in the first quarter of 2004.
"We are off to a strong start in 2005, and are proud that
Wal-Mart, the nation's largest retailer, recognized JAKKS Pacific this
past Friday as Toy Vendor of the Year," said Jack Friedman, Chairman
and Chief Executive Officer, JAKKS Pacific. "The performance of our
products at retail has given us an outstanding first quarter, in which
we achieved top-line growth in our traditional toy and international
categories, and improvements in both operating efficiencies and
increased shelf space at all of the leading retailers. We continue to
enhance our long-term growth prospects with the introduction of new
licensed and non-licensed products, including our innovative Fly
Wheels(TM) vehicle product line marketed under the Road Champs brand,
and our Sky Dancers(R) action doll line and Doodle Bear(R) plush line,
both marketed under our Play Along division."
First quarter revenue was highlighted by JAKKS Pacific's
Plug-It-In and Play TV Games(TM) line and strong market reception for
the new Fly Wheels vehicle line, as well as a contribution from JAKKS'
Play Along division with the continuing performance of its Care
Bears(R) and Cabbage Patch Kids(R) product lines. JAKKS plans to
expand shelf space for its Fly Wheels line in the traditional mass
market and drug store channels, as well as in non-traditional
locations, such as auto-related retailers, in coming quarters.
Additionally, a number of other licensed and non-licensed product
lines performed well in the quarter, including Sky Dancers, Doodle
Bear, WWE(R) action figures, Nickelodeon(R) Splish Splat(TM) and other
compounds, and Vivid Velvet(R) activities.
Stephen Berman, President and Chief Operating Officer, stated, "We
remain confident that our strong portfolio of brands, combined with
our commitment to product innovation and advertising, will enable our
company to achieve another record year of revenue and earnings. Ms.
Pac-Man(R) continues to be a strong seller, and we will have more than
20 new exciting titles planned for our TV Games product line,
including Star Wars(R), Mortal Kombat(R), Superman(TM), The Batman(TM)
animated series and numerous Nickelodeon properties. In addition to
new titles, we are making technological advancements, with the recent
introduction of wireless TV Games and the planned fall 2005 launch of
our GAMEKEY(TM) expansion packs. The wireless and GAMEKEY(TM)
technology was well-received at the recent Toy Fair, and we are
excited about the expanded market opportunity this new technology
offers both JAKKS Pacific and our retail partners. We also have a
number of new licensing agreements, including Hasbro's My Little
Pony(R), Marvel Superheroes(TM) and additional Care Bears categories
that we expect will contribute to future revenue and profitability."
Berman concluded, "Looking forward, we believe that we are well
positioned for the coming months with a number of exciting new
products. Our balance sheet remains strong and at March 31, 2005, we
had approximately $194.0 million in cash and investments and $251.9
million in working capital."
Friedman concluded, "We reaffirm our prior guidance for 2005 of
approximately $660 million in revenue, and net income of approximately
$70 million, or $2.28 earnings per diluted share."
Anyone interested will be able to listen to the teleconference,
scheduled to begin at 7:00 a.m. PDT (10:00 a.m. EDT) on April 20th,
via the Internet at www.jakkspacific.com, www.CompanyBoardroom.com or
www.StreetEvents.com. These websites will also host an archive of the
teleconference for 30 days.
A telephonic playback will be available from 11:00 a.m. EDT on
April 20th through 12:00 a.m. EDT on May 4th. The playback can be
accessed by calling 888-843-8996, or 630-652-3044 for international
callers, pass code "11422172."
About JAKKS Pacific, Inc.:
JAKKS Pacific, Inc. is a multi-brand company that designs and
markets a broad range of toys and consumer products. The product
categories include: Action Figures, Art Activity Kits, Stationery,
Writing Instruments, Performance Kites, Water Toys, Sports Activity
Toys, Vehicles, Infant/Pre-School, Plush, Construction Toys,
Electronics and Dolls. The products are sold under various brand
names, including JAKKS Pacific(R), Play Along(R), Flying Colors(R),
Road Champs(R), Child Guidance(R), Pentech(R), Trendmasters(R),
Toymax(R), Funnoodle(R), Go Fly a Kite(R), Color Workshop(R) and
Plug-it-in and Play TV Games(TM). The Company also participates in a
joint venture with THQ Inc. that has exclusive worldwide rights to
publish and market World Wrestling Entertainment(R) video games. For
further information, visit www.jakkspacific.com or
www.jakkstvgames.com.
This press release contains forward-looking statements (within the
meaning of the Private Securities Litigation Reform Act of 1995) that
are based on current expectations, estimates and projections about
JAKKS Pacific's business based partly on assumptions made by its
management. These statements are not guarantees of 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 statements due to
numerous factors, including, but not limited to, those described
above, changes in demand for JAKKS' products, product mix, the timing
of customer orders and deliveries, the impact of competitive products
and pricing, and difficulties with integrating acquired businesses.
The forward-looking statements contained herein speak only as of the
date on which they are made, and JAKKS undertakes no obligation to
update any of them to reflect events or circumstances after the date
of this release.
JAKKS Pacific, Inc. and Subsidiaries
Condensed Consolidated Balance Sheets
March 31, December 31,
2005 2004
-------------- ------------
(In thousands)
ASSETS
Current assets:
Cash and cash equivalents $170,848 $176,544
Marketable Securities 23,132 19,047
Accounts receivable, net 77,376 102,266
Inventory, net 62,828 50,000
Prepaid expenses and other current
assets 23,238 24,682
-------------- ------------
Total current assets 357,422 372,539
-------------- ------------
Property and equipment 39,329 38,213
Less accumulated depreciation and
amortization 28,919 27,273
-------------- ------------
Property and equipment, net 10,410 10,940
-------------- ------------
Goodwill, net 257,593 258,331
Trademarks & other assets, net 42,948 45,136
Investment in joint venture 3,185 9,816
-------------- ------------
Total assets $671,558 $696,762
============== ============
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable and accrued
expenses $72,142 $108,976
Reserve for sales returns and
allowances 20,998 23,173
Income taxes payable 12,369 10,847
-------------- ------------
Total current liabilities 105,509 142,996
-------------- ------------
Long-term debt 98,000 98,000
Deferred income taxes 4,285 4,281
-------------- ------------
102,285 102,281
-------------- ------------
Total liabilities 207,794 245,277
Stockholders' equity:
Common stock, $.001 par value 27 26
Additional paid-in capital 283,356 276,642
Retained earnings 186,648 176,564
Deferred compensation from
restricted stock grants (4,509) -
Accumulated other comprehensive
income (loss) (1,758) (1,747)
-------------- ------------
463,764 451,485
-------------- ------------
Total liabilities and
stockholders' equity $671,558 $696,762
============== ============
JAKKS Pacific, Inc. and Subsidiaries
First Quarter Earnings Announcement, 2005
Condensed Statements of Operations (Unaudited)
Three Months Ended March 31,
2005 2004
------------------ -------------------
(In thousands, expect per share data)
Net sales $134,676 $73,986
Less cost of sales
Cost of goods 63,831 36,220
Royalty expense 15,541 5,824
Amortization of tools and
molds 1,092 1,476
------------------ -------------------
Cost of sales 80,464 43,520
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Gross profit 54,212 30,466
Direct selling expenses 19,062 8,701
Selling, general and
administrative expenses 19,129 15,392
Depreciation and amortization 2,346 1,489
------------------ -------------------
Income from operations 13,675 4,884
Other income (expense):
Profit from Joint Venture 150 360
Interest, net (198) (481)
------------------ -------------------
Income before provision for
income taxes 13,627 4,763
Provision for income taxes 3,543 972
------------------ -------------------
Net income $10,084 $3,791
================== ===================
Earnings per share - diluted $0.34 $0.15
Shares used in earnings per
share - diluted 32,256 30,676
CONTACT: JAKKS Pacific, Inc.
Genna Goldberg, 310-455-6235
or
Integrated Corporate Relations
John Mills, 310-395-2215