Exhibit 99.1
JAKKS Pacific(R) Reports Record Third Quarter 2005 Results
Third Quarter Net Income Increases 41% to $32.8 Million
Company Reaffirms 2005 Revenue and Earnings Guidance
MALIBU, Calif.--(BUSINESS WIRE)--Oct. 19, 2005--JAKKS Pacific,
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 record revenue and earnings results for the
three and nine-month periods ended September 30, 2005.
Third quarter net sales increased to $233.5 million in 2005,
compared to $206.1 million in the comparable period last year. Net
income for the third quarter of 2005 increased 41% to $32.8 million,
or $1.05 per diluted share, compared to $23.3 million, or $0.76 per
diluted share, for the same period last year.
The Company's net sales for the nine months ended September 30,
2005 increased to $495.3 million, from $389.5 million during the same
period in 2004. Net income for the first nine months of 2005 was $54.5
million, or $1.77 per diluted share, compared to first nine month 2004
earnings of $33.1 million, or $1.14 per diluted share.
"We are pleased with our third quarter results and the current
pace of our business as we head into the holiday season," said Jack
Friedman, Chairman and Chief Executive Officer, JAKKS Pacific. "We
continue to introduce and market new, innovative products, resulting
in improved product placement at retail, all while maintaining careful
cost controls and enhancing operating efficiencies. These efforts are
clearly reflected in our record revenue, operating income and earnings
for the first nine months of 2005."
Friedman concluded, "We expect to realize our previously issued
guidance for 2005 of approximately $660 million in revenue and
earnings per diluted share of approximately $2.28. These results
reflect the hard work and commitment of our employees, which have been
the drivers of our past and, hopefully, will be for our continued
achievements. We look forward to a successful Toy Fair, where we will
be displaying our diverse product offerings across all JAKKS
divisions."
Stephen Berman, President and Chief Operating Officer, stated, "We
have secured prime retail placement nationwide for the upcoming
holiday season and are encouraged about our prospects based on retail
sales from our retail partners. Many product lines in our diversified
portfolio, including our Fly Wheels(TM) vehicle line, which recently
made the 'Hot Dozen' list by Toy Wishes magazine, are performing
extremely well. Our Cabbage Patch Kids(R) dolls and Doodle Bears plush
lines, marketed under our Play Along division are also expected to
enjoy a strong holiday season. We continue to be the leader in the
Plug It In & Play TV Games(TM) category and are expanding our
leadership position with new offerings based on kid-focused titles
such as Disney Princesses, Dora the Explorer, and a new SpongeBob
SquarePants title."
Mr. Berman concluded, "We believe we are very well positioned for
the upcoming holiday season and for beyond as well. Our financial
position remains very solid, with approximately $293.2 million of
working capital, including cash and equivalents of $228.1 million, and
we have ample capacity to pursue additional strategic acquisition
opportunities and to invest in our organic growth."
JAKKS Pacific is hosting a teleconference today at 8:30 a.m. PDT
(11:30 a.m. EDT) on October 19th, via the Internet at
www.jakkspacific.com, www.CompanyBoardroom.com or
www.StreetEvents.com. These websites will host an archive of the
teleconference for 30 days. A telephonic playback will be available
from 9:30 a.m. PDT on October 19th through 12 a.m. PST on November
2nd. The playback can be accessed by calling 888-843-8996 or
630-652-3044 for International callers, and entering passcode
"9547026."
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, Dolls and Pet Toys and Accessories. 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), Pet Pal(TM) and Plug It In & 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.tvgames.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
Sept. 30, Dec. 31,
2005 2004
----------- ---------
(In thousands)
ASSETS
Current assets:
Cash and cash equivalents $228,053 $176,544
Marketable Securities - 19,047
Accounts receivable, net 144,334 102,266
Inventory, net 73,876 50,000
Prepaid expenses and other current assets 30,830 24,682
--------- ---------
Total current assets 477,093 372,539
--------- ---------
Property and equipment 41,896 38,213
Less accumulated depreciation and amortization 30,095 27,273
--------- ---------
Property and equipment, net 11,801 10,940
--------- ---------
Goodwill, net 262,880 258,331
Trademarks & other assets, net 38,602 45,136
Investment in joint venture 3,609 9,816
--------- ---------
Total assets $793,985 $696,762
========= =========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable and accrued expenses $126,358 $108,976
Reserve for sales returns and allowances 27,400 23,173
Income taxes payable 30,162 10,847
--------- ---------
Total current liabilities 183,920 142,996
--------- ---------
Long term debt 98,000 98,000
Deferred income taxes 4,237 4,281
--------- ---------
102,237 102,281
--------- ---------
Total liabilities 286,157 245,277
Stockholders' equity:
Common stock, $.001 par value 27 26
Additional paid-in capital 281,229 276,642
Retained earnings 231,043 176,564
Deferred compensation from restricted
stock grants (2,435) -
Accumulated other comprehensive income (loss) (2,036) (1,747)
--------- ---------
507,828 451,485
--------- ---------
Total liabilities and stockholders' equity $793,985 $696,762
========= =========
JAKKS Pacific, Inc. and Subsidiaries
Third Quarter Earnings Announcement, 2005
Condensed Statements of Income (Unaudited)
Three Months Ended Nine Months Ended
September 30, September 30,
2005 2004 2005 2004
--------- --------- --------- ---------
(In thousands, expect per share data)
Net sales $233,500 $206,083 $495,267 $389,464
Less cost of sales
Cost of goods 115,823 100,754 246,175 194,120
Royalty expense 23,105 22,661 50,235 38,013
Amortization of tools
and molds 1,120 867 3,120 3,783
--------- --------- --------- ---------
Cost of sales 140,048 124,282 299,530 235,916
--------- --------- --------- ---------
Gross profit 93,452 81,801 195,737 153,548
Direct selling expenses 20,082 19,258 52,951 39,578
Selling, general and
administrative expenses 23,595 30,959 59,779 66,164
Depreciation and amortization 2,557 1,667 7,500 4,684
--------- --------- --------- ---------
Income from operations 47,218 29,917 75,507 43,122
Other income (expense):
Profit from Joint Venture 238 911 1,541 1,275
Other expense (1,401) - (1,401) -
Interest, net 251 (785) 18 (1,954)
--------- --------- --------- ---------
Income before provision for
income taxes 46,306 30,043 75,665 42,443
Provision for income taxes 13,553 6,788 21,186 9,393
--------- --------- --------- ---------
Net income $32,753 $23,255 $54,479 $33,050
========= ========= ========= =========
Earnings per share - diluted $1.05 $0.76 $1.77 $1.14
Shares used in earnings per
share - diluted 32,088 31,919 32,182 31,243
CONTACT: JAKKS Pacific, Inc.
Genna Rosenberg, 310-455-6235
or
Integrated Corporate Relations
John Mills, 310-395-2215