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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
_____
FORM 8-K
Current Report
Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported):
July 20, 2005 (July 20, 2005)
JAKKS PACIFIC, INC.
(Exact Name of registrant as specified in its charter)
Delaware 0-28104 95-4527222
(State or other jurisdiction of (Commission File Number) (I.R.S. Employer
incorporation) Identification No.)
22619 Pacific Coast Highway 90265
Malibu, California (Zip Code)
(Address of principal
executive offices)
Registrant's telephone number, including area code: (310) 456-7799
Check the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of the registrant under any of the
following provisions (see General Instruction A.2. below):
[ ] Written communications pursuant to Rule 425 under the Securities Act
(17 CFR 230.425)
[ ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act
(17 CFR 240.14a-12)
[ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange
Act (17 CFR 240.14d-2(b))
[ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange
Act (17 CFR 240.13e-4(c))
JAKKS PACIFIC, INC.
INDEX TO FORM 8-K
FILED WITH THE SECURITIES AND EXCHANGE COMMISSION
July 20, 2005
ITEMS IN FORM 8-K
-----------------
Page
----
Facing Page 1
Item 2.02 Results of Operations and Financial Condition 3
Item 9.01 Financial Statements and Exhibits 3
Signatures 4
Exhibit Index 5
2
Item 2.02. Results of Operations and Financial Condition.
On July 20, 2005, we issued a press release announcing our results of
operations for the quarter ended June 30, 2004. A copy of such release is
annexed as an exhibit and is incorporated by reference hereto in its entirety.
Item 9.01. Financial Statements and Exhibits.
(c) Exhibits
Exhibit
Number Description
- ------- -----------
99.1* July 20, 2005 Press Release
- -----------------------------
* Filed herewith
3
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
Dated: July 20, 2005 JAKKS PACIFIC, INC.
By: /s/ Jack Friedman
------------------------------
Jack Friedman
Chairman and Chief Executive Officer
4
Exhibit Index
Exhibit
Number Description
- ------- -----------
99.1* July 20, 2005 Press Release
- -----------------------------
* Filed herewith
5
Exhibit 99.1
JAKKS Pacific(R) Reports Record Second Quarter 2005 Results;
Company Reaffirms 2005 Revenue and Earnings Guidance
MALIBU, Calif.--(BUSINESS WIRE)--July 20, 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 six-month periods ended June 30, 2005.
Second quarter net sales increased to $127.1 million in 2005,
compared to $109.4 million in the comparable period last year. Net
income for the second quarter of 2005 increased $11.6 million, or
$0.39 per diluted share, compared to $6.0 million, or $0.22 per
diluted share, for the same period last year.
The Company's net sales for the six months ended June 30, 2005
increased to $261.8 million, from $183.4 million during the same
period in 2004. Net income for the first six months of 2005 was $21.7
million, or $0.73 per diluted share, compared to first six month 2004
earnings of $9.8 million, or $0.38 per diluted share.
"The quarter was marked by record second quarter revenue and a
significant increase in year-over-year profitability," said Jack
Friedman, Chairman and Chief Executive Officer, JAKKS Pacific. "Our
diverse products continue to be well received by our customers and our
acquisition of Play Along in June 2004 has positively impacted our
results and has helped make JAKKS Pacific a more diversified and more
profitable company. Our results reflect the outstanding efforts of our
employees in developing and marketing our broad array of products to
traditional and new retail channels consistent with our plan, to
create a more consistent revenue flow throughout all four quarters,
with products that have selling seasons counter-seasonal to those of
traditional toys.
"We continue to remain comfortable with our previously-issued
guidance for 2005 of approximately $660 million in revenue and net
income of approximately $70 million, or $2.28 earnings per diluted
share."
Friedman concluded, "As forecasted, we believe that we are on
track to achieve record annual revenue and earnings in 2005. With the
recent acquisition of the Pet Pal product line and a number of new
multi-toy licensing agreements and products, we look forward to
continuing to offer exciting product lines to our customers in the
second half of 2005 and beyond."
Stephen Berman, President and Chief Operating Officer, stated,
"During the second quarter, we experienced continued success with a
number of our product lines, namely our Fly Wheels(TM) vehicle line,
marketed under the Road Champs brand; our Cabbage Patch Kids(R), Sky
Dancers(R) action doll line and Doodle Bear(R) plush line, marketed
under our Play Along division and we maintained the leading position
in the Plug and Play category. Our action figures also performed well
in the quarter. In addition, our international business continues to
strengthen and was up over 100% from the second quarter of 2004 as we
continued to expand the distribution of our lines to Europe, South
America, Australia and New Zealand. We continue to identify
opportunities for improvement in our crafts and activities, as well as
seasonal lines, and are committed to maximizing their growth
potential.
"As we enter the latter half of 2005, we expect our plush toys and
other lines to continue to perform to our expectations. We also expect
to continue to capitalize on our TV Games product category with new
offerings based on kid-focused titles such as Disney Princesses, Dora
the Explorer, a second SpongeBob SquarePants title and Nick Toons, and
adult interest titles such as Wheel of Fortune, as well as the
introduction of our GAMEKEY expansion packs. We believe that our
comprehensive line is well placed for the holiday selling season."
Berman continued, "We are excited about what we have accomplished
as we approach our tenth year in business and look forward to
continuing to execute on a business strategy that we believe will
hopefully position us for future growth well beyond 2005. Our
financial position remains very solid, with approximately $256.4
million of working capital, including cash and equivalents of $192.5
million, and we have ample capacity to pursue additional strategic
acquisition opportunities and to invest in our organic growth as
well."
JAKKS Pacific is hosting a teleconference today at 6:00 a.m. PDT
(9:00 a.m. EDT) to discuss the results. Anyone interested will be able
to listen to the teleconference 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
July 20th through 12:00 a.m. EDT on August 4th. The playback can be
accessed by calling 888-843-8996 or 630-652-3044 for international
callers, pass code "12208083."
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
June 30, December 31,
2005 2004
------------- -------------
(In thousands)
ASSETS
Current assets:
Cash and cash equivalents $192,539 $176,544
Marketable Securities - 19,047
Accounts receivable, net 77,247 102,266
Inventory, net 72,158 50,000
Prepaid expenses and other current
assets 26,937 24,682
------------- -------------
Total current assets 368,881 372,539
------------- -------------
Property and equipment 40,187 38,213
Less accumulated depreciation and
amortization 29,439 27,273
------------- -------------
Property and equipment, net 10,748 10,940
------------- -------------
Goodwill, net 262,754 258,331
Trademarks & other assets, net 42,438 45,136
Investment in joint venture 4,017 9,816
------------- -------------
Total assets $688,838 $696,762
============= =============
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable and accrued expenses $75,730 $108,976
Reserve for sales returns and
allowances 20,264 23,173
Income taxes payable 16,526 10,847
------------- -------------
Total current liabilities 112,520 142,996
------------- -------------
Long term debt 98,000 98,000
Deferred income taxes 3,384 4,281
------------- -------------
101,384 102,281
------------- -------------
Total liabilities 213,904 245,277
Stockholders' equity:
Common stock, $.001 par value 27 26
Additional paid-in capital 282,005 276,642
Retained earnings 198,290 176,564
Deferred compensation from restricted
stock grants (3,458) -
Accumulated other comprehensive income
(loss) (1,930) (1,747)
------------- -------------
474,934 451,485
------------- -------------
Total liabilities and stockholders'
equity $688,838 $696,762
============= =============
JAKKS Pacific, Inc. and Subsidiaries
Second Quarter Earnings Announcement, 2005
Condensed Statements of Operations (Unaudited)
Three Months Ended Six Months Ended
June 30, June 30,
2005 2004 2005 2004
--------- --------- --------- ---------
(In thousands, expect per share data)
Net sales $127,091 $109,395 $261,767 $183,381
Less cost of sales
Cost of goods 66,521 57,146 130,352 93,366
Royalty expense 11,589 9,528 27,130 15,352
Amortization of tools and
molds 908 1,440 2,000 2,916
--------- --------- --------- ---------
Cost of sales 79,018 68,114 159,482 111,634
--------- --------- --------- ---------
Gross profit 48,073 41,281 102,285 71,747
Direct selling expenses 13,807 11,619 32,869 20,320
Selling, general and
administrative expenses 17,055 19,813 36,184 35,205
Depreciation and amortization 2,597 1,528 4,943 3,017
--------- --------- --------- ---------
Income from operations 14,614 8,321 28,289 13,205
Other income (expense):
Profit from Joint Venture 1,153 4 1,303 364
Interest, net (35) (688) (233) (1,169)
--------- --------- --------- ---------
Income before provision for
income taxes 15,732 7,637 29,359 12,400
Provision for income taxes 4,090 1,633 7,633 2,605
--------- --------- --------- ---------
Net income $11,642 $6,004 $21,726 $9,795
========= ========= ========= =========
Earnings per share -- diluted $0.39 $0.22 $0.73 $0.38
Shares used in earnings per
share -- diluted 32,229 31,123 32,239 30,890
CONTACT: JAKKS Pacific, Inc.
Genna Goldberg, 310-455-6235
or
Integrated Corporate Relations
John Mills, 310-395-2215