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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):
April 20, 2006 (April 20, 2006)
JAKKS PACIFIC, INC.
(Exact Name of registrant as specified in its charter)
Delaware 0-28104 95-4527222
(State or other jurisdiction (Commission (I.R.S. Employer
of incorporation) File Number) 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
April 20, 2006
ITEMS IN FORM 8-K
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Page
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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 April 20, 2006, we issued a press release announcing our results of
operations for the quarter ended March 31, 2006. A copy of such release is
annexed hereto as an exhibit.
Item 9.01. Financial Statements and Exhibits.
(c) Exhibits
Exhibit
Number Description
- ------- -----------
99.1* April 20, 2006 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: April 20, 2006 JAKKS PACIFIC, INC.
By: /s/ Jack Friedman
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Jack Friedman
Chairman and Chief Executive Officer
4
Exhibit Index
Exhibit
Number Description
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99.1* April 20, 2006 Press Release
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* Filed herewith
5
Exhibit 99.1
JAKKS Pacific(R) Reports 2006 First Quarter Results;
Reaffirms 2006 Sales Guidance of $825 Million and Diluted EPS of $2.63
MALIBU, Calif.--(BUSINESS WIRE)--April 20, 2006--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 results for its first quarter ended March
31, 2006.
First quarter 2006 net sales were $107.8 million, compared to
$134.7 million in the comparable period last year. Net income for the
first quarter was $2.3 million, or $0.09 per diluted share, compared
to $10.1 million, or $0.34 per diluted share, reported in the first
quarter of 2005. Included in the results were non-cash, stock-based
compensation charges of $2.4 million, or $0.05 per share, in the first
quarter of 2006 and $0.4 million in the first quarter of 2005, and
acquisition accounting charges of $2.4 million, or $0.05 per share, in
2006 relating to the Company's recent acquisition of Creative Designs
International.
"Our sales for the first quarter met our expectations and we
remain confident that we are on target to hit our goals for 2006,"
said Jack Friedman, Chairman and Chief Executive Officer, JAKKS
Pacific. "We continue to expand many of our categories and brands by
re-investing in our diverse portfolio of products and we continue our
focus on positioning our company for continued long-term growth. Our
TV Games(TM) product line is in its fourth year cycle, and we have a
strong arsenal of kid-driven titles launching throughout the year,
including `Sesame Street(R),' `Bob the Builder(R),' `Scooby-Doo(R),'
and `Power Rangers(R).' Our JPI(TM) Pet products are gaining shelf
space, and we expect that our pet and Play Along product lines, along
with our recently acquired Creative Designs(TM) product lines, will be
strong contributors for the balance of the year."
Stephen Berman, President and Chief Operating Officer, stated,
"During the first quarter, we saw the continued success of a number of
product lines, including our Doodle Bear(R) plush products, vehicles
and our action figure lines. We launched a number of new products and
line extensions at the International Toy Fair in February and the
response from retailers was extremely positive, particularly for our
Tele-Story(TM) line, our interactive reading system for preschoolers,
and our electronic Virtual Pets game line, both of which utilize our
Plug It In & Play technology. In our pets division, the AKC(TM) line
is a strong contributor, and we are especially enthusiastic about the
introduction of our White Bites(TM) oral care treats for dogs. These
products are expected to begin shipping at the end of the second
quarter to our mass and specialty retail distribution channels
worldwide. We are confident that our strong portfolio of brands has
positioned JAKKS Pacific for continued growth throughout 2006."
Mr. Friedman concluded, "As we enter the second quarter, we are
excited about our diversified product line and we are looking forward
to new product launches targeted for our extensive distribution
channels. We will continue to grow our business both organically and
by actively pursuing complementary acquisitions. At March 31, 2006, we
had approximately $123.7 million in cash and cash equivalents and
$226.9 million in working capital.
"We are reaffirming our previously issued guidance of $825 million
in sales for 2006, and net income of approximately $82 million, or
$2.63 earnings per diluted share."
JAKKS Pacific is hosting a teleconference today at 2:00 p.m. PDT
(5:00 p.m. EDT) on April 20th, 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 6:00 p.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 "14406778."
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, Dress-Up, Role Play, and Pet Toys and Accessories.
The products are sold under various brand names, including JAKKS
Pacific(R), Play Along(R), Flying Colors(R), Creative Designs
International(TM), Road Champs(R), Child Guidance(R), Pentech(R),
Trendmasters(R), Toymax(R), Funnoodle(R), Go Fly a Kite(R), Color
Workshop(R), JPI(TM) and Plug It In & Play TV Games(TM). JAKKS and THQ
Inc. participate in a joint venture that has worldwide rights to
publish and market World Wrestling Entertainment video games. For
further information, visit www.jakkspacific.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,
2006 2005
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(In thousands)
ASSETS
Current assets:
Cash and cash equivalents $123,737 $240,238
Accounts receivable, net 67,795 87,199
Inventory, net 62,198 66,729
Deferred income taxes 13,639 13,618
Prepaid expenses and other current assets 35,653 17,533
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Total current assets 303,022 425,317
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Property and equipment 41,453 38,089
Less accumulated depreciation and amortization 27,234 25,394
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Property and equipment, net 14,219 12,695
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Goodwill, net 345,051 269,298
Trademarks & other assets, net 50,779 36,280
Investment in joint venture 3,201 10,365
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Total assets $716,272 $753,955
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LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable and accrued expenses $54,048 $94,948
Reserve for sales returns and allowances 22,033 25,123
Income taxes payable - 3,792
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Total current liabilities 76,081 123,863
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Long term debt 98,000 98,000
Deferred rent liability 959 995
Deferred income taxes 7,013 6,446
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105,972 105,441
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Total liabilities 182,053 229,304
Stockholders' equity:
Common stock, $.001 par value 27 27
Additional paid-in capital 300,027 287,356
Retained earnings 242,388 240,057
Deferred compensation from restricted stock
grants (5,388) -
Accumulated other comprehensive income (loss) (2,835) (2,789)
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534,219 524,651
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Total liabilities and stockholders' equity $716,272 $753,955
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JAKKS Pacific, Inc. and Subsidiaries
First Quarter Earnings Announcement, 2006
Condensed Statements of Income (Unaudited)
Three Months Ended
March 31,
2006 2005
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(In thousands,
expect per share
data)
Net sales $107,760 $134,676
Less cost of sales
Cost of goods 52,723 63,831
Royalty expense 9,615 15,541
Amortization of tools and molds 1,259 1,092
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Cost of sales 63,597 80,464
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Gross profit 44,163 54,212
Direct selling expenses 14,131 19,062
Selling, general and administrative expenses 23,264 19,129
Depreciation and amortization 4,524 2,346
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Income from operations 2,244 13,675
Other income (expense):
Profit from video game joint venture 757 150
Other expense - -
Interest, net 282 (198)
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Income before provision for income taxes 3,283 13,627
Provision for income taxes 952 3,543
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Net income $2,331 $10,084
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Earnings per share - diluted $0.09 $0.34
Shares used in earnings per share - diluted 32,617 32,256
CONTACT: JAKKS Pacific, Inc.
Genna Rosenberg, 310-455-6235
or
Integrated Corporate Relations
John Mills, 310-395-2215