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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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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):
October 22, 2007 (October 22, 2007)
JAKKS PACIFIC, INC.
(Exact Name of registrant as specified in its charter)
Delaware 0-28104 95-4527222
(State or other jurisdiction (Commission File Number) (I.R.S. Employer
of 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
October 22, 2007
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
Item 2.02. Results of Operations and Financial Condition.
On October 22, 2007, we issued a press release announcing our results
of operations for the quarter ended September 30, 2007. 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* October 22, 2007 Press Release
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* 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: October 22, 2007 JAKKS PACIFIC, INC.
By: /s/ Jack Friedman
----------------------
Jack Friedman
Chairman and Chief Executive Officer
4
Exhibit Index
Exhibit
Number Description
- ------ -----------
99.1* October 22, 2007 Press Release
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* Filed herewith
5
Exhibit 99.1
JAKKS Pacific(R) Reports 2007 Third Quarter Results
-- Achieves Record Third Quarter Sales and Earnings --
-- Reiterates Record Year Guidance for 2007 --
MALIBU, Calif.--(BUSINESS WIRE)--Oct. 22, 2007--JAKKS Pacific,
Inc. (NASDAQ:JAKK), a leading toy and consumer products company,
announces results for the Company's third quarter and first nine
months ended September 30, 2007.
Third quarter 2007 net sales were $318.4 million, compared to
$295.8 million recorded in the comparable period last year. Net income
for the third quarter was $47.3 million, or $1.45 per diluted share,
compared to $40.5 million, or $1.26 per diluted share, reported in the
third quarter of 2006.
Net sales for the nine months ended September 30, 2007 were $572.0
million, compared to $527.1 million during the same period in 2006.
Net income for the first nine months of 2007 was $55.6 million, or
$1.75 per diluted share, compared to the first nine months of 2006
earnings of $49.2 million, or $1.57 per diluted share.
"We shipped many of our major holiday items during the third
quarter, and are quite pleased with the distribution and retail
sell-throughs we have been experiencing, as well as with the reception
by retailers and the media, as evidenced by our inclusion on virtually
all of this season's Hot Holiday Toy Lists," said Jack Friedman,
Chairman and Chief Executive Officer, JAKKS Pacific. "We are proud of
our most expansive product line to date and are seeing positive
momentum at retail thus far into the fourth quarter. We believe both
JAKKS and our product lines are well positioned for the 2007 holiday
season."
"We have a number of noteworthy drivers for JAKKS this year,
including our Hannah Montana(TM) toys, WWE(R) and Pokemon(R) toys,
classic Disney(R) Princess role play items, and electronic toys, most
notably, the Plug it in and Play EyeClops(TM) Bionic Eye," added
JAKKS' President and Chief Operating Officer, Stephen Berman. "We
expect kids and adults everywhere will also want our 25th Anniversary
Collectible Care Bears(R) Plush, Disney's The Cheetah Girls(TM) dolls
and playsets, Puppy in My Pocket(R) toys, among others.
"Earlier this month we previewed JAKKS' 2008 product portfolio to
retailers at the Dallas Fall Toy Preview, and the response was
excellent. We expect to introduce new initiatives based on popular
licenses, such as Neopets(R), Discovery Kids(R), the Disney epic, The
Chronicles of Narnia(R), The Wiggles(R) and SpongeBob SquarePants(R),
along with new initiatives based on popular and emerging trends of our
time. We also look forward to new, expanded lines based on classic
characters and the premiere brands currently in our portfolio."
Friedman continued, "We remain confident that JAKKS Pacific will
achieve at least its previously announced 2007 full-year guidance of
$800 million in net sales and net income of $75.8 million, or $2.39
per diluted share. Our financial position remains very strong and, as
of September 30, 2007, JAKKS had approximately $342.2 million in
working capital, including $186.6 million cash and equivalents."
Berman concluded, "We continue to evaluate potential acquisition
opportunities, and believe that our free cash flow, along with cash
and equivalents we have on hand, position us well to execute on this
component of our business growth strategy. At the same time, we
continue to invest our resources in product development and licensing
and marketing opportunities that we expect will benefit both JAKKS and
ultimately our valued shareholders. Overall, we are excited by the
future that lies ahead for JAKKS Pacific."
Conference Call
JAKKS Pacific is hosting a teleconference today at 7:00 a.m. PDT
(10:00 a.m. EDT) on October 22, 2007. Anyone interested will be able
to listen to the teleconference via the Internet at www.jakks.com,
www.CompanyBoardroom.com, or www.StreetEvents.com. These website will
host an archive of the teleconference for 30 days. A telephone
playback will also be available from 11:00 a.m. ET on October 22, 2007
through 12:00 a.m. ET on November 22, 2007, and can be accessed by
calling 800-642-1687, or 706-645-9291 for international callers, pass
code "21236036."
About JAKKS Pacific, Inc.
JAKKS Pacific, Inc. (NASDAQ:JAKK) 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), JAKKS Pets(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.jakks.com.
This press release may contain 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
September 30, December 31,
2007 2006
-------------- ------------
(In thousands)
ASSETS
Current assets:
Cash and cash equivalents $186,589 $184,489
Marketable securities 216 210
Accounts receivable, net 209,056 153,116
Inventory, net 93,762 76,788
Deferred income taxes 8,537 10,592
Prepaid expenses and other current assets 27,771 26,543
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Total current assets 525,931 451,738
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Property and equipment 55,963 49,781
Less accumulated depreciation and
amortization 35,427 32,898
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Property and equipment, net 20,536 16,883
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Deferred income taxes 1,566 -
Goodwill, net 340,007 337,999
Trademarks & other assets, net 49,215 60,401
Investment in video game joint venture 18,025 14,873
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Total assets $955,280 $881,894
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LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable and accrued expenses $145,657 $120,238
Reserve for sales returns and allowances 19,399 32,589
Income taxes payable 18,636 18,548
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Total current liabilities 183,692 171,375
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Long term debt 98,000 98,000
Other liabilities 6,003 854
Income taxes payable 9,598 -
Deferred income taxes 2,244 2,377
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115,845 101,231
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Total liabilities 299,537 272,606
Stockholders' equity:
Common stock, $.001 par value 28 28
Additional paid-in capital 307,145 300,255
Retained earnings 352,020 312,432
Accumulated other comprehensive income
(loss) (3,450) (3,427)
-------------- ------------
655,743 609,288
-------------- ------------
Total liabilities and stockholders'
equity $955,280 $881,894
============== ============
JAKKS Pacific, Inc. and Subsidiaries
Third Quarter Earnings Announcement, 2007
Condensed Statements of Income (Unaudited)
Three Months Ended Nine Months Ended
September 30, September 30,
2007 2006 2007 2006
--------- --------- --------- ---------
(In thousands, expect per share data)
Net sales $318,391 $295,789 $572,000 $527,075
Less cost of sales
Cost of goods 163,034 155,466 296,532 269,546
Royalty expense 29,181 25,793 54,638 46,878
Amortization of tools and
molds 2,126 1,647 5,977 4,326
--------- --------- --------- ---------
Cost of sales 194,341 182,906 357,147 320,750
--------- --------- --------- ---------
Gross profit 124,050 112,883 214,853 206,325
Direct selling expenses 20,132 21,908 40,956 48,132
Selling, general and
administrative expenses 34,798 28,496 87,021 75,796
Depreciation and amortization 4,063 4,275 12,007 12,986
--------- --------- --------- ---------
Income from operations 65,057 58,204 74,869 69,411
Other income (expense):
Profit (loss) from video game
joint venture 908 (245) 3,117 732
Interest income 1,814 1,029 5,121 3,530
Interest expense (692) (1,133) (3,855) (3,400)
Other expense - - - -
--------- --------- --------- ---------
Income before provision for
income taxes 67,087 57,855 79,252 70,273
Provision for income taxes 19,769 17,356 23,662 21,083
--------- --------- --------- ---------
Net income $ 47,318 $ 40,499 $ 55,590 $ 49,190
========= ========= ========= =========
Earnings per share - diluted $ 1.45 $ 1.26 $ 1.75 $ 1.57
Shares used in earnings per
share - diluted 33,145 32,736 33,083 32,731
CONTACT: JAKKS Pacific, Inc.
Genna Rosenberg, 310-455-6235
or
Joel Bennett, 310-455-6210