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
23, 2008 (April 23, 2008)
JAKKS PACIFIC,
INC.
(Exact
Name of registrant as specified in its charter)
|
Delaware |
0-28104 |
95-4527222 |
|
(State or other jurisdiction of incorporation) |
(Commission File Number) |
(I.R.S. Employer Identification No.) |
|
22619 Pacific Coast Highway Malibu, California |
90265 |
|
|
(Address of principal executive offices) |
(Zip Code) |
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:
⃞ 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 23, 2008
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 April 23, 2008, we issued a press release announcing our results of
operations for the quarter ended March 31, 2008. 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 23, 2008 Press Release |
-----------------------------
* Filed herewith
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 23, 2008 |
JAKKS PACIFIC, INC. |
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By: |
/s/ Jack Friedman |
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Jack Friedman |
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Chairman and Chief Executive Officer |
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Exhibit Index
|
Exhibit Number |
Description |
|
99.1* |
April 23, 2008 Press Release |
-----------------------------
* Filed herewith
5
Exhibit 99.1
JAKKS Pacific® Reports First Quarter 2008 Results
--- Reaffirms Full Year Guidance of Growth ---
--- Hannah Montana, Night Vision Goggles, Cupcake Maker, Action Figures and Other JAKKS Lines Expected To Drive Record Year for 2008 ---
MALIBU, Calif.--(BUSINESS WIRE)--JAKKS Pacific, Inc. (NASDAQ: JAKK), a leading toy and consumer products company, announces results for the Company’s first quarter ended March 31, 2008.
First quarter 2008 net sales increased 5.5% to $130.9 million, compared to $124.1 million recorded in the comparable period last year. Including pre-tax litigation costs of $2.6 million, product testing costs of $0.8 million and restructuring costs of $0.6 million, or an aggregate of $0.10 per diluted share, net income for the first quarter was $0.9 million, or $0.03 per diluted share, compared to $3.2 million, or $0.12 per diluted share reported in the first quarter of 2007 which included $0.6 million in litigation costs, $0.2 million in product testing and no restructuring costs, or an aggregate of $0.02 per diluted share.
“Sell-through continued strong in the first quarter, with sales driven by our Hannah Montana toys, action figures and Plug It In & Play electronic products,” said Jack Friedman, JAKKS’ Chairman and Chief Executive Officer. “With increased costs related to litigation, product testing, and marketing, promotion and advertising, as well as some closeout sales that affected gross margins and the bottom-line versus last year’s first quarter, we are still on track to achieve our previous guidance of at least 4% growth over 2007, leaving us poised for another record year for JAKKS Pacific. During the first quarter, we finalized the integration of our Play Along division and expect to benefit beginning in the second quarter from the operating efficiencies as a result.”
JAKKS’ President and Chief Operating Officer, Stephen Berman added, “We continue to have momentum in our top licensed and non-licensed brands, which we expect to drive our business this year, and are pleased with the development of many new innovative toys slated to begin shipping in the second quarter. We are optimistic about the potential for our new EyeClops™ Night Vision™ Goggles, new Disney Hannah Montana dolls, role play toys and electronics products, including the Plug It In and Play Hannah Montana Pop Hero Guitar, as well as many other new products.
“Our international business benefited from strong sales of WWE® and Chronicles of Narnia Prince Caspian action figures and Plug It In and Play products during the first quarter, and we expect the momentum to continue in the second quarter, as well.”
Berman concluded, “Also highlighting our roster are several new lines including our Girl Gourmet Cupcake Maker™, Spa Factory™ line, toys based on Neopets®, NASCAR®, Nickelodeon SLIME!™ and SpongeBob SquarePants®, and our new Ulti-Motion™ gaming system that combines plug and play and role play accessories with the hugely popular category of wireless motion games. These products shipping in the second and third quarter give us enthusiasm for the rest of this year and beyond.”
Cash flow from operations in the quarter was $15.4 million, and our financial position remains very strong. As of March 31, 2008, our working capital was $359.2 million, including cash and equivalents of $238.3 million, and we continue to evaluate potential acquisition opportunities and expect to continue to grow our business by actively pursuing complementary acquisitions and executing on internal growth initiatives, in the near future.
Friedman concluded, “We remain confident that we will achieve our 2008 forecast of at least $891.4 million in net sales, $93.6 million in net income and $2.91 diluted EPS, despite the recession affecting the US economy and some challenges that are affecting our industry and others who manufacture in China.”
Conference Call
JAKKS Pacific will host a conference call on Wednesday, April 23, 2007 at 9:30 a.m. Eastern (6:30 a.m. Pacific) where the Company will discuss the first quarter 2008 earnings in more detail. You can listen to the call live via the Internet at www.jakks.com, where the call will also be archived for 30 days. A telephone playback will be available from 10:30 a.m. Eastern on April 23, 2008 through 12:00 a.m. Eastern on May 23, 2008. The playback can be accessed by calling 800-642-1687 or 706-645-9291 for international callers, passcode “43446039”.
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®, Play Along®, Flying Colors®, Creative Designs International™, Road Champs®, Child Guidance®, Pentech®, Trendmasters®, Toymax®, Funnoodle®, Go Fly a Kite®, Color Workshop®, JAKKS Pets™ and Plug It In & Play TV Games™. 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 | |||||||||||
| March 31, | December 31, | ||||||||||
| 2008 | 2007 | ||||||||||
| (In thousands) | |||||||||||
| ASSETS | |||||||||||
| Current assets: | |||||||||||
| Cash and cash equivalents | $ | 238,335 | $ | 241,250 | |||||||
| Marketable securities | 219 | 218 | |||||||||
| Accounts receivable, net | 81,935 | 174,451 | |||||||||
| Inventory, net | 66,866 | 75,486 | |||||||||
| Income taxes receivable | 4,110 | - | |||||||||
| Deferred income taxes | 13,921 | 13,921 | |||||||||
| Prepaid expenses and other current assets | 27,134 | 21,733 | |||||||||
| Total current assets | 432,520 | 527,059 | |||||||||
| Property and equipment | 62,925 | 59,480 | |||||||||
| Less accumulated depreciation and amortization | 41,599 | 38,073 | |||||||||
| Property and equipment, net | 21,326 | 21,407 | |||||||||
| Deferred income taxes | |||||||||||
| Goodwill, net | 353,340 | 353,340 | |||||||||
| Trademarks & other assets, net | 44,508 | 45,768 | |||||||||
| Investment in video game joint venture | 38,522 | 36,090 | |||||||||
| Total assets | $ | 890,216 | $ | 983,664 | |||||||
| LIABILITIES AND STOCKHOLDERS' EQUITY | |||||||||||
| Current liabilities: | |||||||||||
| Accounts payable and accrued expenses | $ | 56,386 | $ | 122,372 | |||||||
| Reserve for sales returns and allowances | 16,921 | 26,036 | |||||||||
| Income taxes payable | - | 21,997 | |||||||||
| Total current liabilities | 73,307 | 170,405 | |||||||||
| Long term debt | 98,000 | 98,000 | |||||||||
| Other liabilities | 6,819 | 6,432 | |||||||||
| Income taxes payable | 11,294 | 11,294 | |||||||||
| Deferred income taxes | 6,486 | 6,536 | |||||||||
| 122,599 | 122,262 | ||||||||||
| Total liabilities | 195,906 | 292,667 | |||||||||
| Stockholders' equity: | |||||||||||
| Common stock, $.001 par value | 29 | 28 | |||||||||
| Additional paid-in capital | 314,549 | 312,127 | |||||||||
| Retained earnings | 383,165 | 382,288 | |||||||||
| Accumulated other comprehensive income (loss) | (3,433 | ) | (3,446 | ) | |||||||
| 694,310 | 690,997 | ||||||||||
| Total liabilities and stockholders' equity | $ | 890,216 | $ | 983,664 | |||||||
| - | - | ||||||||||
| Working capital | 359,213 | 356,654 | |||||||||
| JAKKS Pacific, Inc. and Subsidiaries | ||||||||||
| First Quarter Earnings Announcement, 2008 | ||||||||||
| Condensed Statements of Income (Unaudited) | ||||||||||
| Three Months Ended March 31, | ||||||||||
| 2008 | 2007 | |||||||||
|
(In thousands, except per share data) |
||||||||||
| Net sales | $ | 130,935 | $ | 124,062 | ||||||
| Less cost of sales | ||||||||||
| Cost of goods | 69,094 | 64,370 | ||||||||
| Royalty expense | 11,465 | 12,327 | ||||||||
| Amortization of tools and molds | 2,935 | 1,857 | ||||||||
| Cost of sales | 83,494 | 78,554 | ||||||||
| Gross profit | 47,441 | 45,508 | ||||||||
| Direct selling expenses | 12,105 | 11,827 | ||||||||
| Selling, general and administrative expenses | 33,468 | 26,403 | ||||||||
| Depreciation and amortization | 2,762 | 3,954 | ||||||||
| Income (loss) from operations | (894 | ) | 3,324 | |||||||
| Other income (expense): | ||||||||||
| Profit (loss) from video game joint venture | 2,432 | 1,495 | ||||||||
| Interest income | 1,320 | 1,514 | ||||||||
| Interest expense | (1,558 | ) | (1,571 | ) | ||||||
| Other expense | - | - | ||||||||
| Income before provision for income taxes | 1,300 | 4,762 | ||||||||
| Provision for income taxes | 423 | 1,524 | ||||||||
| Net income | $ | 877 | $ | 3,238 | ||||||
| Earnings per share - diluted | $ | 0.03 | $ | 0.12 | ||||||
| Shares used in earnings per share - diluted | 28,453 | 27,984 | ||||||||
CONTACT:
JAKKS Pacific, Inc.
Genna Rosenberg, (310) 455-6235
Joel
Bennett, (310) 455-6210