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):
February
18, 2009
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
February 18, 2009
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 5.02 | Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers | 3 | ||
| Item 9.01 | Financial Statements and Exhibits | 3 | ||
| Signatures | 4 | |||
| Exhibit Index | 5 |
Item 2.02 Results of Operations and Financial Condition.
On February 18, 2009, we issued a press release announcing our results of operations for the quarter and year ended December 31, 2008. A copy of such release is annexed hereto as an exhibit.
Item 5.02 Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.
Effective February 18, 2009, Mr. Jack Friedman, our Chairman and Chief Executive Officer became our Co-Chief Executive Officer along with Mr. Stephen Berman, our current President and Secretary, who will also assume the title of Co-Chief Executive Officer. Inasmuch as both Messrs. Friedman and Berman are currently our senior executive officers, information about them is currently available in our other pubic filings.
Item 9.01 Financial Statements and Exhibits.
(c) Exhibits
| Exhibit | ||
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Number |
Description |
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| 99.1* | February 18, 2009 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: |
February 18, 2009 |
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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4
Exhibit Index
| Exhibit | ||
|
Number |
Description |
|
| 99.1* | February 18, 2009 Press Release | |
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----------------------------------------------------------- |
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| * Filed herewith | ||
5
Exhibit 99.1
JAKKS Pacific® Reports Fourth Quarter and Year-End Results for 2008
MALIBU, Calif.--(BUSINESS WIRE)--February 18, 2009--JAKKS Pacific, Inc. (NASDAQ:JAKK), announces results for the Company’s fourth quarter and year ended December 31, 2008.
Fourth quarter 2008 net sales were $269.3 million, compared to $285.1 million recorded in the comparable period last year. Net income for the fourth quarter was $16.9 million, or $0.55 per diluted share, compared to $33.4 million, or $1.03 per diluted share reported in the fourth quarter of 2007.
Net sales for the year ended December 31, 2008 increased to $903.4 million, compared to $857.1 million during the same period in 2007. Net income for 2008 was $76.1 million, or $2.42 per diluted share, compared to earnings of $89.0 million, or $2.77 per diluted share for the year ended December 31, 2007.
“In 2008, we continued to have top selling items in our portfolio that performed well for our retail partners, including our award-winning EyeClops Night Vision Goggles, Girl Gourmet product line, Disney pretend play products and others. However, sales in the fourth quarter were impacted by a challenging economy, particularly in the retail sectors in which we experienced declines in some lines, including Hannah Montana and Care Bears," said Jack Friedman, Chairman and Chief Executive Officer. “Earnings in the year were also adversely impacted by rising costs of labor, raw materials and testing that affected margins across the board.
“For 2009 we will continue to focus on providing value to our customers, with the majority of our product lines retailing for under $20. In addition, we are continuing to implement our plan of cost savings company-wide and create improvements to our margins across every JAKKS division.”
President and Chief Operating Officer, Stephen Berman added, “Since closing on three recent acquisitions in late 2008, Tollytots, Kids Only and Disguise, we have been working on integrating these businesses into our existing infrastructure and evaluating strategic cost savings in this area as well, as we seek to maximize profitability.”
“Our long-standing relationships with key licensors and retailers, coupled with our commitment to product innovation, cautious planning to reduce working capital needs and capital expenditures, and margin improvements, should position us well for 2009 and beyond,” continued Berman. “From a product standpoint, we have a robust portfolio this year comprised of brand new initiatives and innovative and value-driven line extensions. These are based on many of our popular internally developed brands, such as TV Games, EyeClops and Girl Gourmet, and products based on popular licensed properties from Disney, Nickelodeon, Cabbage Patch Kids, UFC and more.”
Mr. Friedman added, “Cash flow from operations in 2008 was $58.7 million, and our financial position remains very strong. As of December 31, 2008, our working capital was $329.6 million, including cash and equivalents of $169.7 million. While we do expect to take time to fully digest and integrate our recently acquired divisions, we will continue to evaluate potential acquisition opportunities, while concurrently executing on internal growth and cost-saving initiatives. In order to meet the needs of the Company’s growth and acquisition strategy, Stephen Berman has been named to serve with me as Co-Chief Executive Officer, with me continuing as Chairman and Mr. Berman continuing as President of the Company.”
“As for our 2009 guidance,” Berman continued, “given the state of the economy and the retail environment, we are anticipating growth in revenue above 2008 levels to $920 million with earnings of $2.25 per diluted share, which results anticipate lower gross margins and increased acquisition amortization attributable to our recently acquired businesses and higher product testing charges. Because our newly acquired businesses, particularly the Disguise Halloween business, will not significantly contribute to revenues and profitability until later in the year, our forecast anticipates first quarter net sales in the range of $105 million to $115 million and an overall loss per share in the range of $0.29 to $0.36, approximately $0.27 per share of which is attributable to the cumulative net loss after increased amortization charges and overhead costs related to the new acquisitions.”
Conference Call
JAKKS Pacific will host a conference call on Wednesday, February 18, 2008 at 9am eastern when the Company will discuss the 2008 earnings in more detail. Anyone interested can listen to the teleconference via the Internet at www.jakks.com. The call will also be archived on jakks.com for 30 days. A telephonic playback will be available one hour following the call on February 18, 2009 through 9:00 a.m. ET on March 20, 2009. The playback can be accessed by calling (888) 843-8996, or (630) 652-3044 for international callers, pass code #23896457.
About JAKKS Pacific, Inc.
JAKKS Pacific, Inc. (NASDAQ:JAKK) is a leading designer and marketer of toys and consumer products, with a wide range of products that feature some of the most popular children's toy licenses in the world. JAKKS’ diverse portfolio includes 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, sold under various proprietary brands including JAKKS Pacific®, Play Along®, Flying Colors®, Creative Designs International™, Road Champs®, Child Guidance®, Pentech®, Funnoodle®, Go Fly a Kite®, Color Workshop®, JAKKS Pets™, EyeClops®, Plug It In & Play TV Games™, Girl Gourmet™, Kids Only®, Tollytots® and Disguise. JAKKS is an award-winning licensee of several hundred nationally and internationally known trademarks including Disney, Nickelodeon, Warner Bros., World Wrestling Entertainment, Ultimate Fighting Championship, Graco and Cabbage Patch Kids. 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 | |||||||||||
| December 31, | December 31, | ||||||||||
| 2008 | 2007 | ||||||||||
| (In thousands) | |||||||||||
| ASSETS | |||||||||||
| Current assets: | |||||||||||
| Cash and cash equivalents | $ | 169,520 | $ | 241,250 | |||||||
| Marketable securities | 195 | 218 | |||||||||
| Accounts receivable, net | 147,587 | 174,451 | |||||||||
| Inventory, net | 87,944 | 75,486 | |||||||||
| Income taxes receivable | 14,501 | - | |||||||||
| Deferred income taxes | 16,679 | 13,921 | |||||||||
| Prepaid expenses and other current assets | 36,123 | 21,733 | |||||||||
| Total current assets | 472,549 | 527,059 | |||||||||
| Property and equipment | 81,412 | 59,480 | |||||||||
| Less accumulated depreciation and amortization | 52,914 | 38,073 | |||||||||
| Property and equipment, net | 28,498 | 21,407 | |||||||||
| Goodwill, net | 427,693 | 353,340 | |||||||||
| Trademarks & other assets, net | 38,076 | 45,768 | |||||||||
| Investment in video game joint venture | 53,184 | 36,090 | |||||||||
| Total assets | $ | 1,020,000 | $ | 983,664 | |||||||
| LIABILITIES AND STOCKHOLDERS' EQUITY | |||||||||||
| Current liabilities: | |||||||||||
| Accounts payable and accrued expenses | $ | 121,268 | $ | 122,372 | |||||||
| Reserve for sales returns and allowances | 21,679 | 26,036 | |||||||||
| Income taxes payable | - | 21,997 | |||||||||
| Total current liabilities | 142,947 | 170,405 | |||||||||
| Long term debt | 98,000 | 98,000 | |||||||||
| Other liabilities | 2,112 | 6,432 | |||||||||
| Income taxes payable | - | 11,294 | |||||||||
| Deferred income taxes | 29,988 | 6,536 | |||||||||
| 130,100 | 122,262 | ||||||||||
| Total liabilities | 273,047 | 292,667 | |||||||||
| Stockholders' equity: | |||||||||||
| Common stock, $.001 par value | 28 | 28 | |||||||||
| Additional paid-in capital | 292,809 | 312,127 | |||||||||
| Retained earnings | 458,345 | 382,288 | |||||||||
| Accumulated other comprehensive income (loss) | (4,229 | ) | (3,446 | ) | |||||||
| 746,953 | 690,997 | ||||||||||
| Total liabilities and stockholders' equity | $ | 1,020,000 | $ | 983,664 | |||||||
| JAKKS Pacific, Inc. and Subsidiaries | ||||||||||||||||||
| Fourth Quarter Earnings Announcement, 2008 | ||||||||||||||||||
| Condensed Statements of Income (Unaudited) | ||||||||||||||||||
| Three Months Ended December 31, | Twelve Months Ended December 31, | |||||||||||||||||
|
2008 |
2007 |
2008 |
2007 |
|||||||||||||||
| (In thousands, expect per share data) | ||||||||||||||||||
| Net sales | $ | 269,347 | $ | 285,085 | $ | 903,397 | $ | 857,085 | ||||||||||
| Less cost of sales | ||||||||||||||||||
| Cost of goods | 147,055 | 139,875 | 477,748 | 436,407 | ||||||||||||||
| Royalty expense | 25,088 | 33,606 | 89,395 | 88,244 | ||||||||||||||
| Amortization of tools and molds | 4,555 | 2,807 | 15,041 | 8,784 | ||||||||||||||
| Cost of sales | 176,698 | 176,288 | 582,184 | 533,435 | ||||||||||||||
| Gross profit | 92,649 | 108,797 | 321,213 | 323,650 | ||||||||||||||
| Direct selling expenses | 37,441 | 30,365 | 83,275 | 71,321 | ||||||||||||||
| Selling, general and administrative expenses | 43,531 | 42,438 | 146,781 | 129,459 | ||||||||||||||
| Depreciation and amortization | 2,853 | 3,865 | 11,245 | 15,872 | ||||||||||||||
| Write-down of intangible assets | - | - | 9,076 | - | ||||||||||||||
| Income from operations | 8,824 | 32,129 | 70,836 | 106,998 | ||||||||||||||
| Other income (expense): | ||||||||||||||||||
| Profit from video game joint venture | 12,622 | 18,063 | 17,092 | 21,180 | ||||||||||||||
| Interest income | 594 | 1,699 | 3,396 | 6,820 | ||||||||||||||
| Interest expense, net of benefit | (1,238 | ) | (1,602 | ) | (2,425 | ) | (5,457 | ) | ||||||||||
| Other expense | - | - | - | - | ||||||||||||||
| Income before provision for income taxes | 20,802 | 50,289 | 88,899 | 129,541 | ||||||||||||||
| Provision for income taxes | 3,923 | 16,888 | 12,842 | 40,550 | ||||||||||||||
| Net income | $ | 16,879 | $ | 33,401 | $ | 76,057 | $ | 88,991 | ||||||||||
| Earnings per share - diluted | $ | 0.55 | $ | 1.03 | $ | 2.42 | $ | 2.77 | ||||||||||
| Shares used in earnings per share - diluted | 32,312 | 33,251 | 32,637 | 33,149 | ||||||||||||||
CONTACT:
JAKKS Pacific, Inc.
Genna Rosenberg, 310-455-6235
or
Joel
Bennett, 310-455-6210