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Document and Entity Information - USD ($)	12 Months Ended
Document and Entity Information - USD ($)	Dec. 31, 2011	Mar. 14, 2012	Jun. 30, 2011
Document Information [Line Items]
Document Type	10-K
Amendment Flag	false
Document Period End Date	Dec. 31, 2011
Document Fiscal Year Focus	2011
Document Fiscal Period Focus	FY
Trading Symbol	JAKK
Entity Registrant Name	JAKKS PACIFIC INC
Entity Central Index Key	0001009829
Current Fiscal Year End Date	--12-31
Entity Well-known Seasoned Issuer	No
Entity Current Reporting Status	Yes
Entity Voluntary Filers	No
Entity Filer Category	Accelerated Filer
Entity Common Stock, Shares Outstanding		26,017,763
Entity Public Float			$ 475,685,809

CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands	Dec. 31, 2011	Dec. 31, 2010
Current assets
Cash and cash equivalents	$ 257,258	$ 278,346
Marketable securities	214	207
Accounts receivable, net of allowance for uncollectible accounts of $2,778 and $3,069, respectively	103,637	122,476
Inventory, net	47,019	43,230
Income tax receivable	24,166	19,052
Deferred income taxes	34,505	23,576
Prepaid expenses and other	30,686	25,275
Total current assets	497,485	512,162
Property and equipment
Office furniture and equipment	13,606	12,127
Molds and tooling	61,005	57,103
Leasehold improvements	6,788	6,920
Total	81,399	76,150
Less accumulated depreciation and amortization	65,213	59,204
Property and equipment, net	16,186	16,946
Deferred income taxes	47,081	58,848
Intangibles	21,753	23,437
Other long term assets	3,670	12,643
Investment in joint venture	2,736	74
Goodwill, net	24,015	6,988
Trademarks, net	2,308	2,308
Total assets	615,234	633,406
Current liabilities
Accounts payable	26,430	35,886
Accrued expenses	50,780	54,476
Reserve for sales returns and allowances	43,440	28,378
Capital lease obligation		27
Income taxes payable	2,183	6,143
Total current liabilities	122,833	124,910
Convertible senior notes, net	92,188	89,458
Other liabilities	1,630	1,625
Income taxes payable	4,992	5,005
Total liabilities	221,643	220,998
Commitments and Contingencies
Stockholders' equity
Preferred shares, $.001 par value; 5,000,000 shares authorized; nil outstanding
Common stock, $.001 par value; 100,000,000 shares authorized; 27,610,952 and 25,943,214 shares issued in 2010 and 2011 respectively; 27,319,624 and 25,943,214 shares outstanding, respectively	26	28
Additional paid-in capital	274,532	302,425
Treasury Stock at cost; 291,238 and nil shares in 2010 and 2011, respectively		(5,641)
Retained earnings	123,174	119,884
Accumulated other comprehensive loss	(4,141)	(4,288)
Total stockholders' equity	393,591	412,408
Total liabilities and stockholders' equity	$ 615,234	$ 633,406

CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Thousands	Dec. 31, 2011	Dec. 31, 2010
Accounts receivable, allowance for uncollectible accounts	$ 3,069	$ 2,778
Preferred shares, par value	$ 0.001	$ 0.001
Preferred shares, shares authorized	5,000,000	5,000,000
Preferred shares, outstanding
Common stock, par value	$ 0.001	$ 0.001
Common stock, shares authorized	100,000,000	100,000,000
Common stock, shares issued	25,943,214	27,610,952
Common stock, shares outstanding	25,943,214	27,319,624
Treasury Stock, shares		291,238

CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) shares in Thousands, $ in Thousands	12 Months Ended
	Dec. 31, 2011	Dec. 31, 2010	Dec. 31, 2009
Net sales	$ 677,751	$ 747,268	$ 803,704
Cost of sales	483,761	502,318	600,776
Gross profit	193,990	244,950	202,928
Selling, general and administrative expenses	192,710	194,753	227,036
Write-down of intangible assets			8,221
Write-down of goodwill			407,125
Reorganization charges			12,994
Income (loss) from operations	1,280	50,197	(452,448)
Profit (loss) from video game joint venture	6,000	6,000	(16,128)
Equity in net income/(loss) of joint venture	(34)	(56)
Interest income	412	333	318
Interest expense	(8,196)	(6,732)	(7,930)
Income (loss) before provision (benefit) for income taxes	(538)	49,742	(476,188)
Provision (benefit) for income taxes	(9,010)	2,693	(90,678)
Net income (loss)	$ 8,472	$ 47,049	$ (385,510)
Basic earnings (loss) per share	$ 0.32	$ 1.71	$ (14.02)
Basic weighted number of shares	26,760	27,491	27,502
Diluted earnings (loss) per share	$ 0.32	$ 1.52	$ (14.02)
Diluted weighted number of shares	26,893	34,513	27,502

CONSOLIDATED STATEMENTS OF OTHER COMPREHENSIVE INCOME (LOSS) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2011	Dec. 31, 2010	Dec. 31, 2009
Other comprehensive income (loss):
Net income (loss)	$ 8,472	$ 47,049	$ (385,510)
Foreign currency translation adjustment	147	(60)	1
Other comprehensive income (loss)	$ 8,619	$ 46,989	$ (385,509)

- Definition

The change in equity [net assets] of a business enterprise during a period from transactions and other events and circumstances from non-owner sources which are attributable to the reporting entity. It includes all changes in equity during a period except those resulting from investments by owners and distributions to owners, but excludes any and all transactions which are directly or indirectly attributable to that ownership interest in subsidiary equity which is not attributable to the parent.

+ References

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+ Details

- Definition

The portion of profit or loss for the period, net of income taxes, which is attributable to the parent.

+ References

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+ Details

- Definition

Adjustment that results from the process of translating subsidiary financial statements and foreign equity investments into the reporting currency of the reporting entity, net of tax.

+ References

Reference 1: http://www.xbrl.org/2003/role/presentationRef
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+ Details

CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY - USD ($) shares in Thousands, $ in Thousands	Total	Common Stock	Treasury Stock	Additional Paid-in Capital	Retained Earnings	Accumulated Other Comprehensive Loss
Beginning Balance (in shares) at Dec. 31, 2008		27,521
Beginning Balance at Dec. 31, 2008	$ 746,953	$ 28		$ 292,809	$ 458,345	$ (4,229)
Exercise of options (in shares)		3
Exercise of options	40			40
Excess tax deficiency on stock options	(487)			(487)
Restricted stock grants (in shares)		483
Restricted stock grants	4,179			4,179
Compensation for vested stock options	173			173
Retirement of restricted stock (in shares)		(368)
Retirement of restricted stock	(1,498)			(1,498)
Net income (loss)	(385,510)				(385,510)
Debt discount	13,650			13,650
Deferred tax liability on debt discount	(5,392)			(5,392)
Foreign currency translation adjustment	1					1
Ending Balance (in shares) at Dec. 31, 2009		27,639
Ending Balance at Dec. 31, 2009	372,109	$ 28		303,474	72,835	(4,228)
Excess tax deficiency on stock options	(713)			(713)
Restricted stock grants (in shares)		298
Restricted stock grants	4,619			4,619
Reversal of stock option compensation	(224)			(224)
Retirement of common stock (in shares)		(292)
Retirement of common stock	(4,554)			(4,554)
Repurchase of common stock	(5,641)		$ (5,641)
Retirement of restricted stock (in shares)		(34)
Retirement of restricted stock	(177)			(177)
Net income (loss)	47,049				47,049
Foreign currency translation adjustment	(60)					(60)
Ending Balance (in shares) at Dec. 31, 2010		27,611
Ending Balance at Dec. 31, 2010	412,408	$ 28	(5,641)	302,425	119,884	(4,288)
Exercise of options (in shares)		18
Exercise of options	276			276
Exercise of warrants (in shares)		100
Exercise of warrants	1,135			1,135
Excess tax benefit on stock options	363			363
Restricted stock grants (in shares)		141
Restricted stock grants	1,594			1,594
Dividends declared	(5,182)				(5,182)
Retirement of common stock (in shares)		(1,772)
Retirement of common stock	(24,359)	$ (2)	$ 5,641	(29,998)
Retirement of restricted stock (in shares)		(155)
Retirement of restricted stock	(1,263)			(1,263)
Net income (loss)	8,472				8,472
Foreign currency translation adjustment	147					147
Ending Balance (in shares) at Dec. 31, 2011		25,943
Ending Balance at Dec. 31, 2011	$ 393,591	$ 26		$ 274,532	$ 123,174	$ (4,141)

CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2011	Dec. 31, 2010	Dec. 31, 2009
Cash flows from operating activities
Net income (loss)	$ 8,472	$ 47,049	$ (385,510)
Adjustments to reconcile net income (loss) to net cash provided by operating activities
Depreciation and amortization	25,931	28,657	35,964
Share-based compensation expense	1,594	4,395	4,352
Loss on disposal of property and equipment	470	74	3,317
Write-down of intangible assets			8,221
Write-down of goodwill			407,125
Write-down of debt issuance costs		495	1,973
Investments in joint ventures	34	6,653	46,119
Deferred income taxes	(628)	(10,168)	(88,663)
Changes in operating assets and liabilities, net of acquisitions
Accounts receivable	27,816	7,454	17,657
Inventory	(3,020)	(8,773)	50,848
Prepaid expenses and other	2,936	2,534	(578)
Income tax receivable	(5,114)	15,962	(12,727)
Accounts payable	(16,700)	(5,268)	(19,819)
Accrued expenses	(8,330)	(9,575)	14,619
Income taxes payable	(4,269)	(5,640)	4,913
Reserve for sales returns and allowances	15,062	(5,519)	10,580
Other liabilities	5	(865)	378
Total adjustments	35,787	20,416	484,279
Net cash provided by operating activities	44,259	67,465	98,769
Cash flows from investing activities
Purchases of property and equipment	(12,455)	(11,605)	(16,330)
Change in other assets	271	193	(2,434)
Proceeds from sale of property and equipment	26	99
Investment in joint venture	(2,696)
Change in deposits			529
Cash paid for net assets of businesses acquired	(21,429)	(1,875)	(12,253)
Net purchases of marketable securities	(7)	(5)	(7)
Net cash used in investing activities	(36,290)	(13,193)	(30,495)
Cash flows from financing activities
Proceeds from stock options exercised	276		40
Proceeds from warrants exercised	1,135
Common stock surrendered	(1,263)	(177)	(1,498)
Common stock repurchased	(24,359)	(10,195)
Dividends paid	(5,182)
Repayment of capital lease obligations	(27)	(129)	(261)
Retirement of convertible notes		(20,262)	(77,738)
Proceeds from sale of convertible notes			100,000
Bank fees related to sale of convertible notes			(3,500)
Tax benefit from stock options exercised	363
Net cash (used in) provided by financing activities	(29,057)	(30,763)	17,043
Net (decrease) increase in cash and cash equivalents	(21,088)	23,509	85,317
Cash and cash equivalents, beginning of year	278,346	254,837	169,520
Cash and cash equivalents, end of year	257,258	278,346	254,837
Cash paid during the period for:
Interest	4,534	4,880	4,213
Income taxes	$ (7,249)	$ 22,539	$ 5,939

Principal Industry

12 Months Ended

Dec. 31, 2011

Principal Industry

Note 1—Principal Industry

JAKKS Pacific, Inc. (the “Company”) is engaged in the development, production and marketing of consumer products, including toys and related products, electronic products, pet toys and related products, and other consumer products, many of which are based on highly-recognized character and entertainment licenses. The Company commenced its primary business operations in July 1995 through the purchase of substantially all of the assets of a Hong Kong toy company. The Company markets its product lines domestically and internationally.

The Company was incorporated under the laws of the State of Delaware in January 1995.

Summary of Significant Accounting Policies

12 Months Ended

Dec. 31, 2011

Summary of Significant Accounting Policies

Note 2—Summary of Significant Accounting Policies

Principles of consolidation

The consolidated financial statements include accounts of the Company and its wholly-owned subsidiaries. In consolidation, all significant inter-company balances and transactions are eliminated.

Cash and cash equivalents

The Company considers all highly liquid assets, having an original maturity of less than three months, to be cash equivalents. The Company maintains its cash in bank deposits which, at times, may exceed federally insured limits. The Company has not experienced any losses in such accounts. The Company believes it is not exposed to any significant credit risk of cash and cash equivalents.

Cash and cash equivalents are maintained at financial institutions and, at times, balances may exceed federally insured limits. The Company has never experienced any losses related to these balances. All of the Company’s non-interest bearing cash balances were fully insured at December 31, 2011 due to a temporary federal program in effect from December 31, 2010 through December 31, 2012. Under the program, there is no limit to the amount of insurance for eligible accounts. Beginning 2013, insurance coverage will revert to $250,000 per depositor at each financial institution, and our non-interest bearing cash balances may again exceed federally insured limits.

Accounts Receivable and Allowance for Doubtful Accounts

Credit is granted to customers on an unsecured basis. Credit limits and payment terms are established based on extensive evaluations made on an ongoing basis throughout the fiscal year of the financial performance, cash generation, financing availability, and liquidity status of each customer. Customers are reviewed at least annually, with more frequent reviews performed as necessary, based on the customer’s financial condition and the level of credit being extended. For customers who are experiencing financial difficulties, management performs additional financial analyses before shipping to those customers on credit. The Company uses a variety of financial arrangements to ensure collectability of accounts receivable of customers deemed to be a credit risk, including requiring letters of credit, purchasing various forms of credit insurance with unrelated third parties, or requiring cash in advance of shipment.

The Company records an allowance for doubtful accounts based on management’s assessment of the business environment, customers’ financial condition, historical collection experience, accounts receivable aging, customer disputes, and the collectability of specific customer accounts.

Use of estimates

The preparation of consolidated financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the dates of the financial statements, and the reported amounts of revenue and expenses during the reporting periods. Actual future results could differ from those estimates.

Revenue recognition

Revenue is recognized upon the shipment of goods to customers or their agents, depending on terms, provided that there are no uncertainties regarding customer acceptance, the sales price is fixed or determinable, and collectability is reasonably assured.

The Company provides a negotiated allowance for breakage or defects to its customers, which is recorded when the related revenue is recognized. However, the Company does make occasional exceptions to this policy and consequently accrues a return allowance in gross sales based on historic return amounts and management estimates.

The Company also will occasionally grant credits to facilitate markdowns and sales of slow moving merchandise. These credits are recorded as a reduction of gross sales at the time of occurrence. The Company’s reserve for sales returns and allowances increased by $15.0 million from $28.4 million as of December 31, 2010 to $43.4 million as of December 31, 2011. This increase is primarily due to the Company granting additional allowances to certain customers in 2011 compared to 2010.

Fair value measurements

Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. In determining fair value, the Company uses various methods including market, income and cost approaches. Based on these approaches, the Company often utilizes certain assumptions that market participants would use in pricing the asset or liability, including assumptions about risk and/or the risks inherent in the inputs to the valuation technique. These inputs can be readily observable, market-corroborated, or generally unobservable inputs. The Company utilizes valuation techniques that maximize the use of observable inputs and minimize the use of unobservable inputs. Based upon observable inputs used in the valuation techniques, the Company is required to provide information according to the fair value hierarchy. The fair value hierarchy ranks the quality and reliability of the information used to determine fair values into three broad levels as follows:

Level 1:	Valuations for assets and liabilities traded in active markets from readily available pricing sources for market transactions involving identical assets or liabilities.
Level 2:	Valuations for assets and liabilities traded in less active dealer or broker markets. Valuations are obtained from third-party pricing services for identical or similar assets or liabilities.
Level 3:	Valuations incorporate certain assumptions and projections in determining the fair value assigned to such assets or liabilities.

In instances where the determination of the fair value measurement is based on inputs from different levels of the fair value hierarchy, the level in the fair value hierarchy within which the entire fair value measurement falls is based on the lowest level input that is significant to the fair value measurement in its entirety. The Company’s assessment of the significance of a particular input to the fair value measurement in its entirety requires judgment, and considers factors specific to the asset or liability.

The following table summarizes the Company’s financial assets measured at fair value on a recurring basis as of December 31 (in thousands):

			Fair Value Measurements
	Carrying Amount as of		As of December 31, 2010
	December 31, 2010		Level 1		Level 2		Level 3

Cash equivalents	$	163,474	$	163,474	$	—	$	—
Marketable securities		207		207		—		—
	$	163,681	$	163,681	$	—	$	—

			Fair Value Measurements
	Carrying Amount as of		As of December 31, 2011
	December 31, 2011		Level 1		Level 2		Level 3

Cash equivalents	$	85,343	$	85,343	$	—	$	—
Marketable securities		214		214		—		—
	$	85,557	$	85,557	$	—	$	—

The Company’s accounts receivable, accounts payable and accrued expenses represent financial instruments. The carrying value of these financial instruments is a reasonable approximation of fair value.

The fair value of the $100.0 million of convertible senior notes payable for the years ended December 31, 2010, and 2011 was approximately $135.8 and $113.9 million, respectively, based on the most recent quoted market price.

As of June 30, 2009, a review of the Company’s “Child Guidance”, “Play Along” and other divisions associated with its Craft and Activity product lines’ historic, current and forecasted operating results (Level 3 Fair Value Measurement) indicated that the carrying amount of these finite-lived intangible assets may not be recoverable from the sum of future undiscounted cash flows. As a result, the tradenames “Child Guidance” and “Play Along” and certain tradenames associated with its Craft and Activity product lines were written down to their fair value of zero, resulting in an impairment charge of approximately $8.2 million included in write-down of intangible assets in the consolidated statements of operations. Goodwill was tested by estimating the fair value of the reporting unit using a consideration of market multiples and a discounted cash flow model (Level 3 Fair Value Measurement) and was written down to its implied fair value, which was zero as of June 30, 2009, resulting in an impairment charge of approximately $407.1 million included in write-down of goodwill in the consolidated statements of operations. See Note 6, Goodwill, and Note 7, Intangible Assets Other Than Goodwill, for additional information.

For the years ended December 31, 2010 and 2011, there was no impairment to the value of the Company’s non-financial assets.

Inventory

Inventory, which includes the ex-factory cost of goods, capitalized warehouse costs and in-bound freight and duty, is valued at the lower of cost (first-in, first-out) or market, net of inventory obsolescence reserve, and consists of the following (in thousands):

	December 31,
	2010			2011
Raw materials		$	3,340		$	2,428
Finished goods			39,890			44,591
		$	43,230		$	47,019

Property and equipment

Property and equipment are stated at cost and are being depreciated using the straight-line method over their estimated useful lives as follows:

Office equipment	5 years
Automobiles	5 years
Furniture and fixtures	5 - 7 years
Leasehold improvements	Shorter of length of lease or 10 years

The Company uses the usage method as its depreciation methodology for molds and tools used in the manufacturing of its products, which is more closely correlated to production of goods. The Company believes that the usage method more accurately matches costs with revenues. Furthermore, the useful estimated life of molds and tools is two years.

For the years ended December 31, 2009, 2010, and 2011, the Company’s aggregate depreciation expense related to property and equipment was $22.2 million, $15.7 million and $13.9 million, respectively.

Advertising

Production costs of commercials and programming are charged to operations in the period during which the production is first aired. The costs of other advertising, promotion and marketing programs are charged to operations in the period incurred. Advertising expense for the years ended December 31, 2009, 2010 and 2011, was approximately $18.4 million, $15.4 million and $15.5 million, respectively.

The Company also participates in cooperative advertising arrangements with some customers, whereby it allows a discount from invoiced product amounts in exchange for customer purchased advertising that features the Company’s products. Typically, these discounts range from 1% to 6% of gross sales, and are generally based on product purchases or on specific advertising campaigns. Such amounts are accrued when the related revenue is recognized or when the advertising campaign is initiated. These cooperative advertising arrangements are accounted for as direct selling expenses.

Income taxes

The Company does not file a consolidated return with its foreign subsidiaries. The Company files federal and state returns and its foreign subsidiaries file returns in their respective jurisdictions. Deferred taxes are provided on an asset and liability method whereby deferred tax assets are recognized as deductible temporary differences and operating loss and tax credit carry-forwards and deferred tax liabilities are recognized for taxable temporary differences. Temporary differences are the differences between the reported amounts of assets and liabilities and their tax basis. Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion or all of the deferred tax assets will not be realized. Deferred tax assets and liabilities are adjusted for the effects of changes in tax laws and rates on the date of enactment.

Foreign Currency Translation Exposure

The Company’s reporting currency is the US dollar. The translation of its net investment in subsidiaries with non-US dollar functional currencies subjects the Company to currency exchange rate fluctuations in its results of operations and financial position. Assets and liabilities of subsidiaries with non-US dollar functional currencies are translated into US dollars at year-end exchange rates. Income, expense, and cash flow items are translated at average exchange rates prevailing during the year. The resulting currency translation adjustments are recorded as a component of accumulated other comprehensive loss/gain within stockholders’ equity. The Company’s primary currency translation exposures in 2009, 2010 and 2011 were related to its net investment in entities having functional currencies denominated in the Hong Kong dollar.

Foreign Currency Transaction Exposure

Currency exchange rate fluctuations may impact the Company’s results of operations and cash flows. The Company’s currency transaction exposures include gains and losses realized on unhedged inventory purchases and unhedged receivables and payables balances that are denominated in a currency other than the applicable functional currency. Gains and losses on unhedged inventory purchases and other transactions associated with operating activities are recorded in the components of operating income in the consolidated statement of operations. Inventory purchase transactions denominated in the Hong Kong dollar were the primary transactions that cause foreign currency transaction exposure for the Company in 2009, 2010 and 2011.

Accounting for the impairment of finite-lived intangible assets

Long-lived assets with finite lives, which include property and equipment and intangible assets other than goodwill, are evaluated at least annually for impairment when events or changes in circumstances indicate that the carrying amount of the assets may not be recoverable through the estimated undiscounted future cash flows from the use of these assets. When any such impairment exists, the related assets will be written down to fair value. Finite-lived intangible assets consist primarily of product technology rights, acquired backlog, customer relationships, product lines and license agreements. These intangible assets are amortized over the estimated economic lives of the related assets. There were no impairments for years ended December 31, 2010 and 2011.

Goodwill and other indefinite-lived intangible assets

Goodwill and indefinite-lived intangible assets are not amortized, but are tested for impairment at least annually at the reporting unit level. Losses in value are recorded when material impairment has occurred in the underlying assets or when the benefits of the identified intangible assets are realized. Indefinite-lived intangible assets other than goodwill consist of trademarks.

During 2009, the Company determined that the significant decline in its market capitalization is likely to be sustained. The Company’s market capitalization was not significantly affected by the substantial resolution of the legal matter, and the lower revenue expectations for 2009 versus 2008 were factors that indicated that an interim goodwill impairment test was required. As a result, the Company determined that $407.1 million, or all of the goodwill related to previous acquisitions, including the acquisition of Disguise in December 2008, was impaired. This amount is included in Write-down of Goodwill in the accompanying consolidated statements of operations.

During 2009, the Company determined that the tradenames “Child Guidance” and “Play Along” and certain tradenames associated with our Craft and Activity product lines would either be discontinued, or were under performing. Consequently, the intangible assets associated with these tradenames were written off to Write-down of intangible assets, resulting in a charge of $8.2 million.

The carrying value of goodwill and trademarks are based on cost which is subject to management’s current assessment of fair value. Management evaluates fair value recoverability using both objective and subjective factors. Objective factors include management’s best estimates of projected future earnings and cash flows and analysis of recent sales and earnings trends. Subjective factors include competitive analysis and the Company’s strategic focus.

Share-based Compensation

The Company measures all employee stock-based compensation awards using a fair value method and records such expense in its consolidated financial statements. The Company recorded $0.2 million of stock option expense in 2009, while recording $0.2 million reversal of stock option compensation in 2010, and nil in 2011. The company recorded $4.2 million, $4.6 million, and $1.6 million of restricted stock expense, in 2009, 2010, and 2011, respectively. See Note 16 for further details relating to share based compensation.

Earnings per share

The following table is a reconciliation of the weighted-average shares used in the computation of basic and diluted earnings per share (“EPS”) for the periods presented (in thousands, except per share data):

2009

Weighted

Average

Loss

Per Share

Basic EPS

Loss available to common stockholders

(385,510)

27,502

(14.02)

Effect of dilutive securities:

Assumed conversion of convertible senior notes

―

Options and warrants

―

Unvested restricted stock grants

―

Diluted EPS

Loss available to common stockholders plus assumed exercises and conversion

(385,510)

27,502

(14.02)

	2010
			Weighted
			Average
	Income		Shares		Per Share
Basic EPS
Income available to common stockholders	$	47,049		27,491		1.71
Effect of dilutive securities:
Assumed conversion of convertible senior notes		5,434		6,785
Options and warrants		―		44
Unvested restricted stock grants		―		193
Diluted EPS
Income available to common stockholders plus assumed exercises and conversion	$	52,483		34,513		1.52

	2011
			Weighted
			Average
	Income		Shares		Per Share
Basic EPS
Income available to common stockholders	$	8,472		26,760		0.32
Effect of dilutive securities:
Options and warrants		―		22
Unvested restricted stock grants		―		111
Diluted EPS
Income available to common stockholders plus assumed exercises and conversion	$	8,472		26,893		0.32

Basic earnings per share has been computed using the weighted average number of common shares outstanding. Diluted earnings per share has been computed using the weighted average number of common shares and common share equivalents outstanding (which consist of warrants, options and convertible debt to the extent they are dilutive). For the year ended December 31, 2009, the convertible notes interest and related common share equivalent of 5,236,733, diluted options and warrants of 24,333 and unvested restricted stock grants outstanding of 376,886 were excluded from the diluted earnings per share calculation because they were anti-dilutive. For the year ended December 31, 2011, the convertible notes interest and related common share equivalent of 6,332,232 were excluded from the diluted earnings per share calculation because they were anti-dilutive. Potentially dilutive stock options of 394,150, 301,499 and 171,119 for the year ended December 31, 2009, 2010 and 2011, respectively, were excluded from the computation of diluted earnings per share as the average market price of the Company’s common stock did not exceed the weighted average exercise price of such options and to have included them would have been anti-dilutive. Potentially dilutive restricted stock of 14,918, nil, and nil for the year ended December 31, 2009, 2010 and 2011, respectively, were excluded from the computation of diluted earnings per share since they would have been anti-dilutive.

Debt with Conversion and Other Options

The provisions of ASC 470-20, “Debt with Conversion and Other Options” are applicable to the 4.5% convertible notes, see Note 11, Convertible Senior Notes. ASC 470-20 requires the Company to separately account for the liability (debt) and equity (conversion feature) components of the Notes in a manner that reflects the Company’s nonconvertible debt borrowing rate at the date of issuance when interest cost is recognized in subsequent periods. The company allocated $13.7 million of the $100.0 million principal amount of the Notes to the equity component, which represents a discount to the debt and will be amortized into interest expense through November 1, 2014. Accordingly, the company’s effective annual interest rate on the Notes will be approximately 7.9%. The Notes are classified as long-term debt in the balance sheet at December 31, 2010 based on their November 1, 2014 maturity date. Debt issuance costs of approximately $3.5 million are being amortized to interest expense over the five year term of the Notes.

Recent Accounting Standards

In May 2011, the Financial Accounting Standards Board (“FASB”) issued new accounting guidance that provides a consistent definition of fair value and common requirements of and disclosure about fair value between GAAP and International Financial Reporting Standards (“IFRS”). The guidance states the concepts of highest and best use and valuation premise are only relevant when measuring the fair value of nonfinancial assets. Enhanced disclosure requirements will require companies to disclose quantitative information about unobservable inputs used, a description of the valuation processes used, and a qualitative discussion about the sensitivity of the measurements for recurring Level 3 fair value measurements. For assets and liabilities not recorded at fair value but where fair value is disclosed, companies must report the level in the fair value hierarchy of assets and liabilities. This new guidance is effective for interim and annual periods beginning January 1, 2012, and the Company does not anticipate a material impact on the consolidated financial statements.

In June 2011, the FASB issued ASU 2011-05, Presentation of Comprehensive Income, which requires an entity to present the total of comprehensive income, the components of net income, and the components of other comprehensive income either in a single continuous statement of comprehensive income, or in two separate but consecutive statements. ASU 2011-05 eliminates the option to present components of other comprehensive income as part of the statement of equity. In December 2011, the FASB issued ASU 2011-12, Comprehensive Income (Topic 220): Deferral of the Effective Date for Amendments to the Presentation of Reclassifications of Items Out of Accumulated Other Comprehensive Income in Accounting Standards Update No. 2011-05 , which defers specific requirements to present reclassification adjustments for each component of accumulated other comprehensive income. ASU 2011-05 will be retroactively effective for the Company in the first quarter of 2012. Since the Company already presents two separate but consecutive statements of operations and comprehensive income, this adoption will not have a material effect on the consolidated financial statements.

In September 2011, the FASB issued ASU 2011-08, Intangibles – Goodwill and Other (Topic 350): Testing Goodwill for Impairment, which permits an entity to first assess qualitative factors to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying value as a basis for determining whether it is necessary to perform the two-step goodwill impairment test. ASU 2011-08 will be effective for fiscal years beginning after December 15, 2011, with early adoption permitted. The Company early adopted ASU 2011-08 for its annual goodwill impairment test conducted as of October 1, 2011.

Business Segments, Geographic Data, Sales by Product Group, and Major Customers

12 Months Ended

Dec. 31, 2011

Business Segments, Geographic Data, Sales by Product Group, and Major Customers

Note 3—Business Segments, Geographic Data, Sales by Product Group, and Major Customers

The Company is a worldwide producer and marketer of children’s toys and other consumer products, principally engaged in the design, development, production, marketing and distribution of its diverse portfolio. In 2010, the Company re-aligned its products into two new categories to better reflect the business. The Company’s reportable segments are Traditional Toys and Electronics, and Role Play, Novelty and Seasonal Toys each of which includes worldwide sales.

The Traditional Toys and Electronics segment includes action figures, vehicles, playsets, plush products, dolls, accessories, electronic products, construction toys, infant and pre-school toys, pet products, and related products.

Role Play, Novelty and Seasonal include role-play and dress-up products, novelty toys, seasonal and outdoor products, indoor and outdoor kid’s furniture, Halloween and everyday costume play.

Segment performance is measured at the operating income level. All sales are made to external customers, and general corporate expenses have been attributed to the various segments based on sales volumes. Segment assets are comprised of accounts receivable and inventories, net of applicable reserves and allowances, goodwill, molds and tooling and other assets.

Results are not necessarily those that would be achieved were each segment an unaffiliated business enterprise. Information by segment and a reconciliation to reported amounts as of December 31, 2010 and 2011 and for the three years in the period ended December 31, 2011 are as follows (in thousands):

	Years Ended December 31,
	2009		2010		2011
Net Sales
Traditional Toys and Electronics	$	439,382	$	358,356	$	348,852
Role Play, Novelty and Seasonal Toys		364,322		388,912		328,899
	$	803,704	$	747,268	$	677,751

	Years Ended December 31,
	2009			2010		2011
Operating Income (Loss)
Traditional Toys and Electronics	$	(332,953	)	$	18,078	$	(3,974)
Role Play, Novelty and Seasonal Toys		(119,495	)		32,119		5,254
	$	(452,448	)	$	50,197	$	1,280

	Years Ended December 31,
	2009		2010		2011
Depreciation and Amortization Expense
Traditional Toys and Electronics	$	26,113	$	18,721	$	16,955
Role Play, Novelty and Seasonal Toys		9,851		9,936		8,976
	$	35,964	$	28,657	$	25,931

	December 31,
	2010		2011
Assets
Traditional Toys	$	252,107	$	269,411
Role Play, Novelty and Seasonal Toys		381,299		345,823
	$	633,406	$	615,234

Information as to the Company’s operations in different geographical areas is presented below on the basis the Company uses to manage its business. Net revenues are categorized based on location of the customer, while long-lived assets are categorized based on the Company’s ownership. Tools, dyes and molds represent a substantial portion of the long-lived assets included in the United States with a net book value of $10.1 million in 2010 and $10.4 million in 2011 and substantially all of these assets are located in China. The following table’s present information about the Company by geographic area as of December 31, 2010 and 2011 and for the three years ended December 31, 2011 (in thousands):

	December 31,
	2010		2011
Long-lived Assets
United States	$	16,023	$	15,274
Hong Kong		923		912
	$	16,946	$	16,186

	Years Ended December 31,
	2009		2010		2011
Net Sales by Geographic Area
United States	$	671,249	$	633,900	$	569,233
Europe		61,457		46,965		43,225
Canada		36,824		32,927		29,538
Hong Kong		5,090		7,319		2,898
Other		29,084		26,157		32,857
	$	803,704	$	747,268	$	677,751

Major Customers

Net sales to major customers were as follows (in thousands, except for percentages):

	2009					2010					2011
			Percentage of					Percentage of					Percentage of
	Amount		Net Sales			Amount		Net Sales			Amount		Net Sales
Wal-Mart	$	219,226		27.3	%	$	171,515		23.0	%	$	166,928		24.6	%
Target		136,334		16.9			115,416		15.5			131,781		19.4
Toys ‘R’ Us		91,298		11.4			111,180		14.9			85,087		12.6
	$	446,858		55.6	%	$	398,111		53.4	%	$	383,796		56.6	%

No other customer accounted for more than 10% of the Company’s total net sales.

At December 31, 2010 and 2011, the Company’s three largest customers accounted for approximately 52.5% and 41.3%, respectively, of net accounts receivable. The concentration of the Company’s business with a relatively small number of customers may expose the Company to material adverse effects if one or more of its large customers were to experience financial difficulty. The Company performs ongoing credit evaluations of its top customers and maintains an allowance for potential credit losses.

- Definition

The entire disclosure for reporting segments including data and tables. Reportable segments include those that meet any of the following quantitative thresholds a) it's reported revenue, including sales to external customers and intersegment sales or transfers is 10 percent or more of the combined revenue, internal and external, of all operating segments b) the absolute amount of its reported profit or loss is 10 percent or more of the greater, in absolute amount of 1) the combined reported profit of all operating segments that did not report a loss or 2) the combined reported loss of all operating segments that did report a loss c) its assets are 10 percent or more of the combined assets of all operating segments.

+ References

Reference 1: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Statement of Financial Accounting Standard (FAS)
-Number 131
-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

Reference 2: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 34
-URI http://asc.fasb.org/extlink&oid=6534315&loc=d3e8981-108599

Reference 3: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 35
-URI http://asc.fasb.org/extlink&oid=6534315&loc=d3e8984-108599

Reference 4: http://www.xbrl.org/2003/role/presentationRef
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-Name Accounting Standards Codification
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Reference 5: http://www.xbrl.org/2003/role/presentationRef
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-Name Accounting Standards Codification
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Reference 6: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
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-Paragraph 31
-URI http://asc.fasb.org/extlink&oid=6534315&loc=d3e8924-108599

Reference 7: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 10
-URI http://asc.fasb.org/extlink&oid=6534315&loc=d3e8538-108599

Reference 8: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
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-Topic 280
-SubTopic 10
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-URI http://asc.fasb.org/extlink&oid=6534315&loc=d3e8906-108599

Reference 9: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 41
-URI http://asc.fasb.org/extlink&oid=6534315&loc=d3e9038-108599

Reference 10: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 29
-URI http://asc.fasb.org/extlink&oid=6534315&loc=d3e8864-108599

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-Publisher FASB
-Name Accounting Standards Codification
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Reference 15: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
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+ Details

Joint Ventures

12 Months Ended

Dec. 31, 2011

Joint Ventures

Note 4—Joint Ventures

The Company owned a fifty percent interest in a joint venture with THQ Inc. (“THQ”) to develop and publish video games on various platforms based on the World Wrestling Entertainment franchise. Pursuant to a Settlement Agreement and Mutual Release dated December 22, 2009, the joint venture was terminated on December 31, 2009 and THQ is obligated to pay the Company an aggregate of $20.0 million in fixed payments of $6.0 million on each of June 30, 2010 and 2011 and $4.0 million on each of June 30, 2012 and 2013 which the Company will record as income on a cash basis when received (see Note 20). The Company received the first two fixed payments from THQ as agreed in the amount of $6.0 million each, which were recognized as income during the quarter received. The Company recognized $6.0 million in income related to its video game joint venture in 2010 and 2011, as compared to a loss of $16.1 million in 2009.

The Company owns a fifty percent interest into a joint venture with the U.S. entertainment subsidiary of a leading Japanese advertising and animation production company. The joint venture was created to develop, produce and exploit a boys animated television show which it intends to license worldwide for television broadcast. The joint venture has already licensed the right to the Company to develop and market toys based on the television program and certain other merchandising rights to third-parties. The Company is responsible for fifty percent of the operating expenses of the joint venture and for twenty-five percent of the production costs of the television show. The joint venture has approved 52 episodes of the show and has commenced production on the first 26 episodes for which the Company is responsible for an aggregate of approximately $1.7 million which was paid in 2011. The Company’s investment is being accounted for using the equity method. During 2011 the Company had capital contributions of $2,696,670. For the year ended December 31, 2011, the Company recognized a loss of $34,260 from the joint venture.

As of December 31, 2010 and December 31, 2011, the balance of the investment in the joint venture includes the following components (in thousands):

	December 31,			December 31,
	2010			2011
Capital Contributions	$	130		$	2,826
Equity in cumulative net (loss)		(56	)		(90)
Investment in joint venture	$	74		$	2,736

- Definition

The entire disclosure for equity investment, or group of investments, for which combined disclosure is appropriate, including: (a) the name of each investee and percentage of ownership of common stock, (b) accounting policies for investments in common stock, (c) difference between the amount at which the investment is carried and the amount of underlying equity in net assets and the accounting treatment of the difference, (d) the total fair value of each identified investment for which a market value is available, (e) summarized information as to assets, liabilities, and results of operations of the investees (for investments in unconsolidated subsidiaries, common stock of joint ventures, or other investments using the equity method), and (f) material effects of possible conversions, exercises, or contingent issuances of the investee. Other disclosures include (a) the names of any investee in which the investor owns 20 percent or more of the voting stock and investment is not accounted for using the equity method, and the reasons why not, and (b) the names of any investee in which the investor owns less than 20 percent of the voting stock and the investment is accounted for using the equity method, and the reasons why it is.

+ References + Details

Business Combinations

12 Months Ended

Dec. 31, 2011

Business Combinations

Note 5—Business Combinations

The Company acquired the following entities to further enhance its existing product lines and to continue diversification into other toy categories and seasonal businesses:

In October 2008, the Company acquired substantially all of the assets of Tollytots Limited. The total initial consideration of $26.8 million consisted of $12.0 million in cash and the assumption of liabilities in the amount of $14.8 million, and resulted in goodwill of $4.1 million, all of which has been determined to be impaired and was written off in the quarter ended June 30, 2009. In addition, we agreed to pay an earn-out of up to an aggregate amount of $5.0 million in cash over the three calendar years following the acquisition based on the achievement of certain financial performance criteria, which will be recorded as goodwill when and if earned. In the first earn-out period ended December 31, 2009, no portion of the earn-out was earned, while $1.7 million was earned for each of the second and third earn-out periods ended December 31, 2010 and 2011. Tollytots is a leading designer and producer of licensed baby dolls and baby doll pretend play accessories based on well-known brands and was included in our results of operations from the date of acquisition.

In October 2008, the Company acquired all of the stock of Kids Only, Inc. and a related Hong Kong company, Kids Only Limited (collectively, “Kids Only”). The total initial consideration of $23.8 million consisted of $20.4 million in cash and the assumption of liabilities in the amount of $3.4 million, and resulted in goodwill of $13.2 million, all of which has been determined to be impaired and was written off in the quarter ended June 30, 2009. In addition, we agreed to pay an earn-out of up to an aggregate amount of $5.6 million in cash over the three calendar years following the acquisition based on the achievement of certain financial performance criteria, which will be recorded as goodwill when and if earned. For the earn-out periods ended September 30, 2009, 2010 and 2011, $1.9 million, $1.9 million and $1.8 million were earned, respectively. Kids Only is a leading designer and producer of licensed indoor and outdoor kids’ furniture, and has an extensive portfolio which also includes baby dolls and accessories, room décor and a myriad of other children’s toy products and was included in our results of operations from the date of acquisition.

In October 14, 2011, the Company acquired all of the stock of Moose Mountain Toymakers Limited, a Hong Kong company, and a related New Jersey company, Moose Mountain Marketing, Inc. (collectively, “Moose Mountain”). The total initial consideration of $31.5 million consisted of $16.0 million in cash and the assumption of liabilities in the amount of $15.5 million, and resulted in goodwill of $13.5 million. In addition, the Company agreed to pay an earn-out of up to an aggregate amount of $5.3 million in cash over the three calendar years following the acquisition based on the achievement of certain financial performance criteria. The fair value of the expected earn-out of $4.6 million is included in goodwill and assumed liabilities as of December 31, 2011. All future changes to the earn-out liability will be charged to income. Moose Mountain is a leading designer and producer of foot to floor ride-ons, inflatable environments, wagons, pinball machines and tents and was included in our results of operations from the date of acquisition.

Refer to Note 6 for information on the write-down of goodwill.

- Definition

The entire disclosure for a business combination (or series of individually immaterial business combinations) completed during the period, including background, timing, and recognized assets and liabilities. The disclosure may include leverage buyout transactions (as applicable).

+ References

Reference 1: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Emerging Issues Task Force (EITF)
-Number 88-16
-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

Reference 2: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Statement of Financial Accounting Standard (FAS)
-Number 141
-Paragraph 51, 52
-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

Reference 3: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Statement of Financial Accounting Standard (FAS)
-Number 141R
-Appendix F
-Paragraph F4
-Subparagraph e

Reference 4: http://www.xbrl.org/2003/role/presentationRef
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-Number 141R
-Paragraph 67-73
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-Name Accounting Standards Codification
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-Paragraph 1
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+ Details

Goodwill

12 Months Ended

Dec. 31, 2011

Goodwill

Note 6—Goodwill

The changes in the carrying amount of goodwill for the years ended December 31, 2010 and 2011 are as follows (in thousands):

	Traditional Toys and Electronics		Role Play, Novelty and Seasonal Toys		Total
Balance, January 1, 2010:
Goodwill	$	778	$	793	$	1,571
Adjustment to goodwill during the year		1,667		3,750		5,417
Balance December 31, 2010:		2,445		4,543		6,988
Balance, January 1, 2011:
Goodwill		2,445		4,543		6,988
Additions to goodwill during the year		13,485		―		13,485
Adjustment to goodwill during the year		1,667		1,875		3,542
Balance December 31, 2011:	$	17,597		6,418	$	24,015

During 2010 the Company re-aligned Goodwill based on new reporting units. See Note 3 for further details.

The Company assesses goodwill and indefinite-lived intangible assets for impairment on an annual basis by reviewing relevant qualitative and quantitative factors. More frequent evaluations may be required if the Company experiences changes in its business climate or as a result of other triggering events that take place. If carrying value exceeds fair value, a possible impairment exists and further evaluation is performed. The Company performed a qualitative assessment of its annual goodwill impairment as of October 1, 2011 and concluded that more likely than not the fair value of the goodwill is not less than its carrying amount.

At December 31, 2009, the Company recorded deferred tax liabilities related to the Tollytots and Kids Only acquisitions that resulted in Goodwill of $1.6 million.

In April 2010, the Company made an earn-out payment in the amount of $1.9 million related to the Kids Only acquisition. In December 2010, the Company also recorded earn-outs related to the Tollytots and Kids Only acquisitions of $1.7 million and $1.9 million, respectively. These amounts were recorded as Goodwill in 2010.

In November 2011, the Company made an earn-out payment in the amount of $1.9 million related to the Kids Only acquisition. In December 2011, the Company also recorded an earn-out related to the Tollytots acquisitions of $1.7 million. These amounts were recorded as Goodwill in 2011. Please refer to Note 5 for goodwill for current year acquisitions.

Intangible Assets Other Than Goodwill

12 Months Ended

Dec. 31, 2011

Intangible Assets Other Than Goodwill

Note 7—Intangible Assets Other Than Goodwill

Intangible assets other than goodwill consist primarily of licenses, product lines, debt offering costs from the Company’s convertible senior notes and trademarks. Amortized intangible assets are included in the Intangibles and other, net, in the accompanying balance sheets. Trademarks are disclosed separately in the accompanying balance sheets. Intangible assets are as follows (in thousands):

			December 31, 2010							December 31, 2011
	Weighted Useful Lives		Gross Carrying Amount		Accumulated Amortization			Net Amount		Gross Carrying Amount		Accumulated Amortization		Net Amount
	(Years)

Amortized Intangible Assets:
Acquired order backlog		.50	$	2,393		(2,393	)		—	$	2,393		(2,393)		―
Licenses		4.96		85,788		(65,435	)		20,353		91,488		(72,797)		18,691
Product lines		3.65		19,100		(18,592	)		508		19,500		(18,787)		713
Customer relationships		5.28		6,296		(3,902	)		2,394		7,096		(4,800)		2,296
Non-compete/ Employment contracts		3.84		3,133		(2,951	)		182		3,133		(3,080)		53
Total amortized intangible assets				116,710		(93,273	)		23,437		123,610		(101,857)		21,753
Deferred Costs:
Debt issuance costs		5.00		3,678		(856	)		2,822		3,678		(1,592)		2,086
Unamortized Intangible Assets:
Trademarks	indefinite			2,308		―			2,308		2,308		―		2,308
			$	122,696		(94,129	)		28,567	$	129,596		(103,449)		26,147

During the second quarter of 2009, the Company determined that the tradenames “Child Guidance” and “Play Along” and certain tradenames associated with its Craft and Activity product lines would either be discontinued, or were under performing. Consequently, the intangible assets associated with these tradenames were written off to Write-down of intangible assets, resulting in a non-cash charge of $8.2 million.

For the years ended December 31, 2009, 2010, and 2011, the Company’s aggregate amortization expense related to intangible assets and deferred costs was $13.1 million, $10.2 million and $9.3 million, respectively. The Company currently estimates continuing future amortization expense to be approximately (in thousands):

2012	$	6,882
2013		6,516
2014		3,567
2015		2,189
2016		1,780
Thereafter		2,905
	$	23,839

Concentration of Credit Risk

12 Months Ended

Dec. 31, 2011

Concentration of Credit Risk

Note 8—Concentration of Credit Risk

Financial instruments that subject the Company to concentration of credit risk are cash and cash equivalents and accounts receivable. Cash equivalents consist principally of short-term money market funds. These instruments are short-term in nature and bear minimal risk. To date, the Company has not experienced losses on these instruments.

The Company performs ongoing credit evaluations of its customers’ financial conditions, but does not require collateral to support domestic customer accounts receivable. Most goods shipped FOB Hong Kong or China are secured with irrevocable letters of credit.

- Definition

The entire disclosure for any concentrations existing at the date of the financial statements that make an entity vulnerable to a reasonably possible, near-term, severe impact. This disclosure informs financial statement users about the general nature of the risk associated with the concentration, and may indicate the percentage of concentration risk as of the balance sheet date.

+ References

Reference 1: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Statement of Financial Accounting Standard (FAS)
-Number 107
-Paragraph 15A
-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

Reference 2: http://www.xbrl.org/2003/role/presentationRef
-Publisher AICPA
-Name Statement of Position (SOP)
-Number 94-6
-Paragraph 21, 22, 24
-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

Reference 3: http://www.xbrl.org/2003/role/presentationRef
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Reference 6: http://www.xbrl.org/2003/role/presentationRef
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Reference 7: http://www.xbrl.org/2003/role/presentationRef
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+ Details

Accrued Expenses

12 Months Ended

Dec. 31, 2011

Accrued Expenses

Note 9—Accrued Expenses

Accrued expenses consist of the following (in thousands):

	2010		2011
Royalties	$	22,624	$	22,193
Bonuses		6,417		1,020
Employee salaries and benefits		1,939		2,497
Unearned revenue		—		760
Sales commissions		2,255		617
Interest expense		750		750
Molds and tools		1,825		1,746
Reorganization charges		5,264		3,484
Advertising commitment		3,000		2,106
Professional fees		—		1,924
Acquisition earn-out		—		4,634
Inventory liabilities		5,273		3,319
Other		5,129		5,730
	$	54,476	$	50,780

In addition to royalties currently payable on the sale of licensed products during the quarter, the Company records a liability as Accrued Royalties for the estimated shortfall in achieving minimum royalty guarantees pursuant to certain license agreements (Note 15).

The Company incurred reorganization charges in the fourth quarter of 2009 to consolidate and stream-line its existing business functions. This was especially necessary given the decreased volume of consolidated sales in 2009 from 2008 and the added general and administrative expenses from the three acquisitions made at the end of 2008. Reorganization charges relate to the termination of lease obligations, one-time severance termination benefits, fixed asset write-offs and other contract terminations and are accounted for in accordance with “Exit and Disposal Cost Obligations” ASC 420-10.

These reorganization charges relate to the Company’s Traditional Toys and Electronics segment and are included in Reorganization Charges in the consolidated statements of operations. The components of the reorganization charges are as follows (in thousands):

	Accrued Balance						Accrued Balance
	December 31, 2010		Accrual		Payments		December 31, 2011
Lease abandonment costs	$	5,264	$	—	$	(1,780)	$	3,484
Total reorganization charges	$	5,264	$	—	$	(1,780)	$	3,484

Related Party Transactions

12 Months Ended

Dec. 31, 2011

Related Party Transactions

Note 10—Related Party Transactions

A director of the Company is a partner in a law firm that acts as counsel to the Company. The Company incurred legal fees and expenses to the law firm in the amount of approximately $2.5 million in 2009, $2.7 million in 2010 and $3.4 million in 2011. As of December 31, 2010 and 2011, legal fees and reimbursable expenses of $1.1 million and $0.8 million, respectively, were payable to this law firm.

- Definition

The entire disclosure for related party transactions, including the nature of the relationship(s), a description of the transactions, the amount of the transactions, the effects of any change in the method of establishing the terms of the transaction from the previous period, stated interest rate, expiration date, terms and manner of settlement per the agreement with the related party, and amounts due to or from related parties. If the entity and one or more other entities are under common ownership or management control and this control affects the operating results or financial position, disclosure includes the nature of the control relationship even if there are no transactions between the entities. Disclosure may also include the aggregate amount of current and deferred tax expense for each statement of earnings presented where the entity is a member of a group that files a consolidated tax return, the amount of any tax related balances due to or from affiliates as of the date of each statement of financial position presented, the principal provisions of the method by which the consolidated amount of current and deferred tax expense is allocated to the members of the group and the nature and effect of any changes in that method. Examples of related party transactions include transactions between (a) a parent company and its subsidiary; (b) subsidiaries of a common parent; (c) and entity and its principal owners; and (d) affiliates.

+ References

Reference 1: http://www.xbrl.org/2003/role/presentationRef
-Publisher SEC
-Name Regulation S-X (SX)
-Number 210
-Article 4
-Section 08
-Paragraph k

Reference 2: http://www.xbrl.org/2003/role/presentationRef
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-Name Regulation S-X (SX)
-Number 210
-Article 3A
-Section 04
-Paragraph b

Reference 3: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Statement of Financial Accounting Standard (FAS)
-Number 57
-Paragraph 1-4
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+ Details

Convertible Senior Notes

12 Months Ended

Dec. 31, 2011

Convertible Senior Notes

Note 11—Convertible Senior Notes

Convertible senior notes consist of the following (in thousands):

	December 31,
	2010		2011
4.50% Convertible senior notes (due 2014)	$	100,000	$	100,000
	$	100,000	$	100,000

In November 2009, the Company sold an aggregate of $100.0 million of 4.50% Convertible Senior Notes due 2014 (the “Notes”). The Notes are senior unsecured obligations of the Company, will pay interest semi-annually at a rate of 4.50% per annum and will mature on November 1, 2014. The initial conversion rate was 63.2091 shares of our common stock per $1,000 principal amount of notes (equivalent to an initial conversion price of approximately $15.82 per share of common stock), subject to adjustment in certain circumstances. As a result of the cash dividend of $0.10 per share declared by the Board of Directors paid on October 3, 2011 and January 3, 2012, the new conversion rate will be 63.9329 shares of JAKKS common stock per $1,000 principal amount of notes (or approximately $15.64 per share). Prior to August 1, 2014, holders of the Notes may convert their Notes only upon specified events. Upon conversion, the Notes may be settled, at the Company’s election, in cash, shares of our common stock, or a combination of cash and shares of our common stock. Holders of the Notes may require us to repurchase for cash all or some of their Notes upon the occurrence of a fundamental change (as defined in the Notes).

The provisions of ASC 470-20, “Debt with Conversion and Other Options” are applicable to the 4.50% convertible notes. ASC 470-20 requires the Company to separately account for the liability (debt) and equity (conversion feature) components of the Notes in a manner that reflects the company’s nonconvertible debt borrowing rate at the date of issuance when interest cost is recognized in subsequent periods. The Company allocated $13.7 million of the $100.0 million principal amount of the Notes to the equity component, which represents a discount to the debt and will be amortized into interest expense through November 1, 2014. Accordingly, the Company’s effective annual interest rate on the Notes will be approximately 7.9%. The Notes are classified as long-term debt in the balance sheet at December 31, 2011 based on their November 1, 2014 maturity date. Debt issuance costs of approximately $3.7 million are being amortized to interest expense over the five year term of the Notes.

Key components of the 4.50% convertible senior notes consist of the following (in thousands):

	December 31,
	2010			2011
Principal amount of notes	$	100,000		$	100,000
Unamortized discounts		(10,542	)		(7,812	)
Net carrying amount of the convertible notes	$	89,458		$	92,188

	Years Ended December 31,
	2009		2010		2011
Contractual interest expense on the coupon	$	641		4,500		4,500
Amortization of the discount component and debt issue fees recognized as interest expense		498	$	3,466	$	3,466
	$	1,139	$	7,966	$	7,966

As of December 31, 2011, the unamortized discount was $7.8 million, which will be amortized over approximately 2.9 years, and the carrying amount of the equity component was $13.7 million. As of December 31, 2011, the conversion rate was equal to approximately $15.64 per share and the if-converted value of the Notes was $100.0 million.

Income Taxes

12 Months Ended

Dec. 31, 2011

Income Taxes

Note 12—Income Taxes

The Company does not file a consolidated return with its foreign subsidiaries. The Company files federal and state returns and its foreign subsidiaries file returns in their respective jurisdictions.

The Company’s income tax benefit, which includes federal, state and foreign income taxes was $9.0 million, or an effective tax rate of 1671% for the year ended 2011. For the years ended 2009 and 2010, the provision for income taxes, which included Federal, state and foreign income taxes was a benefit of $90.7 million and an expense of $2.7 million, reflecting effective tax provision rates of 19.0% and 5.41%, respectively.

Included in the 2011 tax benefit of $9.0 million are discrete tax benefits of $2.1 million. These tax benefits are comprised of $0.3 million reduction of uncertain tax positions related to foreign depreciation due to statute expiration, $1.7 million benefit related to state tax apportionment changes and an adjustment to record various outstanding state tax refunds.

For the years ended 2009 and 2010, provision for income taxes includes Federal, state and foreign income taxes at effective tax rates of 19.0% and 5.41%, respectively. The decrease in the effective rate in 2010 is primarily due to the recognition of certain discrete income tax adjustments. These discrete adjustments include reductions of uncertain tax positions due to the settlement of 2003 – 2006 IRS exams and statute expirations, benefits related to a refund received from the IRS for previously filed amended returns and benefit attributable to a transfer pricing adjustment. Exclusive of these discrete items, the effective tax provision rate would be 40.1% in 2009 and 26.2% in 2010.

For the years ended 2010 and 2011, provision for income taxes includes Federal, state and foreign income taxes at effective tax rates of 5.41% and 1671%, respectively. The increase in the effective rate in 2011 is primarily due to a decrease in the Company’s consolidated and United States earnings compared to 2010 and the recognition of certain discrete income tax adjustments. These discrete adjustments include $0.3 million reduction of uncertain tax positions related to foreign depreciation due to statute expiration and $1.7 million benefit related to state tax apportionment changes and an adjustment to record various outstanding state tax refunds. Exclusive of these discrete items, the effective tax rate would be 26.2% in 2010 and 1,288% for 2011. The increase in the effective rate absent discrete items is due to the foreign rate differential between the United States and Hong Kong. The foreign rate differential is impacted by the proportion of Hong Kong earnings to overall earnings and is expected to vary depending on the level of consolidated earnings.

For year ended 2011, the Company had net deferred tax assets of approximately $81.6 million.

Provision (benefit) for income taxes reflected in the accompanying consolidated statements of operations are comprised of the following (in thousands):

	2009			2010			2011
Federal	$	(11,103	)	$	1,656		$	(12,674)
State and local		(980	)		3,290			(661)
Foreign		3,105			7,915			4,590
Total Current		(8,978	)		12,861			(8,745)
APIC		(487	)		(713	)		363
Deferred		(81,213	)		(9,455	)		(628)
Total	$	(90,678	)	$	2,693		$	(9,010)

The components of deferred tax assets/(liabilities) are as follows (in thousands):

	2010			2011
Net deferred tax assets/(liabilities):
Current:
Reserve for sales allowances and possible losses	$	1,764		$	2,184
Accrued expenses		4,683			3,127
Federal and state net operating loss carryforwards		1,141			9,035
Prepaid Royalties		9,168			18,338
Accrued Royalties		7,440			2,081
Uncertain tax positions		—			―
Inventory		5,013			5,480
State income taxes		(4,985	)		(6,767)
Other		(648	)		1,027
Gross current		23,576			34,505
Valuation allowance related to state net operating loss carryforwards		—			―
Net Current		23,576			34,505
Long Term:
Property and equipment		4,302			3,777
Original issue discount interest		(15,336	)		(20,273)
Goodwill and intangibles		65,697			61,076
Prepaid Royalties		—			―
Share Based Compensation		3,222			2,588
Income from joint venture		—			―
Other		963			(87)
Total long-term		58,848			47,081
Total net deferred tax assets/(liabilities)	$	82,424		$	81,586

Provision (benefit) for income taxes varies from the U.S. federal statutory rate. The following reconciliation shows the significant differences in the tax at statutory and effective rates:

	2009			2010			2011
Federal income tax expense (benefit)		(35.0	)%		35.0	%		35.0	%
State income tax expense, net of federal tax effect		(2.4	)		1.65			415.9
Effect of differences in U.S. and Foreign statutory rates		(0.6	)		(14.55	)		1031.8
Uncertain tax positions		(0.5	)		(10.39	)		54.2
Refund from IRS Exam		—			(8.03	)		―
State tax refund adjustment		—			—			180.0
Goodwill write-down		17.1			—			―
Foreign NOLs		0.6			—			―
Other		1.8			1.73			(46.2)
		(19.0	)%		5.41	%		1670.7	%

Deferred taxes result from temporary differences between tax bases of assets and liabilities and their reported amounts in the consolidated financial statements. The temporary differences result from costs required to be capitalized for tax purposes by the U.S. Internal Revenue Code (“IRC”), and certain items accrued for financial reporting purposes in the year incurred but not deductible for tax purposes until paid. The Company has no valuation allowance on deferred tax assets since, in the opinion of management, it is more likely than not that the deferred tax assets will be realized.

The components of income (loss) before provision (benefit) for income taxes are as follows (in thousands):

	2009			2010		2011
Domestic	$	(488,182	)	$	20,066	$	(30,577)
Foreign		11,994			29,676		30,039
	$	(476,188	)	$	49,742	$	(538)

The Company has cumulative undistributed earnings of non-U.S. subsidiaries for which U.S. taxes have not been provided. These earnings are intended to be permanently reinvested outside the U.S. If future events necessitate that these earnings should be repatriated to the U.S., an additional tax expense and related liability may be required.

The Company uses a recognition threshold and measurement process for recording in the financial statements uncertain tax positions (“UTP”) taken or expected to be taken in a tax return.

Approximately $1.0 million of new Hong Kong based unrecognized tax positions (UTPs) were recognized in 2011. These UTPs are associated with a reserve for fixed assets depreciation in Hong Kong. In addition, approximately $1.0 million of Hong Kong based UTPs became de-recognized during 2011 which are primarily related to a release of a reserve for depreciation due to statute expirations. These items are included in the 2011 income tax provision. During 2010, approximately $1.8 million of the liability for UTP was recognized.

Current interest on uncertain income tax liabilities is recognized as interest expense and penalties are recognized in selling, general and administrative expenses in the consolidated statement of operations. During 2009, the Company recognized $0.8 million of current year interest expense relating to UTPs. During 2010, the Company de-recognized 1.6 million of current year interest expense relating to UTPs. During 2011, the Company recognized 0.2 million of current year interest expense relating to UTPs.

The following table provides further information of UTPs that would affect the effective tax rate, if recognized, as of December 31, 2011 (in millions):

Balance, January 1, 2009	$	11.9
Current year additions		9.7
Current year reduction due to lapse of applicable statute of limitations		(4.8	)
Balance, January 1, 2010		16.8
Current year additions		1.8
Current year reduction due to lapse of applicable statute of limitations		(13.6	)
Balance, January 1, 2011		5.0
Current year additions		1.0
Current year reduction due to lapse of applicable statute of limitations		(1.0)
Balance, December 31, 2011	$	5.0

Tax years 2007 through 2010 are still subject to examination in the United States and tax years 2005 through 2010 are still subject to examination in California. The tax years 2005 through 2010 are still subject to examination in Hong Kong. In the normal course of business, the Company is audited by federal, state, and foreign tax authorities. The U.S. Internal Revenue Service is conducting a limited examination related to the 2009 U.S. federal income tax return. The Company was under examination by various state jurisdictions during 2011. The ultimate resolution of these U.S. and state examinations, including matters that may be resolved within the next twelve months, is not yet determinable.

- Definition

The entire disclosure for income taxes. Disclosures may include net deferred tax liability or asset recognized in an enterprise's statement of financial position, net change during the year in the total valuation allowance, approximate tax effect of each type of temporary difference and carryforward that gives rise to a significant portion of deferred tax liabilities and deferred tax assets, utilization of a tax carryback, and tax uncertainties information.

+ References

Reference 1: http://www.xbrl.org/2003/role/presentationRef
-Publisher SEC
-Name Regulation S-X (SX)
-Number 210
-Section 08
-Paragraph h
-Article 4

Reference 2: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Statement of Financial Accounting Standard (FAS)
-Number 109
-Paragraph 136, 172
-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

Reference 3: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Statement of Financial Accounting Standard (FAS)
-Number 109
-Paragraph 43, 44, 45, 46, 47, 48, 49
-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

Reference 4: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 740
-SubTopic 10
-Section 50
-Paragraph 15
-URI http://asc.fasb.org/extlink&oid=6907707&loc=d3e32718-109319

Reference 5: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 740
-SubTopic 10
-Section 50
-Paragraph 9
-URI http://asc.fasb.org/extlink&oid=6907707&loc=d3e32639-109319

Reference 6: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 235
-SubTopic 10
-Section S99
-Paragraph 1
-Subparagraph (SX 210.4-08.(h))
-URI http://asc.fasb.org/extlink&oid=6881521&loc=d3e23780-122690

Reference 7: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 740
-SubTopic 10
-Section 50
-Paragraph 2
-URI http://asc.fasb.org/extlink&oid=6907707&loc=d3e32537-109319

Reference 8: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 740
-SubTopic 10
-Section 50
-Paragraph 3
-URI http://asc.fasb.org/extlink&oid=6907707&loc=d3e32559-109319

+ Details

Leases

12 Months Ended

Dec. 31, 2011

Leases

Note 13—Leases

The Company leases office, warehouse and showroom facilities and certain equipment under operating leases. Rent expense for the years ended December 31, 2009, 2010 and 2011 totaled $15.1 million, $15.3 million and $14.5 million, respectively. The following is a schedule of minimum annual lease payments (in thousands).

2012	$	13,678
2013		12,546
2014		10,616
2015		7,198
2016		4,126
Thereafter		4,520
	$	52,684

- Definition

The entire disclosure for lessee entity's leasing arrangements including, but not limited to, all of the following: (a.) The basis on which contingent rental payments are determined, (b.) The existence and terms of renewal or purchase options and escalation clauses, (c.) Restrictions imposed by lease agreements, such as those concerning dividends, additional debt, and further leasing.

+ References + Details

Common Stock, Preferred Stock and Warrants

12 Months Ended

Dec. 31, 2011

Common Stock, Preferred Stock and Warrants

Note 14—Common Stock, Preferred Stock and Warrants

The Company has 105,000,000 authorized shares of stock consisting of 100,000,000 shares of $.001 par value common stock and 5,000,000 shares of $.001 par value preferred stock. On December 31, 2011, shares issued and outstanding were 25,943,214. On December 31, 2010 shares issued were 27,610,952 and shares outstanding were 27,319,624.

In January 2011, the Company issued 27,442 shares of restricted stock at a value of $0.5 million to an executive officer, which vest, subject to certain company financial performance criteria, over a six year period beginning in February 2012. In addition, an aggregate of 26,480 shares of restricted stock was issued to its five non-employee directors, which vest in January 2012, at an aggregate value of approximately $0.5 million.

In February 2011, the Company issued an aggregate of 65,363 shares of restricted stock at a value of $1.2 million to certain employees including an executive officer, which vest over a three-year period beginning in December 2011. In addition, the company issued 18,238 shares of restricted stock at a value of $0.3 million to an executive officer, which vest, subject to certain company financial performance criteria, over a six year period beginning in February 2011.

In March 2011, the Company cancelled an aggregate of 5,000 shares of restricted stock due to the termination of an employee and the refusal of a grant by a current employee. During the first quarter of 2011, an executive officer surrendered an aggregate of 57,096 shares of restricted stock at a value of $1.0 million to cover income taxes on the 2011 vesting of his restricted shares.

In April 2011, the Company issued 5,500 shares of common stock on the exercise of options at a value of $73,480. Also, in April 2011, the Company cancelled an aggregate of 19,362 shares of restricted stock due to the termination of two employees. In May 2011, the Company issued 4,500 shares of common stock on the exercise of options at a value of $60,120. In June 2011, the Company cancelled 13,013 shares of restricted stock due to the termination of an employee.

In August 2011, certain employees surrendered an aggregate of 7,868 shares of restricted stock at a value of $136,588 to cover their income taxes due on the 2011 vesting of the restricted shares granted to them in 2006. Also, in August 2011, the Company cancelled an aggregate of 15,229 shares of restricted stock due to the termination of two employees.

In October 2011, the Company issued 7,500 shares of common stock on the exercise of options at a value of $142,125. Also in October 2011, the Company issued 3,957 shares of restricted stock as a value of $75,985 to as executive officer, which vest, subject to certain company financial performance criteria , over a four year period beginning in October 2011.

In December 2011, certain employees surrendered an aggregate of 6,118 shares of restricted stock at a value of $86,325 to cover their income taxes due on the 2011 vesting of shares granted them in 2009. Also, in December 2011, the Company cancelled an aggregate of 31,399 shares of two executives restricted stock as a result of the financial performance criteria not being achieved.

All issuances of common stock, including those issued pursuant to stock option and warrant exercises, restricted stock grants and acquisitions, are issued from the Company’s authorized but not issued and outstanding shares.

During 2011, the Company declared a cash dividend of $0.10 per share to shareholders of record as of market close on September 12, 2011 and December 12, 2011. Cash paid for these dividends were approximately $2.6 million and $2.6 million, respectively.

During 2003, the Company issued 100,000 fully vested warrants, expiring in 2013, in connection with license costs relating to its video game joint venture. The fair value of these warrants was approximately $1.1 million. All such warrants were exercised in 2011, and as of December 31, 2011, there are no remaining warrants outstanding.

In January 2010, the Company issued an aggregate of 240,000 shares of restricted stock at an aggregate value of approximately $2.9 million to two of its executive officers, of which 120,000 shares vested, subject to certain Company financial performance criteria, in January 2011, and 120,000 shares vested in July 2010. In addition, an aggregate of 40,950 shares of restricted stock was issued to its five non-employee directors, which vested in January 2011, at an aggregate value of approximately $0.5 million. Also in January 2010, the company cancelled an aggregate of 16,725 shares of restricted stock due to the termination of various employees.

In February 2010, the company cancelled 2,675 shares of restricted stock due to the termination of an employee.

In March 2010, the company cancelled 4,750 shares of restricted stock due to the termination of an employee.

In April 2010, the Company issued 5,507 shares of restricted stock to a non-employee director, which vested in July 2010, at a value of approximately $0.1 million. Also, the company issued 5,000 shares of restricted stock at a value of approximately $0.1 million to an employee, which vests over a three-year period. Additionally, the company issued 5,000 shares of restricted stock at a value of approximately $0.1 million to an employee, which vests over a five-year period.

In August 2010, certain employees surrendered an aggregate of 2,523 shares of restricted stock at a value of $39,813 to cover their income taxes due on the 2010 vesting of the restricted shares granted to them in 2006. Also, in August 2010, the Company repurchased 291,574 shares of its common stock at a price of $15.62 per share for a total cost of $4.6 million. The repurchased stock represented approximately 1.0% of the company’s then outstanding shares of common stock at the time of the repurchase and was subsequently retired by the Company.

In October 2010, the Company issued 1,417 shares of restricted stock to a non-employee Director, which vest in January 2011, at a value of approximately $0.02 million. Also, in October 2010, an employee surrendered 2,796 shares of restricted stock at a value of $51,083 to cover his income taxes due on the October 22, 2010 vested shares.

In December 2010, certain employees surrendered an aggregate of 4,648 shares of restricted stock at a value of $85,988 to cover their income taxes due on the 2010 vesting of the restricted shares granted them in 2009.

In October 2010, the Company’s Board of Directors authorized it to repurchase up to $30.0 million of its common stock. As of December 31, 2011, 1,771,633 shares at a value of $30.0 million were repurchased. The repurchased stock represented approximately 6.8% of the company’s outstanding shares of common stock at the time of the repurchase, and were subsequently retired by the company.

In January 2009, the Company issued an aggregate of 240,000 shares of restricted stock at an aggregate value of approximately $5.0 million to two of its executive officers, which were to vest, subject to certain Company financial performance criteria, in January 2010 (which criteria were not met so the shares did not vest and were subsequently cancelled by the Company in December 2009), an aggregate of 30,340 shares of restricted stock to its five non-employee directors, which vested in January 2010, at an aggregate value of approximately $0.6 million, and an aggregate of 206,500 shares of restricted stock to its employees at an aggregate value of approximately $3.8 million, which vest over a three to five-year period. Additionally, 74,836 shares of restricted stock previously received by two executive officers were surrendered at a value of $1.4 million to cover their income taxes due on the 2009 vesting of the restricted stock granted to them in 2007 and 2008. This restricted stock was subsequently retired by the Company. Also, in January 2009, an employee surrendered 551 shares of restricted stock at a value of $11,367 to cover his income taxes due on the December 31, 2008 vested shares. In February 2009, the Company issued 3,000 shares of restricted stock at a value of approximately $0.05 million to an employee, which vest over a five-year period. Also in January 2009, the Company cancelled an aggregate of 13,000 shares of restricted stock due to the termination of various employees.

In May 2009, the Company cancelled 3,500 shares of restricted stock due to the termination of an employee.

In June 2009, the Company issued 2,500 shares of restricted stock at a value of approximately $0.03 million to an employee, which vest over a five-year period. In August 2009, certain employees surrendered an aggregate of 920 shares of restricted stock at a value of $10,608 to cover their income taxes due on the 2009 vesting of the restricted shares granted to them in 2006.

In August 2009, the Company cancelled 2,100 shares of restricted stock due to the termination of an employee.

In October 2009, the Company issued 3,000 shares of common stock on the exercise of options at a value of $40,440. Also, in October 2009, an employee surrendered 2,717 shares of restricted stock at a value of $40,701 to cover his income taxes due on the October 22, 2009 vested shares. In December 2009, certain employees surrendered an aggregate of 4,725 shares of restricted stock at a value of $58,118 to cover their income taxes due on the 2009 vesting of the restricted shares granted them in 2009.

In November 2009, the Company cancelled an aggregate of 25,500 shares of restricted stock due to the termination of various employees.

- Definition

The entire disclosure for shareholders' equity, comprised of portions attributable to the parent entity and noncontrolling interest, if any, including other comprehensive income (as applicable). Including, but not limited to: (1) balances of common stock, preferred stock, additional paid-in capital, other capital and retained earnings; (2) accumulated balance for each classification of other comprehensive income and total amount of comprehensive income; (3) amount and nature of changes in separate accounts, including the number of shares authorized and outstanding, number of shares issued upon exercise and conversion, and for other comprehensive income, the adjustments for reclassifications to net income; (4) rights and privileges of each class of stock authorized; (5) basis of treasury stock, if other than cost, and amounts paid and accounting treatment for treasury stock purchased significantly in excess of market; (6) dividends paid or payable per share and in the aggregate for each class of stock for each period presented; (7) dividend restrictions and accumulated preferred dividends in arrears (in aggregate and per share amount); (8) retained earnings appropriations or restrictions, such as dividend restrictions; (9) impact of change in accounting principle, initial adoption of new accounting principle and correction of an error in previously issued financial statements; (10) shares held in trust for Employee Stock Ownership Plan (ESOP); (11) deferred compensation related to issuance of capital stock; (12) note received for issuance of stock; (13) unamortized discount on shares; (14) description, terms, and number of warrants or rights outstanding; (15) shares under subscription and subscription receivables, effective date of new retained earnings after quasi-reorganization and deficit eliminated by quasi-reorganization and, for a period of at least ten years after the effective date, the point in time from which the new retained dates; and (16) retroactive effective of subsequent change in capital structure.

+ References

Reference 1: http://www.xbrl.org/2003/role/presentationRef
-Publisher AICPA
-Name Accounting Principles Board Opinion (APB)
-Number 12
-Paragraph 10
-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

Reference 2: http://www.xbrl.org/2003/role/presentationRef
-Publisher SEC
-Name Regulation S-X (SX)
-Number 210
-Section 04
-Article 3

Reference 3: http://www.xbrl.org/2003/role/presentationRef
-Publisher SEC
-Name Regulation S-X (SX)
-Number 210
-Article 4
-Section 08
-Paragraph d

Reference 4: http://www.xbrl.org/2003/role/presentationRef
-Publisher AICPA
-Name Accounting Research Bulletin (ARB)
-Number 43
-Chapter 1
-Section B
-Paragraph 7, 11A
-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

Reference 5: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Statement of Financial Accounting Standard (FAS)
-Number 129
-Paragraph 2, 3, 4, 5, 6, 7, 8
-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

Reference 6: http://www.xbrl.org/2003/role/presentationRef
-Publisher SEC
-Name Regulation S-X (SX)
-Number 210
-Section 08
-Article 4

Reference 7: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Statement of Financial Accounting Standard (FAS)
-Number 5
-Paragraph 15
-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

Reference 8: http://www.xbrl.org/2003/role/presentationRef
-Publisher SEC
-Name Regulation S-X (SX)
-Number 210
-Section 02
-Paragraph 29, 30, 31
-Article 5

Reference 9: http://www.xbrl.org/2003/role/presentationRef
-Publisher SEC
-Name Staff Accounting Bulletin (SAB)
-Number Topic 4
-Section E

Reference 10: http://www.xbrl.org/2003/role/presentationRef
-Publisher SEC
-Name Staff Accounting Bulletin (SAB)
-Number Topic 4
-Section C

Reference 11: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 505
-SubTopic 10
-Section S99
-Paragraph 1
-Subparagraph (SX 210.3-04)
-URI http://asc.fasb.org/extlink&oid=6959260&loc=d3e187085-122770

Reference 12: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 505
-SubTopic 10
-Section 50
-Paragraph 2
-URI http://asc.fasb.org/extlink&oid=6928386&loc=d3e21463-112644

Reference 13: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 505
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-Paragraph 3
-URI http://asc.fasb.org/extlink&oid=6928386&loc=d3e21475-112644

Reference 14: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 505
-SubTopic 10
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-Paragraph 4
-URI http://asc.fasb.org/extlink&oid=6928386&loc=d3e21484-112644

Reference 15: http://www.xbrl.org/2003/role/presentationRef
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-Name Accounting Standards Codification
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-SubTopic 10
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-Paragraph 11
-URI http://asc.fasb.org/extlink&oid=6928386&loc=d3e21564-112644

Reference 16: http://www.xbrl.org/2003/role/presentationRef
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-Name Accounting Standards Codification
-Topic 505
-SubTopic 10
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-Paragraph 5
-URI http://asc.fasb.org/extlink&oid=6928386&loc=d3e21488-112644

Reference 17: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 235
-SubTopic 10
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-Paragraph 1
-Subparagraph (SX 210.4-08.(d),(e))
-URI http://asc.fasb.org/extlink&oid=6881521&loc=d3e23780-122690

Reference 18: http://www.xbrl.org/2003/role/presentationRef
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Reference 19: http://www.xbrl.org/2003/role/presentationRef
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-Name Accounting Standards Codification
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-SubTopic 30
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-Paragraph 2
-URI http://asc.fasb.org/extlink&oid=6405834&loc=d3e23285-112656

Reference 20: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 310
-SubTopic 10
-Section S99
-Paragraph 2
-Subparagraph (SAB TOPIC 4.E)
-URI http://asc.fasb.org/extlink&oid=6228006&loc=d3e74512-122707

Reference 21: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Glossary Preferred Stock
-URI http://asc.fasb.org/extlink&oid=6521494

Reference 22: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 210
-SubTopic 10
-Section S99
-Paragraph 1
-Subparagraph (SX 210.5-02.29-31)
-URI http://asc.fasb.org/extlink&oid=6877327&loc=d3e13212-122682

Reference 23: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
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-Paragraph 4
-Subparagraph (SAB TOPIC 4.C)
-URI http://asc.fasb.org/extlink&oid=6959260&loc=d3e187143-122770

+ Details

Commitments

12 Months Ended

Dec. 31, 2011

Commitments

Note 15—Commitments

The Company has entered into various license agreements whereby the Company may use certain characters and intellectual properties in conjunction with its products. Generally, such license agreements provide for royalties to be paid at 1% to 14% of net sales with minimum guarantees and advance payments.

In the event the Company determines that a shortfall in achieving the minimum guarantee is likely, a liability is recorded for the estimated short fall and charged to royalty expense.

Future annual minimum royalty guarantees as of December 31, 2011 are as follows (in thousands):

2012	$	40,295
2013		9,734
2014		5,934
2015		2,003
2016		170
Thereafter		―
	$	58,136

The Company has entered into employment and consulting agreements with certain executives expiring through December 31, 2015. The aggregate future annual minimum guaranteed amounts due under those agreements as of December 31, 2011 are as follows (in thousands):

2012	$	8,584
2013		7,219
2014		2,776
2015		1,240
	$	19,819

The Company had entered into a retirement plan agreement with one of its executives. Having met the eligibility criteria for retirement, the executive elected to retire effective April 1, 2010 and began to receive a single-life annuity retirement payment of approximately $1.0 million per year. However, as a result of his death during 2010, his estate received a death benefit of approximately $2.8 million.

Share-Based Payments

12 Months Ended

Dec. 31, 2011

Share-Based Payments

Note 16—Share-Based Payments

Under its 2002 Stock Award and Incentive Plan ( the "Plan”), which incorporated its Third Amended and Restated 1995 Stock Option Plan, the Company has reserved 6,525,000 shares of its common stock for issuance upon the exercise of options granted under the Plan, as well as for the awarding of other securities. Under the Plan, employees (including officers), non-employee directors and independent consultants may be granted options to purchase shares of common stock and other securities (Note 14). The vesting of these options and other securities may vary, but typically vest on a step-up basis over a maximum period of 5 years and restricted shares typically vest over 1 to 6 years. Share-based compensation expense is recognized on a straight-line basis over the requisite service period.

Restricted Stock

Under the Plan, share-based compensation payments may include the issuance of shares of restricted stock. Historically, two executive officers were each entitled to be awarded 120,000 shares of restricted stock annually on each January 1 (through and including January 1, 2010); such awards typically vest 50% each on the first and second anniversaries of issuance, subject to acceleration. Beginning in 2011, each executive officer’s restricted stock award grants are based on their employment contracts, which varies by individual and year, and are subject to vesting conditions. Five non-employee directors, beginning in January 2010, receive grants of restricted stock at a value of $100,000 annually which vest after one year – this amount is prorated if a director is appointed within the year. Lastly, and at the discretion of Management and approval of the Board, non-executive employees also receive restricted stock awards, which occurs approximately once per year.

During 2011, the Company issued a total of 141,480 shares of restricted stock, of which 49,769 shares of restricted stock were issued to one executive officer. Additionally, the Company granted and issued an aggregate of 26,480 shares to its non-employee directors. Lastly, the Company granted and issued an aggregate of 65,231 shares of restricted stock to its non-executive employees. As of December 31, 2011, 142,184 shares of the restricted stock remained unvested, representing a weighted average grant date fair value of $2.6 million.

During 2010, the Company issued a total of 297,874 shares of restricted stock, of which 240,000 shares of restricted stock were issued to two executive officers. Additionally, the Company granted and issued an aggregate of 47,874 shares to its non-employee directors. Lastly, the Company granted and issued an aggregate of 10,000 shares of restricted stock to its non-executive employees. As of December 31, 2010, 324,635 shares of restricted stock remained unvested, representing a weighted average grant date fair value of $4.9 million.

During 2009, the Company issued a total of 482,340 shares of restricted stock, of which 240,000 shares of restricted stock were issued to two executive officers; however, as of December 31, 2009 the Company will incur no expense related to this grant as the vest was contingent upon performance goals that were not achieved. Additionally, the Company issued 6,068 shares to its five non-employee directors. Lastly, the Company granted and issued an aggregate of 212,000 shares of restricted stock to its non-executive employees. As of December 31, 2009, 436,443 shares of restricted stock remained unvested, representing a weighted average grant date fair value of $8.8 million.

The table below summarizes the grant activity for the year ended December 31, 2011 and is broken down in the following three distinct groups because each group has unique characteristics: executives, board of directors, and employees:

Group Type	# Shares Granted		Average Grant Date Value		Vest Schedule Range
Executives		49,769	$	18.27	1-6 year
Board of directors (non-executives)		26,480		18.22	1 year
Employees		65,231		18.38	3 - 5 years
Total		141,480	$	18.31	1 – 6 years

The following tables summarize the restricted stock award activity, annually, for the years ended December 31, 2009, 2010 and 2011:

	Restricted Stock Awards
	Number of Shares			Weighted Average Exercise Price

Outstanding, December 31, 2008		454,758		$	22.00
Awarded		482,340		$	19.55
Released		(228,155	)	$	22.24
Forfeited		(272,500	)	$	20.28
Outstanding, December 31, 2009		436,443		$	20.24
Awarded		297,874		$	12.27
Released		(385,532	)	$	18.64
Forfeited		(24,150	)	$	17.98
Outstanding, December 31, 2010		324,635		$	14.99
Awarded		141,480		$	18.31
Released		(240,978)		$	13.93
Forfeited		(82,953)		$	18.32
Outstanding, December 31, 2011		142,184		$	18.15

Stock Options

Share-based compensation cost is measured at the grant date, based on the estimated fair value of the award, and is recognized as expense over the employee's requisite service period.

The Company uses the Black-Scholes method of valuation for share-based option awards. In valuing the stock options, the Black-Scholes model incorporates assumptions about stock volatility, expected term of stock options, and risk free interest rate. The valuation is reduced by an estimate of stock option forfeitures.

The amount of share-based compensation expense recognized in the years ended December 31, 2009, 2010 and 2011 is based on options granted prior to January 1, 2006 and restricted stock, and ultimately expected to vest, and it has been reduced for estimated forfeitures. The revised shared-based compensation guidance requires forfeitures to be estimated at the time of grant and revised, if necessary, in subsequent periods if actual forfeitures differ from those estimates.

The following table summarizes the total share-based compensation expense and related tax benefits recognized (in thousands):

	Year Ended December 31,
	2009		2010			2011

Stock option compensation expense (benefit)	$	173	$	(224	)	$	―
Tax benefit related to stock option compensation	$	58	$	—		$	―
Restricted stock compensation expense	$	4,179	$	4,619		$	1,594
Tax benefit related to restricted stock compensation	$	1,522	$	1,788		$	558

As of December 31, 2011, 801,068 shares were available for future grant. Additional shares may become available to the extent that options or shares of restricted stock presently outstanding under the Plan terminate or expire. Stock option activity pursuant to the Plan is summarized as follows:

				Weighted
				Average
	Number			Exercise
	of Shares			Price
Outstanding, December 31, 2008		477,515		$	19.55
Granted		—			—
Exercised		(3,000	)		13.48
Canceled		(29,800	)		18.99
Outstanding, December 31, 2009		444,715		$	19.63
Granted		—			—
Exercised		—			—
Canceled		(126,450	)		20.64
Outstanding, December 31, 2010		318,265		$	19.23
Granted		―			―
Exercised		(17,250	)		15.03
Canceled		(118,100	)		20.02
Outstanding, December 31, 2011		182,665		$	19.11

The following characteristics apply to the Plan stock options that are fully vested, or expected to vest, as of December 31, 2011:

Aggregate intrinsic value of options outstanding	$	22,180
Weighted-average contractual term of options outstanding (in years)		2.24
Number of options currently exercisable		182,665
Weighted-average exercise price of options currently exercisable	$	19.11
Aggregate intrinsic value of options currently exercisable	$	22,180
Weighted-average contractual term of currently exercisable (in years)		2.24

The following table summarizes information about stock options outstanding and exercisable at December 31, 2011:

	Outstanding						Exercisable
			Weighted		Weighted				Weighted
			Average		Average				Average
Option Price	Number		Life		Exercise		Number		Exercise
Range	of Shares		in Years		Price		of Shares		Price
$0.00 – 9.99		—		—	$	—		—	$	—
$10.00 – 19.99		100,521		1.80	$	17.35		100,521	$	17.35
$20.00 – 50.00		82,144		2.78	$	21.27		82,144	$	21.27

- Definition

The entire disclosure for compensation-related costs for equity-based compensation, which may include disclosure of policies, compensation plan details, allocation of equity compensation, incentive distributions, equity-based arrangements to obtain goods and services, deferred compensation arrangements, employee stock ownership plan details and employee stock purchase plan details.

+ References

Reference 1: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Statement of Financial Accounting Standard (FAS)
-Number 123R
-Paragraph 64, 65, A240
-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

Reference 2: http://www.xbrl.org/2003/role/presentationRef
-Publisher AICPA
-Name Statement of Position (SOP)
-Number 93-6
-Paragraph 53
-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

Reference 3: http://www.xbrl.org/2003/role/presentationRef
-Publisher SEC
-Name Staff Accounting Bulletin (SAB)
-Number Topic 14

Reference 4: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 505
-SubTopic 50
-Section 50
-Paragraph 1
-URI http://asc.fasb.org/extlink&oid=6406099&loc=d3e25284-112666

Reference 5: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 718
-SubTopic 10
-Section 50
-Paragraph 1
-URI http://asc.fasb.org/extlink&oid=6415400&loc=d3e5047-113901

Reference 6: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 718
-SubTopic 10
-Section 50
-Paragraph 2
-URI http://asc.fasb.org/extlink&oid=6415400&loc=d3e5070-113901

Reference 7: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 718
-SubTopic 10
-Section 50
-Paragraph 4
-URI http://asc.fasb.org/extlink&oid=6415400&loc=d3e5444-113901

Reference 8: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 718
-SubTopic 40
-Section 50
-Paragraph 1
-URI http://asc.fasb.org/extlink&oid=6418621&loc=d3e17540-113929

+ Details

Employee Benefits Plan

12 Months Ended

Dec. 31, 2011

Employee Benefits Plan

Note 17—Employee Benefits Plan

The Company sponsors for its U.S. employees, a defined contribution plan under Section 401(k) of the Internal Revenue Code. The Plan provided that employees may defer up to 50% of their annual compensation subject to annual dollar limitations, and that the Company will make a matching contribution equal to 100% of each employee’s deferral, up to 5% of the employee’s annual compensation. The Company suspended its matching contribution effective January 1, 2010 and restarted the matching contribution effective January 1, 2011. Company matching contributions, which vest immediately, totaled $1.5 million, nil, and $2.1 million for 2009, 2010 and 2011, respectively.

Supplemental Information to Consolidated Statements of Cash Flows

12 Months Ended

Dec. 31, 2011

Supplemental Information to Consolidated Statements of Cash Flows

Note 18—Supplemental Information to Consolidated Statements of Cash Flows

In 2011, an executive officer surrendered an aggregate of 57,096 shares of restricted stock at a value of $1.0 million to cover his income taxes due on the 2011 vesting of restricted shares granted to him in 2010 and 2011. During 2011, certain employees surrendered an aggregate of 13,986 shares of restricted stock at a value of $0.2 million to cover their income taxes due on the 2011 vesting of the restricted shares granted them in 2006 and 2009. Additionally, the Company recognized a $0.4 million tax benefit from the vesting of restricted stock.

In 2010, certain employees surrendered an aggregate of 9,967 shares of restricted stock at a value of $0.2 million to cover their income taxes due on the 2010 vesting of the restricted shares granted them in 2006 and 2009. Additionally, the company recognized a $0.7 million tax deficiency from the vesting of restricted stock.

In 2009, two executive officers surrendered an aggregate of 74,836 shares of restricted stock at a value of $1.4 million to cover their income taxes due on the 2009 vesting of the restricted stock granted to them in 2007 and 2008. During 2009, certain employees surrendered an aggregate of 8,913 shares of restricted stock at a value of $0.1 million to cover their income taxes due on the 2009 vesting of the restricted shares granted them in 2006 and 2009. Additionally, the Company recognized a $0.5 million tax deficiency from the vesting of restricted stock.

Selected Quarterly Financial Data (Unaudited)

12 Months Ended

Dec. 31, 2011

Selected Quarterly Financial Data (Unaudited)

Note 19—Selected Quarterly Financial Data (Unaudited)

Selected unaudited quarterly financial data for the years 2010 and 2011 are summarized below:

	2010									2011
	First			Second		Third		Fourth		First			Second			Third			Fourth
	Quarter			Quarter		Quarter		Quarter		Quarter			Quarter			Quarter			Quarter
	(in thousands, except per share data)
Net sales	$	77,345			123,255		348,677		197,991	$	72,323	$		131,930	$		332,419	$		141,079
Gross profit	$	25,233			43,229		110,957		65,531	$	24,271	$		45,092	$		105,670	$		18,987
Income (loss) from operations	$	(13,628	)		1,274		51,579		10,972	$	(14,790)	$		1,998	$		50,068	$		(35,996	)
Income (loss) before provision (benefit) for income taxes	$	(14,768	)		4,362		50,131		10,016	$	(16,716)	$		6,087	$		48,081	$		(37,990	)
Net income (loss)	$	(5,157	)		2,975		40,360		8,871	$	(10,575)	$		4,240	$		34,825	$		(20,018	)
Basic earnings (loss) per share	$	(0.19	)		0.11		1.47		0.33	$	(0.39)	$		0.16	$		1.32	$		(0.77	)
Weighted average shares outstanding		27,393			27,672		27,379		27,260		27,217			26,948			26,476			25,839
Diluted earnings (loss) per share	$	(0.19	)		0.11		1.23		0.30	$	(0.39)	$		0.16	$		1.10	$		(0.77	)
Weighted average shares and equivalents outstanding		27,393			27,388		33,974		33,880		27,217			27,096			32,922			25,839

Quarterly and year-to-date computations of income (loss) per share amounts are made independently. Therefore, the sum of the per share amounts for the quarters may not agree with the per share amounts for the year.

- Definition

The entire disclosure for the quarterly financial data in the annual financial statements. The disclosure may include a tabular presentation of financial information for each fiscal quarter for the current and previous year, including revenues, gross profit, income or loss before extraordinary items and earnings per share data. It also includes an indication if the information in the note is unaudited, comments on the aggregate effect of year-end adjustments, and an explanation of matters or transactions that affect comparability or are pertinent to an understanding of the information furnished.

+ References + Details

Litigation

12 Months Ended

Dec. 31, 2011

Litigation

Note 20 — Litigation

The Company is a party to, and certain of its property is the subject of, various other pending claims and legal proceedings that routinely arise in the ordinary course of its business. The Company does not believe that any of these claims or proceedings will have a material effect on its business, financial condition or results of operations.

Profit from Video Game Joint Venture

Pursuant to a Settlement Agreement and Mutual Release dated December 22, 2009, the joint venture was terminated on December 31, 2009. As a result, we recognized $6.0 million in income related to our video game joint venture in 2010 and 2011, as compared to a loss of $16.1 million in 2009 relating primarily to an adjustment to our preferred return as a result of an arbitration decision and legal fees. In 2010 and 2011 we received payments from THQ of $6.0 million each, which was recognized as income from joint venture. Additionally, we will receive future payments in the amount of $4.0 million on each of June 30, 2012 and 2013 which we will record as income on a cash basis since collectability of these payments is not reasonably assured.

Subsequent Events

12 Months Ended

Dec. 31, 2011

Subsequent Events

Note 21 — Subsequent Events

On March 5, 2012, our board of directors unanimously adopted a stockholder rights plan and declared a dividend of one right for each outstanding share of our common stock. The Board adopted the rights plan in response to Oaktree Capital Management's unsolicited and highly conditional indication of interest as well as a recent indication by Oaktree that it may accumulate additional shares of our stock in the open market.

The rights plan is designed to protect against any potential coercive or abusive takeover techniques and to help ensure that our stockholders are not deprived of the opportunity to realize full and fair value on their investment. The plan, which was adopted following evaluation and consultation with our outside advisors, is similar to plans adopted by numerous publicly traded companies.

In connection with the adoption of the stockholder rights plan, our board of directors declared a dividend of one right for each share of our common stock held by stockholders of record as of the close of business on March 15, 2012. Initially, the rights will not be exercisable and will trade with the shares of the Company's common stock. Under the plan, the rights will generally be exercisable only 10 business days either after a person or group becomes an "acquiring person" by acquiring beneficial ownership of 10% or more of the Company's common stock or if a person or group commences a tender or exchange offer which, if consummated, would result in a person owning 10% or more of our common stock. In addition, if a person or group acquires beneficial ownership of 10% or more of our common stock, each right will generally entitle the holder, other than the acquiring person or group, to acquire, for the exercise price of $80.00 per right, shares of our common stock (or, in certain circumstances, other consideration) having a market value equal to twice the right's then-current exercise price. Our board of directors may redeem the rights at a price of $0.01 per right at any time up to ten business days after a person or group acquires beneficial ownership of 10% or more of our common stock.

The rights plan will continue in effect until March 4, 2013, unless earlier redeemed or exchanged for shares of common stock by the Company.

Stockholders are not required to take any actions to receive the rights distribution. Until the rights become exercisable, outstanding stock certificates will represent both shares of our common stock and the rights. The issuance of the rights will have no dilutive effect and will not impact our reported earnings per share.

SCHEDULE II-VALUATION AND QUALIFYING ACCOUNTS

12 Months Ended

Dec. 31, 2011

SCHEDULE II-VALUATION AND QUALIFYING ACCOUNTS

JAKKS PACIFIC, INC. AND SUBSIDIARIES

SCHEDULE II—VALUATION AND QUALIFYING ACCOUNTS

YEARS ENDED DECEMBER 31, 2009, 2010 and 2011

Allowances are deducted from the assets to which they apply, except for sales returns and allowances.

	Balance at		Charged to						Balance
	Beginning		Costs and						at End
	of Period		Expenses			Deductions			of Period
	(In thousands)
Year ended December 31, 2009:
Allowance for:
Uncollectible accounts	$	2,005	$	918		$	(380	)	$	2,543
Reserve for potential product obsolescence		5,108		28,795	(a)		(24,031	)		9,872
Reserve for sales returns and allowances		23,317		61,557			(50,977	)		33,897
	$	30,430	$	91,270		$	(75,388	)	$	46,312
Year ended December 31, 2010:
Allowance for:
Uncollectible accounts	$	2,543	$	1,086		$	(851	)	$	2,778
Reserve for potential product obsolescence		9,872		6,844			(8,245	)		8,471
Reserve for sales returns and allowances		33,897		52,412			(57,931	)		28,378
	$	46,312	$	60,342		$	(67,027	)	$	39,627
Year ended December 31, 2011:
Allowance for:
Uncollectible accounts	$	2,778		461			(170)			3,069
Reserve for potential product obsolescence		8,471		8,099			(8,297)			8,273
Reserve for sales returns and allowances		28,378		67,947			(52,885)			43,440
	$	39,627	$	76,507		$	(61,352)		$	54,782

(a)	During the second quarter of 2009, the Company booked a charge of $24.0 million related to the write-down of certain excess and impaired inventory.