JAKKS Pacific, Inc. (NASDAQ:JAKK) Q1 2019 Earnings Conference Call Transcript

May 09, 2019 • 04:30 pm ET


JAKKS Pacific, Inc. (NASDAQ:JAKK) Q1 2019 Earnings Conference Call Transcript


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Good afternoon, and welcome to the JAKKS Pacific First Quarter 2019 Earnings Conference Call with Management, who will review financial results for the quarter ended March 31st, 2019.

JAKKS issued its earnings press release earlier today. Presentation slides containing information covered in both today's earnings press release and call are available on our website in the Investors section. This presentation includes videos showing some of our key products.

On the call this afternoon are Stephen Berman, Chairman and Chief Executive Officer; and Brent Novak, Chief Financial Officer. Mr. Berman will provide an overview of the quarter and provide highlights of the product lines and current business trends. Then Mr. Novak will provide details, comments regarding JAKKS Pacific's financial and operational results prior to opening up the call for questions. (Operator Instructions)

Before we begin, the company would like to point out that any comments made about JAKKS Pacific's future performance, events or circumstances including the estimates of sales and/or adjusted EBITDA in 2019, as well as any other forward-looking statements concerning 2019 and beyond are subject to safe harbor protection under federal securities laws. These statements reflect the company's best judgment based on current market trends and conditions today and are subject to certain risks and uncertainties, which could cause actual results to differ materially from those projected in forward-looking statements.

For details concerning these and other such risks and uncertainties, you should consult JAKKS' most recent 10-K and 10-Q filings with the SEC, as well as the company's other reports subsequently filed with the SEC from time-to-time.

In addition, today's comments by management will refer to the non-GAAP financial measures such as adjusted EBITDA unless stated otherwise, the most directly comparable GAAP financial metric has been reconciled to the associated non-GAAP financial measure within the company's earnings press release issued today or previously. As a reminder, this conference is being recorded.

With that, I would now like to turn the call over to Stephen Berman.

Stephen G. Berman

Good afternoon, everyone, and thank you for joining us today. This afternoon, we are going to review our performance during the first quarter of 2019. I will talk about how our brands and products performed in the quarter, compared to last year and to our expectations. After my comments, Brent will discuss our financial performance.

As has been the case for over a year now, the toy industry in several markets around the world is still feeling the reverberations of the disruption caused by the liquidation last year of Toys "R" Us. That liquidation commenced at the end of Q1 2018 and continued through the end of second quarter, affecting not only shipments to TRU, but to other retailers during the liquidation, and it changed the consumer behavior. We believe year-over-year comparisons in the industry won't really be clean until the second half, and even then, we'll be clouded by the changes in consumer behavior, which affected the timing of retail purchases.

We saw sales contributions from new licensed products, notably Godzilla, Harry Potter, Fancy