JAKKS Pacific, Inc. (JAKK)
Q3 2009 Earnings Call Transcript
October 21, 2009 4:45 am ET
Genna Rosenberg - SVP, Corporate Communications & IR
Jack Friedman - Chairman & CEO
Joel Bennett - EVP & CFO
Stephen Berman - President & COO
Edward Woo - Wedbush Morgan Securities
Drew Crum - Stifel Nicolaus
Sean McGowan - Needham & Company
Scott Hamann - KeyBanc Capital Markets
Jeff Blaeser - Morgan Joseph
Previous Statements by JAKK
» JAKKS Pacific, Inc. Q4 2008 Earnings Call Transcript
» JAKKS Pacific, Inc. Q3 2008 Earnings Call Transcript
» JAKKS Pacific Inc. Q2 2008 Earnings Call Transcript
Thank you, operator. Good morning, ladies and gentlemen. This is Genna Rosenberg, we apologize for the delay in getting this call started. Thank you for joining our teleconference with management of JAKKS Pacific today to review the results for our third quarter and first nine months ended September 30, 2009
On the call today are Jack Friedman, Chairman and Co-Chief Executive Officer of JAKKS Pacific; Stephen Berman, our President and Co-CEO; Joel Bennett, Executive Vice President and CFO.
Mr. Friedman will first provide an overview of the quarter and our operational results and then Mr. Bennett will provide detailed comments regarding our financial results. Mr. Friedman will then conclude the prepared portion of the call with highlights of the current business trends prior to opening up the call for your one-on-one questions.
Before we begin, I would like to point out that any comments made about our future performance, events or circumstances, including the estimates of sales and earnings per share for 2009, as well as any other forward-looking statements, are subject to Safe Harbor protection under the federal security laws.
These statements reflect our 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 our forward-looking statements. For details concerning these and other such risks and uncertainties, you should consult our most recent 10-K and 10-Q filings with the SEC as well as our company's other reports subsequently filed with the SEC from time to time.
With that, I will turn the call over to Mr. Friedman.
Good afternoon, ladies and gentlemen. This is Jack Friedman. Thank you for joining us this afternoon. Today we announced our results for the third quarter and first nine months of 2009 for JAKKS Pacific.
While this year has been extremely challenging on many levels, sales for the third quarter met our expectations. Last quarter we announced we will be implementing a company-wide restructuring plan and comprehensive cost saving initiatives in light of lower than expected sales and we have been diligently working on this implementation process.
We’ve been working closely with key management in every area of business around the world to implement changes that confront these obstacles affecting our top and bottom line and turn to our outlook for 2010 in a very positive direction.
On a non-GAAP basis, third quarter 2009 net sales were $351.4 million compared with sales of $357.8 million for the third quarter of 2008 and for the first nine months of 2009, sales on a non-GAAP basis were $605 million compared with $634.1 million for the first nine months of 2008.
These non-GAAP net sales figures exclude one-time charges related to the recall of one of our products. On a non-GAAP we had earnings for the third quarter of $35.9 million or $1.13 per share and net income on a non-GAAP basis of $24.3 million or $0.83 per share for the first nine months.
We began shipping many of our new items in the third quarter, including Halloween products from our Disguise division and continue shipping reorders and spring orders in the fourth quarter. Our Halloween portfolio is doing quite well with items based on popular licenses including Transformers, Marvel characters, Sesame Street and Toy Story leading the way and we have many value-driven toy items that have good placement at retail, including a myriad of product based on Disney Princess and Fairies, our UFC action figures that are just hitting shelves and look extremely well so far.
Girl Gourmet, Food Play products, new Plug It In & Play TV Games products including our Big Buck Hunter, which has been a bit of an upswing surprise for us. However, as I mentioned, we are seeing underperformance of several lines that have been strong contributors in the past, particularly Hannah Montana toys, and both WWE and Pokémon action figures and accessories.
Given all that, we have been very focused, analyzing every area of our business, executing on our restructuring plan, shipping our Fall line into retail, and developing our portfolio for 2010.
We previewed next year's lines to many of our customers at the JAKKS' 2010 Fall Toy Preview held at our new Santa Monica Showroom during the past two weeks. A line which was very well received by our retail partners from every sales channel.
Several new initiatives resonated as favorites based on our early reads, including our robust Disney range, some new internally developed JAKKS brands, a number of key line extensions into other areas in our diverse portfolio.
Our commitment to product coupled with our commitment to running a lean and profitable business, along with our strong balance sheet, excellent relationships and a seasoned team should position us well for future growth.