JAKKS Pacific Reports First Quarter 2025 Financial Results

SANTA MONICA, Calif., April 29, 2025 (GLOBE NEWSWIRE) -- JAKKS Pacific, Inc. (NASDAQ: JAKK) today reported financial results for the first quarter ended March 31, 2025. First Quarter 2025 Net sales were $113.3 million, a year-over-year increase of $23.2 million or 26%, driven in part by demand for product related to last quarter’s film releasesGross margin of 34.4% vs. 23.4% in Q1 2024, driven by improved margin of new product launches along with significantly reduced inventory obsolescence expense and retailer markdownsGross profit of $39.0 million, up $17.9 million compared to $21.1 million in Q1 2024Operating loss of $3.8 million, compared to an operating loss of $21.3 million in Q1 2024Adjusted net loss attributable to common stockholders (a non-GAAP measure) of $0.4 million (or $0.03 per share), compared to an adjusted net loss attributable to common stockholders of $11.3 million (or $1.09 per share) in Q1 2024Adjusted EBITDA (a non-GAAP measure) of $0.4 million vs. $(17.2) million in Q1 2024 Management Commentary“We are happy to share our results after a strong start to the year at JAKKS. We’ve seen great consumer reaction year-to-date with solid consumer sales across major accounts and major markets.” said Stephen Berman, Chairman and CEO of JAKKS Pacific. ““It has certainly been a moment of reflection to see our industry’s long-standing tradition of building substantial global partnerships come under scrutiny. Yet rather than viewing this as a setback, we see it as an opportunity to showcase the agility, innovation, and resilience that define not only our industry — but especially JAKKS as a nimble, focused company.We’re proud to have restored our fortress balance sheet — a critical milestone for our long-term success. We have maintained a strong liquidity position and a prudent capital structure that not only shields us in times of volatility but also positions us to move swiftly on growth opportunities. This disciplined approach gives us the confidence to invest in our future with a flexible financial foundation — even when the external environment is less predictable. In 2023, we eliminated all long-term debt and completed the repurchase of our preferred stock, giving us a clean and stable balance sheet. This not only enhances our ability to respond quickly to market shifts but also allows us to dedicate more energy and focus to driving our core business forward and pursuing new, high-potential opportunities. We continue to create products that resonate with consumers globally, and we’re especially excited about what’s coming to market over the next twelve months. While the current environment in the United States has presented some unique challenges — particularly in the month of April — our foresight in building up strong infrastructure and capable teams in Europe and Latin America is already paying off. These regions are delivering real growth, and we see significant runway ahead. We remain actively engaged in monitoring the evolving situation in the U.S. and are positioning ourselves to maximize performance in 2025, while keeping our medium- and long-term goals firmly in sight. We believe our seasoned team, global presence, and financial strength give us a clear advantage in navigating uncertainty — and ultimately emerging stronger.” The Board of Directors has declared a quarterly dividend of $0.25 per share on the company’s common stock, payable June 27, 2025, to shareholders of record May 30, 2025. First Quarter 2025 ResultsNet sales for the first quarter of 2025 were $113.3 million, up 26% versus $90.1 million last year. The Toys/Consumer Products segment sales were up 30% globally to $107.4 million and sales of Costumes were down 19% to $5.8 million compared to last year. North America sales were $92.2 million, up from $73.8 million last year. International sales were $21.0 million, up from $16.3 million last year, led by a 100+% increase from Europe, which grew from $5.7 million to $11.8 million. The Company’s cash and cash equivalents (including restricted cash) totaled $59.4 million as of March 31, 2025, compared to $35.5 million at the same time last year, and to $70.1 million as of December 31, 2024. Inventory was $53.2 million, compared to $46.3 million in total inventory as of March 31, 2024, and $52.8 million as of December 31, 2024. Use of Non-GAAP Financial InformationIn addition to the preliminary results reported in accordance with U.S. GAAP included in this release, the Company has provided certain non-GAAP financial information including Adjusted EBITDA and Adjusted Net Income (Loss) that exclude various items that are detailed in the financial tables and accompanying footnotes reconciling GAAP to non-GAAP results contained in this release. The non-GAAP financial measures included in the press release are reconciled to the corresponding GAAP financial measures below, as required under the rules of the Securities and Exchange Commission regarding the use of non-GAAP financial measures. We define Adjusted EBITDA as income (loss) from operations before depreciation, amortization and adjusted for certain non-recurring and non-cash charges, such as reorganization expenses and restricted stock compensation expense. Net income (loss) is similarly adjusted and tax-effected to arrive at Adjusted Net Income (Loss). Adjusted EBITDA and Adjusted Net Income (Loss) are not recognized financial measures under GAAP, but we believe that they are useful in measuring our operating performance, enhance an overall understanding of the Company’s past financial performance, and provides useful information to the investor by comparing our performance across reporting periods on a consistent basis. Investors should not consider these measures in isolation or as a substitute for net income, operating income, or any other measure for determining the Company’s operating performance that is calculated in accordance with GAAP. In addition, because these measures are not calculated in accordance with GAAP, they may not necessarily be comparable to similarly titled measures employed by other companies. The non-GAAP financial measures included in the press release are reconciled to the corresponding GAAP financial measures below, as required under the rules of the Securities and Exchange Commission regarding the use of non-GAAP financial measures. See “Use of Non-GAAP Financial Information” for additional disclosures with respect to the use of non-GAAP financial information. This press release may contain “forward-looking statements” (within the meaning of the Private Securities Litigation Reform Act of 1995) that are based on current expectations, estimates and projections about JAKKS Pacific’s business based partly on assumptions made by its management. These statements are not guarantees of future performance and involve risks, uncertainties and assumptions that are difficult to predict. Therefore, actual outcomes and results may differ materially form what is expressed or forecasted in such statements due to numerous factors, including, but not limited to, those described above, changes in demand for JAKKS specifics products, product mix, the timing of customers orders and deliveries, the imposition, threat or uncertainty of tariffs, including reciprocal or retaliatory tariffs, the impact of competitive products and pricing, or that any future transactions will result in future growth or success of JAKKS. The “forward-looking statements” contained herein speak only as of the date on which they are made, and JAKKS undertakes no obligation to update any of them to reflect events or circumstances after the date of this release. Conference Call Live WebcastJAKKS Pacific, Inc. invites analysts, investors, and media to listen to the teleconference scheduled for 5:00 p.m. ET / 2:00 p.m. PT on April 29, 2025. A live webcast of the call will be available on the “Investor Relations” page of the Company’s website at www.jakks.com/investors. To access the call by phone, please go to this link (1Q25 Registration link), and you will be provided with dial-in details. To avoid delays, we encourage participants to dial into the conference call fifteen minutes ahead of the scheduled start time. A replay of the webcast will also be available for a limited time at (www.jakks.com/investors). About JAKKS Pacific, Inc.:JAKKS Pacific, Inc. is a leading designer, manufacturer and marketer of toys and consumer products sold throughout the world, with its headquarters in Santa Monica, California. JAKKS Pacific’s popular proprietary brands include: AirTitans®, Disguise®, Fly Wheels®, JAKKS Wild Games®, Moose Mountain®, Maui®, Perfectly Cute®, ReDo® Skateboard Co., Sky Ball®, SportsZone™, Xtreme Power Dozer®, WeeeDo®, and Wild Manes™ as well as a wide range of entertainment-inspired products featuring premier licensed properties. Through our products and our charitable donations, JAKKS is helping to make a positive impact on the lives of children. Visit us at www.jakks.com and follow us on Instagram (@jakkspacific.toys), X (@jakkstoys) and Facebook (@jakkspacific.toys). Forward Looking StatementsThis press release may contain “forward-looking statements” (within the meaning of the Private Securities Litigation Reform Act of 1995) that are based on current expectations, estimates and projections about JAKKS Pacific's business based partly on assumptions made by its management. These statements are not guarantees of future performance and involve risks, uncertainties and assumptions that are difficult to predict. Therefore, actual outcomes and results may differ materially from what is expressed or forecasted in such statements due to numerous factors, including, but not limited to, those described above, changes in demand for JAKKS Pacific's products, product mix, the timing of customer orders and deliveries, the impact of competitive products and pricing, or that any future transactions will result in future growth or success of JAKKS. The “forward-looking statements” contained herein speak only as of the date on which they are made, and JAKKS undertakes no obligation to update any of them to reflect events or circumstances after the date of this release. CONTACT:JAKKS Pacific Investor Relations(424) 268-9567 Lucas Natalini; investors@jakks.net JAKKS Pacific, Inc. and Subsidiaries Condensed Consolidated Balance Sheets (Unaudited) March 31, December 31, 2025 2024 2024 (In thousands) Assets Current assets: Cash and cash equivalents $59,188 $35,290 $69,936 Restricted cash 207 202 201 Accounts receivable, net 95,611 79,875 131,629 Inventory 53,163 46,341 52,780 Prepaid expenses and other assets 19,854 19,087 14,141 Total current assets 228,023 180,795 268,687 Property and equipment 142,493 138,066 142,623 Less accumulated depreciation and amortization 124,592 122,694 126,981 Property and equipment, net 17,901 15,372 15,642 Operating lease right-of-use assets, net 52,721 22,965 53,254 Deferred income tax assets, net 70,404 68,142 70,394 Goodwill 35,085 34,997 35,111 Other long-term assets 1,737 2,063 1,781 Total assets $405,871 $324,334 $444,869 Liabilities, Preferred Stock and Stockholders' Equity Current liabilities: Accounts payable $44,489 $31,683 $42,560 Accounts payable - Meisheng (related party) - 8,689 13,461 Accrued expenses 37,200 37,201 48,456 Reserve for sales returns and allowances 26,229 27,859 35,817 Income taxes payable 1,093 - 1,035 Short term operating lease liabilities 9,806 8,237 8,091 Total current liabilities 118,817 113,669 149,420 Long term operating lease liabilities 47,110 15,961 48,433 Accrued expenses - long term 2,909 3,183 2,563 Income taxes payable 2,009 3,295 3,620 Total liabilities 170,845 136,108 204,036 Stockholders' equity: Common stock, $.001 par value 11 11 11 Additional paid-in capital 295,931 292,024 297,198 Accumulated deficit (44,860) (88,117) (39,692) Accumulated other comprehensive loss (16,556) (16,192) (17,184) Total JAKKS Pacific, Inc. stockholders' equity 234,526 187,726 240,333 Non-controlling interests 500 500 500 Total stockholders' equity 235,026 188,226 240,833 Total liabilities, preferred stock and stockholders' equity $405,871 $324,334 $444,869 Supplemental Balance Sheet and Cash Flow Data (Unaudited) March 31, Key Balance Sheet Data: 2025 2024 Accounts receivable days sales outstanding (DSO) 76 81 Inventory turnover (DSI) 64 61 Three Months Ended March 31, Condensed Cash Flow Data: 2025 2024 Cash flows used in operating activities $(1,700) $(12,863) Cash flows used in investing activities (3,065) (3,634) Cash flows used in financing activities and other (5,977) (20,565) Increase in cash, cash equivalents and restricted cash $(10,742) $(37,062) Capital expenditures $(2,070) $(2,228) JAKKS Pacific, Inc. and Subsidiaries Condensed Consolidated Statements of Operations (Unaudited) Three Months Ended March 31, 2025 2024 Δ (%) (In thousands, except per share data) Net sales$113,253 $90,076 26 % Less: Cost of sales Cost of goods 54,626 53,821 1 Royalty expense 18,168 13,776 32 Amortization of tools and molds 1,446 1,427 1 Cost of sales 74,240 69,024 8 Gross profit 39,013 21,052 85 Direct selling expenses 8,696 8,097 7 General and administrative expenses 33,961 34,192 (1) Depreciation and amortization 113 87 30 Selling, general and administrative expenses 42,770 42,376 1 Loss from operations (3,757) (21,324) (82) Other income (expense): Other income (expense), net 5 138 (96) Interest income 362 376 (4) Interest expense (155) (143) 8 Loss before benefit from income taxes (3,545) (20,953) (83) Benefit from income taxes (1,163) (6,728) (83) Net loss (2,382) (14,225) (83) Net loss attributable to non-controlling interests - 280 nm Net loss attributable to JAKKS Pacific, Inc.$(2,382) $(14,505) (84)% Net loss attributable to common stockholders$(2,382) $(13,175) (82)% Loss per share - basic & diluted$(0.21) $(1.27) Shares used in loss per share - basic & diluted 11,146 10,354 Three Months Ended March 31, 2025 2024 Δ bps Fav/(Unfav) Net sales 100.0 % 100.0 %- Less: Cost of sales Cost of goods 48.3 59.7 1,140 Royalty expense 16.0 15.3 (70) Amortization of tools and molds 1.3 1.6 30.0 Cost of sales 65.6 76.6 1,100 Gross profit 34.4 23.4 1,100 Direct selling expenses 7.7 9.0 130 General and administrative expenses 29.9 38.0 810 Depreciation and amortization 0.1 0.1 - Selling, general and administrative expenses 37.7 47.1 940 Loss from operations (3.3) (23.7) 2,040 Other income (expense): Other income (expense), net - 0.2 Interest income 0.3 0.4 Interest expense (0.1) (0.2) Loss before benefit from income taxes (3.1) (23.3) Benefit from income taxes (1.0) (7.5) Net loss (2.1) (15.8) Net loss attributable to non-controlling interests - 0.3 Net loss attributable to JAKKS Pacific, Inc. (2.1)% (16.1)% Net loss attributable to common stockholders (2.1)% (14.6)% JAKKS Pacific, Inc. and SubsidiariesReconciliation of Non-GAAP Financial Information (Unaudited) Three Months Ended March 31, 2025 2024 Δ ($) (In thousands) EBITDA and Adjusted EBITDA Net loss $(2,382) $(14,225) $11,843 Interest expense 155 143 12 Interest income (362) (376) 14 Benefit from income taxes (1,163) (6,728) 5,565 Depreciation and amortization 1,559 1,514 45 EBITDA (2,193) (19,672) 17,479 Adjustments: Other (income) expense, net (5) (138) 133 Restricted stock compensation expense 2,552 2,575 (23) Adjusted EBITDA $354 $(17,235) $17,589 Adjusted EBITDA/Net sales % 0.3 % (19.1)%1940 bps Trailing Twelve Months Ended March 31, 2025 2024 Δ ($) (In thousands) TTM EBITDA and TTM Adjusted EBITDA TTM net income $46,043 $29,206 $16,837 Interest expense 1,107 3,591 (2,484) Interest income (827) (1,603) 776 Provision for income taxes 11,097 1,488 9,609 Depreciation and amortization 10,091 10,659 (568) TTM EBITDA 67,511 43,341 24,170 Adjustments: Loss from joint ventures (JAKKS Pacific, Inc. - 51%) - 276 (276) Loss from joint ventures (Meisheng - 49%) - 289 (289) Other (income) expense, net (169) (263) 94 Restricted stock compensation expense 9,512 8,513 999 Change in fair value of preferred stock derivative liability - 8,176 (8,176) Molds and tooling capitalization - (1,751) 1,751 Loss on debt extinguishment - 1,023 (1,023) TTM Adjusted EBITDA $76,854 $59,604 $17,250 TTM Adjusted EBITDA/TTM Net sales % 10.8 % 8.6 %220 bps Three Months Ended March 31, 2025 2024 Δ ($) (In thousands, except per share data) Adjusted net loss attributable to common stockholders Net loss attributable to common stockholders $(2,382) $(13,175) $10,793 Restricted stock compensation expense 2,552 2,575 (23) Tax impact of additional charges (524) (657) 133 Adjusted net loss attributable to common stockholders $(354) $(11,257) $10,903 Adjusted loss per share - basic & diluted $(0.03) $(1.09) $1.06 Shares used in adjusted earnings (loss) per share - basic & diluted 11,146 10,354 792 JAKKS Pacific, Inc. and SubsidiariesNet Sales by Division and Geographic Region (In thousands)Q1 Divisions 2025 2024 2023% Change 2025 v 2024 % Change 2024 v 2023 Toys/Consumer Products$107,438$82,910$97,89329.6%-15.3% Dolls, Role-Play/Dress Up 55,463 40,574 47,84336.7%-15.2% Action Play & Collectibles 42,881 33,008 37,84629.9%-12.8% Outdoor/Seasonal Toys 9,094 9,328 12,204-2.5%-23.6% Costumes$5,815$7,166$9,591-18.9%-25.3% Total$113,253$90,076$107,48425.7%-16.2% (In thousands)Q1 Regions 2025 2024 2023% Change 2025 v 2024 % Change 2024 v 2023 United States$88,944$70,430$80,44326.3%-12.4% Europe 11,810 5,735 10,162105.9%-43.6% Latin America 7,459 7,996 9,204-6.7%-13.1% Canada 3,279 3,370 4,054-2.7%-16.9% Asia 751 965 1,380-22.2%-30.1% Australia & New Zealand 613 1,346 1,608-54.5%-16.3% Middle East & Africa 397 234 63369.7%-63.0% TOTAL JAKKS$113,253$90,076$107,48425.7%-16.2% (In thousands)Q1 Regions 2025 2024 2023% Change 2025 v 2024 % Change 2024 v 2023 North America$92,223$73,800$84,49725.0%-12.7% International 21,030 16,276 22,98729.2%-29.2% Total$113,253$90,076$107,48425.7%-16.2%

JAKKS Pacific Reports First Quarter 2025 Financial Results

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