Jakks' profit slims in Q3
By Staff -- Playthings, 10/21/2009 3:06:00 PM
MALIBU, Calif.—Jakks Pacific said today that it finished the third quarter with a double-digit decline in net income, yet remained profitable for the period.
Net income for the third quarter of 2009 was $33.7 million, or $1.06 per diluted share, a nearly 38 percent drop from the corresponding period of 2008. For the nine month period Jakks reported a net loss of $383.7 million, or $14.11 per diluted share, compared to earnings for the first nine months of 2008 of $59.2 million, or $1.88 per diluted share.
The toymaker's financial figures were hurt earlier this year by almost $500 million in pre-tax charges recorded in the second quarter, including a $407.1 million goodwill impairment charge that Jakks says does not affect the company’s liquidity or business operations, and is not expected to limit or change its ability to continue to generate positive future cash flow from intangible assets.
Net sales for the third quarter were $351.4 million, down less than 2 percent from the $357.8 million the toymaker tallied in the third quarter of 2008. Net sales for the first nine months of 2009 were down 4.6 percent to $604.9 million.
On a non-GAAP basis, 2009 net sales for the third quarter were $351.4 million and $605.5 million for the nine month period, compared to non-GAAP net sales of $357.8 million and $634.1 million for the third quarter and first nine months of 2008, respectively. On a non-GAAP basis, Jakks’ net income for the third quarter was $35.9 million, or $1.13 per diluted share, compared to non-GAAP net income of $46.6 million, or $1.47 per diluted share in the third quarter of 2008. Non-GAAP net income for the first nine months of 2009 was $24.3 million, or $0.83 per diluted share, compared to non-GAAP net income of $53.4 million, or $1.70 per diluted share for the first nine months of 2008.
Commenting on recent layoffs at the company’s headquarters and office in Hong Kong last week, Jakks Chairman and co-CEO Jack Friedman said: “In this challenging retail environment, we have been focused on executing on our restructuring plan … Our goal is to streamline processes, reduce costs and lower capital expenditures in order to enhance profitability in this retail environment.”
Stephen Berman, Jakks’ co-CEO and president, added: “We have been analyzing every area of our business, shipping our Fall line into retail, and developing our portfolio for 2010. We previewed next year’s line to buyers at JAKKS’ 2010 Fall Toy Preview held at our new Santa Monica Showroom during the past two weeks, and it was very well received by our licensors and retailer partners from every sales channel.”
The company said it still believes it will achieve its previously announced performance for the 2009 fiscal year of GAAP net sales of approximately $810 million, with a net loss on a GAAP basis of $378.0 million, or $13.72 per share.
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