Jakks Q3 profit declines, but exceeds expectations

Jakks Pacific reports results for the third quarter and first nine months ended September 30th, 2009.
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Net sales for the third quarter were $351.4 million, compared to $357.8 million in the third quarter of 2008, and net sales for the first nine months of 2009 were $604.9 million, compared to $634.1 million for the first nine months of 2008.

Net profit for the third quarter was $33.7 million, or $1.06 per share, compared to $54.1 million, or $1.70 per share, year-on-year.

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 figures were hit earlier this year by nearly $500 million in pre-tax charges recorded in the second quarter, including a $407.1 million goodwill impairment charge.

The firm says the charges do 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.

Jack Friedman, chairman and co-CEO commented: “In this challenging retail environment, we have been focused on executing on our restructuring plan.

“In October we began consolidating operations in Hong Kong and New York, and also carried out headcount reductions company-wide. 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, continued: “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.”

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