Q2 2024 JAKKS Pacific Inc Earnings Call

Good afternoon, everyone. Welcome to the JAKKS Pacific Second Quarter 2024 Earnings Conference Call with Management.

Operator: The financial results for the first quarter ended June 30 of 2024. JAKS issued its earnings press lease earlier today. The earnings release and presentation slides for today's call are available on the company's website in the investor section.

Operator: Today's results for the first quarter ended June 30, 2024. JAKKS issued its earnings press release earlier today. The earnings release and presentation slides for today's call are available on the company's website in the Investor section.

Speaker Change: who will review the financial results for the first quarter ended June 30th, 2024.

Speaker Change: JAKKS issued its earnings press release earlier today. The earnings release and presentation slides for today's call are available on the company's website in the investor section.

Operator: On the call this afternoon are Stephen Berman, Chairman and Chief Executive Officer, and John Kimble, Chief Financial Officer.

Operator: On the call this afternoon are Stephen Berman, Chairman and Chief Executive Officer, and John Kimble, Chief Financial Officer. Stephen will first provide an overview of the quarter along with highlights of product lines and current business trends, then John will provide some additional commentary around JAKKS Pacific's financial and operational results. Mr. Berman will then return with additional comments and some closing remarks prior to opening up the call for questions. Your lines will be placed on mute for the first portion of the call. If you would like to be placed in the queue to ask a question, please press star 1 when on your telephone.

Stephen Berman: Stephen will first provide an overview of the quarter, along with highlights of product lines and current business trends.

Speaker Change: On the call this afternoon are Stephen Berman, Chairman and Chief Executive Officer, and John Kimble, Chief Financial Officer. Stephen will first provide an overview of the quarter along with highlights of product lines and current business trends. Then John will provide some additional editorial around JAKKS Pacific's financial and operational results.

John Kimble: Then John will provide some additional editorial around JAKS Pacific's financial and operational results.

Operator: Mr. Berman will then return with additional comments and some closing remarks prior to opening up the call for questions. Your lines will be placed on me for the first portion of the call. If you would like to be placed in the queue to ask a question, please press star 1-1 on your telephone.

Speaker Change: Mr. Romer will then return with additional comments and some closing remarks prior to opening up the call for questions. Your lines will be placed on mute for the first portion of the call. If you would like to be placed in the queue to ask a question, please press star 1 1 on your telephone.

Operator: Before we begin, the company would like to point out that any comments made about JAKS Pacific's future performance events were circumstances, including estimates of sales, margins, and or adjusted EBITDA in 2024, as well as any other four looking statements concerning 2024 and beyond, are subject to safe harbor protections under the 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 the four looking statements.

Operator: Before we begin, the company would like to point out that any comments made about JAKKS Pacific's future performance, events, or circumstances, including estimates of sales, margins, and or adjusted EBITDA in 2024, as well as any other forward-looking statements concerning 2024 and beyond, are subject to safe harbor protections under the 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 the forward-looking statement.

Speaker Change: Before we begin, the company would like to point out that any comments made about JAKKS Pacific's future performance, events, or circumstances, including estimates of sales, margins, and or adjusted EBITDA in 2024, as well as any other forward-looking statements concerning 2024 and beyond, are subject to safe harbor protections under the federal securities laws.

Speaker Change: These statements reflect the company's best judgment based on current market trends and conditions today and are subject to certain risk and uncertainties which could cause actual results to differ materially from those projected in the forward-looking statements.

Operator: For details concerning these and other risks and uncertainties, you should consult JAKS on those 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.

Operator: 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 refer to non-GAAP financial measures, such as adjusted EBITDA and adjusted earnings per share. 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 said, I'd like to turn the call over to Mr. Stephen Berman.

Speaker Change: For details concerning these and other such risk 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.

Operator: In addition, today's comments by management will refer to non-GAAP financial measures such as adjusted EBITDA and adjusted earnings per share. Unless stated otherwise, the most directly comparable GAAP financial measure 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 like to turn the call over to Mr. Stephen Burman.

Speaker Change: In addition, today's comments by management refer to non-GAAP financial measures, such as adjusted EBITDA and adjusted earnings per share. Unless stated otherwise, the most directly comparable GAAP financial metric has been reconciled to the associated non-GAAP financial measure.

Speaker Change: within the company's earnings press release issued today or previously as a reminder this conference is being recorded. With that, I'd like to turn the call over to Mr. Stephen Berman.

Stephen Berman: Good afternoon, and thank you for joining our call today. We are happy to share our current results after another constructive quarter. We continue to proactively engage retailers and licenseors about new ideas to grow our mutual businesses, and we continue to work internally, revisiting and refining the way we do business to ensure we are maximizing margins and sales as the increasing complexity of our global business merits. I feel confident that we are doing all the correct things today and looking toward the future that will both help us achieve our plans for this year as well as we generate long-term value as we look ahead to 2025 and even 2026.

Stephen G. Berman: Good afternoon, and thank you for joining our call today. We are happy to share our current results after another constructive quarter. We continue to proactively engage retailers and licensors about new ideas to grow our mutual business network. And we continue to work internally, revisiting and refining the way we do business to ensure we are maximizing margins and sales, as the increasing complexity of our global business requires. I feel confident that we are doing all the correct things today and looking toward the future that will both help us achieve our plans for this year, as well as generate long-term value as we look ahead to 2025 and even 2026.

Stephen G. Berman: Good afternoon and thank you for joining our call today. We are happy to share our current results after another constructive quarter.

Stephen G. Berman: We continue to proactively engage retailers and licensors about new ideas to grow our mutual businesses.

Stephen G. Berman: And we continue to work internally revisiting and refining the way we do business to ensure we are maximizing margins and sales as the increasing complexity of our global business merits.

Stephen G. Berman: I feel confident that we are doing all the correct things today and looking toward the future that will both help us achieve our plans for this year as well as we generate long-term value as we look ahead to 2025 and even 2026.

Stephen Berman: Our business performed in line with our expectations for the quarter, and although consumer outlook remains a bit unpredictable, we are increasingly confident we will achieve our objectives for the year. As I touch upon later in the call, we have a number of exciting initiatives launching this fall. As we look at the second half of 2024, this gives us confidence that 2025 has a lot of potentially positive narratives in its earliest stages. As such, we are diligently planning for that and seeing new opportunities.

Stephen G. Berman: Our business performed in line with our expectations for the quarter, and although the consumer outlook remains a bit unpredictable, we are increasingly confident we will achieve our objectives for the year. As I touch on later in the call, we have a number of exciting initiatives launching this fall. As we look at the second half of 2024, this gives us confidence that 2025 has a lot of potentially positive narratives in its earliest stages.

Stephen G. Berman: Our business performed in line with our expectations for the quarter, and although consumer outlook remains a bit unpredictable, we are increasingly confident we will achieve our objectives for the year.

Stephen G. Berman: As I touch upon later in the call, we have a number of exciting initiatives launching this fall.

Stephen G. Berman: As we look at the second half of 2024, this gives us confidence that 2025 has a lot of potentially positive narratives in its earliest stages.

Stephen G. Berman: As such, we are diligently planning for that and seeding new opportunities. Our total business generated $148.6 million in the second quarter, down 11% from this time last year. That sales level is significantly higher than the $112.4 million we shipped in the second quarter of 2021, which is the last year we had a similar content-light first half. So although our sales are down, we are not concerned that it's somehow a negative reflection on the health of our core Evergreen business.

Stephen Berman: Our total business generated 148.6 million in the second quarter, done 11% from this time last year. That sales level is significantly higher than the 112.4 million we shipped in the second quarter of 2021, which is the last year we had a similar content light first half. So, although our sales are down, we are not concerned that it's somehow a negative reflection on the health of our core at every unit. The Dall & Roll Play Division delivered 63.6 million in net sales, up 6.6% from 59.7 million, despite comparing against the dizzyed Little Mermaid release timing last year.

Stephen G. Berman: As such, we are diligently planning for that and seeding new opportunities.

Stephen G. Berman: Our total business generated $148.6 million in the second quarter, down 11% from this time last year.

Stephen G. Berman: That sales level is significantly higher than the $112.4 million we shipped in second quarter of 2021, which is the last year we had a similar content light first half.

Stephen G. Berman: So although our sales are down, we are not concerned that it's somehow a negative reflection on the health of our core and evergreen businesses.

Stephen G. Berman: The Dahlen Roleplay Division delivered $63.6 million in net sales, up 6.6% from $59.7 million, despite comparing it against the Dizzy Little Mermaid release timing last year. The action play and collectible business generated $36.6 million, down 30.5% from $52.6 million last year, which was a very difficult comparison with the Super Mario Bros. movie. Our outdoor and seasonal business continued to be light, delivering $4.4 million versus $5.7 million last year, but we are starting to see some bright spots with new listings and solid sell-throughs at relevant accounts. Our Disguised Costume business generated $44 million in net sales, down from $49 million last year.

Stephen G. Berman: The Dolan Roleplay Division delivered $63.6 million in net sales, up 6.6% from $59.7 million, despite comparing against the Dizzy Little Mermaid release timing last year.

Stephen Berman: The action play in collectible business generated 36.6 million, down 30.5% from 52.6 million last year, which was a very difficult comparison with the Super Mario Brothers movie. Our outdoor and seasonal business continued light, delivering 4.4 million versus 5.7 million last year, but we are starting to see some bright spots with new listings and solid self-thrues at relevant accounts. Our disguised costume business generated 44 million in net sales, down from 49 million last year. As you said on the last call, we expect this business to be slightly softer than last year globally. Retailers are still trying to calibrate their order levels on a full-year basis post-COVID.

Stephen G. Berman: The action play and collectible business generated $36.6 million, down 30.5% from $52.6 million last year, which was a very difficult comparison with the Super Mario Bros. movie.

Stephen G. Berman: Our outdoor and seasonal business continued light, delivering $4.4 million versus $5.7 million last year, but we are starting to see some bright spots with new listings and solid sell-throughs at relevant accounts.

Stephen G. Berman: Our disguised costume business generated $44 million in net sales, down from $49 million last year.

Stephen G. Berman: As we said on the last call, we expect this business to be slightly softer than last year, globally, because retailers are still trying to calibrate their order levels on a full-year basis post-COVID. With $51.2 million sold year-to-date, we are still tracking significantly higher than 2021, when our year-to-date number was $34.8 million. Looking at the business from a market perspective, our North American business has led the way, shipping $132.1 million in the quarter at a decline of 7.6%.

Stephen G. Berman: As we said on the last call, we expect this business to be slightly softer than last year, globally.

Stephen Berman: With 51.2 million sold year-to-date, we are still tracking significantly higher than 2021, when our year-to-date number was 34.8 million. Reviewing the business from a market perspective, our North American business has led the way, shipping 132.1 million in the quarter at a client of 7.6%. International has been more of a drag, although also impacted by content comp. Some logistic issues in Asia resulted in some sales slipping out of the quarter. As a result, we saw international drop to 16.5 million in the quarter, down 31.1% versus prior year. Our toy and consumer products, POS comparisons, are ever changing, given the impact of content-driven product last year and this year.

Stephen G. Berman: Retailers are still trying to calibrate their order levels on a full-year basis post COVID. With 51.2 million sold year-to-date, we are still tracking significantly higher than 2021 when our year-to-date number was 34.8 million.

Stephen G. Berman: Reviewing the business from a market perspective, our North American business has led the way shipping 132.1 million in the quarter at a decline of 7.6 percent.

Stephen G. Berman: International has been more of a drag, although also impacted by content comp. Some logistic issues in Asia resulted in some sales slipping out of the quarter. As a result, we saw international drop to $16.5 million in the quarter, down 31.1% versus prior year.

Stephen G. Berman: International has been more of a drag, although also impacted by content comp.

Stephen G. Berman: Some logistic issues in Asia resulted in some sales slipping out of the quarter. As a result, we saw international drop to $16.5 million in the quarter, down 31.1% versus prior year.

Stephen G. Berman: Our toy and consumer products POS comparisons are ever-changing given the impact of content-driven products last year and this year. Putting those titles aside, some of our product lines outperformed last year, and some are a bit softer. Overall, we would say our business was tracking down a low single-digit percentage at retail. Consistent with what you've heard from other sources, we agree that there hasn't been a tremendous amount of excitement in this space for the first half of the year, and in-store results have tracked similarly.

Stephen G. Berman: Our toy and consumer products POS comparisons are ever-changing given the impact of content-driven product last year and this year. Putting those titles aside, some of our product lines outperformed last year and some are a bit softer.

Stephen Berman: Putting those titles aside, some of our product lines outperformed last year, and some are a bit softer. Overall, we would say our business was tracking down a low single-digit percentage at retail. Consisting with what you've heard from other sources, we agreed that there hasn't been a tremendous amount of excitement in the space for the first half of the year, and in-store results have tracked similarly. We're not seeing any trends in this area, however, that give us any reason for any concern as we move into the second half and the majority of the new product introductions queue up for the launch during the second half of this year.

Stephen G. Berman: Overall we would say our business was tracking down a low single-digit percentage at retail.

Stephen G. Berman: Consistent with what you've heard from other sources, we agree that there hasn't been a tremendous amount of excitement in the space for the first half of the year, and in-store results have tracked similarly.

Stephen G. Berman: We're not seeing any trends in this area, however, that give us any reason for any concern as we move into the second half and the majority of the new product introductions queue up for launch during the second half of this year.

Stephen G. Berman: We are not seeing any trends in this area, however, that give us any reason for any concern as we move into the second half and the majority of the new product introductions queue up for the launch during the second half of this year.

Stephen G. Berman: On a final note, before I pass it over to John, we were excited to learn this month that we were named the 2023 Hard Goods Vendor of the Year by Target. As you know, we have a great, long-standing relationship with Target, which supports a broad and deep assortment of product lines. We are extremely proud to receive this recognition that stretches beyond Torial to the entire hard goods sector at Target. Congratulations to our team and particularly to the people we have based in Minneapolis who partner with Target daily to maximize our business together. Now over to John for some comments, and after that, I will come back and talk more about where we are focusing in the second half and beyond. John.

Stephen Berman: On a final note, before I pass it over to John, we were excited to learn this month that we were named the 2023 Hard Goods Vendor of the Year by Target. As you know, we have a great, long-standing relationship with Target, who supported a broad and deep assortment of product lines. We are extremely proud to receive this recognition that stretches beyond the toil to the entire Hard Goods sector at Target. Congratulations to our team and particularly the people we have based in Minneapolis who partnered with Target Daily to maximize our business together.

Stephen G. Berman: On a final note, before I pass it over to John , we were excited to learn this month that we were named the 2023 Hard Goods Vendor of the Year by Target.

John: As you know, we have a great, long-standing relationship with Target, who support a broad and deep assortment of product lines. We are extremely proud to receive this recognition that stretches beyond the Torial to the entire hard goods sector at Target.

John: Congratulations to our team and particularly the people we have based in Minneapolis who partner with Target daily to maximize our business together.

John Kimble: Now over to John for some comments, and after, I will come back and talk more about where we are focusing in the second half and beyond.

John: Now over to John for some comments and after I will come back and talk more about where we are focusing in the second half and beyond. John .

John Kimble: John. Thank you, Stevens, and hi everybody. Q2 was a pleasantly uneventful quarter when it comes to talking about results, even if there's been a lot of activity happening behind the scenes. Stevens said, "top and bottom line results were in line with our expectations, and we seem to be on track for another very productive year." We have a wide range of new product introductions coming to market over the next six months, and we're excited for consumers to engage with them.

John L. Kimble: Thank you, Stephen. And Hi everybody.

John: Thank you, Stephen. And hi, everybody. Q2 is a pleasantly uneventful quarter when it comes to talking about results, even if there's been a lot of activity happening behind the scenes.

John L. Kimble: Q2 was a pleasantly uneventful quarter when it came to talking about results, even if there's been a lot of activity happening behind the scenes. Stephen said, "top and bottom line results were in line with our expectations, and we seem to be on track for another very productive year." We have a wide range of new product introductions coming to market over the next six months, and we're excited for consumers to engage with them.

John: Stephen said, top and bottom line results were in line with our expectations and we seem to be on track for another very productive year. We have a wide range of new product introductions coming to market over the next six months and we're excited for consumers to engage with them.

John Kimble: As we've covered sales extensively, I'll move into margin. Gross margin was up 130 basis points in the quarter, primarily due to lower royalty expense. The reduction is essentially driven by the mix of products sold in the quarter, the contributions of the various IP, and then also some impact of selling method. With gross margin at 32.0%, that's as good of a Q2 we've posted since 2012. It's challenging to improve margins when sales are down, so we're happy with that result.

John L. Kimble: As we've covered sales extensively, I'll move into margin. Gross margin was up 130 basis points in the quarter, primarily due to lower royalty expenses. The reduction is essentially driven by the mix of products sold in the quarter, the contributions of the various IP, and then also some impact of selling methods. With gross margin at 32.0%, that's as good of a Q2 we've posted since 2012. It's challenging to improve margins when sales are down, so we're happy with that result.

Speaker Change: As we've covered sales extensively, I'll move into margin. Gross margin was up 130 basis points in the quarter, primarily due to lower royalty expense. The reduction is essentially driven by the mix of products sold in the quarter, the contributions of the various IP, and then also some impact of selling method.

Speaker Change: With gross margin at 32.0%, that's as good of a Q2 we've posted since 2012. It's challenging to improve margins when sales are down, so we're happy with that result.

John Kimble: Moving down the P&L, there's not a lot of updated news from last quarter. Lower sales do not help scale fixed costs, and we are investing against the back half of the year and 2025 a bit more than we were at this time last year. We would like to see our first half level of margin erosion decrease in the latter half of the year, but we will also not try to optimize against the specific metric if we think an expenditure is the right thing to do. As we have said before, we plan the business considering full year revenues and related full year expenditures as opposed to trying to optimize for a quarterly outcome, while also managing the current year's transactions and deploying resources to enable business in the two subsequent calendar years.

John L. Kimble: Moving down the P&L, there's not a lot of updated news from last quarter. Lower sales do not help scale fixed costs, and we are investing against the back half of the year and 2025 a bit more than we were at this time last year. We would like to see our first-half level of margin erosion decrease in the latter half of the year, but we will also not try to optimize against a specific metric if we think an expenditure is the right thing to do.

Speaker Change: Moving down the P&L, there's not a lot of updated news from last quarter. Lower sales do not help scale fixed costs, and we are investing against the back half of the year and 2025 a bit more than we were at this time last year.

Speaker Change: We would like to see our first half level of margin erosion decrease in the latter half of the year, but we will also not try to optimize against a specific metric if we think an expenditure is the right thing to do.

John L. Kimble: As we have said before, we plan the business considering full-year revenues and related full-year expenditures, as opposed to trying to optimize for a quarterly outcome, while also managing the current year's transactions and deploying resources to enable business in the two subsequent calendar years. Seasonality is a fact for us, which is why we value resilience and predictability of results and avoid trying to over-obsess about the short term. With all those protestations aside, Q2 operating margin of 5.1% and adjusted EBITDA margin of 8.3% are still strong results for us.

Speaker Change: As we have said before, we plan the business considering full-year revenues and related full-year expenditures, as opposed to trying to optimize for a quarterly outcome, while also managing the current year's transactions and deploying resources to enable business in the two subsequent calendar years.

John Kimble: Seasonality is a fact for us, which is why we value resilience and predictability of results and avoid trying to over obsess about the short term. With all those protestations aside, Q2 operating margin of 5.1% and adjusted EBITDA margin of 8.3% are still strong results for us. We continue to increase our internal communications around sales, expectations, and inventory management to improve productivity in that area. Our Q2 total inventory level of 51 million dollars is the lowest it has been at this time of the year since 2010. Customers continue to embrace the direct import FOB business model, which, among other positive attributes, is working capital friendly to us.

Speaker Change: Seasonality is a fact for us, which is why we value resilience and predictability of results and avoid trying to over-obsess about the short term.

Speaker Change: With all those protestations aside, Q2 operating margin of 5.1% and adjusted EBITDA margin of 8.3% are still strong results for us.

John L. Kimble: We continue to increase our internal communications around sales expectations and inventory management to improve productivity in that area. Our Q2 total inventory level of $51 million is the lowest it has been at this time of the year since 2010. Customers continue to embrace the direct import FOB business model, which, among other positive attributes, is working capital friendly to us.

Speaker Change: We continue to increase our internal communications around sales expectations and inventory management to improve productivity in that area. Our Q2 total inventory level of $51 million is the lowest it has been at this time of the year since 2010.

Speaker Change: Customers continue to embrace the direct import FOB business model, which among other positive attributes, is working capital friendly to us.

John Kimble: Timing of sales and pace of collections leads us exiting the quarter with a bit more accounts receivable and a bit less cash than usual, but this is in line with our internal planning.

John L. Kimble: Timing of sales and pace of collections leaves us exiting the quarter with a bit more accounts receivable and a bit less cash than usual, but this is in line with our internal planning. We have drawn $5 million on our ABL as of quarter close, a number that we have increased to $26 million as of this week, but we anticipate that balance to be mostly if not entirely repaid by the end of Q3 as collections accelerate.

Speaker Change: Timing of sales and pace of collections leaves us exiting the quarter with a bit more accounts receivable and a bit less cash than usual, but this is in line with our internal planning.

John Kimble: We have drawn $5 million on our ABL as of quarter close, a number that we have increased to $26 million as of this week, but we anticipate that balance to be mostly, if not entirely, repaid by the end of Q3 as collections accelerate. This seems like an ideal place to point out that year-over-year, our interest expense at the total company level is $399,000 year-to-date versus $4.3 million in the first half of 2023.

Speaker Change: We have drawn $5 million on our ABL as of quarter close, a number that we have increased to $26 million as of this week, but we anticipate that balance to be mostly, if not entirely, repaid by the end of Q3 as collections accelerate.

John L. Kimble: This seems like an ideal place to point out that, year-over-year, our interest expense at the total company level is $399,000 year-to-date versus $4.3 million in the first half of 2023. To wrap up, Adjusted EBITDA for the quarter was $12.3 million, or 8.3% of net sales, bringing our 12-month trailing number to $51.2 million, or 7.6% of net sales. And now, back to Stephen.

Speaker Change: This seems like an ideal place to point out that year-over-year, our interest expense at the total company level is $399,000 year-to-date versus $4.3 million in the first half of 2023.

John Kimble: To wrap, adjusted EBITDA for the quarter was $12.3 million, or 8.3% of net sales, bringing our 12-month trailing number to $51.2 million, or 7.6% of net sales. Adjusted EPS was $0.65 per diluted share, down from $1.26 last year.

Speaker Change: To wrap, adjusted EBITDA for the quarter was $12.3 million, or 8.3% of net sales, bringing our 12-month trailing number to $51.2 million, or 7.6% of net sales. Adjusted EPS was $0.65 per diluted share, down from $1.26 last year.

Stephen Berman: And now, back to Steven. Thank you, John. As we highlighted last quarter, certainly the two biggest pieces of new news for us in the second half will be supporting the theatrical releases of Disney's Moana 2 in late, mid-term retail support for both properties in the U.S. and internationally and look forward to a great audience reaction to both the films and our complimentary product. lines. This will also vote extremely well going into 2025 as the movie should continue, and then we should get a boost from the streaming launch based on our past experiences.

Stephen G. Berman: As we highlighted last quarter, certainly, the two biggest pieces of new news for us in the second half will be supporting the theatrical releases of Disney's Moana 2 in late November and Sega's Sonic the Hedgehog 3 in December. We have broad retail support for both properties in the U.S. and internationally, and look forward to a great audience reaction to both the films and our complementary product line. This will also bode extremely well going into 2025, as the movie should continue, and then we should get a boost from the streaming launch based on our past experience.

Speaker Change: And now, back to Stephen.

Stephen G. Berman: Thank you, John . As we highlighted last quarter, certainly the two biggest pieces of new news for us in the second half will be supporting the theatrical releases of Disney's Moana 2 in late November and Sega's Sonic the Hedgehog 3 in December .

Speaker Change: We have a broad retail support for both properties in the U.S. and internationally and look forward to a great audience reaction to both the films and our complimentary product lines.

Speaker Change: This will also bode extremely well going into 2025 as the movie should continue and then we should get a boost from the streaming launch based on our past experiences.

Stephen Berman: As I mentioned earlier, we have several additional product launches this fall, almost all of which represent very specific initiatives that, with success, can layer into our brick-by-brick product assortment by extension and at a resilience to our evergreen business for the long-term. Starting with the Simpsons, our product line will begin to appear on Shell's this quarter at the largest U.S. accounts as well as some internationally. Our core toy line includes plush, multiple scales of figures, and a diorama set of the iconic living room with notable features from the show. We also have a variety of collectibles, including premium figures, shelf talkers for Bart and Homer, a most-prank phone, and a large-scale, talking Crusty doll that received an incredible amount of pre-cell interest.

Stephen G. Berman: As I mentioned earlier, we have several additional product launches this fall, almost all of which represent very specific initiatives that, with success, can layer into our brick-by-brick product assortment by extension and add resilience to our evergreen business for the long term. Starting with The Simpsons, our product line will begin to appear on shelves this quarter at the largest U.S. accounts as well as some international locations. Our core toy line includes plush, multiple scales of figures, and a diorama set of the iconic living room with notable features from the show.

Speaker Change: As I mentioned earlier, we have several additional product launches this fall, almost all of which represent very specific initiatives that with success can layer into our brick-by-brick product assortment by extension and add resilience to our evergreen business for the long term.

Stephen G. Berman: We also have a variety of collectibles, including premium figures, shelf talkers for Bart and Homer, a Mohs prank phone, and a large-scale talking Krusty doll that received an incredible amount of pre-sale interest. With a couple exclusive figures coming to Walmart later this year, our Simpsons toys represent a wide range of offerings to please fans of all ages and are a great launch for this new business We also continue to move more aggressively forward with our new authentic brands businesses. This quarter, you will be able to find our Element, Quicksilver, and Roxy skateboards at Academy Sports.

Stephen G. Berman: Starting with the Simpsons, our product line will begin to appear on shelves this quarter at the largest U.S. accounts as well as some internationally.

Stephen G. Berman: Our core toy line includes plush, multiple scales of figures, and a diorama set of the iconic living room with notable features from the show.

Speaker Change: We also have a variety of collectibles including premium figures, shelf talkers for Bart and Homer, a Mohs prank phone, and a large-scale talking Krusty doll that received an incredible amount of pre-sale interest.

Stephen Berman: With a couple exclusive figures coming to Walmart later this year, our Simpsons toys represent a wide range of offerings to police fans of all ages and is a great launch to this new business this year.

Speaker Change: With a couple exclusive figures coming to Walmart later this year, our Simpsons toys represent a wide range of offerings to please fans of all ages and is a great launch to this new business this year.

Stephen Berman: We also continue to move more aggressively forward with their new architect brand's businesses. This quarter, you will be able to find our element, quick-sever, and rocks-escape boards at Academy Sports. We have a range of 15 different boards planned to be on shelf with what we hope will be just the start of the business as an expanded product and customer-based footprint in 2025. The big initiative of the broad launch of the ABG line of products really comes into effect in spring 2025, with inflatables, skateboards, inline skates, beach and park chairs, umbrellas, and carriers, just to give them a few of the items and the wide category range of products.

Speaker Change: We also continue to move more aggressively forward with our new authentic brands businesses.

Speaker Change: This quarter, you will be able to find our Element, Quiksilver, and Roxy skateboards at Academy Sports. We have a range of 15 different boards planned to be on shelf with what we hope will be just the start of the business as we expand our product and customer base footprint in 2025.

Stephen G. Berman: We have a range of 15 different boards planned to be on the shelf with what we hope will be just the start of the business as we expand our product and customer base footprint in 2025. The big initiative of the broad launch of the AVG line of products really comes into effect in Spring 2025, with inflatables, skateboards, inline skates, beach and park chairs, umbrellas, and carriers, just to name a few of the items in the wide category range of products.

Speaker Change: The big initiative of the broad launch of the ABG line of products really comes into effect in Spring 2025 with inflatables, skateboards, inline skates, beach and park chairs, umbrellas, and carriers just to name a few of the items in the wide category range of products.

Stephen Berman: Another new and noteworthy initiative is the launch of Jack's newest-owned IP, Wild Mainz. We are launching with toys, content, and gaming, looking to reach girls of all ages on every platform. The toy line debuts an extensive range of horses, play sets, and vehicles. We have received great reaction from both customers and consumer testings for this concept since we started showing it last year and have support all across the major customers in the US, with some international support as well. We have partnered with Epic Story Media to create over 300 minutes of animated content, with over a dozen original songs.

Stephen G. Berman: Another new and noteworthy initiative is the launch of JAKKS' newest owned IP, Wild Maine. We are launching with toys, content, and gaming, looking to reach girls of all ages on every platform. The toy line debuts an extensive range of horses, play sets, and vehicles. We have received great reactions from both customers and consumer testing for this concept since we started showing it last year and have had support all across the major customers in the U.S. with some international support as well.

Speaker Change: The toy line debuts an extensive range of horses, play sets, and vehicles.

Speaker Change: We have received great reaction from both customers and consumer testings for this concept since we started showing it last year and have support all across the major customers in the U.S. with some international support as well.

Stephen G. Berman: We have partnered with Epic Story Media to create over 300 minutes of animated content with over a dozen original songs. Those animated shorts are starting to become available now on the Wild Manes YouTube channel. In addition, our Roadblocks game launched in June and is steadily building an audience. We're super excited about the potential here as it's a concept within our global appeal and relevant and relatable themes that we think can sustain for years to come, and we are well underway in planning for that accordingly.

Stephen Berman: Those animated shorts are starting to become available now on the Wild Mainz YouTube channel. In addition, our roadblocks game launched in June and a steadily-building audience. We're super excited with potential here as it's a concept within our global appeal and relevant and relatable themes that we think can sustain for years to come, and we are well underway in planning for that accordingly.

Speaker Change: In addition, our Roadblocks game launched in June and is steadily building an audience. We're super excited of the potential here as it's a concept within our global appeal and relevant and relatable themes that we think can sustain for years to come, and we are well underway in planning for that accordingly.

Stephen Berman: In our dizzy roleplay business, we are building a new roleplay segment for Frozen, similar to what we did with Style Collection for Disney Princess. The launching in August is the new Frozen roleplay line, the IC Magic Collection, which will hit shelves exclusively at Target. This line invites girls to experience a magic of Elsa via a feature-rich line of core roleplay Editially. As mentioned, we are all anticipating the launch of Dizzy's Vol 1 and 2. JAKS is participating in a much anticipated sequel with a full line of dolls dressed up and role played toys, which will be supported with inline and out-of-isle displays that all major global retailers.

Stephen G. Berman: In our Disney roleplay business, we are building a new roleplay segment for Frozen, similar to what we did with the Style Collection for Disney Princess. The launch in August is the new Frozen roleplay line, the Icy Magic Collection, which will hit shelves exclusively at Target. This line invites girls to experience the magic of Elsa via a feature-rich line of core roleplay items.

Stephen G. Berman: Additionally, as mentioned, we are all anticipating the launch of Disney's Moana 2. JAKKS is participating in the much-anticipated sequel with a full line of dolls, dress-up, and role-play toys, which will be supported with in-line and out-of-aisle displays at all major global retailers. Building on the success of the Disney Tsum Tsum D100 program, JAKKS is extending its product line with Disney on Tsum Tsum with a brand new collection this fall. In August, the first collection launches, offering collectibles across the core Disney franchise. Then, in October, we will release Marvel Tsum Tsum in December, and Target will premiere the first collectible line of Star Wars Tsum Tsum, launching widely in Spring 2025.

Speaker Change: Additionally, as mentioned, we are all anticipating the launch of Disney's Moana 2. JAKKS is participating in a much-anticipated sequel with a full line of dolls, dress-up and role-play toys, which will be supported with inline and out-of-aisle displays at all major global retailers.

Stephen Berman: Building on the success of the Dizzy Sumesum D100 program, JAKS is extending our product line with Dizzy on Sumesum with a brand new collection this fall. In August, the first collection launches offering collectibles across the core Disney franchises. Then in October, we will release Marvel Sumesum in December, and Target will premiere the first collectible line of Star Wars Sumesum, launching wide in spring 2025. In fourth quarter, we will also benefit from the initial shipments of two new lines within the Disney portfolio. Dizzy's Musical Minis and Ili Tote Ili Teenies, both new and exciting collectible lines, offer new ways to engage with your favorite Disney stories and caricatures.

Speaker Change: Building on the success of the Disney Tsum Tsum D100 program, JAKKS is extending our product line with Disney on Tsum Tsum with a brand new collection this fall. In August , the first collection launches, offering collectibles across the core Disney franchises.

Stephen G. Berman: In the fourth quarter, we will also benefit from the initial shipments of two new lines within the Disney portfolio, Disney's Musical Minis and Illy Tote Illy Teenies. Both new and exciting collectible lines offer new ways to engage with your favorite Disney stories and caricatures. Look for these on the shelf in Spring 2025.

Stephen Berman: Look for these on shelf in Spring 2025.

Stephen Berman: Moving more to dress up and roleplay opportunities, I'm excited to share that we will be supporting NBC Universal's highly anticipated tent pole film Wicked, coming to theaters in November. Leveraging our market leadership in this space, we have the extensive line of roleplay dresses and accessories, inspired by Glinda, Elphaba, and the entire cast of this cultural phenomenon. We have a broad retail support for this line, and expansion plans for 2025, as a second film is planned for fall 2025.

Stephen G. Berman: Moving more to dress-up and role-play opportunities, I'm excited to share that we will be supporting NBCUniversal's highly-anticipated tentpole film, Wicked, coming to theaters in November. Leveraging our market leadership in this space, we have an extensive line of role-play dresses and accessories inspired by Glinda, Elphaba, and the entire cast of this cultural phenomenon. We have broad retail support for this line and expansion plans for 2025, and a second film is planned for fall 2025. Although it sometimes flies under the radar, JAKKS has a long history of working with customers to create unique private label offerings to meet their needs while surprising and delighting their consumers.

Speaker Change: look for these on shelf in spring 2025.

Speaker Change: Moving more to dress-up and role-play opportunities, I'm excited to share that we will be supporting NBCUniversal's highly anticipated tentpole film, Wicked, coming to theaters in November .

Speaker Change: Leveraging our market leadership in this space, we have an extensive line of role-play dresses and accessories inspired by Glinda, Elphaba, and the entire cast of this cultural phenomenon.

Speaker Change: We have a broad retail support for this line and expansion plans for 2025, and a second film is planned for Fall 2025.

Stephen Berman: Although it sometimes flies under the radar, Jack says a long history of working with customers to create a unique private label offerings to meet their needs while surprising and delighting their consumers. With that in mind, I'm delighted to share that starting this fall, we are starting several new initiatives with CBS across all their doors in the US. We are partnered with them in developing a line of 14- and 18-inch dolls sold under the Be My Baby and Be My Besties brands. These are great looking dolls, and with a great value as well. In addition, we will be launching a child-sized version of the CBS 2-in-run Roller Shopping Basket, which comes with 12-owned brand accessories.

Speaker Change: Although it sometimes flies under the radar, JAKKS has a long history of working with customers to create a unique private label offerings to meet their needs while surprising and delighting their consumers. With that in mind, I'm delighted to share that starting this fall, we are starting several new initiatives with CVS across all their doors in the U.S.

Stephen G. Berman: With that in mind, I'm delighted to share that starting this fall, we are starting several new initiatives with CVS across all their doors in the U.S. We have partnered with them to develop a line of 14 and 18 inch dolls sold under the Be My Baby and Be My Bessies brands. These are great looking dolls and with a great value as well. In addition, we will be launching a child-size version of the CVS 2-in-1 Roller Shopping Basket, which comes with 12 own-brand accessories.

Speaker Change: We have partnered with them in developing a line of 14 and 18 inch dolls sold under the Be My Baby and Be My Bessies brands.

Speaker Change: These are great looking dolls and with a great value as well. In addition, we will be launching a child-sized version of the CVS 2-in-1 Roller Shopping Basket, which comes with 12 own-brand accessories.

Stephen G. Berman: This fun and functional item is bound to be a hit. Make sure to review our presentation deck on the investor page of our website for images of these items and some other items that I'll be mentioning throughout today. Back in our action figure and play collectible businesses, we were pleased and surprised by the very strong reaction to our Bendy figure and Bendy plush line earlier this year, launching exclusively at Walmart in both the U.S. and Canada. These items were almost immediately on our top selling list every week.

Stephen Berman: This fun and functional item is bound to be a hit.

Stephen Berman: Make sure to review our presentation deck on the investor page of our website for the images of these items and some other items that I'll be mentioning throughout today. Back in our action figure and play collectible businesses, we have been pleased and surprised by their very strong reaction to our bendy figure and bendy plus line earlier this year. Launching exclusively at Walmart in both the US and Canada, these items were almost immediately on our top-selling items list every week. With new ways of figures and plus starting to hit shelves now, along with some additional collector items for special accounts, we anticipate these sales trends to continue through the rest of the year and 2025.

Speaker Change: This fun and functional item is bound to be a hit. Make sure to review our presentation deck on the investor page of our website for the images of these items and some other items that I'll be mentioning throughout today.

Speaker Change: Back in our action figure and play collectible businesses, we've been pleased and surprised by the very strong reaction to our Bendy figure and Bendy plush line earlier this year.

Speaker Change: launching exclusively at Walmart in both the US and Canada. These items were almost immediately on our top selling items list every week.

Stephen G. Berman: With new waves of figures and plush starting to hit shelves now, along with some additional collector items for specialty accounts, we anticipate these sales trends to continue through the rest of the year and into 2025. And suffice to say that we have a lot of exciting things happening in support of the Sonic 3 movie, but given our embargo issues around the rollout of some of that information, we're going to have to save that for the next quarter. What we can tell you about is a tornado biplane item in our core line. This is an iconic vehicle from the Sonic video game lore.

Speaker Change: With new waves of figures and plush starting to hit shelves now, along with some additional collector items for specialty accounts, we anticipate these sales trends to continue through the rest of the year and into 2025.

Stephen Berman: And suffice to say that we have a lot of excited things happening in support of the Sonic 3 movie, but given our embargo issues around the roll out of some of that information, we are going to have to save that for the next course. Order. What we can tell you about is a tornado byplane item in our core line. This is an iconic vehicle from the Sonic video game lore. We are also introducing a new Google Racing segment that highlights that Sonic is all about speed. We were excited to share both of these new releases at the San Diego Comic Con last weekend and to tell you about them today.

Speaker Change: And suffice to say that we have a lot of exciting things happening in support of the Sonic 3 movie, but given our embargo issues around the rollout of some of that information, we're going to have to save that for the next quarter.

Speaker Change: What we can tell you about is the tornado biplane item in our core line.

Stephen G. Berman: We're also introducing a new go-go racing segment that highlights that Sonic is all about speed. We were excited to share both of these new releases at the San Diego Comic-Con last weekend and to tell you about them today, and Nintendo continues to be a top brand in this division. We have added new figures, a diorama set, and a new feature play set for this fall that's backed by a media campaign. We also have the new King Boo figure set that's exclusive to Target this fall and is available in store now.

Speaker Change: This is an iconic vehicle from the Sonic video game lore.

Speaker Change: We're also introducing a new go-go racing segment that highlights that Sonic is all about speed.

Speaker Change: We were excited to share both of these new releases at the San Diego Comic Con last weekend and to tell you about them today.

Stephen Berman: And Nintendo continued to be a top brand in this division. We have added new figures, a diorama set, and a new feature play set for this fall. That's backed by a media campaign. We also have the new King Boo figure set that's exclusive to Target this fall and is available in store now.

Speaker Change: And Nintendo continues to be a top brand in this division.

Speaker Change: We have added new figures, a diorama set, and a new feature play set for this fall that's backed by a media campaign. We also have the new King Boo figure set that's exclusive to Target this fall and is available in store now.

Stephen Berman: We're also quite excited to be supporting a January 2025 film from DreamWorks Animation, Dogman, based on the best-selling children's book series. I wish I could somehow share the steady and consistent reactions we saw during customer previews as people turned the corner in our showroom and exclaimed, "Dogman," upon seeing that display in the product line. The series really has been a rite of passage for many parents and their children over the past several years, and the team has developed a very endearing line to support it.

Stephen G. Berman: We're also quite excited to be supporting a January 2025 film from DreamWorks Animation, Dogman, based on the best-selling children's book series. I wish I could somehow share the steady and consistent reactions we saw during customer previews as people turned the corner in our showroom and exclaimed, "Dogman" upon seeing the display in the product line. The series really has been a rite of passage for many parents and their children over the past several years, and the team has developed a very endearing line to support it.

Speaker Change: We're also quite excited to be supporting a January 2025 film from DreamWorks Animation, Dogman, based on the best-selling children's book series.

Speaker Change: I wish I could somehow share the steady and consistent reactions we saw during customer previews as people turned the corner in our showroom and exclaimed, Dog Man, upon seeing the display in the product line.

Speaker Change: The series really has been a rife of passage for many parents and their children over the past several years and the team has developed a very endearing line to support it.

Stephen Berman: I also wanted to highlight that we have a nice placement over our Advent calendars available at Costco this year, anchored by the classic holiday movies that fans will be watching on TV and streaming this holiday season. The assortment includes Elf, A Christmas Story, and National Lampoon's Christmas Vacation.

Stephen G. Berman: I also wanted to highlight that we have a nice placement of our Advent Calendars available at Costco this year, anchored by the classic holiday movies that fans will be watching on TV and streaming this holiday season. The assortment includes Elf... A Christmas Story, and National Lampoon's Christmas Vacation.

Speaker Change: I also wanted to highlight that we have a nice placement of our Advent calendars available at Costco this year, anchored by the classic holiday movies that fans will be watching on TV and streaming this holiday season. The assortment includes Elf,

Stephen Berman: As is always the case, our disguise costume business features an assortment of new trending products to maintain our market leadership position. We have products related to Pixar's Inside Out 2, Disney's Descendants, The Rise of Red, and Transformers 1, the new animated film from that franchise. And of course, Disney's will want a two and Sega Sonic the Headshot three. The sentence is a perennial strong costume line for us as well. We're also supporting Dogman as the excitement builds for January film release.

Stephen G. Berman: As is always the case, our disguised costume business features an assortment of new, trending products to maintain our market leadership position. We have products related to Pixar's Inside Out 2, Disney's Descendants, The Rise of Red, and Transformers 1. The new animated film from that franchise, and, of course, Disney's Moana 2 and Sega's Sonic the Hedgehog 3.

Speaker Change: A Christmas Story and National Lampoon's Christmas Vacation

Speaker Change: As is always the case, our disguised costume business features an assortment of new trending products to maintain our market leadership position.

Speaker Change: We have products related to Pixar's Inside Out 2.

Speaker Change: Disney's Descendants, The Rise of Red, and Transformers 1.

Speaker Change: The new animated film from that franchise.

Stephen G. Berman: The sentence is a perennial strong costume line for us as well. We're also supporting Dog Man as the assignment builds for the January film release. We're also thrilled to announce that we've recently expanded our Pokémon costume rights into Europe. It's a great franchise and a great part of our U.S. range, and we are excited to start shipping that product into the U.K. and EU next year. Hopefully, that recap of several things we're excited about this fall gives you a sense of how strongly we feel about our business today and why we are so enthused to be moving into the second half of this year and into 2025. Thanks again for your support and interest. Operator. Thank you, ladies and gentlemen, if you have any questions

Speaker Change: and of course Disney's Moana 2 and Sega's Sonic the Hedgehog 3

Speaker Change: The sentence is a perennial strong costume line for us as well. We're also supporting Dog Man as the excitement builds for January film release.

Stephen Berman: We're also thrilled to announce that we've recently expanded our Pokémon costume rights into Europe. It's all a great franchise and a great part of our U.S. range. And we are excited to start shipping that product into the UK and EU next year.

Speaker Change: We're also thrilled to announce that we've recently expanded our Pokémon costume rights into Europe .

Speaker Change: It's all a great franchise and a great part of our U.S. range, and we are excited to start shipping that product into the U.K. and E.U. next year.

Stephen Berman: Hopefully, that recap of several things we're excited about this fall gives you a sense of how strongly we feel about a business today and why we are so enthused to be moving into the second half of this year and into 2025. Thanks again for your support and interest.

Speaker Change: Hopefully that recap of several things we're excited about this fall gives you a sense of how strongly we feel about a business today and why we are so enthused to be moving into the second half of this year and into 2025. Thanks again for your support and interest. Operator.

Operator: Operator? Thank you, ladies and gentlemen. If you have a question or a comment at this time, please press star 1-1-1 on your telephone. If your question has been answered, you wish to move yourself from the queue. Please press star 1-1 again. We'll pause for a moment while we compile our Q&A roster.

Operator: Ladies and gentlemen, if you have a question or a comment at this time, please press star 11 on your telephone. If your question has been answered, and you are still in the queue, please press star 11 again. We'll pause for a moment while we compile our Q&A roster. Our first question comes from Eric Better with Small Cap Consumer Research.

Speaker Change: Thank you. Ladies and gentlemen, if you have a question or a comment at this time, please press star 11 on your telephone. If your question has been answered and you wish to move yourself from the queue, please press star 11 again.

Speaker Change: We'll pause for a moment while we compile our Q&A roster.

Eric Beder: My first question comes from Eric and better with small cap consumer research. Your line is open. Good afternoon. Thank you. Congrats on managing through here and getting to a much stronger other side. It seems like a few questions here.

Speaker Change: Our first question comes from Eric Beder with Small Cap Consumer Research. Your line is open.

Eric Better: Good afternoon. Thank you. Congratulations on managing through here and getting to a much stronger other side, it seems like. A few questions here. Authentic, I know you mentioned Academy and the expansion possibilities beyond Academy. How do you look at that brand's ability going forward to kind of offset some of the, I guess you've got some previously called, extreme seasonality that you see in the business, and what has been the continued response to it as you're moving forward? I'm sorry to offer some of those solutions.

Eric Beder: Good afternoon.

Eric Beder: Thank you. Congrats on managing through here and getting to a much stronger other side, it seems like. A few questions here. Authentic, I know you mentioned Academy and the expansion possibilities beyond Academy, how do you look at

Operator: Well, thank you.

Operator: And then you mentioned Academy and the expansion possibilities beyond the Academy. How do you look at that brand's ability going forward to kind of offset some of the, I guess you guys preferable, their true seasonality that you see in the business and what has been the continued response to it as you're moving forward.

Speaker Change: That brand's ability going forward to kind of offset some of the, I guess you've got some previously called the extreme seasonality that you see in the business and what has been the continued response to it as you're moving forward and starting to offer some of those products.

Stephen Berman: I'm sorry to offer some of this. The ABG initiative that we're undertaking, we're extremely excited about it because we undertook this deal in February and we wanted an extremely expeditious pace in achieving the development and manufacturing of these goods. Academy Wood really strong in early and they were very strong within this area of business, so we launched it with them immediately and we have done our previews and we are extremely excited now to get into the spring 2025 because seasonality we are focused on lovely and outer revenue base and the authentic brand business with the elementscape boards, Roxy Quicksilver in addition to the juicy and Roxy inline skates and inflatables and the umbrella really puts us in a really strong area of business that's counter-sickical to the normal called traditional toy business. So that on top of our enhanced other seasonal business of our foot-to-floor ride-ons, our outdoor play environments it really sets us apart a really strong ever-green segment of business that's not hit-driven at all and truly focused on solid brand names and solid recognition of brands and the retail is from more North America and call it Western Europe are really excited about these brands because they're a long-term very well-known brand you know from kids, tweens, teens, adults and others these brands have been around some of them 20, 30, 40 years. So we're really excited about it and we just need to be able to manufacture more and get ready for spring to get these launched and once we get them launched we're looking to expand it you know broadly.

Stephen G. Berman: Well, thank you, Eric. Actually, the ABG initiative that we're undertaking, we're extremely excited about because we undertook this deal in February and we went at an extremely expeditious pace in achieving the development and manufacturing of these goods. Academy, we went really strong in earlier and they were very strong within this area of business. So we launched it with them immediately and we have done our previews and we are extremely excited now to get into the spring 2025 because seasonality, we are focused on leveling out our revenue base and the authentic brand business with the Element skateboards, Roxy, Quicksilver, in addition to the Juicy and Roxy inline skates and inflatables, and the Umbrellas really puts us in a really strong area of business that's counter-cyclical to the normal, call it traditional, toy business.

Speaker Change: The ABG initiative that we're undertaking, we're extremely excited about because we undertook this deal in February and we went at an extremely expeditious pace in achieving the development and manufacturing of these goods.

Eric Beder: Academy went really strong in earlier and they were very strong within this area of business so we launched it with them immediately and we have done our previews and we are extremely excited now to get into the spring 2025 because

Speaker Change: Seasonality, we are focused on leveling out our revenue base and the authentic brand business with the Element Skateboards, Roxy, Quicksilver, in addition to the Juicy and Roxy inline skates and inflatables.

Speaker Change: and The Umbrellas really puts us in a really strong area of business that's counter-cyclical to the normal, call it traditional, toy business.

Stephen G. Berman: So that on top of our enhanced other seasonal business of our foot-to-floor ride-ons, our outdoor play environments, it really sets us apart of building a really strong evergreen segment of business that's not hit-driven at all. It's really focused on solid brand names and solid recognition of brands. Western Europe are really excited about these brands because they're long-term Very well-known brands, you know from kids tweens teens adults and others These brands have been around some of them 20 30 40 years So we're really excited about it And we just need to be able to manufacture more and get ready for spring to get these launched and once we get them launched We're looking to expand it, you know broadly

Speaker Change: So that, on top of our enhanced other seasonal business of our foot-to-floor ride-ons, our outdoor play environments, it really sets us apart, building a really strong, evergreen segment of business that's not hit-driven at all. It's really focused on solid brand names and solid recognition of brands.

Speaker Change: and the retailers from more in North America and call it...

Speaker Change: Western Europe are really excited about these brands because they're long-term very well-known brands you know from kids, tweens, teens, adults and others. These brands have been around some of them 20, 30, 40 years.

Speaker Change: So we're really excited about it, and we just need to be able to manufacture more and get ready for spring to get these launched, and once we get them launched, we're looking to expand it, you know, broadly.

Stephen Berman: Okay, and turning to the symptoms, I know you guys were at the San Diego Comic Con showing the product again to the people. You know, what has been the response here? We haven't seen a symptoms product in like decades plus, you know, what's the excitement level here? And how do you look upon this as an ability? I think you've kind of mentioned a little bit kind of on A to make something like a $20 diorama and B the potential to do more for maybe like the adult collector who will spend a lot more for a collectible or for an action figure.

Eric Better: Okay, and turning to The Simpsons, I know you guys were at the San Diego Comic-Con, showing the product again to people. You know, what has been the response here? We haven't seen a Simpsons product in like decades plus. Correct. You know, what's the excitement level here, and how do you look upon this as an ability? I think you've kind of mentioned a little bit about A, to make something like a $20 diorama, and B, the potential to do more for maybe the adult collector who will spend a lot more on a collectible or for an action figure.

Speaker Change: Okay and turning to the Simpsons, I know you guys were at the San Diego Comic-Con.

Speaker Change: Showing the product again to the people.

Speaker Change: You know, what has been the response here? We haven't seen a Simpsons product in like

Speaker Change: and JAKKS Plus.

Speaker Change: What's the excitement level here and how do you look upon this as ability, I think, and you kind of mentioned a little bit, kind of on A, to make something like a $20 diorama and B, the potential to do more for maybe like the adult collector who will spend a lot more for a collectible or for an action figure.

Stephen G. Berman: Firstly, Simpsons, you're right, it hasn't been in the market in totality with a breadth of product for over 15 years. So there's a need and a want for it. It's been around, I think, 35 years as an animated series.

Stephen Berman: Firstly, Simpson, you're right; it has been in the market in totality with a breath of product for over 15 years, so there's a need and want for it. It's been around, I think, 35 years as an animated series, and the excitement is, you know, it's in the top levels of all, you know, views on this programming. The excitement is really there; we're just trying to curtail the excitement internally because Comic Con was terrific. The retail sell-through that we currently have to date, which just recently launched in the last week or two, is extremely strong. That being said, we just don't want to oversight something because there is a collectible market in the Simpsons, and we have collectible items specifically for that market, and then there is a kid market for it. So there's a blend of both, and we're managing both aspects of it. Early on, reads are extremely strong; we're really happy. Retailers need it. We look at this that will build into an evergreen brand like we've done with the Sonic, like we've done with Nintendo, and we're looking at it very strong. It has such wide array appeal, you know, again to collect our kid. So the initial excitement is really strong; we're just looking at it internally without trying to get overly excited to manage this brand, both collectible and to kid, and so far the receptiveness from retail and consumers is extremely strong. I know you do most of your product FOB, but how have some of the discontinuities in supply chain affected some of your international sales?

Speaker Change: Firstly, Simpsons, you're right, it hasn't been in the market in totality with a breadth of product for over 15 years.

Stephen G. Berman: And the excitement is in the top levels of all views on its programming. The excitement is really there. We're just trying to curtail the excitement internally because Comic-Con was terrific.

Speaker Change: So there's a need and want for it. It's been around, I think, 35 years as an animated series.

Speaker Change: And the excitement is, you know, it's in the top levels of all, you know, views on this programming.

Speaker Change: The excitement is really there. We're just trying to curtail the excitement internally because, um...

Stephen G. Berman: The retail sell-through that we currently have to date, which just recently launched in the last week or two, is extremely strong. That being said, we just don't want to overexcite anything because there is a collectible market for The Simpsons, and we have collectible items specifically for that market. And then there is a kid market for it, so there's a blend of both, and we're managing both aspects of it. Early on, reads are extremely strong. We're really happy. Retailers need it because they are losing money.

Speaker Change: Comic-Con was terrific.

Speaker Change: The retail sell-through that we currently have to date, which just recently launched in the last week or two,

Speaker Change: is extremely strong. That being said, we just don't want to

Speaker Change: overexcite something because there is a collectible market in the Simpsons and we have collectible items specifically for that market.

Speaker Change: and then there is a kid market for it. So there's a blend of both.

Speaker Change: and we're managing both aspects of it. Early on reads are extremely strong. We're really happy. Retailers need it. We look at this.

Stephen G. Berman: We look at this as it will build into an evergreen brand like we've done with Sonic, like we've done with Nintendo. And we're looking at it very strongly. It has such a wide range of appeal, again, to collectors and kids. So the initial excitement is really strong. We're just looking at it internally without trying to get overly excited to manage this brand, both collectible and for kids. And so far, the receptiveness from retail and consumers is extremely strong.

Speaker Change: that will build into an evergreen brand like we've done with...

Speaker Change: The Sonic, like what we've done with Nintendo, and we're looking at it very strong. It has such wide array appeal, you know, again, to collector and kid.

Speaker Change: So the initial excitement is really strong, we're just looking at it internally without trying to get overly excited to manage this brand, both collectible and to kid, and so far the receptiveness from retail and consumers is extremely strong.

Eric Better: I know you do most of your product FOB, but how have some of the discontinuities in the supply chain affected some of your international sales? I know historically, that's been a big focus for you. Are you still kind of on the track that you want to be with international even after kind of like a quarter like this? What do you think about that?

Speaker Change: I know you do most of your product FOB, but how have some of the discontinuities in the supply chain affected some of your international sales? I know, historically, that's been a big focus for you. Are you still kind of on the track that you want to be with international even after kind of like a quarter like this? How should we think about that?

Operator: I know historically that's been a big focus for you.

Operator: Are you still kind of on the track that you want to be with international event or kind of like a quarter like this?

Stephen G. Berman: Primarily, when we founded JAKKS, myself and my business partner, who passed away about 15 years ago, we founded it as an FOB company. And during the big shipping crisis that happened in like 21, 22, we actually became more of an FOB company, about 70% plus. And we're going to continue that way.

Stephen Berman: Primarily when we found the JAKS, myself and my business partner who passed away about 15 years ago, we found it as an Applebee company. During the big shipping crisis that happened in like 21-22, we actually became more of an Applebee company, about 70% plus, and we're going to continue that way. It's something that the retailers like, and we like it as well, as the capital expenditures of bringing inventory in is less than by doing it on an Applebee basis. What occurred internationally, more so in Europe, was our new logistics centers that we opened up in Italy and we're opening one in Spain.

Speaker Change: primarily when we founded JAKKS myself and my business partner who passed away about 15 years ago

Speaker Change: We founded it as an FOB company and during the big shipping crisis that happened in like 21-22

Eric Better: It's something that the retailers like, and we like it as well as the business. The capital expenditure of bringing inventory in is lessened by doing it on an FOB basis. What occurred internationally, more so in Europe, was our new logistics centers that we opened up in Italy and we're opening one in Spain. We just had a difficult time getting these containers in. There was some lack of containers that we were able to get during the quarter.

Speaker Change: We actually became more of an SOB company, about 70% plus.

Speaker Change: and we're going to continue that way. It's something that the retailers like, and we like it as well as the business. The capital expenditures of bringing inventory in is lessened by doing it on a FOB basis.

Speaker Change: What occurred internationally, more so in Europe , was our new logistic centers that we opened up in Italy and we're opening one in Spain. We just had a difficult time of getting these containers in during, there was some lack of containers that were able to get it during the quarter. Those have all been resolved, so it just was more of trying to do something on an expeditious basis.

Stephen Berman: We just had a difficult time of getting these containers, and there were some lack of containers that were able to get it during the quarter. Those have all been resolved, so it just was more of trying to do something on an exhibition process of platform, and we just did get it done as quick as we thought. All those things have been resolved; they weren't material, but they were enough that we had to call it out. But overall, the FOB bookings are extremely strong where we stand this year versus last year, and we're going to continue on that FOB platform.

Eric Better: Those have all been resolved. So it just was more of trying to do something on an expeditious process, a platform, and we just didn't get it done as quickly as we had thought. All those things have been resolved. They weren't material, but they were enough that we had to call them out. But overall, our business FOB bookings are extremely strong where we stand this year versus last year, and we're going to continue on that FOB platform, but we also will be bringing in domestic businesses such as Simpsons or whether it's authentic brands or Moana 2 or Sonic or Nintendo. We bring in inventory where needed, but we will never chase something and bring in too much inventory in case something doesn't work. We'll always be leaner on inventory than the norm in our industry.

Speaker Change: process, a platform, and we just did get it done as quick as we thought. All those things have been resolved. They weren't material, but they were enough that we had to call it out.

Speaker Change: But overall, our business FOB bookings are extremely strong, where we stand this year versus last year. And we're going to continue on that FOB platform.

Stephen Berman: But we also will be bringing in domestic areas of businesses such as sipsins or whether it's authentic brands or marijuana, two or Sonic or Nintendo. We bring in inventory where needed, but we will never chase something and bring in too much inventory in case something doesn't work. We'll always be leaner on inventory than the norm in our industry.

Speaker Change: We also will be bringing in domestic on areas of businesses.

Speaker Change: Simpsons or whether it's Authentic Brands or Moana 2 or Sonic or Nintendo, we bring in inventory where needed but we will never chase something and bring in too much inventory in case something doesn't work. We'll always be leaner on inventory than the norm in our industry.

Operator: Okay, and final question. Last quarter, you paid off the preferred. I know you did it, so it was so close to the end of the quarter. You really didn't want to talk about capital allocation and potential now. Maybe to return some capital shareholders. It's been about three months. What's kind of the thought process?

Stephen G. Berman: Okay, and final question. Last quarter you paid off the preferred. I know you did it so close to the end of the quarter, you really didn't want to talk about capital allocation and potential now, maybe to return some capital to shareholders. It's been about three months. What's the thought process? How is that evolving now that you are basically debt free for the first time in a very long time?

Speaker Change: Okay, and, um, final question.

Speaker Change: Last quarter, you paid off the preferred. I know you did it so close to the end of the quarter, you really didn't want to talk about capital allocation and potential now, maybe to return some capital to shareholders. It's been about three months. What's kind of the thought process?

Stephen Berman: How is that evolving now that you are basically debt free for the first time in a very long time? It's very proud of the overall company, its employees of being diligent and being able to pay off from the recap that we did around 2018. We paid off all of our debt and our preferred and couldn't be more happy, especially going into an unknown environment and going into a presidential race to be clean of debt and know that we could run our business based off our free cash well. That being said, we are being prudent. There's a lot of other opportunities that we need to look at for capital allocation.

Speaker Change: How is that evolving now that you are basically debt-free for the first time in a very long time?

Eric Better: First, Eric, I'm very proud of the overall company, its employees, for being diligent and being able to pay off the recap that we did around 2018. We paid off all of our debt and our preferred and couldn't be more happy, especially going into an unknown environment and going into a presidential race to be clean of debt and know that we could run our business based off our free cash flow.

Speaker Change: First Eric, I'm very proud of the overall company, its employees, of being diligent and being able to pay off

Speaker Change: From the recap that we did around 2018, we paid off all of our debt and our preferred, and couldn't be more happy, especially going into an unknown environment and going into a presidential race, to be clean of debt and know that we could run our business based off our free cash flow.

Stephen G. Berman: That being said, we are being prudent. There are a lot of other opportunities that we need to look at for capital allocation. We've been having internal meetings with our board, and we are looking, you know, for the future. There are many different types of capital allocations, from dividends to buybacks to acquisitions, and we are now looking at certain opportunities. We see that there have been several different bankruptcies in our industry that allow us to have other opportunities, whether buying assets from these unfortunate events or getting licenses that licensors don't want to work with companies that they're worried about financially.

Stephen Berman: We've been having internal meetings with our board, and we are looking for the future. There's many different ways of capital allocations, you know, from dividends to buybacks to acquisitions. And we are now looking at certain opportunities. We see there's been several different bankruptcies in our industry that allows us to have other opportunities, whether buying assets from these unfortunate events or getting licenses that license orders don't want to work with companies that they're worried about financially. So we're looking at the various opportunities that are in front of us today and kind of looking at what the future holds.

Speaker Change: That being said, we are being prudent. There's a lot of other opportunities that we need to look at for capital allocation. We've been having internal meetings with our board and we are looking for the future. There's many different ways of capital allocations from

Speaker Change: dividends to buybacks to acquisitions, and we are now looking at certain opportunities

Speaker Change: We see there's been several different bankruptcies in our industry that allows us to have other opportunities whether buying assets from these Unfortunate events or getting licenses that licensors don't want to work with companies that they're worried about financially

Stephen G. Berman: So we're looking at the various opportunities that are in front of us today and kind of looking at what the future holds, you know, going into 2025 and 26. So it's something on our priority list, but we don't have any confirmation of the direction that we're to go in, but it's something that we've been looking into internally. We just paid down the debt again. It hasn't been that long, so we can't do things just on an immediate basis without looking at liquidity analysis, future benefits to the company, retailer expansions, international expansions, a lot of different avenues that we're looking at, but again, it's something that's a priority to us, and we will be reviewing through

Stephen Berman: You're going into 2025 and 26. So it's something on our priority list, but we don't have any confirmation of the direction that we're going to go. But it's something that we've been looking in internally. We just pay down the debt again; it hasn't been that long.

Speaker Change: So we're looking at the various opportunities.

Speaker Change: that are in front of us today and kind of looking at what the future holds, you know, going into

Speaker Change: 25 and 26. So it's something on our priority list, but we don't have any

Speaker Change: [inaudible]

Stephen Berman: So we can't do things just on an immediate basis without looking at liquidity analysis, future benefits to the company, retailer, expansions, international expansions. A lot of different avenues that we're looking at, but again, it's something that's a priority to us, and we will be reviewing through this year.

Speaker Change: A lot of different avenues that we're looking at, but again, it's something that's a priority to us and we'll be reviewing through this year.

Eric Better: Okay, and good luck for the second half of the year. Thank you, Eric. Again, ladies and gentlemen, if you have a question or a comment at this time, please press star 1-1 on your telephone.

Operator: Okay, good luck for the back half of the year. Thank you, Eric.

Speaker Change: Okay and good luck for the back half of the year.

Operator: Again, ladies and gentlemen, if you have a question or a comment at this time, please press star 111 on your telephone. I'm not showing any further questions.

Operator: I'm not showing any further questions at this time. I'd like to turn the call back to Stephen for any closing remarks.

Speaker Change: Thank you, Eric. Thanks, Eric.

Speaker Change: Again, ladies and gentlemen, if you have a question or a comment at this time, please press star 1-1 on your telephone.

Stephen Berman: It's time to turn the club back to Stephen for any closing remarks. Great. Thank you, Operator, and you've done a terrific job on the call. I will say we are looking forward to our bunch of our follow-up calls today with Investor and Analyst today and tomorrow.

Stephen G. Berman: Great, thank you operator, and you've done a terrific job on the call, I will say. We are looking forward to a bunch of follow-up calls today with investors and analysts today and tomorrow, and thank you everyone for the call. We're excited to get into our third quarter and start our call again, and right after that, we're excited for the second half of this year and really excited for 2025. Thank you all.

Speaker Change: I'm not showing any further questions at this time. I'd like to turn the call back to Stephen for any closing remarks.

Stephen G. Berman: Great. Thank you, operator, and you've done a terrific job on the call, I will say. We are looking forward to a bunch of our follow-up calls today with investor and analysts today and tomorrow. And thank you, everyone, for the call. I'm excited to get into our third quarter and start our call again. And right after, we're excited for the second half of this year and really excited for 2025.

Stephen Berman: And thank you, everyone, for the call.

Stephen Berman: I'm excited to get into our third quarter and start our call again, and right after, we're excited for the second half of this year, and really excited for 2025. Thank you all.

Operator: Ladies and gentlemen, this concludes today's presentation. You may now disconnect and have a wonderful day.

Operator: Well, ladies and gentlemen, that concludes today's presentation. You may now disconnect and have a wonderful day.

Speaker Change: Thank you all. Ladies and gentlemen, this concludes today's presentation. You may now disconnect and have a wonderful day.