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JAKKS Comments on Toys ‘R’ Us Bankruptcy; Updates 2017 Forecast

SANTA MONICA, Calif.--(BUSINESS WIRE)--Sep. 20, 2017-- JAKKS Pacific, Inc. (NASDAQ: JAKK) today announced that the Company does not anticipate any long-term material adverse impact from the Toys ‘R’ Us bankruptcy filing. The uninsured portion of the amounts due from Toys ‘R’ Us represents less than 3% of the Company’s outstanding accounts receivables as of September 18, 2017. The Company also stated it is not known yet what the recovery will be on such uninsured receivables. Sales to Toys ‘R’ Us were anticipated to account for approximately 5% to 6% of the Company’s net sales for the third and fourth quarters, but the Company does not know what amount of such sales will be realized.

JAKKS now expects to recognize charges against income for the 2017 fiscal year, including cash charges related to the write-off of bad debt and minimum guarantee shortfalls, and non-cash charges related to the impairment of certain assets including goodwill from acquisitions. The Company is revising its forecast since it now expects to sustain a net loss and negative earnings per share for the year, but still expects to have positive EBITDA, as adjusted, for the year, although not higher than the prior year, as previously announced. JAKKS otherwise anticipates no significant impact on its ability to execute on-going corporate initiatives and business operations.

JAKKS CEO & Chairman Stephen Berman said, “2017 continues to present a challenging retail environment, which has now been further disrupted by the Toys ‘R’ Us Chapter 11 filing. Nevertheless, the announced availability of DIP financing leaves us optimistic that we can resume our relationship with Toys ‘R’ Us as one of its significant suppliers.”

Berman continued, “For the past 22 years, since the founding of JAKKS Pacific in 1995, Toys ‘R’ Us has been one of JAKKS’ most significant business partners. Together, the companies have brought new and innovative toy products to millions of children around the world. The Chapter 11 filing by Toys ‘R’ Us and its announcement of available financing for its continued operations is expected to provide the opportunity for Toys ‘R’ Us, together with JAKKS, to continue to provide high-quality and exciting toy products for many years to come. JAKKS appreciates the relationship that has existed throughout the years and looks forward to the relationship continuing to grow and flourish.”

About JAKKS Pacific, Inc.

JAKKS Pacific, Inc. (NASDAQ: JAKK) is a leading designer, manufacturer and marketer of toys and consumer products sold throughout the world, with its headquarters in Santa Monica, California. JAKKS Pacific’s popular proprietary brands include BIG-FIGS™, XPV®, Max Tow™ and Friends, Disguise®, Moose Mountain®, Funnoodle®, Maui®, Kids Only!®; a wide range of entertainment-inspired products featuring premier licensed properties; and, C’est Moi™, a youth skincare and make-up brand. Through JAKKS Cares, the company’s commitment to philanthropy, JAKKS is helping to make a positive impact on the lives of children. Visit us at www.jakks.com and follow us on Instagram (@jakkstoys), Twitter (@jakkstoys) and Facebook (JAKKS Pacific).

© 2017 JAKKS Pacific, Inc. All rights reserved.

Forward-Looking Statements

This press release may contain “forward-looking statements” (within the meaning of the Private Securities Litigation Reform Act of 1995) that are based on current expectations, estimates and projections about JAKKS Pacific's business based partly on assumptions made by its management. These statements are not guarantees of future performance and involve risks, uncertainties and assumptions that are difficult to predict. Therefore, actual outcomes and results may differ materially from what is expressed or forecasted in such statements due to numerous factors, including, but not limited to, those described above, changes in demand for JAKKS' products, product mix, the timing of customer orders and deliveries, the impact of competitive products and pricing, and difficulties with integrating acquired businesses. The “forward-looking statements” contained herein speak only as of the date on which they are made, and JAKKS undertakes no obligation to update any of them to reflect events or circumstances after the date of this release.

Source: JAKKS Pacific, Inc.

JAKKS Pacific
Sara Rosales Montalvo
424-268-9363
SaraRM@jakks.net
or
Joel Bennett
310-455-6210
JoelB@jakks.net
or
Liolios
Sean McGowan
949-574-3860
JAKK@liolios.com


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