Jakks Pacific, Inc. · NASDAQ:JAKK
Jakks Pacific — Q4 2022 Earnings Presentation
29 slides from Jakks Pacific's earnings presentation, Mar 9, 2023
Slide 1: Fourth Quarter and Full Year 2022 Earnings Conference Call Presentation
Fourth Quarter and Full Year 2022 Earnings Conference Call Presentation March 9, 2023, 5:00 PM Eastern Time Webcast link Registration Link 1
Slide 2: Executive Team on the Call
EXECUTIVE TEAM ON THE CALL STEPHEN BERMAN Chairman & Chief Executive Officer JOHN KIMBLE Executive Vice President & Chief Financial Officer 2
Slide 3: Safe Harbor Statement
SAFE HARBOR STATEMENT The Company would like to point out that any comments made about JAKKS Pacific's future performance, events or circumstances, including the estimates of sales and/or Adjusted EBITDA in 2023, as well as any other forward-looking statements concerning 2023 and beyond are subject
Slide 4: CEO Overview
CEO OVERVIEW Tremendous quarter, and a tremendous year • Q4 Net Sales were $132 million, 30% decrease versus prior year • Q4 gross margins were negatively impacted by lower capitalization of warehouse costs, higher tooling amortization, obsolete inventory and royalty expense – Full Year Gross Margin
Slide 5: CEO Overview (continued)
CEO OVERVIEW (continued) Strong Calendar Year Sales Across Core Business Categories • Full-year sales up 28%; Toy/Consumer Product sales up 26% – Disney Encanto™ led growth – Excitement around Sonic® movie continued all year – Continued strong growth in Disney® Princess & Style Collection – Nintendo
Slide 6: Q4 Net Sales
2022 Q4 Net Sales $ Millions $200 $188.0 $152.5 $150 $132.3 $128.3 $131.9 $100 $50 $0 2018 2019 2020 2021 2022 YoY % Change: 15% (16%) 47% (30%) 6
Slide 7: Fourth Quarter Toy/Consumer Product Net Sales
2022 Fourth Quarter Toy/Consumer Product Net Sales $ Millions $200 $179.2 $148.7 $150 $125.5 $121.0 $117.7 $100 $50 $0 2018 2019 2020 2021 2022 YoY % Change: 18% (19%) 48% (34%) 7
Slide 8: Fourth Quarter Toy/Consumer Product Net Sales by Region
2022 Fourth Quarter Toy/Consumer Product Net Sales $ Millions NA TOY/CP INTL TOY/CP $175 $50 $147.8 $150 $40 $35.2 $125 $113.6 $31.3 $100.9 $99.0 $97.4 $30 $100 $24.6 $22.1 $20.3 $75 $20 $50 $10 $25 $0 $0 2018 2019 2020 2021 2022 2018 2019 2020 2021 2022 13% (13%) 49% (34%) 43% (37%) 42% (35%) YoY %
Slide 9: Fourth Quarter Costume Net Sales
2022 Fourth Quarter Costume Net Sales $ Millions $20 $15 $14.2 $10 $8.8 $7.2 $6.8 $5 $3.8 $0 2018 2019 2020 2021 2022 YoY % Change: (44%) 89% 22% 61% 9
Slide 10: Fourth Quarter Gross Margin %
2022 Fourth Quarter Gross Margin % 35.0% 32.8% 30.6% 30.4% 30.0% 26.6% 25.0% 21.7% 20.0% 2018 2019 2020 2021 2022 YoY % Change: (20) bps 240 bps (620) bps (490) bps 10
Slide 11: Fourth Quarter Adj. EBITDA and Adj. Net Income
2022 Fourth Quarter Adj. EBITDA and Adj. Net Income $ Millions Q4 ADJ EBITDA Q4 ADJ NET INCOME $10 $5 $5.0 $1.3 $5 $3.3 $3.9 $0 $0 ($5) ($3.6) ($1.6) ($5) ($8.6) ($7.8) ($10) ($10) ($15) ($14.0) ($12.1) ($15) ($20) 2018 2019 2020 2021 2022 2018 2019 2020 2021 2022 (1.2%) 2.2% 3.0% 2.7% (9.2%) (6.5%)
Slide 12: Full-Year Net Sales
2022 Full-Year Net Sales $ Millions $900 $796.2 $800 $700 $598.6 $621.1 $600 $567.8 $515.9 $500 $400 $300 $200 $100 $0 2018 2019 2020 2021 2022 YoY % Change: 5% (14%) 20% 28% 12
Slide 13: Full-Year Toy/Consumer Products Net Sales
2022 Full-Year Toy/Consumer Products Net Sales $ Millions $700 $647.3 $600 $513.5 $500 $466.2 $479.0 $427.1 $400 $300 $200 $100 $0 2018 2019 2020 2021 2022 YoY % Change: 3% (11%) 20% 26% 13
Slide 14: Full-Year Toy/Consumer Products Net Sales by Region
2022 Full-Year Toy/Consumer Products Net Sales $ Millions NA TOY/CP INTL TOY/CP $600 $125 $538.3 $109.0 $101.9 $500 $94.5 $100 $428.5 $85.0 $400 $384.6 $364.3 $355.3 $71.8 $75 $300 $50 $200 $25 $100 $0 $0 2018 2019 2020 2021 2022 2018 2019 2020 2021 2022 6% (8%) 21% 26% (7%) (24%) 18% 28% YoY % Chan
Slide 15: Full-Year Costume Net Sales
2022 Full-Year Costume Net Sales $ Millions $175 $148.9 $150 $125 $119.6 $107.6 $101.6 $100 $88.7 $75 $50 $25 $0 2018 2019 2020 2021 2022 YoY % Change: 18% (26%) 21% 38% 15
Slide 16: Full-Year Gross Margin %
2022 Full-Year Gross Margin % 35.0% 30.0% 29.5% 29.0% 27.4% 26.6% 26.5% 25.0% 20.0% 2018 2019 2020 2021 2022 YoY % Change: (80) bps 240 bps 50 bps (300) bps 16
Slide 17: Full-Year Adj. EBITDA and Adj. Net Income
2022 Full-Year Adj. EBITDA and Adj. Net Income $ Millions FY ADJ EBITDA FY ADJ NET INCOME $80 $76.4 $60 $43.4 $40 $60 $23.6 $49.2 $20 $40 $28.1 $0 $18.9 ($6.3) $20 ($20) ($18.9) $2.3 ($28.9) $0 ($40) 2018 2019 2020 2021 2022 2018 2019 2020 2021 2022 0.4% 3.2% 5.4% 7.9% 9.6% (5.1%) (3.2%) (1.2%) 3.8%
Slide 18: Year-end Inventory - 2021 vs 2022 (Worldwide)
Year-end Inventory - 2021 vs 2022 (Worldwide) $ Millions $100 $84.0M $80.6M $4.9 $75 $24.3 $50 $75.7 $59.7 $25 $0 2021 2022 In-Transit to Warehouse Inventory less In-Transit 18
Slide 19: Trailing-Twelve-Month (TTM) Adjusted EBITDA
Trailing-Twelve-Month (TTM) Adjusted EBITDA $ Millions TTM ADJ EBITDA TTM ADJ EBITDA % $120 14.0% 12.0% 9.6% $100 $76 10.0% $80 8.0% $60 6.0% $40 4.0% $20 2.0% 0.0% $0 -2.0% ($20) Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 2019 2019 2019 2019 2020
Slide 20: Total Debt
Total Debt $ Millions TOTAL DEBT $200 $175 $162 $150 $125 $129 $96 $96 $100 $95 $85 $68 $67 $75 $30.8M (debt as of $50 3/9/23) Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 2021 2021 2021 2021 2022 2022 2022 2022 *Short-term and long-term debt, net of discounts and deferred issuance costs 20
Slide 21: See
\S) 70% See
Slide 22: ~ Gakks)
~ Gakks)
Slide 23: Disney ILY 4EVER Fashion Dolls
Disney ILY 4EVER™ Fashion Dolls 23
Slide 24: Key Themes for 2023 – Continue to...
Key Themes for 2023 – Continue to... • Focus on timeless brands and categories - “singles and doubles” • Actively pursue the most relevant IP rights for our model • Expand North America distribution beyond major customers • Methodically grow International presence by going deeper into largest market
Slide 25: Thank You
THANK YOU 25
Slide 26: Supplemental Financial Information
Supplemental Financial Information 26
Slide 27: Condensed Consolidated Statements of Operations (Unaudited)
JAKKS Pacific, Inc. and Subsidiaries Condensed Consolidated Statements of Operations (Unaudited) Three Months Ended December 31, Twelve Months Ended December 31, 2022 2021 Δ (%) 2022 2021 Δ (%) (In thousands, except per share data) (In thousands, except per share data) Net sales $ 131,886 $ 187,964
Slide 28: Condensed Consolidated Balance Sheets (Unaudited)
JAKKS Pacific, Inc. and Subsidiaries Condensed Consolidated Balance Sheets (Unaudited) December 31, 2022 2021 (In thousands) Assets Current assets: Cash and cash equivalents $ 85,297 $ 44,521 Restricted cash 193 811 Accounts receivable, net 102,771 147,394 Inventory 80,619 83,954 Prepaid expenses an
Slide 29: Reconciliation of Non-GAAP Financial Information (Unaudited)
JAKKS Pacific, Inc. and Subsidiaries Reconciliation of Non-GAAP Financial Information (Unaudited) Three Months Ended December 31, Twelve Months Ended December 31, 2022 2021 Δ ($) 2022 2021 Δ ($) (In thousands) (In thousands) EBITDA and Adjusted EBITDA Net income (loss) $ 39,398 $ (3,153) $ 42,551 $