Jakks Pacific, Inc. · NASDAQ:JAKK
Jakks Pacific — Q1 2022 Earnings Presentation
32 slides from Jakks Pacific's earnings presentation, Apr 28, 2022
Slide 1: First Quarter 2022 Earnings Conference Call Presentation
First Quarter 2022 Earnings Conference Call Presentation April 28, 2022, 5:00 PM Eastern Time Participant Dial in: 1(833) 423-0496 International Dial in: 1(918) 922-2390 Conference ID: 3951819 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 2022, as well as any other forward-looking statements concerning 2022 and beyond are subject
Slide 4: Executive Summary
EXECUTIVE SUMMARY Highest Q1 Net Sales & Earnings per Share in 14 years • Q1 Net Sales were $121 million, 44% increase over prior year, highest Q1 level since 2008 • Q1 Toy/Consumer Products (CP) business up even when excluding Sonic the Hedgehog® and Disney’s Encanto™ • Q1 gross margins were negati
Slide 5: CEO Overview
CEO OVERVIEW 5
Slide 6: 2022 Q1 Net Sales
2022 Q1 Net Sales $ Millions Q1 Net Sales $150 $120.9 $100 $83.8 $50 $- 2021 2022 YoY % Change: 44% 6
Slide 7: 2022 Q1 Toy/CP Net Sales
2022 Q1 Toy/CP Net Sales $ Millions Toy/CP Q1 Net Sales $125 $100 $111.1 $75 $79.9 $50 $62.6 $25 $- 2020 2021 2022 YoY % Change: 28% 39% 7
Slide 8: 2022 Q1 Toy/CP Net Sales
2022 Q1 Toy/CP Net Sales $ Millions North America Q1 Net Sales International Q1 Net Sales $100 $92.5 $100 $75 $67.6 $75 $50.9 $50 $50 $25 $25 $18.6 $11.7 $12.3 $- $- 2020 2021 2022 2020 2021 2022 YoY % Change: 33% 37% 5% 52% 8
Slide 9: International Expansion
International Expansion Top 5 Direct Markets Total +80% International Rest of International +59% UK GERMANY FRANCE ITALY MEXICO +41% TOTAL ALL OTHER INTL INTL COUNTRIES 9
Slide 10: 2022 Q1 Costume Net Sales
2022 Q1 Costume Net Sales $ Millions Costume Q1 Net Sales $15 $9.8 $10 $5 $4.0 $4.0 $- 2020 2021 2022 YoY % Change: (1%) 146% 10
Slide 11: 2022 Q1 Gross Margin %
2022 Q1 Gross Margin % Q1 Gross Margin % 40% 31.1% 30% 24.6% 24.7% 20% 10% 0% 2020 2021 2022 +650 bps (640 bps) 11
Slide 12: 2022 Q1 Adj. EBITDA and Adj. Net Income
2022 Q1 Adj. EBITDA and Adj. Net Income $ Millions Q1 Adj EBITDA Q1 Adj Net Income $5 $10 $1.9 $5 $- $- $(5) $(2.6) $(10) $(2.4) $(9.5) $(5) $(15) 2021 2022 2021 2022 (2.9%) 1.6% (11.3%) (2.2%) Adj. EBITDA Margin % Adj. Net Income Margin % 12
Slide 13: Q1 '22 vs '21 Inventory
Q1 ‘22 vs ‘21 Inventory $ Millions Q1 Inventory $100 $75 $15 $50 $5 $70 $25 $32 $- 2021 2022 In-Transit Inventory less In-Transit 13
Slide 14: TTM Adjusted EBITDA
TTM Adjusted EBITDA $ Millions TTM ADJ EBITDA TTM ADJ EBITDA % $53.6 $60 10.0% 8.1% $50 8.0% $40 6.0% $30 4.0% $20 2.0% $10 0.0% $0 -2.0% ($10) -4.0% Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 2018 2018 2018 2018 2019 2019 2019 2019 2020 202
Slide 15: Net Leverage Ratio
Net Leverage Ratio (1) Net Leverage Ratio is defined as Net Debt / TTM Adjusted EBITDA (2) Net Debt is defined as Total Debt less Cash & Cash Equivalents 15
Slide 16: TTM Net Sales
TTM Net Sales $ Millions TTM NET SALES $700 $658 $650 $621 $600 $567 $550 $561 $533 $500 $516 $450 $400 Q4 Q1 Q2 Q3 Q4 Q1 2020 2021 2021 2021 2021 2022 16
Slide 17: Total Debt
Total Debt $ Millions TOTAL DEBT $200 $175 $162 $150 $156 $125 $129 $100 $96 $96 $95 $75 $50 Q4 Q1 Q2 Q3 Q4 Q1 2020 2021 2021 2021 2021 2022 17
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Slide 19: BLACK+ <Difenep
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Slide 21: ~ Gakks
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Slide 22: Conclusions
Conclusions • Tremendous opportunity with Disney Encanto™ and Sonic the Hedgehog® 2 • Strong suite of “singles and doubles” • International growth • Continue to add additional licenses to our Costume business • New categories and expanding product lines: – AirTitans™ Jurassic World Massive Attack T-
Slide 23: Thank You
THANK YOU 23
Slide 24: Supplemental Financial Information
Supplemental Financial Information 24
Slide 25: Net Sales by Division and Geographic Region
JAKKS Pacific, Inc. and Subsidiaries Net Sales by Division and Geographic Region (In thousands) Q1 Divisions 2022 2021 2020 2022-2021 2021-2020 Toys/Consumer Products $111,123 $79,875 $62,565 39.1% 27.7% Dolls, Role-Play/Dress Up 62,006 45,155 40,074 37.3% 12.7% Action Play & Collectibles 31,698 16,
Slide 26: Condensed Consolidated Statements of Operations
JAKKS Pacific, Inc. and Subsidiaries Condensed Consolidated Statements of Operations (Unaudited) Three Months Ended March 31, 2022 2021 Δ (%) (In thousands, except per share data) Net sales $ 120,881 $ 83,843 44 % Less: Cost of sales Cost of goods 72,058 44,049 64 Royalty expense 17,690 12,511 41 Am
Slide 27: Condensed Consolidated Statements of Operations
JAKKS Pacific, Inc. and Subsidiaries Condensed Consolidated Statements of Operations (Unaudited) Three Months Ended March 31, 2022 2021 Δ bps Fav/(Unfav) Net sales 100.0 % 100.0 % - Less: Cost of sales Cost of goods 59.6 52.5 (707) Royalty expense 14.6 15.0 29 Amortization of tools and molds 1.1 1.4
Slide 28: Condensed Consolidated Balance Sheets
JAKKS Pacific, Inc. and Subsidiaries Condensed Consolidated Balance Sheets (Unaudited) March 31, December 31, 2022 2021 2021 (In thousands) Assets Current assets: Cash and cash equivalents $ 39,225 $ 80,406 $ 44,521 Restricted cash - 3,653 811 Accounts receivable, net 103,730 79,657 147,394 Inventor
Slide 29: Condensed Consolidated Balance Sheets
JAKKS Pacific, Inc. and Subsidiaries Condensed Consolidated Balance Sheets (Unaudited) March 31, December 31, 2022 2021 2021 (In thousands) Liabilities, Preferred Stock and Stockholders' Equity Current liabilities: Accounts payable $ 36,439 $ 25,262 $ 50,237 Payable to Meisheng 15,511 6,045 15,894 A
Slide 30: Supplemental Balance Sheet and Cash Flow Data
JAKKS Pacific, Inc. and Subsidiaries Condensed Consolidated Balance Sheets (Unaudited) March 31, December 31, 2022 2021 2021 (In thousands) Supplemental Balance Sheet and Cash Flow Data (Unaudited) March 31, Key Balance Sheet Data: 2022 2021 Accounts receivable, net days of sales outstanding (DSO) 7
Slide 31: Reconciliation of Non-GAAP Financial Information
JAKKS Pacific, Inc. and Subsidiaries Reconciliation of Non-GAAP Financial Information (Unaudited) Reconciliation of GAAP to Non-GAAP measures: This press release and accompanying schedules provide certain information regarding Adjusted EBITDA and Adjusted Net Income (Loss), which may be considered n
Slide 32: Reconciliation of Non-GAAP Financial Information
JAKKS Pacific, Inc. and Subsidiaries Reconciliation of Non-GAAP Financial Information (Unaudited) Reconciliation of GAAP to Non-GAAP measures: This press release and accompanying schedules provide certain information regarding Adjusted EBITDA and Adjusted Net Income (Loss), which may be considered n