Slide 1: Q2 2020 Earnings Update
2019 Q2 2020Forecast Earnings Update July 29, 2020 August 29th, 2019
Slide 2: Second Quarter 2020 Earnings Conference Call Presentation
Second Quarter 2020 Earnings Conference Call Presentation July 29, 2020 Participant Dial in: 1(833) 423-0496 International Dial in: 1(918) 922-2390 Conference ID 4594426 1
Slide 3: 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 4: 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 2020, as well as any other forward-looking statements concerning 2020 and beyond are subject
Slide 5: CEO Overview
CEO OVERVIEW Performed In Line With Expectations In Spite of COVID-19 Disruptions • Net Sales down 17% vs. Q2’19; • Toy Segment down 4%, but up 3% excluding discontinued Funnoodle line; • Toy Segment down 2% in No. America, down 14% internationally • Disguise down 38% vs. strong Q2’19 amid retailer
Slide 6: Q2 2020 Results
Q2 2020 RESULTS (in US $000s except per share data) Q2 Favorable/(Unfavorable) 2019 2020 ∆$ ∆% Net Sales 95,182 78,758 (16,424) (17.3%) Gross Profit % 18.6% 21.3% 265 bps Loss from Operations (18,649) (9,746) 8,903 47.7% Loss from Operations % (19.6%) (12.4%) 722 bps Loss Per Share - Diluted (9.55)
Slide 7: CFO Sales Review
CFO SALES REVIEW Balancing Evergreens and Licenses Girls Products up 5% vs. Q2 2019 Lines that performed well in Q2: • Frozen 2 • Disney Princess • Perfectly Cute Baby • Kitten Catfe Boys’ Products up 2% vs. Q2 2019 Lines that performed well in Q2: • Fly Wheels • Nintendo / Super Mario and Sonic • B
Slide 8: CFO Sales Review cont'd
CFO SALES REVIEW cont’d Seasonal Products down 26% vs. Q2 2019 • Funnoodles discontinued last year Lines that performed well in Q2: • Minnie Mouse and Frozen2 Rideons • ReDo Skateboards Disguise down 38% vs. Q2 2019 • Q2’19 Unusually strong • Retailers cautious on Halloween • JAKKS reducing credit r
Slide 9: Q2 Net Sales by Segment & Category
Q2 Net Sales by Segment & Category (In US $ millions) Mix ∆% Category ∆% Mix Category $95.2 $78.8 (17%) $95.2 $78.8 (17%) 22.5 (38%) 22.5 (38%) Halloween 36.4 Halloween 36.4 8.8 (14%) 12.7 (26%) w/Funnoodle (2%) w/o International 10.3 Funnoodle 4.2 $17.1 Seasonal 12.9 10.7 2% $56.2 Boys 10.5 North $
Slide 10: Q2 2020 Results
Q2 2020 RESULTS (in US $000s except per share data) Q2 Favorable/(Unfavorable) 2019 % of Sales 2020 % of Sales ∆$ ∆% Net Sales 95,182 100.0% 78,758 100.0% (16,424) (17.3%) Cost of Sales 77,436 81.4% 61,988 78.7% (15,448) (19.9%) Gross Profit 17,746 18.6% 16,770 21.3% (976) (5.5%) Direct Selling Expe
Slide 11: Q2 2020 Cash Flow
Q2 2020 CASH FLOW (in US $ millions) Q2 Favorable/(Unfavorable) 2019 2020 ∆$ ∆% Cash Flow From Operations (7.0) 7.0 14.0 nm Free Cash Flow (9.7) 4.2 13.9 nm
Slide 12: Balance Sheet Summary
BALANCE SHEET SUMMARY (in US $ millions) June 30, June 30, Inc/(Dec) 2019 2020 ∆$ Cash, Cash Equivalents and Restricted Cash 37.0 52.7 15.6 Accounts Receivable, net 85.1 69.0 (16.1) Inventory 53.5 57.7 4.2 Prepaid Expenses & Other Assets 28.5 28.4 (0.1) AP, Accrued Expenses & Other Current Liabiliti
Slide 13: Working Capital
WORKING CAPITAL (in US $ millions) June 30, June 30, Inc/(Dec) 2019 2020 ∆ $ /∆ % Net Sales 95,182 78,758 (16,424) Working Capital w/ Cash 70,623 85,307 14,684 % Net Sales 74% 108% 34% Working Capital w/o Cash 33,575 25,192 (8,383) % Net Sales 35% 32% -3%
Slide 14: CEO Overview
CEO OVERVIEW Managing Through an Unprecedented Business Environment • Supply chain back to normal • Retail opening up, but COVID cases still rising • Categories that benefit include Activity toys and Games • Categories that get hurt are Action Figures, some Dolls and Collectibles Factors That Help D
Slide 15: Considerations for Second Half of 2020
Considerations for Second Half of 2020 JAKKS has in its favor: • Strong position in categories with proven play patterns • Powerful licenses from top Entertainment IP holders • Success with new, owned IP • Long term, stable relationships with top retailers • Established and reliable supply chain 12
Slide 16: 2020 Product Drivers
2020 PRODUCT DRIVERS Girls: • Frozen 2 • Disney Style Collection - kitchen and vanity • Kitten Catfe • Cute Girls Hairstyles Boys • Fly Wheels • Nintendo / Super Mario • Sega, Sonic • Xtreme Power Dump Truck 13
Slide 17: 2020 Product Drivers
2020 PRODUCT DRIVERS Seasonal: • Full year of Indoor Tents, Inflatables & Ride-Ons • Redo skateboards • Eyeclops Disguise • Frozen 2 • Billie Eilish • Trolls 2 • Mulan • Harry Potter • Bakugan 14
Slide 18: Conclusion
CONCLUSION • We know challenges lie ahead, but we are facing them • Preparing business for safe return to normal operations • Managing costs, conserving cash and focusing on evergreens • Positioned to emerge stronger than before 15
Slide 19: Thank You
THANK YOU cll