JAKKS Pacific(JAKK) - 2024 Q3 - Quarterly Results

Financial Performance - Q3 2024 net sales were $321.6 million, a year-over-year increase of 4%[2] - Toys/Consumer Products net sales were $264.3 million, a year-over-year increase of 7%[2] - Costumes net sales were $57.3 million, a year-over-year decrease of 10%[2] - Operating income was $68.1 million, representing 21.2% of net sales, up from 20.1% in Q3 2023[2] - Net income attributable to common stockholders was $52.3 million or $4.64 per diluted share, compared to $47.8 million or $4.53 per diluted share in Q3 2023[2] - Year-to-date adjusted net income was $50.0 million ($4.50 per diluted share), down from $59.4 million ($5.66 per diluted share) in the first nine months of 2023[5] - Net income attributable to JAKKS Pacific, Inc. increased by 9% to $52.3 million in Q3 2024 compared to $48.1 million in Q3 2023[16] - The company experienced a 12% decrease in net income for the nine months ended September 30, 2024, totaling $43.3 million compared to $48.9 million in the same period of 2023[16] - TTM net income decreased to $32,441,000 from $87,094,000, a decline of $54,653,000[19] Margins and Expenses - Gross margin was 33.8%, down 70 basis points compared to Q3 2023[2] - Adjusted EBITDA for Q3 2024 was $74.4 million, up from $67.1 million in Q3 2023[2] - Gross profit margin decreased to 33.8% in Q3 2024 from 34.5% in Q3 2023, reflecting a decline in gross profit to $108.8 million[17] - Direct selling expenses decreased by 29% to $7.6 million in Q3 2024, compared to $10.7 million in Q3 2023[16] - General and administrative expenses increased by 9% to $100.9 million for the nine months ended September 30, 2024, compared to $92.5 million in the same period of 2023[16] - The company reported a decrease in royalty expenses by 2% to $50.0 million in Q3 2024 compared to $51.1 million in Q3 2023[16] - Interest expense decreased significantly by 62% to $539,000 in Q3 2024 from $1.4 million in Q3 2023[18] - Interest expense decreased to $1,648,000 from $8,035,000, a reduction of $6,387,000[19] - The overall TTM Adjusted EBITDA margin decreased to 8.5%, down 190 basis points from 10.4%[19] Cash and Inventory - Cash and cash equivalents totaled $22.3 million as of September 30, 2024, down from $96.4 million a year earlier[6] - Inventory was $63.5 million, compared to $68.8 million as of September 30, 2023[6] Earnings Per Share - Earnings per share (EPS) for Q3 2024 was $4.78, slightly up from $4.77 in Q3 2023[16] - Adjusted earnings per share (diluted) decreased to $4.79 from $5.66, a decline of $0.87[20] Regional Sales Performance - Net sales in the United States for Q3 2023 were $255,278,000, a 4.2% increase year-over-year, but a 3.5% decline compared to the previous quarter[21] - Latin America showed significant growth with Q3 2023 sales of $22,632,000, a 47.7% increase year-over-year[21] - Total net sales for Q3 2023 were $321,606,000, reflecting a 3.8% increase from Q3 2022[21] - The company reported a 22.8% increase in year-to-date sales for Latin America compared to the previous year[21] Other Financial Impacts - The company experienced a loss from joint ventures totaling $565,000, impacting overall profitability[20] - TTM Adjusted EBITDA fell to $58,490,000, down 22% from $74,549,000[19]