JAKKS Pacific Q2 Loss Narrows; Lifts 2014 Net Sales Outlook - Quick Facts

JAKKS Pacific Inc. (JAKK), a toys and other consumer products maker, reported that its net loss for the second quarter narrowed to $9.1 million or $0.43 per share from $46.9 million or $2.14 per share in the same quarter last year. Analysts polled by Thomson Reuters expected the company to report a loss of $0.29 per share for the quarter. Analysts' estimates typically exclude special items.

The latest-quarter results included pre-tax restructuring charges of $1.2 million, or $0.05 per diluted share, higher than anticipated product testing and development costs of $2.1 million, or $0.10 per share, due to higher sales in the quarter and to support new products in response to increasing consumer demand for some of its licensed product lines, and the aggregate dilutive impact of $.03 per diluted share resulting from the incremental interest expense of $0.4 million associated with the recently completed convertible note issuance ($0.02 per share) and the reduction in the aggregate number of outstanding common shares resulting from the recently completed 3.1 million share repurchase ($0.01 per share).

The previous year results included charges for license minimum guarantee shortfalls of $14.1 million and inventory impairment of $12.2 million.

Net sales for the second quarter increased to $124.2 million, up 16.9% from net sales of $106.2 million reported in the comparable period in 2013. Wall Street expected revenues of $112.86 million.

The company currently expects net sales for the full year of 2014 to be in the range of $660 million to $670 million, an increase from its previously issued guidance of net sales in the range of $633 million to $640 million.

Giving effect to the full year impact of the net dilution of $0.15 per share relating to the recent convertible note issuance and stock buyback, previous earnings guidance would have been in the range of $0.15 to $0.25 per share, and, now, earnings guidance is in the range of $0.20 to $0.30 per share.

The Company's previous reported earnings guidance was in the range of $0.30 to $0.40 per diluted share, and, excluding the impact of the convertible note issuance, stock buyback and restructuring charges, revised guidance for earnings per share would have been in the range of $0.40 to $0.45 per share.

Street currently is looking for fiscal year 2014 earnings of $0.40 per share on annual revenues of $649.84 million.

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