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aNb Media News, February 21, 2012

Neil Friedman Resigns from TRU

Toys “R” Us (TRU) announced late Friday afternoon that Neil Friedman resigned from his position as executive vice-president/president, Toys “R” Us to become an advisor to the broader toy industry. Friedman’s employment will end effective this Friday, February 24, 2012. TRU intends to retain his advisory services, on a non-exclusive basis, for new ventures and business alliances.

Friedman’s announcement comes on the heels of management changes at TRU since the beginning of the year.

On January 26, TRU announced that, “the employment of Deborah Derby will terminate on February 17, 2012. This termination of employment shall be treated as a termination without cause pursuant to her employment agreement.” She has served as the company’s executive vice-president and chief administrative officer since February 2009.

In addition, TRU announced the promotions of Richard Barry and Lisa Harnisch earlier this month. Read it here.

Jakks Reports Q4 and Year-End Results for 2011; Company to Pay Dividend

Jakks Pacific, Inc., reported results for the company’s fourth quarter and full year ended December 31, 2011.

Net sales for the fourth quarter of 2011 were $141.1 million, compared to $198 million reported in the comparable period in 2010. The reported net loss for the fourth quarter was $20 million, or a loss of $0.77 per diluted share, which includes $1.9 million, or $0.05 per diluted share, related to financial and legal advisory fees and expenses in conjunction with the unsolicited indication of interest to acquire the company. This compares to net income of $8.9 million, or $0.30 per diluted share, which included a tax benefit of $5.9 million, or $0.17 per diluted share reported in the comparable period in 2010. Excluding the advisory fees and expenses in 2011 and tax benefit in 2010, the fourth quarter net loss in 2011 would have been $18.8 million, or $0.72 per diluted share, compared to earnings of $3 million, or $0.13 per diluted share, in 2010.

Net sales for the full year of 2011 were $677.8 million, compared to $747.3 million in 2010. Net income reported for the full year period was $8.5 million, or $0.32 per diluted share, which includes advisory fees and expenses related to the unsolicited indication of interest of $3.8 million, or $0.09 per diluted share. This compares to net income for the full year of 2010 of $47 million, or $1.52 per diluted share, which includes a one-time pre-tax charge relating to the benefit payment of $2.8 million, or $0.06 per diluted share, to the estate of Jack Friedman pursuant to his employment agreement and tax benefits of $10.8 million, or $0.31 per diluted share. Excluding the advisory fees and expenses in 2011 and the tax benefits and one-time charge in 2010, the full year earnings in 2011 would have been $10.9 million, or $0.41 per diluted share, compared to $38.2 million, or $1.27 per diluted share in 2010.

“The difficult retail sales environment for toys, especially during the important year-end 2011 holiday season contributed to lower than expected sales for the year,” said Stephen Berman, president and CEO of Jakks Pacific in a statement. “This resulted in higher markdown allowances and higher royalty expenses relating to license guarantee shortfalls. We anticipate an improved retail sales environment in 2012 and will continue to closely manage our supply chain while maintaining momentum by focusing on the development and placement of our product lines.”

The company noted that it has experienced a strong reception to its 2012 portfolio including Monsuno, Winx Club, Disney’s properties, and its Marvel lines based on The Amazing Spider-Man and The Avengers feature films to be released this year. Jakks recently signed an agreement with Warner Bros. Consumer Products to create figures and plush of DC Comics Super Heroes and Villains. The company also plans to launch a line of novelty and large-scale figures and plush based on The Dark Knight Rises.

As of December 31, 2011, the company’s working capital was $374.7 million, including cash and equivalents and marketable securities of $257.5 million, compared to working capital of $387.3 million including cash and equivalents and marketable securities of $278.6 million as of December 31, 2010.

For 2012, Jakks anticipates an increase in net sales of 6.2 percent to 7.4 percent to approximately $720 million to $728 million, with diluted earnings per share in the range of approximately $1.01 to $1.07, excluding any financial and legal advisory fees. This guidance anticipates first-quarter 2012 net sales in the range of $63 to $70 million, with a loss per share in the range of $0.61 to $0.64, which includes incremental operating expenses associated with the recent acquisition of Moose Mountain in a seasonally low sales volume quarter, and marketing expenses associated with the launch of the Monsuno product line. This is compared to net sales of $72.3 million and a loss per share of $0.39 in the first quarter of 2011, which included advisory fees of $0.3 million, or $0.01 per share.

The Jakks Board of Directors has declared a regular quarterly cash dividend of $0.10 per common share. The dividend is payable on April 2, 2012, to shareholders of record at the close of business on March 15, 2012.

Pinkalicious Launches Online Store

Brand-Xpand announced that it has entered into a licensing agreement to become the official Pinkalicious online storefront on TysToyBox.com. The agreement allows for a branded shopping experience with a wide range of Pinkalicious products. The Joester Loria Group (JLG), the licensing agent for Pinkalicious, brokered the deal on the brand’s behalf.

Fans will be able to purchase clothing, games, accessories such as backpacks, water bottles, and beach towels, kids’ room décor items, and birthday party supplies. The store will also offer a print-on-demand feature so shoppers can personalize products.

Dentsu, Namco Bandai Partner for LBX

Dentsu Entertainment USA, Inc., and Namco Bandai announced a multi-territory partnership to distribute toys based on LBX (a.k.a. Little Battlers eXperience) throughout the Americas. Namco Bandai has also signed a separate master toy licensing agreement with TV Tokyo for European territories.

LBX is an animated television series and franchise based on miniature customizable robots. It currently airs in Japan on TV Tokyo. More than 44 episodes have aired in a prime time programming block with more to follow.

The Japanese series now being adapted by Dentsu Entertainment USA throughout the Americas. Bandai’s toy products for the Americas have an anticipated debut date of fall 2013. In European territories, Bandai and TV Tokyo plan for broadcast and toy launches with a similar timeframe.