LEGO Reports 2014
The LEGO Group is reporting that LEGO City, LEGO Creator, and the products from The LEGO Movie all contributed to sales growth increasing to approximately $4.3 billion (DKK 28.6 billion) in 2014.
“In 2014 we increased our sales by 15 percent,” said Jørgen Vig Knudstorp, president and CEO of The LEGO Group. “I am proud that we delivered high-quality creative play experiences to millions of children all over the world.”
LEGO’s Key 2014 Results:
• Revenue growth, excluding foreign exchange impacts, was 15 percent year-over-year on a local currency basis
• Revenue increased by 13 percent to approximately $4.3 billion (DKK 28.6 billion) versus approximately $3.8 billion (DKK 25.3 billion) in the prior year
• The year’s operating profit increased to approximately $1.4 billion (DKK 9.7 billion) versus approximately $1.25 billion (DKK 8.3 billion) in 2013—an increase of 16 percent
• Net profit was approximately $1 billion (DKK 7 billion) compared to approximately $925 million (DKK 6.1 billion) in 2013—an increase of 15 percent
• Investments in property, plant, and equipment amounted to approximately $470 million (DKK 3.1 billion) in 2014—an increase of 18 percent versus the prior year’s investment level
LEGO reported that all of its market regions experienced double-digit sales growth. In the U.S., LEGO’s largest market, sales growth was in the double digits. LEGO also says that it experienced double-digit sales growth in the UK, France, Russia, and China, while Central and Northern European markets achieved healthy single digit growth rates.
Some of the top-selling lines in 2014 were LEGO City, LEGO Star Wars, and LEGO Friends, according to the company. LEGO Creator and LEGO Technic also experienced high growth rates during the year. The LEGO Movie product line was a significant contributor to strong sales in 2014, says LEGO. The movie opened February 7, 2014, and LEGO says the product line performed well during the entire year.
Jakks Reports Q4
Jakks Pacific, Inc., reported results for the company’s fourth quarter and full year ended December 31, 2014. Net sales for the fourth quarter of 2014 were $254 million, compared to $137.7 million reported in the comparable period in 2013. Reported net income for the fourth quarter was $2.8 million, or $0.11 per diluted share. This compares to a net loss of $16.1 million, or $0.73 per diluted share, reported in the comparable period in 2013. Adjusted EBITDA for the fourth quarter of 2014 increased to $10.6 million, compared with negative EBITDA of $6 million in the fourth quarter of 2013.
Net sales for the full year of 2014 were $810.1 million, compared to $632.9 million in 2013. Reported net income for the full year was $21.5 million, or $0.70 per diluted share. This compares to net loss for the full year of 2013 of $53.9 million, or $2.43 per diluted share. Adjusted EBITDA for the full year of 2014 increased to $52.9 million, compared with negative EBITDA of $17 million for 2013.
“We are very satisfied with our strong performance in the fourth quarter,” said Stephen Berman, president and CEO, Jakks Pacific. “Despite logistical challenges related in part to the port issues, and a difficult retail and consumer landscape that adversely affected many of our competitors, we ended the year with a solid quarter. We are gratified with our accomplishments in 2014. We returned the company to profitability and positioned it to remain on this path going forward with a strong lineup of products, a dedicated staff and the implementation of ongoing operating efficiencies.”
Working Capital
As of December 31, 2014, Jakks’ working capital was $246.2 million, including cash and equivalents and marketable securities of $71.7 million, compared to working capital of $136.3 million, including cash and equivalents and marketable securities of $117.3 million as of December 31, 2013. Due to sustained customer demand and as a contingency measure to better deal with the port issues, on-hand inventory levels increased to $78.8 million at year-end 2014 from $46.8 million at year-end 2013. In 2014, DSIs remain flat at 52 days when compared to 2013 and, due to the proportion of shipments later in the fourth quarter, our accounts receivable of $234.5 million resulted in DSOs increasing modestly by 17 days to 83 days.
2015 Guidance
For 2015, we are currently forecasting an increase in earnings and EBITDA on lower revenue. Net sales are expected to be in the range of approximately $730 million to $740 million, with earnings in the range of approximately $0.71 to $0.75 per diluted share and EBITDA in the range of approximately $56 million to $58 million.
For the first quarter ending March 31, 2015, the company expects net sales in the range of approximately $101 million to $103 million with a loss in the range of approximately $0.47 to $0.44 per share compared to net sales of $82.5 million and a loss of $0.74 per diluted share for the same period in 2014. EBITDA is expected to be in the range of $2.8 million to $2.2 million loss for the first quarter of 2015.
The improvement in earnings and EBITDA in 2015 reflects the impact of cost-saving and other margin improvement initiatives undertaken by the company, with gross margins anticipated to be approximately 31 percent.
Planeta Junior, Famosa Partner on TV Series
Planeta Junior, a European content provider, and the Spanish toy company Famosa, announced that they are partnering to co-produce an animated series based on the Mutant Busters toy line, which launched in 2013.
Mutant Busters shows a future where the Earth has been divided into two parts. Humans of “La Résistance” inhabit one part and mutants inhabit the second part. Some of the mutants are stinky and repulsive beings who aim to become the owners of the planet.
Kotoc, a studio that specializes in creating and producing CGI-style intellectual properties, has also been signed to develop the series. Kotoc, has worked with Planeta Junior on Sendokai Champions Challenge, which has been sold into five continents.
The 52 episodes x 11’ series is in pre-production. Planeta Junior will hold the worldwide TV and licensing rights for the Mutant Busters property.
London Toy Fair 2016 Dates to Be Finalized
The UK’s ToyNews is reporting that London’s Toy Fair 2016 dates will be finalized soon. It is expected that the show will take place at Olympia from Sunday, January 24–Tuesday, January 26, 2016. The British Toys and Hobby Association (BTHA) is working to avoid a conflict with the dates of the Nuremberg Toy Fair, which is set to take place Wednesday, January 27–Monday, February 1, 2016. For more information, click here.
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