JAKKS PACIFIC INC Q4 FY2024 earnings call

• Holiday season: Shipped comparable volume of toy and consumer products in Q4 to past 2 years, 4.8% growth in second half vs 2023. • International: Disguise business grew outside North America for 4th consecutive year. Europe, Middle East and African regions shipped over 300 more customers than in 2023. • FOB sales: Over 75% of 2024 sales volume sold on FOB basis from China. • Dividend: Board approved quarterly dividend of $0.25 per share payable March 3, 2025. • European operations: Entering second year of increased investment, anticipating holding inventory in 4 EU facilities by end of Q2 2025. • Product momentum: Sonic, Disney, Dog Man, Simpson's, Outdoor Seasonal, private label and Disguise businesses had various positive developments with new segments and launches.

Toy and consumer products business was down 1.8% full year, with each of the three divisions down 1-2% range. Costume business was down 7.5% full year, driven by softness in U.S. market. International business (inclusive of costumes) was down 1% full year. Latin America sales reached $38 million for full year, growing over 19%. North America was down 3% for quarter and year.

• Goal to grow top line and bottom line in 2025, with a plan in place to achieve this.

• Tariffs: Need to review domestic pricing to mitigate impact on margin structure. • Industry volatility: Smaller customers struggling to survive, industry has a lot of volatility. • Unexpected adverse events: Company has experienced such events in the past and remains mindful of associated risks.

Q: Congratulations on dividend, still have flexibility to pick up other properties?

A: Yes, comfortable with dividend initiative, ample cash allows for opportunistic initiatives like acquiring new IP.

Q: How do holiday movies' coattails flow?

A: Movies like Moana, Sonic, Dog Man have long tails with streaming and strong IP, enhancing visibility.

Q: Inventories and FOB?

A: Managing inventory methodically, FOB at high level, will manage inventory tightly considering tariff issues.

Q: Physical retailers devoting floor space to toys?

A: Seeing more placement for JAKKS products due to broad array of evergreen products and three-tier development process.

Q: Wholesale sales to low price point value focused retailers?

A: Expanding in such areas, with diverse distribution from mass retail to value trade.

Q: eCommerce sales events?

A: Opportunities exist, capitalizing on initiatives like Amazon Prime Day.

Q: U.S. dollar strength and currency exposure?

A: FOB business is U.S. dollar denominated, costing negotiated in USD or HK dollars, reasonably insulated from FX exposure.

Q: Box office performance and strategy?

A: Box office is an enhancement, broad mix and diversification reduces need for box office success this year, with momentum in future movies.