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Edited Transcript of JAKK earnings conference call or presentation 26-Feb-19 9:30pm GMT

Q4 2018 JAKKS Pacific Inc Earnings Call

MALIBU Mar 1, 2019 (Thomson StreetEvents) -- Edited Transcript of JAKKS Pacific Inc earnings conference call or presentation Tuesday, February 26, 2019 at 9:30:00pm GMT

TEXT version of Transcript

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Corporate Participants

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* Brent T. Novak

JAKKS Pacific, Inc. - Executive VP & CFO

* Stephen G. Berman

JAKKS Pacific, Inc. - Co-Founder, Chairman, CEO, President & Secretary

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Conference Call Participants

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* Gerrick Luke Johnson

BMO Capital Markets Equity Research - Senior Toys and Leisure Analyst

* Stephanie Marie Schiller Wissink

Jefferies LLC, Research Division - Equity Analyst

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Presentation

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Operator [1]

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Good afternoon, and welcome to the JAKKS Pacific Fourth Quarter 2018 Earnings Conference Call with Management, who will review financial results for the quarter ended December 31, 2018.

JAKKS issued its earnings press release earlier today. Presentation files containing information covered in both today's earnings press release and in call are available on our website in the Investors section. This presentation includes videos showing some of our key products.

On this call, this afternoon, are Stephen Berman, Chairman and Chief Executive Officer; and Brent Novak, Chief Financial Officer. Mr. Berman will first provide an overview of the quarter and provide highlights of product lines and current business trends. Then Mr. Novak will provide detailed comments regarding JAKKS Pacific's financial and operational results prior to opening up the call for questions. (Operator Instructions)

Before we begin, the company would like to point out any comments made about JAKKS Pacific's future performance, events or circumstances, including estimates of sales and/or adjusted EBITDA in 2019 as well as any other forward-looking statements concerning 2019 and beyond are subject to safe harbor protection under federal security laws.

These statement reflect the company's best judgment based on current market trends and conditions today and are subject to certain risks and uncertainties, which could cause actual results to differ materially from those projected in forward-looking statements.

For details concerning these and other risks and uncertainties, you should consult JAKKS' most recent 10-K and 10-Q filings with the SEC as well as the company's other reports subsequently filed with the SEC from time to time. In addition, today's comments from management refer to non-GAAP financial measures such as adjusted EBITDA. Unless stated otherwise, the most directly comparable GAAP financial metric has been reconciled to the associated non-GAAP financial measure within the company's earnings press release issued today or previously.

As a reminder, this conference is being recorded.

With that, I'd like to turn the call over to Mr. Stephen Berman.

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Stephen G. Berman, JAKKS Pacific, Inc. - Co-Founder, Chairman, CEO, President & Secretary [2]

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Good afternoon, everyone, and thank you for joining us today. This afternoon, we are going to review our performance during the fourth quarter 2018. I will talk about how our brands and products performed in the quarter compared to last year and to our expectations. After my comments, Brent will discuss our financial performance.

2018 was a year that we saw unprecedented disruption in the global toy industry, principally, but not exclusively, because of the bankruptcy and the liquidation of Toys"R"Us. When we held our second quarter earnings call last July, we said that while we expected that eventually most of the lost Toys"R"Us sales would be picked up by other retailers. We did not expect our sales or industry sales to see anything of a full transfer of these sales until next year. Other manufacturers disagreed, but now looking back, the transfer of business to other retailers did not happen for JAKKS and much of the industry.

NPD reported that retail toy sales in the U.S. were down 7% for the fourth quarter and down 2% for the full year. That is roughly in line with the decrease that we saw in the U.S. in the fourth quarter. We believe most of that decline is due to the fact that other retailers were unable to make up the loss Toys"R"Us sales.

We expect that by the end of 2019, the industry will have largely completed the adjustment, but we expect to continue seeing disruption in the first half, bearing in mind that most of the industry's major suppliers were shipping to Toys"R"Us well into the first quarter of 2018, and that the liquidation sales appear to have pulled forward a lot of the consumer purchases into the first half of 2018.

As disruptive as this event was to our results in 2018, this is now behind us, and we are focused on the future. I'd like to point to a number of encouraging signs in our fourth quarter results. For the second consecutive quarter, we exceeded our internal forecast for top line and adjusted EBITDA, finishing the year with positive adjusted EBITDA.

Sales within our international segment were strong in fourth quarter, up around 25% year-over-year. We had many new products which sold well in 2018, including some of our own IP. And we continue to have a solid base of evergreen products in categories where we are the industry leader. We have seen success and expanded beyond traditional toys and beyond traditional toy retailers, and we have seen a nice increase in our sales to online retailers.

Our net sales in fourth quarter declined approximately 3%, primarily due to the loss of sales to Toys"R"Us compared to last year. This brought our full year decline to approximately 7%. Excluding sales to Toys"R"Us, our sales were up 12% in fourth quarter and 1% for the full year as fourth quarter saw strong performances for online sales and from some of our larger customers.

Despite the reduction in sales, we were able to produce better financial results for the year than we expected. As Brent will detail shortly, our gross margin improved significantly. We greatly reduced our operating loss and posted positive adjusted EBITDA for the full year, despite having extremely challenging first half of 2018.

During fourth quarter, we had strong sales of several new or recently launched products led by Incredibles 2, Fancy Nancy, Harry Potter, MorfBoard, Disney Princess, TP Blaster, Daniel Tiger, Nintendo and PERFECTLY CUTE. Offsetting the positive sales contribution of products we just mentioned, there were several entertainment properties that contributed significant sales in the fourth quarter of 2017, which declined this year in the absence of new content such as Moana, Frozen, Squish-Dee-lish, which was launched in 2017 second half, Elena of Avalor, Tsum Tsum and Beauty and the Beast.

We also saw some declines in promotional products that are nearing the end of their life cycles, such as Chocolate Egg Surprise. Brent will provide more details later in the call.

Not surprisingly, online sales continue to build momentum. Our total sales through online retailers were up dramatically in the fourth quarter. Over 30% in total and nearly 50% excluding Toys"R"Us from the fourth quarter 2017 results. Increasing online sales, as a percent of total sales, has been a goal of ours in recent years, and we are pleased to see this accelerate in 2018.

For the quarter, we estimate that our online sales represented over 15% of our total sales, and for the year, over 10% of our total sales. Because we anticipated the industry-wide sales challenge, and because of steps we took earlier in the year to reduce our cost, we saw improvements in our operating cost structure.

On a GAAP basis, our gross margin for the year was up by more than 2 full points and our total SG&A costs were down around 15%. Our inventories and our accounts receivable were both down by more than a reduction in full year sales and considerably more than the fourth quarter sales.

I will now turn the call over to Brent Novak. Brent?

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Brent T. Novak, JAKKS Pacific, Inc. - Executive VP & CFO [3]

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Thank you, Stephen, and good afternoon, everyone. Net sales for the 2018 fourth quarter were $132.3 million, down 3% compared to $136.6 million last year. As was the case all year, the decline was essentially due to a decrease in sales to Toys"R"Us.

Reported net income for the quarter was a loss of $3.2 million or $0.14 per diluted share compared to a net loss of $30.4 million or $1.33 per diluted share in the fourth quarter of last year.

Adjusted EBITDA for the 2018 fourth quarter was negative $1.6 million compared to negative $6.8 million in the fourth quarter of 2017. For the full year of 2018, net sales were $567.8 million, down 7% compared to $613.1 million last year.

Reported net income for the 2018 year was a loss of $42.4 million or $1.83 per diluted share compared to a net loss of $83.1 million or $3.89 per diluted share in 2017.

Adjusted EBITDA for the full year of 2018 was $2.3 million compared to $15.8 million for the full year of 2017. The sales drivers in the fourth quarter of 2018 by category were as follows: sales of dolls, role play and dress up, plush and activity products in our girls category, amounted to $72.9 million for the 2018 fourth quarter, down 14% compared to $85.2 million in the comparable quarter last year.

We saw positive contributions from the girls category with Incredibles 2, Fancy Nancy and Disney Princess as well as from PERFECTLY CUTE, a private label brand we produce for one major customer.

These brands were more than offset by the expected declines in a number of girls lines, including several entertainment, content-driven lines such as Moana, Frozen, Elena of Avalor and Tsum Tsum as well as Squish-Dee-lish and Chocolate Egg Surprise, both of which were launched in the second half of 2017.

Sales of Action Figures, Vehicles, Role Play and electronic products in our boys and other category for the 2018 fourth quarter were $28.8 million, up 36% compared to $21.1 million last year, driven by Incredibles 2, Harry Potter, TP Blaster and Nintendo, which more than offset declines in Real Workin' Buddies and Star Wars.

Sales of seasonal products, including licensed Ride-Ons, Ball Pits, kids' furniture, Maui outdoor activity products and MorfBoards were $19.9 million in the 2018 fourth quarter, down 12% from $22.5 million in 2017 as a nice sales performance by MorfBoard were more than offset by declines in other areas. As was the case in the third quarter, sales were impacted by the Ball Pit category as well as a decline in indoor kids' furniture.

Sales in our Halloween category, which is also one of our business segments, increased 19% to $6.8 million in the fourth quarter of 2018 compared to $5.7 million in 2017.

Sales of baby doll accessories, figures, plush and games in our preschool and activity category were $3.9 million in the fourth quarter of 2018, up from $2.1 million in 2017. The increase was driven primarily by a strong increase in Daniel Tiger.

Looking at sales by business segment, U.S. and Canada net sales for the fourth quarter were $100.9 million compared to $111.3 million in the prior year quarter, driven by the drop in sales to Toys"R"Us as well as the same puts and takes described earlier in the product group descriptions.

International sales for the 2018 fourth quarter were stronger at $24.6 million and up when compared to $19.6 million in the 2017 fourth quarter, driven by strength in Europe. And we already mentioned, Halloween sales in the category breakdown earlier.

Moving down the P&L. Reported gross margin in the 2018 fourth quarter was 30.6% compared to 22.1% in the 2017 fourth quarter. Gross margin was higher than a year ago due to nonrecurring items recorded in the prior year, related to minimum guarantee shortfalls and inventory charges. That said, the 2018 fourth quarter gross margin was the highest gross margin percentage we have seen since the first quarter of 2017 and it reflects a more favorable product mix, prudent sales forecasting and the lack of large onetime minimum guarantee shortfalls.

Gross margin for the full year was 27.4% compared to 25.4% in 2017, with the increase driven by the lack of significant nonrecurring items in 2018.

SG&A expenses, including direct selling expenses and depreciation and amortization, in the 2018 fourth quarter, totaled $44.9 million or 33.9% of net sales compared to $56.7 million or 41.5% of net sales in 2017. The year-over-year decrease primarily relates to lower compensation in the 2018 fourth quarter, due in part to the previously announced restructuring plan and a $3.2 million bad debt recovery from TRU in the 2018 fourth quarter compared to a $1.6 million bad debt charge in the 2017 period.

For the full year, SG&A expenses totaled $187.9 million, which included a net $8.7 million bad debt charge compared to SG&A expenses of $219.8 million in 2017, which included $11.2 million in bad debt write-offs and a $13.5 million impairment charge.

Lower SG&A cost on a year-over-year basis, excluding these items, was primarily due to lower compensation, due in part to the recently announced restructuring plan and reduced spending across a number of categories.

Income tax expense for the fourth quarter of 2018 was $1.2 million compared to $716,000 in Q4 of last year. For the full year, income tax expense was $3 million compared to $1.6 million in 2017. The variability of the income tax provision is based on changes in taxable income levels in various tax jurisdictions in which we operate.

Net cash used in operating activities was $3.7 million for the fourth quarter of 2018, down when compared to net cash provided by operating activities of $17.6 million in the fourth quarter of 2017, due to the timing of paying our payables and accrued liabilities.

For the full year 2018, net cash used in operating activities was $626,000, down when compared to net cash provided by operating activities of $11.4 million in 2017, due in part to additional cash advances paid in 2018.

Free cash flow was negative $5.5 million in 2018 fourth quarter and a positive $13.1 million in the 2017 fourth quarter. For the full year 2018, free cash flow was negative $12.4 million compared to negative $3.5 million in 2017. The declines in free cash flow for the above periods were driven by declines in the operating cash previously noted.

As of December 31, 2018, our cash and cash equivalents, including restricted cash, totaled $58.2 million compared to $65 million at the end of 2017. We continue to focus on improving the company's liquidity position while also balancing the need to invest in the business and secure new licenses.

Accounts receivable as of December 31, 2018, were $122.3 million, down from $142.5 million at the end of the fourth quarter of 2017.

DSOs improved in the 2018 fourth quarter to 85 days from 96 days reported in the 2017 fourth quarter.

Inventory as of December 31, 2018, was $53.9 million versus $58.4 million at the end of the fourth quarter of 2017. DSIs in the 2018 fourth quarter were 70 days, relatively flat with the 68 days in the 2017 fourth quarter.

As of December 31, the company's debt includes $113 million of convertible notes due June 2020, $29.5 million of previously exchanged convertible notes due November 2020, the $20 million term loan with Great American and $7.5 million outstanding under our credit facility. The $7.5 million was subsequently repaid in the 2019 first quarter.

Capital expenditures during the fourth quarter of 2018 were $2.2 million compared to $4.5 million in the fourth quarter of 2017. For the full year 2018, CapEx was $11.8 million compared with $14.9 million in 2017.

The diluted loss per share calculations for both the fourth quarter and the full year 2018 are based on an average of 23.1 million common shares outstanding. The 2018 year-end diluted share count excludes 23.4 million shares underlying our outstanding convertible senior notes.

Before I pass the call back over to Stephen, I would like to discuss our expectations for 2019. We closed 2018 on a positive note, exceeding our internal expectations for the back half of the year. As Stephen mentioned, although we believe the worst is behind us regarding the Toys"R"Us liquidation, we continue to believe that there will be some disruption and adverse impacts into 2019.

On the positive side, we are encouraged by the early indications we are receiving from our customers regarding some of the content coming in 2019, specifically Frozen 2. We have also seen some good progress on the gross margin line and expect to benefit from the previously announced restructuring plan. Currently, we believe net sales in 2019 will increase year-over-year by approximately 5% or to $596 million, give or take a few percentage points.

Assuming we achieve our net sales objective of $596 million, adjusted EBITDA is expected to be roughly $27 million. Adjusted EBITDA excludes significant nonrecurring and noncash items, including stock-based compensation expense, acquisition-related cost and restructuring charges, many of which pertain to future events and are not currently estimable with a reasonable degree of accuracy. Therefore, no reconciliation to GAAP amounts can be provided.

From a seasonality perspective, we expect 2019 gross sales to be more significantly weighted towards the back half of the year. We currently estimate that approximately 27% of our gross sales will be generated in the 2019 first half, with the balance generated in the back half of the year. I would also like to note that the 2018 first half benefited from sales of Incredibles 2 products and final sales to Toys"R"Us in certain jurisdictions, which in 2018 first quarter, totaled approximately $9.5 million in those certain jurisdictions.

And with that, I will turn the call back over to Stephen. Stephen?

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Stephen G. Berman, JAKKS Pacific, Inc. - Co-Founder, Chairman, CEO, President & Secretary [4]

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Thank you, Brent. Before we get to Q&A, I will share some thoughts on some of the properties and trends we think will be important in 2019. We are optimistic about 2019 for a number of reasons. First, we expect more of the Toys"R"Us business to be picked up by other retailers, and we expect the big winners to be customers we have strong relationships with. We still have to anniversary shipments to Toys"R"Us in the first quarter 2018, but after that, the comparisons are easier.

Second, 2019 is shaping up to be a very content-rich year, with an almost unprecedented lineup of entertainment content, and we have more than our share of licenses that we expect will drive sales.

Third, we continue to expand our own IP, consistent with our strategic goal of having our own IP constitute a higher portion of our total sales. We have several Disney properties that should benefit from either new or continued content, including Fancy Nancy, which is doing very well in radiants and in toy sales and we'll be shipping for the full year in 2019.

We have products tied to Toy Story 4 such as the Buzz Lightyear Star Command Center, which received the Best of Toy Fair award from Parents Magazine. We also have from the highly anticipated live-action Aladdin film Dolls, Dress Up & Role Play items.

Disney will be celebrating the 30th anniversary of the release of the Little Mermaid this year, and we have special products for that celebration, including a beautiful clamshell vanity. And of course, Frozen 2 will be out in time for Thanksgiving. We have several products shipping in the weeks leading up to the box office release, including special feature Dolls, Dress Up & Role Play.

One key driver of note is a Playdate Sven, a kid-sized reindeer styled after the popular character from the original film.

We expect the Frozen brand to be significant factor in both 2019 and 2020. In addition to the Disney licensed products, we also have several other licenses that should do well this year, starting with Harry Potter, which was very strong for us in 2018. Becca's Bunch, a new preschool program for children aged 3 to 6 years old on Nick Jr. Gigantosaurus, a new animated TV series on Disney Junior featuring dinosaurs. And Godzilla returns to the big screen this summer, and we have a line of products exclusive to Walmart.

Daniel the Tiger goes into 2019 with great momentum after a strong last year. One trend we are very well positioned for 2019 and beyond is the success of toys tied to popular video game franchises. Nintendo has done very well for us in the recent years, growing over 30% in fourth quarter and double digits for the whole year. We continue to have action figures tied to Mega Man, based on the classic video game. And Sonic the Hedgehog is another beloved video game character that will benefit from new content on both TV and in theaters in 2019.

We have several products based on our own IP that look promising for 2019. Starting with TP Blaster, Sheet Storm. The follow-up to last year's surprise hit, TP Blasters Skid Shot. MorfBoard should benefit not only from broader distribution for the full year but also from the addition of an electric motor, giving writers yet another way to experience versatility of the Morf system.

Slot Ninja, the fun action game, while Piñata Fiesta is a line of collectibles and activity sets, which will broaden our presence in both those categories. And X-Power Dozer is our latest powered vehicle line.

In conclusion, we expect some of this disruption from Toys"R"Us liquidation to extend into 2019 but this should be largely over by the end of the first half. But we are also very encouraged by the performances of some of our new brands and some of our new opportunities that will allow us to be well positioned for the future. The rightsizing of our cost structure puts us in a good position to return to profitability in 2019.

With that, we will now take questions. Operator?

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Questions and Answers

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Operator [1]

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(Operator Instructions) And our first question comes from Stephanie Wissink from Jefferies.

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Stephanie Marie Schiller Wissink, Jefferies LLC, Research Division - Equity Analyst [2]

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Stephen, the first question is for you. I always appreciate your candor when you are talking about the industry, and wondering if you can just help us with that 5% growth forecast for JAKKS. How are you thinking of that relative to the industry expectation? What are you thinking about the backdrop will be in terms of growth this year?

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Stephen G. Berman, JAKKS Pacific, Inc. - Co-Founder, Chairman, CEO, President & Secretary [3]

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Well, for -- I can speak specifically for JAKKS. Based off of the movie lineup, the TV show lineup, the depth of our own IP and our categories that are very strong and very consistent, we're seeing growth in our mass distribution both U.S. and internationally. The alternative distribution channel has grown very, very well both in U.S. as well as internationally and online sales from our online retailers as well as the online component of our brick-and-mortars are all really starting to come to fruition for us after about a 3-year plan of going and getting deeper into distribution. That coupled with the content that we have, we have a tremendous amount of new content, and we're hitting many different categories with all the new content coming out. So it's really like a perfect storm for us this year.

In addition, on a separate side, Halloween, we're seeing a very nice dramatic growth for us this year in North America, one of which is the content lineup as well as additional distribution we had going into 2019. As last year in 2018, we had several online retailers in our Halloween segment that went to liquidation. So we believe the past, call it, hardships are behind us, and we see a really good future going forward. I can't speak exactly for the industry, because I just don't know what the toy industry or through NPD what they believe the growth is for 2019. And separately, besides that, we have, obviously, one of the top, top most, call it, sought after properties and a broad product line for the up-and-coming Frozen 2, which, again, when we did Frozen originally, we did really nice the first, call it, quarter that was out. But the real strength was the following year, which will be 2020.

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Brent T. Novak, JAKKS Pacific, Inc. - Executive VP & CFO [4]

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But that's why to -- Steph, when you look at the seasonality and why we're kind of guiding more heavily to the back half so 27% in the first half, the balance coming in, in the second half.

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Stephanie Marie Schiller Wissink, Jefferies LLC, Research Division - Equity Analyst [5]

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Okay. And Stephen, how should we think about Frozen 2 relative to Frozen 1? Typically, we all assume that the sequels are less productive from a consumer products and merchandising perspective, but maybe share a little bit of insight into how Disney is thinking about the globalization of that property at this time. And then you mentioned several things that you have and just wanting to help understand -- for us to understand, is the license similar in scope to what you had last time or do you have access to more subcategories this time around?

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Stephen G. Berman, JAKKS Pacific, Inc. - Co-Founder, Chairman, CEO, President & Secretary [6]

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For us, the license is similar, but now we are much more educated of the content of Frozen and the characters and we're much more passionate to the understanding of the storyline. When the first Frozen came out, it was unknown to many of us, inclusive of Disney in the sense of what the success will be. And we believe and also Disney believes as well as retail believes, the sequel will be extremely powerful. Normally, sequels are a little bit less than the original, but for Incredibles, for instance, Incredibles the movie when it came out originally, when it came out the second time, the movie surpassed the success of the original as well as the product line did as well. So we're really now -- our breadth of our line is extremely expansive, we have a broad array of exclusives worldwide for retailers to promotional plans that are being made by retailers around the world are much more in line now because they know of the success. So everyone is pushing for the success and carrying on the success from Disney, from us, and from worldwide retailers. So I really believe this is going to be pretty equal to the original, based on what we see today.

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Stephanie Marie Schiller Wissink, Jefferies LLC, Research Division - Equity Analyst [7]

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Okay, that's great. And then, Brent, really quickly for you, just on cash flow in 2019. I know you had a use of cash this year. But based on your sales growth forecast of EBITDA, do you expect to be generating cash in 2019?

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Brent T. Novak, JAKKS Pacific, Inc. - Executive VP & CFO [8]

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To increase cash flow? Yes, so adjusted EBITDA would be about $27 million, that's what we're projecting right now. So we should be able to generate a bit of cash going into 2020. There may be some working capital movement there because again, we're going to be more back-half loaded in terms of sales.

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Stephen G. Berman, JAKKS Pacific, Inc. - Co-Founder, Chairman, CEO, President & Secretary [9]

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And Steph, one other thing, as we have the NPD data and NPD is saying that sales in the U.S. in 2019 will be down approximately 1%.

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Operator [10]

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(Operator Instructions) And the next question comes from Gerrick Johnson from BMO Capital.

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Gerrick Luke Johnson, BMO Capital Markets Equity Research - Senior Toys and Leisure Analyst [11]

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So you called out strength in Europe, others in the space have called out Europe as being very weak. We've heard a lot of commentary around Toy Fair of Europe being very weak. So what are you seeing there differently, why your business doing well in Europe? And that's number 1.

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Stephen G. Berman, JAKKS Pacific, Inc. - Co-Founder, Chairman, CEO, President & Secretary [12]

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One is for us, is our price points and our product line. We're seeing the appropriate price points that are resonating in addition to having the right products for the specific territory. So for us, I could only speak for is that we're seeing nice pockets at specific retailers. There is some weakness in certain retailers across certain countries. But for us, in general, we see nice strength going, and for us, we also have changed to a direct model with part of our business in Italy, a Spain distribution partnership, we have actually -- have extremely built our U.K. operation to a much more in-depth operation of sales focus and marketing focus. So a lot of things we've been working on started come into fruition last year.

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Brent T. Novak, JAKKS Pacific, Inc. - Executive VP & CFO [13]

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Yes, but the Incredibles 2 was pretty strong too in Europe, and so that may create some volatility going forward. Just to add that note on Stephen's.

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Gerrick Luke Johnson, BMO Capital Markets Equity Research - Senior Toys and Leisure Analyst [14]

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Okay. And we didn't hear anything about Samoa, so what's the update on that initiative?

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Stephen G. Berman, JAKKS Pacific, Inc. - Co-Founder, Chairman, CEO, President & Secretary [15]

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Samoa, we actually launched in fourth quarter, 4 new retailers, one is walmart.com, Riley Rose, FabFitFun and Ricky's. In addition to our launches early in 2019, we have target stores in H-E-Butt and our focus is now with specific influencers that we're working with to garnish now the actual sell-throughs based on the distribution and more of the, call it, structural necessity for Samoa to be a placement at retail, both online retail and brick-and-mortar. And from there, then we focus on the marketing to initiate the sell-throughs.

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Gerrick Luke Johnson, BMO Capital Markets Equity Research - Senior Toys and Leisure Analyst [16]

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Okay. And sorry to bounce around but one more, I should ask this one first. Can you talk about your POS in the quarter, how did that perform?

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Stephen G. Berman, JAKKS Pacific, Inc. - Co-Founder, Chairman, CEO, President & Secretary [17]

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Actually, the POS, we ended up the year at retail going into first quarter 2019 from listening to the retailers, call it, across the board, I'm generalizing. Levels are very low for us, we don't have high levels inventory overall. There are specific pockets of items that will have additional, call it, inventory that we need to address but nothing that we see that's material to the company. So we came into the year or the end of last year, very healthy in that over shipping and it actually provided sell-throughs to be very well and not having a tremendous amount of inventory going into 2019.

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Gerrick Luke Johnson, BMO Capital Markets Equity Research - Senior Toys and Leisure Analyst [18]

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Okay. So your POS was up in the quarter?

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Stephen G. Berman, JAKKS Pacific, Inc. - Co-Founder, Chairman, CEO, President & Secretary [19]

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I don't have the key data year-over-year if it was up, because I just don't have that in front of me, Gerri.

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Operator [20]

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And that concludes the question-and-answer session. I'll now turn the call back over to Stephen Berman for concluding remarks.

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Stephen G. Berman, JAKKS Pacific, Inc. - Co-Founder, Chairman, CEO, President & Secretary [21]

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Well, thank you, ladies and gentlemen, for the call, and we look forward to updating everybody after our first quarter and looking forward to a strong 2019. Thank you very much.

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Operator [22]

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Thank you, ladies and gentlemen. This does conclude today's conference call. Thank you for participating, and you may now disconnect.