JAKKS Pacific Inc (JAKK) 2003 Q1 法說會逐字稿

Good morning. My name is Kamiah [ph], and I will be your conference facilitator today. At this time, I would like to welcome everyone for the JAKKS Pacific 2003 First Quarter Financial Results Conference Call. All lines have been placed on mute to prevent any background noise. After the speakers' remarks, there will be a question and answer period. If you would like to ask a question during this time, simply press "*" then the number "1" on your telephone keypad. If you would like to withdraw your question, press "*" then the number "2" on your telephone keypad. I would now like to introduce today's speakers, Jack Friedman, Chairman and CEO; Joel Bennett, Executive Vice President and CEO; Steve Berman; President and COO. Thank you. Mr. Friedman, you may begin your conference.

Good morning. One correction -- Joel Bennett is CFO, not CEO, and good morning, ladies and gentlemen. I'm Jack Friedman, Chairman and Chief Executive Officer of JAKKS Pacific. Thank you for joining us to review our results for the first quarter ending 3/31/2003. With us today on the call is Stephen Berman, President and Chief Operating Officer; and Joel Bennett, Chief Financial Officer. I will provide an overview of our operational results for the quarter and year ending -- and the year ending March 31st 2003 and update you on current business trends.

Joel will then provide detailed comments regarding our first quarter. Then we will open up the call for questions. Before we begin, I would like to point out that any comments made about future performance, events and circumstances including estimates of sales and earnings per share, information for 2003 are forward-looking statements subject to Safe Harbor protection under the Federal Securities Laws. Such statements reflect our best judgment today based on current market trends and conditions and are subject to certain risks and uncertainties, which could cause the actual results to differ materially from those, projected in forward-looking statements. For details concerning these and other risks and uncertainties, you should consult our most recent Form 10-K filed with the SEC as well as the company's other reports subsequently filed with the SEC from time to time.

First quarter overview and operational results. I am very pleased to report that sales for the first quarter of 2003 increased 13% to a record first quarter results of $67.8 million, our highest sales ever for the first quarter. This was achieved in spite of the extremely challenging retail and economic environment. During the first quarter, our recent acquisition of the Trendmasters (ph) product line adversely affected our margins, because we are still in a process of fully integrating all of their lines into all production facilities. We are very enthusiastic about our Trendmaster product line and we do expect to have these lines fully integrated by the end of second quarter of this year and expect our margins on the Trendmaster lines to improve in that timeframe substantially.

In addition, our earnings were affected mostly from a lesser contribution from our videogame joint venture during the first quarter as compared to the same period last year. But we are very encouraged by the initial feedback for the title Wrestlemania XIX and other titles slates for the release later this year including classic games. As always we are very exited about the future opportunities with our joint venture and look forward to many years of continued success in this relationship.

I believe our top line growth in the face of a challenging retail environment and continued [ph] difficult economic conditions are a direct result of our basic strategy to diversify our product lines and distribution channels and continued execution of our core business plan organic and external growth. In addition, this first quarter of 2003 marked our 31st consecutive quarterly profits. I'd like to take a moment to review our company's current position and address how we believe we will to strive towards our goal of becoming a billion dollar diversified company. Since our founding we have achieved a compounded growth rate in excess of 100% through a combination of internal growth and acquisitions. This growth has created a very diversified product offering, which includes toy items, writing instruments, seasonal items, electronics, handy and other leisure products.

In addition, JAKKS continues to diversify its store base as well. In a now in over 25,000 storefronts in North America and our top five accounts approximate 55% of total sales as opposed to 67% of sales 2 years ago. As we strive to becoming a billion dollar company, acquisitions will continue to play an important part of our growth as they have in the past. The company has demonstrated its ability to identify, favorably negotiate and integrate these acquisitions. Time and time again we have consolidated these companies into JAKKS, eliminated expenses and made the acquired product lines more profitable while delivering additional profits to our bottom line. With approximately $72 million in cash, $136 million in working capital and virtually no debt, our balance sheet is extremely strong and we continue to look for additional acquisition opportunities to increase shareholder returns by leveraging our financial strength and accelerate internal growth for where we have nothing to announce at this time.

I would like to add that I believe we have an excellent team in place to continue to grow our business. We will continue to focus on delivering value products to the consumer, higher profit for the retailers and results for our shareholders. Lastly before I turn the call over to Joel Bennett, I would like to comment on several additional items, our share repurchase program and executive loans income compensation. As you know during the first quarter, our board of directors approved a stock buy back of $20 million for the company's common stock. To date we have purchased 412,000 shares at an average price of $10.24. As always we will continue to evaluate all strategic uses of cash, which improve stock buy back programs, internal growth initiatives and acquisitions. Secondly, I wanted to comment on official loans and the new executive compensations.

As of March 31st, 2003 no executive loans are outstanding. All balances have been paid back to the company. Concerning executive compensation as we mentioned on our Q4 conference call, the company hired a well known compensation consulting company that may have developed a new bonus incentive plan for the company's senior executives. Beginning next year this plan will replace the current cash bonus plan that is currently based on a percentage of pretax income with the cash bonus plan based on growth and earnings per share. Under the new plan senior executives will also be granted annual restricted stock grant dependent upon achieving minimum pretax income each grant starts testing over a two-year period. This new plan should more closely align executive compensations, incentives with shareholder interest by giving senior management a greater equity stake in the company by both through performance and length of service and time cash bonuses through earnings per share. With that I will now turn the call over to Joel Bennett for more details regarding our financial results.

As Jeff mentioned, first quarter sales increased 13.1% to a record $67.8 million, compared to $59.9 million in the comparable period last year. Net income for the period increased to %6 million or 24 cents per diluted share compared to $2.2 million or 11 cents per diluted share in the comparable period last year. Diluted shares increased 23% from 20.2 million shares in 2002 to 24.9 million shares in 2003. First quarter 2002 net income excluding one-time acquisition charges was $7 million or 35 cents per diluted share. As we have mentioned on previous earnings calls, we've adopted a new policy of disclosing sales by category on a go-forward basis to give better insight as to how our business is growing and where we face challenges.

We will comment on broad product categories but for competitive reasons as we've indicated before, we ask that you please refrain from asking about detailed sales trends by specific products. Sales of traditional toys, which includes wheels, Action Figures, Child Guidance, Dolls and electronic products, as well as, promotional products. Sales were $13.9 million or 20.5% for the quarter. World Wrestling Entertainment products continue to contribute plus we have the Dragon Ball Z and Yu Yu Hakusho products to the action line this quarter. In our seasonal product category, which includes Go Fly a Kite, Funnoodle, Storm and Junior Sports products, sales were $22.5 million or 33.2% for the quarter. Craft and activities and stationary and writing instruments, which is primarily our Flying Colors and Pentech divisions, sales were $30.3 million or 35.5% for the quarter.

Finally, international sales were $7.3 million for the quarter or 10.8% of net sale. Gross margins for the first quarter of 2001 decreased modestly from 2002 doing part to a product mix shifts with more seasonal products and less compounds. We do, however, expect gross margins to improve beginning in the second quarter as the integration changes we made begin to impact Trendmasters margin and as the product mix continues to shift to more back to school product, which carry higher gross margins. Growth has decreased in dollars and as a percentage of net sales due to the product mix and tooling amortization as a percentage decreased as a percentage of net sales due to higher sales in 2003, as well as, due to a higher proportion of our tool and mold inventory becoming fully amortized in 2002.

Excluding acquisition charges in 2002, SG&A expenses for the first quarter were up in dollars but decreased as a percentage of net sales versus a year ago. We expect careful management of our operating expenses will result in continued margin improvement as the year progresses. Operating margins were down modestly for the quarter of 2003 by 240 basis points compared to the period in the last year due primarily to the decreasing gross margin. For the quarter profit from the JV decreased to $200,000 from $1.3 million in the comparable period in 2002. This decrease was due to the release of fewer titles in 2003, as well as, having releases at lower price points in 2003 than in 2002. We do expect profit from the joint venture to accelerate over the next three quarters with the release of new titles at regular price point and a release of classic games through the end of the year.

Cash flow from operations for the quarter was $6.3 million compared to $13.3 million in the year ago period. Our financial position remained very strong at $72 million in cash, $136 million in networking capital, no debt, an untapped $50 million credit line and continued improvement in DSO's and DSI's. Accounts receivable although increased sequentially to $58.9 million from $56.2 million with the modest increase in DSO's of 4.3 days to 78.2 days. We expect the modest in the second quarter due to extended terms given on back-to-school sale; we then expect to continue decrease through the end of the year. Inventory again decreased sequentially 10.2% to $35.3 million from $38.9 million at December 31st. With improvement in DSI's of 10.7 days to 88.2 day's down from 98.9 days. We expect to continue to improve cash flow and reduce working capital, which should have a favorable impact on our return on equity over the forth-coming year. Now, I'll return the call back to Jack.

As we look into 2003, we're very enthusiastic about our product offerings and the strong expansion to our product reinforces our expectations for another record year. We believe we have a broadest and best product line to cross our different product segment. Even though we're excited and optimistic about our product offerings in 2003, as I mentioned in my opening remarks the current environment is pretty dicey out there. We hope that this change is over the ensuing month and that we'll have - our retails will have an easier time taking in product and selling through our product line as well as other product line. In spite of that we think we're doing very fine as a company.

Product commentary, our wheels division has done a terrific turnaround, for us, our NASCAR line - our new introduction of our NASCAR line, we've picked up all of the top five major retailers with our power [indiscernible] ready to work and truck and travel lines with spring and we're getting excellent responses across all of the our vehicle lines and retailers for the remaining three quarters of the year. Our introduction of Tongue Tape in first quarter this year continues to be a successful organic product for JAKKS. Resulting in this, mass retailers continue to exceed our expectations so far and we began to roll out the line in drug store chains, supermarkets and convenience stores. We'll also be introducing a license line of Tongue Tape as well as other products as the year continues under our new Tongue Tape brand.

We have our strongest thing in summer line today for JAKKS. We are very encouraged by our distinct products such as Go Fly a Kite, Funnoodle and we are also enthusiastic about our new line of Storm water guns, which we acquired in the Trendmaster asset acquisitions. All of these lines are selling very nicely at retail. The diversity of our back-to-school products including stationary, writing instruments, lunch boxes amongst others should enable us to have a strong back-to-school season. As Joe mentioned earlier even though our joint ventures did not perform as we would have liked in the first quarter, we are enthused by the initial response from the three new major titles later -- released later in 2003, plus we are now able to release as classic game hits, which we were not able release last year and in first quarter of this year due to legality.

JAKK's has become the new master to our licensee with two top rated Japanese animate properties, Yu Yu Hakusho and Dragon Ball Z franchise. Also these deals strengthen our position within the boys' action category. We are very pleased with our growth of our Nickelodeon products, our Blues Clues products and our Hello Kitty products all of these have significant increases in SKUs at the -- our retailers are running into their plan programs for the three quarters remaining of the year. We are also seeking and expect to have additional product opportunities in our Hello Kitty product lines through new product introductions, through in -- extension of new categories for our license. We're also extremely pleased with the response we'd received from our new TV games line that's our plug and play lines, Atari TV Games it's enjoying grand sell-through and we are increasing our distribution dramatically into more and more retailers.

Our new Namco TV games have also exceeded our expectations in terms of retailers take(ph). Our first quarter keeps us on track to achieve our financial goal for 2003. Based on current initiatives and no further deterioration of economic conditions, the company is targeting to achieve a sales increase of 10% plus and earnings growth per share of 10% in 2003 excluding non recurring charges. In closing, I believe JAKKS Pacific is well situated to continue on its path to becoming a billion dollar company. Let me review a few factors I believe will help get us there. We have an extremely strong management team, our emphasis on evergreen products releases our reliance on hit driven products and mitigate some of the risks impaired in the sectors we participant.

We have proven our ability to deliver organic growth. We have developed very diversified product lines. We have demonstrated dramatically our ability to execute and integrate accretive acquisitions and we have an extremely strong balance sheet to continue doing so. We continue to operate in a challenging retail environment but because of our strength just mentioned, I believe we will navigate through these challenging times and we will be well positioned to capitalize when the environment improves. Overall, we are very enthusiastic about the opportunities available to us and we expect to continue delivering both sales and earnings growth over the long term. With that, I would like to open this meeting to Q&A.

At this time, I would like to remind everyone in order to ask a question please press "*" then the number "1" on your telephone keypad. We'll pause for just a moment to compile the Q&A roster. Your first question comes from Sean McGowen of Gerald Klauer, Madison.

Very close enough. Hi guys.

Hey Sean good morning.

Couple of questions if I can, can you give us an idea of how much close out sales there may have been in the quarter that could account from the drop in the gross margin. Second, what is your, most specifically outlook for the JV revenue or income this year do you expect it to be on track with last year or higher or lower and finally were the more international sales in comparison and were you helped by currency at all? Thank you.

Okay the first part of the question in regards to close out it was mostly a product shift with lower margin seasonal product affecting it. It's about a 170 basis points up of last year's total though about 400 basis points for the quarter. As we indicated we do expect the mix, the shift resulting in higher margins starting the second quarter with the back-to-school with regards.

Excuse me Joe. So that's to say the close outs were one of the factor in the quarter?

Correct. Regarding the JV we do expect it to be up over last year. We did - there was a court victory where we're now able to release the classic games. But the problem there is they had WWF logo and several WWE and that just gives us additional throughput and we expect that we'll add the new games to go well for the JV. International will go up with the rest of the business. We are expecting, you know, in the range of 15% to 20% of sale that goes to, you know, keep increasing it as we have traditional software that works throughout the world and we're on track with that. On the currency side, all of our sales in the US and all of the FOB international sales are in US dollars. We do have some currency risk on domestic sales in the UK. We do watch from time to time and will engage in foreign currency hedging if it became an issue, but today it is not.

But did the relationship of the dollar to the pound have any impact on reported sales?

No.

Thank you.

Your next question comes from Arvind Bhatia of Southwest Securities.

Arvind.

Arvind, your line is open.

Arvind, can you hear me?

Good Morning guys, can you hear me?

Hi, Arvind.

Hi, Arvind. We can.

Hi, how are you? Sorry about that. Couple of questions here, you talked about 10 % EPS growth for 2003 and I want to make sure, I know what numbers you're using for the 2002 fiscal year, are you targeting 10% over the 159 or 159 it's on first call or are you using a lower number including the charges and your 10% growth in EPS include any acquisitions, that's my first question?

The 10% does not include acquisitions and it's based on the EPS excluding charges.

So, it's actually about 75. So there look at the first quarter, you're down about 11 cents then you're talking about making up about 27 cents in the balance of the year. I think I'm doing the math correct. So, is the buck 75 type of number this year, is that the goal?

Yes.

Okay. And then, what was the CAPEX number for the quarter?

$1.2 million.

$1.2 million. Got it. And Jack, you talked about the retailers in the difficult environment that we're all seeing here, are you seeing though any shift in the way they're ordering meeting, are they beginning to be less conservative in their inventory? I mean, how they keep the inventory, are they still the same way that they were last Christmas, i.e. they're going to lose sales, they have to, but they won't take any inventory risk?

I have answered too full [ph] this is my personal observation of it. I think, most of the retailers are talking with more enthusiasm in taking more aggressive stand. We and I think our competitor not really seen it in action yet. But I think, to that, I think that the worst situation put a damper on everybody and nobody was doing anything of significant, looking at that situation. Hopefully, now that kind of looks over and that's things will begin to improve in terms of retail enthusiasm. I would like to reiterate that our share position on the shelves is looking excellent. We're in dramatically increased planograms (ph) over last year and that gives us a great deal of comfort within our forecasting for the year.

Okay, Jack you talked about the wheels division, doing better than it was before. Can you quantify that meaning, it was coming down at an X percentage rate or something and then now it's not. I mean any numbers to that statement that you made about the wheels division?

No. My comment Arvind was on a going forward basis. The products that we have introduced, many of which are not available to ship until the next couple of months, has been very well received and is in many significant planograms, particularly our new NASCAR product line has been extremely well received, and we think we're in a turn around mode in our real position. But it's more going forward than in Q1.

Got it. But you would say that it has stabilized as of right now?

Absolutely.

Okay, and the final question is regarding the executive compensation going forward, I guess, next year. What is the growth hurdle rate that you have to achieve to get those bonuses?

I don't think this is the right format for that, it's accessible, isn't it John.

Yes. The agreements with the targets were filed with our 10-K, and then if you have any additional questions, because they are fairly compact.

Got it. Okay, thanks guys.

[indiscernible], but if you have any additional questions, we can do that offline.

Got it. Thank you.

Your next question comes from Brett Jordan, Advest.

Hi Brett.

Hi Good morning. A couple of questions on the margin and it looks like Trendmaster brought that down pretty well. Do you have a feeling for what the impact from the Trendmaster was in the first quarter? And is that something that you see Trendmaster improving in profitability, or you see the back-to-school lines coming in and offsetting the softness in the Trendmaster margin in the current quarter?

I think, I'll take part and John will take part Brett. I think that the Trendmaster products that we shipped in Q1 were continuing products or inventory that came in the asset deal with significantly lower margins than we're accustomed to working on. We have put all of those products out to the factory that we deal with and we are seeing dramatically improved margins on those products. And those products that can't meet our margin requirements we are dropping as we did in many of the Toymax products, when we took over Toymax.

So I would say, overall that the Trendmaster products, after Q2 were, sometime beginning in Q2 will be reasonably in line with our regular margin. On the other side of that some of our back-to-school items take unusually high margin for us. So the combination of the Trendmaster lower margins with some which continues in Q2 and the higher margins on the back-to-school program, which is a significant part of our Q2 business growth should get us back on target in Q2 to a normalization of our margins. Did I give you an answer that you understand.

Yes Joel do you have a feeling for what the gross would have been ex-Trendmaster in the quarter?

Probably 100 basis points up, because we also have other seasonal products. The Funnoodle, which is a sort of a commodity items and some of the kites.

And I guess what percentage f the business in the quarter was letter if credit and if you have a feeling for the JV, the video launch schedule as we look out for next three quarters?

[indiscernible] was mid fifties and Jerry.

Regarding video game releases [indiscernible] Microsoft Xbox will come out August -- is expected August 25th, Wrestlemania XIX, for Nintendo GameCube September 8th. SmackDown here comes the Pen, Sony PlayStation October 27th and at some point we will be releasing the classic games, which we had some legal difficulties with throughout the year beginning now.

: Okay, thank you.

Your next question comes from Tony Gikas [ph] of US Bancorp Piper Jaffray.

Yes that's actually Mark Argento for Tony Gikas. Little bit more color on the margins trying to an idea what we should except for Q2 are you saying that the three of those about a 330 basis point drag from the Trendmaster's acquisition?

Both seasonal and general which would include the Trendmaster.

No I mean year over year you're down about 400 basis points, you said about 170 of that was mix all in and you're saying that sort of about 230 remaining you said to be up about a 100 and was it for the Trendmaster itself which you had about 330. Is the drag that [indiscernible] got for the Trendmaster's business?

And seasonal. I mean it's the whole category.

Yes, so what do you see, I guess may be the better question is?

Well.

What you see as the percentage of the business as Trendmaster net growth [ph] this quarter Q2 and then on the run rate basis what should we be looking at for margins for the quarter?

Margins for the quarter should be 42 plus. Again we'll have more back-to-school, which have higher margins including lower royalties.

So we're definitely on track to be in that 41$, 42% range for the year. Last year, we were at, I think, 42.5%, which was the 170 that I had referred to.

Yes [ph].

That was for the full year.

Got you. Then, looking at the [indiscernible], everything that's going on there -- I know that a lot of the other toy manufacturers are pretty much busy as usual at this point. But could you speak a little bit to continue to bind you up in place or how you approach this situation?

Well, currently, we offer flex schedules. We have certain teams that don't have overlapped work schedules. We provide the filtering masks and do lot more frequent training in such. We're not having anyone travel in the region. And so it's sort of a self-induced quarantine, but we've increased our video teleconferencing. So it's, I think, in part more hyped; but we've definitely taken some steps, and we feel we're prudent in those steps.

But most of -- this is Jack -- most of those steps are to -- for the safety of our employees. So we're busy in terms of our business; it's business as usual.

All right. Thank you.

We do have a follow-up question from Sean McGowen.

Hi. Actually, I follow-up two questions. Can you give me some idea in the quarter to the extent there was Toymax revenue might have picked it up, because you didn't have it for the full first quarter of last year? You did have a year to work on that. And then, second, in gross profit, I just want to clarify -- I was thinking about what you all said about gross profit. Was that 100 points up over what was reported or 100 points up over last year?

100 points up over what we just reported. But we will see continued improvement over the course of the year, which keeps us on track for 41%, 42% margins for the year.

Thank you, and the question regarding acquisition pickup in the quarter.

We've also introduced Junior Sports. It's a whole seasonal category. Junior Sports, which does include Trendmaster, Stormball, GakSplat, and Disney Junior Sports in such.

And I was also getting at -- Toymax has closed toward the end of the first quarter of last year. Was there any pickup in revenue due to the fact that you had it for the full quarter?

They were -- yes, we annualized it; but they were actually up anyway. I mean that was part of the overall increase in the seasonal category.

Okay. Thanks.

Your next question comes from Bob Delean of Morgan Keegan.

Hey, guys. I just want to clarify on the joint venture. Can you talk about the WWF classic games? Is that only the $1.3 million in inventory that THQ currently has or can they reorder in addition?

That -- it can -- that's the current inventory plus they can reorder as needed.

Also, I'm trying to get my arms a little bit more around the organic top line growth rate. Is there any way you can breakout, you have got couple of acquisitions in there that make it difficult to kind of decipher what the organic sales rate was?

May be it would difficult Bob for even us to determine that although we don't want to breakout by specific product for competitive purposes which we stated at the onset of the conference call, but it is difficult for us to actually change that. Just one example that we used last quarter that I will use once again, Toymax had a line of Creepy crawlers that was disintegrating. Let's say very good name. We took that line over totally revamped line and is that -- I don't know the answer of that would be organic or through acquisition and basically what we did was keep the name.

Okay. Thanks.

Your next question comes from Joe Yurman of Bear Stearns.

Hi guys.

Hi Joe.

As far as the organic growth, you know, I am not going to jump on the sourcing on this quarter but just may be a suggestion to talk about organic growth. Everything before Toymax for example you know after Toymax we will be call that acquisition growth, just you know a suggestion. A couple of questions here Joe, this one for housekeeping, what was D&A during the quarter? Also the tax rate, the 24% effective, is that a good run rate for the balance of the year?

Want to understand the relationship between the sales growth and -- on a year-over-year basis and accounts receivable been down about 11%, I am wondering if you stepped up your collection activities on that? And Jack, just a question for you, I heard in the opening again you reiterated your desire to be a billion dollar toy company, and I would like you to discuss how you believe this comp package is more aligned with shareholders not from a perspective of growth per se but in creation of value? Thanks.

I will take it and then give this to Jack, then I will get it back. Joe, in terms of us becoming a billion dollar company, we used the word and didn't use the word billion dollar toy company, I said billion dollar company.

[indiscernible] I just imagined.

Well, partially, you know, I am not criticizing your statement. I am just saying from our perspective, you know, writing instruments and season products, which is fringe toy.

Okay.

And we like being on those borderlines, if you will we find a great comfort in those zones.

Okay.

I think to get to a billion dollar company we have just restated a good balance sheet, good credit. If you will out there, we are continuing looking at deals. We think we understand valuations in deals, the cost of deals, , I think with rotten [ph] economy that win and not the best stock market valuations have come down. We are looking at larger acquisitions than we have in the past and we feel confident that will come truly.

We won't buy a deal just for the sake of buying a deal and create revenue, it has to make sense in terms of the compensation question, were we senior management are tied into earnings per share growth for the company which is something that The Street seem to -- and the institutions have been pushing them for a while and the outside compensation committee has tied us into that. And the other letch, which we didn't, asked the question Joe, is people complaining about the loans and those loans are now fully paid back.

Well, I applaud you on the loans. I'm sorry for not mentioning that. However, I guess the only thing I would point out in terms of a comp package is it, if you got an EPS bogie and a tax rate that continues to fall, it just seems that this is in a comp -- this is in a package that is still based upon value creation, because as you know you can still grow earnings and yet if your investment aren't earning at least, than your total cost the capital will not create value. That's just an observation.

Okay.

Thank.

Yes. Regarding the tax rate, that impact and not to be defensive with only impact at first year but I think, overall I think, what will - we'll run the company as we have in you know although their compensation is tied to be growth in EPS, I think you'll see that the activities of companies will definitely be in line with you know share holder interest.

So, Joel the 24% you get affective rate for the balance of the year?

It should be in a 24% to 25%. The 25% was based on certain assumptions on mix between FOB and domestic. In the first quarter it was a little bit more FOB. So we do think that there is a 25% is the right number for the balance of the year. Those are actually your number two -- your number one on D&A was $2.2 million.

Okay.

And the lastly, the year-over-year decrease in AR was mostly attributable to the acquired receivables in the Toymax deal. We still -- we were up modestly, sequentially from December 31st, but the big decrease was the acquisition of the Toymax receivables and subsequent collection on those.

Thank You

Your next question comes from Chris Abet [ph] of Kelton Investment [ph].

Good Morning.

Good Morning.

Could you remind us what the revenue contribution was for Trendmasters in the quarter?

Part of the seasonal number which was I think $22 million all seasonal

For the entire seasonal.

Right that was the Funnoodle, Go Fly a Kite, GakSplat, Disney Junior Sport. Though its contribution would've been in that category.

Okay, how about just deals by category for the prior year, so we can have year-over-year comparison?

We began the breakout in the third quarter, and that's when, we have the anniversary of the category performance.

I thought you guys were going to try to go back and break that up for us, talked about that, I think, in the last quarter. Try to go back historically and break that down to the -- also we could just see the growth there, in those categories.

Part of it is, just the, you know the logistics in trying to dig out on a SKQ by SKQ basis. So, you know, we're focusing on the, the go forward --so again the anniversary of the categories will be in the third quarter.

Okay. Thank you.

At this time, there are no further questions.

Thank You, all very much for your time and we look forward to speaking again on our next quarterly statement, and once again I'd like to reiterate, we are expecting to have a very nice year in spite of rough conditions out there. We are actually, I am extremely pleased and proud of our performance, and are truly are looking forward to a very exciting year for the continued growth of JAKKS Pacific, both in revenue and earnings. And I thank you all very - very much for your time.

This concludes today's JAKKS Pacific's 2003 first quarter financial result conference call. You may now disconnect.