JAKKS Pacific doesn't see LT material adverse impact from Toys 'R' Us filing
JAKKS Pacific announced that the company does not anticipate any long-term material adverse impact from the Toys 'R' Us bankruptcy filing. The uninsured portion of the amounts due from Toys 'R' Us represents less than 3% of the company's outstanding accounts receivables as of September 18, 2017. The company also stated it is not known yet what the recovery will be on such uninsured receivables. Sales to Toys 'R' Us were anticipated to account for approximately 5%-6% of the company's net sales for the third and fourth quarters, but the company does not know what amount of such sales will be realized. JAKKS now expects to recognize charges against income for the 2017 fiscal year, including cash charges related to the write-off of bad debt and minimum guarantee shortfalls, and non-cash charges related to the impairment of certain assets including goodwill from acquisitions. The company is revising its forecast since it now expects to sustain a net loss and negative earnings per share for the year, but still expects to have positive EBITDA, as adjusted, for the year, although not higher than the prior year, as previously announced. JAKKS otherwise anticipates no significant impact on its ability to execute on-going corporate initiatives and business operations. JAKKS CEO & Chairman Stephen Berman said, "2017 continues to present a challenging retail environment, which has now been further disrupted by the Toys 'R' Us Chapter 11 filing. Nevertheless, the announced availability of DIP financing leaves us optimistic that we can resume our relationship with Toys 'R' Us as one of its significant suppliers."