v3.25.2
Business Segments, Geographic Data and Sales by Major Customers
 6 Months Ended
Jun. 30, 2025
Segment Reporting [Abstract]  
Segment Reporting Disclosure [Text Block]

Note 2 — Business Segments, Geographic Data and Sales by Major Customers

 

The Company is a worldwide producer and marketer of children’s toys and other consumer products, principally engaged in the design, development, production, marketing and distribution of its diverse portfolio of products. The Company’s segments are (i) Toys/Consumer Products (“TCP”) and (ii) Costumes.

 

The Toys/Consumer Products segment includes action figures, vehicles, play sets, plush products, dolls, electronic products, construction toys, infant and pre-school toys, child-sized and hand-held role play toys and everyday costume play, foot-to-floor ride-on vehicles, wagons, novelty toys, seasonal and outdoor products, kids’ indoor and outdoor furniture, and related products.

 

The Costumes segment, under its Disguise branding, designs, develops, markets and sells a wide range of every-day and special occasion dress-up costumes and related accessories in support of Halloween, Carnival, Children’s Day, Book Day/Week, and every-day/any-day costume play.

 

The Company’s Chief Executive Officer and Chief Financial Officer have been identified jointly as the Chief Operating Decision Maker (“CODM”). The CODM manages and allocates resources on a segment basis. The determination of the two segments is consistent with the financial information regularly reviewed by the CODM for purposes of evaluating performance. Results are regularly reviewed in comparison with current budget, prior forecast, prior year and recent years’ performance in that quarter.

 

Segment performance is measured at the operating income (loss) level. All sales are made to external customers and general corporate expenses have been attributed to the segments based upon relative sales volumes. Segment assets are primarily comprised of accounts receivable and inventories, net of applicable reserves and allowances, goodwill and other assets. Certain assets which are not tracked by operating segment and/or that benefit multiple operating segments have been allocated on the same basis.

Results are not necessarily those which would be achieved if each segment was an unaffiliated business enterprise. Information by segment and a reconciliation to reported amounts for the three and six months ended June 30, 2025 and 2024 and as of June 30, 2025 and December 31, 2024 are as follows (in thousands):

 

   Three Months Ended June 30, 
   2025   2024 
   TCP   Costumes   Total   TCP   Costumes   Total 
Net Sales  $80,379   $38,715   $119,094   $104,570   $44,049   $148,619 
Cost of Sales (A)   53,293    26,778    80,071    67,519    33,515    101,034 
Gross Profit   27,086    11,937    39,023    37,051    10,534    47,585 
                               
Direct selling expenses   4,987    1,723    6,710    4,179    2,076    6,255 
Product development and testing expenses   2,180    889    3,069    2,053    1,346    3,399 
Divisional general and administrative expenses (A), (B)   5,805    2,956    8,761    6,826    2,536    9,362 
Allocated headquarter general & administrative expenses (A), (C)   15,782    7,484    23,266    14,283    6,643    20,926 
Income (loss) from operations   (1,668)   (1,115)   (2,783)   9,710    (2,067)   7,643 
Other income (expense), net             25              72 
Loss on debt extinguishment             (417)             — 
Interest income             395              88 
Interest expense             (145)             (256)
Income (loss) before provision for (benefit from) income taxes            $(2,925)            $7,547 

 

(A) Includes depreciation and amortization  $1,858   $42   $1,900   $2,095   $39   $2,134 

 

(B) Consist mainly of payroll and related expenses, rent, depreciation and other general and administrative expenses.

 

(C) Consist mainly of payroll related expenses, rent, depreciation and other general and administrative expenses.
   Six Months Ended June 30, 
   2025   2024 
   TCP   Costumes   Total   TCP   Costumes   Total 
Net Sales  $187,817   $44,530   $232,347   $187,480   $51,215   $238,695 
Cost of Sales (A)   122,532    31,779    154,311    132,574    37,484    170,058 
Gross Profit   65,285    12,751    78,036    54,906    13,731    68,637 
                               
Direct selling expenses   12,954    2,452    15,406    11,025    3,327    14,352 
Product development and testing expenses   4,195    1,273    5,468    3,719    1,645    5,364 
Divisional general and administrative expenses (A), (B)   11,362    6,188    17,550    13,061    6,548    19,609 
Allocated headquarter general & administrative expenses (A), (C)   37,522    8,630    46,152    34,601    8,392    42,993 
Loss from operations   (748)   (5,792)   (6,540)   (7,500)   (6,181)   (13,681)
Other income (expense), net             30              210 
Loss on debt extinguishment             (417)             — 
Interest income             757              464 
Interest expense             (300)             (399)
Loss before benefit from income taxes            $(6,470)            $(13,406)

 

(A) Includes depreciation and amortization  $3,409   $50   $3,459   $3,595   $53   $3,648 

 

(B) Consist mainly of payroll and related expenses, rent, depreciation and other general and administrative expenses.

 

(C) Consist mainly of payroll related expenses, rent, depreciation and other general and administrative expenses.

 

   June 30,   December 31, 
   2025   2024 
Assets        
Toys/Consumer Products  $378,535   $429,254 
Costumes   60,183    15,615 
   $438,718   $444,869 

Net revenues are categorized based upon location of the customer, while long-lived assets are categorized based upon the location of the Company’s assets. The following tables present information about the Company by geographic area as of June 30, 2025 and December 31, 2024 and for the three and six months ended June 30, 2025 and 2024 (in thousands):

 

   June 30,   December 31, 
   2025   2024 
Long-lived Assets        
United States  $47,805   $53,020 
China   17,576    13,553 
Hong Kong   2,093    582 
Italy   796    754 
United Kingdom   677    808 
Mexico   619    31 
Canada   103    107 
France   33    41 
   $69,702   $68,896 

 

   Three Months Ended   Six Months Ended 
   June 30,   June 30, 
   2025   2024   2025   2024 
Net Sales by Customer Area                
United States  $86,990   $125,837   $175,934   $196,267 
Europe   14,657    10,264    26,467    15,999 
Canada   8,826    6,288    12,105    9,658 
Latin America   6,047    3,239    13,506    11,235 
Asia   1,448    1,268    2,199    2,233 
Australia & New Zealand   886    1,607    1,499    2,953 
Middle East & Africa   240    116    637    350 
   $119,094   $148,619   $232,347   $238,695 

 

Major Customers

 

Net sales to major customers globally for the three and six months ended June 30, 2025 and 2024 were as follows (in thousands, except for percentages):

 

   Three Months Ended June 30,   Six Months Ended June 30, 
   2025   2024   2025   2024 
       Percentage       Percentage       Percentage       Percentage 
   Amount   of Net Sales   Amount   of Net Sales   Amount   of Net Sales   Amount   of Net Sales 
Target  $30,122    25.3%  $41,412    27.8%  $66,382    28.6%  $68,079    28.5%
Walmart   30,630    25.7    34,745    23.4    60,074    25.8    56,039    23.5 
   $60,752    51.0%  $76,157    51.2%  $126,456    54.4%  $124,118    52.0%

 

No other customer accounted for more than 10% of the Company’s total net sales.

 

The concentration of the Company’s business with a relatively small number of customers may expose the Company to material adverse effects if one or more of its large customers were to experience financial difficulty. The Company performs ongoing credit evaluations of its top customers and maintains an allowance for potential credit losses.