| Segment Reporting [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, 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 gross profit and 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 nine months ended September 30, 2026 and 2025 and as of September 30, 2026 and December 31, 2025 are as follows (in thousands):
| | Three Months Ended September 30, | |
| | 2026 | | | 2025 | |
| | TCP | | | Costumes | | | Total | | | TCP | | | Costumes | | | Total | |
| | | | | | | | | | | | | | | | | | | | | | | | |
Net Sales | | $ | 191,957 | | | $ | 62,265 | | | $ | 254,222 | | | $ | 156,080 | | | $ | 55,130 | | | $ | 211,210 | |
Cost of Sales (A) | | | 129,604 | | | | 43,118 | | | | 172,722 | | | | 104,513 | | | | 39,054 | | | | 143,567 | |
Gross Profit | | | 62,353 | | | | 19,147 | | | | 81,500 | | | | 51,567 | | | | 16,076 | | | | 67,643 | |
Direct selling expenses | | | 4,549 | | | | 3,012 | | | | 7,561 | | | | 3,919 | | | | 2,014 | | | | 5,933 | |
Product development and testing expenses | | | 2,587 | | | | 856 | | | | 3,443 | | | | 2,137 | | | | 708 | | | | 2,845 | |
Divisional general and administrative expenses (A), (B) | | | 8,717 | | | | 2,900 | | | | 11,617 | | | | 5,233 | | | | 2,763 | | | | 7,996 | |
Allocated headquarter general & administrative expenses (A), (C) | | | 15,944 | | | | 5,562 | | | | 21,506 | | | | 15,726 | | | | 5,780 | | | | 21,506 | |
Income from operations | | | 30,556 | | | | 6,817 | | | | 37,373 | | | | 24,552 | | | | 4,811 | | | | 29,363 | |
Other income (expense), net | | | | | | | | | | | 48 | | | | | | | | | | | | 388 | |
Loss on debt extinguishment | | | | | | | | | | | — | | | | | | | | | | | | (1 | ) |
Interest income | | | | | | | | | | | 261 | | | | | | | | | | | | 75 | |
Interest expense | | | | | | | | | | | (60 | ) | | | | | | | | | | | (102 | ) |
Income before provision for income taxes | | | | | | | | | | $ | 37,622 | | | | | | | | | | | $ | 29,723 | |
| | | | | | | | | | | | | | | | | | | | | | | | |
(A) Includes depreciation and amortization | | $ | 3,953 | | | $ | 49 | | | $ | 4,002 | | | $ | 4,726 | | | $ | 43 | | | $ | 4,769 | |
(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. |
| | Nine Months Ended September 30, | |
| | 2026 | | | 2025 | |
| | TCP | | | Costumes | | | Total | | | TCP | | | Costumes | | | Total | |
| | | | | | | | | | | | | | | | | | | | | | | | |
Net Sales | | $ | 389,559 | | | $ | 110,577 | | | $ | 500,136 | | | $ | 343,897 | | | $ | 99,660 | | | $ | 443,557 | |
Cost of Sales (A) | | | 259,723 | | | | 78,346 | | | | 338,069 | | | | 227,045 | | | | 70,833 | | | | 297,878 | |
Gross Profit | | | 129,836 | | | | 32,231 | | | | 162,067 | | | | 116,852 | | | | 28,827 | | | | 145,679 | |
Direct selling expenses | | | 17,730 | | | | 6,495 | | | | 24,225 | | | | 16,873 | | | | 4,466 | | | | 21,339 | |
Product development and testing expenses | | | 6,896 | | | | 1,952 | | | | 8,848 | | | | 6,332 | | | | 1,981 | | | | 8,313 | |
Divisional general and administrative expenses (A), (B) | | | 19,860 | | | | 8,540 | | | | 28,400 | | | | 16,595 | | | | 8,951 | | | | 25,546 | |
Allocated headquarter general & administrative expenses (A), (C) | | | 54,412 | | | | 14,525 | | | | 68,937 | | | | 53,248 | | | | 14,410 | | | | 67,658 | |
Income (loss) from operations | | | 30,938 | | | | 719 | | | | 31,657 | | | | 23,804 | | | | (981 | ) | | | 22,823 | |
Other income (expense), net | | | | | | | | | | | 7,049 | | | | | | | | | | | | 418 | |
Loss on debt extinguishment | | | | | | | | | | | — | | | | | | | | | | | | (418 | ) |
Interest income | | | | | | | | | | | 1,529 | | | | | | | | | | | | 832 | |
Interest expense | | | | | | | | | | | (175 | ) | | | | | | | | | | | (402 | ) |
Income before provision for income taxes | | | | | | | | | | $ | 40,060 | | | | | | | | | | | $ | 23,253 | |
| | | | | | | | | | | | | | | | | | | | | | | | |
(A) Includes depreciation and amortization | | $ | 8,598 | | | $ | 119 | | | $ | 8,717 | | | $ | 8,135 | | | $ | 93 | | | $ | 8,228 | |
(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. |
| | September 30, | | | December 31, | |
| | 2026 | | | 2025 | |
Assets | | | | | | | | |
Toys/Consumer Products | | $ | 458,525 | | | $ | 419,064 | |
Costumes | | | 70,264 | | | | 23,133 | |
| | $ | 528,789 | | | $ | 442,197 | |
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 September 30, 2026 and December 31, 2025 and for the three and nine months ended September 30, 2026 and 2025 (in thousands):
| | September 30, | | | December 31, | |
| | 2026 | | | 2025 | |
Long-lived Assets | | | | | | | | |
United States | | $ | 35,741 | | | $ | 42,788 | |
China | | | 18,893 | | | | 16,659 | |
United Kingdom | | | 2,811 | | | | 3,073 | |
Hong Kong | | | 1,316 | | | | 1,853 | |
Others combined | | | 1,199 | | | | 1,411 | |
| | $ | 59,960 | | | $ | 65,784 | |
| | Three Months Ended | | | Nine Months Ended | |
| | September 30, | | | September 30, | |
| | 2026 | | | 2025 | | | 2026 | | | 2025 | |
Net Sales by Customer Area | | | | | | | | | | | | | | | | |
United States | | $ | 202,837 | | | $ | 154,516 | | | $ | 385,724 | | | $ | 330,450 | |
Europe | | | 29,686 | | | | 29,408 | | | | 63,086 | | | | 55,875 | |
Latin America | | | 10,771 | | | | 14,066 | | | | 21,870 | | | | 27,572 | |
Canada | | | 5,960 | | | | 9,237 | | | | 16,032 | | | | 21,342 | |
Asia | | | 2,745 | | | | 1,526 | | | | 6,896 | | | | 3,725 | |
Australia & New Zealand | | | 1,616 | | | | 2,095 | | | | 5,618 | | | | 3,594 | |
Middle East & Africa | | | 607 | | | | 362 | | | | 910 | | | | 999 | |
| | $ | 254,222 | | | $ | 211,210 | | | $ | 500,136 | | | $ | 443,557 | |
Major Customers
Net sales to major customers globally for the three and nine months ended September 30, 2026 and 2025 were as follows (in thousands, except for percentages):
| | Three Months Ended September 30, | | | Nine Months Ended September 30, | |
| | 2026 | | | 2025 | | | 2026 | | | 2025 | |
| | | | | | Percentage | | | | | | | Percentage | | | | | | | Percentage | | | | | | | Percentage | |
| | Amount | | | of Net
Sales | | | Amount | | | of Net
Sales | | | Amount | | | of Net
Sales | | | Amount | | | of Net
Sales | |
Target | | $ | 76,981 | | | | 30.3 | % | | $ | 60,298 | | | | 28.5 | % | | $ | 136,386 | | | | 27.3 | % | | $ | 120,372 | | | | 27.1 | % |
Walmart (*) | | | 64,677 | | | | 25.4 | | | | 49,636 | | | | 23.5 | | | | 139,484 | | | | 27.9 | | | | 119,635 | | | | 27.0 | |
| | $ | 141,658 | | | | 55.7 | % | | $ | 109,934 | | | | 52.0 | % | | $ | 275,870 | | | | 55.2 | % | | $ | 240,007 | | | | 54.1 | % |
(*) | During the year ended December 31, 2025, the Company determined that, in prior periods, net sales to two subsidiaries of Walmart Inc., were not aggregated with net sales to Walmart Inc. in the major customer disclosure under ASC 280-10-50-42. Because these entities are under common control, such sales should be presented as revenues from a single customer. Accordingly, prior-period amounts have been revised to aggregate these net sales amounts to Walmart Inc. and its subsidiaries. This revision affected only the major customer disclosure and had no impact on the Company’s condensed consolidated financial statements for any period presented. The Company concluded that the revision was not material to previously issued financial statements. |
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.
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