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Business Segments, Geographic Data, Sales by Product Group and Major Customers
 6 Months Ended
Jun. 30, 2012
Business Segments, Geographic Data, Sales by Product Group and Major Customers
Note 2 — Business Segments, Geographic Data, Sales by Product Group and 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 reportable segments are Traditional Toys and Electronics and Role Play, Novelty and Seasonal Toys, each of which includes worldwide sales.

The Traditional Toys and Electronics segment includes action figures, vehicles, playsets, plush products, dolls, accessories, electronic products, construction toys, infant and pre-school toys, foot to floor ride-on vehicles, wagons and pet treats and related products.

Role Play, Novelty and Seasonal Toys includes role play and dress-up products, Halloween and everyday costume play, novelty toys, seasonal and outdoor products and indoor and outdoor kids’ furniture.

Segment performance is measured at the operating income level. All sales are made to external customers, and general corporate expenses have been attributed to the various segments based on sales volumes. Segment assets are comprised of accounts receivable and inventories, net of applicable reserves and allowances, goodwill and other assets.
 
Results are not necessarily those that would be achieved were each segment an unaffiliated business enterprise. Information by segment and a reconciliation to reported amounts for the three and six months ended June 30, 2011 and 2012 and as of December 31, 2011 and June 30, 2012 are as follows (in thousands):

   
Three Months Ended
June 30,
    
Six Months Ended
June 30,
  
  
  
2011
     2012    
2011
    
2012
  
                         
Net Sales
                        
Traditional Toys and Electronics
   $ 67,733     $ 72,027     $ 105,897     $ 113,605  
Role Play, Novelty and Seasonal Toys
     64,197       73,332       98,356       105,159  
    $ 131,930     $ 145,359     $ 204,253     $ 218,764  

   
Three Months Ended
June 30,
    
Six Months Ended
June 30,
  
  
  
2011
     2012    
2011
    
2012
  
                         
Operating Income (Loss)
                        
Traditional Toys and Electronics
   $ 1,231     $ (2,100 )   $ (7,125 )   $ (12,956 )
Role Play, Novelty and Seasonal Toys
     767       2,207       (5,667 )     (6,347 )
    $ 1,998     $ 107     $ (12,792 )   $ (19,303 )

   
Three Months Ended
June 30,
    
Six Months Ended
June 30,
  
  
   2011    
2012
    
2011
    
2012
  
                         
Depreciation and Amortization Expense
                        
Traditional Toys and Electronics
   $ 3,932       3,552     $ 6,904     $ 5,788  
Role Play, Novelty and Seasonal Toys
     2,003       1,975       2,915       2,910  
    $ 5,935       5,527     $ 9,819     $ 8,698  

   
December 31,
    
June 30,
  
   
2011
    
2012
  
Assets
                
Traditional Toys and Electronics
  
 $
269,411
    
 $
272,994
  
Role Play, Novelty and Seasonal Toys
    
345,823
      
342,927
  
   
$
615,234
    
$
615,921
  
 
The following tables present information about the Company by geographic area as of December 31, 2011 and June 30, 2012 and for the three and six months ended June 30, 2011 and 2012 (in thousands):
 
   
December 31,
2011
    
June 30,
2012
  
Long-lived Assets
            
United States
  
$
4,896
    
$
4,076
  
Hong Kong
    
11,290
      
14,716
  
   
$
16,186
    
$
18,792
  

   
Three Months Ended June 30,
    
Six Months Ended June 30,
  
   
2011
    
2012
     2011      2012  
Net Sales by Geographic Area
                        
United States
   $ 109,766     $ 115,841     $ 167,233     $ 179,712  
Europe
     8,551       12,229       14,812       15,438  
Canada
     3,240       5,613       6,847       8,392  
Hong Kong
     631       876       1,472       1,105  
Other
     9,742       10,800       13,889       14,117  
    $ 131,930     $ 145,359     $ 204,253     $ 218,764  

Major Customers

Net sales to major customers for the three and six months ended June 30, 2011 and 2012 were as follows (in thousands, except for percentages):

   
Three Months Ended June 30,
    
Six Months Ended June 30,
  
   
2011
    
2012
    
2011
    
2012
  
  
  
Amount
    
Percentage of
Net Sales
    
Amount
    
Percentage of
Net Sales
    
Amount
    
Percentage of
Net Sales
    
Amount
    
Percentage of
Net Sales
  
                                                 
Target
   $ 28,203       21.4 %   $ 26,597       18.3 %   $ 38,132       18.7 %   $ 33,249       15.2 %
Wal-Mart
     20,154       15.3       16,167       11.1       39,630       19.4       32,293       14.8  
Toys ‘R’ Us 
     11,669       8.8       10,732       7.4       21,046       10.3       21,307       9.7  
    $ 60,026       45.5 %   $ 53,496       36.8 %   $ 98,808       48.4 %   $ 86,849       39.7 %
 
No other customer accounted for more than 10% of the Company’s total net sales.

At December 31, 2011 and June 30, 2012, the Company’s three largest customers accounted for approximately 41.3% and 44.2%, respectively, of net accounts receivable. 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.