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Business Segments, Geographic Data, Sales by Product Group and Major Customers
 3 Months Ended
Mar. 31, 2013
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 include 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 upon 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 months ended March 31, 2012 and 2013 and as of December 31, 2012 and March 31, 2013 are as follows (in thousands):
 
 
 
   
Three Months Ended
March 31,
  
  
  
2012
    
2013
  
             
Net Sales
            
Traditional Toys and Electronics
  
$
41,578
    
$
38,117
  
Role Play, Novelty and Seasonal Toys
    
31,827
      
39,952
  
   
$
73,405
    
$
78,069
  


   
Three Months Ended
March 31,
  
  
  
2012
    
2013
  
             
Loss from Operations
            
Traditional Toys and Electronics
  
$
(10,856)
     $
(13,122)
  
Role Play, Novelty and Seasonal Toys
    
(8,554)
      
(10,723)
  
   
$
(19,410)
    
$
(23,845)
  


   
Three Months Ended
March 31,
  
  
  
2012
    
2013
  
             
Depreciation and Amortization Expense
            
Traditional Toys and Electronics
  
$
1,745
    
$
1,793
  
Role Play, Novelty and Seasonal Toys
    
559
      
865
  
   
$
2,304
    
$
2,658
  


   
December 31,
    
March 31,
  
   
2012
    
2013
  
Assets
                
Traditional Toys and Electronics
  
 $
309,940
    
 $
230,158
  
Role Play, Novelty and Seasonal Toys
    
244,885
      
263,698
  
   
$
554,825
    
$
493,856
  

The following tables present information about the Company by geographic area as of December 31, 2012 and March 31, 2013 and for the three months ended March 31, 2012 and 2013 (in thousands):
 
   
December 31,
2012
    
March 31,
2013
  
Long-lived Assets
            
China
  
$
10,793
    
$
11,643
  
United States
    
3,762
      
3,425
  
Hong Kong
  
 
1,271
    
 
1,168
  
   
$
15,826
    
$
16,236
  
 
   
Three Months Ended March 31,
  
   
2012
    
2013
  
Net Sales by Customer Location
            
United States
  
$
63,871
    
$
61,383
  
Europe
    
3,209
      
9,068
  
Canada
    
2,779
      
2,090
  
Hong Kong
    
229
      
1,210
  
Other
    
3,317
      
4,318
  
   
$
73,405
    
$
78,069
  

Major Customers

Net sales to major customers for the three months ended March 31, 2012 and 2013 were as follows (in thousands, except for percentages):

   
Three Months Ended March 31,
  
   
2012
    
2013
  
  
  
Amount
    
Percentage of
Net Sales
    
Amount
    
Percentage
of
Net Sales
  
                         
Target
  
$
6,651
      
9.1
%
  
$
9,493
      
12.2
%
Wal-Mart
    
16,126
      
22.0
      
18,182
      
23.3
  
Toys ‘R’ Us
    
10,575
      
14.4
%
    
7,052
      
9.0
  
   
$
33,352
      
45.5
%
  
$
34,727
      
44.5
%

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

At December 31, 2012 and March 31, 2013, the Company’s three largest customers accounted for approximately 42.1% and 46.2%, 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.