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Business Segments, Geographic Data, Sales by Product Group and Major Customers
 6 Months Ended
Jun. 30, 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 and six months ended June 30, 2012 and 2013 and as of December 31, 2012 and June 30, 2013 are as follows (in thousands):
 
   
Three Months Ended
June 30,
    
Six Months Ended
June 30,
  
  
  
2012
    
2013
    
2012
    
2013
  
                         
Net Sales
                        
Traditional Toys and Electronics
   $ 72,027     $ 45,602     $ 113,605     $ 83,719  
Role Play, Novelty and Seasonal Toys
     73,332       60,630       105,159       100,582  
    $ 145,359     $ 106,232     $ 218,764     $ 184,301  


   
Three Months Ended
June 30,
    
Six Months Ended
June 30,
  
  
  
2012
    
2013
    
2012
    
2013
  
                         
Operating Income (loss)
                        
Traditional Toys and Electronics
   $ (2,100 )   $ (19,877 )   $ (12,956 )   $ (32,999 )
Role Play, Novelty and Seasonal Toys
     2,207       (24,411 )     (6,347 )     (35,134 )
    $ 107     $ (44,288 )   $ (19,303 )   $ (68,133 )


   
Three Months Ended
June 30,
    
Six Months Ended
June 30,
  
  
  
2012
    
2013
    
2012
    
2013
  
                         
Depreciation and Amortization Expense
                        
Traditional Toys and Electronics
   $ 3,141     $ 3,204     $ 4,886     $ 4,997  
Role Play, Novelty and Seasonal Toys
     1,519       1,726       2,079       2,591  
    $ 4,660     $ 4,930     $ 6,965     $ 7,588  
 
   
December 31,
    
June 30,
  
   
2012
    
2013
  
Assets
            
Traditional Toys and Electronics
   $ 309,940     $ 218,809  
Role Play, Novelty and Seasonal Toys
     244,885       203,278  
    $ 554,825     $ 422,087  
 
The following tables present information about the Company by geographic area as of December 31, 2012 and June 30, 2013 and for the three and six months ended June 30, 2012 and 2013 (in thousands):
 
   
December 31,
2012
    
June 30,
2013
  
Long-lived Assets
            
China
   $ 10,793     $ 10,740  
United States
     3,762       3,148  
Hong Kong
     1,271       1,068  
    $ 15,826     $ 14,956  
 
   
Three Months Ended June 30,
    
Six Months Ended June 30,
  
   
2012
    
2013
    
2012
    
2013
  
Net Sales by Customer Area
                        
United States
   $ 115,841     $ 86,317     $ 179,712     $ 147,700  
Europe
     12,229       8,458       15,438       17,526  
Canada
     5,613       2,894       8,392       4,984  
Hong Kong
     876       1,447       1,105       2,657  
Other
     10,800       7,116       14,117       11,434  
    $ 145,359     $ 106,232     $ 218,764     $ 184,301  
 
Major Customers

Net sales to major customers for the three and six months ended June 30, 2012 and 2013 were as follows (in thousands, except for percentages):

   
Three Months Ended June 30,
    
Six Months Ended June 30,
  
   
2012
    
2013
    
2012
    
2013
  
  
  
Amount
    
Percentage
of
Net Sales
    
Amount
    
Percentage
of
Net Sales
    
Amount
    
Percentage
of
Net Sales
    
Amount
    
Percentage
of
Net Sales
  
                                                 
Target
   $ 26,597       18.3 %   $ 14,021       13.2 %   $ 33,249       15.2 %   $ 23,514       12.8 %
Wal-Mart
     16,167       11.1       16,049       15.1       32,293       14.8       34,231       18.6  
Toys ‘R’ Us 
     10,732       7.4       10,431       9.8       21,307       9.7       17,483       9.5  
    $ 53,496       36.8 %   $ 40,501       38.1 %   $ 86,849       39.7 %   $  75,228       40.9 %

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

At December 31, 2012 and June 30, 2013, the Company’s three largest customers accounted for approximately 42.1% and 41.2%, 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.