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Business Segments, Geographic Data, and Sales by Major Customers
 9 Months Ended
Sep. 30, 2022
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 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.

 

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 nine months ended September 30, 2022 and 2021 and as of September 30, 2022 and December 31, 2021 are as follows (in thousands):

 

   

Three Months Ended

   

Nine Months Ended

 
   

September 30,

    

September 30,

  
    2022     2021     2022     2021  

Net Sales

                                

Toys/Consumer Products

   $ 269,607     $ 172,952     $ 529,590     $ 334,365  

Costumes

     53,391       64,005       134,711       98,787  
    $ 322,998     $ 236,957     $ 664,301     $ 433,152  

 

   

Three Months Ended

    

Nine Months Ended

  
   

September 30,

    

September 30,

  
    2022     2021     2022     2021  

Income from Operations

                                

Toys/Consumer Products

   $ 53,643     $ 30,378     $ 74,097     $ 35,594  

Costumes

     98       6,365       2,570       247  
    $ 53,741     $ 36,743     $ 76,667     $ 35,841  

 

   

Three Months Ended

    

Nine Months Ended

  
   

September 30,

    

September 30,

  
    2022     2021     2022     2021  

Depreciation and Amortization Expense

                                

Toys/Consumer Products

   $ 4,139     $ 3,977     $ 8,176     $ 8,229  

Costumes

     119       316       450       636  
    $ 4,258     $ 4,293     $ 8,626     $ 8,865  

 

                   

September 30,

    

December 31,

  
                    2022     2021  

Assets

                                

Toys/Consumer Products

                   $ 397,999     $ 338,266  

Costumes

                     79,115       18,781  
                    $ 477,114     $ 357,047  

 

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, 2022 and December 31, 2021 and for the three and nine months ended September 30, 2022 and 2021 (in thousands):

 

   

September 30,

    

December 31,

  
   

2022

    

2021

  

Long-lived Assets

                

United States

   $ 19,527     $ 16,252  

China

     14,572       11,655  

Hong Kong

     2,343       770  

United Kingdom

     951       1,270  

Mexico

     70       79  

Canada

     51       73  
    $ 37,514     $ 30,099  

 

   

Three Months Ended

    

Nine Months Ended

  
   

September 30,

    

September 30,

  
   

2022

    

2021

    

2022

    

2021

  

Net Sales by Customer Area

                                

United States

   $ 253,854     $ 199,136     $ 543,388     $ 363,317  

Europe

     38,075       20,836       65,911       38,103  

Canada

     12,804       8,094       21,720       12,403  

Latin America

     9,504       4,503       15,712       8,123  

Asia

     4,294       2,635       8,733       6,214  

Australia & New Zealand

     3,941       1,490       7,014       3,927  

Middle East & Africa

     526       263       1,823       1,065  
    $ 322,998     $ 236,957     $ 664,301     $ 433,152  

 

Major Customers

 

Net sales to major customers for the three and nine months ended September 30, 2022 and 2021 were as follows (in thousands, except for percentages):

 

   

Three Months Ended September 30,

    

Nine Months Ended September 30,

  
   

2022

    

2021

    

2022

    

2021

  
           

Percentage

            

Percentage

            

Percentage

            

Percentage

  
   

Amount

    

of Net Sales

    

Amount

    

of Net Sales

    

Amount

    

of Net Sales

    

Amount

    

of Net Sales

  

Wal-Mart

   $ 88,954       27.5

%

   $ 56,822       24.0

%

   $ 182,345       27.5

%

   $ 113,152       26.1

%

Target

     75,327       23.3       67,130       28.3       176,119       26.5       120,458       27.8  

Amazon

     17,718       5.5       27,504       11.6       49,765       7.5       41,168       9.5  
    $ 181,999       56.3

%

   $ 151,456       63.9

%

   $ 408,229       61.5

%

   $ 274,778       63.4

%

 

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.