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Business Segments, Geographic Data and Sales by Major Customers
 9 Months Ended
Sep. 30, 2023
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, 2023 and 2022 and as of September 30, 2023 and December 31, 2022 are as follows (in thousands):

 

 

  

Three Months Ended

   

Nine Months Ended

 
   

September 30,

    

September 30,

  
   

2023

    

2022

    

2023

    

2022

  

Net Sales

                                

Toys/Consumer Products

   $ 246,004     $ 269,607     $ 461,831     $ 529,590  

Costumes

     63,740       53,391       122,330       134,711  
    $ 309,744     $ 322,998     $ 584,161     $ 664,301  

 

   

Three Months Ended

    

Nine Months Ended

  
   

September 30,

    

September 30,

  
   

2023

    

2022

    

2023

    

2022

  

Income from Operations

                                

Toys/Consumer Products

   $ 55,494     $ 53,643     $ 70,020     $ 74,097  

Costumes

     6,905       98       4,427       2,570  
    $ 62,399     $ 53,741     $ 74,447     $ 76,667  

 

   

Three Months Ended

    

Nine Months Ended

  
   

September 30,

    

September 30,

  
   

2023

    

2022

    

2023

    

2022

  

Depreciation and Amortization Expense

                                

Toys/Consumer Products

   $ 2,594     $ 4,139     $ 6,084     $ 8,176  

Costumes

     53       119       147       450  
    $ 2,647     $ 4,258     $ 6,231     $ 8,626  

 

   

September 30,

    

December 31,

  
   

2023

    

2022

  

Assets

                

Toys/Consumer Products

   $ 462,358     $ 377,605  

Costumes

     51,923       27,737  
    $ 514,281     $ 405,342  

 

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, 2023 and December 31, 2022 and for the three and nine months ended September 30, 2023 and 2022 (in thousands):

 

   

September 30,

    

December 31,

  
   

2023

    

2022

  

Long-lived Assets

                

United States

   $ 23,247     $ 17,383  

China

     15,464       14,161  

United Kingdom

     830       974  

Italy

     604       —  

Hong Kong

     140       2,142  

Mexico

     58       69  

Canada

     28       46  
    $ 40,371     $ 34,775  

 

   

Three Months Ended

    

Nine Months Ended

  
   

September 30,

    

September 30,

  
   

2023

    

2022

    

2023

    

2022

  

Net Sales by Customer Area

                                

United States

   $ 244,931     $ 253,854     $ 461,561     $ 543,388  

Europe

     31,676       38,075       58,476       65,911  

Latin America

     15,319       9,504       27,590       15,712  

Canada

     11,453       12,804       22,306       21,720  

Asia

     3,192       4,294       6,403       8,733  

Australia & New Zealand

     2,692       3,941       6,056       7,014  

Middle East & Africa

     481       526       1,769       1,823  
    $ 309,744     $ 322,998     $ 584,161     $ 664,301  

 

Major Customers

 

Net sales to major customers for the three and nine months ended September 30, 2023 and 2022 were as follows (in thousands, except for percentages):

 

   

Three Months Ended September 30,

    

Nine Months Ended June 30,

  
   

2023

    

2022

    

2023

    

2022

  
           

Percentage

            

Percentage

            

Percentage

            

Percentage

  
   

Amount

    

of Net Sales

    

Amount

    

of Net Sales

    

Amount

    

of Net Sales

    

Amount

    

of Net Sales

  

Target

   $ 96,322       31.1

%

   $ 75,327       23.3

%

   $ 175,417       30.0

%

   $ 176,119       26.5

%

Wal-Mart

     59,541       19.2       88,954       27.5       117,888       20.2       182,345       27.5  

Amazon

     44,073       14.2       17,718       5.5       61,367       10.5       49,765       7.5  
    $ 199,936       64.5

%

   $ 181,999       56.3

%

   $ 354,672       60.7

%

   $ 408,229       61.5

%

 

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.