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Business Segments, Geographic Data and Sales by Major Customers
 3 Months Ended
Mar. 31, 2024
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 months ended March 31, 2024 and 2023 and as of March 31, 2024 and December 31, 2023 are as follows (in thousands):

 

   

Three Months Ended

 
   

March 31,

  
   

2024

    

2023

  

Net Sales

                

Toys/Consumer Products

   $ 82,910     $ 97,893  

Costumes

     7,166       9,591  
    $ 90,076     $ 107,484  

 

   

Three Months Ended

 
   

March 31,

  
   

2024

    

2023

  

Loss from Operations

                

Toys/Consumer Products

   $ (17,210 )   $ (1,161 )

Costumes

     (4,114 )     (3,239 )
    $ (21,324 )   $ (4,400 )

 

   

Three Months Ended

 
   

March 31,

  
   

2024

    

2023

  

Depreciation and Amortization Expense

                

Toys/Consumer Products

   $ 1,499     $ 1,160  

Costumes

     15       31  
    $ 1,514     $ 1,191  

 

   

March 31,

    

December 31,

 
   

2024

    

2023

  

Assets

                

Toys/Consumer Products

   $ 298,792     $ 383,812  

Costumes

     25,542       15,139  
    $ 324,334     $ 398,951  

 

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 March 31, 2024 and December 31, 2023 and for the three months ended March 31, 2024 and 2023 (in thousands):

 

   

March 31,

    

December 31,

  
   

2024

    

2023

  

Long-lived Assets

                

United States

   $ 20,916     $ 21,206  

China

     14,250       13,794  

Hong Kong

     1,198       1,410  

United Kingdom

     1,092       892  

Italy

     813       811  

Mexico

     52       55  

Canada

     16       23  
    $ 38,337     $ 38,191  

 

   

Three Months Ended

  
   

March 31,

  
   

2024

    

2023

  

Net Sales by Customer Area

                

United States

   $ 70,430     $ 80,443  

Latin America

     7,996       9,204  

Europe

     5,735       10,162  

Canada

     3,370       4,054  

Australia & New Zealand

     1,346       1,608  

Asia

     965       1,380  

Middle East & Africa

     234       633  
    $ 90,076     $ 107,484  

 

Major Customers

 

Net sales to major customers for the three months ended March 31, 2024 and 2023 were as follows (in thousands, except for percentages):

 

   

Three Months Ended March 31,

  
   

2024

    

2023

  
           

Percentage

            

Percentage

  
   

Amount

    

of Net Sales

    

Amount

    

of Net Sales

  

Target

   $ 26,667       29.6 %   $ 29,404       27.4 %

Walmart

     21,294       23.6       23,283       21.7  
    $ 47,961       53.2 %   $ 52,687       49.1 %

 

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.