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Business Segments, Geographic Data and Sales by Major Customers
 9 Months Ended
Sep. 30, 2025
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 (“TCP”) 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.

 

The Company’s Chief Executive Officer and Chief Financial Officer have been identified jointly as the Chief Operating Decision Maker (“CODM”). The CODM manages and allocates resources on a segment basis. The determination of the two segments is consistent with the financial information regularly reviewed by the CODM for purposes of evaluating performance. Results are regularly reviewed in comparison with current budget, prior forecast, prior year and recent years’ performance in that quarter.

 

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, 2025 and 2024 and as of September 30, 2025 and December 31, 2024 are as follows (in thousands):

 

   Three Months Ended September, 30 
   2025   2024 
   TCP   Costumes   Total   TCP   Costumes   Total 
                         
Net Sales  $156,080   $55,130   $211,210   $264,306   $57,300   $321,606 
                               
Cost of Sales (A)   104,513    39,054    143,567    171,774    41,001    212,775 
                               
Gross Profit   51,567    16,076    67,643    92,532    16,299    108,831 
                               
Direct selling expenses   3,919    2,014    5,933    5,002    2,550    7,552 
Product development and testing expenses   2,137    708    2,845    2,245    760    3,005 
Divisional general and administrative expenses (A), (B)   5,233    2,763    7,996    8,227    2,860    11,087 
Allocated headquarter general & administrative expenses (A), (C)   15,726    5,780    21,506    15,582    3,522    19,104 
                               
Income from operations   24,552    4,811    29,363    61,476    6,607    68,083 
                               
Other income (expense), net             388              84 
                               
Loss on debt extinguishment             (1)             — 
                               
Interest income             75              69 
                               
Interest expense             (102)             (539)
Income before provision for income taxes            $29,723             $67,697 

  

(A) Includes depreciation and amortization  $4,726   $43   $4,769   $4,047   $42   $4,089 

 

(B)Consist mainly of payroll and related expenses, rent, depreciation and other general and administrative expenses.

 

(C)Consist mainly of payroll related expenses, rent, depreciation and other general and administrative expenses.
   Nine Months Ended September, 30 
   2025   2024 
   TCP   Costumes   Total   TCP   Costumes   Total 
                         
Net Sales  $343,897   $99,660   $443,557   $451,786   $108,515   $560,301 
                               
Cost of Sales (A)   227,045    70,833    297,878    304,348    78,485    382,833 
                               
Gross Profit   116,852    28,827    145,679    147,438    30,030    177,468 
                               
Direct selling expenses   16,873    4,466    21,339    16,027    5,877    21,904 
Product development and testing expenses   6,332    1,981    8,313    5,964    2,405    8,369 
Divisional general and administrative expenses (A), (B)   16,595    8,951    25,546    21,288    9,408    30,696 
Allocated headquarter general & administrative expenses (A), (C)   53,248    14,410    67,658    50,183    11,914    62,097 
                               
Income (loss) from operations   23,804    (981)   22,823    53,976    426    54,402 
                               
Other income (expense), net             418              294 
                               
Loss on debt extinguishment             (418)             — 
                               
Interest income             832              533 
                               
Interest expense             (402)             (938)
Income before provision for income taxes            $23,253             $54,291 

 

(A) Includes depreciation and amortization  $8,135   $93   $8,228   $7,642   $95   $7,737 

 

(B)Consist mainly of payroll and related expenses, rent, depreciation and other general and administrative expenses.

 

(C)Consist mainly of payroll related expenses, rent, depreciation and other general and administrative expenses.

 

   September 30,   December 31, 
   2025   2024 
Assets        
Toys/Consumer Products  $425,216   $429,254 
Costumes   60,054    15,615 
   $485,270   $444,869 

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, 2025 and December 31, 2024 and for the three and nine months ended September 30, 2025 and 2024 (in thousands):

 

   September 30,   December 31, 
   2025   2024 
Long-lived Assets        
United States  $45,289   $53,020 
China   14,226    13,553 
United Kingdom   3,096    808 
Hong Kong   2,027    582 
Italy   765    754 
Mexico   610    31 
Canada   96    107 
France   21    41 
   $66,130   $68,896 

 

   Three Months Ended   Nine Months Ended 
   September 30,   September 30, 
   2025   2024   2025   2024 
Net Sales by Customer Area                
United States  $154,516   $255,278   $330,450   $451,545 
Europe   29,408    30,034    55,875    46,033 
Latin America   14,066    22,632    27,572    33,867 
Canada   9,237    7,068    21,342    16,726 
Asia   1,526    2,345    3,725    4,578 
Australia & New Zealand   2,095    3,339    3,594    6,292 
Middle East & Africa   362    910    999    1,260 
   $211,210   $321,606   $443,557   $560,301 

 

Major Customers

 

Net sales to major customers globally for the three and nine months ended September 30, 2025 and 2024 were as follows (in thousands, except for percentages):

 

    Three Months Ended September 30,     Nine Months Ended September 30,  
    2025     2024     2025     2024  
          Percentage           Percentage           Percentage           Percentage  
    Amount     of Net
Sales		     Amount     of Net
Sales		     Amount     of Net
Sales		     Amount     of Net
Sales		  
Target   $ 60,298       28.5 %   $ 93,417       29.0 %   $ 120,372       27.1 %   $ 161,494       28.8 %
Walmart     42,736       20.2       82,051       25.5       109,118       24.6       138,084       24.6  
Amazon                     42,347       13.2                       55,873       10.0  
    $ 103,034       48.7 %   $ 217,815       67.7 %   $ 229,490       51.7 %   $ 355,451       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.