Business Segments, Geographic Data, and Sales by Major Customers

9 Months Ended

Sep. 30, 2020

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 recently re-aligned its products into two reporting segments to better reflect the management and operation of the business. The Company’s segments are (i) Toys/Consumer Products and (ii) Halloween. Prior year’s segment reporting has been restated to reflect this change.

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, and makeup and skincare products under the C'est Moi brand.

Within the Halloween segment, the Company markets and sells Halloween costumes and accessories and everyday costume play products, primarily in the U.S. and Canada.

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.

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, 2020 and 2019 and as of September 30, 2020 and December 31, 2019 are as follows (in thousands):

	Three Months Ended September 30,				Nine Months Ended September 30,
	2020		2019		2020		2019
Net Sales
Toys/Consumer Products	$	187,309	$	204,338	$	306,088	$	330,319
Halloween		54,981		75,792		81,517		115,819
	$	242,290	$	280,130	$	387,605	$	446,138

	Three Months Ended September 30,				Nine Months Ended September 30,
	2020		2019		2020			2019
Income (Loss) from Operations
Toys/Consumer Products	$	33,843	$	32,515	$	15,493		$	(966	)
Halloween		3,670		3,147		(3,712	)		(6,062	)
	$	37,513	$	35,662	$	11,781		$	(7,028	)

	Three Months Ended September 30,				Nine Months Ended September 30,
	2020		2019		2020		2019
Depreciation and Amortization Expense
Toys/Consumer Products	$	4,280	$	5,499	$	8,396	$	11,827
Halloween		251		1,499		596		2,644
	$	4,531	$	6,998	$	8,992	$	14,471

	September 30, 2020		December 31, 2019
Assets
Toys/Consumer Products	$	353,172	$	356,584
Halloween		54,419		8,638
	$	407,591	$	365,222

The following tables present information about the Company by geographic area as of September 30, 2020 and December 31, 2019 and for the three and nine months ended September 30, 2020 and 2019 (in thousands):

	September 30, 2020		December 31, 2019
Long-lived Assets
United States	$	24,467	$	31,175
China		11,454		11,461
Hong Kong		2,149		2,937
United Kingdom		1,431		1,633
Canada		102		134
Mexico		89		—
	$	39,692	$	47,340

	Three Months Ended September 30,				Nine Months Ended September 30,
	2020		2019		2020		2019
Net Sales by Customer Area
United States	$	202,303	$	229,975	$	320,998	$	369,942
Europe		21,045		25,740		34,424		39,477
Canada		9,523		10,218		14,555		14,960
Asia		2,744		3,820		5,976		7,287
Australia & New Zealand		1,936		2,582		4,269		4,270
Latin America		4,504		6,853		6,586		8,789
Middle East & Africa		235		942		797		1,413
	$	242,290	$	280,130	$	387,605	$	446,138

Major Customers

Net sales to major customers for the three and nine months ended September 30, 2020 and 2019 were as follows (in thousands, except for percentages):

	Three Months Ended September 30,										Nine Months Ended September 30,
	2020					2019					2020					2019
	Amount		Percentage of Net Sales			Amount		Percentage of Net Sales			Amount		Percentage of Net Sales			Amount		Percentage of Net Sales
Wal-Mart	$	75,018		31.0	%	$	78,347		28.0	%	$	115,736		29.9	%	$	130,165		29.2	%
Target		60,683		25.0			64,172		22.9			94,227		24.3			90,367		20.2
	$	135,701		56.0	%	$	142,519		50.9	%	$	209,963		54.2	%	$	220,532		49.4	%

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.