Business Segments, Geographic Data, and Sales by Major Customers

3 Months Ended

Mar. 31, 2021

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 (formerly known as “Halloween”).

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.

The Costumes segment designs, develops, markets and sells a wide range of every-day and special occasion dress-up costumes and related accessories. Halloween, Carnival, Children’s Day, Book Day/Week, and every-day/any-day costume play are all purchase occasions for Disguise innovative and trend-setting product since its inception in 1987.

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, 2021 and 2020 and as of March 31, 2021 and December 31, 2020 are as follows (in thousands):

	Three Months Ended March 31,
	2021		2020
Net Sales
Toys/Consumer Products	$	79,875	$	62,565
Costumes		3,968		3,992
	$	83,843	$	66,557

	Three Months Ended March 31,
	2021			2020
Income (Loss) from Operations
Toys/Consumer Products	$	356		$	(12,739	)
Costumes		(3,079	)		(3,247	)
	$	(2,723	)	$	(15,986	)

	Three Months Ended March 31,
	2021		2020
Depreciation and Amortization Expense
Toys/Consumer Products	$	1,727	$	1,824
Costumes		66		58
	$	1,793	$	1,882

	March 31, 2021		December 31, 2020
Assets
Toys/Consumer Products	$	287,246	$	315,838
Costumes		11,159		13,531
	$	298,405	$	329,369

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, 2021 and December 31, 2020 and for the three months ended March 31, 2021 and 2020 (in thousands):

	March 31, 2021		December 31, 2020
Long-lived Assets
United States	$	22,085	$	23,607
China		10,568		10,773
Hong Kong		1,573		1,870
United Kingdom		900		1,458
Canada		93		100
Mexico		89		96
	$	35,308	$	37,904

	Three Months Ended March 31,
	2021		2020
Net Sales by Customer Area
United States	$	68,916	$	51,918
Europe		7,337		7,618
Latin America		2,455		1,000
Canada		2,101		2,348
Asia		1,415		1,770
Australia & New Zealand		1,188		1,531
Middle East & Africa		431		372
	$	83,843	$	66,557

Major Customers

Net sales to major customers for the three months ended March 31, 2021 and 2020 were as follows (in thousands, except for percentages):

	Three Months Ended March 31,
	2021					2020
	Amount		Percentage of Net Sales			Amount		Percentage of Net Sales
Target	$	22,753		27.1	%	$	14,615		22.0	%
Walmart		21,638		25.8			18,510		27.8
	$	44,391		52.9	%	$	33,125		49.8	%

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.