Jakks Pacific Q2 numbers reveal the company took a major hit in net income, marking a loss of US$406.5 million versus a gain of US$4.2 million for the same period in 2008.
Jakks’ six-month period net loss was US$417.3 million, compared to earnings of US$5 million in the same time frame last year. The drop was primarily caused by a pre-tax non-cash goodwill impairment charge of $407.1 million due to the sustained decline in the company’s market capitalization. The quarter’s revenues, however, only took a slight dip from last year’s US$145.3 million to US$144.8 million. Net sales for the six months were down to US$253.5 million from US$276.2 million during the same period in 2008.
Chairman and co-CEO Jack Friedman stated that Jakks would be anticipating lower than expected sales for core products as a result of soft retail activity and underperforming lines including Hannah Montana, WWE, Pokémon and Cabbage Patch Kids.
Co-CEO and president Stephen Berman also noted that the toyco is implementing cost-reduction measures across the board and will restructure to streamline operations, reduce costs and lower capital expenditures – that includes reduction in employee headcount and consolidating office spaces throughout the rest of the year.