JAKKS Pacific, Inc. Price & Performance (JAKK)

These statements [indiscernible] the company's best judgment based on current market trends and conditions today. And are subject to certain risks and uncertainties, which could cause actual results to differ materially from those projected in the forward looking statements. For details concerning these and other such risks and uncertainties, you should consult Jaximel's JAKKS recent 10 ks and 10 Q filings with the SEC as well as the company's other sequentially filed with the SEC from time to time. In addition, today's comments by management will refer to non GAAP financial measures such as adjusted EBITDA and adjusted earnings per share. Unless stated otherwise, the most directly comparable GAAP financial metric has been reconciled to the associated non GAAP financial measures within the company's earnings press release issued today or previously. As a reminder, this call is being recorded. With that, I would like to turn the call over to Stephen Burmes. Please go ahead.

Good afternoon, and thank you for joining us today. We are pleased with how the holiday season ended for us but also excited to be digging into the New Year. In line with our expectations, we shipped a comparable volume of toy and consumer products in in Q4 to the past two years, giving us 4.8% growth in the second half compared to 2023. Momentum we hope to be able to continue in the first half of twenty twenty five and beyond. For the full year, our toy consumer products business was down 1.8% slightly better than our expectations as the event portion of our portfolio was back half weighted. Each of the three toy and consumer product divisions were down in the 1% to 2% range for the full year. Our costume business was down 7.5% for the full year driven by softness in The U. S. Market. Similar to 2023, syndicated data suggests that The U. S. Market was smaller this year compared to prior years. It is some comfort that the data suggests that we increased our U. S. Market leadership by a couple of points but ultimately we'll measure true success looking at the top and the bottom line dollar We are working with our major customers who are looking to capture more market share given the continued financial difficulties of Party City but the industry continues to have a lot of volatility with smaller customers struggling to survive.

We continue to seek our synergies and enhancement to how we go to market. By tightening the integration between our toy and costume teams outside The U. S, we are seeing continued growth internationally. The disguised business grew outside of North America for the fourth consecutive year to reach an all time new high 2024. Although The UK is also working through difficult market conditions, we are engaging licensors to identify new sales opportunities for us by delivering other licenses that we have not had. This will be developing story over the next twelve to eighteen months. We continue to encourage our customer base to adopt FOB sales in 2024. The teams reached a new recent high of over 75% of our 2024 sales volume being sold on an FOB basis from China. This approach of selling larger quantities at sharper prices to customers with much larger logistics organizations as a win for all involved. Delivering the best value to the consumers while providing margin for our customers in royalty revenue for our licensors. Our Q4 POS at our top three U. S. Toy consumer products account was a positive at two of the three despite having difficult revenue comparisons with the prior year.

In addition, year end retail inventories at those same accounts were down high single digits percentages versus the prior year and lower for the second year in a row. We are entering our second year of increased investment in our European operations led by our former COO, who I am pleased to share has extended his agreement through the end of twenty twenty seven to maintain focus on our sustainable expansion initiatives there. By the end of Q2 this year, we anticipate holding inventory in four different facilities in the EU where eighteen months ago we were trying to cover the entire continent with one. Our reduced distance to customers will significantly improve our fulfillment times allow for more frequent replenishment during the year. Over time, we hope to build these relationships to the size and scale we FOB orders will make more economic sense for them. By the end of twenty twenty four, had shipped over 300 more customers in the Europe, Middle East, and African regions. The team also had another strong showing at the Nuremberg Toy Fair, We continue to feel this is the most important show for us globally given the wide breadth of customers we can reach in one location are otherwise unable to visit our showrooms in Southern California.

To hit some additional financial highlights for the quarter and year, from a geography view, North America was down 3% and costumes businesses being down as discussed before. Our international business inclusive of costumes was down 1% for the full year. We continue to see growth in Latin America which reached $38,000,000 in sales for the full year growing by over 19%.

The past quarter closed the book on our first five full years after our painful late twenty nineteen balance sheet restructuring. We are in a much, much stronger financial position today. We have an extremely rich, deep and strong category of expertise a broader diversification of product lines and a powerful lineup of licenses five years later. We've assembled a stronger team around the world than I believe we've ever had on another extremely positive note. We have no long term debt or preferred shareholders distracted us from operations. Have a very nice clean, strong evergreen business that is well positioned for profitable growth worldwide. It is true that the business like ours for companies our size there are always forces outside of our control and the past five years have provided several reminders to that reality. But overall, we at JAKKS feel we're in a great place today in both absolute terms and comparison with many within our industry. It's with that context and strength that we are very happy to share today that this week our Board has approved the initiation a quarterly dividend of $0.25 per share. Payable to shareholders of record as of March 3, 2025.

It is our intention to maintain this dividend going forward on a quarterly basis recalibrating when we deem it's prudent. This will allow our shareholders to directly benefit from our recent performance while maintaining their investment for what we hope will be long term. It will also allow us to replenish our cash reserves to add increased resilience to our balance sheet to ensure we are well prepared for whoever might be ahead of us. Whether that's for unseen challenges or unanticipated opportunities. On a related note, we are mindful and aware of recent developments in areas of tariffs. At restaurants above, over 75% of our business is sold on an FOB basis our customers either right at the factory or at a port in China. Using rough numbers, another 5% of our sales are generated by shipping product from our Eastern European warehouse network. For those markets with increased in product costs, relating to tariffs, we are reviewing our domestic pricing to mitigate any impact to our margin structure. At JAKKS, we are always focused on delivering products at opening price points we have shared in the past most of our total volume retails for $30 or less. With nearly 90% selling at less than $50 This focus on affordability always an asset during times of cost structure surges.

Whether that's labor rates oil and resin or in this case tariffs. As we always do, we will continue to work with our customers to deliver the best price value we can our end consumers. I will now pass it over to John for some comments after which I will come back and share a bit more how we see 2025 shaping up. John? Thank you, Stephen, and hi, everybody. It's been a pretty good wrap up to the year here, Always some room for improvement, but more things going right than not.

Sales were pretty much where we thought they would be in total, although how we got there might not have been exactly what we were originally thinking. And the retail sell throughs were pretty solid as well. Gross margin for the quarter was 70 basis points favorable versus prior year, led by 190 basis point improvement in royalty expense. The quarter reflects higher cost of product versus prior year, mostly attributable to higher inventory obsolescence, which has been a nagging theme of 2024. Also in the quarter gross profit dollars of $35,600,000 dollars were 5% better than $33,700,000 last year. Despite net sales only being up 3%. Overall, we ended up with full year gross margin percentage of 30.8%, our second year in a row greater than 30%. It is 60 basis points down from the prior year, but given some of the year's unique challenges, we'll take it. Selling expenses were up in the quarter driven mostly by media spend as we suggested it would be last quarter. We finished the year at 5.8% of sales, up from 5.2% in the prior year. Of our sales commissions have been migrating down into G and A, as we have brought some sales reps in house.

You'll note some movement on our balance sheet in the fourth quarter, representing a lease renewal at our U. S. [indiscernible] but ideally selling expense can still stay below 6% in the new year with the various puts and takes. Inclusive of our reshuffling our distribution footprint in Europe. G and A was favorable year over year for another quarter again for the reasons we discussed last time. That pulled down our full year G and A percentage to nineteen point two percent hundred and forty basis points worse than 2023, but better than how we started the year. I tend to suspect our streak of pulling down quarterly overhead year over year has come to an end, but seeking opportunities to bring down G and A remains something of a passion here. If not an outright lifestyle, as most costs continue to creep up a bit annually.

That all sums up to an annual operating margin of 5.7%, a two sixty basis point decline from the 8.3% we posted in 2023. That's a pretty lousy result to my mind, but highlights how scale is your friend in this business.

With success, those results should flow through to the bottom line. As a result, we are trying not to despair about the short term at the expense of reducing our chance of success in taking the business to new heights in the medium term. Adjusted earnings per share were a loss of $0.67 in the $0.37 better than prior year. On a full year basis, adjusted EPS was $3.79 down from $4.62 in the prior year. That's also our second year in a row with an adjusted EPS of greater than dollars a share The twenty twenty four year end diluted share count was roughly 11,200,000.0 Adjusted EBITDA for the quarter was a loss of $10,200,000 roughly an $800,000 improvement over the prior year. That resulted in a full year EBITDA of $59,300,000 another very strong year for us even if it's down from the exuberant greater than $70,000,000 years of 2022 and 2023. To that end, cash flow provided by operations was $38,900,000 on the year. As Stephen highlighted earlier, we're happy to initiate the dividend program. We hope to attract a broader year round long term minded shareholder base that values the predictability of results we feel we have reestablished in recent years.

In addition, especially as we believe we will continue to be in a higher for longer interest rate environment, replenishing our cash balances in the short to medium term is also a priority to ensure maximum resilience. We are an asset light company by design. So the cash to inventory to receivables loop and its associated momentum is what our business is all about. More cash keeps that wheel spinning plain and simple. We are ever mindful of the risk associated with unexpected adverse events as we have experienced over the company's history. Both internally and externally, But that cautionary comment aside, it's nonetheless great to finally be announcing the dividend program. And now back to Stephen for some more comments about the year ahead.

Thank you, John. There's some nice momentum in several of our business lines as we start the New Year. We feel something that sets JAKKS apart from other companies in our space is the value we place on evergreen brands categories and play patterns. It's a worldwide view with a long term mentality and what we can oftentimes be a short term fat obsessed industry. As an example, we ship Sonic the hedgehog product in 2019 with a modest rollout but one that made sense for our business and our partners at Sega. When the first movie was released in the early days of COVID, two great reviews We were there with the product on shelf and it was one of the only content led chase opportunities we saw that year. Since then, we have continued to partner with Sega to get the word out globally what a great property this is and by extension to showcase our great product lines, that fans continue to embrace with each new wave. Most licensees would not have the patience to nurture a build a business like this over a five year period. But at its core, that's what JAX is all about.

We are into the long term with our partners rather than hitting a peak in the entertainment year hard and then winding things down to chase what might be the next big thing. During fourth quarter, we saw strong consumer demand for our Sonic toys that coincided with the release of Sega's Sonic's X Generations video game in October and Paramount Sonic three movie that debuted in December. The film has become the highest grossing live action video game inspired film of all time as the Sonic franchise just continues to build. In addition, our Ultimate Talking Sonic was the number one new action figure released during the holiday season according to Circuits, retail tracking service. We look forward to more JAKKS discovering that item the rest of the line in 2025 as the film will ultimately move to its streaming we should find an even broader audience. Another developing story is the actual release of Dog Van, the new hit movie by DreamWorks Animation NBCUniversal that released in late January. Although it's very early days here, the box office results have been very solid and we're seeing traction at retail even though this is generally not a high traffic time of the year in the toys section.

Are hoping customers see what we see in this opportunity and circle back around for more opportunistic phone listings. Another momentum area is in our Disney business. Are very pleased with the Moana two theatric release and look forward to the in home Disney plus releases this spring. New items such as Walk and Talk Codeu will generate excitement and drive sales with consumers as they watch our favorite character story over and over. The excitement will continue to fall when Jax releases three new movie and inspired items bringing key moments and music to the tour hall. While we do not have a new theater release from Jizzy this year, the team is launching several new segments and brands focused on driving growth within the Disney portfolio in 2025. In spring, we are launching two new collectibles segments bringing innovation to the portfolio and retail consumers alike. Tote Ileitini's is a new line of extension from the Disney Ely Forever brand. Girls all around the world can show off their love for their favorite Disney character with one of these Tote Inny Charmed totes and teeny fashionistas inside. These mini dolls with real rooted hair are dressed in fashion forward designs inspired by their favorite Disney character or story and come with a comb and matching tote.

Musical minis is a brand new line celebrating the amazing portfolio of Disney music. Mini figures come displayed on top of a mini music box Give them a push and listen to your favorite Disney song from the character. Blind assortments of TED are now available at retail around the globe. In addition, our systems launch well received in the fall is continuing a slow and steady build through this year, is a business which primarily appeals to long term fans of the show but we are looking to take advantage of the cross generational appeal the show is finding on Disney plus This line is exciting and we're looking forward to what it has for 2025. We have new listings at Target this spring new ways of figures in multiple scales and a new diorama location. And at Walmart, we'll soon begin shipping an exclusive plush King Homer that started to take presales back in October.

Moving to Outdoor Seasonal division, we are expanding our offerings to support our authentic brands business. Following a test and learn approach. We are excited on launching new products in the range of subcategories at brick and mortar retail and online in the first half of the year we'll share more details in the quarters to come. Our private label business is also set up with some interesting opportunities this This is another slow and steady build for us working with accounts tailored to the right product line to meet their respective customer needs.

Our deep experience in large bank of existing tools built up over time allows us to be fast to market and very responsive potential opportunities. We admittedly did have a longstanding customer move away from one of our private label brands which as we anticipated added to a bit of top line softness to our Q4 results. But even with that development, we are pleased with how this part of our portfolio is building. After a successful launch and sell through, of a shopping cart last year with ALDI, we are also partnering on a cash register with them, which is hitting shelves this month. We have some other fund launches this year, which we will share when the customers are ready to announce them. Another first half development is our steady expansion in our address up category. Our Dizzy dress up business has been a market leader for over fifteen years. It provides a year round dress up solution for kids who want to immerse themselves into the caricature Wicked movie As you might expect, plans are also in place to support the second movie this fall. Separately, we're happy to announce the launch of Harry Potter robes at Walmart arriving on shelf next month.

The Potter based fans remain extremely strong with kids coming into the franchise every year. So we're excited about this opportunity. To reiterate, businesses like this are not massive out of the gate, but there are initiatives that build over time to add breadth and depth to our Evergreen portfolio. From dress up to costumes, our disguised business has a lot of different things happening as we start the year. We are starting the year with Pokemon costumes shipping in Europe, which is a nice build on our success in The U. S. We also already seen theatric releases more on top of mind with consumers as the calendar works through the writers strike lag last year. Between 2024 films like Moana two, Wicked and Sonic three, be more top of mind this Halloween season there are new releases in our portfolio like Dog Man, Lilo and Stitch Live Action, and the Minecraft movie, as well as a promotional buildup behind the second Wicked film, We continue to pick up incremental rights where it makes sense have added core Palm Patrol rights. We historically we have supported the movies. And we have mentioned earlier, we are prioritizing European growth across all markets working in partnership with our licensors and leading customers.

In addition to all the above, over three years ago, we implemented a multi tiered development process to ensure we are adequately addressing the global market. We developed lines specifically targeting different class of retailers and trade and with their respective consumers in mind. This development philosophy addresses the mass market retail especially channel and the value dollar trade. Beginning with this end goal in mind, ensures we have a wide range of products designed with the appropriate price points and the customer margin requirements for each potential customer worldwide. As you can see, there is a lot going on without even touching upon what some of our studio partners are thinking about in 2026 and 2027. And a company like ours, we are accustomed to navigating through unknown Based on everything we know today, it is certainly our goal to grow both our top line and bottom line this year however modestly and we feel we have a plan that will get us there. We find ourselves in a great position today as a company both to the context of where we have been not too long ago but more importantly with an eye towards where we think we're headed, We appreciate everyone's support and look forward to collaborating with our key stakeholders for another successful year for all involved.

And with that, will take a couple of questions. Operator, thank you. Thank you. And the first question that we have today is coming from the line of Eric Beder of SmallCap Consumer Research. Your line is open. Good afternoon. Congratulations on a nice bounce back year. Thank you, Eric. So also congratulations on the dividend. Does that does you still have the flexibility if you so desire to potentially pick up other properties here even with the dividend and the desire to maintain cash in terms of changes here in the potential economy. Firstly, good question. Thank you. So yes, we had very deep long thoughts about the dividend and capital allocation initiatives over the past eight months. Once we paid down the preferred, which we did, I think it was in May. So that being said, we looked at the liquidity basis going forward, looking at tariffs, looking at very different implication that could happen to us that's known in hopefully unknowns. And knowing that, we are extremely comfortable with the dividend initiative that we put in place. We have ample cash that we're generating free cash flow and cash on hand. Which allows us to do other opportunistic initiatives, whether it means acquiring new IP on top of the existing IP whether it looks at potential acquisitions in the future, we did is we didn't want to handcuff the company.

By doing many things all at once. So we started off a very, I think, strong powerful initiative with the dividend in hand. On an annualized basis, assuming it goes annual, it's a dollar per share. Which I think is very strong for where we were in the last four to five years. So everything been said, we thought about this in great detail and we are extremely comfortable with the dividend. With where we stand with the capital on hand to acquire new IP or opportunistic initiatives that are out there in this marketplace. Great. Conceptually, could you remind us here, so the movie when it historically, what is kind of the coattails for the holiday movies? I know it's not because how you do your FOB that a lot of the impact the upside impact to the holiday movies is not immediately occur at Q4. You kind of take us through how that flows Thank you. If we take past histories of when movies have been launched from it goes back into Incredibles to Frozen, Frozen one, Frozen two, Encanto. What usually occurs is the movie comes out, which Moana came out at during the Thanksgiving period in 2024.

And you have a great excitement during that period and then you have a usually a long tail that goes with it. Not knowing what the excitement or how euphoric that tail is, But when the streaming comes on, which will come out during the first or second quarter, There's the momentum that occurs with that, especially when there's music involved theatrically that usually carries forward, which it did on the various Frozen movies, Mulanah One, Encanto, all those music initiatives really helped continue the strength of the actual initiative of the movie. Secondly, when you have like a movie which was Sonic three which came out December 20 we only had a minimal amount of time before the children [indiscernible] and families saw the movie during the holiday. So get a strong momentum on that when the streaming comes out to and that moves forward during the second quarter. So you should get long tails and it helps enhance the visibility of the content. Then in which we had Dogman, which came out in January, at the January, it was 30. That's an initial launch that is still has momentum and going very strong and has the appeal with their books that have gone over decades of books that continue that strength of the IP with the movie itself.

A nice combination All that being said, we are still doing business with Encanto. That's still strong. We've just relaunched a beautiful line of frozen items that are enhanced very much similar to our Princess style collection. Even though Frozen came out in original 2013, I believe that the announcement is a new movie in 2027, We still have length of that IP going well. So the momentum continues Usually when something has strong IP, when you have a history, which we do have a history with Sonic and we do have a history with Moana. Okay. And last question, inventory. So the inventory fantastic job of controlling the inventories Part of that I assume is that the FOB kept on rising Is it possible to [indiscernible] The FOB even higher than it is now? And how should we be thinking about your desire to potentially take inventory risks given the whole tariff situation and other pieces? [indiscernible] excuse me, my voice. With our inventory, we've been managing inventory really methodically. Over the last several years. We've done it in the past, but with the new controls and having John Kimble as our CFO over the past few years, really gotten a much better handle on that inventory.

We are at a very high level. I think it's approximately 75% on an FOB basis. I don't think anyone in our industry is close to that. And then you add the domestic international part, which is then 80% with some of the domestic excuse me, FOB internationally, sorry, with my voice That being said, we will be bringing in some inventory but not a Chase inventory. It's inventory that's methodical to what we need that's evergreen. We're not bringing in inventory to bake bank on something being extremely strong and taking that risk. We will chase inventory as we always have. But to us inventory is cash and cash to us is king. Cash is allowing us to do the dividend, look at new opportunities. So we are managing it really, really tightly. But at the same time, dealing with some of the tariff issues, we will be bringing in domestic items that are appropriate that are well positioned for evergreen growth that's inventory that we're not worried about if it doesn't sell this month, it will sell the following month. So it's really a means where this company sits biweekly and goes to the inventory positions worldwide We've introduced the new distribution centers throughout the EMEA.

Which allows us to distribution in shorter time periods to get to the retailers. So all that being said, we need less inventory what we normally do, but we always will be looking at the opportunistic inventory holds, for the certain properties and also to deal with tariffs. Great. Congratulations and good luck in 2025. Thank you, Eric. Thanks, Eric.

You. One moment for the next question, please.

The next question will be coming from the line of Thomas Berte of Maxim Group. Your line is open.

Great. Thanks. So first off, Stephen and John, I hope you and your colleagues are okay. When it comes to the California wildfires. And then I have another question. Appreciate that.

Thank you. You're welcome. I'm just going to go one at a time. But I have a lot of questions. I'll let you know, Stephen, when I get to the last one. So the first one I had is based on my own anecdotal observations, it seems like more physical retailers are devoting incremental floor space to toys and I've seen JAXA JAKKS a lot of them As long time industry participants, I'd appreciate your thoughts if you're seeing the same thing what the implications are. Yes, we are seeing for JAKKS JAKKS more placement and homes for our evergreen product. And the reason for that is if you take the divisional initiatives that we've done our products are really much in the sense an evergreen for parents. We hit all different areas and segments at retail. From seasonal to Halloween to role play to dolls to dress up. So we really have such a broad array of products and with really strong evergreen IP, When people take our items or the categories which are in, they're not main risk to them. They're not worried that it's not sell through. So I just literally got back from Panama last week and we were with some major retailers out there and one of the main ones is called Stephens, which is has one of the most gorgeous toy areas that I've seen in a long time around the world and our placement there is significant for our size of the company compared to our competitors.

So we are seeing it not just in North America, but we're seeing it through EMEA Southeast Asia and LATAM, especially LATAM, where growing it very aggressively. And some of it is just the way that we set forth about three or four years ago, with that three tiered development process that I discussed during the earnings call, of having mass retail product secondary retail product for the secondary accounts like the TJ Maxx, the JAKKS, the Burlington's, the big box stores, the Costco's and Sam's and then the value trade. So we've developed three different lines of product in our categories which thus allows us to have much more shelf space at various retailers compared to our competitors. Okay. So you answered my second question in that I'll just throw it out there in case there's anything else you want to add. So how should we think about your wholesale sales to low price point value focused retailers such as Five Below you just indicated you've been able to kind of take that category? With a third line I guess is there anything else you want to add there before I run into my next one? I'd say we are expanding in those areas of businesses that trade, that class of trade.

At the same time, there's other retailers around the world that have it's interesting different from North America They have the mass section that you go to that has all the toys up the call it the normal price points. And then a lot of these retailers now have value areas that are in bins. So some of these mass retailers are doing both the normal toy sections that you see and then a value section based on kind of the environment and the way that they see people spending. So I think we're getting much more diverse and much more distribution than in the past based off the value opportunities that we have from license and non license [indiscernible] Great.

So then my next one it seems like the number of major sales in the e commerce space has increased over time.

For example, Amazon Prime Day used to be a single event usually held in June. Now it seems like the company holds multiple Prime Days, put it in the quote, type sales during the year What are the implications to you from more big sales events in e commerce To what extent, if it all is an opportunity? Is there any incremental competition? How should we think about it? So there's always opportunity anytime that Amazon or Alibaba does all those new initiatives, all those promotional initiatives always helps JAX itself and our complete industry because it's a benefit because it actually enhances people to spend. And our sales team and our lead of sales is focused throughout the year of planning when they have these big events to do some special initiatives to where it allows the online retailer to not have anyone be able to price compare their items because they're promoting it during a special time. So that area has grown over the years and we are capitalizing on all those initiatives, not just in in North America, but worldwide.

Great. All right. So two more. The U. S. Dollar strengthened against a number of currencies. Can you remind me about your percent of sales outside The U. S. And your percent of costs outside The U. S. And if you had your currency exposure at all?

Yes.

I'll jump in on that one and give Stephen a break. We don't really have as much FX exposure as most other people in the the space because our FOB business is U. S. Dollar denominated. So as we've touched on the call, that means 75%, 80% of our volume is actually even a little bit more than that to come to think of it is going to be U. S. Dollar denominated on the sales side.

And then on the costing side, all of our costing is negotiated And so although the Hong Kong dollar will move around a little bit, it won't move that much. And so we're actually reasonably well insulated on that front even if the dollar strengthened significantly during the year.

Great. Very helpful, John. So last one and thanks for taking all my questions. So it looks like The U. S. Box office was about flat in '24 at $8,700,000,000 even so there were still more than 20 new movies greater than $100,000,000 in gross including a number of properties you capitalize on Wicked, Moana two, Sonic Catchaw three, Apologize if I'm forgetting some. Can you give me your current thoughts on what box office box office performance of your license or potentially license IP means today as it relates to your strategy.

That's a good question. It's a hard question. To answer because there's a plethora of different content movies coming out and we have so many different areas in categories in which we have some of the rights fully, some of the rights partially So for us, the way that we're looking at it, the box office is an enhancement to our year but we have so many other initiatives currently that have been announced some of which have not been announced. This year, the box office or call it the streaming part of the box office will enhance more sales for us than I believe the actual box office itself That's what we planned for. We've looked at that and that's why we've gotten further distribution on a lot of the other initiatives that we've done, our private label that we're very hard core involved with a lot of new initiatives in our different categories. In our sporting goods area, the ABG line of products, that have no real need to have any type of blockbuster have that enhanced. So our broad mix and diversification really doesn't put a need on the box office success at least for this year as well.

Then we go into 2026 and you got some really big blockbuster movies such as the Super Mario movie that comes out in 2027, you got large movie that Sega and Sonic announced their movie the Afrosian. So there's a lot of momentum. But in years that there's not really strong IP that we really need to focus on We brought in our offerings much more than normal and the receptiveness at retail has been very strong.

Excellent. Thanks for taking my question. Thank you very much. Thanks Tom.

Thank you. And that concludes today's Q and A session. I would like to go ahead and turn the call back over to Steven for closing remarks. Please go ahead.

Ladies and gentlemen, thank you for your time today. And we look forward to speaking to you after our first quarter is completed and done. We're excited for the year and excited for the years to come. Happy we're able to do the dividend for the shareholders that we have and the shareholders in the future. Thank you very much.

This concludes today's conference call. Thank you so much for participating. You may now disconnect. [indiscernible]