3SOF

I did something wrong folks please forgive me

JAKKS Pacific(R) Presents a Powerhouse Portfolio of Interactive Toys and Games at the 2008 American International Toy Fair

Business Editors/Toy Industry Writers
     
MALIBU, Calif.--(BUSINESS WIRE)--February 18, 2008--JAKKS Pacific, Inc.
(NASDAQ:JAKK) is presenting the company`s line-up of interactive toys and
games to media and buyers attending the American International Toy Fair held in
New York City, February 17th-20th. The 2008 electronic toy portfolio from JAKKS
Pacific ® features products for every level of gamer and tech gadget
enthusiast, including smart AND fun interactive learning products based on the
Discovery Kids ® brand. It features new expansions of the JAKKS Plug It In &
Play " TV Games " line with the Ulti-Motion "wireless motion gaming system,
conceptualized in collaboration with Disney ®, and Disney Channel`s Hannah
Montana " G2: Game Girl "deluxe plug and play game. JAKKS " will also debutits
EyeClops " Night Vision Goggles and BioniCam ", two extensions of its
award-winning EyeClops " Bionic Eye toy, which was nominated for Most
Innovative and Best Educational Toys of 2007 by the Toy Industry Association.
     
"We are excited about the potential for our 2008 interactive portfolio and
believe it will appeal to many different consumer groups, ranging from
preschoolers to boys, tween girls, adults and everyone in between", said
Stephen Berman, President and COO, JAKKS Pacific. "We continue to focus on
traditional play patterns intertwined with new technology to make them engaging
to today`s kids. Our next generation EyeClops BioniCam features portability, a
multi-zoom lens and recordable features allowing kids to capture and save their
finds on a USB key. The new EyeClops Night Vision Goggles are so cool that
practically everyone out there might want a pair"
     
"With our new Ulti-Motion game system, several titles of which were
conceptualized with Disney Consumer Products, we combine the hugely popular
motion gaming category with plug and play gaming and toyetic role play
accessories especially designed for preschoolers and girls. The G2: Game Girl
line takes our TV Games line to the next level with rich graphics and sounds,
tween-centric gameplay, and popular entertainment properties such as Disney` s
Hannah Montana and High School Musical ".
     
EyeClops" Night Vision and Bionic Cam "
     
The Toy Wishes Toy Awards favorite Tech Toy of 2007, EyeClops " Bionic Eye toy
also topped many retailer and media Best Toy and Holiday Gift lists in 2007.
EyeClops " Night Vision Infrared Stealth Goggles " providesan authentic night
vision experience powered by actual infrared driven night vision technology.
The EyeClops Night Vision goggles allow visibility up to 20 feet in completely
dark environments. SRP $79.99, available for Fall 2008.
     
The EyeClops " BioniCam" toy boasts several exciting new features - a
multi-zoom lens for 100x, 200x or 400x magnification, a color LCD screen, and
clip-on battery pack for portability. It even features a built-in camera and
flash drive which captures images and video and can upload them to a computer
with the included USB key to be printed, emailed, posted and shared. The
EyeClops BioniCam toy can still be plugged into the A/V jacks of any standard
television, to display discoveries right on the TV. SRP $79.99 expected to be
available for Fall 2008.
     
Ulti-Motion"
     
Ulti-Motion game systems are a new video game concept developed in conjunction
with Disney Consumer Products which takes the fun and creativity of interactive
play to the next level in a way only Disney can. The new Ulti-Motion" video
game line expands upon JAKKS Pacific`s award-winning Plug It In & Play TV
Games technology by combining toys and role play with one of the most popular
trends in video gaming: motion games. The Ulti-Motion game system plugs
directly into the A/V jacks of any standard TV, and it contains a number of
games or activities along with role play accessories. No additional cartridges
are needed.
     
The Ulti-Motion " Disney ®line delivers on Disney s preschool brand values
including education, adventure, music, art and exploration and will feature hit
Playhouse Disney " properties. Titles especially developed for girls inspired
by Disney Princess " and Disney Fairies " will also be introduced this Fall.
     
Also slated for launch this Fall is the JAKKS Ulti-Motion " Swing Zone "line,
featuring an all star, multi-sport title including bowling, tennis, golf,
baseball and football.
     
G2: Game Girl" TV Games
     
G2: Game Girl " TV Games is a gaming experience designed especially for tween
girls featuring the most popular entertainment properties, rich graphics &
sounds and a tween-centric gameplay that provides girls with games that are
both realistic and inspirational. Driven by the proven, award-winning Plug It
In & Play technology from JAKKS (compatible with any standard television and no
video game console needed), G2: Game Girl "TV Games boasts high resolution
graphics, rich sound and deep gameplay. The sleek, stylish design of the
controller and console will look cool in any tween girl s bedroom. The new
line is inspired by Disney`s hottest tween brands including Hannah Montana "
and High School Musical " and it was designed in collaboration with Disney
Consumer Products.
     
With G2: Game Girl, girls can play and hang out with their favorite teen
characters, Hannah Montana and the cast of High School Musical! With G2: "Game
Girl  Hannah Montana and "G2: Game Girl " High School Musical girls can
experience firsthand all the fun and drama of the not-so-average teens. With
great graphics, hit tunes and gameplay that`s both relatable and aspirational
for tweens G2: Game Girl truly delivers. The new G2: Game Girl TV Games will
be available in Fall 2008 for a suggested retail price of $49.99.
     
Neopets
     
JAKKS is launching a full line-up of collectible plush, mini figures, playsets
and activities with an interactive online component and based on the expansive
virtual world of Neopets ®, and its extraordinary characters, found at
www.neopets.com. The JAKKS " product line brings the online experience of
Neopets, the world`s orginal youth-targeted virtual world, to the real world
with a focus on collectible plush toys that tie-in to the extensive variety of
Neopets species and characters featured throughout the world of Neopia.
     
Discovery Kids
     
The new line of JAKKS products based on the Discovery Kids brand and values,
which is expected to be available for Fall 2008, will encourage kids to explore
nature, learn about science and technology, develop life skills and expand
their creativity and imagination in fun, meaningful ways.
     
The line includes Discovery KidsSmart Animals " toys that make learning about
animals fun! Each 3-inch animal figure features real-feel skin, sculpted
footprints and a Discovery Kids logo housing a hidden barcode. Kids can
activate the figures with the Discovery Kids Smart Animal Scanopedia (sold
separately) for special effects, to reveal facts unique to each animal. It even
quizzes kids on their knowledge of animals! The Smart Animal Scanopedia is an
electronic animal encyclopedia that not only scans any Discovery Kids Smart
Animal figure, but can also be used on its own to reveal a world of information
about animals, maps and other fun activities. Suggested retail price of $29.99
for Scanopedia & $4.99 , $12.99 for Smart Animal figure packs sold separately.
     
JAKKS 2008 Interactive line-up is available for media to preview at JAKKS
Pacific`s new New York City showroom by appointments only. Please contact
[email protected] for more information.
     
About JAKKS Pacific, Inc.
     
JAKKS Pacific, Inc. (NASDAQ:JAKK) is a multi-brand company that designs and
markets a broad range of toys and consumer products. The product categories
include: Action Figures, Art Activity Kits, Stationery, Writing Instruments,
Performance Kites, Water Toys, Sports Activity Toys, Vehicles,
Infant/Pre-School, Plush, Construction Toys, Electronics, Dolls, Dress-Up, Role
Play, and Pet Toys and Accessories. The products are sold under various brand
names including JAKKS Pacific ®, Play Along ®, Flying Colors ®, Creative
Designs International ", Road Champs ®, Child Guidance ®, Pentech ®,
Trendmasters ®, Toymax ®, Funnoodle ®, Go Fly a Kite ®, Color Workshop ®, JAKKS
Pets " and Plug It In & Play TV Games ". JAKKS and THQ Inc. participate in a
joint venture that has worldwide rights to publish and market World Wrestling
Entertainment video games. For further information, visit www.jakks.com.
     
This press release may contain forward-looking statements (within the meaning
of the Private Securities Litigation Reform Act of 1995) that are based on
current expectations, estimates and projections about JAKKS Pacific's business
based partly on assumptions made by its management.These statements are not
guarantees of future performance and involve risks, uncertainties and
assumptions that are difficult to predict.Therefore, actual outcomes and
results may differ materially from what is expressed or forecasted in such
statements due to numerous factors, including, but not limited to, those
described above,changes in demand for JAKKS' products, product mix, the timing
of customer orders and deliveries, the impact of competitive products and
pricing, and difficulties with integrating acquired businesses.The
forward-looking statements contained herein speak only as of the date on which
they are made, and JAKKS undertakes no obligation to update any of them to
reflect events or circumstances after the date of this release. © JAKKS
Pacific, Inc. All Rights Reserved.
     
© JAKKS Pacific, Inc. All rights reserved.
               
JAKKS Pacific, Inc.
Genna Rosenberg, 310-455-6235
[email protected]
or
Anne-Marie Feliciano, 310-455-6245
[email protected]

Quote from: berloga on February 15, 2008, 09:38:55 AM
Good decision, David. JAKK does not offer a clear path to a significant growth which you typically look for. A good call to sell after the earnings are out.

Thanks berloga, but as Rmagos wrote ...

Quote from: Rmagos on February 18, 2008, 05:58:56 PM
Hi David I know you are man of reasoning convictions and a "stronghander"... but take a look to the following article:

• JAKKS Pacific(R) Presents a Powerhouse Portfolio of Interactive Toys and Games at the 2008 American International Toy Fair
Business Wire (Mon 6:00am)

... there are some really terrific toys there. I especially like this one:

«EyeClops™ Night Vision Infrared Stealth Goggles™ provides an authentic night vision experience powered by actual infrared driven night vision technology. The EyeClops Night Vision goggles allow visibility up to 20 feet in completely dark environments. SRP $79.99, available for Fall 2008.»

This will sell a lot, no doubt about it. Awesome product.

Perhaps the article above is what has been moving JAKK up so strongly, despite the very bad news coming out from WWE/MAT.

I'm undecided again, I guess tomorrow's earnings and conference call will help me decide!

For now I'll keep holding JAKK.

JAKK beat it by a wide margin:

• JAKKS Pacific(R) Reports Fourth Quarter and Year-End Results for 2007
Business Wire (Wed 3:15am)

Everybody is pounding the table on it this morning:

• UPDATE - Jakks Pacific posts sharply higher Q4 profit
at Reuters (Wed 3:21am)

• InPlay: JAKKS Pacific beats by $0.32, beats on revs; board announces $30 mln share repurchase program
Briefing.com (Wed 4:15am)

• Jakks Pacific 4th-quarter net up 48%, sales up 20%
at MarketWatch (Wed 5:30am)

With $2.8 EPS JAKK is trading at about 9 times trailing earnings (it will probably open around $28 for 10 times earnings). EPS growth from a year ago level was 22%, but it accelerated to 45% in the 4th quarter. The Toy industry trades at an average of 16 times earnings and the industry's revenue has been growing about 4.4% (so, less than JAKK).

Let me make a quick comparison between JAKK and MAT, which is the largest Toy company in the World:

Market Cap: JAKK is $758 M, MAT is $7.5 B;
2007 Revenue and Price to Sales Ratio: JAKK's revenue was $857.1 M (PSR = 0.88), MAT's was $5.97 B (PSR = 1.26);
2007 Revenue Growth: JAKK's was 12%, MAT's was 5.7%;
2007 EPS and Price Earnings Ratio: JAKK's was $2.8 (PER = 9.6), MAT's was $1.54 (PER = 13.3)
2007 Net Profit Margin: JAKK's was 10.5%, MAT's was 10%
2007 vs 2006 EPS growth: JAKK's was 45%, MAT's was 0.6%

From this comparison it is obvious that JAKK is deeply undervalued when compared to the industry leader.

Of course, there's a reason for this: for years JAKK had been plagued by the WWE lawsuit, which has come to a resolution in practical terms. JAKK's management has been doing an excellent job to diminish its dependence on WWE's products and I think the strategy has been working.

Hannah Montana won't last 10 years (probably no more than 3), but JAKK's management has been showing the capacity to innovate and create new and very appealing products, like the infra-red Goggles, for example. I also truly enjoy the Plug it and Play TV games.

JAKK's guidance wasn't very optimistic which shows how management learned from past mistakes, when they disappointed investors. They're much more cautious now and prefer to positively surprise people.

The pendulum is bouncing for the HOLD decision again. I'll still listen to the conference call, but as it is now JAKK is worth $35 at the very minimum and I'm not selling it for $28 today.

I'll hold JAKK!

I thought JAKK's reaction to spectacular earnings yesterday wasn't all that special and wondered why. Listening to the conference call and some breakdown by product categories I understand the market reaction better and unfortunately I'm going to have to sell JAKK around today's open.

Here's why:

I "knew" JAKK was going to beat the 4th quarter consensus EPS estimate of $0.75. My expectation was correct, since the actual number came in at $1.06. But I was just lucky ... you see, I had this expectation because I thought Hannah Montana related products would be a bigger than expected contributor to net income. But in fact $18 M of the $34.4 M net income for the quarter came from the partnership with THQ to develop WWE video games.

So, of the $1.06 EPS, $0.55 came from THQ. Without this, EPS would have been $0.51, which would be way below expectations.

Moreover, THQ's net income came from the big game they released, Smack vs Raw or something like that. JAKK's management expects revenue coming from the THQ partnership to be down 20% in 2008. More worrisome to me is that I don't expect this revenue source (which is almost all clean profit) to be there over the long term, since WWE clearly doesn't want more business with JAKK (it handed over part of the business to Mattel already, with the contract starting in 2010).

The conclusions of all this is that JAKK is a SELL here at $28. Of course I'll keep it in the Watch List for a potential future re-entry.

Trading Plan:

SELL JAKK.

I did well in selling JAKK for the reasons I've sold (at $29.15), but they were so conclusive that I should have sold the stock short just before today's earnings release:

Jakks Pacific profit slips 73%
at MarketWatch (Wed 6:41am)

The stock is down 11.5% in the pre-market. Anyway, I'm glad that at least I'm not holding this one right now.

David,  Good call on this one.  I was never in it, did not like the sector.  Hope all is going well with you.  Good health and trading.

Poli