Good morning, ladies and gentlemen, and welcome to the JAKKS Pacific fourth quarter and 2008 earnings conference call. At this time, all participants are in a listen-only mode. Later, we will conduct a question-and-answer. Please note that this conference is being recorded. I will now turn the call over to Ms. Genna Rosenberg. Ms. Rosenberg, you may begin.

Thank you, operator. Good morning, ladies and gentlemen. This is Genna Rosenberg, Senior Vice President of Communications and Investor Relations for JAKKS Pacific. Thank you for joining our teleconference with management of JAKKS Pacific to review the results for the fourth quarter and full year of 2008 ended December 31, 2008. On the call today are Jack Friedman, Chairman and Co-Chief Executive Officer of JAKKS Pacific; Stephen Berman, President and Co-Chief Executive Officer; and Joel Bennett, Executive Vice President and Chief Financial Officer. Mr. Friedman will first provide an overview of the quarter and our operational results and then Mr. Bennett will provide detailed comments regarding our financial results. Mr. Friedman will then conclude the prepared portion of the call with highlights of our product lines and current business trends prior to opening up the call for your one-on-one questions. But before we begin, I would like to point out that any comments made about our future performance, events or circumstances, including estimates of sales and earnings per share for 2009, as well as any forward-looking statements, are subject to Safe Harbor protection under the federal security laws. These statements reflect our 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 our forward-looking statements. For details concerning these and other such risks and uncertainties, you should consult our most recent 10-K and 10-Q filings with the SEC as well as our company's other reports subsequently filed with the SEC from time to time. With that, I will turn the call over to Mr. Friedman.

Good morning, ladies and gentlemen. This is Jack Friedman. Thank you for joining us this morning to discuss our results for the fourth quarter and full year 2008. We achieved our capitalized guidance for the year with net sales increasing to $903.4 million, up from $857.1 million in 2007. For the quarter, we had net sales of $269.3 million compared to $285.0 million in the prior year. We continued to have top selling items in our portfolio that performed for JAKKS and our retail partners, including our award-winning EyeClops Night Vision Goggles, Girl Gourmet product line, Disney pretend play products and others, especially considering the overall retail environment and state of the US economy and believe we further strengthen our standing and important relationships with our retailers, licensors and other key stakeholders in our business. But we also experienced declines in some of our lines, including Pokemon, Care Bears and Hannah Montana. And we had an impact to earnings in the year due to the rising cost of raw material, labor, testing and development, and increases in TV advertising, all of which affected margins across the board and resulted in earnings of $76.1 million or $2.40 per diluted share for the year versus the $89.0 million or $2.77 per diluted share last year. For 2009 we have been implementing company-wide cost savings initiatives to reduce overhead as well as to improve our margins across every JAKKS division. We are pleased to have closed on three acquisitions in the fourth quarter, Tollytots, Kids Only and Disguise, executing on an important part of our growth strategy. After these acquisitions, we still finished the year with a strong cash position of $169.7 million. We have been working diligently on integrating these acquired divisions into our infrastructure and evaluating strategic cost savings in this area as well, as we seek to maximize profitability and while we do expect it to take time to fully digest and assimilate our recently acquired divisions, we will continue to evaluate other potential acquisition opportunities, while simultaneously executing on internal growth and cost savings initiatives. Our three new divisions, Tollytots, Kids Only and Disguise, will each contribute to JAKKS’ growth for the future. Tollytots has an extensive but focused line of leading licenses for baby doll accessory. Kids Only is a leader in licensed indoor and outdoor furniture based on popular licenses, and Disguise is an innovative and well respected Halloween custom company that also has strong synergies with JAKKS’ core businesses. We expect all these companies to be accretive in 2009. For 2009 and beyond, we will continue to be a value player with a major of our product lines retailing for under $20, offering consumers great play value for their money. Before I get into more details about our outlook for the future, I would like to turn the call over to Joel Bennett for a review of our financial performance for the fourth quarter and full year of 2008.

Thank you, Jack. And good morning, everyone. Fourth quarter 2008 net sales were $269.3 million compared to $285.1 million in the same period last year. Net income for the fourth quarter was $16.9 million or $0.55 per diluted share compared to $33.4 million or $1.03 per diluted share reported in the fourth quarter of 2007. Net sales for the year ended December 31, 2008 were $903.4 million compared to $857.1 million during the same period in 2007, an increase of 5.4%. Net income for the full year of 2008 was $76.1 million or $2.42 per diluted share compared to the full year of 2007 when earnings of $89 million or $2.77 per diluted share. Included in net income are tax benefits relating to FIN 48 and other tax adjustments in the amount of $13.3 million or $0.39 per diluted share in 2008 and $1.4 million or $0.02 per diluted share in 2007, and $9.1 million or $0.21 per diluted share in pretax non-cash charges relating to the write-down of certain of the company’s trademarks in 2008. Now for our sales by product categories. Worldwide sales of traditional toys, which include action figures, vehicles, electronics, plush, role play, dolls, kites, pull toys, and outdoor promotional products were $233 million for the fourth quarter of 2008 and $803.9 million for the 12 months ended December 31, 2008. This compares to $263.4 million in the fourth quarter of 2007 and $762.0 million for the full year of 2007. Sales in the fourth quarter were driven by our electronic toys, pretend play products, action figures, activity toys and dolls based on popular licenses, and our own internally developed brands, but were offset by declines in other lines in these categories, including Pokemon, Care Bears, WWE and Hannah Montana. Our craft, activity, and writing products,…

Thank you, Joel. For 2009, we have a solid, diverse lineup in our portfolio and have received an excellent response from our retailers, first at the Dallas Toy Fair last October and more recently in Hong Kong and at the high level meetings with our key retail partners. Media is also previewing the line this week in New York for the Toy Fair, and we expect JAKK products will top many hot toy lists again this year. The billion question is, exactly how will this year play out with consumers given what is going on with the recession affecting all America and especially discretionary goods, manufacturers, including toy makers. We are confident in our ability to weather the tough economy. But as I mentioned, we embarked on this year with an abundance of caution and strategies in place to enhance and maintain profitability. We will be working closely with our retail partners, watching and managing inventory shifting focused product that will keep JAKKS product on the retail shelves and moving. We have major new initiatives and meaningful line extensions in all our product lines that we expect to resonate with kids and make sense monetarily to parents. As families are traveling less and looking for value-driven products to keep kids occupied at home, we believe the JAKK portfolio is reflective of this trend. Our Girl Gourmet cupcake maker has been doing extremely well at retail since its 2008 launch, and we are expanding this area significantly for 2009 with new food play activity lines. Consumers have been responding to it, with Girl Gourmet having been a strong seller at retail during the holidays. Girl Gourmet Sweets is a make-your-own candy jewelry product line and the Girl Gourmet Cake Bakery expands on the microwavable mini-cup – mini-cake making with the line…

Thank you. (Operator instructions) Our first question comes from Luke Shagets from Sterne Agee. Please go ahead. Luke Shagets – Sterne Agee: Thank you. Good morning.

Good morning. Luke Shagets – Sterne Agee: Yes, just real quick, what is your expectations in terms of full year impact on the increase in amortization charges related to the new acquisitions? I know it’s $0.27 in the quarter, but what’s your full year expectation?

Incrementally about $5.5 million. Luke Shagets – Sterne Agee: Okay. All right. That’s all I have right now. Thank you.

Our next question comes from Todd Schwartzman from Sidoti. Please go ahead. Todd Schwartzman – Sidoti: Hi, good morning, folks. Could you first maybe just speak briefly to the rationale for the creation of the co-CEO position for you guys?

We think with the growth that we’ve had at JAKKS and we expect to continue growing, and we believe strongly there are opportunities out there for addition – accretive acquisitions. And this is Jack speaking. I’m a sales – or [ph] more involved in that area than the day-to-day business at JAKKS. And we think it’s a proper rationale for the type of business in the environment we are dealing with. Todd Schwartzman – Sidoti: Okay. And Steve, you had mentioned the increase in product testing cost for the quarter. I missed that. Could you repeat it please?

That was probably – that was probably in the – one moment. Yes. We had higher product development cost, which includes the testing in the quarter of $3.8 million and $11.6 million for the year. And for 2009 we are expecting additional testing cost in the range of $8 million to $10 million. Todd Schwartzman – Sidoti: So the $3.8 million, was that the year-over-year increase or was that the total for the quarter?

That was the year-over-year increase. Todd Schwartzman – Sidoti: Great. And how much did the three acquisitions increase SG&A?

Their run rate is about $27 million.

That’s before synergies, which take time to integrate into our operation. That’s – the $27 million is based on their 2008 SG&A. Todd Schwartzman – Sidoti: And that’s the three of them in the aggregate?

Yes, correct. Todd Schwartzman – Sidoti: And in terms of accretion, again, in the aggregate, can you give us a sense of what the bottom line contribution will be for full-year ’09?

No, not really at this point. But you opened up something I would like to mention, which is we are taking under the circumstance of the economy we are dealing with and various pressures, and frankly pressure from some of our retailers in terms of them maintaining margins et cetera, an extremely conservative approach which we think is proper. So we’ve kind of lumped everything together, discounting what potential sales are for the year and have not built in any further savings from integrating the acquisitions into JAKKS. So, once again, hopefully things will get better later in the year, but we are taking an extremely conservative approach, which we think is the proper presentation to the Street and proper for running our business. Todd Schwartzman – Sidoti: So that $2.25 guidance, does that include or exclude the impact of the acquisition?

It includes the impact of the acquisitions, but it doesn’t include any further savings later on in the year integrating those acquisitions. Todd Schwartzman – Sidoti: Any synergies above and beyond the 2008 numbers or the Q1 result?

There are certain – there are minimal synergies built into our forecast for 2009 overall, and we hope that these synergies will further increase during the year, but we are not building that into our model at this point. Todd Schwartzman – Sidoti: And your take on the economy that’s built into that guidance, assuming flat or things get a little worse from here?

No, it’s kind of built around where the atmosphere is right now and the economy. There is no build-in for a further decline or a better improving situation. Todd Schwartzman – Sidoti: Got it. Thank you.

You’re welcome.

Our next question comes from Sean McGowan from Needham & Company. Please go ahead. Sean McGowan – Needham & Company: Thank you. Joel, could you talk a little bit about the directional flow on some of the factors affecting gross margin in ’09, you know, component costs, labor et cetera?

Labor still continues to be an issue although we are striving to make headway on the raw materials part of the business. Beginning in 2008 we started to aggregate our commitment for components. And with the lower oil prices we have seen some prices come down. But in general, there are still cost pressures on the product side.

This is Jack, Sean. My further comment on that would be our CEI [ph] division, as an example, has seen a higher growth than other divisions. And our newly acquired divisions, all have had in the past lower margins than JAKKS has been accustomed to. And we are working very diligently to increase our margins, but for now – once again, I don’t want to keep saying it, but we are taking a very conservative approach to all areas of the business for 2009, including margins, including revenue and including conservative approach to synergies. Sean McGowan – Needham & Company: Okay. Joel, a commentary on what the tax rate is expected to be in 2009?

31.5%. Sean McGowan – Needham & Company: Okay. And the depreciation and amortization, do you think it will stay at that $7.4 million rate for the quarter?

Incrementally, on top of – we will have about $5.5 million for the year, which is about $1.8 million for the quarter – I'm sorry, let’s see. I’m sorry. Actually the number is $6.4 million, not $5.5 million. About $6.4 million incrementally for the acquisition-related assets on top of what we had this year was about $26 million. So it will be in the 32 to 33% – 32 to $3 million [ph] range for 2009. Sean McGowan – Needham & Company: Okay. And last question, could you – would you mind going over – you mentioned one-time tax benefits and some one-time charges, and just a little quick, would you mind going over that again?

Sure. FIN 48 benefits was $13.3 million. It was about $0.39 per share. Sean McGowan – Needham & Company: That’s for the year?

For the year, correct. And there wasn’t any in the quarter. We had written off some trademarks in 2008, which was $9.1 million. And that was I think $0.18 per share. Sean McGowan – Needham & Company: Okay, thank you.

And lastly, for the quarter, the JV was down about $5.5 million. Sean McGowan – Needham & Company: Right. Okay, thank you.

Thank you.

And we thank you all very much for your time. And I’d just like to add one more highlight. Our EBITDA remains strong. We have an extremely strong balance sheet for our size. We have a strong cash position. And I said it earlier, but we are diligently looking at further opportunities in this tough marketplace of continued growth to JAKKS through acquisitions and internal growth. And with that, I thank you all very much. Have a good day.

Thank you. Ladies and gentlemen, this concludes today’s conference. Thank you for participating. You may all disconnect.