Good morning, ladies and gentlemen. Thank you for joining the JAKKS Pacific Fourth Quarter and Full Year 2012 Earnings Call with Management. Today, JAKKS will review the results of the fourth quarter and full year ended December 31, 2012, which the company released earlier this morning. On the call today are Stephen Berman, President and Chief Executive Officer; and Joel Bennett, Executive Vice President and Chief Financial Officer. Mr. Berman will first provide an overview of the quarter and the full year, and then Mr. Bennett will provide detailed comments regarding JAKKS Pacific's financial and operational results. Mr. Berman will then conclude the prepared portion of the call with highlights of product lines and current business trends prior to opening up the call for your questions. [Operator Instructions] Before we begin, the company would like to point out that any comments made by JAKKS Pacific's future performance, events or circumstances, including the estimates of sales and earnings per share for 2012, as well as any other forward-looking statements concerning 2013 and beyond are subject to the Safe Harbor protection under Federal security laws. These statements reflect 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 forward-looking statements. For details concerning these and other such risks and uncertainties, you should consult JAKKS' most recent 10-K and 10-Q filings with the SEC, as well as the company's other reports subsequently filed with the SEC from time to time. With that, I'll turn the call over to Mr. Berman.

Thank you for joining us today. With the backdrop of a fairly challenging season for the toy industry and the global economy overall, weaker-than-expected product demand during the holidays led to a lower-than-expected results for fourth quarter and full year 2012. However, our core business remains strong. Our products in Traditional Toy segment, such as Infant/Pre-school, Seasonal, Dress-Up, and Role Play and Halloween continued to perform at retail and remained our areas of strength. The world is changing and JAKKS is changing along with it. We have experienced such excitement and receptiveness on our DreamPlay technology initiative. What we have shown on the iD image recognition and DreamPlay technologies, combined with toys and kids consumer products, has been nothing short of redefining the boundaries of the physical and digital toy play. From retail partners in the U.S. and internationally, to our licensing partner, Disney, as well as some of the biggest toy and consumer product companies and brands in the world, there is a strong belief in the long-term adoption by children and adults of this technology. We believe that toys and technology have to change to adapt to the way kids play today, as kids gain more and more access to smart devices. By applying the technologies to a broad array of characters and play patterns, we believe we will create a new consumer demand for our toy products. Through the DreamPlay venture, we aim to achieve substantial long-range growth and profitability, warranting the investment in this technology and content that we are making. 2013 will be a period of focused transition as we build the infrastructure for our DreamPlay venture, while also continuing to execute on our core business strategy of organic and external growth. We have added to our core business a number of new brands and licenses that we are launching this year that we feel show great promise. We are keeping a tight rein on our operational expenses, starting with a meaningful internal restructuring. Our outlook for 2013 remains cautiously optimistic as we invest for the future and begin to rollout our plans with exciting growth opportunities in 2014 and beyond with our DreamPlay initiatives, as well as our continued focus on capitalizing on our international distribution growth opportunities. While we recognize that it's critical for us to provide new, exciting and magical experiences for today's wired families, we will not deviate from our core business strategy to offer a diverse portfolio of evergreen products that support traditional play patterns and products that remain core to our business. I would now like to turn the call over to Joel Bennett to review our financial results for the fourth quarter and full year of 2012, and then I will give a further update on our business this year and beyond. Joel?

Thank you, Stephen, and good morning, everyone. Net sales for the fourth quarter of 2012 were $133.5 million compared to $141.1 million reported in the comparable period in 2011. The reported net loss for the fourth quarter was $119.5 million or $5.45 per diluted share, which includes $800,000 of pretax charges or $0.03 per diluted share related to financial and legal advisory fees and expenses associated with the unsolicited indication of interest and activist shareholder activities, and onetime noncash charge of $91.7 million related to the impairment of deferred tax assets. This compares to a net loss of $20 million or $0.77 per diluted share reported in the comparable period in 2011, which included $1.9 million or $0.05 per diluted share of financial and legal advisory fees and expenses. Excluding the legal and financial advising fees and expenses and the deferred tax impairment charge, the 2012 fourth quarter loss would have totaled $27.2 million or $1.24 per diluted share, compared to a loss of $18.8 million or $0.72 per diluted share in 2011. Net sales for the full year of 2012 were $666.8 million compared to $677.8 million in 2011. The net loss reported for the full year was $104.8 million or $4.37 per diluted share, which included $4.8 million of pretax charges or $0.16 per diluted share of financial and legal advisory fees and expenses and the deferred tax impairment charge. This compares to net income for the full year of 2011 of $8.5 million or $0.32 per diluted share, which included $3.8 million or $0.04 per diluted share of financial and legal advisory fees and expenses. Excluding the financial and legal advisory fees and expenses and the deferred tax impairment charge, the 2012 full year loss would've totaled $9.3 million or $0.39 per diluted share, compared to earnings…

Thank you, Joel. Despite a challenging year we had, we're optimistic in the future of JAKKS. Our diverse product portfolio is built on core, evergreen products that make up a large part of our business and remain solid with little fluctuation. Our Toddler and baby dolls, Dress-up and Role Play, Infant/Pre-school products, such as our foot-to-floor ride-ons and activity tables, outdoor seasonal products and Disguise Halloween Costumes had terrific sales in 2012. We also had nice success with a few of our own JAKKS brands, including Power Trains. These are examples of back-to-the-basic products that resonate with consumers every year on our less per age to age compression and to the rapid changes in children's play patterns. We are also pleased with the success of our international business in 2012, with a record full year sales. Securing license for international territories continue to be a priority. China represents a big growth opportunity, and we recently met with one of the largest Chinese retailers to expand our distribution in this territory. There's a great incremental sales potential in this region in 2014 and beyond, and we are focused on expanding licensing rights where appropriate in Asia. Again, 2013 will be a year of transition for JAKKS. We will continue to consolidate operations to gain efficiencies and lower occupancy costs and enhance profitability in the short term with the closing of our New York office and moving our Maui division into our headquarters. We recently completed a meaningful internal restructuring, and we believe our worldwide team today has the drive, passion and creativity to move our business forward. We are optimistic that their efforts, aligned with our focused long-term strategy and investment discipline, will produce strong, creative product lines and financial results for our company. We remain focused on our brand management…

[Operator Instructions] Our first question comes from Ed Woo from Ascendiant Capital.

I had a question in terms of the holiday sales. Was it pretty much broad weaknesses in the U.S. and international?

Ed, actually, what occurred for us, actually, it's been over the last 2 years, they've done some back-trailing of the data. And for the last 2 fourth quarters over the last 2 years, the trailing of demand has been both in the U.S. and call Western European territories, but more so in the U.S. And what we realized from 2011 and 2012, the holiday seasons are coming earlier with the layaway programs and all the incentives that retailers are doing. And then there's a big break prior to the holiday period where the consumer comes in at the last week for the demand. And it's happened both, not just in toy, it happened in back-to-school, we've seen it. And in Halloween, people waiting to the last moment. So what we see is Christmas from years past, it's not the same anymore at retail. And we've seen it from our other competitors on the fourth quarter basis. So we've planned that going forward, that fourth quarter in this new environment isn't the same way fourth quarter used to be years past. It's -- with the layaway programs and the discounting, it's a different methodology that consumers are using for the fall period, and we are planning for that now. It's the new way of retail shopping versus years past.

Okay. And then also in terms of -- it seems like Monsuno has performed a little bit better in international. What about some of your other recent licenses? Do you think that there is any big differences between the performance of either your licensed properties or some of your own internal brands?

Thank you. Great question. The 2 biggest components that we're -- that did less than our expectations, and it was more for the U.S., Monsuno has performed terrific overseas is was -- it did perform to our expectations in the U.S. The animated series which is on Nickelodeon, was not stripped and ended up being on, I think, it was a Saturday morning time slot, which wasn't very conducive for kids to watch. So the expectations we have in the U.S. weren't -- they didn't achieve our high-end goal. And the same thing occurred with the Winx Club that the immediate sales in spring or the mid part of the year were terrific, but the programming changed. Those are the 2 biggest areas that we spent the most amount of media, so those 2 areas are really the components of the lower sales. All of our normal -- not all. Majority of our normal, basic business is extremely solid from our foot to floor, which is the Moose area, from our Kids Only!, from our Toy division, to Disguise, to CDI, to our basic business in Power Trains, MXS, our 31-inch figures, but those are the 2 major areas that really affected us in fourth quarter. And what we realized is, what we've always said in the past is going back to the basics of the singles and doubles, which has been the core asset of our business. Keeping that in mind, we do need to adapt our business to go into the areas of where children are playing, and they are playing more and more from a younger age from 18 months, which are smart devices, and the engagement and initiative that we're doing with NantWorks and DreamPlay is the direction we're going with our core business as well. But we're not taking any big bets as we did last year by focusing on the Monsuno and/or Winx.

Okay. And then one last question on DreamPlay. [indiscernible] a lot of news about your partnership with Disney on DreamPlay, but what about using it for your own toys? Will it be as big this year or...

This year, it's going to -- again, it's a transitional year. We are developing a line with Disney. It's really exclusive to the products that we use with Disney, so we -- they have a movie launch or DVD lunch, which is the Little Mermaid, and which we are focusing the DreamPlay technology on. And yes, we are working internally for 2014 on some beautiful, amazing segments of ours that will enhance the play pattern, as well as working with 1 or 2 of the top largest toy companies in the world, utilize our technology with them, as well as some very top 100 CPG companies. So we are -- the 2013 is the year of building the contents and focusing on the first launch, which is with 3 of the top retailers in the U.S. and 1 abroad, and then it'll have a full launch in 2014 and '15.

Our next question comes from Drew Crum from Stifel, Nicolaus. Andrew E. Crum - Stifel, Nicolaus & Co., Inc., Research Division: So I want to go back to DreamPlay. What's contemplating guidance for 2013? Not specific numbers, but can you talk about what you're expectations are? And who is taking on the cost of the content development? And if it's you, what type of investment does that entail?

Okay. So on the content development, we have a content development in-house team that is doing all the animation for the DreamPlay product. But -- so for JAKKS and DreamPlay itself, we'll utilize that, that content. And if anyone that is a licensing partner that needs to utilize that content, they will end up paying for that content for the use on their product. And/or if we develop new content for a, call it, a licensee of the technology, we will create that content in house and charge them for that content. It'll be an annual licensing model and content development model, and fees and development cost and royalties were all-inclusive. What was this? The first part of the question, Drew? Andrew E. Crum - Stifel, Nicolaus & Co., Inc., Research Division: Just wanted to get a sense as to what you're contemplating as far as revenue contributions to guidance? And what's contemplating guidance from DreamPlay?

As we're launching it this year more so in the U.S. and one other territory, the amount of revenue is nominal, and then also on the license product, then we don't break out what that product category of value is, as we don't break out what each license does. But it is being launched in 4 areas during October sets, and it is a launch always starting from October, then ongoing and spreading through 2014. So it's not a dramatic -- it's not a small piece but it's nominal to the overall number. Andrew E. Crum - Stifel, Nicolaus & Co., Inc., Research Division: Okay. And Stephen, if we go into Toys"R"Us or Target, where are we going to see DreamPlay? Where in the store will it be placed?

I won't use which stores, but on the stores, it'll end up having its own section with its own POP and display. It'll have the call to actions. And another exciting thing is regarding the actual iD app, which -- this is -- there's a lot that goes on with this for iD. It's -- that actually is being placed on Verizon as a -- which we have a very strong partnership, where be a iD featured in Verizon, Android app store. We're anticipating that the iD app will be preloaded in the second half of 2013, with new features that combine a lot of new technologies being developed by NantWorks. We also are in discussions with other U.S. carriers to have this application ready for distribution for consumer adoption. So there's a lot that goes with this. It's not just a technology of augmented reality. That is actually just a small component of it. It's much different to other technologies. It's vastly different. There are strong patented claims that have already been issued to the NantWorks Group. The technology is significant. It goes beyond the world of augmented reality. We developed a platform providing a variety of technologies, such as image recognition, video, audio, speech recognition and working on 3D recognition with tracking systems. And this is all being combined in this powerful recognition technology that allows operators, brands, retailers, marketers and consumers to gain -- to really engage with the physical and digital worlds seamlessly. Andrew E. Crum - Stifel, Nicolaus & Co., Inc., Research Division: Okay. And Joel, I just wanted to ask a question about the internal restructuring you referenced. Can you put any numbers around that? What that entails?

It was about a 10% headcount reduction that we implemented beginning in October. About 15% of overhead in terms of dollars. Andrew E. Crum - Stifel, Nicolaus & Co., Inc., Research Division: Okay. And when will we begin to see that full impact? Do we see any in the fourth quarter? When do we start to see the impact?

It was neutral the last year, we'll see the biggest impact in March. With the layout, we have severance and some other separation costs. So the initial impact -- the annual effect was greater than the actual contribution in '12.

Our next question comes from Sean McGowan from Needham. Sean P. McGowan - Needham & Company, LLC, Research Division: I also have a couple of questions. Let me start with some housekeeping. So Joel, the bank line that you have in place, if I remember correctly, that expires in April. Is there any news on extending that or renewing or replacing it?

Yes. We're in the process of doing a renewal on that with Wells Fargo. Sean P. McGowan - Needham & Company, LLC, Research Division: Okay. And where does that -- I would imagine that some of those receivables have been collected. Has that bank line been paid down from the level that it was at the end of December?

Yes, it's -- I think we paid in the low-20s. But basically, again, the line was obtained to balance the U.S. cash demand in light of the fact that a lot of the cash was in Hong Kong to avoid the repatriation. So our overall liquidity is well over $100 million, but we do expect to use the line fully to manage the tax. Sean P. McGowan - Needham & Company, LLC, Research Division: And should we expect that...

Point where in the -- so it's probably a little less than $50 million at this point. Sean P. McGowan - Needham & Company, LLC, Research Division: Okay. And would we expect that the line, if it's renewed or replaced or whatever, would be about the same size or larger?

No, it should be about the same. Our needs were well-sized in the original deal, so we'd expect it to be the same. Sean P. McGowan - Needham & Company, LLC, Research Division: You mentioned in the release in the prepared comments impact in the first quarter of actual expenses tied to Maui. Can you help us understand what the revenue contribution might be? I mean, I would imagine that Maui being outside toy -- outdoor toys would kind of have a pretty good contribution in the first half of the year. Can you talk a little bit about that?

Yes. Generally, that'll pick up in the second quarter, so we'll have the full quarter effect of their overhead and their biggest core is actually second and third quarter. Sean P. McGowan - Needham & Company, LLC, Research Division: Okay. So not that much in the first quarter?

Correct. Sean P. McGowan - Needham & Company, LLC, Research Division: Okay. And turning back to something that Stephen had said. In some way, what you were saying was the weakness or the surprise, the negative surprise was in Monsuno and Winx Club, and I can understand that. But your role-playing toys were actually down more than traditional, so can you talk a little bit about where the weakness is in the Role Playing side?

Yes, that's right. If you go to the impact of Q4, that is where we got the biggest effect of, call it, the major impact. The part of the Role Play which was down was pretty much Novelty, which is all the, call it, the impulse purchases. That was where we felt that the most of the CDI, but the overall CDI Role Play business is extremely strong. Novelty was part of the Role Play business, so you know. Sean P. McGowan - Needham & Company, LLC, Research Division: Again, jumping back to Joel for a second. So what happens in terms of the optics of how taxes get treaty going forward? Is it basically no provision going forward, or will you be...

Oh, no, no, no. We are -- again, with the restructuring, we will be profitable. Beginning in the U.S., it was a fairly -- the decision to write off the DTA was based on recent historical results, as well as the future forecast. But all it does is clean up the balance sheet as far as that goes, so we will have a provision going forward. The tax rate including adjustments is expected to be about 18.5% in 2013. So we are profitable. We're projecting profitability in U.S. and Hong Kong in '13. So we will have a provision. In terms of the write-offs, we actually will still be benefiting from the cash flow of the deferred tax asset. It's just that in terms of balance sheet presentation, we don't have it on the balance sheet [indiscernible]. Sean P. McGowan - Needham & Company, LLC, Research Division: Right. I would figure that. So it's really just getting in a noncash asset off the balance sheet, right?

Correct. Sean P. McGowan - Needham & Company, LLC, Research Division: Okay. Last question, and in fact, to Stephen. On the DreamPlay products, I know you've described the technology itself but not having been able to see any of these products, I still don't quite understand what the play is. I understand that it's not augmented reality to at least to the specific degree I can, but can you give us some examples of what the play is and how that's different? I mean, because right now, I'm sitting here thinking, I got a kid holding a tablet who looks at a toy through the tablet and he sees some animation going on, but I don't get a sense of what the play is.

Okay, that's a fair question. And so the DreamPlay -- let me give you the experience that it pretty much includes, and I'll give you from at-home and retail, and this suggests a hard description verbally, but I think you'll get a good understanding. So at home, the experience includes an ability to unlock an interact with a physical toy inside the digital game, inside a digital world. So an example, you use your smart device and use the mobile camera using the iD image recognition technology. I'll use an example on the mermaid. You'll point it at a mermaid doll and having that, it will unlock a total interactive inside a DreamPlay application. So the child can have enhanced game play that emerges in the physical and digital world. So there's various entertainment values from a really wonderful gamification to values of education, to values of complete virtual world that the kid can actually have a virtual object and play with a bunch of different physical product in that digital world and be able to videotape it, share it socially, edit it and so on. And so there's a whole platform that develop. It's been developed for years and years to the networks technology that we've actually created more of a real kid interactive ability. So what we've done and watching the kids play, it's magical. And the people that we've seen, Sean, and I know it's -- I know for me -- you said it's frustrating not to see it. Everyone that's seen this whole ecosystem have signed NDAs from the largest retailers in the U.S. and around the world, from some of the biggest consumer product companies in the world, the top 100 companies, from licensors, even from banks. So this is something that we are keeping very close. We are -- we don't just believe in it. The partners believe in it. And then there's the in-store activity. So let's say, your shopping with -- a parent shopping with their child or not, the in-store activities include the ability to point at a DreamPlay product, which enable the signage called the POP in-store, which will show you the whole try-me demonstration by video and/or by an animation, if we so choose, which will overlay a rich interactive content for shoppers. So it can actually demonstrate what this product does at home, and it'll show the value of the DreamPlay-enabled toys. Sean P. McGowan - Needham & Company, LLC, Research Division: Okay, sounds like everybody seen it but us, so I'm looking forward to see it.

Okay. Thank you. And everybody, we appreciate the time for the call today, and thank you very much.

Thank you, ladies and gentlemen. This concludes today's conference. Thank you for participating. You may now disconnect.