Good afternoon, everyone. Welcome to the JAKKS Pacific First Quarter Earnings Conference Call with management, who will review financial results for the quarter ended March 31, 2020. JAKKS issued its earnings press release earlier today. The earnings release and presentation slides for today's call are available on the company’s website in the Investors section. On the call this afternoon are Stephen Berman, Chairman and Chief Executive Officer; and John Kimble, Chief Financial Officer. Mr. Berman, will first provide an overview of the quarter along with highlights of product lines and current business trends and a discussion of the impact of COVID-19. Then Mr. Kimble will provide detailed comments regarding JAKKS Pacific's financial and operational results. Mr. Berman will then return with additional comments and some closing remarks, prior to opening up the call for questions. [Operator Instructions] Before we begin, the company would like to point out that any comments made about JAKKS Pacific's future performance, events or circumstances, including the estimates of sales and-or adjusted EBITDA in 2020 as well as any other forward-looking statements concerning 2020 and beyond, are subject to 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. In addition, today's comments by management will refer to non-GAAP financial measures such as adjusted EBITDA. Unless stated otherwise, the most directly comparable GAAP financial metric has been reconciled to the associated non-GAAP financial measure within the company's earnings press release issued today or previously. As a reminder, this conference is being recorded. With that, I would like to turn the call over to Stephen Berman.

Thank you, and good afternoon everyone, and thank you for joining us today. I want to start by saying that we recognize that everyone in the world is managing through a difficult time, something we've never seen before and we're doing everything we can to keep our people safe, our business intact, and our prospects bright. We have an incredible team at JAKKS. During this time of tremendous change, our employees have done an incredible job to create opportunities, preserve our resources and keep the company on track. Before COVID-19 was even identified as a pandemic, we have been taking steps to keep our employees safe, our supply lines open and our business running as smoothly as it can, with everything is changing by the hour. Obviously, we're all experiencing fluctuations which bring great uncertainty. JAKKS Pacific was founded 25 years ago. And I can say that we have never operated in an environment that has changed so rapidly. But I have never been so proud of our people for all they're doing to find ways to preserve and excel. It has been less than three months since our last conference call. At that time, the big question was, when will our agents, suppliers be back to normal production? Now, we're all asking ourselves, when will anything be normal? While in many ways everything is different, in some ways they are the same. JAKKS has been built on the idea that a strong collection of evergreen products and brands supplemented by opportunistic promotional initiatives can do well and we continue to see that. Our sales were down a modest 6% in the quarter compared to last year, but we see several areas of strength and our retail POS remains encouraging led by Frozen 2 and Disney Princess Role Play, Dolls…

Thank you, Stephen and good afternoon everyone. Net sales for the 2020 first quarter was $66.6 million, down 6% compared to $70.8 million last year. Reported net loss attributable to common stockholders for the first quarter was $12.3 million, or $0.41 per basic and diluted share compared to a net loss of $29.2 million, or $1.24 in the first quarter of last year. As a reminder, certain elements of our capital structure are mark-to-market quarterly based on a few factors inclusive of our share price. But net loss in Q1 2020 includes non-cash gains totaling $9.8 million, reflecting changes in the fair value of our convertible senior notes and the derivative liability associated with our preferred stock. By comparison, the net loss in the first quarter of 2019 also included changes in the fair value of our 2020 convertible senior notes but also a number of charges related to our 2019 recapitalization process. Excluding the impact of such charges as well as stock compensation expense, our adjusted net loss attributable to common stockholders in the first quarter of 2020 was $21.9 million or $0.72 per basic and diluted share, compared to a loss of $23 million or $0.98 per basic and diluted share in the first quarter of 2019, an improvement of $0.26. Adjusted EBITDA for the 2020 first quarter was negative $13.9 million compared to a negative $17.1 million in the first quarter of 2019. Our girls targeted business was strongest during the quarter inclusive of Dolls, Role Play and Dress Up Toys, girls toys was $39.2 million in Q1, up 35% compared to $29 million in the first quarter of last year. As was the case in the fourth quarter, the big driver was Frozen both toys related to Frozen 2 which was released in theaters late in…

Thank you, John. Looking towards the second half of the year, there's obviously a lot of uncertainty about the state of the economies around the world. How quickly retailers will bounce back once they reopen, what affect the current high levels of unemployment will have on the consumer spending if people started going back to work very soon, and how long the changes in consumer buying behavior will persist. That said, we’re managing our inventory positions tightly. We're working harder than ever on SKU efficiencies, and managing tooling and product development spending. We remain laser focused on staying flexible and adaptable to changing market conditions around the world, while being good long-term stewards of our investor's capital. At the same time, we have spent considerable time and energy over the past quarter, staying connected with our network of suppliers, customers, licensors and other business partners to be helpful wherever we can and remind them that we’re there to be problem solvers for them particularly during this unusual time. What we have in our favor are evergreen products based on established play patterns, strong relationships with the world’s best kids intellectual property companies, retail customers that are strong enough to survive these challenges, manufacturing partners that are some of the best in the world and a single site U.S. distribution facility that was built to meet the challenge of getting goods to retailers, and individual customers rapidly. To elaborate number one, relevant lasting play patterns. Our products are based on Play patterns that have been proven over many decades to be fundamental activities for kids around the world. Role Play, Dress Up, Doll Play, Vehicle Play, collecting, plush and otherwise outdoor fun and activity arts and crafts. Number two powerful licenses, our licensing partners are responsible for some of the most…

[Operator Instructions] Our first question comes from the line of Stephanie Wissink from Jefferies. Your line is now open.

This is Ashley Helgans on for Steph. Thanks for taking our questions. We're wondering if you could break down the gross margin improvement, how much was related to cost restructuring and how much related to product mix benefits?

Sure, it's John, I'll take that. You're looking at it year-over-year is your question?

Yes, please.

Because we did roll backwards a little bit from last quarter. I mean really from an overall point of view, it was really much more driven by product cost improvement more so than anything in our restructuring program. Our royalties are up a bit year-over-year in that area. But we still had good expansion from a product margin point of view, as it relates, especially to our newer products. Part of our slipping back from where we were last quarter was moving out some of that older product at a more discounted rate.

Okay, great. Thank you. And Stephen, if I could just have one for you. You mentioned the potential for new licenses. Are you seeing some opportunities from a big company to make it through this disruption?

Thank you, Ashley. It goes both ways. We've been very opportunistic in entrepreneurial working with our retailers and with our licensors due to this disruptive period, there's many companies that are having some major issues whether teetering bankruptcy or are in that process of being bankrupt. So, we've been working diligently and daily and hourly on many new opportunities that’s out there. So we're excited about that. And during these unprecedented times, even though it's a very sad and disheartening time for families and the world, there is opportunity there if you're staying nimble in the head of things and we seem that we are and licensors and retailers have been backing some hopeful new opportunities going forward. So yes, we've been very aggressive on that.

[Operator Instructions] Our next question comes from the line of Gerrick Johnson from BMO Capital Markets. Your line is now open.

Just wondering how the conversations are going right now with retailers as they plan for the fall. Are they thinking about pushing back set dates or what kind of conversations are happening at this point, I know there's a lot of uncertainty but right now how are they feeling about the back half and holiday?

So for the ones that are currently called the retailers that are out there that have groceries or necessities such as the Amazon, the Walmarts, the Walgreens, the Myers, the Costcos and so forth, CVSs and so on, they’re planning as normal. The set dates that the normal set dates that we normally have for fall are still planned as set dates. What has changed are different dates that were for movie launches that are either been pushed out or delayed. So those dates have either been canceled or changed appropriately based off of movies i.e. Mulan is coming out, I believe it's in July now. So coming out in the first quarter and we changed for those appropriate timetables, but for the call it the Halloween set dates that we have, those are all been still set and in place, people are just taking a more cautious view on ensuring that that they have the right inventory and have been focused on called the real selling patterns and selling properties versus taking risk on items that may not have a win to it. They'd rather take a conservative approach. So the basic businesses that we're in, and all the platforms of the outdoor furniture, the foot to floor ride-ons, the ball pits, the Evergreen areas are consistent with the normal set dates that we've had. And then anything new is just being moved around and dealt with by individual retailers. The ones that are changing are the ones that have been closed during this period of time called the specialty retailers throughout the U.S. and around the world, you have Smith's in the U.K. that close down August 6 and opens up again in July. You have had Ross, TJ Maxx. So those ones are just adapting as getting ready for back to school and they have planned everything as normal for the holiday season but also taking a cautious approach and being very opportunistic of positive initiatives. If there's opportunity they want more goods. If things aren't - are slowing, they want to be able to back off of goods.

So is this expediting that that shift to domestic that we've been seeing over the last couple of years? Are we going to be even more domestic fulfillment this year? Is FOB dead? Or how do we look about that kind of fulfillment?

Well for JAKKS, FOB is alive and well. And I think we maybe even picked up slightly on a percentage basis of being more FOB on a percentage basis this year than we did last year. It's stuff that we started since inception for the major customer or major manufacturers that do domestic inventory. It's going to be much more of a domestic focus but specifically for us like JAKKS, our Halloween businesses, at least 70% plus FOB and that hasn't changed. And our third quarter, which is an FOB quarter majority is still our largest quarter. So for JAKKS Pacific, it's really an FOB business this year as it always has. But we're trying to turn it much more on an FOB. So we have less liability going into the fourth quarter and having inventory needs domestically for the retailers.

Okay. And then at retail, we've seen strength in those specific categories and other categories have been rather weak. Are you now seeing as we progress along? Are we seeing more broadening of retail performance in other categories?

Certainly, I think it's consistent to what's happened during the first four months of the year. It's the areas that have done well call it the games, the puzzles, the activities, like our ball pits, our table and chairs, our daily role play business has been very solid. But I think we're going to need to wait till the holiday - summertime, when birthdays come about and we're out of this very depressing environment at home when people start celebrating a little bit more with birthdays and a little bit more of these events, you'll see that some of the normal toy business come into effect. But I do believe the medium price points to lower price points during this time is much more feasible to consumers versus the higher price points that we've seen in the past. So we're seeing at least for us a much better uptick under lower price points, or average price points versus the higher price point product.

Okay. And retail inventory? How does your inventory look at retail right now?

I'm going to let John, I don't have the data in front of me. At retail? I don't know if we have, I don't have that right, inventory right now is down. I don't have the exact percentages if you need, our Walmart inventory is down 60%, Target 41% on our boys business. This is all I have right now in front of me, Gerrick but if you can get back to me, I can get back to you or we can do it offline call and give you much more detail.

At this time, showing no further questions.

Everybody, thank you for the call today. No, we have offline calls with several people that have been scheduled and booked, but please, everyone that's on the call, stay healthy and well, and look forward to having our call in July for our second quarter earnings and focusing on the second half of 2020. Everyone please stay healthy and well and thank you very much.

Ladies and gentlemen, this concludes today's conference call. Thank you for participating. You may now disconnect.