Good afternoon everyone. Welcome to the JAKKS Pacific Fourth Quarter 2022 Earnings Conference Call with management, who will review financial results for the quarter ended December 31, 2022. 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. Stephen will first provide an overview of the quarter and full-year, along with highlights of the product lines and current business trends, then John will provide some comments regarding JAKKS Pacific's financial and operational results. Stephen 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, margins, and/or adjusted EBITDA in 2023, as well as any other forward-looking statements concerning 2023 and beyond are subject to Safe Harbor protection under federal securities laws. These statements reflect the company's best judgment based on the current market trends and conditions today and are subject to certain risks and uncertainties, which could cause the 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 report 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 and adjusted earnings per share. Unless stated otherwise, most directly comparable GAAP financial metric has been reconciled to associated non-GAAP financial measures within the company's earnings press release issued today or previously. As a reminder, this conference is being recorded. With that, I would now like to turn the call over to Stephen Berman.

Thank you. Good afternoon everyone and thank you for joining us today as we recap the quarter and year and share our thoughts about what we’re seeing in the months and quarters ahead. Our fourth quarter sales ended up slightly exceeding our expectations, despite our exceptionally strong results early in the year. Our fourth quarter net sales totaled 131.9 million, bringing our full-year net sales to 796.2 million, the highest annual results since 2014. As we anticipated, sales were down 30% in the quarter, compared to the same quarter last year, largely attributable to our prioritizing FOB selling early in 2022 and the related changes and seasonality of our business. Our full-year growth was driven by a combination of key SKUs across our major brands. In our Nintendo business, both our Mario Kart 24-volt Ride-on Racer and Let's Go, Yoshi Interactive action figure had great launches. Our Sonic Movie 2 Speed RC had a tremendous year. Our Disney Princess Style Collection kitchen and suitcase continued to deliver. In addition, we had two strong entertainment led product lines for Disney's Encanto and SEGA, Sonic The Hedgehog. I'm happy to report that in total 7 of our top largest toy consumer product segments grew in calendar year 2022. We had a very strong holiday season led by key SKUs across our major brands. And our Disney's Encanto Magical Casa Madrigal we've discussed before, but is worth bringing up again, it's been such a great item for us. And as we stated on our call, 2022 was our largest selling year with the Sky since the acquisition in 2008. We finished the year 148.9 million in net sales, a 38% increase over 2021. In reviewing the year, customers clearly chased the Halloween holiday, in a couple of cases a bit too much, which…

Thank you, Stephen, and hi, everybody. As regular listeners know, there's a greater level of granular detail included in our release today, but I'm going to be selective in what I highlight here towards what I think merits a focused attention. We're pretty happy with how the year ended from a shipping perspective delivering the 20% top line growth we talked about last quarter and doing so for the second year in a row. As Stephen alluded to, we saw similar trends as others in the industry as it relates to consumer sell-through at retail, inclusive of a bit more of the traditional rush in the last couple of weeks. The shelves could have been a bit more empty on 12/31. We don't think we distinguished ourselves to the negative on that front, which is helpful from a big picture point of view. Gross margin is clearly an area where we were experiencing more challenges. Being proactive as it relates to cleaning up inventory is something you pay for here, especially in a smaller shipping quarter. Royalties continue to run a bit higher as expected. Our tooling amortization is trending up a bit. We've talked about CapEx being up a bit this year as we duplicated tools on some lines to chase demand. One of the bigger expense areas here is from lack of warehouse productivity to geek out on it briefly. In-bound freight and a portion of warehousing is capitalized to product and that math is driven in part by how much we'd spent on warehousing during the year and also how much product we're importing during the year. When you consider how we've been trying to work down inventory since the beginning of last year and we experienced higher warehousing expense this year dealing with the supply chain…

Thank you, John. I want to turn now to talk about some of the key areas we're focusing on this year. In our action figure and collectible business, we are extremely excited about the new Super Mario Bros. Movie from Illumination and Nintendo launched in theaters, April 5. The team has created an entirely new [indiscernible] scale with greater articulation in conjunction with the movie, along with micro figures and playsets and a 7-inch Fire Breathing Bowser. All that product and more is hitting shelves now. We are extremely excited for fans to see the movie and the product. And if our experience with Sonic the Hedgehog is any indication, the entertainment will bring new fans into the franchise to discover both our movie product, as well as our deep catalog of Super Mario toys we've been building for several recent years. We are expecting some great things with Nintendo this year. That's not to say we have forgotten about Sonic in the slightest. The new Sonic Prime episodic programming started on Netflix in December and has been a great success. We have related products launching this fall, coordinated with an additional drop of content. We were really pleased with the Sonic's performance in Q4 and how the product line will continue to expand this year, supported by new content development. And this team in particular is always aggressively looking out for new opportunities, which at this point would be 2024 and beyond. But watch the space for more news here. Our Dolls, Role Play and Dress Up segment is coming off a massive year led by growth in Disney's Encanto, Disney Princess Dress Up, and the Disney Princess Style Collection. For those of you that know the business, we have some difficult comps year-over-year in this area, but there…

Thank you, ladies and gentlemen. We have a lineup of calls after this one. So, we appreciate everyone that were on the call today and who we'll be speaking to after this call. And we look forward to talking to you after our first quarter is completed and during our first quarter earnings. Thank you again.

And this concludes today's conference call. Thank you for participating. You may now disconnect.