Good afternoon, everyone. Welcome to JAKKS Pacific Q1 2022 earnings conference call with management, who will review financial results for the Q1 ending March 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. Mr. Berman will provide an overview of the quarter, along with highlights of product lines and current business trends. Then Mr. Kimble will provide detailed comments regarding JAKKS Pacific financial and operational results. Mr. Berman will then return with additional comments and some closing remarks prior to opening up the call for questions. You are placed on mute for the portion of the call. If you would like to be placed in the queue to ask a question, please press star one on your telephone keypad. Before we begin, the company would like to point out that any comments made about JAKKS Pacific future performance events or circumstances, including the estimates of sales and adjusted EBITDA in 2022, as well as any other forward-looking statements concerning 2022 and beyond, are subject to safe harbor protection under federal securities 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 the forward-looking statements. For details concerning these and other such risks and uncertainties, you should consult JAKKS' most recent Form 10-K and Form 10-Q filings in the SEC, as well as the company's other reports subsequently filed in 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, the most directly comparable GAAP financial metric has been reconciled to the associated non-GAAP financial measure with the company's earnings press release issued today or previously. As a reminder, this conference call is being recorded. With that, I would now like to turn the call over to Mr. Berman, Stephen Berman. Sir, you may- Good afternoon, and thank you for joining us as we discuss our latest performance and current plans going forward. It has been an exciting Q1 for JAKKS as we ship more product than any Q1 since 2008. Our net sales for the quarter were $120.9 million, a 44% increase compared to the prior year. On the toy consumer product side, sales can be thought of in terms of three key drivers. Our evergreen business of toys and consumer products solidly performed in the quarter, growing single digits almost across all divisions and categories over the prior year. Disney Princess, Nintendo Super Mario, Perfectly Cute, BLACK+DECKER all contributed to improved results. We continue to see fantastic demand for our Encanto Disney products. Retail inventory of Encanto at our top three U.S. accounts at the end of the quarter was only $4 million. The team has been laser-focused on fulfilling the existing demand and broadening the product line with some great new items in time for this holiday season. There also has been great excitement for our Sonic the Hedgehog 2 movie-related products since it hit shelves at the end of February. We were thrilled to see fans rush to the theaters when the movie released earlier this month. Over its first two weeks, the worldwide global box office has exceeded $230 million. The movie and our product line appeals to those new to Sonic, as well as those of us who have loved the world of Sonic for over 30 years now. Point of sale at our top three U.S. customers increased over 40% in Q1 compared to last year, while their retail inventory levels started to catch up from recent quarters, finishing at +54%. We feel really good about the cooperation we're getting from customers working to stay ahead of the supply chain constraints and ensure that everyone has the product our consumers want throughout the year. In total, our toy consumer product segment was up 39% in the quarter, with North America up 37% and international up 52%. Although the pandemic continues to impact local economies in different ways, we are beginning to see solid progress in expanding our international footprint. Over the past 2 years, we have gone direct in more Western European markets as well as Mexico. Those transitions are often challenging in the best of times, and we have erred on the side of caution to not overinvest. As we close Q1, we see signs of solid progress, particularly as European retailers had more lockdowns a year ago and our team in Mexico opens more doors more and more as the weeks go by. Our top five direct toy markets outside of North America were the UK, Germany, Mexico, France, and Italy, and that group aggregated grew over 80% in Q1 versus the prior year. Q1 is a small quarter for our costume business, but nonetheless also performed extremely well. We shipped $9.8 million in the quarter, a nearly 1.5 times increase versus the prior year. As we've discussed on recent calls, our costume business in Europe is ramping up along with our toy growth, and we have begun shipping Disney costumes across Europe in April. From a margin perspective, container costs and stretched delivery times continue to be a challenge as we have anticipated. The team in Hong Kong and in China are working closely with our counterparts in the U.S., Europe, and Southeast Asia to ensure that we are moving product into our warehouses as efficiently and cost-effectively as possible. The situation remains volatile, in part given the wide range of product we offer. Particularly, some of our outdoor seasonal items, which remain subject to tariffs, are now further disadvantaged given their relative size and the simple math of how many units fit in a now more expensive container. We are factoring in all these issues as we plan our year going forward. Increasing cost pressures remain a hot topic everywhere. We continue to leverage our long-term vendor relationships to collaborate in developing products that will be market competitive while dealing with increasing manufacturing costs and above and beyond the aforementioned supply chain challenges. Towards the end of Q1, we returned to on-premise operations in our Southern California offices. As much as the teams have done a remarkable job in collaborating in new and different ways remotely, it's been energizing to be able to walk the halls again and have more spontaneous conversations, both on a professional and personal fronts. We are also starting to see business travel return and are eager to see more cross-office collaborations in the months to come, in addition to spending more in-person time with customers and licensors. As each quarter passes, our balance sheet gets stronger and stronger. We are taking advantage of the low shipping season to import our 2022 inventory needs as early as we can, as we did last year, and managing our cash tightly to fuel our future growth. The Q1 in a company like ours is really just a warm-up for the rest of the year, so we're all aware that there's a lot of hard work ahead of us. When I think back on all the challenges the company and the team has had to work through over the past several years, I couldn't be more excited about where we find ourselves today and the prospects going forward in 2022 and beyond. I will now pass the call over to John for some further discussions around our financials, after which I will come back with some more thoughts about the rest of 2022. John? Thank you, Stephen, and hi, everybody. In the spirit of it being a new year and trying new things, we've extended the data and calculations provided in the exhibits of our earnings release to cover the material that I've historically recapped in my section of the narrative. As a result, I'm not gonna reiterate all that data here. I would like to take the opportunity to go a bit deeper into a few areas that I feel are noteworthy in reviewing the quarter. First off, margin. As we discussed last quarter, we're seeing meaningful increases in input costs when it comes to importing product, inclusive of getting product from the factory to the port, ocean passage, getting product out of the receiving ports in a timely manner, and then transporting to our warehouses in the US and Europe. We absorbed a lot higher costs in the back half of 2021 in this area, a portion of which flowed through the P&L when that product was sold in Q1. It has been in recent years and continues to be our practice to contract for a certain amount of ocean transport to the U.S. to give us a degree of cost certainty. We secure the balance of our capacity on the spot market. As much as the spot market continues to whipsaw around early this year, we know that the retrospectively attractive contractual rate we enjoyed in 2021 will soon be gone, and we will be absorbing higher contractual costs this year. This is not new news in the context of what we shared last quarter, but it is a bit more explicit about our confidence in projecting how we expect that cost to behave in the calendar year. It is the case that the front part of the year is lower volume at the ports and by extension, less challenging than what we saw in the back half of 2021. That doesn't change that unfavorable year-over-year perspective on a container basis with the contractual rate resetting in Q2. Of course, a simple way to reduce spending in ocean freight is to import less product. However, as you can see in recent quarters results, we're currently enjoying fantastic demand for our product, so we are having to be judicious about meeting that demand while realizing we're suffering on the margin side given the current macro events. To that end, our March 31st inventory remains high at $85 million, which is $49 million more than this time prior year. Of the $85 million, $15 million is in transit, where last year that number was $5 million. You can think of that $85 million in at least four different ways, a view towards our short to medium term needs for 2022 sales, more in transit given the longer supply chain, capitalizing the higher supply chain cost of product value, and doing what we can to pull necessary 2022 inventory forward into our distribution centers ahead of the second half crunch. As to how all that plays out in the quarters to come is not something we're gonna speculate on beyond making the observation that we are happy to be in a place where there's a lot of demand for our current product line. Moving down the P&L and building on what Stephen said about cost pressures, as the business has retrenched during the pandemic, we have taken the opportunity to reset a bit as it relates to SG&A spending. There are elements in the direct selling section which have a variable volume attribute, and it's also subject to timing of certain expenditures that can move around during the year. Tracking G&A on a percentage of net sales basis is a bigger metric for us, not in terms of absolute dollars necessarily, but making sure we are at minimum maintaining scale in that more fixed portion of the P&L. Certainly benefiting from our strong Q1 top line, we see nice margin improvements in both areas versus prior year with G&A, the larger of the two buckets, improving by over 400 basis points, which is great. That certainly helps offset some of the aforementioned gross margin squeeze and leads to our closing the quarter just under a 1% operating loss, which represents very strong performance for Q1 at a toy company. Our refinanced capital structure brought interest expense down from $4.9 million last year to $2.2 million this year, and the marking to market of our preferred stock liability resulted in a non-cash loss of $645,000. We back that loss out of our non-GAAP calculations of adjusted EBITDA and adjusted EPS. In aggregate, our adjusted EBITDA for the quarter is a positive $1.9 million versus a negative $2.4 million last year. Our trailing 12-month adjusted EBITDA is now $53.6 million, or 8.1% of net sales, which was $39.5 million and 7.4% of net sales at this time in 2021. Now I want to pivot to talk about cash in the balance sheet. As of March 31, our total debt was $95.4 million. We had no draw on the credit line. With the trailing 12-month adjusted EBITDA, that calculates a leverage ratio of 1.8. As you know, our cash tends to have seasonal ups and downs given the seasonality of the business. If you were to calculate a trailing 12-month view of cash, you'd get $36.8 million. Whether you want to use that number or our cash balance as of March 31 of $39.2 million, you get a net leverage ratio in the range of 1.0-1.1. Our trailing 12-month net sales is now at $658 million compared to a recent low of $516 million at the end of 2020. Given that our debt level has decreased from $161.7 million to $95.4 million over the same time period, we've been rolling forward the results of improved profitability into reduced debt and increased working capital to drive higher sales. It's our intention to continue to follow that script, deploy cash to secure and expand evergreen brands and categories of business, steadily improve our balance sheet and explore on strategy acquisition opportunities as appropriate. With that, I'll now hand the call back over to Stephen for some additional remarks. Thank you, John. As I said at the beginning, it's a very exciting time here at JAKKS. We are focusing on controlling the areas in which we can and being extremely focused on the areas that become problematic, depending on various economic factors. That translates to a few distinct themes as we look ahead. We clearly have a tremendous opportunity this year with both Encanto and Sonic. In a world where we are focused on singles and doubles, they are positioned to be more than that in 2022 and beyond. The Sonic 2 excitement was clear as soon as the movie product hit shelves, and it's also pulling through more volume of our evergreen classic Sonic line as well. We have double tooled key items in these ranges and are talking to customers about additional shelf space for the newly added SKUs this fall. Getting this done is not easy as it shortens the usual development cycle to something closer to half the time. This ability is one of the things that makes JAKKS unique, and retailers are equally excited about consumer reaction to these distinct two businesses. We will chase this business in the US and internationally, while at the same time carefully monitoring POS and talking to our partners. As we touched upon back in February, we are still locked into our singles and doubles core focus and have a lot of great refreshes, innovations, extensions of lines and categories and expansions planned across businesses like Disney Princess, the Style Collection, and Perfectly Cute in the dolls and role play aisles, and Super Mario, BLACK+DECKER, Apex Legends in action and play collectible aisles. We see all of these businesses growing in North America and many of them growing even more internationally. In addition, we are anticipating a tremendous year in our costume business Disguise. Last year left many customers wishing they had bought a bit more and that they had shipped a bit sooner. We are leaning into that to ship more and ship sooner, again, looking to minimize the second half crunch and also to make sure that the retailers are setting as early as they can, something which didn't always happen in 2021. When you combine those dynamics with our ever strengthening licensing portfolio in the US and international, we are extremely excited for growth this year. Finally, I want to point out that our diligent focus on growing our overall business unit categories through the approach of singles and doubles doesn't mean we're out of surprises with some thoughtful and unexpected launches of new categories or products this year. We've recently announced a new JAKKS product line of inflatable remote control vehicles called AirTitans. Our first to market for this line comes in partnership with Universal Brand Development. The AirTitans Jurassic World Massive Attack T-Rex R/C is coming to online retail this spring ahead of the theatrical release of Jurassic World: Dominion in June 2022. This constant air inflatable RC prehistoric beast is over 6 feet long and fully inflates in approximately 20 seconds. We also recently introduced a distribution partnership in the U.S. and Asia-Pac with Wow! Stuff, a European-based toy innovation company for two new product lines. The first is MovieMates, launching first with a blockbuster franchise, Jurassic World. Our range of collectible, highly detailed and articulated action figures mounted on a non-removable film rig that comes with a free MovieMates app. Using the figures and the stop motion app, kids and kidults can recreate movie scenes or make new ones of their own. Start making movies within 60 seconds is the premise with the easy to use toys and app. The second item from our Wow! Stuff relationship is Jurassic World RealFX Baby Blue. Featuring a lifelike feel and movements, the RealFX Baby Blue comes alive with easy one-handed controls. Move the head and the neck to protect and battle or lunge. Get close and pet Blue to activate touch sensors on the head, and the body activates over 20 movie sound effects. The verbal description of all three of these items really don't do them justice. The team is putting the finishing touches on the promotional sizzles, so keep an eye out on our website to see how fun all these new introductions and innovations are. I'd like to end with thanking the global teams and partners for their continued focus and commitment, and our investment community for their support and patience as we execute against our plans to continue to deliver greater products, profitability, and greater results. With that, we will now take questions. Thank you. Thank you. Again, ladies and gentlemen, if you'd like to ask a question, please press star, then one on your touch-tone telephone. Again, to ask a question, please press star, then one. Our first question comes from Stephanie Wissink of Jefferies. Your line is open. Thank you. Good afternoon, everyone. We have a couple of questions, maybe one for you, Stephen, just to start. I think you mentioned distribution. I understand you're bringing back some of your international distributorships in-house, but maybe talk a little bit about some of the new retail wins, how your distribution is changing in the U.S. and internationally, and how that's playing out into kind of the growth numbers that you're putting up currently? Sure. Hello, Steph, and thank you. Yes. Besides our main large partnerships with Amazon, Walmart, Target, the clubs, Sam's Club, Tesco, Carrefour in France, all these major ones, we have started about 4 years ago, 5 years ago, a 3-tier development, product development cycle to make sure that we get all classes of trade. You have the mass, you have the secondary accounts, you have the dollar trade. We've seen the penetration really come to fruition over the last 18 months from going into the retailers like Fleet Farm, CVS, Walgreens, Macy's, Burlington, Barnes & Noble. Those are just to name a few. The Five Below, the dollar trade. Our distribution has been really penetrated through all the different categories, and based off the trade of currency of which the consumer goes in. We go from high-end to low-end, and it's really enhanced our increase in sales and enhanced our distribution platform. If you see what we've mentioned earlier in the call, our inventory being high, this is all planned as we ended the year with high inventory to make sure we can achieve the numbers that we did this Q1. It's no different than going forward. We're managing the manufacturing by double tooling and bringing goods in through different various ports to make sure that we have the product. Then we have our FOB side of the business that really benefits a lot of the main retailers. Then on the dollar trade and some of the other ones, those are domestic backup inventory. We are really getting great penetration both in North America and in EMEA. Okay, that's helpful. Then I just wanna clarify, in the release, you mentioned that your core business was up mid-single digits, but your reported revenue was up quite a bit more. Are you attributing the overage to Encanto and Sonic, or is there a way to dimensionalize what the lift was above the core business? Maybe you can help us think through how much of that is durable versus what was maybe more one-time related to entertainment. It's a good question. We mentioned in our release that Disguise was up over double from where it was last year, and it's actually the bookings and where we stand with Disguise are very similar to going into Q2. The lack of the cost impact of the seasonal business, the put to floor right on the tables did decrease because of the cost to ship those in are excessive based off the carrying cost of the containers. All of the Nintendo, the BLACK+DECKER, the Style Collection, Princess in general has all grown, you know, mid-single digits. Then the enhancement of growth was Encanto, Sonic, and Disguise. John Kimble, if you'd like to elaborate on that because we're in different spots, please do so. Yeah, no, I think you sort of got that right, Stephen. What we're trying to communicate is certainly we had a lot of great success with both Sonic and Encanto in the quarter on the toy side. Even if you set those aside, we're still up mid-single digits with the balance of the business. Okay, that's very helpful. Last one, hopefully this is a quick one. It's just understanding a little bit more on the decision to pull inventory in early. Is that a risk mitigation strategy just given the volatility in the supply chain, or are your retailers asking for inventory earlier as well? And maybe talk about Disguise separately from the core toy business, if you would. Thank you. We work really strong with the retailers around the world, and it's not that they're asking for it's they need it based off POS. Our POS has been excessively strong almost across the board in every division and almost in every category. Based off of the logistics issues that are happening with bringing goods in, you know, in the US and in Europe, then on the FOB side, you know, for even the retailers to get their containers, and then when you hear about the lockdowns and the different port congestion in China, it's just mitigating and managing this, really micromanaging it from all of our teams, ensuring that we have the goods appropriately and really making sure the mix of the FOB and domestic are managed well internally. The other side of things, we are managing inventory very strong and tight. We have some really strong successes currently, even without the formidable Encanto and Sonic. We are gonna make sure that we manage it correctly, we don't have too much inventory. It's always better to keep it low. If you see, we had only $4 million of inventory of retail of Encanto during at the end of the quarter. We have double tooled, triple tooled, the right SKU. So it's really just micromanaging and making sure we have the right product that is available for the retail. We're working really meticulously with each retailer on the plans by week, you know, the inventories required, you know, in each of their DCs much more than in the last 10 years. This is as important as us developing hot product. It's developing the right way to be able to ensure that the retailers have the right inventory, not have too much inventory, and that we have the right manufacturing and that we're not utilizing capital to build inventory where not needed. Very helpful. Thank you. I'll jump back in queue. Thank you. Thanks, Steph. Thank you. Our next question comes from Gerrick Johnson of BMO Capital Markets. Your line is open. Hey, good afternoon. Hi, Gerrick. Hi. Hi. Stephen, I was kind of curious how you're feeling about the consumer, the state of the consumer, here on out, you know, lapsing stimulus and inflation's impact on the budget, et cetera. How are you feeling about the consumer? Hello, Gerrick. For where we stand, we do a tremendous amount of time with our retailers and not just hearing how our industry is doing. It's kind of how the consumer is doing, you know, just the traffic. Retailers don't just get traffic from, you know, toy manufacturers. The retailers get it from various abundance of different categories which are in. If their consumer is not healthy, they may not come in to the retailer and have many different purchases or whether they are purchasing online. What we see today, then speaking to retailers both in North America and EMEA, it's just a strong consumer. There's a lot of concern with inflation. You know, everyone is talking about it. Where we've seen it, this is 27 years, I co-founded JAKKS, and prior to that was THQ, it's very strong. If you're in the correct categories, you're doing well. I would tell you, if you're in a category that is just there, that's where it's difficult. There are several other toy manufacturers that have just general products, but when you have products that are really resonating with children, and we call it kidults, the tweens, we are very excited. You know, even without stimulus continuing, we this pattern of sell-throughs and where we stand with our forward-looking numbers and our categories. As I did mention earlier in the call, that our foot to floor ride-on, our table and chair, all the bulk items are getting hurt because of the cost of shipping. We expect that to be offset next year, hopefully in a much stronger platform. We also are having great success across the board. We have right now currently in Santa Monica retailers here, the major retailers, the clubs are here, the dollar trade, and they're buying quite aggressive for the fall and looking into spring. It's our Spring Toy Fair, and they're looking to be focused, you know, do much more with one manufacturer than with many. We have had one of the best, call it Fall 2022 follow-ups and Spring 2023 Toy Fairs in the history of JAKKS. So far, what we're hearing is solidness where there's good product, and where there's not, then there's issues. Okay, great. Thank you. You know, I was wondering, you've given us breakdown in the past, but your business between, you know, basics, role-play items, everyday kind of stuff, and then what's more hit-driven and including but not limited to entertainment. How would you break out your business, you know, percent-wise between basics and hit-driven? Good question, Gerrick. I don't have it in front, but I could give you kind of categories. I don't have the percentages and we could do it offline when we have a call. Our basic evergreen business, call it the BLACK+DECKER, the Disney Princess Style Collection, the Perfectly Cute, Eevee, which is exclusive at Target, all that is Nintendo, just the general Nintendo business. Our skateboard area of business and our call it trampolines and ball pits all are growing very nicely and are strong. I don't have the breakout in which you, I think, are requesting correctly, and I don't wanna give approximate, but we could do that afterward. You have on top of those nice successes that we're having of our everyday core product line, you have the enhancement of the Encanto, the Sonic Classic, the Sonic movie. We have the new AirTitans, which is launching. I know, Gerrick, you've been in the toy world forever. It's one of the funnest toys I've seen in a long time. You know, we have that. We have the MovieMates. We have a lot of fun things that are really just resonating right now with consumers. Our core is doing great, and I have to break out the categories in which, whether it's role play and Halloween and so on. The excitement is going great with the licenses of the Encanto and all the different categories, and with Sonic and all the different categories. Okay. Well, let me ask you just one more thing. Do you think you can grow next year on top of, you know, all of the hit-driven stuff you have this year? It's a great question. There's a few things when I look at next year. We have some exciting new properties which we have not come out with or discussed. You see that Nintendo yesterday moved their movie till April, which is very exciting for us because it's a much better time for a manufacturer. When it was coming out in December, the kids would not be able to get to resonate with that content. But now that's going to April. You know, Nintendo has grown double digits almost every year. Then having that in April, we have a great new strong movie for fall next year and other licenses that we haven't come out with. So I'm not sure if we're gonna be able. I can't tell you where growth is this year 'cause it's really early on, but I do believe we will have growth and profitability, possibly sales. It's way too early to see where we stand today. It's you know, April, and we just don't know where the whole year pans out. We do have exciting things this year. We have exciting things next year and some of which we can't discuss. We have a great platform going into 2024. Okay. All right, great. Thank you, Stephen. Thank you, Gerrick. Thank you. I'm showing no further questions at this time. I'd like to turn the call back over to Mr. Stephen Berman for any closing remarks. Great. Thank you, everyone, for taking the call with us today. We're excited. This is definitely the slowest quarter of the year, and we had a great quarter, and we're looking forward to a terrific year going forward. We appreciate everyone's time, and we look forward to seeing people at the licensing show during Toy Fair and on our next call. Thank you very much. Thank you. Ladies and gentlemen, this does conclude today's conference. Thank you all for participating. You may now disconnect. Have a great day.