Good afternoon, everyone. Welcome to the JAKKS Pacific First Quarter 2025 Earnings Conference call with management, who will review financial results for the quarter ended March 31, 2025. JAKKS issued its earnings press release earlier today. The earnings release and presentation slides related to today's call are available on the company's recently remodeled website in the Investor 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 fiscal year, along with highlights of recent performance and current business trends. John will provide some additional comments around 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. Your line will be placed on mute for the first portion of the call. If you would like to be placed in the queue to ask a question, please press star 11 on your telephone keypad. 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, earnings, and/or adjusted EBITDA in 2025, as well as any other forward-looking statements concerning 2025 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 and forward-looking statements. For details concerning these and other such risks and uncertainties, you should consult JAKKS's 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 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 within the company's earnings press release issued today or previously. As a reminder, this call is being recorded. With that, I would now like to turn the call over to Stephen Berman. Good afternoon, and thank you for joining us. We are pleased to report another quarter of solid performance underpinned by the strength and stability of our operations, our financial discipline, and the resiliency of our business model in an ever-evolving market environment. As reported, our sales were up 26% in the quarter, led by the success of toys from films like Sonic the Hedgehog 3, Disney Moana 2, DreamWorks Animation Dogman, as well as increases in many of our evergreen product lines. We saw growth in Disney Princess, Star Collection, and Frozen, as well as a number of new initiatives that were not in the Q1 portfolio last year. Globally, our dolls, role-play dress-up business, shipped 55.5 million, a 37% increase versus the prior year. Action Play and Collectibles shipped 42.9 million, an increase by 30%. North America in total was 25% ahead of the prior year, with international up 29%. Our 34.4% gross margin is an excellent result for any quarter, but particularly Q1. Higher volumes associated with successful new releases, as well as new product launches, increased product margins significantly. We also benefited from higher quality inventory at retail and in our warehouses. In addition, we continue to scrutinize where and how we are spending to offset unavoidable increases. In total, SG&A was up 1% for the quarter globally, an increase of less than $500,000. Those are the key drivers that contributed to an adjusted EBITDA number for the quarter, which is just above break-even at $400,000. Again, it's a small quarter, but as it's only the second positive first quarter EBITDA we have had in the past 15 years, we're extremely pleased with the performance. At JAKKS, we currently have a lot of strong opportunities for 2025 and beyond, but we'll be taking a very cautious view until the tariff issues definitively resolve. We have been working with our factory network to selectively hold some goods that were developed to ship to the U.S. so they could be available should import costs reduce substantially. In the meantime, we are aggressively pushing forward to generate additional international shipment opportunities. Teams are engaging customers across the U.K., Western and Eastern Europe, Asia Pacific, and Latin America. We know we have the right product portfolio to achieve higher sales and incremental margin, so we're looking to take advantage of any hesitancy that exists around the U.S. market to further accelerate our international growth plan. In addition, we currently have healthy domestic inventory positions both in the U.S. and selectively internationally. I'll now pass it over to John for some more details on the financials, and then I'll come back to elaborate a bit more about the quarters ahead. John. Thank you, Stephen. Hello, everyone. A nice first quarter for us, as Stephen has highlighted. Results were pretty much in line with our expectations. We had a few million dollars' worth of sales that might have otherwise found their way into Q2. Generally speaking, we did not see customers pivoting to try to forward buy, and similarly, we were not stockpiling inventory. Our business model, and to some extent the industry broadly, wants to keep money tied up as product for as short of a period of time as possible, starting with raw material purchasing. It is not like someone can just turn a dial and make a conveyor belt go twice as fast or whatever one might imagine as it relates to some of these things. There are a lot of steps and activities designed around maximum asset utilization. The First Quarter remains our smallest quarter, but we will run you through the highlights as we see them with that in mind. Gross Margin Dollars were up $18 million in the quarter versus prior year's Q1. To provide some color and context there, our rough sense of the numbers would be around $6 million has been generated by higher sales in the quarter. Another $6 million has been generated by a favorable comparison to last year's abysmal sell-through of Fall 2023 product launches. About $2 million has been driven by better product margins from new product lines we shipped this year versus what we shipped last year. In the balance, about $3 million is timing favorability. A little of that is sales-related, and the rest relates to when we flow certain expenses off the balance sheet related to the timing of our importing finished goods into destination markets. Think of it as money is on the balance sheet; it'll make its way through the P&L soon enough. SG&A was pretty much aligned with our planning as we had a favorable comparison against some specific projects, which were starting to wind down at this time last year. That probably helped us out around a couple million dollars in aggregate. As Stephen pointed out, adjusted EBITDA for the quarter was $354,000, a notable improvement over the loss of $17.2 million last year. Adjusted EPS was a loss of $0.03 per share, much improved from a loss of $1.09 last year. The share count for that calculation was 11.146 million shares. As mentioned in our release, the board has approved a $0.25 per share dividend for the second quarter for shareholders of record as of May the 30th to be paid on June the 27th. On the balance sheet side of things, we're happy to be debt-free and not spending time evaluating covenants and coverage ratios and things like that, given the forecasting fog that has rolled out across the U.S. Our unrestricted cash balance at the end of the quarter was $59.2 million compared to $35.3 million at this time last year. A big driver of the difference was the $20 million we paid last year as part of our preferred share buyback. As you would imagine, we are carefully monitoring our working capital given the current disruption to the normal course of business. We've received some outreach asking our take on what long-term tariffs would mean for our business and the industry at large. Our perspective is that any lasting tariff on import of product is essentially a consumer tax. The cost will be passed along to the consumer in higher retail prices. There is no magic wallet that is going to pay for it. Our industry has already seen too many factories, wholesalers, and retailers go bankrupt over the past 10 years without these additional burdens being in place. With all the players in the industry facing the same cost surge, the medium to longer-term fallout would be less product innovation, as the industry is always positioning itself favorably for impulse and widely accessible purchase occasions. Now, I'll pass things back to Stephen. Thank you, John. At JAKKS, the foundation of our strength has always been twofold: the depth of the experience within our world-class team and the enduring partnerships we've cultivated with our key stakeholders. These relationships have not only stood the test of time, they have fueled our collective success. John and I recently traveled to Hong Kong to reinforce these relationships in person. Over several days, we met with our exceptional local team and the leadership from more than half a dozen of our most valued factory partners, many of whom have worked alongside JAKKS for decades. These meetings quickly evolved into dynamic, forward-thinking collaborations focused not only on current challenges but on new opportunities to innovate and grow together. As a next step to continue this momentum, we are hosting a factory summit next month at our Santa Monica headquarters. This initiative will give our partners direct access to our marketing, design, and product development teams, fostering closer alignment and driving a shared vision of product-level innovation. Beyond that, in addition, it opens the doors to high-level strategic conversations, exploring new business models and long-range growth plans that will propel all parties forward. We have always had a degree of visibility to manufacturing some of our existing product lines outside of China. Historically, our customers have almost always preferred keeping the business in China to secure the lowest possible pricing. Given recent events, we have accelerated and expanded our exploration of alternative sourcing opportunities. To be clear, China will always be a key production hub for JAKKS, given the specialized capabilities developed over decades. These two points are not in conflict, as it's often the case that it is our current Chinese vendor base, which has begun to diversify their manufacturing footprints into other markets in Southeast Asia and beyond. Our improvement in product margin post-recapitalization has in part been driven by our increased selectivity around product lines we bring to the market and efforts to limit SKU counts. Our focus on opening price points with 50% of our current volume coming from SKUs that historically retail for $29.99 or less serves us well in this environment. We have been active in developing product for the value trade, given the emergence of that channel in the U.S. and in Europe, as we discussed on earlier calls. Our rapidly expanding business in Latin America has provided a steady flow of information that is funneling back into our development process to ensure that we are designing the right products with the specific pricing and margin requirements of those customers in mind. With that as a base, we are reviewing our entire product portfolio and ensuring that we are getting maximum leverage out of all the work done to date, as we anticipate the higher-priced items will not have the same level of market demand with substantially higher cost of import. This is a prime example of our unwavering focus on controlling what we can and doing so with purpose, precision, and partnership. While external forces like tariffs remain outside of our control, we continue to advocate strongly alongside our industry peers for their removal. These tariffs are not only punitive. They stifle business potential and divert focus from our true objectives. In the meantime, we are adapting with resolve. Substantial U.S. domestic price adjustments are necessary to mitigate the impact, and we are making disciplined decisions about which products to import for the Halloween and holiday season. We are working closely with our FOB customers to navigate these changes and remain firmly committed to our identity as an FOB-first company. We are evaluating a range of cost mitigation efforts as it relates to our overhead without jeopardizing the plans we have in place outside of this fiscal year. We have a great lineup of new initiatives at varying stages of readiness set to launch over the next 12 months across all of our divisions. Although we are maintaining a positive, proactive approach to business development, we think it's somewhat pointless to talk about those product-level efforts until this tariff issue is definitively resolved. We remain extremely positive about the long-term prospects and possibilities for our business and know we will ultimately successfully navigate the current situation over time. Through it all, our path forward is clear. With strong partnerships, a proactive approach, and a relentless commitment to excellence, we are well-positioned to emerge stronger and remain ready to evaluate and, when appropriate, seize new opportunities. Lastly, we would like to take the opportunity to congratulate Nintendo with the unprecedented Switch 2 pre-sale launch, which speaks to the high quality of Nintendo's IP and Nintendo as a company. With that, we'll take a couple of questions. Operator. Thank you. As a reminder, to ask a question, please press star 11 on your telephone. You will then hear an automated message letting you know that you are in the queue. To withdraw your question, please press star 11 again. One moment for our first question. Our first question comes from Eric Beder of SCC Research. Your line is open. Good afternoon. Congratulations on a strong start to the year. Thank you, Eric. Thanks, Eric. Hi. I know we're in very uncertain times, and you have to live this probably more intensely than we do right now in many respects. When I think about it, if the tariff levels stay the same, what are we going to see for the holidays here in terms of product? Are we going to see—you tell us. What is your prediction if we keep this where we are right now, how the holiday season is going to flow in terms of both, I guess, lower and high end and kind of the middle end of product? If you're talking about the China tariff of approximately 144%, if that stayed in place through the year, you would just see a lot of lower-priced products at higher prices overall in the U.S. Put aside, outside of the U.S., you would just see a lot of lower-priced products that are just at a higher price through all the major retail chains. At the value chains, you would actually see the value chains coming in with higher prices at the same time. At the end of the day, the tariffs are going to be affecting the consumer more than anyone. The prices are going to have to be increased to us selling the prices. The retailers themselves are going to increase the price. At the end of the day, the consumer is one that's going to be impacted. One of the positive things for JAKKS is that we have an extensive line of over 50% of our company is under $29.99 at retail. A lot of our products are even lower than that. We have a very strong value line across the board that we sell to the value trade in the U.S. When you sell into Mexico, Latin America, or China, there are different tiers of consumers. We will utilize those lines, the value lines, to enhance a lower price point for the consumer. I do not believe, and no one believes, those tariffs will be at those prices, at those percentages going forward. To mitigate it, we are holding inventory and waiting for a resolve on these tariff issues. We also, at the same time, have moved and have always worked with Vietnam, Cambodia, and Indonesia, various areas of manufacturing. Remember, for anyone that's going in these territories, it's usually a Chinese manufacturer, a Chinese vendor that is moving to Indonesia and setting up in Indonesia and Cambodia. It's not normally going to a manufacturer that is born and raised there. It's the ones that have actually moved there that have the expertise in our field. Got it. I guess looking internationally, I know historically it's about 20% of sales. How does this move the needle in terms of—I know it's been an imperative for the last even before tariffs. How does this move the needle there, and where can we think longer-term the split might go between U.S. and international? Thank you. We are moving aggressively, as we always have, internationally. Our Latin America business has grown exceptionally. Our EMEA business has grown exceptionally well. At this time, we are focusing on offsetting any of the risk that we're getting in the U.S. to have our whole teams really focus on the international territories to enhance that market and that profitability that we achieve in those areas. At the same time, we have domestic inventory here that we're utilizing that we've planned early on to bring inventory to sell to hopefully mitigate some of the pressure of the tariff. It is a twofold. One, we're still selling here. At the same time, we want to aggressively approach internationally as an opportunity for them to get products and for us to be able to expand much quicker in those marketplaces to offset any or some of the impact that we'll have from the tariffs in the U.S. You're in some of the other places. Are you kind of where you need to be in terms of the infrastructure for this material focus internationally? Yeah. Our team is set up, as we mentioned a year and a half ago, we moved Jack McGrath, our COO there, to be head of international. And he understands the company. He's been with me over 25 years. The plan in place has been, I'd say, not seamless, but amazingly strong and well. His efforts with the team that we've built there, and again, in Latin America as well, are really outperforming, I'd say, some of our peers in the market. We're happy with every way we're structured. Our distribution centers that we just moved from Rotterdam to Germany and Italy and Spain, we're really set up well internationally for growth. Okay. Good luck for the rest of the year. Thank you. Thank you. Thank you. Thanks, Eric. Our next question comes from Tom Forte of Maxim Group. Your line is open. Great. First off, Stephen and John, congrats on the quarter and best of luck navigating a challenging environment. All right. Stephen, feel free to punt on any of these. I'm going to ask questions in four different categories. The first category is, at the industry level, how should we think about, for the toy industry, cost borne by the consumer, not the supplier, not the company? In your prepared remarks, you suggested that it'll all be borne on the consumer. Second, how should we think about the relative demand curve for toys versus other discretionary items? You made some great comments in the past about children's birthdays, things of that nature. I'd appreciate your thoughts on that group first. Okay. As we've always said, this is JAKKS's 30-year anniversary, and I co-founded it with my partner. Previous to that, we had THQ. We've been in this industry, I'd say, probably the longest as a public company. We're not recession-proof. Everyone uses the word resilient. I think that's the case. I do think with the consumer becoming weak and nervous with what's occurring around with layoffs around the board, price increases, and an unsteady economy right now, they still spend on children, but they may not be spending as much. As we mentioned before, birthdays, holidays, not just a child's birthday that they have from a parent, but many children go to birthday parties and they bring something. In that case, they'll be spending approximately the same dollar amount that they would have, but they're just going to get less in a sense of product based off the current tariff issues. We are really focused on the enhancement of bringing down product costs. We went to China, as I mentioned, myself and John, and worked with our factories for cost-reducing measures, having them give us concessions. At the same time, we're working with our retailers to have the least amount of impact as possible. They all know themselves that they have profitability margins that they have to enhance. The price, at the end of the day, is going to go to the consumer, as John mentioned in his pre-recorded comments, that it's a tax. The way that we look at it is it's going to go to the consumer. What's going to happen is the highest price items, I think, will be the hardest ones to sell into the market or sell through into the market. We are taking an approach that we have these big items that are vanities and kitchens that we know that the price point this year may be a little bit too intense for the consumer or too high priced. We are doing various versions of a lesser product that will actually give the kids playability and fun, but at a much lesser price to the consumer. Okay. Thank you for that, Stephen. For my next set, feel free to comment on these either at the industry level or company-specific. It is the ability to move manufacturing outside of China, the ability to source items from the U.S., and the ability to launch more products at lower price points. Okay. Sourcing items in the U.S., in the majority of our businesses, that will not occur. We do have a great relationship with a partner of ours, which is Crazy Art. They have strong manufacturing in the U.S. that we will be able to utilize for some areas of our business, the tables and chairs, large plastic items. The capability of doing the majority of our product will not be sourced in the U.S. It will be sourced more so in Asia. We have always worked with Vietnam, Cambodia, and Indonesia and Mexico in manufacturing. Again, the main hub and the main skill sets are they lie in China. The Chinese manufacturers that I mentioned earlier are the ones that are setting up and have set up in Indonesia and the companies that I've mentioned. We will work with them as we see fit and as their skill sets enhance. For that, it's really sourcing in China, Asia, I'd call it Mexico at the most for us, and not really much in the U.S. It'll be nominal, but we have the ability to move around. Again, the skill sets that are utilized in toys. One of the main things that everyone needs to focus on is the safety requirement that toys have. China has such a clear track record of safety. We will not take a risk by moving just to move for price barriers. We do need to make sure we have the enhancement of safety for children. That comes first and foremost before anything. Any quick comments on lower price points? Lower price points. What we're doing is what we've reviewed with all of our teams is if you take a look at the different categories which we're in, we're actually enhancing and selling more of, call it, in our boys' action figure area, which has Sonic and has Nintendo and Simpsons. We're looking at selling the lower price point figures versus higher price point figures for the time being due to the price points that will increase, that you're going to get a small, you're going to get much less for your dollars, but you still will have happy play for the children based off the price points. We take a lot of our value line that we use in Latin America and we use in Asia that we're now utilizing here in America. That is a value trade line that will enhance the lower price point as needed as much as we can at the major retailers. Normally, those value lines are really set for the value trade and the value consumer. Excellent. All right. Two more groups. You've had an amazing run with licensed film and product tied to that, Sonic being a great example, Dogman crushed it. How are tariffs impacting your visibility on licensing film IP? Is there any silver lining, meaning that maybe others are more nervous and you can take advantage of the opportunity? That's a good question. We are still very full force on our licensing partnerships, our licensing agreements. We've expanded and extended many of them to date. There'll be, I'm sure, some information flowing this year on licenses that we've achieved and moving forward. What we are seeing is there are various companies that are having difficulties at this time due to the tariffs. When that time comes of opportunistic initiatives, we are looking very much so right now. In some of these bad times is when some really good things can occur. One of the main things that we are very proud of is we have no debt. We have a lot of liquidity. We have a great facility, bank facility. During these times, it's a really opportunistic time when people are having difficulties to take that and make it an opportunity for JAKKS. We are aggressively looking at various opportunities with licenses and product categories that we can go after due to some of these companies having a difficult time. A lot of these companies have debt that they have to work with, and it's going to be a little bit harder for them during this process. Excellent. Last one, and thanks for taking all my questions. In a similar vein, is this changing the opportunities from a strategic M&A standpoint, maybe creating some new ones that were not around a couple of months ago? I would say yes, we are getting quite a bit of reach from banks and individuals of opportunities. I think this time it's scaring a lot of companies that have gone through the COVID issue, and now they're going through the tariff issue. Some of these companies are having a more difficult time during this tariff than they did in COVID. There are opportunities that are out there. I think the longer this goes, the more opportunities there will be. Wonderful. Thank you, John. Thank you, Stephen, for taking all my questions. Best of luck. Thank you. Thank you, John. Thank you. This concludes the question and answer session. I would now like to turn it back to Stephen Berman for closing remarks. Ladies and gentlemen, thank you for the time today. We are very proud with our quarter. We're very proud of our company. We are excited for this year to continue and move forward and resolve the tariff issues and go back to what we do best is building JAKKS around the world. Thank you very much. This concludes today's conference call. Thank you for participating, and you may now disconnect.