Good afternoon, everyone. Welcome to the JAKKS Pacific Second Quarter Earnings Conference Call with management, who will review financial results for the quarter ended June 30, 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. Before we begin, the company would like to point out that any comments made about JAKKS Pacific's future performance, events or circumstances, including estimates of sales and of 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 contact JAKKS’ most recent 10-K and 10-Q filings with the SEC, as well as the company's Annual 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 now like to turn the call over to Stephen Berman.

Thank you and good afternoon everyone, and thank you for joining us today. We're pleased with the results we were able to post for the second quarter and not just because they were better than we had expected internally, but because I believe underneath the reported numbers, there are very promising signs that we believe point to better performance in the future. Like almost every company in the world, we face considerable challenges in the quarter from the ongoing pandemic. These challenges started in the first quarter, but in some ways they were different from the ones we faced in the first quarter. Our priority remains the health and safety of our employees and their families, our customers, and our suppliers. In some ways, our business is back to normal, and in other ways, it still has a way to go. We continue to operate with limited staff coming into the offices worldwide, and many if not most of our employees are working from home. Our manufacturing partners are back online, but they're facing production challenges that are limiting access to some of our products that are selling very well. Our major retail partners stayed open for the most part during the worst days and have picked up a lot of the slack from those that were closed. But many of our smaller retail partners continue to struggle. Sales through online channels have thrived this time and continue to grow. We're slowly opening our facilities following federal and state guidelines in an attempt to resume full and normal operations. Our reported sales in the second quarter were down 17% from the results we posted a year ago. But we are encouraged by the composition of those sales. In our Toys segment, our sales were down to approximately 4%. This was due to the fact that we consciously exited certain low growth, low margin lines of business, notably FUNNOODLES at the end of 2019. Excluding the discontinuation of FUNNOODLES, our Toys segment sales were actually up approximately 3% compared to last year, and roughly flat for the first half of the year. The main driver of the sales decline was Disguise, our Halloween division. But even there, we think the story is better than it looks. John will go over the details in this section, but the main point is last year, Disguise was unusually strong, and this year, we're being more cautious in who we ship to, even as retailers are being more cautious regarding their Halloween expectations. In other words, we don't just want sales; we want sales that are profitable, and where we see sustainable growth potential, and are more willing to sacrifice volume in the name of increasing profitability. We're very encouraged by our retail POS and our retail inventory levels. Through the end of June, POS at our top three customers was up mid-single digits, and retail inventory at these retailers is down mid to high teens. We are pleased with this position as we move into the second half. We know we have some difficult comps in Q4 against the launch of Frozen 2, but we're satisfied with how clean our inventory levels are at retail. Even more encouraging than the sales trends and POS is how much we have reduced costs compared to last year and the year before. We have been diligently working to reduce our fixed costs, taking dramatic steps to reduce costs in both 2019 and earlier this year. John will review shortly, but we have taken millions of dollars in expenses out of our cost structure, such that despite the reduction in sales, our EBITDA loss is actually considerably lower. These cost reductions lower our breakeven and leave us better positioned to leverage our costs and higher volume quarters. So we are pleased with how our results in the quarter reflect our efforts to be more disciplined and more focused on profits. And we look forward to reaping the benefits of these efforts. John will now review financials and I will return to discuss what we see for the rest of the year.

Thank you, Stephen, and good afternoon everyone. As I discuss our results for the second quarter of 2020, please note that the company executed a one-for-ten reverse stock split after the close of trading on July 9th, and all per share figures discussed here reflect that reverse split. Net sales for the 2020 second quarter were $78.8 million, down 17% compared to $95.2 million last year. Reported net loss attributable to common stockholders for the second quarter was $23.6 million, or $7.70 per basic and diluted share, compared to a net loss of $22.5 million or $9.55 per basic and diluted share in the second 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. The net loss in Q2 of 2020 includes non-cash charges totaling $7.7 million reflecting changes in the fair value of our convertible senior notes and the derivative liability associated with our preferred stock. By comparison, these charges in Q2 of 2019 totaled $0.1 million. The second quarter of 2020 also included restructuring charges and COVID pandemic-related charges of $1.9 million, compared to a negligible amount in Q2 of last year for restructuring charges. Conversely, Q2 of last year included $2.5 million in acquisition and recapitalization-related expenses, compared to no comparable spending in Q2 of this year. Excluding the impact of such charges as well as stock compensation expense, our adjusted net loss attributable to common stockholders in the second quarter of 2020 was $13.4 million, or $4.38 per basic and diluted share, compared to a loss of $19.5 million, or $8.27 per basic and diluted share in the second quarter of 2019, an improvement of $3.89 per share. Adjusted EBITDA for the 2020 second quarter was negative $4.6 million, compared to a negative $11.5 million in the second quarter of 2019. Our Girls targeted businesses showed growth for the quarter, inclusive of Dolls, Role Play and Dress Up Toys, preschool plush, as well as C'est Moi Cosmetics. Girls products were $32.8 million in Q2, up 5% compared to $31.3 million in the second quarter of last year. As was the case in the fourth quarter of 2019 and the first quarter of this year, the big driver was Frozen 2, which was released in theatres late in Q4 of 2019. Other products that contributed to growth were Disney Princess, Perfectly Cute Baby, our exclusive baby doll line with Target, and Kitten Catfe, our own aspirational doll and collectible world of Catfe inspired surprises, which continued to build nicely during the quarter. These sales more than offset some of the anticipated declines in various other product lines, particularly those related to older entertainment properties such as Disney's Aladdin, the original Frozen, crystallization assorted other older lines. Sales of Action Figures, Vehicles, Role Play, and Electronics products in our Boys category for the 2020 second quarter were $10.7 million, up 2% compared to $10.5 million last year. Positive contributions from our Fly Wheels line of proprietary Action Vehicles, Sonic the Hedgehog and Nintendo Super Mario toys, and Black & Decker role-play more than offset declines in entertainment-driven properties such as Godzilla, Incredibles 2, and Harry Potter. Sales of seasonal products including licensed Ball Pits and play structures were $12.7 million in the 2020 second quarter, down 26% from $17.1 million in the second quarter of 2019, primarily due to our discontinuation of FUNNOODLES, a low-margin product line we exited last year and referenced in Q4 when we took an impairment charge against the intangibles associated with that acquisition. Strong sales of Minnie Mouse and Frozen 2 Ride-Ons, as well as sales of our Redo skateboards, offset declines in MorfBoard. Broadly speaking, we are seeing strong retail sell-through with our activity tables, foot to floor ride-ons, and skateboards, but had been production constrained due to the lingering impact of the extended Chinese New Year shutdowns, and this unanticipated spike in consumer demand. Sales in our Halloween segment Disguise decreased 38% to $22.5 million in the second quarter of 2020 compared to $36.4 million last year. In the second quarter of last year, a strong slate of licenses including Toy Story 4 and Frozen 2, as well as a shift in some shipments from Q1 to Q2 led to unusually strong sales growth in the second quarter. This year, we did not have the same entertainment lineup or the timing shift, and the pandemic is clearly impacting some of our sales. This business sells disproportionately to smaller specialty retailers and some of them are struggling. In addition, we have been more cautious and disciplined in our shipments, not wanting to turn good inventory into bad debt. And even the healthiest retailers are uncertain as to how the ongoing pandemic will affect demand for Halloween products, even though Halloween falls on a Saturday this year, which often leads to higher than normal sales. Looking at sales by Business segment, sales in our Toys/Consumer Products segment, which includes all markets around the world were down 4% to $56.2 million, compared to $58.8 million in the second quarter of last year. The decrease was driven by the same factors noted above in the product discussion. Latin America and Australia, New Zealand were up year-over-year, whereas the U.S., Canada, Europe, Asia, and the Middle East and Africa were lower. And as we noted above, our Halloween segment was down 38%. Looking at the rest of the P&L, the reported gross margin in the 2020 second quarter was 21.3% compared to 18.6% in the 2019 second quarter. Steady improvements in our product margins and lower obsolescence expense outpaced higher royalty charges incurred in the quarter. The increase in royalty expenses as a percentage of sales was driven partly by a mixed shift towards products with higher royalty rates, but also reflects a more disciplined approach to accruing for royalty costs earlier in the product selling cycle. Sharply lower spend for SG&A expenses including direct selling expenses and depreciation and amortization in the 2020 second quarter totaled $24.7 million, or 31.3% of net sales compared to $33.9 million or 35.6% of net sales in the second quarter of 2019. Our interest expense in Q2 of this year was $5.5 million, compared to $2.9 million last year, reflecting higher borrowings under our term loan and a higher average interest rate. Net cash provided by operating activities was $7 million for the second quarter of 2020 compared to a net cash used in operating activities of $7 million in the second quarter of 2019 primarily due to cost savings measures. Free cash flow is positive $4.2 million in the 2020 second quarter and negative $9.7 million in the 2019 second quarter. As of June 30, 2020, our cash and cash equivalents including restricted cash totaled $52.7 million, compared to $66.3 million at the end of 2019 and $37 million as of June 30, 2019. Accounts receivable as of June 30, 2020, were $69 million down from $117.9 million as of December 31, 2019, and $85.1 million as of June 30, 2019. DSOs for the 2020 second quarter decreased to 80 days from 81 days reported in the 2019 second quarter. Inventory as of June 30, 2020, was $57.7 million versus $54.3 million at December 31, 2019, and $53.5 million as of June 30, 2019. DSIs in the 2020 second quarter were 85 days, compared to 80 days in the 2019 second quarter, and looking at DSIs on a trailing 12-month basis. We were at 62 days for 2020 and 63 days for 2019. During the quarter, the company applied for and was granted a Paycheck Protection Program or PPP loan under the Federal CARES Act program. Those proceeds of $6.2 million will be utilized to cash flow payroll and rent payments over the next six months as per the program's intention. At the end of the time period allotted to utilize the funds, it is the company's intention to file for forgiveness for a portion of the debt. In the absence of knowing whether any funds will be forgiven and how the program may change as the year continues, the company has taken a conservative approach and presumed a two-year loan period with interest beginning to accrue in December of 2020. As a result, we now reflect an additional $1.8 million in short-term and $4.4 million in long-term debt on our balance sheet. As of June 30, 2020, the company's debt at face value included a $6.2 million PPP loan due June of 2020, $30.4 million of recapitalized convertible senior notes due July 2023, and $134.8 million owed under our term loan due February of 2023. During the quarter, $7.1 million of the July 2020 third convertible senior notes were converted to common shares at $1 per share. The $1.9 million worth of 4.875% convertible senior notes was paid off during Q2 on schedule. We currently have no outstanding balance under our credit facility. Capital expenditures during the second quarter of 2020 were $2.8 million, compared to $2.7 million in the second quarter of 2019. The diluted loss per share calculation for the second quarter of 2020 was based on a weighted average of 3.06 million common shares outstanding, up from 2.36 million in the second quarter of 2019. This number reflects the impact of our reverse stock split, as well as the aforementioned convertible note conversions. And with that, I will now hand the call back over to Stephen for some additional remarks.

Thank you, John. Right now we are usually at the peak of our Halloween shipping season. Halloween falls on a Saturday this year and in a normal year, we would expect to get a lift from that timing. This typically leads to more trick-or-treaters and people dressing up for parties. But this is not a normal year. We know that kids and adult fans of Halloween will want to celebrate in some form. However, we are expecting COVID to have a negative impact on sales of Halloween merchandise this year. Even the healthiest retailers are taking a more cautious approach to their overall Halloween buying with orders down double-digits for most of them. Less healthy retailers are, of course, more worried and so are we with these retailers, and we're taking a more prudent approach to credit risk by turning down some orders if we feel there's too much risk for JAKKS. We do not want to turn good inventory into bad debt. We recognize that COVID has caused a near complete shutdown of live-action film production and caused films that were completed to have their theatrical debuts delayed because theaters are closed. This will affect not only JAKKS but any company making products tied to films that were expected to come out this year. One example that affects us is Disney’s Mulan, which was postponed open in the fall, then got pushed to next March, and now has no current scheduled release date for this year. Another is Raya and the Last Dragon, which was moved from November 2020 to March 2021. But we still have expectations that some of our growth product lines will do well and will benefit us this year. Frozen 2 continues to be a big contributor, and for the holidays, we expect our animatronic Magic Emotion Elsa Doll and our Playdate Nokk Water Horse to sell very well. We have two products in the Disney style collection that we believe will perform well. One is a gourmet smart kitchen set, and the other is a lineup and style vanity. Both are proven play patterns and benefit from being part of the strong Disney subsegment. Kitten Catfe, which is based on our own internal IP, has been selling very well, and we expect that to continue in the second half with new exciting releases. Our Cute Girls Hairstyles product line, which is based on the number one hair channel on YouTube with more than 5.5 million subscribers and over 13 million video views per month shows girls how to make elaborate hairstyles at home. Perfectly Cute, our Baby Doll line sold exclusively at Target continues to be a very solid seller, and we expect good sales in the second half. In our Boys division, we have several strong launches in addition to the solid evergreen base of business of some of our existing strong brands. Our toys based on video games continue to sell very well, including Sonic the Hedgehog and Nintendo. For the holiday season, we will be launching It's-A Me, Mario, an oversize feature action figure with integrated voice and sounds. This is the first time in the history of Nintendo that a Talking Mario toy has been introduced into the market. Another new video game-related line we are launching this fall is based on Apex Legends, a highly successful Battle Royale video game from Electronic Arts. We have broad rights for Apex toys, and are optimistic our product lines will sell well given the continued success of the game. Also in boys, we're following up with the success of last year's Xtreme Power Dozer with this year's introduction of Xtreme Power Dump Truck. This new release has a powerful drive mechanism that allows users to haul, push, and pull all types of items with a beautifully designed construction play toy. Redo, our very cool proprietary line of skateboards, has performed well for us this year, and we expect continued success going into the holidays with our current customer base and the expansive reach into new retail distribution channels. And we are relaunching a reimagined version of the Icops, a powerful new toy that allows kids to explore the unseen world around them with high magnification imagery that can be captured and shared for use in both indoor and outdoor settings. This is just some of the products we expect to do well this holiday season. Before we finish up, I would like to talk more broadly about our expectations for the industry, and how we all need to evolve and adapt to these changes being caused by COVID-19, some of which may last well into the future. We in the toy industry have often pointed out that toy sales hold up relatively well in recessions and during times of uncertainty, and this has been mostly true. People like to give their children toys, even if they can't take vacations, buy a new car, dine out, and various other restrictions. During the early phase of the pandemic, we saw the added boost that retail toy sales got from the fact that kids were stuck at home, and parents were looking for something to keep their kids occupied. Activity toys, puzzles, games, and role play plus indoor environments sold very well. We're not sure that this demand surge will sustain. If schools remain closed, there will still be kids at home needing to be occupied, but they may already have purchased the activity toys and games and may not need to purchase more. When unemployment benefits run out or are greatly diminished, there is going to be some impact on consumer spending. Consumers have accelerated their shift to online shopping and most probably already had Amazon accounts. However, those consumers who shopped at Target.com or Walmart.com to name a few, for the first time have now set up accounts, and they continue to buy on those sites more than they did before. The entertainment landscape may also be altered for some time. We are already seeing a reduction in the frequency of events like birthday parties or other gift-giving occasions where people get together. What will the holidays look like this year? Will fewer family members get together and not seeing nieces and nephews reduce the need to purchase gifts? Or will family members still spend on gifts but just have them sent? With all this in mind, we are expecting consumers to be cautious this holiday season. At JAKKS, our plan is to focus on making basic evergreen toys with proven appeal and proven play patterns, selling them through our strong retail networks around the globe, and keeping our operational costs lower as we prepare for when the effects of the pandemic are reduced. This bodes well for JAKKS to continue its focus on growth and profitability now and for the future. In closing, I want to thank our incredible team for all their hard work in the challenging environment we have today. We continue to take the steps needed to position the company for profitability growth, and we couldn't do it without the dedicated team. With that, we will now take questions.

Our first question comes from Steph Wissink with Jeffries. Your line is now open.

A few questions for you, both of you actually Stephen and John. For the first one, Stephen, as you were concluding your remarks, you were talking about this pretty direct shift to online, and it sounds like you expect some of that to be permanent. So how have you adjusted your marketing programs, your digital assets, particularly your own brands to ensure that you're landing on pages for consumers when they're searching that you're easily found in a digital environment, relative to the physical experience that we've seen in the past?

Well firstly hello, Steph. Hope everything is well for you and everything is healthy and safe. For JAKKS, what we've been working on, and it's bode well for this call environment, is we've been working on doing videos internally with all of our products that go online. So you actually have, we believe actually a better experience when you go online to search for a product because you're actually looking at 3D rendering, you're looking at videos, and you're getting a much more descriptive overview of the product. So you're really much more engulfed in actually the product when you see it online. In addition, that all the online customers that we mentioned, and some of which we haven't mentioned in the call, we're doing specific advertising on their online sites. And we drive them to their online sites straight regarding certain advertising commitments we have with each retailer, so some of the digital marketing initiatives are done specifically to the retailer itself. And then we drive it ourselves with our own social media platforms and initiatives through Instagram, Facebook, and we drive that more online than in-store. In addition to our TV advertising, that does explain both our in-store and both available online at major retailers. So what's happening now is media is a lot less expensive digitally than what we do on TV; we're getting a little bit more benefit out of our own dollar spent for digital advertising versus the traditional TV advertising. But that being said, during the second half of the year, traditional TV advertising is one of our strong catapults for us worldwide, and throughout North America and called Western and Eastern territories, that actually benefit us to do it more TV-based in the second half of the year.

And then just a second question on the Disguise business. Recognizing that COVID is hopefully transitory, you're one of the world's best positioned and well-positioned brand vendors in that space. But not all of your peers are as well positioned, and even seeing one of your largest peers go through a bankruptcy process? So talk a little bit about the opportunity to actually enhance and upsize that business, not for 2020, but into future years, where you could actually become an even larger player within Halloween, role play, and costumes and even maybe some cosplay areas?

So, that is the case one of our - probably our real competitor has actually went to Chapter 11, and we'll see what goes on with that process. That being said, we've also during the ill fate for that manufacturer, we have been in the process of obtaining new licenses and many new licenses going into 2021 for the Halloween period which is a good sign because Halloween next year will be on Sunday, which actually gives us the most benefit of a lift, normally in a non-pandemic year. But with our major retailers, we've been very, very close with them working methodically and meticulously on the correct cutbacks of the unknowns of what Halloween will be this year. That just doesn't mean that costumes will be purchased in a different way this year. But it means candy, home decorations, indoor and outdoor is going to be a change because retailer saw Easter having a big low down year-over-year and back-to-school started out that way as well. So for us, we have garnished the majority of the top video game licenses, so we're the leader in video game license costumes. We have a cluster of new licenses that we will look forward to announcing shortly going into 2021. And with things getting back to somewhat of a normal lifestyle next year, the healthiness of people missing some of the Halloween this year, not knowing what it will be, will just be more excited for 2021. I think people will be having that pent-up timeline to spend more and do more in 2021. So that will bode, we think, exceptionally well for us going into 2021.

And then just the last one is on the breakeven point. I think John, in your script, you mentioned you had an agenda really to reduce the overall sales level to breakeven on your costs. I'm wondering if you can just articulate what you see as your - whether it's monthly or quarterly sales level to really cover your cost structure. And as we look out into the next couple of years, see a pathway towards really starting to generate incrementality in your overall operating margins structure?

Yes, I don't know if a breakeven point of view if that was something that was in my part or Stephen's part. But I think to be fair, consistent with what we've been talking about for the past several months, you see our specific focus on bringing G&A down to both a smaller level. And while at the same time we're trying to attack gross margin as well. So, without getting into specifics as to where we're going to go down to the year, we're happy with what ended up happening with Q2 from a results perspective. We're mindful about the challenges of the year as we've kind of talked about the past and talked about today and looking at Halloween in particular, and are hoping to be able to end the year without going backwards on that front, in terms of looking at cost as a percentage of sales. So, certainly when it comes here is like G&A, there's always a degree of unexpected action impacting that line. But some of the changes we've been making in the front half of the year are intended to be kind of changes to the long term.

Our next question comes from the line of Gerrick Johnson with BMO Capital Markets. Your line is now open.

How have your discussions lately been going with retailers? What are their expectations in terms of planograms and set dates? Are they still - when they're supposed to be are we thinking about presenting back? And then maybe Part B of that is, are you fully able to hit all those dates? Are you still seeing some lingering issues anywhere from any of your manufacturing partners? Thanks.

So on the manufacturing side, we are pretty well working with the majority of manufacturers both in China in the Southern part and the Northern part; the Southern part was hit the hardest. And we had problems in the first quarter getting plush some of the console done which was in Shenzhen, but we're all back to normal production and in different areas like Cambodia and India, and Indonesia. It's back to normal business now. So I believe the majority of the platforms in manufacturing, assuming there's no major pandemic, we’ll go extremely well this year, assuming nothing extreme goes out of the control. In addition to planograms and the set dates are being set, I believe it's a week after next for the call that North American retailers will set the first second week of August. In fact, I'm going out later this week or next week to some retailers to meet with them and also walk some of the planograms and just some of the retail outlets. Because what we're hearing, there are some companies manufacturer-wise that are having difficult times to ship during this period due to whether it's financial issues or how impacted they were from COVID. So for JAKKS, as we've been very nimble and entrepreneurial throughout our inception, we're looking at to garnish some of that shelf space now and for the future. So I believe the retailers are keeping the set dates for the majority of the ones that we spoke to the mass retailers and not shifting their dates. So far, everything that we see on the set dates and what we're shipping for the set dates as we need to have products exactly on the set dates in order for us to ensure that we have the lines occurring for the rest of the year have not changed. They were up in the year up until about six weeks ago, but everything has been settled. It looks like it's the first week of August, second week of August. So we have some media planned behind those initial set dates on some of our product lines.

Thank you. We have no further questions in the queue at this time. I would now like to turn the call back to Stephen Berman for closing remarks.

Thank you, everybody. We appreciate the time today for everyone on the call and look forward to having our follow-up calls later today and tomorrow as scheduled. Thank you, everyone. Stay healthy. All the best.

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