Financial Analysis

Note 11 Litigation and Contingencies The Company is a party to, and certain of its property is the subject of, various pending claims and legal proceedings that routinely arise in the ordinary course of its business. The Company accrues for losses when the loss is deemed probable and the liability can reasonably be estimated. Where a liability is probable and there is a range of estimated loss with no best estimate in the range, the Company records the minimum estimated liability related to the claim. As additional information becomes available, the Company assesses the potential liability related to its pending litigation and revises its estimates. In the normal course of business, the Company may provide certain indemnifications and/or other commitments of varying scope to a) its licensors, customers and certain other parties, including against third-party claims of intellectual property infringement, and b) its officers, directors and employees, including against third-party claims regarding the periods in which they serve in such capacities with the Company. The duration and amount of such obligations is, in certain cases, indefinite. The Companys directors and officers liability insurance policy may, however, enable it to recover a portion of any future payments related to its officer, director or employee indemnifications. For the past five years, costs related to director and officer indemnifications have not been significant. Other than certain liabilities recorded in …

CommitmentsAndContingenciesDisclosureTextBlock · excerpt; the full note is in the filing

Note 12 Share-Based Payments The Companys 2002 Stock Award and Incentive Plan (the Plan), as amended, provides for the awarding of stock options, restricted stock and restricted stock units to certain key employees, executive officers and non-employee directors. Current awards under the Plan include grants to executive officers and certain key employees of restricted stock units, with vesting contingent upon the completion of specified service periods ranging from one to four years and/or (b) meeting certain financial performance and/or market-based metrics. Shares for the restricted stock units are not issued until they vest. The following table summarizes the total share-based compensation expense recognized for the three and six months ended June 30, 2026 and 2025 (in thousands): Three Months Ended Six Months Ended June 30, June 30, 2026 2025 2026 2025 Share-based compensation expense $ 2,998 $ 3,188 $ 6,079 $ 5,740 Restricted Stock Units The following table summarizes the RSU award activity for awards with service conditions for the six months ended June 30, 2026: 2026 Number of Shares Weighted Average Grant Date Fair Value Outstanding, December 31, 2025 1,117,068 $ 21.03 Granted 263,556 16.88 Vested (177,082 ) 24.83 Forfeited (30,511 ) 18.27 Outstanding, June 30, 2026 1,173,031 19.59 The following table summarizes the RSU award activity for awards with market conditions for the six months ended June 30, 2026: 2026 Number of Shares Weighted Average Grant Date Fair Value O …

DisclosureOfCompensationRelatedCostsShareBasedPaymentsTextBlock · excerpt; the full note is in the filing

Note 13 Fair Value Measurements Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. In determining fair value, the Company uses various methods including market, income and cost approaches. Based upon these approaches, the Company often utilizes certain assumptions that market participants would use in pricing the asset or liability, including assumptions about risk and/or the risks inherent in the inputs to the valuation technique. These inputs can be readily observable, market-corroborated, or unobservable inputs. The Company utilizes valuation techniques that maximize the use of observable inputs and minimize the use of unobservable inputs. Based upon observable inputs used in the valuation techniques, the Company is required to provide information according to the fair value hierarchy. The fair value hierarchy ranks the quality and reliability of the information used to determine fair values into three broad levels as follows: Level 1: Valuations for assets and liabilities traded in active markets from readily available pricing sources for market transactions involving identical assets or liabilities. Level 2: Valuations for assets and liabilities traded in less active dealer or broker markets. Valuations are obtained from third-party pricing services for identical or similar assets or liabilities. Level 3: Valuations incorporate certain assumptions a …

FairValueDisclosuresTextBlock · excerpt; the full note is in the filing

Note 6 Income Taxes The Companys income tax expense of $1.7 million for the three months ended June 30, 2026, reflects an effective tax rate of 22.5%. The Companys income tax benefit of $0.6 million for the three months ended June 30, 2025, reflects an effective tax rate of 20.7%. The increase in tax expense for the quarter ended June 30, 2026 compared to the corresponding period in 2025 was primarily attributable to higher pretax earnings and an increase in tax expense from discrete items recognized during the current-year period. The Companys income tax expense of $0.9 million for the six months ended June 30, 2026 reflects an effective tax rate of 35.1%. The Companys income tax benefit of $1.8 million for the six months ended June 30, 2025 reflects an effective tax rate of 27.3%. The increase in tax expense during the six months ended June 30, 2026 compared to the corresponding period in 2025 was primarily attributable to higher pretax earnings and an increase in tax expense from discrete items recognized during the current-year period. From time to time, in the normal course of business, the Company may be audited by federal, state and foreign tax authorities. At this time, the Company has at least one audit underway. The Company currently cannot assess the impact of the outcome on its condensed consolidated financial statements. …

IncomeTaxDisclosureTextBlock · excerpt; the full note is in the filing

Note 4 Revenue Recognition and Reserve for Sales Returns and Allowances The Companys contracts with customers only include one performance obligation (i.e., sale of the Companys products). Revenue is recognized in the gross amount at a point in time when delivery is completed and control of the promised goods is transferred to the customers. Revenue is measured as the amount of consideration the Company expects to be entitled to in exchange for those goods. The Companys contracts do not involve financing elements as payment terms with customers are less than one year. Further, because revenue is recognized at the point in time goods are sold to customers, there are no contract assets or contract liability balances. The Company disaggregates its revenues from contracts with customers by reporting segment: Toys/Consumer Products and Costumes. The Company further disaggregates revenues by major geographic regions (See Note 2 - Business Segments, Geographic Data and Sales by Major Customers, for further information). The Company offers various discounts, pricing concessions, and other allowances to customers, all of which are considered in determining the transaction price. Certain discounts and allowances are fixed and determinable at the time of sale and are recorded at the time of sale as a reduction to revenue. Other discounts and allowances can vary and are determined at managements discretion (variable consideration). Specifically, the Company occasionally grants discretion …

RevenueFromContractWithCustomerTextBlock · excerpt; the full note is in the filing

Note 2 Business Segments, Geographic Data and Sales by Major Customers The Company is a worldwide producer and marketer of childrens toys and other consumer products, principally engaged in the design, development, production, marketing and distribution of its diverse portfolio of products. The Companys segments are (i) Toys/Consumer Products (TCP) and (ii) Costumes. The Toys/Consumer Products segment includes action figures, vehicles, play sets, plush products, dolls, electronic products, construction toys, infant and pre-school toys, child-sized and hand-held role play toys and everyday costume play, foot-to-floor ride-on vehicles, wagons, novelty toys, seasonal and outdoor products, kids indoor and outdoor furniture, and related products. The Costumes segment, under its Disguise branding, designs, develops, markets and sells a wide range of every-day and special occasion dress-up costumes and related accessories in support of Halloween, Carnival, Childrens Day, Book Day/Week, and every-day/any-day costume play. The Companys Chief Executive Officer and Chief Financial Officer have been identified jointly as the Chief Operating Decision Maker (CODM). The CODM manages and allocates resources on a segment basis. The determination of the two segments is consistent with the financial information regularly reviewed by the CODM for purposes of evaluating performance. Results are regularly reviewed in comparison with current budget, prior forecast, prior year and recent years perfo …

SegmentReportingDisclosureTextBlock · excerpt; the full note is in the filing

Note 8 Common Stock Common Stock All issuances of common stock, including those issued pursuant to restricted stock or unit grants, are issued from the Companys authorized but not issued and outstanding shares. During 2026, certain employees, including one executive officer, surrendered an aggregate of 75,051 shares of restricted stock units for $1.3 million to cover income taxes due for the vesting of restricted shares. Additionally, an aggregate of 30,511 shares of restricted stock granted in 2023, 2024 and 2025 with a value of approximately $0.6 million was forfeited during 2026. During 2025, certain employees, including two executive officers, surrendered an aggregate of 136,071 shares of restricted stock units for $3.8 million to cover income taxes due for the vesting of restricted shares. Additionally, an aggregate of 3,549 shares of restricted stock granted in 2022, 2023 and 2024 with a value of approximately $0.1 million was forfeited during 2025. A quarterly dividend of $0.25 per share for owners of record as of May 29, 2026 was declared on April 29, 2026 and paid on June 29, 2026. At the Market Offering On July 1, 2022, the Company entered into an At the Market Issuance Sales Agreement (ATM Agreement) with B. Riley, as agent pursuant to which the Company may, from time to time, sell shares of its common stock, up to $75 million of common stock, in one or more offerings in amounts, prices and at terms that the Company will determine at the time of the offering. As of …

StockholdersEquityNoteDisclosureTextBlock · excerpt; the full note is in the filing

Note 15 Subsequent events On July 22, 2026, the Companys Board of Directors declared a quarterly cash dividend of $0.25 per common share. The dividend will be payable on September 28, 2026, to shareholders of record at the close of business on August 28, 2026. …

SubsequentEventsTextBlock · excerpt; the full note is in the filing