Jakks Pacific Inc. reported financial results for the second quarter ending on June 30.

Net sales for the second quarter were $105.8 million compared to $119.6 million reported in the comparable period in 2017. The net loss attributable to Jakks Pacific for the second quarter was $18.6 million, or $0.80 per diluted share. This compares to a net loss attributable to Jakks Pacific of $16.7 million, or $0.77 per diluted share, reported in the comparable period in 2017. Adjusted EBITDA for the second quarter was negative $8.5 million, compared to Adjusted EBITDA of negative $5.4 million in the 2017 second quarter.

Gross margin in the second quarter was 26.4 percent, down from 28.2 percent last year, as a result of an increased level of sales reserves.

The company’s cash and cash equivalents, including restricted cash, totaled $63.0 million as of June 30, compared to $46.8 million at March 31.

Convertible Senior Note Retirement
On July 25, the company reached an agreement to exchange $8.0 million of the 2018 convertible senior notes held by Oasis Management with new convertible senior notes with terms similar to the notes issued to Oasis Management in November 2017. The new notes will mature in November 2020.

On June 14, the company closed a $20.0 million term loan with Great American Capital Partners Finance Co. LLC, the net proceeds of which will be used to retire the remaining $13.2 million of the company’s convertible senior notes that mature on August 1, 2018.

Expression of Interest from Hong Kong Meisheng Cultural Company Limited
A committee of independent directors continues to evaluate Meisheng’s expression of interest, which was recently reaffirmed, in buying additional shares to bring its holdings to 51 percent of Jakks’ outstanding shares, as well as other possible interest.

2018 Outlook
The company believes the market disruption and lingering effects of the Toys “R” Us bankruptcy and liquidation in the U.S. and internationally will continue to persist into the second half of 2018, and will likely result in a decline in net revenues in 2018 when compared to 2017.