Tuesday's after market-close bevy of earnings and news releases was a mini-bonanza for a trio of down, but not completely out, smaller names. First, beleaguered toymaker JAKKS Pacific (JAKK) saw a 12% post-market gain after reporting better than expected fourth quarter results.
Revenue of $132.3 million was $7.1 million better than consensus estimates, and the loss of $0.37 per share was $0.15 ahead of expectations. The Toys "R" Us bankruptcy continues to weigh on JAKK (and others), with attributable revenue of $1.3 million, down from $19.6 million for the same quarter last year. But excluding Toys "R" Us, sales actually increased 12%. That is a bit like putting "lipstick on a pig" -- but an encouraging sign nonetheless.
Gross margins improved from 22.1% to 30.6% year on year, and perhaps more importantly, the company expects to return to profitability in 2020. JAKK ended the quarter with $53.3 million, or $2.31 per share in cash (excluding restricted cash) and $167 million in debt. Last but not least, the company reported that it is in the "final stages" of negotiating with Hong Kong Meisheng Cultural Company Limited and others for a deal that would give Meisheng 51% ownership of JAKK, which would include a $50 million cash infusion and involve a debt exchange.
Struggling dairy name Dean Foods (DF) , which has seen its shares fall nearly 60% since last July, received a 9% boost after hours upon announcing that it is reviewing "strategic alternatives to enhance shareholder value," and has retained Evercore Group LLC as financial advisor. Now, the old "strategic alternatives" proclamation is often not-so-subtle code for "we are in trouble, and need to sell some assets, or the entire business, or at least need to show shareholders and the markets we are doing something to help right the ship."
But in this case, the timing is also interesting. DF is scheduled to announce fourth-quarter earnings prior to today's market open. Consensus estimates are calling for revenue of $1.91 billion and a loss per share of $0.26.
Last but not least, retailer Big 5 Sporting Goods (BGFV) enjoyed a 10% gain during Tuesday's regular trading on nearly 4x normal volume, but on no news. That is not all that out of the ordinary for a small deep-value play that trades just over net current asset value, and could have been driven by expectations for better-than-expected fourth-quarter results. After market close, BGFV reported those results, with a $0.16 per share loss and revenue of $247 million -- both in line with consensus.
There were some bright spots; same-store sales for December were up more than 4%, and in addition, guidance for the first quarter of 2019 suggests earnings per share in the $0.04-$0.10 range (better than previous consensus), with same-store sales up in the mid-single digits. Shares reacted positively, and rose another 5% in post-market trading. The company also declared a $0.05 dividend, indicating a 4.3% dividend yield. Back in late October, the company cut the quarterly dividend 67% from $0.15.
After falling more than 70% between June and September, BGFV shares have more than doubled, but still have a long way to go to get back to the $9 range they saw in 2018.
