JAKKS REPORTS STRONG QUARTER.

Byline: Brent Hopkins Staff Writer

MALIBU - Cabbage Patch Kids and high-tech video games powered Jakks Pacific Inc. to a strong fourth quarter, as the toy maker reported Tuesday that its year-end revenue jumped more than $100 million.

The news came at a good time for Jakks, which has been tainted with a bribery lawsuit from its longtime partner, World Wrestling Entertainment Inc. Though Chairman and Chief Executive Officer Jack Friedman touched on the legal difficulties during a conference call with analysts, he devoted more time to discussing the company's impressive finish to the year.

``In 2004, we continued to show our company can anticipate, adapt and influence demand within our markets,'' Friedman said. ``Even in a challenging retail environment such as in 2003 and 2004, Jakks Pacific has continued delivering exciting products from our diverse portfolio of brands.''

For the final quarter of 2004, sales improved to $184.8 million from $84.4 million in the same period a year ago. Profits climbed to $11.1 million, or 37 cents per share, from $1.87 million, or 8 cents per share, in the last quarter of 2003.

Full-year sales hit $574 million in 2004, with $45.9 million in profits, or $1.57 per share. This compares favorably with 2003, when Jakks had sales of $315.8 million, with profits of $20 million, or 83 cents per share.

The company noted during the conference call that the Securities and Exchange Commission has asked it to restate quarterly results in 2003 and 2002, stemming from past acquisitions of its Toymax, Trendmasters and P&M Products subsidiaries. In its earnings release, Jakks said the restatement will reduce past periods' net income, but not materially. Analysts brushed off the restatement as minor news.

But the lingering controversy over Jakks' alleged payment of kickbacks to a fired WWE executive to obtain the rights to its wrestling characters still concerns stock watchers. WWE filed suit against Jakks in October, seeking to void their licensing agreement that dates back to 1995.

Former WWE Vice President James Bell pleaded guilty to mail fraud in U.S. District Court in Connecticut earlier this month, a charge not directly connected to the suit but one that lends credence to the wrestling company's allegations. Jakks refused to comment on the suit on Tuesday, aside from saying that it would cause increased legal fees.

``As time goes by, the lawsuit may mean less and less, but each time news comes out about it, it'll be back in the public consciousness,'' said Garrett Edson, a senior analyst with the independent research company Monarch Research LLC in New York. ``This will be hanging over them for a long time unless a settlement is reached.''

Friedman rang the closing bell on the Nasdaq exchange, watching Jakks shares finish down 17 cents at $20.98.

Brent Hopkins, [phone]

brent.hopkins(at)dailynews.com