We can do that in part because our licensing agreements require us to be very precise on what we report back to the licensors and a new film property will almost always have a unique packaging look. It’s the only place you can find new characters unique to that film, where our day-in, day-out evergreen product will be reported separately and found in different packaging. To be clear, in any given year, we’re bringing to market over 40 different product lines, representing an even broader array of characters, and of course, selling across all the major markets of the world. By extension, each of those lines are their own unique business, and it’s the accumulated portfolio that we check in and talk about on a quarterly basis. I subject you to all that as a bit of a backstory to understand the nuance there.
As much as we’re not thrilled with top line being down, the data supports what we know to be true, that our underlying core business has steadily expanded over the past few years, even while we’ve benefited from some exceptional upsides driven by films and episodic TV at the same time. That’s the best insight I can think of to provide as it relates to sales. I know some of you are now asking, yes, but what the heck is going on with margins? Fair question. It’s a bunch of different things, as it turns out, which tend to pile up on each other when they appear all at once. Product margin was something of a tightrope and likely will be most of the year. The newest, hottest product tends to sell through cleanly and secure the best margins at the beginning of the product lifecycle.
So based upon what we’ve said about the first half, we don’t have that working in our favor. Lower royalties may help you a bit here, but you have both the volume and rate components there. The films in the back half should help. We have two in particular that we’re excited about, but we had one last year that we were excited about back then. So the year-over-year excitement increment, from a margin point of view at least, is really only one noteworthy film that doesn’t release until December, that being Sonic 3. Rough numbers, we usually see 25% to 30% of marginal sales flow through to EBITDA. So in summary, I’d say sales volume created a $4 million to $5 million negative comp this quarter. Issue number two, the cleanup on aisle seven of the aforementioned disappointing Q4 2023 theatrical release.
Should this topic be somewhat done and resolved now? Yes, we hope so. I would say this was as big of an issue as issue number one in the quarter, if not a bit more. You have product on shelf, product in the warehouse, product and components in anticipation of spring orders, all of which is suddenly a bit ill-advised when the consumer isn’t responding. We’re moving on. Separate but related, call it to be, beginning in the second half of last year, and so far this year, we are seeing a return to more pre-COVID-like levels of product needing more price promotion to sell through cleanly. This can be a very challenging area to forecast prospectively, as you are inevitably presuming recent results will be indicative of future performance. But the alternative is to presume everything will be awesome and nothing bad will ever happen, and that’s not responsible or gap either.
So assume there was a bit of this happening in Q1 as well. But with all those thoughts in mind, we still feel we’re running a business that will generate a gross margin percentage that starts with a three, despite what Q1 might imply. Issue number three, we are spending more money on G&A areas as we’ve said in recent quarters. Our focus in 2020 and 2021 was survival and fixing the balance sheet. 2022 was a wild ride chasing a great revenue year. 2023 and now 2024 are gradually tuning up the organization, processes and infrastructure for the next wave of revenue growth. Unfortunately, at a time where everything tends to cost more than it did prior, that can be a bad look when revenues and gross margins are down. Some of the spending that’s happening in G&A is going to persist for a time until the revenue line makes it seem less notable or we get to better places from an efficiency point of view.
That said, you’re not going to see us leaning into talking about “one time” projects and backing those numbers out. That’s not in our plans. Some of these efforts are tallying up to six digit spend on a full year basis to give you an order of magnitude, but we wanted to point it out as they’re real as much as we’re trying to self-fund as much as we can by cutting back in other places. We’re simply trying to manage the business for the long-term as much as that sounds like an obvious thing to say. And some of that work is driving spending in areas where we’ve been lighter the past couple of years. That’s in addition to the reality of the cost for most SG&A areas tend to be running higher year-over-year on a rate basis, which we know is a phenomenon not unique to us.
Finally, four, it’s a small revenue quarter. Someone knocking over a vase [ph] in the lobby impacts the bottom line. No, that didn’t really happen. But metaphorically it does happen from time to time over the course of the year. Q1 seemed to have more than its fair share, low seven digits. In addition, there were some timing elements in total that were unfavorable for the quarter, but ideally will just prove to be some full year spending being pulled forward a bit more than 2023. That’s it for the P&L. Balance sheet. Stephen has talked about the preferred, happy to not be talking about them anymore. We were on a path to start paying the dividends in cash this year to stop the accretion. So the fact that we’re not eliminates about $1.7 million in cash that would have gone out the door and represents nearly 10% of the cash payment we did make in closing the transaction.
That payment is digging deep into the bank account for us given the time of the year, not unlike when we paid off the term loan last June. We have enough confidence in our outlook for the balance of the year that we can take the calculated risk to extend ourselves cash-wise without jeopardizing our overall liquidity. As of April 22nd, our total cash on hand was around $22 million as an additional reference point for you. Next, I wanted to update the narrative a bit on capital allocation. As Stephen mentioned, the preferred redemption opportunity surfaced on relatively short notice. So something we contemplated as more of a 2025 scenario has accelerated on us. We are being more diligent in monitoring cash given the unscheduled outflow and have a path forward to get to the end of the year with the backstop of our credit line.
