TORONTO, Nov. 6, 2018
/CNW/ - Spin Master Corp. ("Spin Master" or the "Company")
(TSX: TOY; www.spinmaster.com), a leading global children's
entertainment company, today announced its financial results for
the third quarter and nine months ended September 30, 2018.
The Company's full Management's Discussion and Analysis and
unaudited condensed consolidated interim financial statements for
the three and nine months ended September 30, 2018 are
available on SEDAR (www.sedar.com) and posted on the Company's
website at www.spinmaster.com/financial-info.php.
"In a quarter where sales were affected by the uncertainty
arising from the demise of Toys "R" Us, we are pleased with our
operating and financial results for Q3 2018. We saw particularly
strong growth in our Activities, Games & Puzzles business
segment, further bolstered by our newest acquisition, Gund,"
said Ronnen Harary, Chairman and
Co-Chief Executive Officer of Spin Master. "Looking forward, we are
excited about our upcoming innovative product line integrated with
entertainment content, to growing our franchises globally including
the relaunch of Bakugan and to launching the Monster
Jam and How to Train your Dragon licensed product
lines."
Q3 2018 Financial Highlights as compared to the same period
in 20171
- Revenue of US$620.0 million
increased 2.3% from US$606.1
million.
- In Constant Currency2 terms, revenue increased by
2.9%.
- Gross Product Sales2 decreased by 0.4% to
US$658.2 million, compared to
US$660.9 million, driven by declines
in Air Hogs, Zoomer and PAW Patrol, offset by sales
of Gund and increases in Cool Maker, Kinetic Sand,
and the games portfolio including Cardinal.
- Gross Product Sales2 increased by 17.4% in the Rest
of World and decreased by 1.5% in North
America and 5.8% in Europe
respectively. International Gross Product Sales2 on a
combined basis were 33.3% of total Gross Product Sales2,
up from 32.5%.
- Other Revenue, which primarily reflects merchandising royalty
and television distribution income from products marketed by third
parties using Spin Master's owned intellectual property, as well as
app revenue from Toca Boca and Sago
Mini, increased by 46.1% to US$25.8
million compared to US$17.7
million.
- Gross profit increased by 0.3% to US$317.8 million, representing 51.3% of revenue,
compared to US$316.9 million, or
52.3% of revenue in Q3 2017. The decrease in gross margin was
primarily driven by the amortization of the inventory fair market
value increment associated with the Gund acquisition, higher
entertainment property amortization and product mix partially
offset by higher Other Revenue and lower sales allowances.
- Selling, general and administrative expenses ("SG&A"),
adjusted for share-based compensation expenses, represented 25.7%
of revenue compared to 26.8%. The decrease was primarily due to
lower administrative and selling expenses partially offset by
higher marketing, distribution and product development costs.
- Net income was US$107.9 million,
or US$1.06 per share, compared with
US$108.8 million, or US$1.07 per share.
- Adjusted Net Income2 was US$117.7 million, or US$1.16 per share, compared to US$111.7 million, or US$1.10 per share.
- Adjusted EBITDA2 was US$179.8
million, up 5.6% from US$170.3
million. Adjusted EBITDA Margin2 increased to
29.0% from 28.1%. The increase in Adjusted EBITDA
Margin2 was largely driven by lower SG&A
expenses.
- Net cash flows provided by operating activities was
US$106.9 million compared to
US$113.3 million. Free Cash
Flow2 was US$149.8 million
compared to US$145.2 million.
"Our performance this quarter highlights the continued
successful execution against our four key growth strategies and
demonstrates Spin Master's resilience in what has been a
challenging period for the industry" said Ben Gadbois, President and Chief Operating
Officer of Spin Master. "While we remain confident that the
industry will ultimately recover the sales lost to the disruption
caused by the Toys "R" Us liquidation, we did not see as much
recovery in the third quarter as we expected. Nevertheless, we
achieved both revenue and profitability growth in the quarter over
last year and generated operating leverage through a strong focus
on cost management."
Q3 2018 Gross
Product Sales2 by Business Segment (US$
millions)
|
|
|
|
|
|
Q3
2018
|
Q3
2017
|
%
Change
|
Activities, Games
& Puzzles
|
$166.5
|
$128.2
|
|
29.9%
|
Remote Control and
Interactive Characters
|
$237.9
|
$264.1
|
|
(9.9)%
|
Boys Action and
High-Tech Construction
|
$37.3
|
$44.7
|
(16.6)%
|
Pre-School and
Girls
|
$208.4
|
$215.7
|
(3.4)%
|
Outdoor
|
$8.1
|
$8.2
|
(2.1)%
|
Gross Product
Sales2
|
$658.2
|
$660.9
|
(0.4)%
|
Other
Revenue
|
$25.8
|
$17.7
|
46.1%
|
Sales
Allowances2
|
$64.0
|
$72.5
|
(11.6)%
|
Revenue
|
$620.0
|
$606.1
|
2.3%
|
Q3 2018 Business Segment Gross Product Sales2
as compared to the same period in 2017
Gross Product
Sales2 in the Activities, Games & Puzzles segment
increased by 29.9%, primarily driven by sales of Gund and
increases in Cool Maker, Kinetic Sand and Spin Master's
games portfolio, which includes Cardinal and Marbles,
partially offset by decreases in Bunchems, Doctor Dreadful
and licensed Build a Bear products. Gross Product
Sales2 in the Remote Control and Interactive
Characters segment decreased by 9.9%, primarily due to decreased
sales of Air Hogs, and Zoomer, partially offset by
increases in Hatchimals Colleggtibles and
Luvabella. Gross Product Sales2 in the Boys
Action and High-Tech Construction segment decreased by 16.6%,
primarily due to decreased sales of Meccano and Star
Wars licensed merchandise. This was partially offset by
increases in Boxer and Fugglers. Gross Product
Sales2 in the Pre-School and Girls segment
decreased by 3.4%, driven by decreased sales of PAW Patrol,
ZhuZhu Pets and Chubby Puppies, partially offset by
sales of Party Popteenies and Twisty Petz. Gross
Product Sales2 in the Outdoor segment decreased by
2.1% in Q3.
September 30, 2018 Year to Date
("YTD") Financial Highlights as compared to the same period in
2017
- Revenue of US$1,217.2 million
increased by 9.6% from US$1,110.5
million.
- In Constant Currency2 terms, revenue increased by
9.0%.
- Gross Product Sales2 increased by 5.9% to
US$1,242.5 million, compared to
US$1,173.2 million, driven by sales
of Gund and increases in Hatchimals Colleggtibles, Cool
Maker, Kinetic Sand and Spin Master's games portfolio, which
includes Cardinal and Marbles, more than offsetting
declines in PAW Patrol, ZhuZhu Pets, Chubby Puppies and
Teletubbies.
- Gross Product Sales2 increased by 3.7% in
North America, 2.1% in
Europe and 26.0% in the Rest of
World respectively. International Gross Product Sales2
on a combined basis represented 33.6% of total Gross Product
Sales2 increasing from 32.1%.
- Other Revenue increased by 59.2% to US$88.8 million compared to US$55.8 million.
- Gross profit increased by 8.4% to US$619.8 million, representing 50.9% of revenue,
compared with US$571.6 million, or
51.5% of revenue.
- SG&A, adjusted for share-based compensation expenses and
the Toys "R" Us bad debt expense, represented 33.4% of revenue
compared to 32.5%. The increase was primarily due to higher
marketing expenses partially offset by lower selling expenses.
- Net income increased by 1.8% to US$143.5
million, or US$1.41 per share,
compared to US$141.0 million, or
US$1.39 per share.
- Adjusted Net Income2 increased by 6.7% to
US$157.4 million, or $1.55 per share, compared to US$147.5 million, or US$1.45 per share.
- Adjusted EBITDA2 was US$268.5
million, up 9.7% from US$244.9
million. Adjusted EBITDA Margin2 increased to
22.1% from 22.0%.
- Net cash flows provided by operating activities was
US$121.6 million compared to
US$157.9 million. Free Cash
Flow2 decreased to US$141.0
million from US$175.0
million.
YTD September 30
Gross Product Sales2 by Business Segment (US$
millions)
|
|
2018
|
2017
|
%
Change
|
Activities, Games
& Puzzles
|
$310.3
|
$233.9
|
32.7%
|
Remote Control and
Interactive Characters
|
$397.5
|
$394.7
|
0.7%
|
Boys Action and
High-Tech Construction
|
$75.2
|
$75.4
|
(0.3)%
|
Pre-School and
Girls
|
$378.4
|
$390.7
|
(3.1)%
|
Outdoor
|
$81.1
|
$78.5
|
3.3%
|
Gross Product
Sales2
|
$1,242.5
|
$1,173.2
|
5.9%
|
Other
Revenue
|
$88.8
|
$55.8
|
59.2%
|
Sales
Allowances2
|
$114.1
|
$118.5
|
(3.7)%
|
Revenue
|
$1,217.2
|
$1,110.5
|
9.6%
|
September 30 YTD Business
Segment Gross Product Sales2 as compared to the
same period in 2017
Gross Product Sales2 in the
Activities, Games & Puzzles segment increased by 32.7%,
primarily driven by sales of Gund and increases in Cool
Maker, Kinetic Sand and Spin Master's games portfolio, which
includes Cardinal and Marbles, partially offset by
decreases in Bunchems, Build a Bear, and Doctor
Dreadful. Gross Product Sales2 in the Remote
Control and Interactive Characters segment increased by 0.7%,
primarily due to higher sales of Hatchimals Colleggtibles
and Luvabella which offset declines in Air
Hogs and Zoomer. Gross Product Sales2 in
the Boys Action and High-Tech Construction segment decreased by
0.3%, primarily as a result of decreases in Meccano and
Pirates of the Caribbean
licensed products, offset by sales of Boxer, Flush Force,
and Fugglers. Gross Product Sales2 in the
Pre-School and Girls segment decreased by 3.1%, primarily driven by
declines in PAW Patrol, ZhuZhu Pets, Chubby Puppies and
Teletubbies, offset by sales of Party Popteenies and
Twisty Petz. Gross Product Sales2 in the
Outdoor segment increased by 3.3%, driven by products under the
Swimways, Kelysius, Coop and Aerobie
brands.
Outlook
For the full year 2018, organic Gross Product
Sales2 are now expected to grow in the low single digit
range relative to 2017 as compared to the mid-single digit growth
rate announced in connection with the release of Q2 2018 results in
August 2018. Including Gund,
Spin Master now expects mid-single digit Gross Product
Sales2 growth for the full year 2018 relative to 2017,
compared to the mid to high single digit growth rate announced in
connection with the release of Q2 2018 results in August
2018. Consistent with prior guidance, Adjusted EBITDA
Margins2 in 2018, both including and excluding
Gund, are expected to be slightly higher than Adjusted
EBITDA Margins2 in 2017. Adjusted EBITDA
Margins2 are calculated as a percentage of Revenue and
not Gross Product Sales2.
Conference call
Ronnen
Harary, Co-Chief Executive Officer, Ben Gadbois, President & Chief Operating
Officer, and Mark Segal, Executive
Vice President and Chief Financial Officer will host a conference
call to discuss Q3 2018 results on Wednesday, November 7, 2018 at 9:30 a.m. EST.
The call-in numbers for participants are (647) 427-7450 or (888)
231-8191. A live webcast of the call will be accessible via Spin
Master's website at: http://www.spinmaster.com/events.php.
Following the call, both an audio recording and transcript of the
call will be archived on the same website page and will be
available indefinitely.
About Spin Master
Spin Master
(TSX:TOY; www.spinmaster.com) is a leading global children's
entertainment company that creates, designs, manufactures, licenses
and markets a diversified portfolio of innovative toys, games,
products and entertainment properties. Spin Master is best known
for award-winning brands including Zoomer®, Bakugan®, Erector® by
Meccano®, Hatchimals®, Air Hogs® and PAW Patrol®. Since 2000,
Spin Master has received 96 TIA Toy of The Year (TOTY) nominations
with 28 wins across a variety of product categories, including 13
TOTY nominations for Innovative Toy of the Year, more than any of
its competitors. To date, Spin Master has produced six television
series, including 2007 success Bakugan Battle Brawlers and current
hit PAW Patrol, which is broadcast in over 160 countries and
territories globally. Spin Master employs over 1,600 people
globally with offices in Canada, United
States, Mexico, France, Italy, United
Kingdom, Slovakia, Poland, Germany, Sweden, the
Netherlands, China, Hong
Kong, Japan, Vietnam and Australia.
Non-IFRS Financial Measures
In addition to using
financial measures prescribed under IFRS, references are made in
this press release to "EBITDA", "Adjusted EBITDA", "Adjusted EBITDA
Margin", "Adjusted Net Income", "Free Cash Flow", "Gross Product
Sales", "Constant Currency" and "Sales Allowances", which are
non-IFRS financial measures. Non-IFRS financial measures do not
have any standardized meaning prescribed by IFRS and are therefore
unlikely to be comparable to similar measures presented by other
issuers.
EBITDA is calculated as net earnings before finance costs,
income tax expense and depreciation and amortization.
Adjusted EBITDA is calculated as EBITDA excluding normalization
adjustments, non-recurring items that do not necessarily reflect
the Company's underlying financial performance. Normalization
adjustments include restructuring costs, foreign exchange gains or
losses, equity-settled share-based compensation expenses,
impairment of intangible assets, fair market value adjustments to
acquired inventories and bad debt expense, among other items.
Adjusted EBITDA is used by management as a measure of the Company's
profitability.
Adjusted EBITDA Margin is calculated as Adjusted EBITDA divided
by Revenue. Management uses Adjusted EBITDA Margin to evaluate the
Company's performance compared to internal targets and to benchmark
its performance against key competitors.
Adjusted Net Income is calculated as net income excluding
normalization adjustments, as defined above, and the corresponding
impact these items have on income tax expense. Management uses
Adjusted Net Income to measure the underlying financial performance
of the business on a consistent basis over time.
Constant Currency represents Revenue and Gross Product Sales
results that are presented excluding the impact from changes in
foreign currency exchange rates. The current period and prior
period results for entities reporting in currencies other than the
US dollar are translated using consistent exchange rates, rather
than using the actual exchange rate in effect during the respective
periods. The difference between the current period and prior period
results using the consistent exchange rates reflects the changes in
the underlying performance results, excluding the impact from
fluctuations in foreign currency exchange rates.
Free Cash Flow is calculated as cash flows provided by/used in
operating activities before changes in net working capital and
after cash flows used in investing activities before cash used in
license, brand and business acquisitions. Management uses the Free
Cash Flow metric to analyze the cash flow being generated by the
Company's business.
Gross Product Sales represent sales of the Company's products to
customers, excluding the impact of Sales Allowances. As Sales
Allowances are generally not associated with individual products,
the Company uses changes in Gross Product Sales as to provide
meaningful comparisons across product category and geographical
segment results to highlight trends in Spin Master's
business. For a reconciliation of Gross Product Sales to
Revenue, please see the table "Q3 2018 Gross Product Sales by
Business Segment" in this press release.
Sales Allowances represent marketing and sales credits requested
by customers relating to factors such as co-operative advertising,
contractual discounts, negotiated discounts, customer audits,
volume rebates, defective products and costs incurred by customers
to sell the Company's products and are recorded as a reduction to
Gross Product Sales. Management uses Sales Allowances to identify
and compare the cost of doing business with individual retailers,
different geographic markets and amongst various distribution
channels.
Management believes that the non-IFRS measures defined above are
important supplemental measures of operating performance and
highlight trends in the core business that may not otherwise be
apparent when relying solely on IFRS financial measures. Management
believes that these measures allow for assessment of the Company's
operating performance and financial condition on a basis that is
more consistent and comparable between reporting periods. The
Company believes that lenders, securities analysts, investors and
other interested parties frequently use these non-IFRS financial
measures in the evaluation of issuers.
The following tables presents a reconciliation of Net Income to
EBITDA, Adjusted EBITDA and Adjusted Net Income, and Cash provided
by Operations to Free Cash Flow for the three and nine months ended
September 30, 2018 and 2017. All
references to $ refer to US$:
|
|
Three Months Ended
September 30
|
(in $ thousands,
except percentages)
|
2018
|
2017
|
$
Change
|
%
Change
|
Reconciliation of
Non-IFRS Financial Measures
|
|
|
|
|
Net
income
|
107,891
|
108,825
|
(934)
|
(0.9)%
|
|
Income tax
expense
|
38,211
|
42,233
|
(4,022)
|
(9.5)%
|
|
Finance
costs
|
2,732
|
2,558
|
174
|
6.8%
|
|
Depreciation and
amortization
|
17,676
|
12,670
|
5,006
|
39.5%
|
EBITDA
(1)
|
166,510
|
166,286
|
224
|
0.1%
|
Normalization
Adjustments:
|
|
|
|
|
|
Restructuring
(2)
|
404
|
167
|
237
|
141.9%
|
|
Foreign exchange loss
(gain) (3)
|
5,372
|
(5,831)
|
11,203
|
(192.1)%
|
|
Share based
compensation (4)
|
3,612
|
2,425
|
1,190
|
49.1%
|
|
Acquisition related
incentive compensation (5)
|
250
|
279
|
(29)
|
(10.4)%
|
|
Impairment of
intangible assets (6)
|
—
|
3,800
|
(3,800)
|
(100.0)%
|
|
Amortization of fair
market value adjustments (7)
|
3,692
|
—
|
3,692
|
n.m.
|
|
Bad debt expense
(8)
|
—
|
5,382
|
(5,382)
|
(100.0)%
|
|
Royalty recovery
(9)
|
—
|
(2,200)
|
2,200
|
(100.0)%
|
Adjusted EBITDA
(1)
|
179,840
|
170,308
|
9,532
|
5.6%
|
|
Income tax
expense
|
38,211
|
42,233
|
(4,022)
|
(9.5)%
|
|
Finance
costs
|
2,732
|
2,558
|
174
|
6.8%
|
|
Depreciation and
amortization
|
17,676
|
12,670
|
5,006
|
39.5%
|
|
Tax effect of
normalization adjustments (10)
|
3,487
|
1,136
|
2,351
|
207.0%
|
Adjusted Net
Income (1)
|
117,734
|
111,711
|
6,023
|
5.4%
|
|
|
|
|
|
|
Cash provided by
operations
|
106,928
|
113,343
|
(6,415)
|
(5.7)%
|
Changes in net
working capital
|
53,898
|
53,300
|
598
|
1.1%
|
Cash provided by
operations before net working capital changes
|
160,826
|
166,643
|
(5,817)
|
(3.5)%
|
Cash used in
investing activities
|
(11,048)
|
(32,169)
|
21,121
|
(65.7)%
|
Cash used for
license, brand and business acquisitions
|
—
|
10,695
|
(10,695)
|
(100.0)%
|
Free Cash Flow
(1)
|
149,778
|
145,169
|
4,609
|
3.2%
|
|
1) Non-IFRS financial
measure. See "Non-IFRS Financial Measures".
|
2) Restructuring
primarily relates to organizational changes.
|
3) Includes foreign
exchange (gains) losses generated by the translation of monetary
assets/liabilities denominated in a currency other than the
functional currency of the applicable entity and (gains) losses
related to the Company's hedging programs.
|
4) Related to
non-cash expenses associated with subordinate voting shares granted
to equity participants at the time of the Company's initial public
offering and share option expense. As of August 1, 2018, share
based compensation includes non-cash expenses related to the
Company's long-term incentive plan.
|
5) Remuneration
expense associated with contingent consideration for the Swimways
acquisition.
|
6) Non-cash
impairment charges for intangible assets relating to licenses,
content development, brands and trademarks.
|
7) Amortization of
fair market value adjustments to inventory relating to the
acquisition of Gund in the second quarter of 2018.
|
8) Non-recurring bad
debt expense related to the bankruptcy declaration of Toys "R" Us
during the third quarter of 2017.
|
9) Non-recurring
royalty income recovery related to 2016 fiscal year.
|
10) Tax effect of
normalization adjustments (Footnotes 2-9). Normalization
adjustments are tax effected at the effective tax rate of the given
period.
|
|
|
Nine Months Ended
September 30
|
(in $ thousands,
except percentages)
|
2018
|
2017
|
$
Change
|
%
Change
|
Reconciliation of
Non-IFRS Financial Measures
|
|
|
|
|
Net
income
|
143,501
|
141,026
|
2,475
|
1.8%
|
|
Income tax
expense
|
50,814
|
54,520
|
(3,706)
|
(6.8)%
|
|
Finance
costs
|
6,546
|
7,861
|
(1,315)
|
(16.7)%
|
|
Depreciation and
amortization
|
48,759
|
32,486
|
16,273
|
50.1%
|
EBITDA
(1)
|
249,620
|
235,893
|
13,727
|
5.8%
|
Normalization
adjustments:
|
|
|
|
|
|
Restructuring
(2)
|
2,234
|
1,353
|
881
|
65.1%
|
|
Foreign exchange loss
(gain) (3)
|
4,044
|
(14,236)
|
18,280
|
(128.4)%
|
|
Share based
compensation (4)
|
7,747
|
8,006
|
(259)
|
(3.2)%
|
|
Legal settlement
(5)
|
(15,500)
|
—
|
(15,500)
|
n.m.
|
|
Bad debt expense
(6)
|
15,152
|
5,382
|
9,770
|
181.5%
|
|
Acquisition related
incentive compensation (7)
|
1,491
|
840
|
651
|
77.5%
|
|
Impairment of
intangible assets (8)
|
—
|
6,501
|
(6,501)
|
(100.0)%
|
|
Amortization of fair
market value adjustments (9)
|
3,692
|
2,355
|
1,337
|
56.8%
|
|
Transaction costs
(10)
|
—
|
956
|
(956)
|
(100.0)%
|
|
Royalty recovery
(11)
|
—
|
(2,200)
|
2,200
|
(100.0)%
|
Adjusted EBITDA
(1)
|
268,480
|
244,850
|
23,630
|
9.7%
|
|
Income tax
expense
|
50,814
|
54,520
|
(3,706)
|
(6.8)%
|
|
Finance
costs
|
6,546
|
7,861
|
(1,315)
|
(16.7)%
|
|
Depreciation and
amortization
|
48,759
|
32,486
|
16,273
|
50.1%
|
|
Tax effect of
normalization adjustments (12)
|
4,932
|
2,498
|
2,434
|
97.4%
|
Adjusted Net
Income (1)
|
157,429
|
147,485
|
9,944
|
6.7%
|
|
|
|
|
|
|
Cash provided by
operations
|
121,649
|
157,880
|
(36,231)
|
(22.9)%
|
Changes in net
working capital
|
83,679
|
73,732
|
9,947
|
13.5%
|
Cash provided by
operations before net working capital changes
|
205,328
|
231,612
|
(26,284)
|
(11.3)%
|
Cash used in
investing activities
|
(141,402)
|
(71,980)
|
(69,422)
|
96.4%
|
Cash used for
license, brand and business acquisitions
|
77,029
|
15,370
|
61,659
|
401.2%
|
Free Cash Flow
(1)
|
140,955
|
175,002
|
(34,047)
|
(19.5)%
|
|
1) Non-IFRS financial
measure. See "Non-IFRS Financial Measures".
|
2) Restructuring
primarily relates to organizational changes.
|
3) Includes foreign
exchange (gains) losses generated by the translation of monetary
assets/liabilities denominated in a currency other than the
functional currency of the applicable entity and (gains) losses
related to the Company's hedging programs.
|
4) Related to
non-cash expenses associated with subordinate voting shares granted
to equity participants at the time of the Company's initial public
offering and share option expense. As of August 1, 2018, share
based compensation includes non-cash expenses related to the
Company's long-term incentive plan.
|
5) Non-recurring
legal settlement in the Company's favour in the second quarter of
2018.
|
6) Non-recurring bad
debt expense related to the bankruptcy declaration and liquidation
proceedings of Toys "R" Us during the first quarter of 2018 and
third quarter of 2017.
|
7) Remuneration
expense associated with contingent consideration for the Swimways
acquisition.
|
8) Non-cash
impairment charges for intangible assets relating to licenses,
content development, brands and trademarks.
|
9) Amortization of
fair market value adjustments to inventory relating to the
acquisition of Gund in the second quarter of 2018;
Marbles and Aerobie in the second and third quarters
of 2017, respectively; and Swimways in the third quarter of
2016.
|
10) Non-recurring
transaction costs relating to the Marbles acquisition in the
second quarter of 2017.
|
11) One-time royalty
income recovery related to 2016 fiscal year.
|
12) Tax effect of
normalization adjustments (Footnotes 2-11). Normalization
adjustments are tax effected at the effective tax rate of the given
period.
|
Forward Looking Statements
Certain statements, other
than statements of historical fact, contained in this press release
constitute "forward-looking information" within the meaning of
certain securities laws, including the Securities Act (Ontario), and are based on expectations,
estimates and projections as of the date on which the statements
are made in this press release. The words "plans", "expects",
"projected", "estimated", "forecasts", "anticipates", "indicative",
"intend", "guidance", "outlook", "potential", "prospects", "seek",
"strategy", "targets" or "believes", or variations of such words
and phrases or statements that certain future conditions, actions,
events or results "will", "may", "could", "would", "should",
"might" or "can", or negative versions thereof, "be taken",
"occur", "continue" or "be achieved", and other similar
expressions, identify statements containing forward-looking
information. Statements of forward-looking information in this
press release include, without limitation, statements with respect
to: the Company's outlook for 2018 (see "Outlook"); the
products and entertainment properties expected to be launched in
2018 and beyond ; that the industry will eventually recover all the
sales lost to the disruption caused by the Toys "R" Us liquidation;
and some expected third quarter sales will be realized in the
fourth quarter.
Forward-looking statements are necessarily based upon
management's perceptions of historical trends, current conditions
and expected future developments, as well as a number of specific
factors and assumptions that, while considered reasonable by
management as of the date on which the statements are made in this
press release, are inherently subject to significant business,
economic and competitive uncertainties and contingencies which
could result in the forward-looking statements ultimately being
incorrect. In addition to any factors and assumptions set forth
above in this press release, the material factors and assumptions
used to develop the forward-looking information include, but are
not limited to: the expanded use of advanced technology, robotics
and innovation the Company applies to its products will have a
level of success consistent with its past experiences; the Company
will continue to successfully secure broader licenses from third
parties for major entertainment properties consistent with past
practices; the expansion of sales and marketing offices in new
markets will increase the sales of products in that territory; the
Company will be able to successfully identify and integrate
strategic acquisition opportunities; the Company will be able to
maintain its distribution capabilities; the Company will be able to
leverage its global platform to grow acquired companies' brands
sales; the Company will be able to recognize and capitalize on
opportunities earlier than its competitors; the Company will
be able to continue to build and maintain strong, collaborative
relationships; the Company will maintain its status as a preferred
collaborator; the culture and business structure of the Company
will support its growth; the current business strategies of the
Company will continue to be desirable on an international platform;
the Company will be able to expand its portfolio of owned
branded intellectual property and successfully license it to third
parties; use of advanced technology and robotics in the Company's
products will expand; access of entertainment content on mobile
platforms will expand; fragmentation of the market will continue to
create acquisition opportunities; the Company will be able to
maintain its relationships with its employees, suppliers and
retailers; the Company will continue to attract qualified personnel
to support its development requirements; and the Company founders
will continue to be involved in the Company; Company products and
entertainment properties will be launched as scheduled; and that
the risk factors noted below, collectively, do not have a material
impact on the Company.
By its nature, forward-looking information is subject to
inherent risks and uncertainties that may be general or specific
and which give rise to the possibility that expectations,
forecasts, predictions, projections or conclusions will not prove
to be accurate, that assumptions may not be correct, and that
objectives, strategic goals and priorities will not be achieved.
Known and unknown risk factors, many of which are beyond the
control of the Company, could cause actual results to differ
materially from the forward-looking information in this press
release. Such risks and uncertainties include, without limitation,
the factors discussed under "Risk Factors" in the Company's
continuous disclosure documents filed under the Company's profile
on SEDAR (www.sedar.com) including the Company's Management
Discussion and Analysis and Annual Information Form. These risk
factors are not intended to represent a complete list of the
factors that could affect the Company and investors are cautioned
to consider these and other factors, uncertainties and potential
events carefully and not to put undue reliance on forward-looking
statements.
There can be no assurance that forward-looking statements will
prove to be accurate, as actual results and future events could
differ materially from those anticipated in such statements.
Forward-looking statements are provided for the purpose of
providing information about management's expectations and plans
relating to the future. The Company disclaims any intention or
obligation to update or revise any forward-looking statements
whether as a result of new information, future events or otherwise,
or to explain any material difference between subsequent actual
events and such forward-looking statements, except to the extent
required by applicable law.
___________________________________
|
1 The
financial highlights in this release are presented in US$ millions,
whereas the financial information in Management's Discussion and
Analysis (the "MD&A") is presented in US$ thousands. This may
result in immaterial differences in rounding and the calculated
percentages reflected between the two documents.
|
2 Non-IFRS
financial measure. See "Non-IFRS Financial Measures"
section.
|
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SOURCE Spin Master Corp.