- Revenue increased 8% to $153.2
million in Q2 2022, compared to $142.3 million in Q2 2021. H1 2022 revenue grew
12% to $265.8 million, compared to
$237.7 million in H1 2021.
- Net income was $4.6 million in Q2
2022, compared to net income of $11.3
million in Q2 2021. H1 2022 net loss of $16.8 million, compared to net income of
$8.0 million in H1 2021, mainly due
to a non-cash, foreign exchange loss in Q1 2022.
- Cash provided by operating activities in Q2 2022 was
$11.3 million, compared to
$41.4 million in Q2 2021. H1 2022
cash flow used in operating activities of $0.1 million, compared to $60.9 million provided by operating activities in
H1 2021.
- Free Cash Flow1 for Q2 2022 was negative
$0.8 million, compared with Free Cash
Flow1 of $23.5 million in
Q2 2021, primarily due to significant growth in accounts
receivables associated with larger deals in the current quarter and
to timing of working capital settlements. H1 2022 negative Free
Cash Flow1 of $20.7
million, compared to positive Free Cash Flow1 of
$20.9 million in H1 2021.
- Adjusted EBITDA1 in Q2 2022 was $27.3 million, compared with $29.1 million in Q2 2021. Excluding other income
of $4.4 million from a litigation
settlement and $1.2 million of
government wage subsidies in Q2 2021, adjusted EBITDA1
increased 16% in Q2 2022 vs the same prior year quarter. H1 2022
adjusted EBITDA1 increased to $47.2 million, compared to $46.7 million in H1 2021. Normalizing for the
above-mentioned other income and $2.3
million in government wage subsidies in H1 2021, adjusted
EBITDA1 increased 18% vs the same six months last
year.
- Consumer Products revenue grew 35% to $62.5 million in Q2 2022, compared to
$46.4 million in Q2 2021. H1 2022
revenue increased to $110.9 million,
compared to $85.3 million in H1
2021.
- WildBrain Spark ("Spark") revenue increased 16% to $18.0 million in Q2 2022, compared to
$15.5 million in Q2 2021. H1 2022
revenue increased 37% to $33.4
million, compared to $24.4
million in H1 2021.
HALIFAX, NS, Feb. 8, 2022 /CNW/ - WildBrain Ltd. ("WildBrain"
or the "Company") (TSX: WILD), a global leader in kids' and family
entertainment, today reported its Fiscal 2022 second-quarter ("Q2
2022") and six-month ("H1 2022") results for the periods ended
December 31, 2021.
Eric Ellenbogen, WildBrain CEO,
said: "We activated yet another enduring IP brand with the recent
announcement of an all-new Degrassi series for HBO Max in the
US. Furthermore, HBO Max has licensed the entire 14-season,
385-episode library of Degrassi: The Next Generation for the
US. This partnership — the largest deal in the history of the
brand — underscores the importance of our ownership of a portfolio
of franchise IP in the highly competitive current market amongst
streaming platforms."
Ellenbogen added: "We're also demonstrating our strengths in
developing and sustaining new IP. We've just delivered to Netflix a
third season plus three new family specials for our original
series, Chip & Potato — a burgeoning preschool brand
that we're taking to the toy shelf under a licensing agreement with
JAKKS Pacific.
"Our production business in China is just getting started, marked by a
global partnership with leading Chinese streamer, iQIYI, for the
new original IP Jonny Jetboy from the creator of PAW
Patrol and Bob the Builder. The partnership spans
production supervision on the new series, as well as distribution
and licensing outside of China.
"We've also recently partnered with Jay Ward Productions across
distribution, production and licensing for their entire portfolio
including such legendary properties as Rocky & Bullwinkle,
George of the Jungle, Mr. Peabody & Sherman, Dudley Do-Right,
Super Chicken and more. This agreement adds another pillar of
renowned IP to our vault, contributing 788 episodes of classic
animation to our distribution library. We look forward to creating
fresh new content based on the Ward portfolio.
"As we promised, we're layering on more and more premium content
deals and launching and re-launching IP to drive consumer products
upside and grow our long-term earnings base. We're just
getting started, so stay tuned."
Aaron Ames, WildBrain CFO, added:
"We're executing on our plan, which delivered strong results in Q2
2022, especially given the high comp to Q2 2021. This was
highlighted by double-digit revenue growth in consumer products and
at WildBrain Spark. Holistic management of our consumer
products business for our owned and partner brands is translating
into higher Peanuts revenue and upside at our global licensing
agency, WildBrain CPLG. We're building on our core earnings base
from which we expect increasing momentum next year and beyond, as
new IP activations are brought to market and start to contribute to
our results."
Q2 2022 Performance – Executing on Priorities
PRIORITIES
|
HIGHLIGHTS
|
Activate IP and
Grow Key
Brands
|
- As part of our
"always-on" approach to building the widest possible audience for
Strawberry Shortcake, we signed an agreement with Netflix for four
brand-new animated CG specials to be produced in our studio.
Netflix also picked up the new digital series, Berry in the Big
City, to launch in Spring 2022, which premiered on Spark last
fall.
- Building on the
growing fan base for our preschool brand, Chip & Potato,
delivered to Netflix a third season of the original animated series
plus three new seasonal specials. We are extending popularity for
the property into consumer products for the first time, planning to
launch toys from JAKKS Pacific, in collaboration with our global
licensing agency WildBrain CPLG.
- Partnered with
leading China streaming service, iQIYI, to create a new original
animated series, Jonny Jetboy. WildBrain will supervise
development and production, as well as handle global distribution
and licensing outside of Greater China.
- Subsequent to
quarter-end, signed a multi-year deal to produce a new Degrassi
series, launching exclusively on HBO Max in the US in 2023.
Additionally, HBO Max has picked up the US rights for the entire
14-season library of Degrassi: The Next Generation.
- Partnered with Jay
Ward Productions across distribution, production and licensing for
such classic brands as Rocky & Bullwinkle, George of the
Jungle, Mr. Peabody & Sherman and Super Chicken.
|
Maximizing the
Value of
WildBrain Spark
|
- Spark revenue
increased 16% to $18.0 million in Q2 2022 vs $15.5 million in Q2
2021, reflecting recovery in advertising rates and our focus on
higher-value views.
- Enhanced
monetization of our large audience is driving growth in direct ad
sales, paid media and digital production. These nascent revenues
collectively increased by 127% in Q2 2022 vs Q2 2021.
|
Deliver
Sustainable
Growth
|
- Revenue increased
8% to $153.2 million in Q2 2022, compared to $142.3 million in Q2
2021.
- Adjusted
EBITDA1 was $27.3 million in Q2 2022 vs $29.1 million in
Q2 2021. Excluding other income of $4.4 million from a litigation
settlement and $1.2 million of government wage subsidies in Q2
2021, adjusted EBITDA1 increased 16% in Q2 2022 vs the
same prior year quarter.
- We reaffirm our
expectations for Fiscal 2022 of achieving revenue in the range of
$480.0 million to $500.0 million and adjusted EBITDA1
between $87.0 million to $93.0 million.
|
Q2 2022 Financial Highlights
Financial
Highlights1 (in millions of Cdn$)
|
Three Months
ended December
31,
|
Six Months
ended December
31,
|
2021
|
2020
|
2021
|
2020
|
Revenue
|
$153.2
|
$142.3
|
$265.8
|
$237.7
|
Gross
Margin
|
$63.6
|
$61.8
|
$115.2
|
$105.0
|
Gross Margin
(%)
|
42%
|
43%
|
43%
|
44%
|
Adjusted EBITDA
attributable to WildBrain
|
$27.3
|
$29.1
|
$47.2
|
$46.7
|
Net Income (Loss)
attributable to WildBrain
|
$4.6
|
$11.3
|
$(16.8)
|
$8.0
|
Basic Earnings (Loss)
per Share
|
$0.03
|
$0.07
|
$(0.10)
|
$0.05
|
Cash Provided by
(Used In) Operating Activities
|
$11.3
|
$41.4
|
$(0.1)
|
$60.9
|
Free Cash
Flow
|
$(0.8)
|
$23.5
|
$(20.7)
|
$20.9
|
In Q2 2022, revenue grew 8% to $153.2
million, compared with $142.3
million in the prior year, reflecting growth at Spark and
strong Consumer Products performance. H1 2022 revenue
increased to $265.8 million, compared
to $237.7 million in H1 2021.
Content Production and Distribution revenue was $61.3 million in Q2 2022 vs $68.5 million in Q2 2021, driven by a robust
pipeline of premium productions including Sonic Prime, new
Peanuts content, and work starting on Jonny Jetboy as well
as a number of large distribution deals in the current
quarter. This was against a high comp in Q2 2021, which
included $34.3 million from the
Peanuts library licensing deal to Apple TV+. H1 2022 revenue
was $98.8 million, compared to
$104.9 million in H1 2021.
Consumer Products revenue grew 35% to $62.5 million in Q2 2022, compared with
$46.4 million in Q2 2021, reflecting
the strength of the Peanuts franchise, supported by consistent
output of new content. We are also realizing the synergies of our
licensing agency, WildBrain CPLG, representing Peanuts across
Europe, the Middle East and India, as well as a broad uplift in revenue
across its portfolio of third-party IP partners. H1 2022 revenue
increased to $110.9 million, compared
to $85.3 million in H1 2021.
Q2 2022 revenue at Spark increased 16% to $18.0 million vs $15.5
million in Q2 2021, fueled by continued advertising
recovery. H1 2022 Spark revenue increased 37% to $33.4 million, compared to $24.4 million in H1 2021. Higher revenue at Spark
reflects increasing monetization of our large audience, driven by
premium content where we own the IP or share in consumer
products. Kids continued to be highly engaged on Spark, which
continued to attract wide audience engagement with 8.3 billion
views across 51.5 billion minutes of video watched on our network
in Q2 2022. This compared to 9.5 billion views and 59.7
billion minutes in watch time in Q2 2021 as consumption patterns
normalize from last year's peak viewership during COVID-19
lockdowns. These metrics have improved with views and watch time
increasing since hitting a trough in April
20212. During this same period, advertising
rates, on average, have increased 89% since April 20212.
Q2 2022 Gross Margin1 was steady at 42% vs 43% in Q2
2021. Gross Margin1 for H1 2022 remained consistent at
43% vs 44% in H1 2021.
Cash provided by operating activities in Q2 2022 was
$11.3 million, compared to
$41.4 million in Q2 2021. Free
Cash Flow1 for Q2 2022 was negative $0.8 million, compared with Free Cash
Flow1 of $23.5 million in
Q2 2021, primarily due to significant growth in accounts receivable
associated with larger deals in the current quarter and to timing
of working capital settlements. H1 2022 cash flow used in operating
activities of $0.1 million, compared
to $60.9 million provided by
operating activities in H1 2021. H1 2022 negative Free Cash
Flow1 of $20.7 million,
compared to positive Free Cash Flow1 of $20.9 million in H1 2021.
Adjusted EBITDA1 was $27.3
million in Q2 2022, compared with $29.1 million in Q2 2021, primarily driven by
higher gross margins and lower distribution to non-controlling
interests, offset by higher SG&A including growth initiatives.
Excluding other income of $4.4
million from a litigation settlement and $1.2 million of government wage subsidies in Q2
2021, adjusted EBITDA1 increased 16% in Q2 2022 vs the
same prior year quarter. H1 2022 adjusted EBITDA1
increased to $47.2 million, compared
to $46.7 million in H1 2021.
Normalizing for the above-mentioned other income and $2.3 million in government wage subsidies in H1
2021, adjusted EBITDA1 increased 18% vs the same six
months last year.
Q2 2022 net income was $4.6
million vs net income of $11.3
million in Q2 2021, primarily due to higher gross margins,
lower distribution to non-controlling interests, offset by higher
SG&A related to growth initiatives and a lower foreign exchange
gain in the current quarter. H1 2022 net loss of $16.8 million, compared to net income of
$8.0 million in H1 2021, mainly due
to a non-cash, foreign exchange loss in Q1 2022.
1.
|
Free Cash Flow,
Gross Margin, Adjusted EBITDA and Adjusted EBITDA attributable to
WildBrain are non-GAAP financial measures. Free Cash Flow is
defined as operating cash flow less distributions to
non-controlling interests, changes in interim production financing,
cash interest paid on our long-term debt, bank indebtedness and
lease liabilities and principal repayments on our lease
liabilities. Gross Margin means revenue less direct production
costs and expense of film and television programs produced (per the
financial statements). Adjusted EBITDA represents income of the
Company before amortization, finance income (expense), taxes,
reorganization and development expenses, impairments,
equity-settled share-based compensation expense, and adjustments
for other identified charges. Adjusted EBITDA attributable to
WildBrain means Adjusted EBITDA excluding the portion of Adjusted
EBITDA attributable to non-controlling interests. Further details
on the definitions of and reconciliation to Free Cash Flow, Gross
Margin, Adjusted EBITDA and Adjusted EBITDA attributable to
WildBrain can be found in the "Non-GAAP Financial Measures" section
of the Company's Q2 2022 Management Discussion and Analysis
("MD&A").
|
|
|
2.
|
Growth in views
and watch time from April 2021 to December 2021.
|
Q2 2022 Conference Call
The Company will hold a conference call on February 9, 2022 at 10:00
a.m. ET to discuss the results.
To listen, call +1 (888) 393-8218 toll-free or +1 (647) 484-0475
internationally and reference conference ID 4935501. Please allow
10 minutes to be connected to the conference call. Replay
will be available after the call on +1 (888) 203-1112 toll free or
+1 (647) 436-0148, under passcode 4935501, until February 16, 2022.
The audio and transcript will also be archived on our website
approximately two days after the event.
For more information, please contact:
Investor Relations: Nancy Chan-Palmateer - Director,
Investor Relations, WildBrain
nancy.chanpalmateer@wildbrain.com
+1 416-977-7358
Media: Shaun Smith - Director,
Corporate & Trade Communications, WildBrain
shaun.smith@wildbrain.com
+1 416-977-7230
About WildBrain
At WildBrain we inspire imaginations to run wild, engaging kids
and families everywhere with great content across all media. With
approximately 13,000 half-hours of filmed entertainment in our
library – one of the world's most extensive – we are home to such
brands as Peanuts, Teletubbies, Strawberry Shortcake, Yo Gabba Gabba! Caillou, Inspector Gadget,
Johnny Test and Degrassi. At our
75,000-square-foot state-of-the-art animation studio in
Vancouver, BC, we produce such
fan-favourite series as The Snoopy Show, Snoopy in Space, Chip
& Potato, Carmen Sandiego, Go,
Dog. Go! and more. Our shows are enjoyed worldwide in more than
150 countries on over 500 streaming platforms and telecasters, and
our AVOD business – WildBrain Spark – offers one of the largest
networks of kids' channels on YouTube, garnering billions of views
per month from over 245 million subscribers. Through our leading
agency, WildBrain CPLG, we also license consumer products and
location-based entertainment in every major territory for our own
properties as well as for our clients and content partners. Our
television group owns and operates four family entertainment
channels that are among the most viewed in Canada. WildBrain is headquartered in
Canada with offices worldwide and
trades on the Toronto Stock Exchange (TSX: WILD). Please visit us
at www.wildbrain.com.
Forward-Looking Statements
This press release
contains "forward looking statements" under applicable securities
laws with respect to WildBrain including, without limitation,
statements regarding the growth strategy of WildBrain, WildBrain's
production pipeline and projects in development, WildBrain's brand
strategies (including its plans for developing and monetizing
Peanuts, Strawberry Shortcake and other franchises), the activation
of WildBrain's IP and the results and benefits therefrom,
WildBrain's direct ad sales business, the value of WildBrain's
assets, leverage ratio and cash flow, use of capital for
investments and other growth opportunities and expected returns
therefrom, monetization of WildBrain Spark, the business strategies
and operational activities of WildBrain, the markets and industries
in which WildBrain operates, and the growth and future financial
and operating performance of WildBrain. Although WildBrain believes
that the expectations reflected in such forward looking statements
are reasonable, such statements involve risks and uncertainties and
are based on information currently available to WildBrain. Actual
results or events may differ materially from those expressed or
implied by such forward looking statements. These forward-looking
statements are made as of the date hereof, and WildBrain assumes no
obligation to update or revise them to reflect new events or
circumstances, except as required by law.
Forward-looking statements are based on factors and assumptions
that management believes are reasonable at the time they are made,
but a number of assumptions may prove to be incorrect, including,
but not limited to, assumptions about (i) WildBrain's future
operating results, (ii) the expected pace of expansion of
WildBrain's operations, (iii) future general economic and market
conditions, including debt and equity capital markets and the
availability of financing on acceptable terms, (iv) the impact of
increasing competition on WildBrain, (v) changes in the industries
and changes in laws and regulations related to the industries in
which WildBrain operates, (vi) consumer and consumer preferences,
(vii) the ability of WildBrain to execute on acquisition and other
growth strategies and opportunities and realize the expected
benefits therefrom, (viii) the ability of WildBrain to execute on
production, distribution and licensing arrangements, (ix) the
availability of investment opportunities at acceptable valuations
and the ability of WildBrain to execute on such investment
opportunities, * the timing for commencement and completion of
productions, (xi) the ability of WildBrain and its partners to
execute on its brand plans and consumer products programs, (xii)
changes in the markets and industries in which the WildBrain
operates and the ability of WildBrain to adapt to such changes,
(xiii) changes to YouTube and in advertising markets, (xiv) the
ability of WildBrain to commercialize consumer products related to
its brands, and (xv) changes in foreign exchange and interest
rates.
Forward-looking statements are inherently subject to 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
statements in this press release. Factors that could cause actual
results or events to differ materially from current expectations
include, among other things, the current outbreak of COVID-19 and
the magnitude and length of economic disruption as a result of such
outbreak, market factors, WildBrain's ability to close and execute
on anticipated production, distribution, licensing and other
contracts, the ability of WildBrain to realize the expected value
of its assets, and other factors discussed in materials filed with
applicable securities regulatory authorities from time to time
including matters discussed under "Risk Factors" in WildBrain's
most recent Annual Information Form and Management Discussion and
Analysis filed with the securities regulatory authorities in
Canada and available under the
Company's profile on SEDAR (www.sedar.com).
Non-IFRS Measures
In this press release, WildBrain
uses certain non-IFRS financial measures, including "Free Cash
Flow", "Gross Margin", "Adjusted EBITDA", and "Adjusted EBITDA
attributable to WildBrain", to measure, compare and explain
WildBrain's operating results and financial performance. These
measures and other non-IFRS measures are commonly used by entities
in WildBrain's industry as useful metrics for measuring
performance. However, they do not have any standardized meaning
prescribed by IFRS and are not necessarily comparable to similar
measures presented by other publicly traded entities. These
measures should be considered as supplemental in nature and not as
a substitute for related financial information prepared in
accordance with IFRS. For further details on these non-IFRS
measures, including relevant definitions and reconciliations, see
"Non-GAAP Measures" in WildBrain's most recent MD&A.
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SOURCE WildBrain Ltd.