Full Year 2018 Gross Product
Sales1 Increase 3.1%
TORONTO, Feb. 13, 2019 /CNW/ - Spin Master Corp. ("Spin
Master" or the "Company") (TSX: TOY; www.spinmaster.com), a leading
global children's entertainment company, today announced
preliminary Gross Product Sales (a non-IFRS financial measure) for
the fourth quarter and full year 2018.
These preliminary Gross Product Sales1 results for
the fourth quarter and full year 2018 are intended to provide
context for Spin Master's performance in advance of the 2019 New
York Toy Fair. This is consistent with broader industry practice
regarding the release of financial information ahead of this
significant industry event. Spin Master will host 2019
product previews for investors and analysts on February 19th at the New York Toy Fair and is
scheduled to report its full financial results for the fourth
quarter and full year 2018 after the close of business on
March 6th, 2019.
"We are incredibly proud of our sales performance in 2018,
despite the effect that the liquidation of Toys R' Us had on the
toy industry," said Ronnen Harary,
Chairman and Co-Chief Executive Officer of Spin Master. "This past
year was uniquely challenging for both the U.S. and global toy
industry, with sales declining two percent for the full year in the
U.S." continued Mr. Harary. "Despite these challenges, our 2018
full year Gross Product Sales1 grew over three percent
to record levels for Spin Master. We are particularly pleased with
the strength of our overall product portfolio as Gross Product
Sales1 in four of our five business segments increased
for both the fourth quarter and full year 2018."
|
2018
|
2017
|
%
Change2
|
Activities, Games
& Puzzles and Plush
|
$455.5
|
$365.4
|
24.7%
|
Remote Control and
Interactive Characters
|
$505.4
|
$593.4
|
(14.8)%
|
Boys Action and
High-Tech Construction
|
$133.1
|
$112.1
|
18.7%
|
Pre-School and
Girls
|
$517.5
|
$493.1
|
5.0%
|
Outdoor
|
$96.5
|
$93.1
|
3.6%
|
Gross Product
Sales1
|
$1,708.0
|
$1,657.1
|
3.1%
|
2018 Full Year Business Segment Preliminary Gross Product
Sales1 as compared to 2017
Gross Product Sales1 were $1,708.0 million in 2018, an increase of
$50.9 million, or 3.1%, compared to
2017, primarily driven by increases in Activities, Games &
Puzzles and Plush of $90.1 million,
Pre-School and Girls of $24.4
million, Boys Action and High-Tech Construction of
$21.0 million, offset by a decrease
in Remote Control and Interactive Characters of $88.0 million.
Gross Product Sales1 in the Activities, Games &
Puzzles & Plush business segment increased by 24.7%, primarily
driven by sales of Gund plush products, increases in Kumi
Creator, Kinetic Sand and Spin Master's Games & Puzzles
portfolio, which includes Cardinal. This increase was
partially offset by declines in Bunchems, Sew Cool, Pottery
Cool and Marshmallow furniture.
Gross Product Sales1 in the Remote Control and
Interactive Characters business segment decreased by 14.8%,
primarily due to lower sales of Hatchimals large
eggs offset by higher sales of Hatchimals Colleggtibles,
Air Hogs and Zoomer, offset by an increase in
Luvabella.
Gross Product Sales1 in the Boys Action and High-Tech
Construction business segment increased by 18.7%, primarily as a
result of sales of Boxer and Fugglers, and initial
shipments of DreamWorks' Dragons, Bakugan and
Monster Jam, offset by decreases in Meccano, Star
Wars and Pirates of the Caribbean licensed products, and Spy
Gear.
Gross Product Sales1 in the Pre-School and Girls
business segment increased by 5.0%, primarily driven by sales of
Twisty Petz and Party Popteenies, offset by lower
sales of PAW Patrol and ZhuZhu Pets.
Q4 2018
Preliminary Gross Product Sales1 by Business
Segment (US$ millions)
|
|
|
Q4
2018
|
Q4
2017
|
%
Change2
|
Activities, Games
& Puzzles and Plush
|
$145.2
|
$131.4
|
10.5%
|
Remote Control and
Interactive Characters
|
$107.9
|
$198.7
|
(45.7)%
|
Boys Action and
High-Tech Construction
|
$57.9
|
$36.7
|
57.8%
|
Pre-School and
Girls
|
$139.1
|
$102.4
|
35.8%
|
Outdoor
|
$15.3
|
$14.6
|
5.3%
|
Gross Product
Sales1
|
$465.4
|
$483.8
|
(3.8)%
|
Q4 2018 Business Segment Preliminary Gross Product
Sales1 as compared to the same period in
2017
Gross Product Sales1 were $465.4 million in the fourth quarter of 2018, a
decrease of $18.4 million, or 3.8%,
compared to the fourth quarter of 2017. This decrease was
primarily driven by a decline in Remote Control and Interactive
Characters business segment of $90.8
million, offset by increases in the Pre-School and Girls
business segment of $36.7 million,
Boys Action and High-Tech Construction of $21.2 million and Activities, Games & Puzzles
of $13.8 million.
Gross Product Sales1 in the Activities, Games & Puzzles and
Plush business segment increased by 10.5%, primarily driven by
sales of Gund plush products and increases in both Kumi Creator and
Kinetic Sand, partially offset by decreases in Bunchems, Spin
Master's Games & Puzzles portfolio, Marshmallow furniture, Sew
Cool and Doctor Dreadful.
Gross Product Sales1 in the Activities, Games & Puzzles and
Plush business segment increased by 10.5%, primarily driven by
sales of Gund plush products and increases in both Kumi Creator and
Kinetic Sand, partially offset by decreases in Bunchems, Spin
Master's Games & Puzzles portfolio, Marshmallow furniture, Sew
Cool and Doctor Dreadful.
Gross Product Sales1 in the Remote Control and
Interactive Characters business segment decreased by 45.7%,
primarily due to lower sales of all Hatchimals products,
Zoomer and Air Hogs.
Gross Product Sales1 in the Boys Action and High-Tech
Construction business segment increased by 57.8%, primarily due to
sales of Boxer and initial shipments of DreamWorks'
Dragons, Monster Jam and Bakugan products,
offset by lower sales of Star Wars licensed products.
Gross Product Sales1 in the Pre-School and Girls
business segment increased by 35.8%, driven by higher sales of
PAW Patrol, Twisty Petz and Rusty Rivets.
Ben Gadbois, Spin Master's Global
President and COO added, "The absorption of toy sales that were
lost from the liquidation of Toys R' Us, amongst our remaining
customers, was not as much as we expected, creating an
unprecedented and difficult holiday season. Against these
headwinds, our 2018 Gross Product Sales growth solidly outperformed
the industry. Activities, Games & Puzzles and Plush grew
strongly in 2018 led by Gund, Cardinal and Kinetic
Sand and we saw growth in our Pre-school and Girls
business segment in the fourth quarter, driven by an increase in
Paw Patrol shipments, which rebounded strongly in Q4 2018
led by fresh content and a deep and diverse product line.
Hatchimals in its third holiday season declined, as planned,
resulting in a decrease in the Remote Control and Interactive
Characters business segment. We remain very focused on our rolling
forward-looking brand innovation pipeline and to showing our 2019
product line to investors and analysts during our New York Toy Fair
presentation."
Spin Master is scheduled to report its financial results for the
fourth quarter and full year 2018 after the close of business on
March 6th, 2019. Ronnen Harary, Co-CEO, Ben Gadbois, Global
President & COO, and Mark Segal, CFO, will host a
conference call on Thursday, March 7th, 2019 at 9:30 a.m.
(ET). 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.
1.
|
Unaudited Non-IFRS
financial measure. See "Non-IFRS Financial Measures"
below.
|
|
|
2.
|
The percentage change
is calculated based on Gross Product Sales in US$ thousands (as
will be reported in the Company's 2018 Management's Discussion and
Analysis).
|
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 103 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. To date, Spin Master has produced eight television series,
including the recently re-launched Bakugan Battle Brawlers and
current hit PAW Patrol, which is broadcast in over 160 countries
and territories globally. Spin Master has 28 offices and employs
over 1,700 people globally in Canada, United
States, Mexico,
France, Italy, United
Kingdom, Russia,
Slovakia, Poland, Germany, Sweden, the
Netherlands, China,
Hong Kong, Japan, Vietnam, and Australia.
Non-IFRS Financial Measures
This press release references "Gross Product Sales" 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.
Gross Product Sales represent sales of the Company's products to
customers, excluding the impact of marketing, incentive and Sales
Allowance adjustments. Changes in Gross Product Sales are discussed
because, while Spin Master records the details of such Sales
Allowances (in its financial accounting systems at the time of sale
in order to calculate revenue, such Sales Allowances are generally
not associated with individual products, making revenue less
meaningful when comparing its product category and business segment
results to highlight trends in Spin Master's business.
Sales Allowances represent marketing and sales credits requested
by customers relating to factors such as cooperative 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 Gross Product Sales is an important
supplemental measure of operating performance and highlights trends
in the core business that may not otherwise be apparent when
relying solely on IFRS financial measures. Management believes that
Gross Product Sales 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 this non-IFRS financial measures
in the evaluation of issuers.
This press release contains certain pre-released fourth quarter
and full year 2018 financial metrics.
The fourth quarter and full year 2018 financial metrics
contained in this press release are preliminary and represent the
most current information available to the Company's management, as
financial closing procedures for the three months ended
December 31, 2018 and the year ended
December 31, 2018 are not yet
complete. The Company's actual consolidated financial statements
for such periods may result in material changes to the financial
metrics summarized in this press release (including by any one
financial metric, or all of the financial metrics, being below or
above the figures indicated) as a result of the completion of
normal quarter and year end accounting procedures and adjustments,
and also what one might expect to be in the final consolidated
financial statements based on the financial metrics summarized in
this press release. Although the Company believes the expectations
reflected in this press release are based upon reasonable
assumptions, the Company can give no assurance that actual results
will not differ materially from these expectations.
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SOURCE Spin Master Corp.