Delivers Solid Financial Performance
Operational Improvement Milestones Achieved Ahead of
Schedule
TORONTO, Nov. 11, 2020
/PRNewswire/ - 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 ended September 30, 2020. The
Company's full Management's Discussion and Analysis ("MD&A")
for the three and nine months ended September 30, 2020 is
available on SEDAR (www.sedar.com) and posted on the Company's web
site at www.spinmaster.com/financial-info.php.
"This quarter we showed continued progress on many fronts," said
Ronnen Harary, Spin Master's Co-CEO.
"We launched one of our strongest Fall lines ever, with many of our
toys making retailers' top toy lists and in the quarter we grew
both Gross Product Sales and Revenue while managing through the
uncertain conditions arising from COVID-19. In September, we
premiered our first-ever straight-to-streaming entertainment
franchise Mighty Express and also saw significant growth in our
Toca Boca digital games business
driven by increased engagement and new content. Thanks to the
dedication and tenacity of our team members globally, we are very
well positioned for the holiday season with strong POS momentum
globally for our products, lean retail inventories and continued
consumer demand within the toy category."
"Our efforts to manage costs and improve our profitability
continue to show progress," added Mark
Segal, Spin Master's Chief Financial Officer. "Our team
achieved key milestones on our operational improvement goals well
ahead of schedule and we are well positioned to execute our plan.
During the quarter, we have reduced our inventory levels and
improved our net working capital and liquidity position. With a
diversified portfolio of brands, entertainment franchises and
digital games across our global platform and a very solid financial
base, we remain focused on investing to create long term
value."
Q3 2020 Financial Highlights as compared to the same period
in 2019
- Revenue of US$571.6 million
increased by 4.3% from US$548.1
million. In Constant Currency1 terms, revenue
increased by 3.5%.
- Gross Product Sales1 increased by 0.7% to
US$587.4 million from US$583.3 million. Increases in Boys Action &
Construction, Activities, Games & Puzzles and Plush, as well as
Outdoor were offset by declines in Remote Control & Interactive
Characters and Pre-School & Girls. In Constant
Currency1 terms, Gross Product Sales1
increased by 0.2%.
- Gross Product Sales1 increased by 15.6% in
Europe and declined 2.6%
North America and 10.8% in Rest of
World. International Gross Product Sales1 were 38.3% of
total Gross Product Sales1, compared to 36.2%.
- Other revenue increased by 80.9% to US$48.3 million. Growth was driven by strong
digital games revenue, primarily from the Toca Life World
platform, as well as higher television distribution revenue,
partially offset by lower royalty income from products marketed by
third parties using Spin Master's owned intellectual property.
- Sales Allowances1 increased by US$2.2 million to US$64.1
million. As a percentage of Gross Product Sales1,
Sales Allowances1 increased 0.3% to 10.9% from 10.6%,
primarily driven by a change in geographic mix due to higher sales
in Europe relative to North America.
- Gross profit was US$277.9
million, representing 48.6% of revenue, compared to
US$286.9 million or 52.3% of revenue.
The decrease in gross margin was primarily due to product mix, the
sale of inventory arising from the operational challenges
experienced in Q4 2019 as well as an increase in freight-related
expenses. The decrease was partially offset by higher other
revenue.
- Selling, general and administrative expenses
("SG&A")2 increased 3.4%. The increase was a result
of higher administrative, selling and distribution expenses,
partially offset by lower marketing costs. As a percentage of
revenue, SG&A2 was 27.9% compared to 28.1%.
- Net income was US$86.8 million or
earnings per share of US$0.83
(diluted), compared to US$92.2
million or US$0.89
(diluted).
- Adjusted Net Income1 was US$95.1 million or adjusted earnings per share of
US$0.91 (diluted), compared to
US$93.3 million or US$0.91 (diluted).
- Adjusted EBITDA1 was US$139.9
million compared to US$150.2
million. Adjusted EBITDA Margin1 was 24.5%
compared to 27.4%.
- Free Cash Flow1 was US$108.3
million compared to US$128.6
million. Including changes in working capital, Free Cash
Flow1 was US$96.0 million
compared to US$86.5 million.
- As at September 30th, 2020, the
Company had cash on hand of US$207.3
million. During the quarter, the Company repaid in full the
balance of US$300.0 million
previously outstanding on its Credit Facility.
- On October 27, 2020, the Company
announced it reached an agreement to acquire London-based Rubik's Brand Ltd, which owns the
rights to the Rubik's Cube, for $50.0
million. The transaction is expected to close on
January 4, 2021.
Q3 2020 Gross
Product Sales1 by Business Segment
(US$ millions)
|
|
Q3
2020
|
Q3
2019
|
$
Change
|
%
Change
|
Activities, Games
& Puzzles and Plush
|
$172.5
|
$152.4
|
20.1
|
13.2
|
%
|
Remote Control &
Interactive Characters
|
$88.6
|
$117.3
|
(28.7)
|
(24.5)
|
%
|
Boys Action &
Construction
|
$131.6
|
$103.2
|
28.4
|
27.5
|
%
|
Pre-School &
Girls
|
$182.4
|
$204.0
|
(21.6)
|
(10.6)
|
%
|
Outdoor
|
$12.3
|
$6.4
|
5.9
|
92.2
|
%
|
Gross Product
Sales1
|
$587.4
|
$583.3
|
4.1
|
0.7
|
%
|
Sales
Allowances1
|
$(64.1)
|
$(61.9)
|
(2.2)
|
3.6
|
%
|
Net
Sales1
|
$523.3
|
$521.4
|
1.9
|
0.4
|
%
|
Other
Revenue
|
$48.3
|
$26.7
|
21.6
|
80.9
|
%
|
Revenue
|
$571.6
|
$548.1
|
23.5
|
4.3
|
%
|
Q3 2020 Gross Product Sales1 by Business Segment
as compared to the same period in 2019
Gross Product Sales1 were US$587.4 million, an increase of US$4.1 million or 0.7%, with a favourable foreign
exchange impact of US$3.2 million or
0.6%. Excluding the impact of foreign exchange, Gross Product
Sales1 increased by US$0.9
million or 0.2%. The increase was driven by Boys Action
& Construction, Activities, Games & Puzzles and Plush and
Outdoor, offset by declines in Remote Control & Interactive
Characters and Pre-School & Girls.
Gross Product Sales1 in Activities, Games
& Puzzles and Plush increased by US$20.1 million or 13.2% to US$172.5 million. The increase was driven
primarily by Kinetic Sand, the Games & Puzzles
portfolio, Cool Maker, Rainbow Jellies and
Orbeez, partially offset by declines in GUND and
Bunchems.
Gross Product Sales1 in Remote Control &
Interactive Characters decreased by US$28.7
million or 24.5% to US$88.6
million, primarily due to lower sales of Owleez
and Hatchimals, partially offset by increases in
Monster Jam RC and Ninja Bots.
Gross Product Sales1 in Boys Action &
Construction increased by US$28.4
million or 27.5% to US$131.6
million. The increase was primarily driven by DC
licensed products, Present Pets and Tech Deck, offset
in part by declines in DreamWorks Dragons, Boxer and
Bakugan.
Gross Product Sales1 in Pre–School & Girls
decreased by US$21.6 million or 10.6%
to US$182.4 million. The decrease was
driven primarily by declines in PAW Patrol, Twisty
Petz, Candylocks and Awesome Blossems, offset in
part by higher sales of Pre
Cool.
Gross Product Sales1 in Outdoor increased by
US$5.9 million or 92.2% to
US$12.3 million.
Financial Highlights for Nine Months Ended September 30, 2020 as compared to the same period
in 2019
- Revenue of US$1,080.0 million
decreased 2.5% from US$1,108.1
million. In Constant Currency1 terms, revenue
decreased by 2.5%.
- Gross Product Sales1 decreased by US$28.6 million or 2.5% to US$1,111.9 million. In Constant
Currency1 terms, Gross Product Sales1
decreased by 2.4%.
- Gross Product Sales1 decreased by 0.9% in
North America and 24.8% in Rest of
World and increased by 6.3% in Europe. International Gross Product
Sales1 represented 36.1% of total Gross Product
Sales1 compared to 37.1%.
- Other revenue increased by US$12.7
million or 14.8% to US$98.7
million, driven by higher digital games revenue from
Toca Boca and Sago Mini offset in
part by lower royalty income from products marketed by third
parties using Spin Master's owned intellectual property.
- Sales Allowances1 increased by US$12.2 million to US$130.6 million. As a percentage of Gross
Product Sales1, Sales Allowances1 were 11.7%
compared to 10.4%, primarily driven by an increase in
non-compliance charges arising from operational issues in Q4 2019
and growth in Europe, which has a
higher Sales Allowance1 rate structure.
- Gross profit decreased to US$486.9
million, representing 45.1% of revenue compared to
US$558.9 million or 50.4% of revenue.
The decline in gross margin was primarily due to product mix, the
sale of inventory arising from the operational challenges
experienced in Q4 2019, an increase in freight-related expenses,
higher Sales Allowances1 and supplier liabilities as a
result of realigning inventory as part of the Company's ongoing
operational improvement initiatives. These decreases were partially
offset by an increase in other revenue.
- SG&A2 increased US$8.7
million or 2.1%. The increase in SG&A2 was
driven by higher distribution and administrative expenses, offset
by lower marketing expenses.
- Net income was US$45.2 million or
earnings per share of US$0.43
(diluted), compared to US$81.5
million or US$0.79
(diluted).
- Adjusted Net Income1 was US$38.8 million or adjusted earnings per share of
US$0.37 (diluted), compared to
US$100.6 million or US$0.98 (diluted).
- Adjusted EBITDA1 was US$129.1
million compared to US$212.3
million. Adjusted EBITDA Margin1 was 12.0%
compared to 19.2%.
- Free Cash Flow1 decreased to US$23.6 million compared to US$107.3 million. Including changes in working
capital, Free Cash Flow increased by $84.4
million to US$108.4 million
compared to US$24.0 million.
September 30, 2020
Year to Date Gross Product Sales1 by Business Segment
(US$ millions)
|
|
2020
|
2019
|
$
Change
|
%
Change
|
Activities, Games
& Puzzles and Plush
|
$346.1
|
$295.6
|
$
|
50.5
|
17.1
|
%
|
Remote Control &
Interactive Characters
|
$142.0
|
$192.8
|
$
|
(50.8)
|
(26.3)
|
%
|
Boys Action &
Construction
|
$235.2
|
$216.6
|
$
|
18.6
|
8.6
|
%
|
Pre-School &
Girls
|
$313.2
|
$363.8
|
$
|
(50.6)
|
(13.9)
|
%
|
Outdoor
|
$75.4
|
$71.7
|
$
|
3.7
|
5.2
|
%
|
Gross Product
Sales1
|
$1,111.9
|
$1,140.5
|
$
|
(28.6)
|
(2.5)
|
%
|
Sales
Allowances
|
$(130.6)
|
$(118.4)
|
$
|
(12.2)
|
10.3
|
%
|
Net
Sales1
|
$981.3
|
$1,022.1
|
$
|
(40.8)
|
(4.0)
|
%
|
Other
Revenue
|
$98.7
|
$86.0
|
$
|
12.7
|
14.8
|
%
|
Revenue
|
$1,080.0
|
$1,108.1
|
$
|
(28.1)
|
(2.5)
|
%
|
September 30, 2020 Year to
Date Gross Product Sales1 by Business Segment as
compared to the same period in 2019
Gross Product Sales1 were US$1,111.9 million, a decrease of US$28.6 million or 2.5%, with an unfavourable
foreign exchange impact of US$1.3
million or 0.1%. The decrease was driven by Remote Control
& Interactive Characters and Pre-School & Girls, offset by
increases in Activities, Games & Puzzles and Plush, Boys Action
& Construction and Outdoor.
Gross Product Sales1 in Activities, Games &
Puzzles and Plush increased by US$50.5
million or 17.1% to US$346.1
million, primarily driven by Kinetic Sand, the Games
& Puzzles portfolio, Rainbow Jellies and Orbeez,
offset in part by declines in GUND and Bunchems.
Gross Product Sales1 in Remote Control &
Interactive Characters decreased by US$50.8
million or 26.3% to US$142.0
million, due to declines in Hatchimals, Owleez
and Juno, partially offset by higher sales of Monster Jam
RC and Ninja Bots.
Gross Product Sales1 in Boys Action &
Construction increased by US$18.6
million or 8.6% to US$235.2
million, due to DC licensed products, Present
Pets and Tech Deck, partially offset by declines in
DreamWorks Dragons, Boxer, Bakugan,
Meccano and Fugglers.
Gross Product Sales1 in Pre–School & Girls
decreased by US$50.6 million or 13.9%
to US$313.2 million, driven by
declines in PAW Patrol, Twisty Petz, Candylocks,
Awesome Blossems and Off the Hook, offset in part by
higher sales of Pre Cool.
Gross Product Sales1 in Outdoor increased by
US$3.7 million or 5.2% to
US$75.4 million.
Outlook
Spin Master continues to focus on driving long-term growth. Its
principle strategies include:
- Innovate using our global internal and external research and
development network;
- Developing evergreen global entertainment and digital toys
properties;
- Increasing international sales in developed and emerging
markets; and
- Leveraging the Company's global platform through strategic
acquisitions.
On March 19, 2020 Spin Master withdrew its 2020
outlook, which was previously provided on March 4, 2020. Given
the uncertain environment associated with COVID-19, the company has
elected to continue to suspend providing guidance until
circumstances warrant.
Conference call
Ronnen Harary, Chairman and
Co-Chief Executive Officer and Mark
Segal, Executive Vice President and Chief Financial Officer
will host a conference call to discuss these results on
Thursday, November 12, 2020
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.
About Spin Master
Spin Master Corp. (TSX:TOY) is a leading global children's
entertainment company creating exceptional play experiences through
a diverse portfolio of innovative toys, entertainment franchises
and digital toys and games. Spin Master is best known for
award-winning brands PAW Patrol®, Bakugan®, Kinetic Sand®, Air
Hogs®, Hatchimals® and GUND®, and is the toy licensee for other
popular properties. Spin Master Entertainment creates and produces
compelling multiplatform content, stories and endearing characters
through its in-house studio and partnerships with outside creators,
including the preschool success PAW Patrol and 10 other
television series, which are distributed in more than 160
countries. The Company has an established digital presence anchored
by the Toca Boca® and Sago Mini® brands, which combined have more
than 25 million monthly active users. With over 1,800 employees in
28 offices globally, Spin Master distributes products in more than
100 countries. For more information visit spinmaster.com or
follow on Instagram, Facebook and Twitter
@spinmaster.
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", "Sales
Allowances" and "Net Sales" 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 (recovery) 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, and equity-settled share based compensation expenses.
Adjusted EBITDA is used by management as a measure of the Company's
profitability.
Adjusted Net Income is calculated as net income excluding
adjustments, as defined above, in addition to a one-time tax
recovery and the corresponding impact these items have on income
tax expense (recovery). 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 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 2020 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 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.
Net Sales represents Gross Product Sales less Sales Allowances.
Management uses Net Sales to evaluate the Company's total net
revenue generating capacity compared to internal targets and as a
measure of Company performance.
Management believes 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.
|
|
Three Months Ended
Sep 30
|
(in US$ millions,
except percentages)
|
2020
|
|
2019
|
|
$
Change
|
|
%
Change
|
Reconciliation of
Non-IFRS Financial Measures
|
|
|
|
|
|
|
|
|
Net
income
|
86.8
|
|
92.2
|
|
(5.4)
|
|
(5.9)
|
%
|
|
Income tax
expense
|
14.7
|
|
33.0
|
|
(18.3)
|
|
(55.5)
|
%
|
|
Finance
costs
|
2.6
|
|
3.2
|
|
(0.6)
|
|
(18.8)
|
%
|
|
Depreciation and
amortization
|
26.4
|
|
22.2
|
|
4.2
|
|
18.9
|
%
|
EBITDA1
|
130.5
|
|
150.6
|
|
(20.1)
|
|
(13.3)
|
%
|
Normalization
adjustments:
|
|
|
|
|
|
|
|
|
|
Restructuring
expense2
|
1.4
|
|
0.3
|
|
1.1
|
|
366.7
|
%
|
|
Foreign exchange loss
(gain)3
|
5.1
|
|
(4.1)
|
|
9.2
|
|
(224.4)
|
%
|
|
Share based
compensation4
|
2.9
|
|
3.4
|
|
(0.5)
|
|
(14.7)
|
%
|
Adjusted
EBITDA1
|
139.9
|
|
150.2
|
|
(10.3)
|
|
(6.9)
|
%
|
|
Income tax
expense
|
14.7
|
|
33.0
|
|
(18.3)
|
|
(55.5)
|
%
|
|
Finance
costs
|
2.6
|
|
3.2
|
|
(0.6)
|
|
(18.8)
|
%
|
|
Depreciation and
amortization
|
26.4
|
|
22.2
|
|
4.2
|
|
18.9
|
%
|
|
Tax effect of
adjustments5
|
1.1
|
|
(1.5)
|
|
2.6
|
|
(173.3)
|
%
|
Adjusted Net
Income1
|
95.1
|
|
93.3
|
|
1.8
|
|
1.9
|
%
|
|
|
|
|
|
|
|
|
|
|
Cash provided by
operations
|
117.2
|
|
106.4
|
|
10.8
|
|
10.2
|
%
|
Changes in net
working capital
|
12.3
|
|
42.1
|
|
(29.8)
|
|
(70.8)
|
%
|
Cash provided by
operations before net working capital changes
|
129.5
|
|
148.5
|
|
(19.0)
|
|
(12.8)
|
%
|
Cash used in
investing activities
|
(20.2)
|
|
(29.3)
|
|
9.1
|
|
(31.1)
|
%
|
Plus:
|
|
|
|
|
|
|
|
|
Cash used for
license, brand and business acquisitions
|
(1.0)
|
|
9.4
|
|
(10.4)
|
|
n.m.
|
|
Free Cash
Flow1
|
108.3
|
|
128.6
|
|
(20.3)
|
|
(15.8)
|
%
|
|
|
|
|
|
|
|
|
|
|
1) See "Non-IFRS
Financial Measures".
|
2) Restructuring
expense primarily relates to personnel related costs.
|
3) Includes foreign
exchange losses (gains) generated by the translation of monetary
assets/liabilities denominated in a currency other than the
functional currency of the applicable entity and losses (gains)
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 IPO, share option expense
and long-term incentive plan ("LTIP").
|
5) Tax effect of
adjustments (Footnotes 2-4). Adjustments are tax effected at the
effective tax rate of the given period.
|
|
|
Nine Months Ended
Sep 30
|
(in US$ millions,
except percentages)
|
2020
|
2019
|
$
Change
|
%
Change
|
Reconciliation of
Non-IFRS Financial Measures
|
|
|
|
|
Net income
|
45.2
|
|
81.5
|
|
(36.3)
|
|
(44.5)
|
%
|
|
Income tax (recovery)
expense
|
(31.4)
|
|
28.2
|
|
(59.6)
|
|
(211.3)
|
%
|
|
Finance
costs
|
8.7
|
|
8.5
|
|
0.2
|
|
2.4
|
%
|
|
Depreciation and
amortization
|
75.4
|
|
68.4
|
|
7.0
|
|
10.2
|
%
|
EBITDA1
|
97.9
|
|
186.6
|
|
(88.7)
|
|
(47.5)
|
%
|
Adjustments:
|
|
|
|
|
|
Restructuring
expense2
|
4.8
|
|
8.1
|
|
(3.3)
|
|
(40.7)
|
%
|
|
Foreign exchange
loss3
|
17.1
|
|
5.9
|
|
11.2
|
|
189.8
|
%
|
|
Share based
compensation4
|
9.3
|
|
11.7
|
|
(2.4)
|
|
(20.5)
|
%
|
Adjusted
EBITDA1
|
129.1
|
|
212.3
|
|
(83.2)
|
|
(39.2)
|
%
|
|
Income tax (recovery)
expense
|
(31.4)
|
|
28.2
|
|
(59.6)
|
|
(211.3)
|
%
|
|
Finance
costs
|
8.7
|
|
8.5
|
|
0.2
|
|
2.4
|
%
|
|
Depreciation and
amortization
|
75.4
|
|
68.4
|
|
7.0
|
|
10.2
|
%
|
|
One-time income tax
recovery5
|
33.3
|
|
—
|
|
33.3
|
|
n.m.
|
|
Tax effect of
adjustments6
|
4.3
|
|
6.6
|
|
(2.3)
|
|
(34.8)
|
%
|
Adjusted Net
Income1
|
38.8
|
|
100.6
|
|
(61.8)
|
|
(61.4)
|
%
|
|
|
|
|
|
|
Cash provided by
operating activities
|
172.6
|
|
87.6
|
|
85.0
|
|
97.0
|
%
|
Changes in net
working capital
|
(84.8)
|
|
83.3
|
|
(168.1)
|
|
(201.8)
|
%
|
Cash provided by
operating activities before net working capital changes
|
87.8
|
|
170.9
|
|
(83.1)
|
|
(48.6)
|
%
|
Cash used in
investing activities
|
(65.6)
|
|
(73.0)
|
|
7.4
|
|
(10.1)
|
%
|
Plus:
|
|
|
|
|
Cash used for
license, brand and business acquisitions
|
1.4
|
|
9.4
|
|
(8.0)
|
|
(85.1)
|
%
|
Free Cash
Flow1
|
23.6
|
|
107.3
|
|
(83.7)
|
|
(78.0)
|
%
|
|
|
|
|
|
|
1) See "Non-IFRS
Financial Measures".
|
2) Restructuring
expense primarily relates to personnel related costs. Restructuring
expense in the current period includes costs related to changes in
senior leadership.
|
3) Includes foreign
exchange losses generated by the translation of monetary
assets/liabilities denominated in a currency other than the
functional currency of the applicable entity and losses related to
the Company's hedging programs.
|
4) Related to
expenses associated with subordinate voting shares granted to
equity participants at the time of the IPO, share option expense
and LTIP.
|
5) One-time income
tax recovery relates to internal transfer of intangible property of
$33.3 million.
|
6) Tax effect of
adjustments (Footnotes 2-4). 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 intentions to issue guidance in the future;
future growth expectations; financial position, cash flows and
financial performance; drivers for such growth; the resolution of
logistics problems; the program to achieve operational
efficiencies; the successful execution of its strategies for
growth; the creation of long term shareholder value; the impacts of
the COVID-19 pandemic on the Company; the completion and timing of
the proposed acquisition; and consumer demand and the seasonality
of financial results and performance.
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: ability of factories to manufacture products,
including labour size and allocation, tooling, raw material and
component availability, ability to shift between product mix, and
customer acceptance of delayed delivery dates; that the program
designed to gain operational efficiencies will achieve the desired
results; that the steps taken will create long term shareholder
value; 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 sales from acquired brands; 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's key personnel will
continue to be involved in the Company products and entertainment
properties will be launched as scheduled and that the risk factors
noted in this Press Release, 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 magnitude and length of economic disruption as a result of the
COVID-19 pandemic, there can be no assurance that the proposed
acquisition will occur, and the terms of the proposed acquisition
could be modified, restructured or terminated; and the factors
discussed in the Company's disclosure materials, including the
Annual MD&A and the Company's most recent Annual Information
Form, filed with the securities regulatory authorities in
Canada and available under the
Company's profile on SEDAR (www.sedar.com) 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.
View original
content:http://www.prnewswire.com/news-releases/spin-master-reports-q3-2020-financial-results-301171335.html
SOURCE Spin Master Corp.