Positive Momentum Continues with 40.5% increase in Revenue and 41.5% increase in Adjusted EBITDA; Raises guidance for 2016
TORONTO, Aug. 4, 2016 /CNW/ - Spin Master Corp. ("Spin Master" or the "Company") (TSX: TOY), a leading global children's entertainment company, today announced strong financial results for the second quarter ended June 30, 2016. The Company's full Management's Discussion and Analysis and Unaudited Interim Consolidated Financial Statements for the three and six month periods ended June 30, 2016 are available on SEDAR (www.sedar.com) and on the Company's web site at www.spinmaster.com/financial-info.php. Comparative Q2 2015 financial results presented in this news release reflect Spin Master's results as a private company, prepared to conform to the Company's financial reporting standards under International Financial Reporting Standards as a public company.
"The second quarter of 2016 was another period of strong financial results for Spin Master, as we maintained the positive momentum we have demonstrated since our IPO," said Anton Rabie, Chairman and Co-Chief Executive Officer of Spin Master. "The quarter was highlighted by growth from the acquisition of Cardinal in late 2015, sales related to key movie licenses and the continuing strength of PAW Patrol. We continued to be active on the acquisition front, acquiring Toca Boca and Sago Mini, leaders in the mobile digital app space, during the quarter and Swimways Corporation, ("Swimways") a leader in water and outdoor sports products, after the quarter. The acquisition of Swimways establishes Spin Master as a key player in the Outdoor and Sports Toys category – currently one of the largest and fastest growing categories in the US toy industry according to NPD."
Q2 2016 Financial Highlights
- Revenue of US$179.4 million increased 40.5% from US$127.7 million in Q2 2015
- In constant currency terms revenue increased by 41.8% relative to Q2 2015
- Gross Product Sales (see "Non-IFRS Measures" below) increased 33.7% to US$186.0 million, compared to US$139.1 million in Q2 2015. Excluding Cardinal Industries Inc., which was acquired in Q4 2015, Gross Product Sales increased 19.5%
- Q2 2016 featured strong contributions from Bunchems, the 2015 Activity Toy of the Year, Cardinal, Meccano, PAW Patrol and toys related to the Secret Life of Pets movie
- On a geographic basis, Spin Master's strong global platform drove Gross Product Sales increases of 29.4% in North America, 48.2% in Europe and 34.3% in the Rest of World
- Other Revenue, which primarily reflects merchandising royalty and television distribution income from products marketed by third parties using Spin Master's owned intellectual property, in addition to App revenue from Toca Boca and Sago Mini, increased 310% from US$3.0 million in Q2 2015 to US$12.4 million in Q2 2016
- Gross profit increased 40.2% to US$91.6 million, representing 51.1% of revenue, compared with US$65.4 million, or 51.2% of revenue in Q2 2015
- Selling, general and administrative expenses, excluding share based compensation expenses, represented 41.3% of revenue compared to 43.0% in Q2 2015, reflecting the Company's increasing operating leverage
- Net income of US$3.6 million, equivalent to US$0.04 per share, compared with US$7.6 million in Q2 2015
- Adjusted Net Income (see "Non-IFRS Measures" below) was US$11.7 million, or US$0.12 per share, an increase of 42.6% from US$8.1 million in Q2 2015
- Adjusted EBITDA (see "Non-IFRS Measures" below) increased 41.5% to US$25.4 million compared with US$17.9 million in Q2 2015; Adjusted EBITDA Margins (see "Non-IFRS Measures" below) increased slightly to 14.2% in Q2 2016 from 14.1% in Q2 2015
- Free Cash Flow (see "Non-IFRS Measures" below) was US$(11.0) million compared to US$5.8 million for Q2 2015
- During the quarter Spin Master announced two initiatives to grow the Company's international sales beginning in 2017. Spin Master announced the formation of an Australian subsidiary based in Sydney, which will assume distribution for the majority of the Company's brands for Australia. Spin Master also announced the establishment of a Sales & Marketing office in Prague, Czech Republic covering Central & Eastern Europe ("CEE"). CEE comprises Poland, Czech Republic, Slovakia, Hungary and Romania
- The previously-announced acquisition of Toca Boca (https://tocaboca.com)
and Sago Mini (http://www.sagomini.com), was completed on May 2, 2016. Toca Boca is a play studio that makes digital toys for kids aged 3-9 which focus on stimulating kids' imagination so that they can play in a safe digital environment with no in-app purchases or external advertising. Toca Boca has released 32 apps that have been downloaded over 140 million times in 215 countries. Sago Mini creates mobile apps for kids aged 2-5 that focus on the pre-school segment and has released 16 apps which have been downloaded over 13 million times. Combined, Toca Boca and Sago Mini have over 15 million monthly active users globally. - On June 6, 2016, the Company closed a public offering of 4.9 million subordinate voting shares at a price of C$26.60 per share; the offering consisted of a treasury offering of 2.45 million subordinate voting shares for gross proceeds to the Company of approximately C$65 million and a secondary offering of 2.45 million subordinate voting shares, indirectly, beneficially owned by the founders of the Company for gross proceeds to the founders of approximately C$65 million; the Company used the net proceeds of the treasury offering to reduce indebtedness
- Subsequent to the end of the quarter, Spin Master announced the acquisition of Swimways Corp (http://www.swimways.com); the acquisition establishes Spin Master in the Outdoor and Sports Toys category and provides a platform for further growth in the category (see "Subsequent Events" below).
"The Company continues to benefit from our disciplined product development and strategic acquisition processes," said Ben Gadbois, President and Chief Operating Officer of Spin Master. "Our rolling 36-month brand innovation pipeline is enabling us to consistently identify market opportunities and to capitalize on them through product development or acquisitions. The acquisition of Swimways is the latest example of Spin Master acquiring a new product line that establishes the Company as a leading player in a key category. Our international sales penetration is continuing to accelerate, particularly in Europe where we saw strong growth in the quarter. We are continuing to execute our international growth strategy and are excited about the potential for our new Central & Eastern Europe and Australian offices," he added.
"Looking forward, we're excited about the potential of Spin Master," said Ronnen Harary, Spin Master's Co-Chief Executive Officer. "With the acquisitions since our IPO of Cardinal, Etch A Sketch, EG Games, Toca Boca & Sago Mini and now Swimways, our product development team has multiple opportunities to do what we do best – innovate for the market. We're also excited about Rusty Rivets, our new pre-school TV show launching on Nickelodeon in August. As we move into the second half of 2016, Spin Master is well positioned for continued success."
Q2 Gross Product Sales by Business Segment (US$ millions)
Q2 2016 |
Q2 2015 |
% Change |
|
Activities, Games & Puzzles and Fun Furniture |
$53.5 |
$28.3 |
89.0% |
Remote Control and Interactive Characters |
$20.4 |
$28.0 |
(26.9%) |
Boys Action and High-Tech Construction |
$37.5 |
$23.9 |
56.7% |
Pre-School and Girls |
$74.6 |
$58.9 |
26.6% |
Gross Product Sales |
$186.0 |
$139.1 |
33.7% |
Other Revenue |
$12.4 |
$3.0 |
310.0% |
Sales Allowances |
($19.0) |
($14.4) |
32.1% |
Revenue |
$179.4 |
$127.7 |
40.5% |
June 30, 2016 Year to Date ("YTD") Results
For the six months ended June 30, 2016, Spin Master generated revenue of US$341.1 million, an increase of 45.6% from US$234.2 million for the six months ended June 30, 2015. In constant currency terms, revenue increased by 47.3% YTD relative to the comparable period in 2015. Excluding the acquisition of Cardinal, YTD revenue increased 30.8% to $306.4 million compared to the same period in 2015. YTD Gross profit increased to US$177.0 million, or 51.9% of revenue, compared with US$122.1 million, or 52.1% of revenue in the first six months of 2015.
Selling, general and administrative expenses YTD, excluding share based compensation expenses associated with equity participation agreements and the grants of restricted share units to employees at the IPO, represented 41.5% of revenue compared to 45.6% in the comparable period in 2015. Net income for the six months ended June 30, 2016 was US$13.5 million, or $0.14 per share, an increase of 46.5% from US$9.2 million for the same period in 2015. Adjusted Net Income YTD was US$23.3 million, or $0.23 per share, up 100.9% from US$11.6 million in the first six months of 2015.
Adjusted EBITDA for the six months ended June 30, 2016 increased to US$49.4 million, up 75.5% from US$28.1 million for the same period in 2015. Adjusted EBITDA Margins YTD increased to 14.5% from 12.0% for the comparable period in 2015, reflecting margin expansion and continued positive operating leverage.
Free Cash Flow for the six months ended June 30, 2016 was US$5.3 million compared to US$(2.4) million for the same period in 2015.
Q2 YTD Gross Product Sales by Business Segment (US$ millions)
Q2 YTD 2016 |
Q2 YTD 2015 |
% Change |
|
Activities, Games & Puzzles and Fun Furniture |
$103.2 |
$56.6 |
82.2% |
Remote Control and Interactive Characters |
$42.0 |
$45.5 |
(7.6%) |
Boys Action and High-Tech Construction |
$60.5 |
$50.7 |
19.2% |
Pre-School and Girls |
$154.1 |
$102.8 |
49.8% |
Gross Product Sales |
$359.8 |
$255.7 |
40.7% |
Other Revenue |
$18.4 |
$6.6 |
178.8% |
Sales Allowances |
($37.1) |
($28.1) |
32.0% |
Revenue |
$341.1 |
$234.2 |
45.6% |
Q2 2016 and Q2 YTD Business Segment Gross Product Sales
Gross Product Sales in the Activities, Games & Puzzles and Fun Furniture segment increased 82.2%, driven by the acquisition of Cardinal. Excluding the acquisition of Cardinal, Gross Product Sales in this segment grew by 16.0%, driven by Bunchems. Gross Product Sales in the Remote Control and Interactive Characters segment decreased 7.6%, primarily due to declines in Digi Birds and Zoomer, partially offset by increases in Air Hogs. Gross Product Sales in the Boys Action and High Tech Construction segment increased 19.2%, due to sales of Meccano and Secret Life of Pets toys, offset by lower sales of How to Train Your Dragon toys. Gross Product Sales in the Pre School and Girls segment increased 49.8%, due to the continued strength of the PAW Patrol franchise and shipments of Popples and Chubby Puppies as well as products associated with the relaunch of Power Puff Girls. Other Revenue increased 178.8% primarily driven by increased merchandising royalties income from products marketed by third parties using Spin Master's owned intellectual property and inclusion of App revenue from Toca Boca and Sago Mini.
Outlook
For the full year 2016, Spin Master now expects organic Gross Product Sales growth to be higher than the guidance provided in connection with the release of Q1 2016 results in May 2016, with organic Gross Product Sales expected to grow in the high-teens, relative to 2015. Previous guidance provided in connection with the release of Q1 2016 results in May 2016 expected organic Gross Product Sales growth in the mid-teens relative to 2015. From a seasonality perspective, Spin Master now expects Gross Product Sales for the first half of 2016 to represent approximately 30% of total 2016 Gross Product Sales. Previous guidance provided in connection with the release of Q1 2016 results in May 2016 expected Gross Product Sales for the first half of 2016 to comprise 30% to 35% of total Gross Product Sales for 2016. Adjusted EBITDA margins for 2016 are also expected to increase slightly compared with prior guidance and 2015.
Subsequent Events
On August 2, 2016, Spin Master acquired Swimways Corporation, a leader in the Outdoor and Sports Toys category and also announced the formation of a new Outdoor business segment. Swimways, headquartered in Virginia Beach, VA, with an office in Guangzhou, China, a manufacturing and distribution facility in Tarboro, NC, and a team of 149 employees, has a diverse portfolio of toys, games and sporting goods for the pool, beach and backyard with stable and consistent performance. Swimways' 2015 gross sales were approximately US$90 million. Swimways' products are sold under the brands Swimways, Kelsyus and Coop, and includes the patented Spring Float line of products, complemented by pool category licenses from a number of popular entertainment franchises. The purchase price for the transaction will be satisfied by US$85 million in cash on closing, less an escrow for possible adjustments, plus up to US$8.5 million payable over 4 years based on Swimways' sales growth. The transaction was financed through Spin Master's existing credit facility. Swimways will operate as a stand-alone subsidiary.
Conference call
Ronnen Harary, Co-Chief Executive Officer, Ben Gadbois, President & Chief Operating Officer and Mark Segal, Chief Financial Officer will hold an investor conference call to discuss 2016 second quarter and YTD results at 10:30am ET on Friday August 5, 2016.
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://spinmaster.com/events-presentations.php . A replay of the call will be available until Friday, August 19, 2016. To access the replay, dial (416) 849-0833 or (855) 859-2056 (Passcode: 47445395). A transcript of the webcast will be archived on Spin Master's website.
About Spin Master
Spin Master (http://www.spinmaster.com) is a leading global children's entertainment company that creates, designs, manufactures and markets a diversified portfolio of innovative toys, games, products and entertainment properties. Spin Master is best known for award-winning brands including Zoomer™ Dino, Bakugan Battle Brawlers™, Air Hogs®, and 2015 Toys of The Year, Bunchems and Meccanoid G15. Since 2005, Spin Master has received 63 TIA Toy of The Year (TOTY) nominations with 16 wins across a variety of product categories. Spin Master has been recognized with 12 TOTY nominations for Innovative Toy of the Year, more than any of its competitors. Spin Master is among a limited number of companies that not only develop and produce global entertainment properties, characters and content, but also monetize that content through the creation, sale and licensing of products. To date, Spin Master has produced six television series, including 2007 hit series Bakugan Battle Brawlers and its current hit PAW Patrol, which is broadcast in over 160 countries and territories globally. Spin Master employs over 1,000 people globally with offices in Canada, United States, Mexico, France, Italy, United Kingdom, Slovakia, Czech Republic, Germany, Sweden, the Netherlands, China, Hong Kong, Japan, and Australia.
Non-IFRS Measures
In addition to using financial measures prescribed under IFRS, references are made in this press release to "Adjusted EBITDA", "Adjusted EBITDA Margin", "Adjusted Net Income", "Free Cash Flow", "Gross Product Sales" and "Sales Allowances", which are non-IFRS financial measures. Non-IFRS financial measure do not have any standardized meaning prescribed by IFRS and are therefore unlikely to be comparable to similar measures presented by other issuers.
Adjusted EBITDA is calculated as EBITDA (i.e., net earnings before borrowing costs, taxes and depreciation and amortization) excluding one time or other non-recurring items that do not necessarily reflect the Company's underlying financial performance, including, share based compensation expenses, foreign exchange gains or losses, restructuring costs, public offering costs and write downs, among other items. Adjusted EBITDA is used internally as the key benchmark for incentive compensation and by management as a measure of the Company's profitability and its ability to fund working capital requirements, investment in property, plant and equipment, and make debt repayments.
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 one time or other items that do not necessarily reflect the Company's underlying financial performance including foreign exchange gains or losses, restructuring costs, IPO costs, the accounting effect of the phantom equity expense and write downs, among other items and the corresponding impact these items have on income tax expense. Management uses Adjusted Net Income to understand the underlying financial performance of the business on a consistent basis over time.
Free Cash Flow is calculated as cash from operations before changes in working capital less capital expenditures plus any cash used in brand or business acquisitions. Capital expenditures include expenditures on assets such as property, plant, equipment (primarily expenditures of tooling) and the production of television properties. 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 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 segments and geographical results to highlight trends in Spin Master's business.
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 booked 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 Adjusted EBITDA, Adjusted EBITDA Margin, Adjusted Net Income, Free Cash Flow and Gross Product Sales 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 Adjusted EBITDA, Adjusted EBITDA Margin, Adjusted Net Income, Free Cash Flow, Gross Product Sales and Sales Allowances 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 measures in the evaluation of issuers.
The following table presents a reconciliation of Net Income to EBITDA, Adjusted EBITDA and Adjusted Net Income, and Cash from (used in) Operations to Free Cash Flow for the three and six month periods ended June 30, 2016. All references to $ refer to US$:
(All amounts in US$ 000's) |
Three Months Ended June 30 |
|||||||||
2016 |
2015 |
$ Change |
% Change |
|||||||
Net Income after Tax |
$ |
3,598 |
$ |
7,574 |
$ |
(3,976) |
-52.5% |
|||
Finance Costs |
$ |
1,852 |
$ |
423 |
$ |
1,429 |
337.8% |
|||
Depreciation and Amortization |
$ |
7,526 |
$ |
6,700 |
$ |
825 |
12.3% |
|||
Income Tax |
$ |
1,056 |
$ |
2,600 |
$ |
(1,545) |
-59.4% |
|||
EBITDA |
$ |
14,032 |
$ |
17,297 |
$ |
(3,265) |
-18.9% |
|||
Normalization Adjustments |
||||||||||
Restructuring |
(1) |
$ |
275 |
$ |
560 |
$ |
(286) |
-51.0% |
||
Foreign exchange loss /(gain) |
(2) |
$ |
4,065 |
$ |
(75) |
$ |
4,140 |
|||
Offering Costs |
(3) |
$ |
- |
$ |
161 |
$ |
(161) |
-100.0% |
||
Share Based Compensation |
(4) |
$ |
7,017 |
$ |
- |
$ |
7,017 |
|||
Adjusted EBITDA |
$ |
23,389 |
$ |
17,943 |
$ |
7,445 |
41.5% |
|||
Adjusted EBITDA |
$ |
25,389 |
$ |
17,943 |
$ |
7,445 |
41.5% |
|||
Finance Costs |
$ |
1,852 |
$ |
423 |
$ |
1,429 |
337.8% |
|||
Depreciation and Amortization |
$ |
7,526 |
$ |
6,700 |
$ |
825 |
12.3% |
|||
Income Tax |
$ |
1,056 |
$ |
2,600 |
$ |
(1,544) |
-59.4% |
|||
Tax Effect of Normalization Adjustments |
(5) |
$ |
3,257 |
$ |
86 |
$ |
3,171 |
3687.0% |
||
Adjusted Net Income |
$ |
11,698 |
$ |
8,134 |
$ |
3,564 |
43.8% |
|||
Free Cash Flow |
||||||||||
Net cash flows generated by (used in) operating activities |
$ |
(21,434) |
$ |
366 |
$ |
(21,800) |
||||
Plus: |
||||||||||
Changes in Working Capital |
$ |
24,634 |
$ |
13,776 |
$ |
10,858 |
||||
Net cash flows generated by (used in) operating activities before working capital changes |
$ |
3,200 |
$ |
14,142 |
$ |
(10,942) |
||||
Less: |
||||||||||
Net cash flows used in investing activities |
$ |
(44,370) |
$ |
(8,356) |
$ |
(36,014) |
||||
Plus: |
||||||||||
Cash used for License, Brand and Business Acquisitions |
$ |
30,144 |
$ |
- |
$ |
30,144 |
||||
Free Cash Flow |
$ |
(11,026) |
$ |
5,786 |
$ |
(16,812) |
||||
1) 2016 Restructuring related to changes to headcount that occurred primarily in the US. 2015 restructuring primarily related to a change to the Company's executive team. |
(All amounts in US$ 000's) |
Six Months Ended June 30 |
|||||||||
2016 |
2015 |
$ Change |
% Change |
|||||||
Net Income after Tax |
$ |
13,535 |
$ |
9,242 |
$ |
4,293 |
46.5% |
|||
Finance Costs |
$ |
3,612 |
$ |
692 |
$ |
2,920 |
422.0% |
|||
Depreciation and Amortization |
$ |
12,897 |
$ |
11,816 |
$ |
1,080 |
9.1% |
|||
Income Tax |
$ |
5,561 |
$ |
3,308 |
$ |
2,252 |
68.1% |
|||
EBITDA |
$ |
35,605 |
$ |
25,058 |
$ |
10,547 |
42.1% |
|||
Normalization Adjustments |
||||||||||
Restructuring |
(1) |
$ |
931 |
$ |
921 |
$ |
11 |
1.1% |
||
Foreign exchange loss /(gain) |
(2) |
$ |
(975) |
$ |
1,552 |
$ |
(2,527) |
|||
Offering Costs |
(3) |
$ |
- |
$ |
603 |
$ |
(603) |
-100.0% |
||
Share Based Compensation |
(4) |
$ |
13,801 |
$ |
- |
$ |
13,801 |
|||
Adjusted EBITDA |
$ |
49,362 |
$ |
28,134 |
$ |
21,227 |
75.5% |
|||
Adjusted EBITDA |
$ |
49,362 |
$ |
28,134 |
$ |
21,227 |
75.5% |
|||
Finance Costs |
$ |
3,612 |
$ |
692 |
$ |
2,920 |
422.0% |
|||
Depreciation and Amortization |
$ |
12,897 |
$ |
11,816 |
$ |
1,080 |
9.1% |
|||
Income Tax |
$ |
5,561 |
$ |
3,308 |
$ |
2,253 |
68.1% |
|||
Tax Effect of Normalization Adjustments |
(5) |
$ |
4,006 |
$ |
811 |
$ |
3,195 |
452.6% |
||
Adjusted Net Income |
$ |
23,286 |
$ |
11,507 |
$ |
11,779 |
102.4% |
|||
Free Cash Flow |
||||||||||
Net cash flows generated by (used in) operating activities |
$ |
(17,273) |
$ |
(63,196) |
$ |
45,923 |
||||
Plus: |
||||||||||
Changes in Working Capital |
$ |
44,688 |
$ |
76,869 |
$ |
(32,181) |
||||
Net cash flows generated by (used in) operating activities before working capital changes |
$ |
27,415 |
$ |
13,673 |
$ |
13,742 |
||||
Less: |
||||||||||
Net cash flows used in investing activities |
$ |
(64,215) |
$ |
(16,096) |
$ |
(48,119) |
||||
Plus: |
||||||||||
Cash used for License, Brand and Business Acquisitions |
$ |
42,133 |
$ |
- |
$ |
42,133 |
||||
Free Cash Flow |
$ |
5,333 |
$ |
(2,423) |
$ |
7,756 |
||||
1) 2016 Restructuring related to changes to headcount that occurred primarily in the US. 2015 restructuring primarily related to a change to the Company's executive team. |
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 launching of new products, brands and entertainment properties; the Company's outlook for 2016; the Company's owned intellectual property and license agreements; the Company's expectations concerning growth of Cardinal in Europe and other international markets; the Company's expectations concerning growth from Editrice Giochi, Etch A Sketch, Toca Boca and Sago Mini or Swimways; the Company's operating momentum, financial position, cash flows and financial performance; the Company's future growth, drivers for such growth, and the successful execution of its strategies for growth; the seasonality of Gross Product Sales and forecasted organic Gross Product Sales and Adjusted EBITDA Margins.
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 Cardinal's 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 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 Management Discussion and Analysis for the period ended June 30, 2016 and the Company's Annual Information Form dated March 30, 2016. 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.
SOURCE Spin Master Corp.
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Mark Segal, Executive Vice President and Chief Financial Officer, [email protected]
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