- Revenue increased 21% to $112.6
million in Q4 2021, compared to $92.9
million in Q4 2020. Fiscal 2021 revenue grew 6% to
$452.5 million, compared to
$425.6 million in Fiscal 2020.
- Net income of $11.4 million in Q4
2021 increased from net income of $4.0
million in Q4 2020. Fiscal 2021 net loss improved to
$7.1 million, compared to a net loss
of $236.0 million in Fiscal 2020,
largely as a result of a non-cash goodwill impairment taken in
Fiscal 2020.
- Positive Free Cash Flow increased 50% to $13.9 million in Q4 2021, compared to
$9.3 million in Q4 2020. Fiscal 2021
positive Free Cash Flow increased 16% to $31.5 million, compared to $27.1 million in Fiscal 2020.
- Adjusted EBITDA in Q4 2021 increased 3% to $19.2 million, compared with $18.7 million in Q4 2020. Fiscal 2021 adjusted
EBITDA increased to $83.1 million,
compared with $81.8 million in Fiscal
2020.
- Consumer Products revenue grew 33% to $44.2 million in Q4 2021, compared to
$33.2 million in Q4 2020. Fiscal 2021
Consumer Products revenue grew to $175.2
million, compared to $168.6
million in Fiscal 2020.
- WildBrain Spark ("Spark") revenue increased 81% to $11.7 million in Q4 2021, compared to
$6.5 million in Q4 2020. Fiscal 2021
Spark revenue was $45.8 million,
compared to $62.3 million in Fiscal
2020.
HALIFAX, NS, Sept. 14, 2021 /PRNewswire/ - WildBrain Ltd.
("WildBrain" or the "Company") (TSX: WILD), a global leader in kids
and family entertainment, today reported its fourth quarter ("Q4
2021") and year-end ("Fiscal 2021") results for the periods ended
June 30, 2021.
![WildBrain Logo (CNW Group/WildBrain Ltd.) WildBrain Logo (CNW Group/WildBrain Ltd.)](https://mma.prnewswire.com/media/1625519/WildBrain_Ltd__WildBrain_Reports_Q4_and_Full_Year_2021_Results.jpg)
Eric Ellenbogen, WildBrain CEO,
said: "Fiscal 2021 was a turning point for WildBrain. We're
seeing returns from our focus on creativity, digital media and IP
and activating some of our key brands, which will further fuel our
cash flow while driving consumer products upside. Among these
activities are our Sonic Prime partnership with SEGA and
Netflix, holistic agreements with the emoji company and Moose Toys
on new IP, and our expanded Peanuts partnership with Apple TV+.
Recently, we switched on yet another major property, Yo Gabba
Gabba!, in an agreement with Apple TV+ for a new original
series and our Yo Gabba Gabba! library. And just last week,
we relaunched Strawberry Shortcake with the debut of an all-new
animated series on WildBrain Spark, a new Roblox game, brand
collaborations and new toys and consumer products set to roll out
in 2022. WildBrain Spark's revenues were also up 81% in the current
quarter, reflecting ongoing improvements in advertising rates and
ad placements. If these positive trends continue together with our
focus on higher value views, we expect growth to continue at
WildBrain Spark in Fiscal 2022 compared to Fiscal 2021 and foresee
Q1 2022 revenue increasing by at least 60% over last year's
Q1."
Ellenbogen added: "Overall, we expect growth to accelerate as we
move through Fiscal 2022 and beyond as these new deals and
franchises play out in our numbers. We're investing our increased
revenues in new content for WildBrain Spark to drive audience
engagement and also in marketing to drive our brands. We're just
beginning to switch on the IP in our vault and to leverage
WildBrain's unique, 360-degree capabilities in content,
distribution, audience delivery and licensing to maximize the
profitability of our assets."
Aaron Ames, WildBrain CFO, added:
"Full year and Q4 2021 results reflected momentum building across
our businesses, enhanced financial flexibility and improving Free
Cash Flow. Our growing production pipeline and the high-quality
deals that we executed over the past quarters have enhanced our
visibility of future revenue and earnings. Looking into Fiscal
2022, we expect revenue of approximately $480 million to $500
million and adjusted EBITDA between $87 million to $93
million based on our latest projections and our current
production pipeline. This reflects the significant investments
we've made across the organization that we will begin to scale as
we move through Fiscal 2022 and beyond."
Q4 2021 Performance - Executing on Priorities
PRIORITIES
|
HIGHLIGHTS
|
Monetizing our
Large Audience on WildBrain Spark
|
- Spark revenue
increased 81% to $11.7 million in Q4 2021 vs $6.5 million in Q4
2020, reflecting ongoing recovery in advertising rates.
- The build-out of
our proprietary data-analysis tools is driving growth in direct ad
sales, paid media and digital production. These nascent revenues
increased by 385% in Q4 2021 vs Q4 2020.
- Spark continues to
add commercial partnerships to create and manage digital content
that drive revenue across our various business units. We recently
announced a 360° multi-year content and licensing partnership with
Moose Toys to produce a new digital-first series for its new Akedo
toy brand. WildBrain Distribution will handle worldwide
distribution of the new series, WildBrain CPLG will manage the
Akedo global licensing program and we also share in revenues from
distribution, toys and consumer products.
|
Grow Key
Brands
|
- WarnerMedia's
Cartoon Network licensed the entire 92 half-hours of Caillou
back catalogue as well as the original new digital series produced
by Spark, Caillou's New Adventures, exclusively for the US
market. This recently signed agreement reflects our ability to
offer both long-form and quality digital content as well as the
benefit of our strategy of consolidating rights ownership on our
portfolio of IP to broaden audience engagement and increase
exploitation of our brands. Furthermore, since opening the Caillou
channels to US viewers on Spark in Q2 2021, global average views
have increased 8% to 4.1 million for the property on our AVOD
platform.
- Subsequent to
quarter-end, we announced a multi-year global exclusive partnership
with Apple TV+ for the production of an original series and
licensing of the back catalogue on Yo Gabba Gabba!,
representing yet another IP activation from the WildBrain
library.
- We relaunched
Strawberry Shortcake with a comprehensive global franchise program,
including an exclusive digital-first debut of an original animated
series on Spark, the launch of a brand-new Roblox game, brand
collaborations with Sunkist and others, publishing from Penguin
Random House and all-new toys set to roll out worldwide with Moose
Toys in 2022 and supported by WildBrain CPLG.
|
Improve Cash Flow
and Balance Sheet
|
- Positive Free Cash Flow increased 50% to $13.9
million in Q4 2021, compared to positive Free Cash Flow of $9.3
million in Q4 2020. Fiscal 2021 positive Free Cash Flow increased
16% to $31.5 million, compared to Free Cash Flow of $27.1 million
Fiscal 2020.
|
Q4 2021 Financial Highlights
Financial
Highlights
(in millions of
Cdn$)
|
Three Months
ended
June
30,
|
Year
ended
June
30,
|
2021
|
2020
|
2021
|
2020
|
Revenue
|
$112.6
|
$92.9
|
$452.5
|
$425.6
|
Gross
Margin
|
$45.9
|
$39.6
|
$194.9
|
$187.8
|
Gross Margin
(%)
|
41%
|
43%
|
43%
|
44%
|
Adjusted EBITDA
attributable to WildBrain
|
$19.2
|
$18.7
|
$83.1
|
$81.8
|
Net Income (Loss)
attributable to WildBrain
|
$11.4
|
$4.0
|
$(7.1)
|
$(236.0)
|
Basic earnings (Loss)
per Share
|
$0.07
|
$0.02
|
$(0.04)
|
$(1.51)
|
Free Cash
Flow
|
$13.9
|
$9.3
|
$31.5
|
$27.1
|
In Q4 2021, revenue grew 21% to $112.6
million, compared with $92.9
million in the prior year, driven by the deal with Apple TV+
for the Yo Gabba Gabba! library, ongoing recovery in Spark
and the strength of our Consumer Products business. Fiscal 2021
revenue increased 6% to $452.5 million vs $425.6 million in Fiscal 2020.
Content Production and Distribution revenue increased 12% to
$44.6 million in Q4 2021 vs
$39.7 million in Q4 2020, benefiting
from the Yo Gabba Gabba! library deal and distribution
agreements with Netflix, Amazon and WarnerMedia in the current
quarter. Fiscal 2021 revenue rose 27% to $185.1 million vs $145.2
million in Fiscal 2020, which reflected a growing roster of
premium productions that also drove associated library deals.
Q4 2021 revenue at Spark increased 81% to $11.7 million vs $6.5
million in Q4 2020, reflecting ongoing recovery in
advertising revenue. The build-out of our proprietary data-analysis
tools is also driving growth in other AVOD revenue streams
including in direct advertising sales, paid media and digital
production fees. These nascent revenues increased by 385% in Q4
2021 vs Q4 2020. Fiscal 2021 revenue at Spark was $45.8 million vs $62.3
million in Fiscal 2020 due to the impacts of COVID-19 as
well as YouTube's policy changes on advertising on kids and family
content made in early January 2020.
We expect Spark to return to growth in Fiscal 2022 as advertising
rates continue to improve and we drive growth in monetizing the
significant audience on our AVOD network. While there will be
seasonality across the year, Q1 2022 revenue is forecast to
increase at least 60%, compared with the same prior year
quarter.
Spark continued to attract a highly engaged audience. Q4
2021 views were 6.6 billion vs 11.6 billion in Q4 2020, reflecting
normalization of viewing patterns from peak viewership during
pandemic lockdowns. This amounted to 42.0 billion minutes of videos
watched on Spark, compared with 72.1 billion in Q4 2020. Compared
to the period prior to COVID-19 lockdowns, views increased 8% to
35.1 billion and watch time increased 30% to 215.9 billion minutes
in Fiscal 2021 vs Fiscal 2019. Kids are spending more time on our
platform, up 17% over Q4 2020 (six-minutes and 21-seconds on
average per view in Q4 2021). In terms of views, Spark has been
outperforming its peers and the overall kids' genre on YouTube.
These metrics hit a trough in Q4 2021 and have been sequentially
improving in Q1 2022 with views and watch time up 26% and 20%
respectively since April 2021.
Advertising rates on average have also increased 163% since
April 2021. This dovetails with our
focus on building higher-quality viewership, driven by our premium
content for our own and partner brands, and not just the quantity
of views, which is resulting in higher revenues as reflected in our
current quarter.
Furthermore, Spark continued to cross sell opportunities to IP
partners, producing and promoting content that monetizes across
multiple revenue streams, including distribution and consumer
products, as evidenced by the recent partnership with Moose Toys on
its new Akedo toy brand. Leading IP partners are recognizing the
value of our AVOD network for its audience delivery and data
insights when building and amplifying brands.
Consumer Products revenue grew 33% to $44.2 million in Q4 2021, compared with
$33.2 million in Q4 2020. Higher
revenue in Q4 2021 was due to the strength of the Peanuts brand,
complemented by the quality and reach of the new content we are
bringing to market starting with the first series, Snoopy in
Space, that debuted in November
2019. We are in the early stages of a prolific rollout of
new Peanuts content over the coming years, which is expected to
drive consumer products globally. For Fiscal 2021, revenue
increased to $175.2 million vs
$168.6 million in the same prior-year
period, reflecting the enduring vitality of the Peanuts franchise
as well as increased commissions and growth in new business from
our licensing agency WildBrain CPLG.
Q4 2021 Gross Margin was 41% vs 43% in Q4 2020, due to higher
WildBrain Spark revenue which typically yields lower gross margin
and higher marketing spend related to the Consumer Products
business, offset by a growing slate of higher-margin premium
production projects. Fiscal 2021 Gross Margin was steady at 43% vs
44% in Fiscal 2020, reflecting a strong slate of premium projects
in our studio and the Peanuts library deal in current year.
Positive Free Cash Flow for Q4 2021 increased to $13.9 million, compared with positive Free Cash
Flow of $9.3 million in Q4 2020,
primarily due to the timing of working capital settlements. In
Fiscal 2021, positive Free Cash Flow increased to $31.5 million, compared with $27.1 million in Fiscal 2020.
Adjusted EBITDA increased 3% to $19.2
million in Q4 2021, compared with $18.7 million in Q4 2020. In Fiscal 2021,
adjusted EBITDA rose to $83.1 million vs $81.8 million in Fiscal 2020, driven by
higher gross margin and other income, offset by higher distribution
to non-controlling interests. During Fiscal 2021, WildBrain
continued to reinvest in new content for Spark and in marketing for
IP based on building momentum in these core areas.
Q4 2021 net income increased to $11.4
million vs net income of $4.0
million in the same prior-year quarter, reflecting higher
gross margin. Fiscal 2021 net loss improved to $7.1 million vs a net loss of $236.0 million in Fiscal 2020. The Fiscal 2021
net loss was primarily due to non-cash, non-operating items of
$3.5 million related to the corporate
refinancing and the change in fair value of embedded
derivatives of $26.2 million
resulting from appreciation of the share price. Fiscal 2020
included a non-cash goodwill impairment charge of $184.5 million1 due to the impact on
advertising revenue from YouTube's policy changes as well as the
potential impacts of global uncertainties from COVID-19.
During Fiscal 2021, we refinanced our corporate debt on
attractive terms with a new seven-year US$285.0 million senior secured term loan and
removed the financial maintenance covenant. We also entered into a
new five-year US$30.0 million
revolving credit facility.
Fiscal 2022 Outlook
We expect growth to build in Fiscal 2022 as our expanding
production pipeline and new deals entered into in the prior fiscal
year are reflected in our results. As a result of this visibility,
we expect revenue of approximately $480.0
million to $500.0 million and
adjusted EBITDA between $87.0 million
to $93.0 million in Fiscal 2022,
based on our latest projections and our current pipeline, as well
as expected timing around revenue recognition on our productions
projects.
Fiscal 2022 Strategic Priorities
- Activate IP and grow key brands;
- Maximize the value of Spark; and
- Deliver sustainable growth.
Further details can be found in the Fiscal 2022 Outlook section
of the Company's Fiscal 2021 MD&A.
1.
|
The non-cash
goodwill impairment charge of $184.5 million recorded in Q3 2020
excluded goodwill held in the Company's Peanuts and Television cash
generating units (CGUs).
|
|
|
2.
|
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 Q4 2021 MD&A.
|
Q4 and Fiscal 2021 Conference Call
The Company will hold a conference call on September 15, 2021 at 10:00 a.m. ET to discuss the results.
To listen, call +1 (800) 437-2398 toll-free or +1 (647) 792-1240
internationally and reference conference ID 2579663. 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 2579663, until September 22, 2021.
The audio and transcript will also be archived on our website
approximately two days after the event.
Investor Day
WildBrain's Investor Day for institutional investors and
analysts will be held on October 5,
2021 from 9:30 a.m. to 12:30 p.m.
ET. The event will be held in person in New York City and will also be available via
live webcast. Please register for Investor Day at this link:
https://canvasmeetings.regfox.com/wildbrain-investor-day-2021
The event will be hosted by WildBrain CEO Eric Ellenbogen, and other members of the
executive team, who will discuss the evolving global landscape and
opportunity in kids' content and present a detailed look into
WildBrain's 360° approach to monetizing its large portfolio of
known brands and IP.
A video recording of the Investor Day webcast will be archived
on WildBrain's website following the event.
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, 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 150 million
subscribers. 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 the Company including,
without limitation, statements regarding the future growth and
financial and operating performance of WildBrain and its
subsidiaries, including expected revenue growth for WildBrain Spark
in Q1 of the Company's Fiscal 2022, activation of the Company's IP
and results therefrom, the timing for certain product rollouts, the
future financial and operating results of the Company, including
revenue and adjusted EBITDA for the Company's Fiscal 2022,
investments of the Company and benefits therefrom, and the
strategic priorities, business strategies and operational
activities of the Company and its growth and long-term prospects.
Although the Company 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 the Company. Actual results or events may
differ materially from those expressed or implied by such
forward-looking statements. Factors that could cause actual results
or events to differ materially from current expectations, among
other things, include the inability to find financing on acceptable
terms, the availability of investment opportunities and at
acceptable valuations, the ability of the Company to execute on
such investments, epidemics, pandemics or other public health
crises, including the current COVID-19 pandemic, the magnitude and
length of economic disruption as a result of the worldwide COVID-19
pandemic, the reliance of the Company on the Internet and other
technologies to continue to conduct its business, the ability of
the Company to execute on its business strategies, consumer and
customer preferences, market factors, conditions in the AVOD,
entertainment and brands industries, the ability of the Company to
execute on production, distribution and licensing arrangements, the
timing for commencing and completing productions, the ability of
the Company and its partners to execute on brand plans and consumer
products programs, foreign exchange risk, and risk factors
discussed in materials filed with applicable securities regulatory
authorities from time to time including matters discussed under
"Risk Factors" in the Company's most recent Annual Information Form
and annual Management Discussion and Analysis. These
forward-looking statements are made as of the date hereof, and the
Company assumes no obligation to update or revise them to reflect
new events or circumstances, except as required by law.
View original content to download
multimedia:https://www.prnewswire.com/news-releases/wildbrain-reports-q4-and-full-year-2021-results-301376920.html
SOURCE WildBrain Ltd.