Spin Master has announced its financial results for the three months ended March 31, 2022.
Toy revenue increased by $95.3 million or 37.3% to $350.9 million, driven by growth in all product categories, particularly Preschool and Dolls & Interactive and Wheels & Action.
Toy Gross Product Sales increased by $102.8 million or 34.9%, to $397.5 million from $294.7 million. Constant Currency Toy Gross Product Sales increased by $107.9 million or 36.6% to $402.6 million, up from $294.7 million. The improvement was led by growth from Gabby’s Dollhouse, DC Comics and Wizarding World, and reflected strong customer demand and Spin Master’s continued successful management of global supply chain volatility.
Spin Master now expects 2022 Toy Gross Product Sales to increase in low double digits compared to 2021, up from mid to high single digits previously announced on February 28, 2022. The seasonality of Toy Gross Product Sales for 2022 is expected to be approximately 40% in the first half of 2022.
“Following our very strong performance in 2021, we are extremely pleased with the positive momentum we saw across all three of our creative centres in the first quarter of 2022,” says Max Rangel, Spin Master’s Global President & CEO.
“The Toy creative centre benefited from strong customer demand for our innovative toy line and our global commercial team continued to manage supply chain volatility to ensure we delivered product on time. The Digital Games creative centre, led by Toca Life World, continued to generate strong engagement and momentum. Our performance this quarter reflects Spin Master’s potential to create magical play experiences for children wherever they are – from the strength of our diversified toy portfolio anchored in franchise brands, partner licenses and exciting innovation, to our engaging multi-platform entertainment content and our open-ended digital playgrounds.”
Mark Segal, Spin Master’s Chief Financial Officer, adds: “In the first quarter of 2022, we delivered very strong financial and operating performance across our Toys, Entertainment and Digital Games creative centres. We are pleased to increase our revenue outlook for 2022. We introduced our new segment reporting structure this quarter, providing an enhanced view of the drivers of our revenue and profit margins and providing shareholders with increased visibility into our performance.
“We remain committed to our financial framework for value creation, underpinned by our formula for innovation and disciplined global growth across all our creative centres. Our solid financial position provides opportunities to leverage our global platform for organic growth and acquisitions.”
Q1 2022 Consolidated Financial Highlights as compared to the same period in 2021 (US$ millions)
- Revenue was $424.2 million, an increase of 34.0% from $316.6 million of which 30.1% was attributable to Toy revenue, 5.4% to Digital Games revenue, offset partially by a decline due to Entertainment revenue of 1.5%. Constant Currency Revenue was $431.1 million, up from $316.6 million, an increase of 36.2%.
- Operating Income was $61.7 million compared to $6.7 million.
- Operating Margin was 14.5% compared to 2.1%.
- Adjusted Operating Income was $77.3 million compared to $13.6 million.
- Adjusted Operating Margin1 was 18.2% compared to 4.3%.
- Adjusted EBITDA was $95.7 million compared to $36.7 million.
- Adjusted EBITDA Margin was 22.6% compared to 11.6%.
- Cash (used in) provided by operating activities was $(62.9) million compared to $9.0 million.
- Cash used in investing activities was $(8.3) million compared to $(64.0) million.
- Free Cash Flow was $(79.4) million compared to $(6.5) million.
- Available liquidity of approximately $1,011 million, comprised of $493 million in cash and cash equivalents and $518 million under the Company’s credit facilities.
- The Company made minority investments in two companies for a total of $1.0 million as part of its Spin Master Ventures strategic initiative.
- Effective January 1, 2022, the Company revised its reportable operating segments. The Company now has three reportable operating segments: Toys, Entertainment and Digital Games.