WOW! Unlimited Media Announces Financial Results for the Second Quarter of 2019
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Source : WOW! Unlimited Media Inc. 28 août 2019 18h45 HE WOW! Unlimited Media Announces Financial Results for the Second Quarter of 2019 VANCOUVER, British Columbia, Aug. 28, 2019 (GLOBE NEWSWIRE) -- WOW! Unlimited Media Inc. (“WOW!” or the “Company”) (TSX-V: WOW; OTCQX: WOWMF) announced its results for the three and six months ended June 30, 2019. The Company completed the second quarter of 2019 with revenue of $26.6 million, as compared to $16.3 million for the second quarter of 2018. Q2 2019 HIGHLIGHTS Studio production During the quarter, WOW! commenced production on a major animated series for a leading US studio with a committed 2+ year production and delivery schedule Strong production pipeline As of June 30, 2019, WOW!’s animation production backlog was $71.9 million; Animation Production segment revenue was $6.9 million for the three months ended June 30, 2019 Networks & Platforms On August 30, 2019, WOW! will officially own the Category B Canadian specialty service license acquired under an agreement with its strategic investor, Bell Media. Management is exploring strategic partnerships to structure a financially attractive business plan for a potential WOW!-branded linear channel On June 8, 2019, the Company announced that a key channel affiliate, ADME (CY), Ltd. (“ADME”), would repatriate certain of its YouTube channels from Frederator; Frederator would continue to distribute and manage certain other ADME channels and it will have the opportunity to distribute and manage certain new ADME YouTube channels as they are developed. As of June 30, 2019, ADME channels represented approximately 85% of overall viewership on the Channel Frederator Network. Pursuant to the agreement, on July 31, 2019, Frederator transferred to ADME channels representing approximately 40% of the viewership of the ADME owned channels. While the ADME-owned channels contribute a significant portion of the Networks and Platforms revenues, they do not represent a significant portion of the Company’s overall profitability. Further, given the nature of their content i.e. crafts and hobbies, the loss of ADME channels do not affect the Company's core objectives on YouTube - those of finding great animation talent and IP, and using the platform to build audiences for its animated shorts and series. Channel Frederator Network had 3,129 channels as at June 30, 2019 Financial highlights & guidance Revenue for the three months ended June 30, 2019 was $26.6 million Operating EBITDA for the three months ended June 30, 2019 was ($0.6) million The Company maintains its revised fiscal 2019 guidance as presented in the June 7, 2019, press release which indicated revenues in excess of $85 million and Operating EBITDA between $2.4-$3.4 million OVERVIEW OF RESULTS For the three months ended For the six months ended $000's, except per share amounts June 30, June 30, June 30, June 30, 2019 2018 2019 2018 Revenue $ 26,614 $ 16,270 $ 46,111 $ 31,933 Operating EBITDA1 (625) (1,230) (2,438) (409) Operating loss1 (2,214) (2,311) (5,481) (2,603) Operating loss per share - basic and diluted $ (0.07) $ (0.09) $ (0.18) $ (0.10) Net loss $ (2,361) $ (2,080) $ (5,754) $ (2,243) Net loss per share - basic and diluted $ (0.07) $ (0.08) $ (0.19) $ (0.09) Weighted average number of shares outstanding: - basic and diluted 31,963,696 25,524,434 31,079,549 25,352,474 1 Operating EBITDA and operating loss include amortization of investment in film and television programming. Refer to discussion under Consolidated Results for a reconciliation of Operating EBITDA and Operating loss to Net loss. Revenue for the three months ended June 30, 2019 was $26.6 million. This included $19.8 million generated by the Networks and Platforms segment, which continues to build viewership. Revenue for the Animation Production segment was $6.9 million for the three months ended June 30, 2019, bolstered by the continued production of the Costume Quest Christmas Special, Barbie Dreamhouse Adventures, season 2, Made by Maddie, the Octonauts specials, and Octonauts, season 5. Operating EBITDA was a $0.6 million loss and net loss was $2.4 million for the three months ended June 30, 2019. “WOW! believes that the worldwide animation business will continue to expand and we are pleased that our backlog substantiates that belief. The investments that we are making to build our studio infrastructure and proprietary pipelines are yielding production efficiencies and expanding our creative capabilities going forward. We are in a strong position to benefit from the growing international demand for top-notch animation and story-telling”, reported Michael Hirsh, Chairman and Chief Executive Officer. CONSOLIDATED RESULTS For the three months ended For the six months ended June 30, June 30, June 30, June 30, $000's 2019 2018 2019 2018 Revenue $ 26,614 $ 16,270 $ 46,111 $ 31,933 Amortization of investment in film and television $ 293 $ 936 $ 657 $ 1,883 programming Operating EBITDA $ (625) $ (1,230) $ (2,438) $ (409) Finance costs 530 300 979 653 Depreciation and amortization1 1,059 781 2,064 1,541 Operating loss (2,214) (2,311) (5,481) (2,603) Items affecting comparability: Share-based compensation expense 147 217 273 478 Deferred income tax recovery – (448) – (838) 147 (231) 273 (360) Net loss $ (2,361) $ (2,080) $ (5,754) $ (2,243) 1 Excludes amortization of investment in film and television programming Revenue and Operating EBITDA Revenue for the three and six months ended June 30, 2019, increased by $10.3 million and $14.2 million, respectively, compared to the same periods in 2018. For the three and six months ended June 30, 2019, revenues for the Networks and Platforms segment increased by $10.8 million and $19.4 million, respectively, and revenues for the Animation Production segment decreased by $0.5 million and $5.2 million, respectively, in comparison to the same periods in 2018. The growth in revenues for the Networks and Platforms segment for the three and six months ended June 30, 2019, was driven by increased views and revenues generated by Channel Frederator Network. The decrease in revenue for the Animation Production segment for the three months ended June 30, 2019, was primarily due to a higher mix of IP production work at Frederator Studios for the three months ended June 30, 2019, as Frederator continued production of Bee & Puppy Cat, season 2 as well as Castlevania, season 3 which are both expected to be delivered late in 2019 when revenue recognition will occur. The higher mix of IP production work in progress at Frederator also contributed to the decrease in revenue for the Animation Production segment for the six months ended June 30, 2019. In addition, the Company recognized revenue from the licensing of international SVOD rights for Reboot: The Guardian Code during the six months ended June 30, 2018 which resulted in higher revenues for the six months period ending June 30, 2018 compared to 2019. Operating EBITDA for the three and six months ended June 30, 2019, increased by $0.6 million and decreased by $2.0 million, respectively, compared to the same periods in 2018. The higher operating EBITDA for the six months ended June 30, 2018 compared to 2019 was driven by gross margin on the revenue from Reboot: The Guardian Code, as noted above. The higher operating EBITDA for the three months ended June 30, 2019 compared to the same period in 2018 was primarily as a result of decreased professional fees and corporate employee costs. CONFERENCE CALL The Company will host a conference call at 8:30 a.m. Eastern Time on Thursday, August 29, 2019, featuring management's quarterly remarks and follow-up question and answer period with analysts. The conference call can be accessed live by dialing 1 (877) 825-9920 five minutes prior to the scheduled start time. The Conference ID is 5369867. A digital recording of the call will be available for one month (until midnight Eastern Time, September 28, 2019) by dialing 1 (855) 859-2056 or (404) 537-3406 and using the Conference ID 5369867. NON-IFRS FINANCIAL MEASURES In addition to results reported in accordance with IFRS, the Company reports using certain non-IFRS financial measures as supplemental indicators of the Company’s financial and operating performance. These non-IFRS financial measures include operating profit or loss, operating profit or loss per share and operating EBITDA. The Company believes these supplemental financial measures reflect the Company's on-going business in a manner that allows for meaningful period-to-period comparisons and analysis of trends in its business. The Company defines operating profit or loss as net profit or loss excluding the impact of specified items affecting comparability, including, where applicable, share of gain or loss of equity accounted investees, other non- operational income and expenses, deferred taxes and other gains or losses. The use of the term "non-operational income and expenses" is defined by the Company as those that do not impact operating decisions taken by the Company's management and is based upon the way the Company's management evaluates the performance of the Company's business for use in the Company's internal management reports. Operating profit or loss per share is calculated using diluted weighted average shares outstanding and does not represent actual profit or loss per share attributable to shareholders. The Company believes that the disclosure of operating profit or loss and operating profit or loss per share allows investors to evaluate the operational and financial performance of the Company's ongoing business using the same evaluation measures that management uses, and is therefore a useful indicator of the Company's performance or expected performance of recurring operations.