CPLG announced a major restructuring this morning to reflect the increasing importance of multi-territory partners and synergies across retail, licensing, and operations.
CPLG says that rapid expansion of its presence in Europe and the U.S. in the past two years has brought the company significant opportunities and highlighted the requirement for an increasingly global approach.
“Historically we have focused on single-territory teams, but we have found that our business is becoming increasingly more global,” said CEO Peter Byrne. “We have incredible talent across the group, and the changes we are announcing enable us to continue to consolidate our European footprint and position us strongly for further growth.”
Maarten Weck, currently MD CPLG Northern Europe, will take on the additional responsibility of heading up CPLG UK.
John Taylor is elevated to commercial director CPLG UK and Gemma Witts is promoted to retail and marketing director CPLG UK. Both will report to Weck.
Maria Gurrieri, currently MD CPLG Italy, will now add the responsibility of Turkey and Greece to her overall remit, to become MD CPLG Southern Europe. Anthe Louizos, MD CPLG Turkey and Greece, will report to Gurrieri.
Pau Pascual, who currently manages CPLG Iberia, will take on the additional oversight of the Middle East, to support the expansion plans of CPLG MENA, which was set up last year and is headed up by Abdel Boazzati, MD CPLG MENA. Boazzati will report to Pascual.
Stephen Gould, current MD of CPLG UK, has stepped down to pursue other opportunities.
Jakks to Work with Liolios Group
Jakks Pacific, Inc., has engaged Liolios Group to lead an expanded strategic investor relations and financial communications program.
“Since its founding more than 20 years ago, Jakks has grown to be one of the largest U.S. toy companies through internally generated growth in existing product categories, international expansion, accretive acquisitions and selective entry into new categories,” said Stephen Berman, chairman and CEO of Jakks Pacific. “Much of our growth has been driven by the successful execution of licenses with our valued partners, which continue to contribute to our current success.”
Jakks will continue to work with licensing partners, as well as develop a growing base of proprietary IP and brands through organic growth and acquisitions.
“Considering our progress and the exciting opportunities ahead, we believe the time is right to engage a comprehensive financial communications firm like Liolios. They bring a proven track record of assisting dynamic companies like Jakks effectively deliver their message to the global capital markets. This is especially true following their recent addition of Wall Street veteran analyst Sean McGowan, who is recognized as an expert in several of our active categories—such as toys, digital games, juvenile products—as well as others we are targeting,” said Berman.
Liolios will work closely with management to provide strategic advisory, messaging, and corporate positioning, as well as assist in communicating with new and existing investors and members of the financial community.
Spin Master Reports Q2 2016
Spin Master Corp. announced strong financial results for the second quarter ended June 30, 2016.
“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-CEO 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, 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 U.S. toy industry according to NPD.”
Q2 2016 Financial Highlights
- Revenue of $179.4 million increased 40.5 percent from $127.7 million in Q2 2015
- In constant currency terms revenue increased by 41.8 percent relative to Q2 2015
- Gross product sales increased 33.7 percent to $186 million, compared to $139.1 million in Q2 2015. Excluding Cardinal Industries, which was acquired in Q4 2015, gross product sales increased 19.5 percent
- Q2 2016 featured strong contributions from Bunchems, 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 percent in North America, 48.2 percent in Europe, and 34.3 percent across 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 percent from $3 million in Q2 2015 to $12.4 million in Q2 2016
- Gross profit increased 40.2 percent to $91.6 million, representing 51.1 percent of revenue, compared with $65.4 million, or 51.2 percent of revenue in Q2 2015
- Selling, general, and administrative expenses, excluding share based compensation expenses, represented 41.3 percent of revenue compared to 43 percent in Q2 2015, reflecting the company’s increasing operating leverage
- Net income of $3.6 million, equivalent to $0.04 per share, compared with $7.6 million in Q2 2015
- Adjusted net income was $11.7 million, or $0.12 per share, an increase of 42.6 percent from $8.1 million in Q2 2015
- Adjusted EBITDA increased 41.5 percent to $25.4 million compared with $17.9 million in Q2 2015; adjusted EBITDA margins increased slightly to 14.2 percent in Q2 2016 from 14.1 percent in Q2 2015
- Free cash flow was $(11.0) million compared to $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 and 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 and Sago Mini was completed on May 2, 2016.
- Subsequent to the end of the quarter, Spin Master announced the acquisition of Swimways Corp.
June 30, 2016 Year-to-Date Results
For the six months ended June 30, 2016, Spin Master generated revenue of $341.1 million, an increase of 45.6 percent from $234.2 million for the six months ended June 30, 2015. In constant currency terms, revenue increased by 47.3 percent YTD relative to the comparable period in 2015. Excluding the acquisition of Cardinal, YTD revenue increased 30.8 percent to $306.4 million compared to the same period in 2015. YTD gross profit increased to $177 million, or 51.9 percent of revenue, compared with $122.1 million, or 52.1 percent 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 percent of revenue compared to 45.6 percent in the comparable period in 2015. Net income for the six months ended June 30, 2016, was $13.5 million, or $0.14 per share, an increase of 46.5 percent from $9.2 million for the same period in 2015. Adjusted net income YTD was $23.3 million, or $0.23 per share, up 100.9 percent from $11.6 million in the first six months of 2015.
Adjusted EBITDA for the six months ended June 30, 2016, increased to $49.4 million, up 75.5 percent from $28.1 million for the same period in 2015. Adjusted EBITDA margins YTD increased to 14.5 percent from 12 percent 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 $5.3 million compared to $(2.4) million for the same period in 2015.
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 percent, driven by the acquisition of Cardinal. Excluding the acquisition of Cardinal, gross product sales in this segment grew by 16 percent, driven by Bunchems. Gross product sales in the Remote Control and Interactive Characters segment decreased 7.6 percent, 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 percent, 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 Preschool and Girls segment increased 49.8 percent, 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 Powerpuff Girls. Other Revenue increased 178.8 percent 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.
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 percent 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 percent to 35 percent of total gross product sales for 2016. Adjusted EBITDA margins for 2016 are also expected to increase slightly compared with prior guidance and 2015.
(Comparative Q2 2015 financial results presented in the company’s release reflect Spin Master’s results as a private company, prepared to conform to its financial reporting standards under International Financial Reporting Standards as a public company.)