Spin Master Posts 31-Percent Increase in Q4 2016 Revenues
Spin Master announced strong financial results for 2016 fourth quarter and year-end, bolstered by sales of Hatchimals and PAW Patrol.
The company posted a 31-percent increase in Q4 gross product sales, which in turn drove increases of 68 percent in adjusted EBITDA and 40 percent in adjusted net income, according to Anton Rabie, chairman and co-CEO. The quarter was also highlighted by an agreement to increase and amend Spin Master’s Credit Agreement with total borrowing capacity of up to $510 million under the new committed facility. “We have significantly enhanced our financing capacity and flexibility, which together with our internally generated Free Cash Flow, is expected to continue to support our growth,” Rabie adds.
Q4 2016 revenue of $338.4 million increased 30.9 percent from $258.4 million in Q4 2015. Gross product sales increased 30.9 percent to $376.2 million, compared to $287.5 million in Q4 2015, driven by sales of PAW Patrol and Hatchimals, which more than offset declines in Meccano, Kinetic Sand, and Air Hogs Star Wars products.
Excluding Swimways, gross product sales grew 26.3 percent, posting a 21.9-percent increase in North America, a 59.4-percent in Europe, and a 34.8-percent increase in the rest of world.
On December 21, 2016, the company also entered into an agreement with a syndicate of lenders to increase, amend, and extend its credit agreement, under which Spin Master’s two credit facilities were restructured into a single committed five-year revolving facility, and the total capital available was increased from $280 million to $510 million; the new maturity date of the facility is December 2021.
“Spin Master continues to generate strong financial results,” says Ben Gadbois, president and COO. “Operationally, our rolling 36-month brand innovation pipeline continues to generate innovation that we intend to build on to drive future growth. The integration of Cardinal, Swimways and Toca Boca is going very smoothly. Our international sales, marketing and distribution network and overall international market presence is stronger today than it was a year ago.”
For the year-end, Spin Master generated revenue of $1,154.5 million, up 31.3 percent compared to $879.4 million for 2015. The company benefitted from strong contributions from Cardinal, Bunchems, Hatchimals and PAW Patrol, offsetting declines in Meccano, Star Wars-licensed product and Flutterbye Fairy. Gross product sales were also up 25.8 percent, excluding Swimways.
Privet Capital Acquires Vivid Toy Group
The private equity firm Privet Capital has acquired Vivid Toy Group for an undisclosed sum, from Phoenix Equity Partners.
Vivid, a leading European independent toys and games companies, licenses, designs, manufactures, and sells a range of toys and games (proprietary and third-party IP) in the UK, France, Germany, Benelux, and U.S. at mass retailers including Tesco, Argos, Walmart, Carrefour, Toys “R” Us, Smyths, The Entertainer, and Amazon.
The company is headquartered in the UK, with sales and marketing operations in Paris and Frankfurt, Germany as well as operations in Hong Kong.
Its core product lines are toys, games, and arts & crafts. It is best known for its association with brands such as Moshi Monsters, Thunderbirds, Bratz, Animagic, Articulate, Logo, Crayola, and others.
Eric Rossi, CEO of Vivid Toy Group, says of the acquisition, “With Privet Capital’s backing, we are well supported to accelerate Vivid’s growth path including some exciting new initiatives. This investment, as well as ongoing operational support from the Privet team, will enable us to continue developing Vivid’s strong product portfolio—particularly within the collectibles segment and certain licenses, as well as strengthen further the company’s excellent long-standing customer relationships with the world’s leading toy and games retailers.”
Roblox Announces $92 Million in Funding
Roblox announced the closing of a $92 million investment. The investment is the first equity financing in more than five years for Roblox, and will be put toward enhancing the platform’s infrastructure and recruiting of top talent. Meritech Capital Partners (investors in Snapchat, Facebook) and Index Ventures (investors in King, Supercell) led the financing, with Meritech’s managing director Craig Sherman and Index’s co-founder and partner Neil Rimer taking observer seats on the Roblox board. The new funding follows a record-breaking year for the company, including the company’s rebranding, and an online to offline expansion with a first-ever user-generated toy line.
According to Sherman, “Roblox’s growth over the past two years has been one of the best-kept secrets in the industry. They’re experiencing engagement and audience numbers that rival some of the world’s biggest gaming and entertainment companies and we see the trajectory continuing to accelerate. This is an exciting time to come on board.”
Through continued expansion across mobile, computer, console, and virtual reality, Roblox has reached more than 48 million active players according to the most recent report in December 2016. In addition, more than 22 million games and experiences have been created by an industry leading 1.7 million independent game creators. At peak hours, Roblox registers one million concurrent players and has seen more than 300 million hours in user engagement and play per month—ranking it third overall for children ages 6-12 years old, according to comScore (November 2016).
Jazwares created a toy line based on popular user-generated characters from the game. The line is now available at Toys “R” Us and other stores, and can be found online at www.roblox.com and www.jazwares.com. The deal marks the beginning of an offline strategy that will bring Roblox to retail throughout 2017 and beyond. Prior funding was led by Altos Ventures and First Round Capital with a total investment of $10.5 million.
Loot Crate Marks Foray into Sports Fandom
Loot Crate announced the launch of Sports Crate and its first line of subscription products exclusively for baseball fans. With licenses from Major League Baseball (MLB) and the Major League Baseball Players Association, Sports Crate is now the exclusive licensed subscription box of MLB.
The new division of Loot Crate, Sports Crate will launch with 10 teams initially, providing fans of the Boston Red Sox, Chicago Cubs, Detroit Tigers, Kansas City Royals, Los Angeles Dodgers, New York Mets, New York Yankees, San Francisco Giants, St. Louis Cardinals, and Texas Rangers with exclusive apparel, collectibles, experiences, and more every month. Sports Crate will roll out additional teams later this year.
The monthly subscription service will feature exclusive team-focused products and VIP one-of-a-kind experiences. The first Sports Crate will feature a “Bringing the Heat” theme, stocked accordingly with a highly collectible, exclusive action figure of the respective team’s starting pitcher, along with everything a fan needs to “bring it” on opening day.