Spin Master Corp. announced its financial results for the third quarter ended September 30, 2020.
“This quarter we showed continued progress on many fronts,” said Ronnen Harary, Spin Master’s Co-CEO. “We launched one of our strongest Fall lines ever, with many of our toys making retailers’ top toy lists and in the quarter we grew both Gross Product Sales and Revenue while managing through the uncertain conditions arising from COVID-19. In September, we premiered our first-ever straight-to-streaming entertainment franchise Mighty Express and also saw significant growth in our Toca Boca digital games business driven by increased engagement and new content. Thanks to the dedication and tenacity of our team members globally, we are very well positioned for the holiday season with strong POS momentum globally for our products, lean retail inventories and continued consumer demand within the toy category.”
“Our efforts to manage costs and improve our profitability continue to show progress,” added Mark Segal, Spin Master’s Chief Financial Officer. “Our team achieved key milestones on our operational improvement goals well ahead of schedule and we are well positioned to execute our plan. During the quarter, we have reduced our inventory levels and improved our net working capital and liquidity position. With a diversified portfolio of brands, entertainment franchises and digital games across our global platform and a very solid financial base, we remain focused on investing to create long term value.”
Revenue of US $571.6 million increased by 4.3% from US $548.1 million. Gross product sales increased by 0.7% to US $587.4 million from US $583.3 million. Increases in Boys Action & Construction, Activities, Games & Puzzles and Plush, as well as Outdoor were offset by declines in Remote Control & Interactive Characters and Pre-School & Girls.
Gross product sales increased by 15.6% in Europe and declined 2.6% North America and 10.8% in Rest of World. International gross product sales were 38.3% of total gross product sales compared to 36.2%.
Other revenue increased by 80.9% to US $48.3 million. Growth was driven by strong digital games revenue, primarily from the Toca Life World platform, as well as higher television distribution revenue, partially offset by lower royalty income from products marketed by third parties using Spin Master’s owned intellectual property.
On October 27, 2020, the Company announced it reached an agreement to acquire London-based Rubik’s Brand Ltd, which owns the rights to the Rubik’s Cube, for $50.0 million. The transaction is expected to close on January 4, 2021.