VANCOUVER, Aug. 29, 2018 (GLOBE NEWSWIRE) -- Wow Unlimited Media Inc. (“Wow” or the “Company”) (TSX-V:WOW.A) (TSX-V:WOW.B) announced its results for the three and six months ended June 30, 2018.
Cumulative prior period information in the following table has been restated for purchase price allocation adjustments relating to the acquisition of Frederator.
| For the three months ended | For the six months ended | |||||||||||||||
| $000's, except per share amounts | June 30, 2018 | June 30, 2017 | June 30, 2018 | June 30, 2017 | ||||||||||||
| Revenue | $ | 16,270 | $ | 10,399 | $ | 31,933 | $ | 16,265 | ||||||||
| Operating EBITDA1 | (1,230 | ) | (150 | ) | (409 | ) | (945 | ) | ||||||||
| Operating loss1 | (2,311 | ) | (1,487 | ) | (2,603 | ) | (3,599 | ) | ||||||||
| Operating loss per share: | ||||||||||||||||
| - basic and diluted | $ | (0.09 | ) | $ | (0.06 | ) | $ | (0.10 | ) | $ | (0.14 | ) | ||||
| Net loss | $ | (2,080 | ) | $ | (2,252 | ) | $ | (2,243 | ) | $ | (3,718 | ) | ||||
| Net loss per share: | ||||||||||||||||
| - basic and diluted | $ | (0.08 | ) | $ | (0.09 | ) | $ | (0.09 | ) | $ | (0.15 | ) | ||||
| Weighted average number of shares outstanding: | ||||||||||||||||
| - basic and diluted | 25,524,434 | 25,037,579 | 25,352,474 | 25,304,775 | ||||||||||||
| 1 Operating EBITDA and operating loss includes 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. | ||||||||||||||||
FINANCIAL HIGHLIGHTS
- Second quarter revenue was $16.3 million. This included $8.9 million generated by the Networks and Platforms segment, which continues to build viewership. Revenue for the Animation Production segment was $7.4 million for second quarter, bolstered by the continued production of Costume Quest, Barbie Dreamhouse Adventures and Octonauts, season 5, as well as revenue from the US licensing of Bravest Warriors, season 4.
- Operating EBITDA was a $1.2 million loss for the three months ended June 30, 2018, and the net loss was $2.1 million.
“Wow has enjoyed another good quarter, with revenue and viewership continuing to grow strongly. Gross revenue for the first six months of our fiscal year has increased by 96% over the same period last year.” said Michael Hirsh, Chairman and CEO. “The CRTC approved Wow’s application for a Canadian broadcast license in July 2018. Closing of the transaction remains subject to approval by the TSX-V. Also in July, Wow raised gross proceeds of $2,360,291 through the private placement of 1,573,527 common voting and variable voting shares at $1.50 per share.”
CONSOLIDATED RESULTS FOR THE QUARTER
Cumulative prior period information in the following table has been restated for purchase price allocation adjustments relating to the acquisition of Frederator.
| For the three months ended | For the six months ended | |||||||||||||||
| $000's | June 30, 2018 | June 30, 2017 | June 30, 2018 | June 30, 2017 | ||||||||||||
| Revenue | $ | 16,270 | $ | 10,399 | $ | 31,933 | $ | 16,265 | ||||||||
| Amortization of investment in film and television programming | $ | 936 | $ | 1,501 | $ | 1,883 | $ | 1,501 | ||||||||
| Operating EBITDA | $ | (1,230 | ) | $ | (150 | ) | $ | (409 | ) | $ | (945 | ) | ||||
| Finance costs | 300 | 100 | 653 | 188 | ||||||||||||
| Depreciation and amortization1 | 781 | 1,237 | 1,541 | 2,466 | ||||||||||||
| Operating loss | (2,311 | ) | (1,487 | ) | (2,603 | ) | (3,599 | ) | ||||||||
| Items affecting comparability: | ||||||||||||||||
| Share based compensation expense | 217 | 453 | 478 | 633 | ||||||||||||
| Deferred income tax (recovery) expense | (448 | ) | 312 | (838 | ) | (514 | ) | |||||||||
| (231 | ) | 765 | (360 | ) | 119 | |||||||||||
| Net loss | $ | (2,080 | ) | $ | (2,252 | ) | $ | (2,243 | ) | $ | (3,718 | ) | ||||
| 1 Excludes amortization of investment in film and television programming | ||||||||||||||||
Revenue and Operating EBITDA
Revenue for the three and six months ended June 30, 2018, increased by $5.9 million and $15.7 million, respectively, compared to the same periods in 2017. The increase in revenue for the six months ended June 30, 2018, compared to 2017, was generated by $10.3 million of growth in the Networks and Platforms segment, driven by increased views and revenue generated by Channel Frederator, and $5.4 million of growth in the Animation Production segment, driven by the continued production of Costume Quest, Barbie Dreamhouse Adventures, Octonauts, season 5, and Spy Kids: Mission Critical, as well as revenue from the US licensing of Bravest Warriors, season 4, and proceeds from licensing of international SVOD rights for Reboot: The Guardian Code. The increase in revenue for the three months ended June 30, 2018, compared to the same period in 2017 was driven by increased views and revenue generated by Channel Frederator.
Operating EBITDA for the three and six months ended June 30, 2018, decreased by $1.1 million and increased by $0.5 million, respectively, compared to the same periods in 2017. The decrease in operating EBITDA for the three months ended June 30, 2018, was primarily a result of higher operating costs in the Networks and Platforms segment as the Company continues to invest in building content and audience on the YouTube platform, including expanding its reach to the gaming category. The increase in operating EBITDA for the six months ended June 30, 2018, was primarily driven by revenue from Reboot: The Guardian Code, as noted above, net of accrued costs and amortization.
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.
The Company defines operating EBITDA as profit or loss net of amortization of investment in film and television programming, but before interest, taxes, depreciation and amortization, adjusted for certain items affecting comparability as specified in the calculation of operating profit or loss. Operating EBITDA is presented on a basis consistent with the Company's internal management reports. The Company discloses operating EBITDA to capture the profitability of its business before the impact of items not considered in management's evaluation of operating performance. Unless otherwise stated, the Company includes the amortization of investment in film and television programming in the calculation of operating EBITDA.
Operating profit or loss, operating profit or loss per share and operating EBITDA do not have any standardized meaning prescribed by IFRS and therefore may not be comparable to similar measures presented by other companies. The Company cautions readers to consider these non-IFRS financial measures in addition to, and not as an alternative for, measures calculated in accordance with IFRS.
Forward-looking Statements
This news release contains certain forward-looking statements and forward-looking information (collectively referred to herein as "forward-looking statements") within the meaning of applicable Canadian securities laws. All statements other than statements of present or historical fact are forward-looking statements. Forward-looking statements are often, but not always, identified by the use of words such as "anticipate", "achieve", "could", "believe", "plan", "intend", "objective", "continuous", "ongoing", "estimate", "outlook", "expect", "may", "will", "project", "should" or similar words, including negatives thereof, suggesting future outcomes.
In particular, this news release contains forward-looking statements relating to, among other things: (i) general economic conditions; (ii) future revenues to be received by Wow; (iii) Wow’s future business prospects and opportunities; (iv) Wow’s ability to complete any or all of its proposed production work; (v) the ability of the Company to raise financing in the future; and (vi) the completion of the proposed transactions with Bell Media Inc.
Management of the Company believes the expectations reflected in such forward-looking statements are reasonable as of the date hereof but no assurance can be given that these expectations will prove to be correct and such forward-looking statements should not be unduly relied upon. Various material factors and assumptions are typically applied in drawing conclusions or making the forecasts or projections set out in forward-looking statements. Those material factors and assumptions are based on information currently available to the Company, including data from publicly available governmental sources as well as from market research and industry analysis and on assumptions based on data and knowledge of this industry which the Corporation believes to be reasonable. However, although generally indicative of relative market positions, market shares and performance characteristics, such data is inherently imprecise.
Forward-looking statements are not a guarantee of future performance and are subject to and involve a number of known and unknown risks and uncertainties, many of which are beyond the control of the Company, which may cause the Company's actual performance and results to differ materially from any projections of future performance or results expressed or implied by such forward-looking statements. These risks and uncertainties include, but are not limited to, the risks identified in the Company's annual information form for the year ended December 31, 2017, which has been filed with the Canadian Securities Administrators and is available on www.sedar.com. Any forward-looking statements are made as of the date hereof and, except as required by law, the Company assumes no obligation to publicly update or revise such statements to reflect new information, subsequent or otherwise.
Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.
About Wow Unlimited Media Inc.
Wow Unlimited is creating a leading next generation kids and youth entertainment business by focusing on creating top end content, and by building and partnering with the most engaging platforms. The Company's key assets include: Frederator Networks Inc., which includes, Channel Frederator Network, the world's #1 digital animation network, Frederator Studios, an animation production company, as well as video-on-demand channels on digital platforms; and one of Canada's largest, multi-faceted animation production studios, Mainframe Studios, which produces computer-generated animated television series and long-form animated features.
Further information available at:
Website: www.wowunlimited.co
Contact: Neil Chakravarti
Tel: (416) 939-9963
Email: neil@wowunlimited.co