VANCOUVER, British Columbia, May 30, 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 months ended March 31, 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 | ||||||||
| $000's, except per share amounts | March 31, 2018 | March 31, 2017 | ||||||
| Revenue | $ | 15,663 | $ | 5,867 | ||||
| Operating EBITDA1 | 1,552 | (374 | ) | |||||
| Operating loss1 | (292 | ) | (2,111 | ) | ||||
| Operating loss per share | ||||||||
| - basic and diluted | $ | (0.01 | ) | $ | (0.08 | ) | ||
| Net loss | $ | (162 | ) | $ | (1,466 | ) | ||
| Net loss per share | ||||||||
| - basic and diluted | $ | (0.01 | ) | $ | (0.06 | ) | ||
| Weighted average number of shares outstanding | ||||||||
| - basic and diluted | 25,178,604 | 25,581,577 | ||||||
| 1 Operating EBITDA includes amortization of investment in film and television. Refer to discussion under Consolidated Results for a reconciliation of Operating EBITDA and Operating loss to Net loss. | ||||||||
FINANCIAL HIGHLIGHTS
- For the three months ended March 31, 2018, revenue grew by 167% to $15.7 million compared to the same quarter in 2017. This included $5.5 million generated from the Networks and Platforms segment through Channel Frederator Network, which continues to build viewership. Revenue for the Animation Production segment was $10.2 million for first quarter, a 137% increase in comparison to the first quarter of 2017, bolstered by the continued production of Costume Quest, Barbie Dreamhouse Adventures and Spy Kids: Mission Critical, as well as revenue from the US licensing of Bravest Warriors, season 4, and proceeds from licensing of worldwide SVOD rights for Reboot: The Guardian Code.
- Operating EBITDA was $1.6 million for the three months ended March 31, 2018, and the net loss was $0.2 million.
“We continue to build our Networks and Platforms business,” reported Michael Hirsh, Chairman and CEO, “the Frederator Networks exceeded 5.4 Billion views in the first quarter of 2018, up 25% from the quarter ended December 31, 2017. WOW continues production on several high-profile titles and our work on three innovative series has premiered on Netflix for the past three months in a row - Reboot: The Guardian Code debuted in March, Spy Kids: Mission Critical commenced in April and Barbie Dreamhouse Adventures began in May, 2018. Excitement is also building for the Canadian premiere of Reboot on YTV in June, 2018.”
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 | ||||||||
| $000's | March 31, 2018 | March 31, 2017 | ||||||
| Revenue | $ | 15,663 | $ | 5,867 | ||||
| Amortization of investment in film and television | $ | 947 | $ | – | ||||
| Operating EBITDA | $ | 1,552 | $ | (374 | ) | |||
| Finance costs | 353 | 88 | ||||||
| Depreciation and amortization1 | 760 | 1,229 | ||||||
| General and administration | 731 | 420 | ||||||
| Operating loss | (292 | ) | (2,111 | ) | ||||
| Items affecting comparability: | ||||||||
| Share based compensation expense | 261 | 180 | ||||||
| Deferred income tax recovery | (391 | ) | (825 | ) | ||||
| (130 | ) | (645 | ) | |||||
| Net loss | $ | (162 | ) | $ | (1,466 | ) | ||
| 1 Excludes amortization of investment in film and television | ||||||||
Revenue and Operating EBITDA
Revenue for the 3 months ended March 31, 2018, increased by $9.8 million, compared to the same period in 2017. This increase was comprised of $3.9 million in incremental revenue in the Networks and Platforms segment, driven by escalating views and revenues for Channel Frederator, and $5.9 million of additional turnover in the Animation Production segment from continued production of series, such as Costume Quest, Barbie’s Dreamhouse Adventures and Spy Kids: Mission Critical, as well as revenue from the US licensing of Bravest Warriors, Season 4, and proceeds from licensing of worldwide SVOD rights to Reboot: The Guardian Code.
Operating EBITDA for the 3 months ended March 31, 2018, increased by $1.9 million compared to the same period in 2017, as a result of the increased volume.
NON-GAAP FINANCIAL MEASURES
The Company reports using certain supplemental indicators of the Company’s financial and operating performance in addition to results reported in accordance with International Financial Reporting Standards (“GAAP”). These measures are referred to as non-GAAP measures, and 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 ongoing 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 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, but before interest, taxes, general and administration expenses, 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 in the calculation of 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 Media Inc. is creating a leading next-generation kids and youth animation business by focusing on digital platforms and content. The company's key assets include: the world's No. 1 digital animation network, Frederator Networks, which consists of an animation production company, Frederator Studios, as well as VOD channels on digital platforms; and one of Canada's largest, multifaceted animation production studios, Rainmaker Entertainment, which consists of Mainframe Studios that produces CGI animated television series, and Rainmaker Studios that produces long-form animated features.