Following a string of acquisitions in the wake of its 2015 initial public offering, Toronto, Canada-based Spin Master continues to be on a roll. The company saw its fiscal 2017 revenue increase by 34% to US$1.55 billion, and gross profit for the full year was also up 34% to US$800.5 million.
Gross sales increased 32% to US$1.65 billion, driven largely by Hatchimals, PAW Patrol, Luvabella and the toyco’s Games portfolio. These full-year increases were partially offset by declines in Zoomer, Air Hogs and licensed products associated with feature films The Secret Life of Pets and Angry Birds.
Spin Master’s Remote Control and Interactive Characters segment saw gross product sales increase by 109% to US$593.4 million. Growth in the segment was driven primarily by sales of Hatchimals, Hatchimals Colleggtibles and Luvabella.
The Outdoor segment, meanwhile, grew by a whopping 388% to US$93.1 million (compared to US$19.1 million in 2016), thanks to products under the Swimways, Kelysius and Coop brands.
The Activities, Games & Puzzles and Fun Furniture segment boasted gross product sales of US$365.4 million for the full year, an increase of 8% over 2016. Cool Maker branded products and Spin Master’s Games portfolio drove this growth.
Declines in the Boys Action and High-Tech Construction segment (down 27% to US$112.1 million in fiscal 2017) were driven primarily by decreases connected to 2016 films Angry Birds and The Secret Life of Pets, as well as Minecraft and Meccano brands.
Spin Master’s Preschool and Girls segment saw gross product sales increase by 7% to US$493 million (with PAW Patrol gains offsetting declines in Brightlings, Chubby Puppies and Power Puff Girls).
Gross product sales for fiscal 2017 rose by 27% in North America, 35% in Europe and 51% internationally. Spin Master’s other revenue (primarily reflecting merch royalties and TV distribution income from products marketed by third parties, as well as app revenue from Toca Boca and Sago Mini) was US$85.8 million compared to US$47.9 million in 2016.
Net income for fiscal 2017 was US$161.1 million (up 61% from US$99.5 million in the same period in 2016). Adjusted EBITDA, meanwhile, increased by 42% to US$292.2 million.
Looking at Q4 2017, Spin Master’s revenue increased by 30% to US$440.9 million, while gross profit was up 33% to US$228.9 million in the same period. The quarter also saw increases in gross product sales (up 28% to US$483.9 million). The strong fourth quarter follows growth in the company’s Q1, Q2 and Q3 reports.
Q4 2017 also saw Spin Master acquire certain assets related to the Perplexus brand for roughly US$9 million. Spin Master has distributed the brand since 2013, and the acquisition gives the company ownership of the entire Perplexus game portfolio.
In fact, Spin Master has made nine acquisitions since 2015, including its March 5 purchase of US plush manufacturer Gund (for US$79.1 million). Spin Master’s previous acquisitions include the assets of bankrupt brain game retailer Marbles, as well as Swimways and outdoor toy company Aerobie.
Moving forward, Spin Master anticipates that gross product sales in the first half of 2018 will be in the range of 32% to 35% of full-year gross product sales (compared to 30% in the past).