Canadian toy and entertainment company Spin Master has reported revenue of US$1.63 billion for fiscal 2018, an increase of 5.2% compared to the year before. Adjusted EBITDA for the year was US$303.6 million, an increase of 3.9%, though net income fell 5.5% to US$154.9 million.
Gross product sales for fiscal 2018 grew 3.1% to US$1.71 billion, with increases in Europe (2.2%) and the rest of the world (19.5%), but very little growth in North America (0.2%).
Spin Master’s activities, games and puzzles and plush segment saw sales increase 24.7% to US$455.5 million for the full year, due to strength in Gund plush products, as well the Kumi Creator and Kinetic Sand brands. Higher sales of Boxer and Fugglers products led to an 18.7% increase in the boys action and high-tech construction segment, to the tune of US$133.1 million. The company’s remote control and interactive characters segment, however, saw sales drop 14.8% to US$505.4 million, due to declines in Hatchimals large eggs (pictured).
The preschool and girls segment (up 5% to US$517.5 million) and the outdoor segment (up 3.6% to US$96.5 million) also saw growth due to Twisty Petz and SwimWays, respectively. Other revenue, meanwhile, increased 42.1% to US$36.1 million due to royalty income from products marketed by third parties using Spin Master’s owned IP as well as television distribution income.
In Q4 2018, Spin Master reported US$414.3 million in revenue (a 6% decline), and US$199 million in gross profit (a 13% drop). Net income was US$11.4 million, down from US$20 million in Q4 2017, and adjusted EBITDA fell 25% to US$35.1 million. Spin Master previously reported increases in revenue in Q3, Q2 and Q1 2018.
Gross product sales, meanwhile, fell 3.8% to US$465.5 million in the same period. Gross product sales fell in North America (down 9.3%) but grew in Europe (up 2.6%) and the rest of the world (up 7.2%).
In the fourth quarter, Spin Master saw declines in its remote control and interactive characters segment, which fell 45.7% to US$107.9 million due to lower sales of all Hatchimals products. The boys action and high-tech construction segment, however, grew 57.8% to US$57.9 million due to strength in the Boxer, DreamWorks Dragons, Monster Jam and Bakugan brands. Higher sales for PAW Patrol and Twisty Petz led to a 35.8% increase in sales in the preschool and girls segment, to the tune of US$139.1 million.
The activities, games and puzzles and plush segment saw sales increase 10.5% to US$145.2 million due to increases in Kumi Creator and Kinetic Sand in the fourth quarter. The outdoor segment grew 5.3% to US$15.4 million due to strength in the SwimWays and Aerobie brands. Other revenue grew 10.4% to US$33.1 million in Q4 2018, driven by television distribution income.
Moving forward, Spin Master will focus on increasing international sales in both developed and emerging markets, and expects to grow its gross product sales in the low single digit range compared to fiscal 2018.