TORONTO and VANCOUVER, B.C., Jan. 16, 2019 (GLOBE NEWSWIRE) -- Wow Unlimited Media Inc. (“WOW!” or the “Company”) (TSX-V: WOW / OTCQX: WOWMF), a leading next generation kids and youth entertainment company, is pleased to provide an update on its 2018 activities and upcoming initiatives for 2019.
“WOW!’s 2018 was a year of strong growth, as the Company focused on building its brand through the creation of highly popular content, the expansion of its networks and platforms initiatives, and the strengthening of relationships with key clients and partners,” said Michael Hirsh, Chairman and CEO of WOW! “WOW! expects to build on that foundation through 2019 with the release of highly anticipated new content and strong growth in both of its operating segments.”
2018 HIGHLIGHTS
- For the nine months ended September 30, 2018, revenues of $49.6M, up 77% from the same period in 2017
- Network and Platforms segment revenues of $26.5M for the nine months ended September 30, 2018, up 278% from the same period in 2017
- Frederator Network viewership up to 9.9 Billion views for the three months ended September 30, 2018, up 241% from the same period in 2017
- Castlevania Season 2 released on Netflix; 10-episode Season 3 announced
- Debuts of three additional WOW!-produced series on Netflix, Barbie Dreamhouse Adventures, Spy Kids: Mission Critical, and Reboot: The Guardian Code
- Launches WOW!-branded programming on AT&T’s VRV platform in the United States
- Closes acquisition agreement with Bell Media Inc. (“Bell Media”) and launches WOW!-branded programming on Crave in Canada
In 2018, WOW! continued to establish itself within the animation space. Season 2 of WOW!’s Castlevania debuted on Netflix in October 2018 to strong reviews, carrying on where Season 1 left off. Paste Magazine deemed the series, “the best videogame adaptation of all time,” and the popular video game and entertainment media website, IGN, declared Castlevania as “the new gold standard.”
The year also saw WOW! building its direct-to-consumer initiatives with key partners. In the United States, WOW!’s Cartoon Hangover Select channel launched multiple series on AT&T’s VRV, including a new season of the popular Bravest Warriors series. In Canada, WOW! launched two kids programming blocks, WOW! World Kids and WOW! Preschool Playdate, within Bell Media’s Crave platform. Both the VRV and Crave initiatives underline the Company’s strategy of building WOW!-branded media offerings with leading distribution partners.
In August 2018, WOW! and Bell Media entered into the Amended and Restated Asset Purchase Agreement for WOW!’s acquisition of a linear channel from Bell Media, which also brought Bell Media in as a key shareholder with ownership of approximately 12% of the Company’s common shares. In connection with this transaction, both parties entered into a series of related agreements, including a Lock-Up Agreement and an Investor Rights Agreement. Pursuant to the latter, Bell Media invested alongside others in two fundraising rounds and WOW! was pleased to appoint a nominee from Bell Media to its Board of Directors in November 2018.
2019 GROWTH INITIATIVES
- Production backlog of $58.3M
- Attractive market conditions for animation production
- Further development of branded, direct to consumer initiatives
- Charting the path to profitability
WOW!’s total animation production backlog stood at $58.3M as at September 30, 2018. In comparison, revenue from its Animation and Production segment for the nine months ended September 30, 2018 was $23.2M. The animation production industry is poised for growth; while leading platforms like Netflix, Amazon and Hulu continue to spend capital on original content creation, the sector also expects to see launches of additional large-scale subscription and advertising-driven streaming platforms as announced by preeminent companies like Disney, Warner Media, Apple and Walmart. Given WOW!’s animation expertise, established studios with over 20 years of operations in Los Angeles and Vancouver, and the traction gained over the last two years of combined operations, WOW! expects to benefit from growth opportunities within this sector and has commenced a hardware and software upgrade program to address anticipated demand.
WOW!’s studio teams are working on several key releases for 2019. Season 3 of Castlevania will launch on Netflix with 10 episodes, up from 8 episodes for Season 2 and 4 episodes for Season 1. Season 2 of Bee & PuppyCat, one of the most successful animation Kickstarters in history based on funding, will launch on VRV’s Cartoon Hangover Select. WOW! also plans to continue its long-standing partnership with Mattel to produce Season 2 of Barbie Dreamhouse Adventures.
WOW!’s Frederator Network plans to continue on its path of discovering new independent creators and working closely with them to create top-end content. In addition to animation production, Frederator Network plans to build its programming initiatives within gaming through its Leaderboard channel and into anime with its newly launched Get in the Robot channel. WOW! will also work closely with the teams at VRV and Crave to refine its offerings to audiences in the United States and Canada, respectively.
The Company remains focused, on creating shareholder value through the monetization of multiple revenue streams and exercising prudent financial discipline.
2018 & 2019 FINANCIAL OUTLOOK
WOW! expects 2018 full-year revenues to be between $70M-$72M, which is a 57%-61% increase from full-year revenues during 2017 and EBITDA of approximately ($3M-$4M). For 2019, the Company expects revenue growth of 40%-45% and EBITDA to be between $3M-$4M.
About Wow Unlimited Media Inc.
WOW! 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 the world's #1 digital animation network, Channel Frederator 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 animated television series and long-form animated features.
Neither the 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.
Forward-Looking Statements
Certain statements contained in this news release constitute "forward-looking information" and "forward-looking statements" (together, "forward-looking statements") within the meaning of applicable Canadian securities laws and are based on assumptions, expectations, estimates and projections as of the date of this news release. Forward-looking statements include statements with respect to (i) WOW!’s proposed operations and growth initiatives for 2019, including the release of anticipated new content and strong growth in both of its operating segments, growth opportunities within the animation production industry; key releases and the continuation of its long-standing partnership with Mattel; achieving WOW!’s Frederator Network’s objectives of discovering new independent contractors, building its programming initiatives within gaming and refining its offerings in the United States and Canada, respectively, (ii) WOW!’s 2018 (full year) and 2019 financial outlook, including expectations regarding revenues and EBITDA, (iii) the market in which WOW! operates and the demand for animation and children’s entertainment content, and (iv) the Company’s operations, including production capabilities and capacity. The words "may", "would", "could", "will", "intend", "plan", "anticipate", "believe", "estimate", "expect", "projected", "forecasts", "guidance", "outlook", "potential", "prospects", "seek", "aim", "strategy" and "targets" or variations of such words or negative versions thereof and other similar expressions, identify forward-looking statements. Forward-looking statements are based upon management's perceptions of historical trends, current conditions and expected future developments, as well as a number of specific factors and assumptions that, while considered reasonable by the Company as of the date of such statements, are, in many cases, outside of the Company's control and are inherently subject to significant business, economic and competitive uncertainties and contingencies which could result in the forward-looking statements ultimately being entirely or partially incorrect or untrue.
By their very nature, forward-looking statements involve inherent risks and uncertainties, both general and specific, and a number of factors could cause actual events or results to differ materially from the results discussed in the forward-looking statements. In evaluating these statements, a reader should specifically consider various factors, including the risks outlined herein under the heading "Risk Factors" in the Company’s annual information form for its fiscal year ended December 31, 2017 and those contained in the Company’s management’s discussion and analysis for the fiscal year ended December 31, 2017, which are available on SEDAR at www.sedar.com, which may cause actual results to differ materially from any forward-looking statements.
The forward-looking statements contained herein reflect management's current expectations and beliefs and are based upon certain assumptions that management believes to be reasonable based on the information currently available to management. Such assumptions include, but are not limited to, assumptions regarding: (a) the demand for the Company's products and services and fluctuations in future revenues; (b) sufficiency of current working capital to support future operating and working capital requirements; (c) currency exchange rates and interest rates; (d) equity and debt markets continuing to provide the Company with access to capital; (e) general economic trends and conditions; (f) the expected actions of third parties; (g) the Company's future growth prospects and business opportunities; (h) the Company’s ability to anticipate and adapt to changes in technology and product consumption patterns; (i) the Company’s ability to secure ongoing work-for-service contracts; (j) the Company’s ability to attract qualified personnel; and (k) a stable industry regulatory environment. By their nature, forward-looking statements are subject to inherent risks and uncertainties that may be general or specific and which give rise to the possibility that expectations, forecasts, predictions, projections or conclusions will not prove to be accurate, that assumptions may not be correct and that objectives, strategic goals and priorities will not be achieved. Should one or more of the risks or uncertainties identified herein materialize, or should the assumptions underlying the forward-looking statements prove to be incorrect, then actual results may vary materially from those described herein.
This news release contains future-oriented financial information and financial outlook information (collectively, “FOFI”) about WOW!’s prospective revenues and EBITDA, all of which are subject to the same assumptions, risk factors, limitations, and qualifications as set forth in the above paragraphs. FOFI contained in this document was made as of the date of this document and was provided for the purpose of providing further information about WOW!’s future business operations. Readers are cautioned that the FOFI contained in this document should not be used for purposes other than for which it is disclosed herein.
Readers are cautioned not to place undue reliance on forward-looking statements, including FOFI. Except as required by applicable laws, the Company does not intend, and does not assume any obligation, to update the forward-looking statements, including FOFI, contained herein.
WOW!’s financial disclosure includes non-International Financial Reporting Standards ("IFRS") financial measures such as "Operating EBITDA“ and "EBITDA" as supplemental indicators of WOW!’s financial and operating performance. WOW! believes these supplemental financial measures reflect WOW!’s on-going business in a manner that allows for meaningful period-to-period comparisons and analyses of trends in its business. Accordingly, WOW! believes that such financial measures may also be useful to prospective investors in enhancing their understanding of WOW!’s operating performance. These non-IFRS measures are not recognized under IFRS and do not have standardized meanings prescribed by IFRS. Therefore, it is unlikely that these measures will be comparable to similarly titled measures reported by other issuers. Non-IFRS financial measures should be considered in the context of WOW’s IFRS results. WOW! cautions readers to consider these non-IFRS financial measures in addition to, and not as an alternative for, measures calculated in accordance with IFRS.
WOW! 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 WOW!’s internal management reports. WOW! discloses Operating EBITDA to capture the profitability of its business before the impact of items not considered in management's evaluation of operating performance.
The financial statements of WOW! are prepared in accordance with IFRS and are reported in Canadian dollars. All currency amounts in this presentation are expressed in and all references in this presentation to "$" to Canadian dollars, unless otherwise indicated.