HALIFAX – Broadcaster and family/kids content maker WildBrain today reported a 10.6% decline in revenues in third quarter, compared to last year’s Q3, to $98.3 million.
Year-to-date revenue was $332.7 million, up slightly from $331 million when compared to the first three quarters of the prior year.
The company saw positive operating cash flow of $12.9 million in Q3 2020 vs $13.7 million in Q3 2019 and negative free cash flow of $3.2 million this quarter compared to negative free cash flow of $1.1 million in Q3 2019. The company has seen YTD 2020 positive free cash flow of $17.8 million vs $6.4 million in the same three quarters of 2019
Adjusted EBITDA was $17.9 million vs $20.1 million in Q3 2019. YTD 2020 adjusted EBITDA came in at $63.1 million vs $59.4 million last year.
Wildbrain booked a net loss of $221.7 million in the quarter, “due largely to a non-cash goodwill impairment of $184.5 million in the quarter,” added the press release as the company wrote down its investments in film and television programs, acquired and library content, property and equipment, and intangible assets as well, explains the company’s financial statements.
Its YouTube channel network WildBrain Spark saw views grow 19% to over 10.3 billion in the quarter, compared to last year’s Q3. So far in fiscal 2020, views have grown 42% to 59.1 billion, but changes in YouTube’s ad policies, plus the early impact of the Covid-19 crisis saw WildBrain Spark revenue dip 37% to $9.5 million in the quarter. The company’s television revenues (from Family, CHRGD, Family Jr. and Télémagino) came in at $11.5 million, a 7% decline over the prior year’s Q3.
The company also announced it has signed a binding term sheet signed with Fine Capital, the company’s largest shareholder, for $25 million in debentures to fund growth initiatives.
“With the $25 million financing announced today, we’re doubling down on our integrated IP (intellectual property) strategy,” said Eric Ellenbogen, CEO of WildBrain, in the press release. “To be clear, this is exclusively growth capital to fund strategic, accretive transactions across the company, with a special focus on our AVOD business, WildBrain Spark.
“This is not working capital for our business; we’ve taken measures to contain costs and to address working capital and cash flow. The WildBrain Spark platform is not only a rich source of emerging IP and promotion for both our proprietary and partner content, but also a beneficiary of advertising dollars migrating from linear to non-linear TV. In the media business, advertising dollars follow eyeballs, and at nearly four billion monthly views, WildBrain Spark has one of the largest and most engaged global audiences in the kids and family space. We remain steadfast in our belief that WildBrain Spark represents a significant monetization opportunity.”
Ellenbogen also noted WildBrain’s studio is producing at over 95% capacity, even in the Covid-19 crisis, making shows such as new Peanuts content for Apple TV+ (pictured) and a new Johnny Test series for Netflix. “Revenue at WildBrain Spark was showing signs of recovery from the changes in YouTube’s advertising policy implemented in January. However, global pullbacks in advertising due to Covid-19 impacted revenue late in Q3 and we anticipate these conditions will extend into our fiscal 2021,” added the CEO.
Since its Canadian TV brands earn 90% of their revenue from advertising, the company said any decline in ad sales there will not be material.
