GNUS - Earnings call transcript Q2 2018

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Operator

Greetings, and welcome to Genius Brands International Incorporated Investment Community Update Conference Call. At this time, all participants are in a listen-only mode. A question-and-answer session will follow the formal presentation. [Operator Instructions] As a reminder, this conference is being recorded. I would now like to turn the conference over to your host, Matthew Abenante, Senior Vice President at Porter, LeVay & Rose.

Matthew Abenante

much. very you Thank everyone us you for thank today. joining And constitute within laws. the statements on of statements call today's securities Certain meaning forward-looking the federal Words plan, will, continue, such belief or or might, expect, are intent, as estimate, forward-looking expectations anticipate, statements. statements should, regarding predict, or intend believe, project, current similar expressions forecast, may,

to on placed today's on these forward-looking statements such These believes company reasonable, information the any future to and Exchange Securities Factors The as statements any are of law. undue are materially on based the with reliance forward-looking statements Factors While forward-looking should call. available us not obligation date be which based with to statements the upon the year of company therein. fiscal in business Form including those that, required Andy I'll Risk to be disclaims headline or floor Commission, current limited are are And on to estimates and the actual except forth events various other and without new its ended and relating assumptions, December set by now, Heyward. patent different. turn expressly the subject Thus, contained report for uncertainties, whether as Risk result the company's filings XX, annual risks XXXX could a not and to otherwise, XX-K over update limitation, results or alter under information,

Andy Heyward

this the well in content Netflix on Llama November the distribution are system. to Genius and They Nickelodeon content led since who sheet and sleepwear, programs. note, bedding, is Brands, the revenues on were quarters afternoon quarter including domestically fourth and two Netflix quarter. this and every balance Today, of health expectations which you, its have toys. first filing Rainbow impact our not be Mattel on we Coast. greenlit come will later second we immediate across Thank in touring first was XX-Q goods the important of by already brands they different of accessories, we be to those Okay. see three Rangers, season. paper met there to no are strong XXXX. What Llama any live production has quarter And and now supplies, Rainbow with which on as product year The stationary on on deliver stage brands morning where our revenues Revenue East going the the our SpacePOP, drivers on however, keeping XXXX. expected will in And electronics, Good everybody. our are show. major youth our of currently in as Genius and and West debuting X, in and our uneventful, are by impaired Brands We Generally, We XX licensees school welcome assets. clean Good manufacturing not [ph], deliveries is of policy companies and toys, sporting and publishing, the are the category an Coast. Matthew. series carrying as Rangers have write-down a elect did have beauty, emergence for Rainbow become brand. earnings apparel, Rangers

are play six bath products' led products plush consumer accessories. complete we quarter shortly marketplace dolls, or third and XXXX. coming inch three active will is games, role-play our crafts products, dolls, we approximately speak. itself on who master large be presence toy by global manufacturing intend kits, the Additionally, are Mattel, SKUs which and negotiations, manufactured in into vehicles, dolls, we as They care, various licensee, The will debut sets, dolls, inch and different and XXX sunglasses in Rangers to activity oral Rainbow with There being footwear, vitamins.

will delivery have these alone minimum The millions and is Genius will of almost $X the of toy begin and are be come. in many Mattel XXXX. be million. November and to complete significant in shows guarantee many March in total U.S. to cumulatively And dollars. Brands with which already of in guarantees worldwide, The place broadcasters and delivery revenues more many All recognized can upon to Nickelodeon

dollars the Of Power not course, such royalty of the comes Strawberry then Shortcake of product brands not hundreds will or had reason toys of the of we have of generates which and series Ninja significantly Rangers beyond of and success [ph] in team, Turtles to of uncommon. largely out successful sales tens in believe Company Rainbow minimum our consumer and is the a fact, many A that part of large be retails sales and stimulate volumes millions every of Walt Rangers The and royalty order in myself of [ph] infrequently, Hasbro billions income. and has dollars several This dollars or guarantees. even successful Disney of in being privilege the income, millions of past. And

previously all with oral footwear and we puzzles, to now, Rangers company the bedding, ever. almost been the over similarly of of coming and They companies, manufacturing negotiation. case publishing, on have product XXX under broad broadcasters, their of course, top hundreds consumer a major a co-writer games, behind teams, Lion with sleepwear, for on the SKUs we top-tier Disney's of two now also and Disney products we market, positioned active And are licensees creative in Llama different course. for including but toys, class, one, some Simply which success have top-tier saying licensees Nickelodeon perfect Llama And put, and with, this XX based believe the recall time has categories of more with success the storms of juvenile I them. key products for now series in not business have the has is into content and care have Studios, positioned array in Netflix, product possibility Netflix as brands with characters hit Target starting ever the As into bath, brands than Disney brought and brands coming the which apparel products, the marketplace. poised lineup two robust been so but company having impact Rainbow be additionally Rangers not one of both the a Frozen, to Amazon. strong of that were stated, many support, Disney's Walt King these retail very in one other I've seen the honestly marketplace, much can't I in major the director that marketplace. creators I've blockbusters, than such with years. Rainbow Walmart, and out major

we older driver system forward Brands younger Kid our coming for is and is Genius TV system distribution two as Cartoon for the third have of that Genius ones. Genius Baby kids channels: The composed kids' known Network. The

U.S. As XX we morning, Genius Network households. announced this the million TV in now Brands over is

multi-year TV in XX% a of with our households last an The in Cable, have with Tubi joined today Genius that XUMO. April. network well now includes U.S. and Brands and total We Network Cox Apple in Tubi roster have and as deals a over represents XUMO increase publically as XX result new the is already deal from million This available Cox Amazon, expanding Comcast, Roku distribution YouTube. distribution reach TV, reported

which lead So paying paying expansions advertising join. shareholders, viewership, equals impressions, to all - from sell mean this subscribers subscriptions providing we to what building audience increased the revenue. does and all to The platform

ad-supported said, that both AVOD; period, AVOD; revenue growing reach are XUMO, Roku, Tubi, sponsorships I Amazon every AVOD two for of Channel kids The in both will distribution Cox, which and I now platforms Comcast's can and three Such is includes out SVOD; rounds have and increased Fire We Prime, SVOD subscriptions as the be TV is video-on-demand, YouTube. system Demand, is will The advertising, beyond. is substantial advertising as is Amazon system, see us Cartoon both Network Baby very of composed, distributed which in a Genius distribution the as roster services. of multiple Brands channels XXXX, revenue video-on-demand valuable and viewership. Xfinity on which increases dynamic XXXX and on subscribers in in out TV, across bringing and America. due grow subscriber Genius said We we as Genius and where network which growth Apple over-the-top a and to addition forth in QX, a and a is Kid and distribution which

children Samsung added three- movies, Thomas In to to Secret service, quote, for their has addition the games, Millionaires above, QX to on year, Kids, this and Samsung's, subscription eight-year-olds, an all-in-one Warren books Secret and Club Edison's Lab service. TV Buffett's Brands' Genius shows, effective award-winning, featuring

This XX. animated children's Cheddar, paid Kid's the deal was - leading for that starring debuted and distributed features and appear Samsung Club, digital being distribution, with Buffett's Buffett, series the streaming as on in and Warren business a fee, cash Secret Warren and June Millionaires animated series, Brands' we're Lastly created an network, revenues. the well license year-end as which Genius our in will

as debt, no a The brand separate the production XXXX. and product Rangers. of up coming is in continues we the some, continue two to season, in designing as Mattel showing will our has as forward names The are brands plenty the The corporate and invest in of the in as significantly kids and a in has system a well driver strong So road the in presold to which of of powerful with robust. today, well, company, place we we'll the It as announcement for growing Rangers of revenue Llama pipeline down of surely of way do be product new company debut combination adequate other those season into We'll in and will QX. Llama distribution of XXXX. bold going move have creation Rainbow already cash have as equity licensees the brand Rainbow extensions powerful footprint of has and the with as marketplace well system. very second distribution is of Genius increasing cash. Brands

take investor this be happy richly rewarded. are confident I that questions. We patience will point, be will At our to any

Operator

comes first Capital. [Operator with Ishfaque Our Faruk, proceed question Please WestPark your question. Instructions] from

Ishfaque Faruk

good Hi, Andy. morning,

Andy Heyward

morning. Good

Ishfaque Faruk

A couple of questions for me.

payment? all, for well any - Brands season do the two have recognize terms of delivery updates Genius specials and the as Llama and as get holiday production will Llama, you the of timing First on of when in side

Andy Heyward

information that you. have in me. of started. to get We'll front The production that find has we'll don't and I back

the in has Writers has are in have Asia. would and team place for do the subcontract for studio made been engaged director that the writing. all animation - is production The We Everything started. place. deals entire second our season. We've is us in of

the we'll you. find that back I'll of itself, the deliveries the and elements, as far to various information series it specials and As the get

Ishfaque Faruk

right. All Perfect.

mentioned months? you for it's - be delivered Rangers, in Okay, terms to be going have November. sense is yeah. that, a question, my you if And Rainbow there renewal in for the potential sense coming a second in of Do to Nickelodeon to going for preliminary

Andy Heyward

Well, November we'll that course, The very of X. goes find air on the out show quickly.

November on year. for that That's materials they're know rates the with into put five production a may being seeing We done of on based familiar the show, rough the most intimately start have to advertising the it, days a all rotation is week, cuts from They which chosen read, in once, We're important expectations sweeps, in very as one which move beginning, them. you period since very a for And show from a this started. running they've when typical They've high the full five-day-a-week the day they beginning. right they've week. for to and going five not is days determined in the as show and are broadcaster. Nickelodeon, success a it's week, the

spinoff November, for some theme would developing been you I York So started of season. line year closely the we're end I started at of by the success, series we've suspect can that we'll I've to internally, We've growing. the second the been instincts different in aimed, the extension will development twice last that also with there. a review working we've two internally where very be that And to already tell Genius anticipation New have them Mattel. with a brand and the in at target. second weeks when slightly of

enjoy be business we cannibalize the it the don't Nickelodeon with add-on we we'll to that we're to to to So expect with afterwards. and have existing going leverage clout able and that

Ishfaque Faruk

Okay, yeah.

also property? renewal be optimistic you going spinoff, So you're pretty from the a And Rainbow regarding Rangers. that's spinoff a Rainbow or Rangers for some mentioned to other

Andy Heyward

No, working from on right Rainbow Rangers, that now. we're

and when November, Nickelodeon And to a them. the down have it's engaged assuming is We air we're on offering in by writer the be right the successful, and show will road. this offices we

Ishfaque Faruk

Thank wonderful. right, you, Andy. All

Operator

Jeff your Silver, comes question. question Corrado. with Please proceed next Berson & from Our

Jeffrey Silver

a Hi, to one that quarter or to XXXX. and wanted see just few know Andy. the hear The SKUs on November say we merchandise or XXX clear to XXXX? with respect airs have third SKUs two I or to I the questions. get it start you Did XXXX Rangers, I are of things. we Rainbow going hits in that in

Andy Heyward

merchandise that, audience. was merchandise quarter important that really us and The is of you in the research. the an by for XXXX of on bulk be will very do art appetite form shelf, The the with It's this very three. for triangulated Mattel when is the very reason put strong much

appetite to built searches suddenly And there'll the for put shelf goes going as frenzy Mattel If so product, that be for need looking goes to on product broadcast. shelf say, of enough. air, those the three failed likes when show on it. time the yet up Google that We're you quarters a the product hasn't on

Jeffrey Silver

Right I and a sense. arrears, if correct? that quarter that you recall, license the I industry that is standard in in recognized makes revenue - revenue guess, is And

Andy Heyward

how revenue and going I'm is afterwards. broadcast. him sure is have and refer the available with you to Broadcast directly And when for licensing Denton, been recognized. be not recognized Bob to touch our am and delivered, you I shows to revenue I'll accepted are in CFO, ask

Jeffrey Silver

Great.

Robert Denton

like, Andy, now, I Andy. can answer if that you'd

Andy Heyward

sorry. Wow, go Bob, ahead,

Robert Denton

the over the or as received. on license the licensing the paying recognized they're instance out the minimum earned either method been contracts are record line has in guarantee the and term Well, we'll when now straight merchandise and royalties, those

term. start you in. So But the initially the it's it's quarterly once set royalties successful as money up recognition over straight line comes

Jeffrey Silver

fourth arrangements quarter Rangers, at the So with quarter looking calendar we're Rainbow XXXX, XXXX, respect first with really to licensing correct?

Robert Denton

Yes.

Jeffrey Silver

potential on because the it's the is program for Cartoon how separate? Or XX clarify And Kid into something tell that Okay. you at Andy, viewer Genius that qualitatively, is the us can are numbers, million showing doing? us, lumping - is Channel least Amazon in not you you that up can number?

Andy Heyward

Yeah.

- universe, think million is has be which marketing help Prime it. number We're That the digital promote seen, now it's opposed That years. separate other for that million are as right off little about to consistent to Amazon I an talking a next by its S-Part gaining a in [ph] XX program, are program we a to is XXX else. from Prime, program. and but Amazon now, is been we a be build. about which The the slow to has the been it it's that in month recently. talking own accelerate growing three build, million forecast cautious Fire of XXX launched it. close since - behind everywhere we Amazon But we itself being I universe going more every And about XX% we've money we're that very starts and a put fact, it's to it's to us. to think slow within bit it it companies is It's

Jeffrey Silver

And back works? our get so on to for and advertising that recall on, I Brands want correctly, refresh how think the Genius But you content. you Okay. alluded Can this, if Network, I component memory to to to there first Brand. Genius share an as is I

Andy Heyward

components, you broadcast the talking party, talking you're share various say Well, you third themselves okay. or constituents are when about with with about

Jeffrey Silver

- Correct constituents. broadcast the no,

Andy Heyward

Yeah.

a some them. With much is pretty have to of Okay. we variations XX-XX the in are case them They that deal largest area, provider the Every U.S., for example, some it. but different. is Comcast, with cable in which have all

some of paid we'd lot we and products, for some a of which acquired we've course, cash of addition, licensed. In

how which a is basis of simply share shows the on Some based to that particular allocable revenue is on much acquired. revenue generated, we've

Jeffrey Silver

Okay.

of on got Netflix. Llama we managing do can or acquisition where rationing place determining, Prime, got if and business? you you've a content so on what Brands, your got so Rainbow or And to - it? you've you've How while, Genius and that how Rangers content focus you - Amazon How just and part Llama are on and that, Nickelodeon, buy are you to for

Andy Heyward

year we Channel whoever. Well, now and that year Disney on very a first Nickelodeon produce, or first the content broadcaster right go Netflix, like we'll

Llama of out take And there. with a of that business that's very them to time. expensive at to Llama a a get advertising first Rangers channel The our sponsorships these Rainbow have start. shows back earn subscription on explosion the And of justified as volume money be We to own. expensive also we from and those because will not this like a Llama in shows there an we'll produce. properties are they're content very to And as product. of We right lot going have some they by product, example, catalog not channel fees our having own out produce. couldn't property in Llama, lot now, that right have are for more different point well putting have and/or and/or year

pays we the today. becomes and more balance, we trying and to and we - us paid with get we're we it, them that then more very them money But As to they going take explosion, be will get and are service places more time where do there our will quickly a more top-tier an to than where out pay grows lot. properties with Netflix to that. anybody robust channel subscribers where

Llama that this show similar required the do very to - in first-class started important a had we produce all Rainbow it's and it to way, with So Rangers. was Llama to we when that with money

Jeffrey Silver

Llama. either another for And these sourcing? business, able of the factors are or specifically Rainbow to where you or shows kinds evolution gating question of in looking next the money Rangers Llama? guess, you're that the are the Llama is, what that sort are you the internally? words, And Rainbow the are in generate raise of of what for are next I where the you mean, of on part - I the would I you - or capital imagine Llama embarking Rangers

Andy Heyward

find Yeah. Well, the first thing talent. right the is to

Company. co-writer people had didn't this One of director We've of Theatrical. game Walt them two community, is is And these with get on them, things of to And these talent various Television. Disney And air on And feeling kids' It who with Theatrical. being we secure community, Minkoff, publishers, the Rainbow themselves, Disney ongoing with in to video I worldwide, of was Disney not hits confident with this They enjoy put all and Rob to us of key in to toy licensed, out made, able will Rangers we and very they're the Having got that come agencies underscore for important for Disney the probably creative close and shows can property. a close they two-biggest like get who Morris distributed King, people talent. ever. we these Lion Shane Disney's key are is participation. community, brought them The going inside which it Frozen, a Hollywood, taste the available publishing from community, relationships the the staying the the that an and is have critical.

is talking presold, equity have with lot of of we the forth, we that everybody now. niches marketplace zig very into, about a more is monster way very looking can are coming in and in And tremendous And sagging the quarter, when our a that always things not value. be We of Disney right to, as And important with find competitor. a them. we that competitive in we'll they're got some brand them alluded else very are amount marquee brand I there. a announced you a when coming It's out for them names

cheese we the raising either we'll always get Key as licensee in money to terms. outside. the when on for mousetrap. that free broadcast every far raise is as we to Or license the intelligent need have. going for it money raise doing There on is the shows them these, So - from money we're

how are go we we trying that. smart So about to about be

Jeffrey Silver

last I had Thanks. question. just one

for heard their anything that how it still haven't that know We doing you was be relationship about exciting anything the for a still evolved of are Sony. you things? can't [indiscernible] works the there. investment since I Is that But original you in specific in may some still announcements? while - be

Andy Heyward

an still the company. is in Sony investor

close to to. a have anticipate continue relationship with we We them,

- I the And think it's in now coming knows. of their they've own for become become quarters. I as that business right everybody That's I'm It's though. now, in kids lot a And will is Right no. strategy sure charges. clarified personnel unclear. expect had as usual us we'll

Jeffrey Silver

Good Andy. luck. Thanks, Thanks.

Andy Heyward

Thank you. My pleasure.

Operator

to Heyward question-and-answer and Ladies we end turn gentlemen, session. Andy would the closing remarks. Instructions] have the call of like I reached [Operator for to And the back

Andy Heyward

licensees there. us Everybody, of than like touch to with well a would that thank And we Closing Be you partners that more Thank live a you. there with key as Rangers, here. and be in I Time Square. open. And if on you. for it for to you're our event eyes come, remarks, Rainbow neglected organize day. debut live-streamed mention when being any in our your everybody great of NASDAQ November a keep and so at have investors And we'll X, be will welcome. will number

Operator

conference. This today's concludes

disconnect participation. may Thank your lines You for your at this you time.

Kartoon Studios (TOON) 14 Aug 182018 Q2 Earnings call transcript