WildBrain Ltd Q3 2024 Earnings Call Transcript

The following is excerpted from the question-and-answer section of the transcript.

Question: Aravinda Galappatthige - Canaccord Genuity - Analyst : Good morning. Thanks for taking my question. I did want to start with the balance sheet. We are obviously getting close to the September timeline here with the converts. Is it fair to say you have options even in the event where you're not able to complete noncore asset sales between now and then that there's conversations being had that would allow you to kind of refinance that? I just wanted some clarity on that to begin with.

Question: Aravinda Galappatthige - Canaccord Genuity - Analyst : Okay. Just maybe a smaller question on that. Are you allowed to use your -- part of that, can you use the existing revolver or is that not possible maybe because of some covenants I may not be aware of?

Question: Aravinda Galappatthige - Canaccord Genuity - Analyst : Okay. And then, on the interest rate swap, can you maybe help me sort of do the math on the impact on interest expenses post the swap? I mean, what kind of the net increase is just to kind of help us with our modeling? I mean, we can kind of complement approximate number, but I just wanted to make sure that we get a more definitive estimate from you. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. MAY 10, 2024 / 2:00PM, WILD.TO - Q3 2024 WildBrain Ltd Earnings Call

Question: Aravinda Galappatthige - Canaccord Genuity - Analyst : Okay. And then maybe on the operational side, Josh, I heard the comments you made about Strawberry Shortcake as well as, I don't know if you're expecting some much licensing from Yo Gabba as well straight off the bat. How should we think of that global licensing number? I know Peanuts is doing well, but I'm kind of thinking of what else would sort of is there to kind of support Peanuts in terms of brands?

Question: Aravinda Galappatthige - Canaccord Genuity - Analyst : Okay.

Question: Aravinda Galappatthige - Canaccord Genuity - Analyst : Okay, thank you. I'll pass the line.

Question: Drew McReynolds - RBC Capital Markets - Analyst : Yeah, thank you very much. Just back to the asset sales, obviously, staying at a high level. In terms of the current environment and on the content side that we saw, Josh, you alluded to through fiscal 2024 trough year. Like is that necessarily had any kind of impact on your ability to kind of get a process or processes going? Or is it just really irrelevant and buyers typically look at kind of the median term and the upswing that's pending?

Question: Drew McReynolds - RBC Capital Markets - Analyst : Okay, yeah. Understood. And then second one, just back to kind of CPLG and kind of a bigger picture question. I mean, to Aravinda's question on IP pipeline, a lot of moving parts with all the IP and the different channels and different kind of initiatives underway. But on the CPLG side, what are the impacts just overall with respect to kind of macro, the inventory dynamic, which sounds like it's all cleaned up, but also with kind of the downturn on the content side, I mean, that typically drives a lot of the CPLG. So, can you just kind of unpack the big kind of crosscurrents? And most importantly, do they all generally kind of dissipate into 2025 and 2026 from your perspective?

Question: Drew McReynolds - RBC Capital Markets - Analyst : Okay, that's great. Josh, thank you for that. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. MAY 10, 2024 / 2:00PM, WILD.TO - Q3 2024 WildBrain Ltd Earnings Call

Question: Dan Kurnos - The Benchmark Company - Analyst : Thanks. Hi, good morning. Josh and/or Nick, can you guys quantify how much was timing in Q3 versus Q4? Obviously, we can back into what the Q4 revenue is supposed to be. I guess I'm just trying to triangulate a little bit, Josh, on your acceleration comment. Totally appreciate the pipeline, the greenlit backlog right now. But just trying to get a sense of how healthy, I guess, demand is in the environment? And then I want to kind of follow up on sort of FAST and formats.

Question: Dan Kurnos - The Benchmark Company - Analyst : Okay. Well, let me ask, I guess, Josh, we've talked about this a bunch and you brought it up again, FAST opportunity. We've obviously got Netflix pushing harder, AVOD Disney pushing harder, AVOD Amazon now has ads. Thanks for that, Amazon. And so, I guess, you have maybe a few more pools to play in. Roku, you mentioned as well, is clearly pushing with Roku channel and you guys have the most amount of kids' content. So how are you attacking these markets? And has this shift away from subscription, which I think we all saw coming, kind of changed either formats or the way the type of programming or the way that they want the programming to be done to accommodate a more ad friendly, especially, which is really hard in the kids' space?

Question: Dan Kurnos - The Benchmark Company - Analyst : And maybe just one -- last one for me, Josh, just your commentary around getting deeper in social. I mean, assuming they don't ban TikTok in the US, reels is making some headwinds as well on short form. Clearly, YouTube is the behemoth. But there seems like there's opportunity there. And something you guys used to do in the past, there's a lot more partnerships. Obviously, Roblox has really become a heavyweight in the category. It's very popular from family, but there are others that are up and coming. And I'm just kind of curious about if you could give us more color on either partnership or deeper color on the social strategy would be helpful. Thanks.

Question: Dan Kurnos - The Benchmark Company - Analyst : On the partnership side, Josh, if there's anything in the works?

Question: Dan Kurnos - The Benchmark Company - Analyst : Okay. Thanks, Josh. I appreciate it. Thanks, Nick.

Question: Adam Shine - National Bank Financial - Analyst : Hi, thanks. Good morning. Josh or Nick, I mean, just on the noncore asset sales, it's been many months now. We haven't really gotten much of a line of sight to what's going on. Could you just help us a little bit without getting into the specific assets in terms of identifying them that are up for sale, can you talk about any progress on any of the files? Is some of the delay due to issues around valuation or lack of interest or any additional color would be helpful? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. MAY 10, 2024 / 2:00PM, WILD.TO - Q3 2024 WildBrain Ltd Earnings Call

Question: Adam Shine - National Bank Financial - Analyst : Okay. So, I mean, if I go back to sort of Nick's commentary in the context of being confident to achieve the guidance, that's an emphatic statement, again, helped by some of the timing issues from Q3 to Q4 as was alluded to before. It just -- as per the comment at the outset in regards to pushing off the leverage objective from end of this year, or end of fiscal this year out further indefinitely, is this something that indeed is a moving target that requires potentially other concessions around the convertible to deal with maturity or is there indeed unqualified confidence in being able to address that convertible on a timely basis?

Question: Adam Shine - National Bank Financial - Analyst : Perfect, okay. I appreciate that. Thanks.