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Wow Unlimited Media Announces Financial Results for Fiscal Year End 2017

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VANCOUVER, British Columbia, April 27, 2018 (GLOBE NEWSWIRE) -- Wow Unlimited Media Inc. ("Wow" or the "Company") (TSX-V:WOW.A) (TSX-V:WOW.B) announced its fourth quarter and fiscal year-end results for the period ended December 31, 2017.  The Company reported the following highlights from the year ended December 31st, 2017:

Cumulative prior period information in the following table has been restated for changes in accounting policies and for purchase price allocation adjustments relating to the acquisition of Frederator.

 

                           
      For the three months ended
    For the twelve months ended
 
$000's, except per share amounts     December 31,
2017
    December 31,
2016
    December 31,
2017
    December 31,
2016
 
Revenue   $    16,675   $    3,453   $    44,660   $    17,660  
Operating EBITDA1     35     (242 )   (42 )   1,898  
Operating (loss)1     (2,226 )   (1,039 )   (7,795 )   (1,215 )
Operating (loss) per share2          
- basic and diluted   $ (0.09 ) $ (0.37 ) $ (0.31 ) $ (0.43 )
Net loss   $    (1,519 ) $    (6,530 ) $    (5,086 ) $    (15,128 )
Net (loss) per share2          
- basic and diluted   $ (0.06 ) $ (2.33 ) $ (0.20 ) $ (5.41 )
Weighted average number of shares outstanding2          
- basic and diluted     25,178,604     2,798,249     25,241,171     2,798,249  
           
1 Operating EBITDA includes amortization of investment in film and television. Refer to discussion under Consolidated Results for a reconciliation of Operating EBITDA and Operating loss to Net loss.
2 Weighted average number of share comparative data has been adjusted to reflect a 10:1 share consolidation that occurred on December 15, 2016
           

FINANCIAL HIGHLIGHTS

  • For Fiscal 2017 revenue earned grew by 153% to $44.7 million compared to Fiscal 2016.  This included $12.7 million generated from the Networks and Platforms segment through Channel Frederator Network, which continues to grow in both views and channels added over the course of the year.  Revenue for the Animation Production segment was $32.0 million for the year ended December 31, 2017, which was an 85% increase in comparison to Fiscal 2016.  Revenues in the Animation Production segment were bolstered from the delivery of the production Costume Quest by Frederator Studios and all 20 episodes of ReBoot: The Guardian Code, the Company's proprietary intellectual property, by Mainframe Studios.
  • Operating EBITDA was a loss of $42 thousand for Fiscal 2017 and net loss was $5.1 million for the year.

Michael Hirsh, Chairman and CEO, commented:  "We are very pleased with our achievements during the first complete fiscal year for WOW!, including such highlights as:

  • WOW! Unlimited Media and Bell Media announcing a Strategic Partnership in Kids and Youth Entertainment. 
  • Commenced production of 28 x 11 min episodes of the new Barbie Dream House Adventures series for Mattel. 
  • Mainframe Studios commenced production on season five of Octonauts for Silvergate Media in the second quarter of 2017.
  • Frederator produced, Castlevania, season 1, launched on Netflix in July, 2017, and it became a top digital series in the United States.
  • Amazon Studios announced the greenlight for Costume Quest for production by Frederator Studios.
  • New episodes of Bravest Warriors, produced in partnership with Nelvana, launched exclusively to Frederator's Cartoon Hangover Select service on Ellation's VRV platform. 
  • Netflix announced a 2nd season pick up of Castlevania based upon the success of the first season.
  •  In September, 2017, WOW! Unlimited Media entered into an agreement acquire a Category B specialty service from Bell Media (subject to Canadian regulatory approvals) in exchange for equity in WOW!. 
  • Rainmaker Studios completed and delivered the Barbie Dolphin Magic DVD to Mattel in the third quarter of 2017.
  • Channel Frederator Network passed 1 billion views a month and exceeded 11 billion views for the year ended December 31, 2017. 
  • GO! Cartoons began on Cartoon Hangover, on YouTube, and on Ellation's RV platform in November 2017.
  • Mainframe Studios completed production of 20 x 22 min episodes of the ReBoot: The Guardian Code series in December 2017. 
  • Completed production of the first 10 x 22 min episodes of Spy Kids: Mission Critical series. 

We are looking forward to continuing to grow the business in 2018 and we are off to a great start."

OPERATIONAL UPDATE

Channel Frederator Network continues to grow, with 68 channels added to the network in the 3 months ended December 31, 2017, for a total of 394 channels added in 2017.  Channel Frederator Network also attracted a total of 11.2 billion views for the year ended December 31, 2017, with 4.3 billion of those views coming in the 3 months ended December 31, 2017, representing a 46% increase over the previous quarter. 

In addition, during the year ended December 31, 2017, Mainframe Studios delivered all episodes of the series Reboot: The Guardian Code to Corus Entertainment Inc. ("Corus").  The series debuted on Netflix on March 30, 2018, for international viewers and is expected to debut in Canada in June 2018. 

Castlevania, Season 1, an animated series, was also delivered to Netflix in June 2017, and debuted on Netflix on July 7, 2017, to wide critical acclaim.   As published by Parrot Analytics, Castlevania achieved the status of both the most in-demand digital original and the most popular digital original series in the United States in the first two weeks of its launch.  Netflix has contracted for an additional 8 episodes to be delivered in 2018. 

YEAR END CONSOLIDATED RESULTS

Cumulative prior period information in the following table has been restated for changes in accounting policies and for purchase price allocation adjustments relating to the acquisition of Frederator.

                     
$000's     2017     2016     2015  
Revenue   $    44,660   $    17,660   $    15,902  
Amortization of investment in film and television $    7,455   $        $       
         
Operating EBITDA     (42 )   1,898     2,787  
Finance costs     443     1,663     1,780  
Depreciation and amortization1     4,878     740     690  
Corporate Expenses     2,432     710     1,235  
Operating loss     (7,795 )   (1,215 )
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