The global entertainment company, Spin Master – the home of brands including the popular PAW Patrol and Bakugan franchise – is to withdraw its 2020 outlook in connection to projected product sales, stating that the potential impact of the developing COVID-19 situation on the firm is as yet unquantifiable.
The firm previously provided a 2020 outlook on March 4th this year, but, as the global coronavirus pandemic continues to deepen, will issue no further guidance in the near term due to the uncertainty surrounding it.
It is anticipated that the spread of COVID-19 and global measures to contain it, will have an impact on the company, however it is challenging to quantify the potential magnitude of such impact at this time. Spin Master is regularly assessing the situation and remains in contact with its customers and suppliers to assess any impacts and risks. It will provide a further update when it reports Q1 2020 results on May 6, 2020.
The 2020 outlook provided by Spin Master on March 4, 2020 reflected the information available to the Company at that time. This information included factory capacity in China, Vietnam and India, labour return rates, tooling availability, raw material and component availability, the ability to shift production between various geographies and products and customer acceptance of modified delivery dates.
Since that time, production levels have increased significantly and are approaching normal levels. However, due to the current market disruptions and heightened uncertainty caused by the spread of COVID-19 in global customer markets, the company is withdrawing such guidance.
“Since early March we have seen a substantial improvement in our Asian supply chain, particularly in China, as expected. However, the disruption we are now seeing in key customer markets resulting from the impact of COVID-19 is significant and we are withdrawing our fiscal 2020 guidance statement as a result thereof,” said Mark Segal, Spin Master’s executive vice president and chief financial officer.
“Our balance sheet remains strong, with cash on hand and committed credit lines available, which provides us with significant financial flexibility. Spin Master is known for its resiliency and entrepreneurial spirit. We believe in our ability to withstand any issues and continue to succeed.”