Spin Master Reports 2022 and Q4 2022 Financial Results.

TORONTO: Spin Master Corp. ("Spin Master" or the "Company") (TSX: TOY) (www.spinmaster.com), a leading global children's entertainment company, today announced its financial results for the three months and year ended December 31, 2022. The Company's full Management's Discussion and Analysis ("MD&A") for the three months and year ended December 31, 2022 is available under the Company's profile on SEDAR (www.sedar.com) and posted on the Company's web site at www.spinmaster.com. All financial information is presented in United States dollars ("$", "dollars" and "US$") and has been rounded to the nearest hundred thousand, except per share amounts and where otherwise indicated.

"Our commitment to reimagining everyday play across our three creative centres resulted in Constant Currency Revenue1 growth for 2022 and propelled Spin Master to the become the 4th largest toy manufacturer globally, against the backdrop of challenging economic and retail dynamics," said Max Rangel, Spin Master's Global President & CEO. "Entering into 2023 we are expanding our core toy portfolio with innovation, driving our franchises, and building our licensed partner portfolio. 2023 will be one of our biggest in terms of entertainment content releases, showcasing our diversified content pipeline including our second PAW Patrol movie, PAW Patrol: The Mighty Movie, our first PAW Patrol spin-off, Rubble & Crew, as well as the debuts of our two new animated series, Vida the Vet and Unicorn Academy. We will also introduce several new digital play experiences, including the launch of a Rubik's digital game and our first in-house PAW Patrol digital game. We expect to face continued macroeconomic headwinds and are focused on managing our operational costs, ensuring we position Spin Master to thrive." He added "from a strategic perspective, we continue to build franchises across Toys, Entertainment and Digital Games, applying our signature innovation, investing in key organizational capabilities and pursuing acquisition opportunities to attract new fans, reach new audiences and engage new players in order to further solidify our leadership in children's entertainment and deliver profitable growth now and into the future."

"We are pleased with our results in 2022, delivering Revenue growth in Constant Currency amidst a challenging macroeconomic backdrop" said Mark Segal, Spin Master's Chief Financial Officer. "Our financial discipline and focus on managing pricing and costs effectively drove strong gross and operating margins, despite challenging operating conditions in the second half of 2022. Our focus on managing working capital and generating cash flow allowed us to end the year with available liquidity in excess of $1.1 billion. We remain in a very strong financial position with the ability to continue investing in innovation, geographic expansion and acquisitions to drive growth. Our financial framework for value creation, underpinned by our formula for growth across all our creative centres, puts us in a position financially and operationally to generate and sustain long-term, profitable growth and maximize shareholder value."

Consolidated Financial Highlights for Q4 2022 as compared to the same period in 2021

Revenue was $465.8 million, a decrease of 24.9% from $620.5 million. Constant Currency Revenue1 was $484.2 million, a decrease of 22.0%, from $620.5 million.

Revenue by segment declined by 26.8% and 24.2% in Toys and Digital Games, respectively, partially offset by a 9.5% increase in Entertainment.

Operating Loss was $24.0 million compared to Operating Income of $39.1 million.

Operating Margin was (5.2)% compared to 6.3%.

Adjusted Operating Loss1 was $5.5 million compared to Adjusted Operating Income1 of $55.3 million.

Adjusted Operating Margin1 was (1.2)% compared to 8.9%.

Adjusted EBITDA1 was $12.4 million compared to $78.3 million.

Adjusted EBITDA Margin1 was 2.7% compared to 12.6%.

Cash used in operating activities was $6.8 million compared to cash provided of $230.1 million.

Free Cash Flow1 was $(30.1) million compared to $211.3 million.

Subsequent to the year end, the Company acquired certain assets of 4D Brands International Inc. on January 17, for total purchase consideration of $20.2 million and the HEXBUG brand of toys from Innovation First International, Inc., on February 1, for total purchase consideration of $16.0 million. These acquisitions will be reported in the Activities, Games & Puzzles and Plush and Wheels & Action product categories within the Toy operating segment, respectively.

During the fourth quarter of 2022, the Company, through Spin Master Ventures, acquired a minority interest in two privately-held entities for a total of $3.5 million.

Subsequent to year end, the Company declared a quarterly dividend of 0.06 CAD per outstanding subordinate voting share and multiple voting share in respect of the first quarter of 2023...