I would disagree with you. They have 16mil cash on balance sheet at september and don't front cash to produce. There is also a seasonality to licensing and merchandising money coming in, which is all cash. I believe it's first quarter typically. Also, if, as you say, they are filed up for this year, then that means around 90-100 episodes each of which is around US$450,000 at a minimum. That's C$57mil in revenues. We know the gross margins are around 40% just on the production work. Any residuals go to the bottom line. I would agree, last year was disappointing, although they have to invest to grow. If they in fact do have a number of new upcoming shows, the investment paid off. They have always stated that they will not speculate on production, but will seek partners and guaranteed outlets to fully fund projects before they even contemplate producing. This is stated in the prospectus. So 16mil should take them rather far, especially with upcoming license payments, new projects and existing contracted productions.
In fact, I spoke to both Hasbro & their TV arm, Claster, last week and inquired about Beast Wars and it's success. They are very happy with the toy line and have a hard time supplying the big chains with enough product. I asked about a third season of BeastWars on TV and they said they would very much like to do it and expect to be able to announce something soon. So it looks like BW3 is set to go for next year. That's great news too. Perhaps it's not at the final stage, so MFE hasn't announced it, I don't know. But it sounds like somethings in the works. |
