The Topps Company Raises 2021 Outlook and Announces Second Quarter 2021 Results
The Topps Company, Inc
Wed, August 18, 2021, 6:30 AM
Raises Full Year 2021 Outlook
Net Sales Increased 77.7% to $212.2 Million
Net Income Increased 176.4% to $36.3 Million
Adjusted EBITDA* Increased 144.0% to $55.1 Million
NEW YORK, Aug. 18, 2021 (GLOBE NEWSWIRE) -- The Topps Company, Inc. (“Topps” or “the Company”), a global leader in sports and entertainment collectibles and confections, today announced financial results for the second quarter ended July 3, 2021.
Second Quarter 2021 Financial Highlights
Comparison of the Thirteen Weeks Ended July 3, 2021 to the Thirteen Weeks Ended July 4, 2020
Net sales increased by $92.8 million, or 77.7%, to $212.2 million
Gross margin improved 350 basis points to 43.3%
Net income grew 176.4% to $36.3 million
Adjusted EBITDA* grew 144.0% to $55.1 million
Adjusted EBITDA margin* increased 710 basis points to 26.0%
Second Quarter 2021 Segment Highlights
Comparison of the Thirteen Weeks Ended July 3, 2021 to the Thirteen Weeks Ended July 4, 2020
Sports & Entertainment segment net sales increased 86.5% to $151.5 million
Physical Sports & Entertainment net sales increased 87.7%
Digital Sports & Entertainment net sales increased 122.4%
Gift Cards net sales increased 28.1%
Sports & Entertainment segment Adjusted EBITDA increased 137.8% to $53.6 million generating an Adjusted EBITDA margin of 35.4% compared to 27.8%
Confections segment net sales increased 58.8% to $60.7 million
Confections segment Adjusted EBITDA increased 71.1% to $11.9 million generating an Adjusted EBITDA margin of 19.6% compared to 18.2%
*Non-GAAP measure; complete definitions of Topps’ non-GAAP measures are provided herein under “Non-GAAP Measures Disclosures.”
Michael Brandstaedter, Chief Executive Officer of The Topps Company stated, “Our second quarter performance reflected the overall strength of our business. We delivered exceptional performance in our Sports & Entertainment segment, as well as a meaningful recovery in our Confections segment compared to last year’s COVID-related impact on this business. We believe we are well positioned to capitalize on the many growth opportunities that exist for our business.”
Michael Eisner, Chairman of The Topps Company, commented, “I am pleased with our fantastic start to 2021. Our recent results exemplify the powerful emotional connection Topps has with a wide range of consumers and great execution by our teams. We are excited to see our businesses perform well and look forward to building on our recent accomplishments to drive continued growth over the long-term.”
Outlook
For 2021, the Company now expects net sales to be in the range of $830 million to $850 million, up from previous guidance of $740 million to $760 million, representing an increase of 46% to 50% over 2020 net sales of $567 million. Adjusted EBITDA*, is now expected to be in the range of $155 million to $165 million, up from previous guidance of $130 million to $140 million, representing an increase of 68% to 79% over 2020 Pro Forma Adjusted EBITDA* of $92 million. The overall more positive outlook assumes no additional global supply chain disruptions caused by the COVID-19 pandemic. 2020 Pro Forma Adjusted EBITDA* and 2021 Adjusted EBITDA* include estimated public company costs of $9 million and $6 million, respectively. The reduction in estimated public company costs to $6 million reflects the projected timing of completing the business combination with Mudrick Capital Acquisition Corporation II (“MUDS”).
Second Quarter 2021 Financial Results
Net sales increased by $92.8 million, or 77.7%, to $212.2 million for the second quarter of 2021, from $119.5 million in the second quarter of 2020, reflecting substantially higher Sports & Entertainment and Confections sales.
13 weeks ended
| 13 weeks ended
| | | | | July 3, 2021
| July 4, 2020
| | $ Change
| % Change
| (in thousands)
| | | | | | | | Net sales
| | $
| 212,244
| | $
| 119,469
| | $
| 92,775
| 77.7
| %
| Sports & Entertainment
| | | 151,497
| | | 81,220
| | | 70,227
| 86.5
| %
| Confections
| | | 60,747
| | | 38,249
| | | 22,498
| 58.8
| %
|
Consolidated gross margin improved 350 basis points, to 43.3% in the second quarter of 2021 from 39.8% in the second quarter of 2020. The improvement mainly reflects a mix shift of net sales to e-commerce in Physical Sports & Entertainment and the improved profitability of Sports & Entertainment, partially offset by higher freight costs for both Sports & Entertainment and Confections.
SG&A in the second quarter of 2021 was $39.1 million, or 18.4% of net sales, compared to $26.4 million, or 22.1% of net sales in the second quarter of 2020. The increase was primarily due to higher employee-related costs in the second fiscal quarter of 2021 compared to the second fiscal quarter of 2020, which had lower marketing and employee-related costs primarily due to cost reductions associated with the COVID-19 pandemic.
Net income for the second quarter of 2021 was $36.3 million, an increase of 176.4% compared to $13.1 million in the second quarter of 2020.
Adjusted EBITDA* in the second quarter of 2021 increased 144.0% to $55.1 million with an Adjusted EBITDA* margin of 26.0% compared to Adjusted EBITDA* of $22.6 million with an Adjusted EBITDA* margin of 18.9% in the second quarter of 2020.
*Non-GAAP measure; complete definitions of Topps’ non-GAAP measures are provided herein under “Non-GAAP Financial Measures.”
Business Combination
On July 30, 2021, MUDS (NASDAQ: MUDS), a publicly-traded special purpose acquisition company, filed a definitive proxy statement on Schedule 14A with the U.S. Securities and Exchange Commission (“SEC”) in connection with the proposed business combination between MUDS and Topps.
MUDS has scheduled a special meeting in lieu of its 2021 annual meeting of stockholders (the “Special Meeting”) to vote on the proposed transaction with Topps and related matters for August 25, 2021 at 10:00 a.m. ET. The Special Meeting will be completely virtual and conducted via live webcast. Stockholders of record as of June 30, 2021 will be entitled to vote at the Special Meeting. After careful consideration, the Board of Directors for MUDS recommends that its stockholders vote “FOR” the proposed business combination.
Upon closing of the transaction, the combined company will be named Topps Companies, Inc. and will be listed on NASDAQ under the new ticker symbol “TOPP.”
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MUDS 10.33 0.23 2.28% : Mudrick Capital Acquisition Corporation II - Yahoo Finance |
