Kew Media Group Inc. Announces Unaudited Earnings Results for the Third Quarter Ended September 30, 2018; Reaffirms Earnings Guidance for the Year Ended December 31, 2018 and Provides Earnings Guidance for the Second Half 2018
The company reaffirms its guidance for adjusted EBITDA of $26.5 million for the year ended December 31, 2018. The company retains strong visibility through the end of 2018 in its production segment based on shows ordered and the expected dates of delivery, and in its distribution segment, based on contractual sales to date and the segment's slate of titles being delivered into the fourth quarter. The company is seeing a greater contribution of higher margin titles in the product mix of its revenues, and expects this to continue into the fourth quarter. The combined effect of the higher margin sales and the divestiture of Campfire will drive significantly higher percentage gross margins and Adjusted EBITDA/Revenue margins, albeit off a lower revenue base. Therefore, KEW expects pro-forma Adjusted EBITDA margins of approximately 11% for the year ended December 31, 2018.
The company expects profitability uplift in the second half 2018, particularly in the last quarter, the company sees to generate increasing levels of free cash flow.