Okay, let's get started. Hello and welcome everyone. Very excited to have Spin Master here with us today to do this fireside chat. It's interesting times for the toy industry and interesting times for Spin Master as well with a new management team in place this spring and summer. Very excited to have them here for the update and to hear from you guys. I have with me up here, CEO Christina Miller, who took the seat back in July, and CFO Jonathan Reuter, who stepped into his role just back in May. Thank you both for joining us. Very excited to have you here. I think to get things kicked off, we've got a little bit of multimedia, so let's see that. Without sound. Innovators, we are global. There you go. I'm ready for Jonathan. Okay, that's definitely the most exciting start to one of these today. Good things to come. All right, let's get into some of the Q&A here. Maybe, Christina, I'll start with you. Can you just start off by maybe telling us a little bit about your background and I guess how that's helped to shape your view of Spin Master and your vision for the company? Sure, absolutely. Thank you. Thank you. I'm glad to be here with everybody today. I would say first and foremost, you know, I was on the board for about five years, and I've been in the seat for just under three months. This is all new in the sense of sitting here with you all today. As far as being in the business and being new to the industry, a lot less so. I've spent, so my career has really been around building enduring global brands, and doing it with a real consumer-first mindset. You know, I really, as we talk through things today, I think one of the things you'll see is I really think about things holistically across the value chain, if you will. I spent a very large part of my career at Time Warner, Warner Media, on and on and on, because as we know, that has changed hands a few times, in lots of different progressive positions. By the time I left there, I was the President, globally of Young Adult, Kids, and Family, as well as Classic. What that really means is all of the kids' networks and brands for Cartoon Network, Adult Swim, Boomerang, and Turner Classic Movies reported up through our organization, through my organization. That meant production, digital products, consumer products, studios, all of that. My path there was less straight than most people, I would say. I came in really as a consumer products person, driving what happens when the brand is not on screen, how you can physically dimensionalize the brand. I was there to build the consumer products team. It was a little bit of a startup inside of a large company at that point. From there, I just took on progressive positions and not straight up. I did a stint in sports for a while where I was the General Manager of the NBA digital venture between Time Warner and the NBA. That meant that I managed all the networks, websites, and that first generation of products that were launched for the NBA, and then wandered back into animation and had lots of stops and doing investments and so it's all sorts of things across my tenure there that made it a lot of fun. In the end, what it really amounted to is this cross-section of experience across multiple categories of business, but really sitting at the center of technology and creative and also really in fan-based businesses. Almost everything I've ever been in business with is something somebody cares about, right? Whether it's how much your children love PAW Patrol or how you played with Etch A Sketch or Bakugan along the way in Powerpuff Girls or Rick and Morty and the NBA or March Madness in the U.S., I've always lived in a world where someone was going to tell me what they think about the product that I put out there ultimately, which I think gives you a whole lot more responsibility in leaving a lasting impression and trying to, you know, matter to them. In this day and age, it's kind of a bit of a privilege to do something that brings joy to the world. I think that's what Spin Master has been doing for 30 years, and it's a privilege to sit in the seat that I do now. That's great. I know you're a whole three months into the job at this point. If I can be so bold, what are your top priorities for the business as you see them today? What, if any, aspects of Spin Master's strategy might be a little bit different or might be more or less of an emphasis than it has been in the past? I think as I sit here today, what I would say is that we've had a real, like, we had a good strategy in place. We just maybe haven't been executing it as well as we could. I think we need to, and Jonathan will do a lot of talking about this, but return to profitable growth. We need to maybe be a bit more disciplined in how we execute. The strategy itself is a strong one. I think the point of difference maybe I bring to the equation is when I look at what we do, as I said before, I think that we've spent the large part of the last decade or so building these three creative centers, be it entertainment, digital games, and toys. We've done that really well. When we do it at the best way we know how, you get something like PAW Patrol that's moving in between all of those creative centers and really driving exponential value, a multiplier on value across those key categories. I think when I look at the organization, it's now about building that connective tissue and looking at where we have other properties, other IP that we can then continue to optimize across the enterprise. By that, I mean, what are our priorities? PAW Patrol, of course, all day long. Next year, we have 2026 is a movie year for us. We have the third movie coming out that is truly the best to date. I've seen all three, including this one. It has a great theme, a dino theme. We've done some early testing of it, and the ratings of it on the way out have been higher than at any other point. It's a real opportunity for the organization to, again, collectively across, whether you're doing digital games, we've had PAW Patrol Academy. We'll have something else that will enter the market around the timing of the movie. We just came off of LA Toy Fair, which is where we show all of the retailers, both internationally and domestically, exactly what is coming next. PAW Patrol and the dino theme and the products were definitely top of that list. There will be more consumer products that will come out around it as well. We'll make sure that the moment is really big, and it helps elevate the brand, and then we sustain it again at a higher point from there. All day long, it is definitely PAW Patrol as a key driver of the business and a priority. After that, I would bring us to Toca Boca. As many of you may know, it's a platform in our digital portfolio. It has close to 60 million active users monthly. and we would like to continue to grow reach and ability to monetize it. When you start to think about what else the organization does when we are activating the full integration of it, it is where else can we bring Toca Boca, right? Should we be doing other products? What is the reach and monetization that we can continue to build for that brand? It's a core priority to us. Part of that is going to be about the tech stack, making sure that we're in a place where we can continue to bring features and more content. This year, we'll have more content than we have in any of the years before and more partnerships. We did one with Cat's Eye, the band. We're doing one with Sanrio next. We have another one coming in this fourth quarter that will be a big one. That's all around understanding that particular audience and what they're looking for. It is a safe platform. It is a creative, open-ended platform and self-expression. We want to do everything we can to bring more people into it and to be able to monetize it further. The third one would be Melissa & Doug. As many of you know, we made that acquisition. It's coming on three years, where, you know, there's four key strategies in that, which is to protect and grow the categories that we have market share in and that we, which are pretend play, early learning, arts and crafts, and then to grow new adjacent categories. To deliver product innovation, you see it in things like Sticker Wow and Blockables that create new opportunities. Part of being part of Spin Master Corp. is driving that innovation, also driving partnerships. PAW Patrol is part of their mix. Miss Rachel, which is a brand that Spin Master Corp. has, is part of that mix. Disney is part of that mix. We're able to move some of the partnership rights to Melissa & Doug as well. That has worked out well for us. Fourth will be to grow internationally. We're launching right now, shipping internationally. That was part of the business model when we acquired it. We're at that moment in time. I think there's a lot of opportunity there and executing well. Where else can Melissa & Doug be outside of toys? It is a beloved brand. It has a bright halo that shines across all of the product. Thinking about how people spend time and how people build attachment to that brand, there are other ways outside of toys, whether it be publishing, whether it be in another category, whether it be in a physical space. Dimensionalizing that and thinking about that brand holistically to unlock value is really what we're thinking about there as well. Last and certainly not least, and something I think Jonathan will talk more about, is returning to profitable growth, right? Being really smart about how and disciplined on how we're allocating our capital, and what it means to, across the brand, not always get just the big win, but everyday fundamentals to keep driving that, discipline in the organization. Those are the things that, like, we're in the short term and longer term, like I would say over the next 18 months, really focused on and believe that the organization and the foundation is there to be successful in those endeavors. Okay, great. That's a lot of great color. I know you've talked about the remainder of this year, a lot of that being focused on just executing on the plans that were already in place to address tariffs and all the adjustments that have to be made there. I mean, is there a plan or an intention to put forward something a little more formal in terms of what the long-term strategy is going to be? When are you thinking about maybe reintroducing guidance or a longer-term outlook? Any thoughts around that? Yeah, sure. You know, starting with the first part of the question, I think we laid out that our strategy is sound. It comes down to better execution. There are steps that we're doing to ensure that we can bring the full power of the team together. In Finance, for example, I see a real opportunity in the Finance department to shift from this controllership and reporting to be more commercially centric and help driving the right decisions around where should we invest capital, et cetera. From a strategy perspective, I don't think we necessarily need to come back with something new. What we do have to do is execute. You know, from a guidance perspective, it's something we're certainly looking at. Why we took away guidance was there was a lot of unknown in the marketplace around tariffs, around how the consumer was going to react, how the retailers are going to react. The reality is we're still seeing that. We don't actually have stability yet on the tariff front. The retailers are continuing to shift from direct source or FOB to DOM. There's still quite a bit of lack of clear visibility. You know, we're certainly looking at when the right time to bring back guidance would be. When the right time is, we certainly will. Okay, great. Jonathan, I mean, anything else you'd want to talk about in terms of what your focuses have been in your first five months on the job? Yeah, look, I think we talked about returning the company to profitable growth, and that's through improved execution. The finance team, as we lay through, as I just was giving an example in front, top line, certainly on the cost structure, ensuring that we're making the right investments, whether it be in IT, for example, that can help with better supply chain, better forecasting. I believe there's a real opportunity to work in capital. We can go after that. That's real value that we can create. On the M&A front, I think the team on the finance team can be even more involved to really ensure that the synergies that we're laying out, we're able to execute on them, and we have a high level of confidence. On Melissa & Doug, we capture our cost synergies. I think bringing the finance team to the next level of being able to really see around the table to really understand where the revenue synergies are and have a high level of confidence, I think it'll certainly help. Ultimately, having the right strategy around returning capital to shareholders, because we do generate a tremendous amount of free cash flow, and so what is that right strategy of redeploying that free cash flow? That's one big bucket. I think the second big bucket comes, part and parcel with that, but is ultimately regaining the credibility of the market. It's not lost on either Christina or I that there has been a little bit of loss in confidence in what we're saying. I think there's a real focus to ensure we have the right systems and processes. The IT investments are going to help, for example, around forecasting, making sure that when we are making large CapEx decisions, we can be transparent with the street in terms of where we think the returns are going to come from, how long it will take to get those returns, what's the thresholds that we're working from. What's the return on invested capital, the IRR on our CapEx? Lastly, we need to ensure there continues to be a healthy secondary market for our shares. That's the third focus on regaining that credibility on the street. Okay, that's great. Jonathan, Christina, you both touched a little bit on tariffs. I did just want to maybe do a bit of a temperature check and just ask you for a bit of an update on how you're seeing that affect the business and maybe touch on some of the more recent steps that you're taking to mitigate or address those challenges. Sure. You know, tariffs are ultimately impacting the business three ways, right? There's ultimately the tariffs that we're paying, how the consumer reacts, and then lastly, how the retail is reacting. From the tariffs that we're paying, we're recapturing the vast majority of the actual payments that we're making to the U.S. government. You know, we're confident there. Then it shifts over to how the consumer is reacting. The nice thing about our industry is that it's quite resilient. There's a certain inelasticity in demand, regardless of what's happening from a price point. There has been inflation, I think, over 2.5% over the last four or five months on toys. While there has been inflation, it's been quite resilient. Our TAM is down in the last two months by about 100 basis points, so about 1%. Now, you have to look at how we're performing. In Q2, we talked about how we were getting share, how we were growing faster than our TAM. I'm pleased to say in July and August, we continue with that trend, and we're growing faster again, and we're taking share. We're about 100 basis points positive, so about plus one versus a market that's down by about 100 basis points. That's because we have the right products. We're seeing it as we head into this heavy, the ever-important holiday season. Walmart, I think we have, and Walmart and Amazon, we have in recent memory, 12. So thank you. Eight. As of this morning, eight on Target as well. We have the right products on the top 20 list of these retailers, so we're placed well. You say, positive POS, you're growing faster. How does that impact ultimately your revenue? There is a disconnect between POS and revenue recognition. What we sell into the retailers is what we would recognize. The toy industry was, I don't want to say fully unique, but it had some unique characteristics in that there was quite a bit, and there is quite a bit, of FOB or direct imports that the retailers do. That has started to shift because of tariffs, where there's been a shift towards domestic replenishment, so DOM, as we would call it on our earnings calls. That pushes out the revenue recognition by, in some cases, months, right? Ultimately, we have to bring the product over from Asia or from Europe onto the U.S. shores. That's certainly having an impact. We see, on the Melissa & Doug front, Melissa & Doug is predominantly U.S. Christina was saying it's only the last few weeks that we've been starting to grow that business internationally. Melissa & Doug has been, I would say, more impacted because it's more of a U.S. business and more of a China source business than the rest of our products and brands. When we look at Q3, I think that the shift in DOM is a little bit bigger than we initially expected when we last spoke to the wider market. We still see the demand. The demand is there from the consumer perspective. We're gaining share. We're going faster. We're growing, and we're growing faster. With the continued shift from FOB to DOM, it'll take a little bit longer for the revenue to be recognized. When we look further out into Q4, there is a possibility that some of that revenue ultimately gets recognized in Q1 as opposed to Q4. Our focus is to make sure we have the right products, make sure that we're relevant with our consumers, make sure we're relevant with the retailers, which we are, and the proof is the POS. We're confident that the revenue will follow, but it's taking a little bit longer for it to follow. Okay, great. Yeah, that's really helpful. Shifting gears a little bit, another thing you guys have talked about in the past is making more inroads into value-focused retail channels like dollar stores, for example, and the opportunity to get in more doors and reach more consumers and different consumers by doing so. How is that part of the strategy progressing? How should we think about the size and potential financial impact of that? I can start just by saying, hey, we're executing on the strategy. We've created specific products for the channel, and we're seeing that channel grow across multiple properties, not a single property. We're about 12 months into it, I would say. We don't break out by channel exactly what the revenue is, but it is an additional source of revenue at this point. Yeah, it's becoming more and more important. We're certainly taking advantage of the fact that we had inventory onshore in Q2 and Q3, taking advantage of that to ship some of that product into the value channel. As part of our product development cycle, we're being more and more thoughtful in making sure that the products that we develop, that there's a specific product that can go into that channel with the right cost structure and therefore give us the right gross margin as well. It was a good summer for some of the film franchises within your licensing portfolio. I'm thinking Jurassic World, How to Train Your Dragon, Superman. Do you expect that some of that momentum to carry through into the holiday season? Maybe you could just touch a little more on what the strategy is overall with licensing going forward. Yeah, I think the momentum, we have a movie about to open, Gabby’s Dollhouse, which we're the toy partner for. That will be coming next. How to Train Your Dragon, some of the toys are on the toy lists that we just mentioned. I think there'll continue to be some momentum there. Licensing as a whole has always been a mix in our portfolio, a percentage mix in our portfolio, and it will continue to be. It's always going to change, though. Like this year, you were able to say, hey, these are all the movies. Next year, we'll have PAW Patrol, obviously, as well, and that is our own. It's always part of the strategy. It runs somewhere between, I'd say, 25%, between 25% and 30% of the toy category at any given time. You're going to fluctuate based on what movies are being released or are they movies that we have rights to. We also activate sort of product in and around movies. If you look at Primal Hatch, which is a great product that just came to market, has been getting a ton of press. That is tied to Jurassic as well. That happens to be a single product, but a great product category for us and a great item for them. There are lots of ways we can play it. A full line, we can play individual items. I think we do a good job of mixing both of those as well as competing for licenses on an ongoing basis. From an economics perspective, quite frankly, we're indifferent. I mean, from a bottom line perspective, essentially, it's the same profitability of either owned or licensed. Okay. Christina, you alluded to the fact that Spin Master is very well represented on some of the top toy lists we've seen coming out. Walmart, I noted some very significant year-over-year improvement there. Target's list out this morning, also very well represented. All those things would point to, I think, a pretty compelling toy lineup going into the holiday season. I'm just wondering, how are you feeling about that into the holidays? Do you feel like you're in a pretty strong position with some of your key retail partners? One of the great things I will say about all those lists that I take zero credit for, given how long I've been sitting in the chair, but it doesn't mean that I'm not thrilled about it, is that it is a wide range of product. It's not any one brand or any one category. I think that shows you the depth and breadth of what Spin Master can do and what our product team and business teams have put out. I'm thrilled about that, whether it's Melissa & Doug, Kinetic Sand, PAW Patrol, Gabby’s Dollhouse, there's How to Train Your Dragon, Across the World, Monster Jam. All of those categories in which we compete in are very well represented. That, I think, sets us up well going into the fourth quarter. As a whole, I would say that we are seeing the POS that is showing us move through the registers. As we look at the current moment, I think, per se, like the market is down minus 1%, but we're up plus 1%. I'll take that. I think we have good momentum on our side in spite of the macro headwinds. Right. Okay. Maybe with our last one or two questions here, this one may be a little more directed at Jonathan. I'm just wondering if you could elaborate a little more on capital allocation priorities, how you're thinking about some of those different buckets, whether that's, you know, growth investments within the business, M&A, how you're thinking about buybacks. I'll let you take that however. Yeah, sure. Thank you. I mean, the nice thing is I'm here at a seat where I'm sitting in a company where it generates a lot of free cash flow, right? Ultimately, we have a very strong EBITDA. We have some CapEx needs to the business, and ultimately, that generates free cash flow. How do we think about capital allocation? The very first thing is that free cash flow is reinvesting in the business, and that's either in OpEx or CapEx. Again, with the increased rigor around making decisions, I have higher expectations in terms of what the returns that we're going to get on the OpEx and CapEx investments. After that, we look externally. This business has benefited from M&A. I mean, it's a big part of the reason why we're plus $2 billion of sales is M&A. Again, improved rigor, we can get even higher returns against M&A. Within M&A, I think capabilities is something that we're constantly looking for, whether it be in toy digital entertainment. That's an element of focus and ensuring that we're creating long-term value for our stakeholders and our shareholders when we're thinking about, you know, purchase prices, et cetera. That leaves us with excess capital. We're proud of the dividend. It's been in place for a number of years now. We've increased it twice. We're very proud of that dividend. As the business grows, we'd like to be able to see if, you know, can we keep on growing that dividend? We'll cross that road. That leaves us with still excess cash. These last two years, we've been redeploying it through buying back shares. Last year, we initiated our first NCIB. We fully executed against the program. This past March, we renewed it. We're well underway on executing against it. We're in the market, you know, each week, each day, and actively buying back shares. When we look at our strategy, when we look at our plan, we think ultimately there's a lot of value. We're not sure that the market has fully appreciated the value we have. That's why we're confident in buying back our shares. Okay. We have a little bit of time left. Maybe I'll sneak one last one. You talked about investments within the business, including within entertainment. How do you think about returns on those sorts of investments where the payoff can be a little bit longer dated and there's sort of a brand-building element to there? Yeah, if I take entertainment just as a, you know, as entertainment as a whole, entertainment, it's a business where you have to invest in CapEx that ultimately is going to create content. The great thing is this content lasts almost forever, and there is a lag in between the CapEx that you put in. When I look back at our historical returns, I mean, we're getting plus three turns cash on cash return, and it takes about, you know, depending on the franchise, two to four years before you start seeing that return. That's just on the entertainment side. Then you have the L&M. As you know, the three creative centers that we've created, they work, and they're going to work even more collaboratively together. You start getting ancillary revenue, whether it be toys or the digital games, etc. Looking at the full circle, I will say that as we invest more capital in the business, I think we need to be more transparent in terms of the thresholds that we're putting on ourselves and communicating those thresholds to the market. Okay, that's great. That takes us to our time. Thanks again, Christina, Jonathan. Really appreciate that. Thank you. Thank you. All right.