What fueled revenue spike at Spiral Toys Inc (OTCBB:STOY) explained

Spiral Toys Inc (OTCBB:STOY) made tremendous gains in 3Q2015 as revenue for the quarter rose sharply to $4.3 million from $98,000 a year ago. The management attributed the successful quarter to CloudPets, a flagship luxury toy product that launched in 2Q2015 but continued to see strong demand throughout 3Q. Lower legal and professional expenses also abated losses in the quarter.

It was a quarter like no other for Spiral Toys in the recent times. Revenue of $4.3 million not only exceeded expectations, but also improved significantly from $1.5 billion in the previous quarter and came strongly above revenue of $98,000 in a year-ago quarter.

According to the company’s CEO, Mark Meyers, multiple favorable factors contributed to the strong revenue gain in 3Q, but what stood out the most was CloudPets. Spiral Toys introduced the luxury connected toy in 2Q2015 and continued to see strong demand throughout 3Q, thus boosting revenue significantly.

The management of Spiral Toys is hoping that the successful launch of CloudPets is something they can replicate in other products to maximize revenue. Spiral Toys plans to launch at least three new products in 2016 with the aim of eventually building an ecosystem of connected devices.

Besides the strong revenue gain 3Q, the water was also characterized by strong margins as gross margins were 16%, thus contributing $690,000 of gross profit. Gross margins in 2Q were 11.9%, which contributed to gross profits of $180,000.

Economies of scale contributed to the margins improvement in 3Q as operating expenses remained flat at $941,000 in the quarter compared to the previous one. Professional and legal fees also slipped in the quarter, thus providing boost to the bottom-line.

Playmates Toys (OTCMKTS:PMTYF) partnering for action-comedy:

Playmates Toys (OTCMKTS:PMTYF) recently announced that it has tapped for a partnership that seeks to develop a potentially high-power animated action-comedy dubbed Mech Mice. The animated comedy is expected to be ready for premiering in 2017.

Besides Playmates Toys (OTCMKTS:PMTYF), others involved in the creation of Mech Mice are  Oktobor Animation and Corus Entertainment Inc. (USA) (OTCMKTS:CJREF)’sNelvana.

4Q revenue slip 4% at Corus Entertainment Inc. (USA)(OTCMKTS:CJREF):

Corus Entertainment Inc. (USA)(OTCMKTS:CJREF) reported a tough quarter in 4Q as revenue declined 4% YoY to $147 million. The bottom-line was also soft as the company posted a 5% drop in consolidated profits to $41.75million.

Nevertheless, Corus Entertainment Inc. (USA)(OTCMKTS:CJREF) generated record free cash flow of $201.2 million for the fiscal year.