Adjusted
EBITDA1 of $17.4 million for Q3 2022 versus $11.6 million for Q3 2021;
Net income of $3.9
million for Q3 2022 versus a net loss of $1.8 million for Q3 2021;
No corporate debt2
TORONTO, Nov. 9, 2022
/CNW/ - Boat Rocker Media Inc. ("Boat Rocker" or the
"Company") (TSX: BRMI), an independent, integrated global
entertainment company, today reported its financial results for the
three months ended September 30, 2022
("third quarter" or "Q3"). The Company's consolidated financial
statements and accompanying notes and Management's Discussion and
Analysis ("MD&A") for the three and nine months ended
September 30, 2022 and 2021 are
available under the Company's profile on SEDAR (www.sedar.com). All
dollar amounts are expressed in Canadian currency, unless otherwise
noted. Certain metrics, including those expressed on an adjusted
basis, are non-IFRS measures (see "Non-IFRS Measures" below).
Selected Financial Highlights
- Adjusted EBITDA1 of $17.4
million for Q3 2022 versus $11.6
million for Q3 2021, an increase of 50%, and $19.0 million for the nine months ended
September 30, 2022 versus
$12.7 million in the same period of
2021, an increase of 50%.
- Net income of $3.9 million for Q3
2022 compared with a net loss of $1.8
million for Q3 2021, an increase of $5.6 million, and a net loss of $3.9 million for the nine months ended
September 30, 2022 compared to a net
loss of $15.6 million in the same
period of 2021, an increase of $11.7
million.
- Debt-free2 with total cash at September 30, 2022 of $106.4 million.
- Generated positive Free Cash Flow1 in the nine
months ended September 30, 2022 of
$18.2 million as compared to negative
Free Cash Flow1 in same period of 2021 of $30.4 million.
"Our strong results this quarter reflect the anticipated
improvement in both Adjusted EBITDA and Adjusted EBITDA margin as
we began to deliver programming across multiple segments and make
the first meaningful sales of Dino
Ranch merchandise through the back-to-school period and
leading into the all important holiday season," said John Young, Chief Executive Officer of Boat
Rocker. "Lower revenue over the comparative quarter reflects both
changing revenue mix, as well as the timing of deliveries,
particularly of premium scripted dramas, that are back-end loaded
for this year and will deliver across year-end into 2023. In 2022,
we have one of the largest slate of shows in our history in
production and continue to grow our owned IP catalog. All of this
sets us up to deliver meaningful Adjusted EBITDA in the fourth
quarter and get off to a strong start in 2023."
____________________________________
|
1 This
is a Non-IFRS measure. For more information on non-IFRS financial
measures, see "Non-IFRS Measures" and "Reconciliation of Non-IFRS
Measures" below and see "Non-IFRS Financial Measures" in our Third
Quarter 2022 Management's Discussion and Analysis.
|
2 The
Company currently has no corporate term debt, only interim
production financing (including through two borrowing base
facilities) in the ordinary course of operations.
|
Selected Operational Highlights
Boat Rocker continues to see high overall activity levels across
its three reporting segments: Television, Kids and Family, and
Representation. Representation, in particular, saw 15% year over
year revenue growth. For 2022, the Company is producing
high-quality scripted, unscripted and Kids and Family titles for
major buyers around the world including Netflix, Apple TV+, AMC,
The ROKU Channel, Amazon Freevee, Nickelodeon and Discovery+ as
well as key domestic platforms including CTV, CBC and Global. At
the end of Q3 Boat Rocker had delivered 16 shows so far in 2022
with another 40 in various stages of production.
Recent highlights include:
Television
- Season two of American Rust, starring Jeff Daniels and Maura
Tierney, is currently in pre-production. The second season
will stream exclusively on Amazon Freevee and begins production at
the end of November. Boat Rocker is producing and will distribute
the series globally.
- Keeley Hawes (Bodyguard,
Line of Duty) joined Krysten
Ritter (Breaking Bad, Jessica Jones) as co-lead in Orphan
Black: Echoes, the highly anticipated spin-off series of
international hit show Orphan Black, currently in production in
Toronto.
- New series, Sarah's Mountain Escape, starring acclaimed
designer Sarah Richardson, premiered
on HGTV Canada on October
19th.
- Season six of The Great Canadian Baking Show premiered
October 2nd on CBC.
- Returning for an incredible 10th season with the
biggest grand prize ever, Top Chef Canada premiered
September 26th on Food
Network Canada.
- Production has started on upcoming Bishop Sycamore football
documentary, titled B.S. High, which will debut on HBO in
2023.
- Signed a first-look deal with actor, writer, director, and
producer Jay Baruchel, under which Baruchel will develop and
produce original television, film and digital projects for the
Company.
Kids & Family
- Dino Ranch was renewed
for a third season (52 x 11 mins) and will air on Disney Junior and
Disney+ in the U.S. in Fall 2023, followed by an international
rollout on Disney Junior in Latin
America and streaming on Disney+ in the UK, Ireland, Australia and New
Zealand.
- Dino Ranch is now available to
view in 170 countries with a total of 50 consumer product licensees
globally.
- Dino Ranch remains the #1
preschool U.S. cable show for kids aged two to five in its
7pm time slot.
- Boat Rocker's exciting new supernatural animated series,
Daniel Spellbound, started streaming on Netflix on
October 27th and debuted
in the Netflix "Top 10 Kids" in most major markets globally,
including Canada, U.S., UK,
Germany, and France.
- Season eight of The Next Step premiered on September 26th on CBBC (UK) and Corus' YTV in
Canada.
- Two Boat Rocker Kids & Family productions have been
nominated for Children's & Family Emmy Awards. A
Tale Dark & Grimm, is
nominated for Outstanding Animated Series. The Kids Tonight
Show is nominated for Outstanding Host. The inaugural awards
ceremony takes place over two days, December
10-11, in Los Angeles.
Representation
- This year was another stellar showing at the Emmys, with more
than 10 projects receiving nominations and client Jean Smart winning Best Actress in a Comedy for
Hacks for the second consecutive year.
- Cobra Kai Season 5, starring client Ralph Macchio, debuted at #1 on Netflix's most
watched TV series list with 107 million viewing hours in its first
week.
- Client Rhea Seehorn was
announced as the lead in an untitled Vince
Gilligan project for Apple TV+, which has received a
two-season straight-to-series order.
- Client Laura Benanti was booked
in Sony comedy No Hard Feelings, starring opposite
Jennifer Lawrence.
- Client Emma Watson is the face
of the new fragrance Prada Paradoxe, for which she also directed
the commercial. The fragrance launch has been a major success to
date.
-
Selected Financial Information
(Amounts in thousands
CAD)
|
Three months ended
September 30,
|
|
2022
|
2021
|
%
change
|
Revenue
|
|
|
|
Television
|
42,142
|
166,930
|
(75) %
|
Kids and
Family
|
27,988
|
27,191
|
3 %
|
Representation
|
10,580
|
9,211
|
15 %
|
Total
revenue
|
80,710
|
203,332
|
(60) %
|
Net income
(loss)
|
3,872
|
(1,758)
|
320 %
|
Adjusted
EBITDA*
|
17,389
|
11,591
|
50 %
|
(Amounts in thousands
CAD)
|
Nine months ended
September 30,
|
|
2022
|
2021
|
%
change
|
Revenue
|
|
|
|
Television
|
97,631
|
239,153
|
(59) %
|
Kids and
Family
|
66,603
|
51,501
|
29 %
|
Representation
|
28,758
|
27,260
|
5 %
|
Total
revenue
|
192,992
|
317,914
|
(39) %
|
Net income
(loss)
|
(3,903)
|
(15,593)
|
75 %
|
Adjusted
EBITDA*
|
19,041
|
12,662
|
50 %
|
Financial Review
Revenue for Q3 2022 was $80.7 million versus $203.3 million in Q3 2021, a decrease of
$122.6 million. Revenue for the
nine months ended September 30, 2022
was $193.0 million compared with
$317.9 million for the same
period of 2021, a decrease of $124.9 million or 39%. In the three
and nine months ended September 30,
2021, the Company delivered several episodes of two big
budget scripted productions. Despite having several similar sized
scripted dramas currently underway, there were no deliveries of
such productions in the current year periods. While revenue
decreased in the Television segment, revenue in both the Kids and
Family and Representation segments increased.
Adjusted EBITDA* for Q3 2022 was $17.4 million compared with $11.6 million for the same period of 2021,
an increase of $5.8 million.
Adjusted EBITDA for nine months ended September 30, 2022 was $19.0 million versus $12.7 million in 2021, an increase of
$6.4 million.
Net income for Q3 2022 was $3.9 million compared with a loss of
$1.8 million for the same period
of 2021, an increase of $5.6 million. Net loss for the nine months
ended September 30, 2022 was
$3.9 million, compared with a
net loss of $15.6 million in the
same period of 2021, a positive variance of $11.7 million.
*This is a Non-IFRS measure. For more information on non-IFRS
financial measures, see "Non-IFRS Measures" and "Reconciliation of
Non-IFRS Measures" below and see "Non-IFRS Financial Measures" in
our Third Quarter 2022 Management's Discussion and Analysis.
Total cash at September 30, 2022 was $106.4 million, of which $21.4 million represents Cash Available for Use*.
The following table presents the breakdown of cash as at
September 30, 2022 and December 31, 2021:
(Amounts in thousands
CAD)
|
September 30,
2022
|
|
December 31,
2021
|
|
%
change
|
Cash Available for
Use*
|
$
21,362
|
|
$
57,247
|
|
(63) %
|
Cash Required for Use
in Productions*
|
85,041
|
|
39,703
|
|
114 %
|
Total
cash
|
$
106,403
|
|
$
96,950
|
|
10 %
|
Outlook
As a result of ordinary course and COVID-related production
schedule extensions, together with some delayed greenlights in the
US unscripted business, Boat Rocker projects Adjusted EBITDA* will
fall below its previously stated guidance for the year, as scripted
deliveries and anticipated US unscripted greenlights push into next
year.
However, management expects to generate appreciable growth in
Adjusted EBITDA* for 2022 over its 2021 results as the Company
continues to anticipate that its expanded slate of premium scripted
dramas, expected continued success of its Kids & Family
programming led by Dino
Ranch, and the steady growth of its Representation
segment will contribute meaningfully to the Company's performance
in 2022 and beyond.
For 2022, as in 2021, the Company expects a strong fourth
quarter, supported principally by anticipated deliveries and
consumer product revenue. Boat Rocker remains focused on annual
Adjusted EBITDA* as the most important measure of the Company's
performance, as well as Adjusted EBITDA* growth over multiple years
given the length and variability of the Company's production
cycles.
Management expects sustained demand for new and returning
series in 2023, with major buyers having confirmed their commitment
to continued content spend and international buyers eager for
original premium scripted, unscripted and kids and family shows.
Boat Rocker anticipates growth in each segment over the long term,
including greater revenue from consumer products which is expected
to contribute to higher margins, and further synergies attributable
to Boat Rocker's enhanced scale. With its diverse content creation
engine and long track record of successfully delivering multi-genre
programming at all budget levels to the world's leading
broadcasters and streamers, Boat Rocker believes that it is well
positioned to capitalize on the ongoing demand for high quality
programming.
The Company's expected performance in Q4 is based on certain
assumptions which are outlined in the Company's annual MD&A
dated March 31, 2022, and subject to
certain risks as outlined in the Company's Annual Information Form
for the year ended December 31,
2021.
*This is a Non-IFRS measure. For more information on non-IFRS
financial measures, see "Non-IFRS Measures" and "Reconciliation of
Non-IFRS Measures" below and see "Non-IFRS Financial Measures" in
our Third Quarter 2022 Management's Discussion and Analysis.
Fiscal 2022 Third Quarter Conference Call
Boat Rocker management will host a conference call to discuss
its fiscal third quarter financial results at 8:30 a.m. EDT on November
9, 2022. To participate in the call, dial (416) 764-8650 or
(888) 664-6383 (using the conference ID 60326350). The audio
webcast can be accessed at:
https://www.boatrocker.com/investor-relations/events-and-presentations/default.aspx.
Listeners should access the webcast or call 10-15 minutes before
the start time to ensure they are connected.
About Boat Rocker
Boat Rocker (TSX: BRMI) is the home for creative visionaries. An
independent, integrated global entertainment company, Boat Rocker's
purpose is to tell stories and build iconic brands across all
genres and mediums. With offices around the world, Boat Rocker's
creative and commercial capabilities include Scripted, Unscripted,
and Kids & Family television production, distribution, brand
& franchise management, a world-class animation studio, and
talent management through Untitled Entertainment. A selection of
Boat Rocker's projects include: Invasion (Apple TV+),
Orphan Black (BBC AMERICA, CTV Sci-Fi Channel), Dear…
(Apple TV+), Billie Eilish: The World's a Little Blurry
(Apple TV+), The Next Step (BBC, Family Channel, CBC),
Daniel Spellbound (Netflix), and Dino Ranch (Disney+, Disney Junior,
CBC). For more information, please visit
www.boatrocker.com.
Non-IFRS Measures
This press release makes reference to certain non-IFRS measures.
These measures are not recognized measures under IFRS, do not have
a standardized meaning prescribed by IFRS and are therefore
unlikely to be comparable to similar measures presented by other
companies. Accordingly, they should not be considered in isolation
nor as a substitute for analysis of the Company's financial
information reported under IFRS. The intent of using non-IFRS
measures is to provide investors with supplemental measures of the
Company's operating performance and thus highlight trends in its
core business that may not otherwise be apparent when relying
solely on IFRS financial measures, in addition to providing a
greater understanding of the Company's liquidity position and
available financial resources. The Company's management uses
non-IFRS measures in order to facilitate operating performance
comparisons from period to period, to prepare annual operating
budgets, and to determine components of management compensation.
The Company also believes that securities analysts, investors and
other interested parties frequently use non-IFRS measures in the
evaluation of issuers.
Definitions and reconciliations of non-IFRS measures to the
relevant reported measures can be found in our MD&A. Such
reconciliations can also be found in this press release under the
heading Reconciliation of Non-IFRS Measures. The non-IFRS measures
the Company uses include: EBITDA, Adjusted EBITDA, Cash Available
for Use, and Cash Required for Use in Productions.
EBITDA is defined as net income or loss before
interest, taxes, depreciation, amortization of property and
equipment, right-of-use assets and other intangible assets.
Adjusted EBITDA is defined as EBITDA adjusted for
amortization of non-cash program intangibles, change in fair value
of other financial liabilities related to put options, certain
other financial liabilities, convertible debt and contingent
consideration, share-based compensation, IPO and
transaction-related costs, non-recoupable COVID-19 costs, goodwill
impairment, reorganization costs, loss on debt modifications, gain
on settlement of loans and borrowings, gain or loss on sale of
assets and unrealized gain or loss on forward currency contracts.
Adjusted EBITDA includes the gain on remeasurement of other
financial liabilities as the gain is directly related to a
production and is considered by management to be operational.
Adjusted EBITDA is used by management as a measure of the Company's
operating performance. For further details refer to the
"Reconciliation of Non-IFRS Measures" section of this press
release.
Cash Available for Use is defined as the total cash
of the Company less Cash Required for Use in Productions. Cash
Available for Use funds ongoing working capital requirements,
principal and interest payments on corporate debt as well as
ongoing development and growth efforts and thus is an important
liquidity measure that management uses to monitor the business on
an ongoing basis.
Cash Required for Use in Productions is defined as
cash required for the funding of productions in progress that is
not considered by the Company to be available for other uses. The
cash is not legally restricted and has not been classified as
Restricted Cash on the consolidated statement of financial
position. This cash has been provided by buyers and third-party IP
owners that have engaged the Company to provide services, as well
as banks with whom Boat Rocker has contracted to provide interim
production financing. Management uses the amount of Cash Required
for Use in Productions to determine the Company's Cash Available
for Use.
Free Cash Flow is defined as cash flow provided by or
used in operations adjusted for proceeds and repayments of interim
production financing, payments of lease liabilities and
distributions to non-controlling interests. While these types of
cash flows are excluded from cash provided by operations,
management believes they add value to evaluating the ability of the
business to generate cash flow. In particular, interim production
financing is crucial to the funding of productions and thus has
been included in the calculation of Free Cash Flow. Similarly,
repayment of lease liabilities and distributions made to
non-controlling shareholders have also been included as management
considers these to be operating cash flows.
Forward-Looking Statements
This press release may contain forward-looking information
within the meaning of applicable securities laws, which reflects
the Company's current expectations regarding future events.
Forward-looking information is based on a number of assumptions,
many of which are beyond the Company's control. Such assumptions
include, but are not limited to, the factors discussed under
"Outlook" in the Company's annual MD&A dated March 31, 2022. Forward-looking information is
also subject to a number of specific and general risks. A
comprehensive summary of the risks and uncertainties that may
affect the business of the Company is set out in the Company's
Annual Information Form for the year ended December 31, 2021. The risks and uncertainties
described therein are not the only ones Boat Rocker faces.
Additional risks and uncertainties not presently known to the
Company or that it currently believes to be immaterial may also
materially adversely affect the Company's business, assets,
liabilities, financial condition, results of operations, prospects,
cash flows and the value and future trading price of the
Subordinate Voting Shares. Boat Rocker does not undertake any
obligation to update forward-looking information, whether as a
result of new information, future events or otherwise, except as
expressly required under applicable securities laws.
Reconciliation of Non-IFRS Measures
The Company uses the non-IFRS measure Adjusted EBITDA to
evaluate performance. The following tables present the
reconciliation from net income (loss) to Adjusted EBITDA for the
three and nine months ended September 30,
2022 and 2021:
(Amounts in thousands
CAD)
|
|
Three months ended
September 30,
|
|
|
2022
|
|
2021
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income
(loss)
|
|
3,872
|
|
(1,758)
|
|
Amortization of
property and equipment, right-of-use assets and other intangible
assets
|
|
4,423
|
|
4,457
|
|
Finance costs,
net
|
|
1,765
|
|
842
|
|
Income
taxes
|
|
330
|
|
601
|
|
EBITDA*
|
|
10,390
|
|
4,142
|
|
|
|
|
|
|
|
Adjustments:
|
|
|
|
|
|
Change in fair value
of contingent consideration3
|
|
—
|
|
132
|
|
Change in fair value
of unsettled forward exchange contracts4
|
|
1,942
|
|
(61)
|
|
Change in fair value
of other financial liabilities5
|
|
1,786
|
|
1,741
|
|
Amortization of
acquired program intangibles6
|
|
2,252
|
|
971
|
|
COVID-19 related
costs7
|
|
—
|
|
3,800
|
|
Share-based
compensation8
|
|
313
|
|
792
|
|
Reorganization
costs9
|
|
706
|
|
74
|
|
Adjusted
EBITDA*
|
|
17,389
|
|
11,591
|
|
|
|
|
|
|
|
* See "Non-IFRS
Measures"
|
|
Note: Adjusted EBITDA
as previously reported included the change in fair value of
unsettled forward exchange contracts and excluded the change in
fair value of financial assets. Adjusted EBITDA for the three
months ended September 30, 2021 as previously reported was $11,536.
The definition of Adjusted EBITDA has been changed to better
reflect the Company's performance.
|
|
____________________________________________
|
1 This is a
Non-IFRS measure. For more information on non-IFRS financial
measures, see "Non-IFRS Measures" and "Reconciliation of Non-IFRS
Measures" below and see "Non-IFRS Financial Measures" in our Third
Quarter 2022 Management's Discussion and Analysis.
|
2 The
Company currently has no corporate term debt, only interim
production financing (including through two borrowing base
facilities) in the ordinary course of operations.
|
3 Change in
value of contingent consideration represents the non-cash expense
associated with certain acquisitions.
|
4 Change in
fair value of the unrealized forward currency contracts.
|
5 Change in fair value of other
financial liabilities represents the non-cash expenses on certain
put options and accretion and and changes in fair value on other
liabilities.
|
6
Amortization of program intangibles acquired in business
combinations included in production, distribution and service
costs.
|
7 Incremental non-recoupable
production costs specifically incurred due to COVID-19.
|
(Amounts in thousands
CAD)
|
|
Nine months
ended
September 30,
|
|
|
2022
|
|
2021
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income
(loss)
|
|
(3,903)
|
|
(15,593)
|
|
Amortization of
property and equipment, right-of-use assets and other intangible
assets
|
|
13,195
|
|
13,985
|
|
Finance costs,
net
|
|
4,317
|
|
3,844
|
|
Income
taxes
|
|
230
|
|
1,188
|
|
EBITDA*
|
|
13,839
|
|
3,424
|
|
|
|
|
|
|
|
Adjustments:
|
|
|
|
|
|
Change in fair value
of convertible debt10
|
|
—
|
|
(4,382)
|
|
Change in fair value
of contingent consideration11
|
|
(6,533)
|
|
398
|
|
Change in fair value
of unsettled forward exchange contracts12
|
|
1,460
|
|
247
|
|
Change in fair value
of other financial liabilities13
|
|
4,577
|
|
3,056
|
|
Gain on settlement of
loans and borrowings14
|
|
—
|
|
(2,334)
|
|
Amortization of
acquired program intangibles15
|
|
3,512
|
|
2,649
|
|
IPO and
transaction-related costs16
|
|
—
|
|
972
|
|
COVID-19 related
costs17
|
|
—
|
|
4,651
|
|
Share-based
compensation18
|
|
1,320
|
|
3,561
|
|
Reorganization
costs19
|
|
866
|
|
420
|
|
Adjusted
EBITDA*
|
|
19,041
|
|
12,662
|
|
|
|
|
|
|
|
* See "Non-IFRS
Measures"
|
|
Note: Adjusted EBITDA
as previously reported included the change in fair value of
unsettled forward exchange contracts and excluded the change in
fair value of financial assets. Adjusted EBITDA for the nine months
ended September 30, 2021 as previously reported was $12,665. The
definition of Adjusted EBITDA has been changed to better reflect
the Company's performance.
|
|
_____________________________
|
8 Non-cash
expenses associated with share-based compensation granted to
certain officers and employees.
|
9 Restructuring charges primarily
related to personnel costs.
|
10 Change in fair value of
convertible debt represents the non-cash gain on the conversion of
certain debentures issued by the Company.
|
11 Change in
value of contingent consideration represents the non-cash expense
associated with certain acquisitions.
|
12 Change in fair value of the
unrealized forward currency contracts.
|
13 Change in
fair value of other financial liabilities represents the non-cash
expenses on certain put options and accretion and changes in fair
value on other liabilities.
|
14 Non-cash gain recorded on the
settlement of the Company's loans and borrowings.
|
15
Amortization of program intangibles acquired in business
combinations included in production, distribution and service
costs.
|
16 Includes professional fees and
other expenses related to transactions such as the Company's IPO,
acquisitions, and special projects which are non-recurring and are
not related to or are not reflective of regular business
operation.
|
17
Incremental non-recoupable production costs specifically incurred
due to COVID-19.
|
18 Non-cash expenses associated with
share-based compensation granted to certain officers and
employees.
|
19 Restructuring charges primarily
related to personnel costs.
|
SOURCE Boat Rocker Media Inc.