Adjusted EBITDA of $7.8 million for Q2 2022 versus $2.7 million for Q2 2021;
Net income of $4.6 million
for Q2 2022 versus a net loss of $8.8
million for Q2 2021;
Announces Intent
to File Notice to Commence Normal Course Issuer Bid
TORONTO, Aug. 10,
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 June 30, 2022
("second quarter" or "Q2"). The Company's consolidated financial
statements and accompanying notes and Management's Discussion and
Analysis ("MD&A") for the three and six months ended
June 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
- Revenue of $65.4 million for Q2
2022 compared with $62.1 million for
Q2 2021, an increase of 5%, and $112.3
million for the six months ended June
30, 2022 versus $114.6 million
in the same period of 2021, a decrease of 2%.
- Adjusted EBITDA1 of $7.8
million for Q2 2022 versus $2.7
million for Q2 2021, an increase of 185%, and $1.7 million for the six months ended
June 30, 2022 versus $1.1 million in the same period of 2021, an
increase of 54%.
- Net income of $4.6 million for Q2
2022 compared with net loss of $8.8
million for Q2 2021, an increase of $13.4 million, and net loss of $7.8 million for the six months ended
June 30, 2022 compared to a net loss
of $13.8 million in the same period
of 2021, an increase of $6.1
million.
- Debt-free2 with total cash at June 30, 2022 of $100.8
million.
- Generated positive Free Cash Flow1 in the six months
ended June 30, 2022 of $7.6 million as compared to negative Free Cash
Flow1 in same period of 2021 of $44.0 million.
"This quarter we saw continued momentum across our business
units with more than 40 shows in various stages of production and
more greenlit to start in the second half of the year," said
John Young, Chief Executive Officer
of Boat Rocker. "With seven premium scripted series on our FY 2022
slate, including the recently renewed American Rust and a
second season of Beacon 23, and our Kids & Family
division delivering 61% quarter over quarter growth compared to the
prior year, we continue to drive towards reaching our financial
goals. Our results this quarter reflect the anticipated build in
Adjusted EBITDA, which we expect to accelerate through the second
half of the year as we begin to deliver on our scripted drama
slate. We remain focused on investing in our owned IP, particularly
in series we are distributing internationally, as well as the
broader business."
_________________________________
|
1 See "Non-IFRS
measures
|
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. The Kids & Family division, in particular, saw
61% quarter over quarter 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.
Recent highlights include:
Television
- Recently announced the early renewal of the second season of
sci-fi series Beacon 23 for Spectrum and AMC.
- Krysten Ritter (Breaking
Bad, Jessica Jones) will
star in Orphan Black: Echoes, the highly anticipated
spin-off series of international hit show Orphan Black.
- Near-fi scripted series Robyn
Hood began production in Toronto & Hamilton in June. The original
series for Corus is created by and directed by frequent Drake
collaborator, Director X and written by award winning screenwriter,
Chris Roberts (Orphan Black).
Boat Rocker is distributing the show internationally.
- Season two of Boat Rocker's premium scripted drama series,
American Rust, starring Emmy winner Jeff Daniels and Golden Globe winner
Maura Tierney, has been picked up by
Amazon Freevee. The show will be produced and distributed worldwide
by Boat Rocker and stream exclusively on Amazon Freevee.
- Insight Productions has wrapped up production on the first
season of Canada's Ultimate
Challenge for the CBC. The series is set to premiere in winter
2023.
- Downey's Dream Cars, (working title), featuring
Robert Downey Jr., is being produced
by Team Downey and Matador Content and is expected to launch in
late 2022 on the Warner Bros. Discovery streaming platform.
- Matador Content also received a greenlight from Hulu for
Drag Me to Dinner, a new cooking series created and
executive produced by and featuring Neil
Patrick Harris and David
Burtka. The new series is slated to premiere on Hulu in
2023.
Kids & Family
- Dino Ranch remains the #1 preschool U.S. cable show
for kids aged two to five in its 7pm
time slot.
- All new season two episodes of Dino Ranch premiered
July 22nd on Disney Junior
in the U.S. Dino Ranch is now available to view in 170 countries
with a total of 45 licensee partners globally joining the
excitement in bringing the Dino Ranch world to life through toys,
apparel, publishing, costumes, footwear, bedding, and more.
- Rebel Cheer Squad: A Get Even Series, the teen thriller
series adapted from the book series "Don't Get Mad" by Gretchen McNeil, premiered on Netflix worldwide
in July.
- Amber
Brown premiered on Apple TV+ on July 29th. From Emmy Award-nominated writer and director
Bonnie Hunt and based on the
bestselling book series by Paula
Danziger, with over 10 million copies in print.
Representation
- Untitled clients were associated with numerous projects which
received Emmy nominations, including 5 acting nominations for
Untitled clients:
-
- Jean Smart - Lead Actress in a
Comedy Series – Hacks
- Christina Ricci –Supporting
Actress in a Drama Series – Yellowjackets
- Rhea Seehorn - Supporting
Actress in a Drama Series – Better Call Saul
- Alexandra Daddario – Supporting
Actress in a Limited Series or TV Movie – The White
Lotus
- Connie Britton - Supporting
Actress in a Limited Series or TV Movie – The White
Lotus
- Untitled added a number of new clients in Q2, including
singer/songwriter Robbie Williams,
Denis Hamill (writer/Co-Producer on
Law & Order: SVU), and Dave Needham (story artist
and Pixar director associated with projects including Trolls
and Boss Baby).
- Buried in Barstow, starring Untitled client Angie Harmon and produced by Untitled, premiered
on Lifetime to strong ratings.
Corporate Update
As part of its ongoing capital allocation strategy, the board of
directors has approved Boat Rocker filing with the Toronto Stock
Exchange ("TSX") a notice of intention to commence a normal course
issuer bid ("NCIB"). The notice will be subject to regulatory
approval by the TSX and there can be no assurance that it will be
accepted. The Company reviews its capital allocation strategy
on an ongoing basis and given the trading price in the Company's
stock and the volatility in the markets, management and the Board
believe that the market price of the Company's Subordinate Voting
Shares does not reflect the intrinsic value of the Company and the
repurchase of the stock would be in the best interests of the
Company and its shareholders and would represent an attractive and
appropriate use of available funds. This intent to file follows a
period of insider buying that saw more than 50,000 shares purchased
by Board members and senior management after the Company's Q1
results were announced.
Selected Financial
Information
|
|
|
|
(Amounts in thousands
CAD)
|
Three months ended
June 30,
|
2022
|
2021
|
%
change
|
Revenue
|
|
|
|
Television
|
36,736
|
41,669
|
(12) %
|
Kids and
Family
|
19,112
|
11,843
|
61 %
|
Representation
|
9,585
|
8,576
|
12 %
|
Total
revenue
|
65,433
|
62,088
|
5 %
|
Net income
(loss)
|
4,557
|
(8,819)
|
152 %
|
Adjusted
EBITDA*
|
7,813
|
2,746
|
185 %
|
|
|
(Amounts in thousands
CAD)
|
Six months ended
June 30,
|
2022
|
2021
|
%
change
|
Revenue
|
|
|
|
Television
|
55,489
|
72,223
|
(23) %
|
Kids and
Family
|
38,615
|
24,310
|
59 %
|
Representation
|
18,178
|
18,049
|
1 %
|
Total
revenue
|
112,282
|
114,582
|
(2) %
|
Net income
(loss)
|
(7,775)
|
(13,835)
|
44 %
|
Adjusted
EBITDA*
|
1,652
|
1,072
|
54 %
|
* See
"Non-IFRS Measures"
|
Financial Review
Revenue for Q2 2022 was $65.4 million versus $62.1 million in Q2 2021, an increase of
$3.3 million. Revenue for the
six months ended June 30, 2022 was
$112.3 million compared with
$114.6 million for the same
period of 2021, a decrease of $2.3 million or 2%. While revenue decreased
in the Television segment, revenue in both the Kids and Family and
Representation segments increased. The variances are primarily due
to the timing of delivery of productions.
Adjusted EBITDA* for Q2 2022 was $7.8 million compared with $2.7 million for the same period of 2021, an
increase of $5.1 million.
Adjusted EBITDA for six months ended June
30, 2022 was $1.7 million
versus $1.1 million in 2021, an
increase of $0.6 million.
Net income for Q2 2022 was $4.6 million compared with a loss of
$8.8 million for the same period
of 2021, an increase of $13.4 million. Net loss for the six
months ended June 30, 2022 was
$7.8 million, compared with a
net loss of $13.8 million in the
same period of 2021, a variance of $6.1 million.
*Adjusted EBITDA is a
non-IFRS measure. See "Non-IFRS Measures" below.
|
Total cash at June 30, 2022 was $100.8 million, of which $38.9 million represents Cash Available for Use*,
a $9.6 million increase from
March 31, 2022. The following table
presents the breakdown of cash as at June 30, 2022 and
December 31, 2021:
(Amounts in thousands
CAD)
|
June 30,
2022
|
|
December 31,
2021
|
|
%
change
|
Cash Available for
Use*
|
$
38,884
|
|
$
57,247
|
|
(32) %
|
Cash Required for Use
in Productions*
|
61,940
|
|
39,703
|
|
56 %
|
Total cash, net of
restricted cash
|
$
100,824
|
|
$
96,950
|
|
4 %
|
*Cash Available for Use
and Cash Required for Use in Productions are non-IFRS measures. See
"Non-IFRS Measures" below.
|
Outlook
Management continues to forecast meaningful Adjusted EBITDA*
growth and margin expansion in 2022. Boat Rocker commenced the year
with an expectation that full-year Adjusted EBITDA* would be in the
range of $40.0 million to
$50.0 million, which would represent
approximately 25% - 60% growth from the $31.6 million generated in 2021. At this point in
the year, the Company has more certainty on the timing of
greenlights and production schedules and anticipates that some
episodes of both scripted and unscripted content currently in
production and previously planned for delivery in Q4 will now be
delivered in 2023. As such, the Company anticipates Adjusted
EBITDA* for the year to be in the lower end of the range, but still
reflective of significant growth over the prior year.
For 2022, as in 2021, the Company expects financial results to
continue to improve in the second half of the year, supported
principally by anticipated deliveries and the beginnings of a
meaningful contribution from consumer products revenue. Revenue
results may fluctuate from year to year depending on production
budgets, the relative mix of service productions and owned IP on
the Company's slate, and the timing of greenlights and
deliveries. 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 of the Company's production cycles. The expected improvement
in performance 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.
Management expects demand for new and returning series to remain
robust through the balance of 2022. 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 demand for high quality programming.
* See
"Non-IFRS Measures"
|
Fiscal 2022 Second Quarter
Conference Call
Boat Rocker management will host a conference call to discuss
its fiscal second quarter financial results at 9:30 a.m. EDT on August
10, 2022. To participate in the call, dial (416) 764-8650 or
(888) 664-6383 (using the conference ID 95619500). 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 financial assets, 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
and cash equivalents 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 demand
loans 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.
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 six months ended June 30,
2022 and 2021:
(Amounts in thousands
CAD)
|
|
Three months
ended
June 30,
|
|
|
2022
|
|
2021
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income
(loss)
|
|
4,557
|
|
(8,819)
|
|
Amortization of
property and equipment, right-of-use assets and
other intangible assets
|
|
4,413
|
|
4,849
|
|
Finance costs,
net
|
|
1,316
|
|
727
|
|
Income
taxes
|
|
652
|
|
724
|
|
EBITDA*
|
|
10,938
|
|
(2,519)
|
|
|
|
|
|
|
|
Adjustments:
|
|
|
|
|
|
Change in fair value
of contingent consideration1
|
|
(6,533)
|
|
139
|
|
Change in fair value
of unsettled forward exchange contracts2
|
|
867
|
|
66
|
|
Change in fair value
of other financial liabilities3
|
|
1,476
|
|
1,879
|
|
Amortization of
acquired program intangibles4
|
|
630
|
|
966
|
|
IPO and
transaction-related costs5
|
|
—
|
|
972
|
|
COVID-19 related
costs6
|
|
—
|
|
851
|
|
Share-based
compensation7
|
|
370
|
|
239
|
|
Reorganization
costs8
|
|
65
|
|
153
|
|
Adjusted
EBITDA*
|
|
7,813
|
|
2,746
|
|
|
|
|
|
|
|
* 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 June 30, 2021 as previously reported was $2,780. The
definition of Adjusted EBITDA has been changed to better reflect
the Company's performance.
|
____________________________________
|
1 Change in
value of contingent consideration represents the non-cash expense
associated with certain acquisitions.
|
2 Change in
fair value of the unrealized forward currency contracts.
|
3 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.
|
4
Amortization of program intangibles acquired in business
combinations included in production, distribution and service
costs.
|
5 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.
|
6
Incremental non-recoupable production costs specifically incurred
due to COVID-19.
|
7 Non-cash
expenses associated with share-based compensation granted to
certain officers and employees.
|
8
Restructuring charges primarily related to personnel
costs.
|
(Amounts in thousands
CAD)
|
|
Six months ended
June
30,
|
|
|
2022
|
|
2021
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income
(loss)
|
|
(7,775)
|
|
(13,835)
|
|
Amortization of
property and equipment, right-of-use assets and
other intangible assets
|
|
8,772
|
|
9,528
|
|
Finance costs,
net
|
|
2,552
|
|
3,002
|
|
Income
taxes
|
|
(100)
|
|
587
|
|
EBITDA*
|
|
3,449
|
|
(718)
|
|
|
|
|
|
|
|
Adjustments:
|
|
|
|
|
|
Change in fair value
of convertible debt9
|
|
—
|
|
(4,382)
|
|
Change in fair value
of contingent consideration10
|
|
(6,533)
|
|
266
|
|
Change in fair value
of unsettled forward exchange contracts11
|
|
(482)
|
|
309
|
|
Change in fair value
of other financial liabilities12
|
|
2,791
|
|
1,315
|
|
Gain on settlement of
loans and borrowings13
|
|
—
|
|
(2,334)
|
|
Amortization of
acquired program intangibles14
|
|
1,260
|
|
1,678
|
|
IPO and
transaction-related costs15
|
|
—
|
|
972
|
|
COVID-19 related
costs16
|
|
—
|
|
851
|
|
Share-based
compensation17
|
|
1,007
|
|
2,769
|
|
Reorganization
costs18
|
|
160
|
|
346
|
|
Adjusted
EBITDA*
|
|
1,652
|
|
1,072
|
|
|
|
|
|
|
|
* See "Non-IFRS
Measures"
|
______________________________________
|
9 Change in
fair value of convertible debt represents the non-cash gain on the
conversion of certain debentures issued by the Company.
|
10 Change in
value of contingent consideration represents the non-cash expense
associated with certain acquisitions.
|
11 Change in
fair value of the unrealized forward currency contracts.
|
12 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.
|
13 Non-cash
gain recorded on the settlement of the Company's loans and
borrowings.
|
14
Amortization of program intangibles acquired in business
combinations included in production, distribution and service
costs.
|
15 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.
|
16 Incremental non-recoupable
production costs specifically incurred due to COVID-19.
|
17 Non-cash
expenses associated with share-based compensation granted to
certain officers and employees.
|
18 Restructuring charges primarily
related to personnel costs.
|
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 six months
ended June 30, 2021 as previously reported was $1,129. The
definition of Adjusted EBITDA has been changed to better reflect
the Company's performance.
|
SOURCE Boat Rocker Media Inc.