BRMI Boat Rocker Media Inc

Year End Adjusted EBITDA¹ of $32.6 million and Fourth Quarter Adjusted EBITDA of $7.6 million 

Total Cash of $72.5 million with $37.0 million of Cash Available for Use² and Debt-Free³

TORONTO, March 28, 2024 /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 December 31, 2023 ("fourth quarter" or "Q4") and for the year ended 2023. The Company's consolidated financial statements and accompanying notes and Management's Discussion and Analysis ("MD&A") for the three months and year ended December 31, 2023 and 2022 are available under the Company's profile on SEDAR+ (www.sedarplus.ca). 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

• Full year revenue of $475.4 million versus $304 million in 2022, an increase of 56.2%.
• Full year Adjusted EBITDA of $32.6 million versus $34.6 million, a decrease of 5.8%.
• Revenue of $65.0 million for Q4 2023 versus $111.3 million for Q4 2022, a decrease of 41.6%.
• Adjusted EBITDA of $7.6 million for Q4 2023 versus $17.3 million for Q4 2022, a decrease of 56%.
• Net loss of $26.9 million for full year 2023 versus net income of $1.8 million in 2022. The current year's net loss includes the non-cash goodwill impairment charge of $15.2 million taken in the Company's Unscripted cash generating unit (CGU) in Q3 2023.⁴
• Debt-free with total cash at December 31, 2023 of $72.5 million. $37.0 million of Cash Available for Use*, an increase of $5.5 million from December 31, 2022.

"We're pleased with our full year performance, particularly given the challenging industry environment we've been operating within," said John Young, Chief Executive Officer, Boat Rocker Media. "We completed delivery of our production slate of premium scripted series by the end of 2023 as planned and are now beginning to benefit from the ramp-up in international sales on many of these titles. As anticipated, however, the WGA and SAG-AFTRA strikes of 2023 slowed progress in key areas of our business, and as such we are expecting 2024 to be less representative of the output and earnings we have achieved since going public. With our focus on building for the long-term while maintaining a healthy balance sheet, we are using this year to invest in and secure our future through concentrated content investment, particularly scripted and premium documentary owned IP and streamlining our operations."

Selected Content Highlights

General

• Boat Rocker shows received 49 nominations for the 2024 Canadian Screen Awards across scripted, unscripted, and kids & family. The awards take place at the end of May 2024.
• Extended first-look deal with TeaTime Pictures to continue to develop and produce scripted and unscripted television and digital content. TeaTime was co-founded by Dakota Johnson and Ro Donnelly.
• Extended first-look deal with Bay Mills Studios to continue to develop and produce original television projects. Bay Mills was co-founded by Stephan James (Beacon 23) and Shamier Anderson (Invasion).
• Boat Rocker has a multi-genre content library of approximately 9,700 half hours of owned and third party IP, which it distributes to leading platforms internationally including Netflix, Apple, Roku, Amazon, Disney, Paramount, AMC Networks, BBC, Bell Media, Corus Entertainment, and ITV.

Television

Scripted

• Sci-fi drama series Invasion was renewed for a third season by Apple TV+. The second season spent several months on the platform's top 10 most watched shows list last year.
• American Rust: Broken Justice, as well as the show's first season, starring Jeff Daniels and Maura Tierney, premiered on Amazon Prime in the U.S., UK, Germany, Australia, New Zealand, and Canada on March 28^th, 2024.
• AMC announced Orphan Black: Echoes, starring Krysten Ritter and Keeley Hawes, will premiere in June 2024.
• Following a strong debut on MGM+, the second season of Beacon 23 will premiere on April 7^th, 2024. Boat Rocker also recently sold Beacon 23 season one to Amazon Prime Video, where it premiered on March 15^th, 2024 in Canada, Australia, New Zealand, and Sub-Saharan Africa. Sales were also made to Paramount, Disney & PCCW Media Entertainment for the UK, Ireland, Bulgaria, The Balkans, Macau, and Hong Kong.
• Slip was nominated for two Independent Spirit Awards: Best New Scripted Series and Best Lead Performance in a New Scripted Series for lead and show creator Zoe Lister-Jones.
• Palm Royale, starring Kristen Wiig, Ricky Martin, with Laura Dern, Allison Janney, and extra special guest star Carrol Burnett, premiered on Apple TV+ on March 20^th, 2024.

Unscripted

• War Game, from award-winning directors Jesse Moss and Tony Gerber, had its world premiere at the Sundance Film Festival in January 2024.
• Producing new premium feature documentary Merchants of Joy from director Celia Aniskovich.
• Big Brother season 12 premiered on March 5^th, 2024 on Global Television.
• Intervention Canada premiered on T+E on January 15^th, 2024. The episodes will air as part of the series Intervention on A&E in late 2024.
• Produced The Juno Awards, the 2024 edition of which was held on March 24^th, 2024 in Halifax and broadcast on CBC.
• Dear… Selena Gomez won Best Primetime Program – Special or Movie at the 38^th Annual Imagen Awards.
• Drag Me to Dinner was nominated for both a GLAAD Award for Outstanding Reality Competition Series and a Queerties Award for Best Reality/Docuseries.
• Downey's Dream Cars, starring Oscar-winner Robert Downey Jr., won Best Documentary Series at the 2023 Environmental Media Awards.

Kids and Family

• Dino Ranch won a 2024 Kidscreen Award for Best Holiday or Special Episode: "A Dino-Might Night."
• Olga Da Polga, from the author of Paddington Bear, will be distributed by Boat Rocker globally (excluding the UK).

Representation

• Client Penelope Cruz was nominated for a Screen Actors Guild award for Outstanding Performance by a Female Actor in a Supporting Role in Ferrari.
• Client Skyler Gisondo is set to star in the upcoming DC Studios film Superman: Legacy.
• Client Ralph Macchio will team with Jackie Chan in the latest film in the Karate Kid franchise.
• Forbes' "30 Under 30" (Hollywood & Entertainment) list includes clients Noah Schnapp (Stranger Things) and Lexi Underwood (Little Fires Everywhere).

Selected Financial Information

Financial Review

Revenue for Q4 2023 was $65 million versus $111.3 million in Q4 2022, a decrease of $46.3 million or 41.6%. Revenue for the year ended December 31, 2023 was $475.4 million versus $304.3 million for the same period in 2022, an increase of $171.1 million or 56%. The quarterly variance is owing to the timing of deliveries while the significant rise in the full year period was due to the production and delivery of five scripted series which, on average, generate higher revenues than the Company's other types of content. The Representation segment recorded lower revenues in the quarter than in the same period in 2022 as a result of a significant slowdown in work during the U.S. labour strikes in 2023, while Kids and Family also recorded a decline due to lower content deliveries.

Adjusted EBITDA for the three months ended December 31, 2023 was $7.6 million versus $17.3 million for the same period in Q4 2022. Adjusted EBITDA for the year ended December 31, 2023 was $32.6 million versus $34.6 million in 2022. Strong scripted production deliveries in the full year period drove the Company's Adjusted EBITDA performance, which was offset by weaker performance in Representation and Kids and Family.

Net loss for the three months ended December 31, 2023 was $3.1 million versus net income of $5.7 million for the same period in Q4 2022, a negative variance of $8.8 million. Net loss for the year ended December 31, 2023 was $26.9 million compared to a net income of $1.8 million for the same period in 2022. The negative variance in the year-to-date period reflects the non-cash goodwill impairment charge of $15.2 million taken in the Company's Unscripted CGU in Q3 2023.

Total cash at December 31, 2023 was $72.5 million, of which $37.0 million represents Cash Available for Use.* In full year 2023, Cash Available for Use increased by $5.5 million, primarily attributable to strong margin growth in the Television segment. The Company maintains that Cash Available for Use is the key cash metric used by management. The following table presents the breakdown of cash as at December 31, 2023 and December 31, 2022:

Outlook

Owing to challenging industry-wide trends exacerbated by the 2023 WGA and SAG-AFTRA strikes, the Company anticipates 2024 being a softer year as a result of the delays in new content commissions, renewals, production, and paid development, therefore impacting its overall financial performance. As such, the Company is targeting Adjusted EBITDA* of approximately $20 million for fiscal 2024. However, management believes this downturn will be temporary and that industry conditions should normalize, resulting in production levels at Boat Rocker returning to those more typical of past performance.

Anticipating the improvement of macroeconomic dynamics, Boat Rocker is implementing a content-first strategy with an increased focus on developing owned IP, particularly in scripted television and premium documentary programming, and its exploitation internationally. As part of this strategy, Boat Rocker will also be pursuing more international co-production and completion financing opportunities. These capabilities round out the Company's diversified portfolio, which will continue to include healthy margin service work across scripted, unscripted and kids and family content and steady performance in its Representation segment.

With $37.0 million of Cash Available for Use,* Management intends to assertively invest in content in 2024 in order to seed future growth. At the end of 2023, Boat Rocker's distribution library of owned and third party IP totaled approximately 9,700 half hours.

Boat Rocker's content strategy is supported by sound operational management and a continued focus on prudent cost management across production and corporate. In addition, Boat Rocker's balance sheet remains strong, with no corporate debt** and a healthy cash position.

The Company's expected future performance is based on certain assumptions that are outlined in the Company's annual MD&A dated March 28, 2024, and subject to certain risks as outlined in the Company's Annual Information Form for the year ended December 31, 2023.

Fiscal 2023 Fourth Quarter and Full Year Conference Call

Boat Rocker management will host a conference call to discuss its fiscal fourth quarter and full year financial results at 8:30 a.m. EDT on April 1, 2024.

The audio webcast can be accessed via https://app.webinar.net/3k1y7LamYWX or on the Company's investor relations page at https://www.boatrocker.com/investor-relations/events-and-presentations/default.aspx

Or to participate by phone, dial 416-764-8650 (local) or 888-664-6383 (North American toll-free).

Listeners should access the webcast or call 10-15 minutes before the start time to ensure they are connected.

To access a replay of the call, dial 416-764-8677 (Local) or 1-888-390-0541 (North America), entry code 247093#. The replay will be available until midnight EST on April 8, 2024.

About Boat Rocker

Boat Rocker (TSX: BRMI) is the home for creative visionaries. An independent, integrated global entertainment company, our 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 and 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+), Palm Royale (Apple TV+), American Rust: Broken Justice (Prime Video), Beacon 23 (MGM+), Pretty Baby: Brooke Shields (Hulu), Downey's Dream Cars (Max), BS High (HBO), 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, Corus, 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, Adjusted EBITDA Margin, Cash Available for Use, Cash Required for Use in Productions, Free Cash Flow and Free Cash Flow Attributable to Owners of the Company.

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 before certain expenses, costs, charges or benefits incurred in the period which in management's view are not indicative of continuing operations, including: 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, professional and consulting fees relating to non-core operating activities, 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, unrealized gains or losses on foreign exchange, unrealized gains or losses on forward currency contracts, and other costs not indicative of the Company's core operating results. Adjusted EBITDA is used by management as a measure of the Company's operating performance.

Adjusted EBITDA Margin is defined as Adjusted EBITDA divided by revenue, expressed as a percentage.

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.

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 28, 2024. 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, 2023 and in its annual MD&A dated March 28, 2024. 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 table presents the reconciliation from net income (loss) to Adjusted EBITDA for the three months ended December 31, 2023 and 2022:

The following table presents the reconciliation from net income (loss) to Adjusted EBITDA* for the year ended December 31, 2023 and 2022:

SOURCE Boat Rocker Media Inc.