Boat Rocker Media Reports First Quarter 2022 Financial Results

Over 40 shows in production in Q1 2022
Reaffirms Full-Year 2022 Adjusted EBITDA Guidance

TORONTO, May 12, 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 March 31, 2022 ("first quarter" or "Q1"). The Company's consolidated financial statements and accompanying notes and Management's Discussion and Analysis ("MD&A") for the  three months ended March 31, 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 $46.8 million compared with $52.5 million in Q1 2021.
• Adjusted EBITDA¹ loss of $6.2 million compared with a loss of $1.7 million in Q1 2021.
• Net loss of $12.3 million compared with net loss of $5.0 million in Q1 2021.
• Over 40 shows in production in Q1 2022 across Scripted, Unscripted and Kids and Family
• Debt-free² with total cash at March 31, 2022 of $84.4 million.

"We started fiscal 2022 with high levels of activity across the business. In Q1 we were in various stages of production on over 40 shows with numerous greenlights yet to be announced. With six confirmed premium scripted series on our 2022 production slate, a significant increase over 2021, our Studio output is shaping up to be very strong," said John Young, Chief Executive Officer of Boat Rocker. "Our Q1 results reflect our continued investment in our content slate, in particular in our owned scripted series that we intend to distribute and which we expect will commence delivery in the second half of the year.   As in 2021, we expect results in the second half of the year will more fully reflect our enhanced scale and strong production slate. For the full year, as previously disclosed, we expect growth over last year, with Adjusted EBITDA of $40-$50 million, as we invest in further growing the business against a backdrop of continued overall demand for content."

Selected Operational Highlights

Boat Rocker continues to see high overall activity levels across its three reporting segments: Television, Kids and Family, and Representation. All segments showed significant growth in 2021. For 2022, the Company is producing high-quality scripted, unscripted, and animation titles for major buyers around the world including Netflix, Apple TV+, HBO Max, AMC, The Roku Channel, Nickelodeon, and Discovery+, as well as key domestic providers including CTV, CBC, and Global.  

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1 See "Non-IFRS" measures 2 The Company currently has no corporate term debt, only interim production financing in the ordinary course of operations.

Recent highlights include:

Television

• Orphan Black: Echoes, the highly anticipated spin-off series of international hit show Orphan Black, has been greenlit by AMC for an initial 10-episode order. This premium scripted drama is slated to begin principal photography in summer 2022 and is anticipated to air on AMC in 2023 and be distributed internationally by Boat Rocker.
• Beacon 23 began production in Toronto in April; the sci-fi drama starring Lena Headey and Stephan James for AMC and Spectrum. Boat Rocker plans to distribute the show internationally.
• Slip, created by and starring Zoe Lister-Jones (Life in Pieces), began shooting in Toronto in April; the comedy-drama series is produced in partnership with Dakota Johnson's TeaTime Pictures for The Roku Channel. Boat Rocker plans to distribute the show internationally.
• Unscripted production pod Maven continues to build its production slate with a new greenlight from Roku for The Marriage Pact, an eight-episode series that shows audiences what really happens when single friends must follow through with marriage pacts that they established with one another.
• The Amazing Race Canada season eight has resumed production after COVID-19-related delays in 2020 and is expected to air Summer 2022 on CTV. According to CTV, the show has consistently ranked as Canada's most watched summer series each year it has aired.
• The immense popularity of The Great Canadian Baking Show continues, with the sixth season currently in production for CBC.
• The Great Canadian Baking Show spin-off series, Raufikat's Better Bake Along, premiered on CBC Gem on March 25^th.
• Wall of Bakers, a spin-off of Boat Rocker's series, Wall of Chefs, premiered on March 28^th on Food Network Canada.
• Recent unscripted shows premiering or airing include:
• Love Match Atlanta, a new docu-series that follows the personal and professional lives of five Atlanta matchmakers, premiered on May 8^th on Bravo.
• Love in the Jungle, a new competition dating series, premiered on May 8^th on Discovery+.
• The 2022 Juno Awards will air live from Budweiser Stage in Toronto on May 15^th, featuring performances by Arcade Fire, Arkells, Avril Lavigne, Charlotte Cardin and Mustafa and will be hosted by Simu Liu.
• Big Brother Canada Season 10 is currently airing on Global Monday, Wednesday and Thursday nights.

Kids & Family

• For the 5^th consecutive quarter since its launch, Dino Ranch remains the #1 preschool U.S. cable show for kids aged two to five in its time slot. In Q1 2022, the hit show racked up 9.6 million viewed hours.
• Season one of Dino Ranch continues its international expansion, launching on Tiny Pop in the UK on April 2^nd.
• Long-running international hit series The Next Step wrapped production on its eighth season. Boat Rocker secured pre-sales for the show from CBBC for UK rights and Corus Entertainment for YTV in Canada. Boat Rocker has sold season eight to HBO Max in US, along with seasons five, six, and seven. ABC Australia also acquired season eight for ABC ME.
• Announced development of a new animated series Stuffed, based on Erik McCurdy's beloved comic series, which has amassed hundreds of thousands of followers on social media since its launch in 2018.

Representation

• Dakota Johnson (BRM is also partnered with her company TeaTime) cast to star in Madame Web in the Sony-Marvel Spider-Man spin-off
• Laura Dern attached to Mrs. American Pie comedy series at Apple TV Plus (Boat Rocker producing)
• Uma Thurman to produce and co-star with Sam Jackson in crime thriller The Kill Room (Untitled Entertainment and Thurman to produce)

COVID-19 Pandemic Update

Boat Rocker continues to face challenges as a result of the COVID-19 pandemic, including the possible interruption of live action productions as a result of illness amongst key cast or crew. Boat Rocker has instituted and continues to maintain health and safety procedures aimed to limit the spread of COVID-19 amongst its cast and crews. However, with the easing of restrictions in the jurisdictions in which the Company operates, the risk of exposure to the virus remains high and is difficult for the Company to fully mitigate. Demand for content has been sustained through the COVID-19 pandemic and management expects this trend will continue based on both industry analysts' expectations and its own experience with  content buyers.

Selected Financial Information

(Amounts in thousands CAD)	Three months ended March 31,
	2022	2021	% change
Revenue
Television	18,753	30,554	(39) %
Kids and Family	19,503	12,467	56 %
Representation	8,593	9,473	(9) %
Total revenue	46,849	52,494	(11) %
Net income (loss)	(12,332)	(5,016)	(146) %
Adjusted EBITDA*	(6,161)	(1,673)	(268) %

* See "Non-IFRS Measures"

Financial Review

Revenue for the three months ended March 31, 2022 was $46.8 million compared with $52.5 million for the same period of 2021, a decrease of $5.6 million or 11%. While revenue decreased in both the Television and Representation segments, revenue in the Kids and Family segment increased. The variances are primarily due to the timing of delivery of productions.

Adjusted EBITDA* loss for the three months ended March 31, 2022 was $6.2 million compared with a loss of $1.7 million for the same period of 2021. The decrease in Adjusted EBITDA* was predominantly driven by lower segment profit in Television owing to a higher volume of content deliveries in the prior year period, as well as a lower segment profit in Representation, partially offset by a higher segment profit in Kids and Family. In addition, excluding share-based compensation expense, general and administrative costs in Corporate and Shared Services were higher due to an increase in personnel and overhead costs incurred by the Company as part of becoming a publicly listed company.

Net loss for the three months ended March 31, 2022 was $12.3 million, compared with a net loss of $5.0 million in the same period of 2021, a variance of $7.3 million.

Total cash at March 31, 2022 was $84.4 million, of which $29.3 million represents Cash Available for Use*. The following table presents the breakdown of cash as at March 31, 2022 and December 31, 2021:

(Amounts in thousands CAD)	March 31, 2022		December 31, 2021		% change
Cash Available for Use*	$           29,295		$           57,247		(49)%
Cash Required for Use in Productions*	55,111		39,703		39%
Total cash, net of restricted cash	$           84,406		$           96,950		(13)%

*Adjusted EBITDA, Cash Available for Use and Cash Required for Use in Productions are non-IFRS measures. See "Non-IFRS Measures" below.

Outlook

In 2022, management continues to expect Adjusted EBITDA growth and margin expansion. It expects full-year Adjusted EBITDA to be in the range of $40 to $50 million, which would represent approximately 25% - 60% growth from the $31.6 million generated in 2021. Factors expected to contribute to these increases include growth in each segment, greater revenue from consumer products, which is expected to contribute to higher margins, and further synergies attributable to Boat Rocker's enhanced scale.

The Company's delivery schedules vary from period to period, with shows being ordered, produced and delivered at all times during the year and not necessarily on the same annual cycle from year to year. On that basis, quarter over quarter comparisons are less meaningful to the Company than annual results, and often production deliveries can move across year ends. For 2022, as in 2021, the Company expects financial results to significantly improve in the second half of the year, supported principally by a growing number of greenlights and anticipated deliveries. Boat Rocker remains focused on annual Adjusted EBITDA as the most important measure of the Company's performance, as well as 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 Annual Information form dated March 31, 2022.

Management expects industry tailwinds to remain strong throughout 2022. With its diverse and scaled content creation engine and long track record of successfully delivering multi-genre content at all budget levels to the world's leading platforms, Boat Rocker believes that it is well positioned to capitalize on positive market trends. Operating in this dynamic setting, Boat Rocker will seek to continue to scale and enhance its capabilities as a next generation entertainment company for the years ahead.

Fiscal 2022 First Quarter Conference Call

Boat Rocker management will host a conference call to discuss its fiscal first quarter financial results at 8:30 a.m. EDT on May 12, 2022. To participate in the call, dial [phone] or [phone] (using the conference ID 67440548). 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+), American Rust (Showtime), 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, 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 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 dated March 31, 2022. 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 of 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 financial 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 months ended March 31, 2022 and 2021:

(Amounts in thousands CAD)		Three months ended March 31,
		2022		2021
Net income (loss)		(12,332)		(5,016)
Amortization of property and equipment, right-of-use assets and    other intangible assets		4,359		4,679
Finance costs, net		1,236		2,275
Income taxes		(752)		(137)
EBITDA*		(7,489)		1,801
Adjustments:
Change in fair value of convertible debt1		—		(4,382)
Change in fair value of contingent consideration2		—		127
Change in fair value of unsettled forward exchange contracts3		(1,349)		243
Change in fair value of other financial liabilities4		1,315		(564)
Gain on settlement of loans and borrowings5		—		(2,334)
Amortization of acquired program intangibles6		630		712
Share-based compensation7		637		2,531
Reorganization costs8		95		193
Adjusted EBITDA*		(6,161)		(1,673)

* 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 March 31, 2021 as previously reported was a loss of $1,650. The definition of Adjusted EBITDA has been changed to better reflect the Company's performance.

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1 Change in fair value of convertible debt represents the non-cash gain on the conversion of certain debentures issued by the Company

2 Change in value of contingent consideration represents the non-cash expense associated with certain acquisitions

3 Change in fair value of the unrealized forward currency contracts.

4 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 liabilities associated with certain acquisitions

5 Non-cash gain recorded on the settlement of the Company's loans and borrowings

6 Amortization of program intangibles acquired in business combinations included in production, service and distribution expense

7 Includes non-cash expenses associated with share-based compensation granted to certain officers and employees

8 Restructuring charges primarily related to personnel costs

 

SOURCE Boat Rocker Media Inc.

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