Selected Financial Highlights
- Revenue of
$79.8 million for Q1 2023 versus$46.8 million for Q1 2022, an increase of 70%. - Adjusted EBITDA1 loss of
$2.0 million for Q1 2023 versus a loss of$6.2 million for Q1 2022, an improvement of 67%. - Net loss of
$9.5 million for Q1 2023 compared to a loss of$12.3 million for Q1 2022, an improvement of$2.8 million . - Debt-free2 with total cash at
March 31, 2023 of$70.5 million .
"The year got off to a solid start as we generated improved revenue and Adjusted EBITDA performance over the prior year period," said
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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 the Company's MD&A for the three months ended |
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. Television, in particular, saw 190% year over year revenue growth. For 2023, 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 Q1 Boat Rocker had 33 shows in various stages of production.
Recent highlights include:
General
- Boat Rocker productions won a total of eight Canadian Screen Awards, which were presented during the first week of April.
Television
- Partnered with
Stephan James andShamier Anderson's Bay Mills Studios , with whom Boat Rocker has a first-look deal, on developing a new scripted series titledChristopher Robin . - Slip, created, directed by and starring
Zoe Lister-Jones , premiered on The Roku Channel onApril 21 st and is receiving widespread critical acclaim. - Production on season two of premium scripted drama American Rust, starring
Jeff Daniels andMaura Tierney , for Amazon Freevee wrapped production inPennsylvania . Pretty Baby :Brooke Shields premiered onApril 3rd and wasABC News' most watched program to ever debut on Hulu.BS High , a new premium documentary forHBO , was accepted into the prestigiousTribeca Film Festival inNew York City . The film will premiere at the festival onJune 14th .- Season two of Lost Car Rescue premiered on
The History Channel and STACKTV. - Boat Rocker's three unscripted shingles (Matador Content,
Insight Productions , and Proper Television) were included in the Realscreen Global 200 list. The annual list names the world's top production companies working in non-fiction and unscripted content.
Kids & Family
- New distribution deals across the EMEA and APAC regions for season two of
Dino Ranch were announced;Dino Ranch is now available to view in more than 170 countries worldwide. - The Next Step season 8 was nominated for the 2023 Shaw Rocket Fund Kids' Choice Award. In addition, the season received three Canadian Screen Award nominations including Best Children's or Youth Fiction Program or Series.
Representation
- Five
Untitled Entertainment clients were nominated for Tony Awards, with the awards set to be presented in June. - Downtown Owl, a dark comedy based on the novel by
Chuck Klosterman , has been slated for theTribeca Film Festival in June. The film marks the directorial debut for Untitled clientHamish Linklater , stars Untitled clientVanessa Hudgens and was produced by Untitled in partnership withLaura Rister . - Untitled client
Abubakar Salim was cast in Season 2 ofHBO's House of the Dragon .
Selected Financial Information
(Amounts in thousands CAD) | Three months ended | ||
2023 | 2022 | % change | |
Revenue | |||
Television | 54,460 | 18,753 | 190 % |
Kids and Family | 15,671 | 19,503 | (20) % |
Representation | 9,629 | 8,593 | 12 % |
Total revenue | 79,760 | 46,849 | 70 % |
Net income (loss) | (9,474) | (12,332) | 23 % |
Adjusted EBITDA* | (2,049) | (6,161) | 67 % |
Financial Review
Revenue for Q1 2023 was
Adjusted EBITDA* for Q1 2023 was a loss of
Net loss for the three months ended
The Company generated positive cash provided by operating activities due to increased collection from receivables and increased deferred revenue, however, Free Cash Flow* in the three months ended
The following table presents the reconciliation from cash used in operating activities to Free Cash Flow* and Free Cash Flow Attributable to Owners of the Company for the quarters ended March 31, 2023 and 2022:
(Amounts in thousands CAD) | Three months ended | |||||||
2023 | 2022 | $ change | % change | |||||
Cash provided by (used in) operating activities | $ 19,508 | $ (32,525) | $ 52,033 | 160 % | ||||
Proceeds from interim production financing | 38,479 | 36,257 | 2,222 | 6 % | ||||
Repayments of interim production financing | (68,444) | (11,080) | (57,364) | (518) % | ||||
Repayment of lease liabilities | (1,979) | (1,801) | (178) | (10) % | ||||
Acquisition of property and equipment | (355) | (488) | 133 | 27 % | ||||
Free Cash Flow* | $ (12,791) | $ (9,637) | $ (3,154) | (33) % | ||||
Less: distributions to non-controlling interest shareholders | (2,457) | (1,489) | (968) | (65) % | ||||
Free Cash Flow Attributable to Owners of the Company* | $ (15,248) | $ (11,126) | $ (4,122) | (37) % |
Total cash at
(Amounts in thousands CAD) | $ change | % change | |||||
Cash Available for Use* | $ 24,522 | $ 31,524 | $ (7,002) | (22) % | |||
Cash Required for Use in Productions* | 45,977 | 54,270 | (8,293) | (15) % | |||
Total cash | $ 70,499 | $ 85,794 | $ (15,295) | (18) % |
*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 Fourth Quarter 2022 Management's Discussion and Analysis. |
Outlook
Boat Rocker expects to deliver improving financial performance again in 2023 as it anticipates delivering the balance of all episodes of the seven premium scripted shows that it commenced producing in 2022 and targets modest Adjusted EBITDA growth over the prior year. However, management is mindful of the current and near-term headwinds, including the
With pro-active cost management of general and administrative expenses and strong discipline on investment spending, Boat Rocker anticipates it will continue to invest in owned IP and grow its content library, while generating positive free cash flow and remaining debt free** in 2023.
With its multi-genre content creation engine and long track record of successfully delivering 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 sustained demand for high quality programming.
The Company's expected performance in 2023 is based on certain assumptions that are outlined in the Company's annual MD&A dated
*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 Fourth Quarter 2022 Management's Discussion and Analysis. |
**Other than interim production financing (including through two borrowing base facilities) in the ordinary course of operations |
Fiscal 2023 First Quarter Conference Call
Boat Rocker management will host a conference call to discuss its fiscal first quarter financial results at
To rapidly join the call without operator assistance please visit
https://emportal.ink/41oKIb4.
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
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 gain or loss on forward currency contracts, and other costs not indicative of the Company's core operating results. 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.
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.
Free Cash Flow is defined as cash flow provided by or used in operations adjusted for proceeds and repayment of interim production financing, repayment of lease liabilities and cash used to purchase property and equipment. Free Cash Flow is a key metric used by the management that measures the Company's ability to repay debt, finance strategic business acquisitions and investments, pay dividends and repurchase shares.
Free Cash Flow Attributable to Owners of the Company is defined as Free Cash Flow less distributions made to non-controlling interests. Distributions to non-controlling interests are made out of the operating cash flows of the consolidated entities that contain the non-controlling interests, and accordingly management believes that deducting these cash outflows from Free Cash Flow is an important measure when considering Free Cash Flow available to shareholders of the Company.
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
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
(Amounts in thousands CAD) | Three months ended | |||
2023 | 2022 | |||
Net income (loss) | (9,474) | (12,332) | ||
Amortization of property and equipment, right-of-use assets and other intangible | 3,761 | 4,359 | ||
Finance costs, net | 1,556 | 1,236 | ||
Income taxes | (161) | (752) | ||
EBITDA* | (4,318) | (7,489) | ||
Adjustments: | ||||
Change in fair value of unsettled forward exchange contracts1 | (273) | (1,349) | ||
Change in fair value of other financial liabilities2 | 1,537 | 1,315 | ||
Amortization of acquired program intangibles3 | 365 | 630 | ||
COVID-19 related costs4 | 129 | — | ||
Share-based compensation5 | 274 | 637 | ||
Reorganization costs6 | 237 | 95 | ||
Adjusted EBITDA* | (2,049) | (6,161) |
* See "Non-IFRS Measures" |
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1 Change in fair value of the unrealized forward currency contracts. |
2 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. |
3 Amortization of program intangibles acquired in business combinations included in production, distribution and service costs. |
4 Incremental non-recoupable production costs specifically incurred due to COVID-19. |
5 Non-cash expenses associated with share-based compensation granted to certain officers, directors and employees. |
6 Restructuring charges primarily related to personnel costs. |
SOURCE
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