Boat Rocker Media Reports Strong Q3 2021 Financial Results

Record Quarter with 161% Revenue Increase and 91% Adjusted EBITDA Increase

TORONTO, Nov. 10, 2021 /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, 2021 ("third quarter" or "Q3"). The Company's unaudited interim consolidated financial statements and accompanying notes and Management's Discussion and Analysis ("MD&A") for the three and nine months ended September 30, 2021 and 2020 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

• Total revenue of $203.3 million in Q3 2021 compared with $78.0 million in Q3 2020, an increase of 161%, and $317.9 million year-to-date versus $171.2 million in the same period of 2020, an increase of 86%.
• Growth for the year-to-date period was driven by increases in revenue of 128% and 44% in the Television and Representation segments respectively.
• Adjusted EBITDA of $11.5 million in Q3 2021 versus $6.0 million in Q3 2020, an increase of 91%, and $12.7 million year-to-date versus $6.0 million in the same period of 2020, an increase of 110%.
• Net loss of $1.8 million in Q3 2021 compared with $23.0 million in Q3 2020 and $15.6 million year-to-date versus $43.5 million in the same period of 2020.
• Debt-free¹ with total cash at September 30, 2021 of $122.9 million.
  

"In the third quarter, Boat Rocker delivered significantly improved financial performance, generating nearly as much revenue as we did in all of 2020," said John Young, Chief Executive Officer of Boat Rocker. "This top-line growth resulted in strong Adjusted EBITDA, highlights our expanded scale, and showcases our ability to produce high-quality, multi-genre content, including big-budget shows for major content buyers, and brands with global appeal. With the ongoing delivery of our premium scripted series   American Rust for Showtime and Invasion for Apple TV+, confirmed and anticipated renewals on other titles, and continued industry tailwinds, we expect to maintain our strong momentum through the fourth quarter of 2021 and into 2022."

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1	The Company currently has no corporate term debt, only interim production financing in the ordinary course of operations.

Selected Operational Highlights

In 2021, Boat Rocker is delivering a material step-up in its financial performance and content creation  across its three reporting segments: Television, Kids & Family, and Representation. All segments are showing significant revenue growth in both the quarter and year-to-date periods. The Company's 2021 production slate now spans more than 60 high-quality scripted, unscripted, and animation titles for nearly every major buyer around the world including Netflix, Apple TV+, Amazon Prime, HBO Max, Peacock, TBS, Disney, ViacomCBS, Discovery + and, this quarter, includes new relationships with HBO Sports, E!, and Snapchat.

Recent highlights include:

Television

• Delivered four episodes of American Rust, starring Emmy award-winner Jeff Daniels and Maura Tierney, which premiered on September 12^th on Showtime.
• Delivered three episodes of the highly anticipated sci-fi drama series Invasion from Simon Kinberg (X-Men franchise, Deadpool), which premiered on October 22^nd on Apple TV+.
• Casting of Stephan James (If Beale Street Could Talk, Homecoming) in Beacon 23 for Spectrum/AMC, starring Lena Headey (Game of Thrones), with showrunner Zak Penn. Production is expected to begin in January in Toronto.
• Announced four high-profile development deals with leading creative talent, namely:
• Shamier Anderson (Invasion, Bruised, John Wick: Chapter 4) and Stephan James (If Beale Street Could Talk, Homecoming, Beacon 23) to develop and produce original television projects under their Bay Mills Studios banner.
• Indie film and television producer Stephanie Langhoff (HBO's Togetherness, The Skeleton Twins, Safety Not Guaranteed) and her newly launched production company, High Tide Productions, to develop television, digital projects, and feature films.
• Cleve Keller and Dave Noll, the veteran, award-winning creative producers behind more than 50 television series, including the Chopped franchise, to develop and produce original unscripted programming.
• Award-winning producer and director, Scott Weintrob, the founder of creative studio LARGE EYES, to develop and produce original multi-genre content.
• Partnered with Michael Strahan, NFL Hall of Famer and host of Good Morning America, and Adam McKay's Hyperobject Industries (HBO's Succession), on a new documentary about the Bishop Sycamore high school football scandal for HBO Sports.
• Maven, a new Boat Rocker pod, is in production on Addison Rae Goes Home for Snapchat's new originals slate. Social media sensation Addison Rae is the third most followed person on TikTok globally, with more than 85.6 million followers.
• The Kids Tonight Show, produced in partnership with Jimmy Fallon for Peacock, premiered October 12^th and features a slew of celebrity guests including Matthew McConaughey, Meghan Trainor and Kristen Bell.

Kids & Family

• Hit series Dino Ranch maintained its ranking as the #1 preschool U.S. cable show for Kids 2-5 in its time slot and will now be airing during prime time on Disney Junior.
• Dino Ranch's global retail roll-out commenced with a range of toys now available in the U.S. on e-retailers Walmart.com, Target.com, and Amazon. Toys are also available in-store at multiple U.S. retailers including Kohl's, Meijer, and Fred Myer and at CVS starting next month. In Australia, toys have launched exclusively with Big W and in Canada, toys will be available exclusively at Toys "R" Us in November. A mass roll-out in the U.K. is anticipated in spring 2022, with European markets following later in the year.
• Global demand for Dino Ranch continues to grow, with the first season now selling to more than 150 countries worldwide.
• A Tale Dark & Grimm, based on the best-selling book by Adam Gidwitz, debuted as the #3 Netflix Kids show in the U.S. (#7 in Canada) since its premiere on October 8. It has since become one of the top 10 shows on Netflix in the U.S. across all genres.
• Inside Job, a new Netflix animation series starring Lizzy Caplan and Christian Slater, has consistently been in the Top 10 shows on Netflix in Canada and the U.S. since it premiered October 22^nd.
• Production continued on a large slate of programming for major global platforms including The Loud House (Nickelodeon), Final Space (TBS, HBO Max), We Lost Our Human (Netflix), Get Even (CBBC), and Amber Brown (Apple TV+).

Representation

• Untitled Entertainment clients won two Emmy awards: Jean Smart for Outstanding Lead Actress in a Comedy Series for Hacks (HBO Max) and Julianne Nicholson for Outstanding Supporting Actress in a Limited Or Anthology Series Or Movie for Mare of Easttown (HBO). Clients Renée Elise Goldsberry and Leslie Odom Jr. were featured in Hamilton (Disney+), the Emmy winner for Outstanding Variety Special.
• Untitled Entertainment client Mary-Louise Parker won a Tony Award for Best Performance by an Actress in a Leading Role in a Play for The Sound Inside.
  

COVID-19 Pandemic Update

The COVID-19 pandemic continued to impact Boat Rocker's financial results for the quarter ended September 30, 2021 although much less so than in 2020 when the content production industry experienced a temporary pause on live-action production. Live-action production continued in Q3 2021 and the Company's animation teams continued to successfully work remotely to produce and deliver content. Although rising vaccination rates have led to lower COVID-19 case counts in the majority of the jurisdictions in which the Company operates, uncertainty remains and the global entertainment industry as a whole continues to experience the ongoing effects of the pandemic, including incremental costs, lack of affordable insurance coverage in the event of COVID-related claims, and supply chain disruptions affecting production and delivery of merchandise related to entertainment brands. Some of the Company's shows that have delivered or are expected to deliver in the second half of 2021 also incurred certain COVID-related costs in excess of budgeted amounts that could not have been anticipated when the budgets were finalized pre-pandemic and which will not be covered by the broadcasters of those series or by insurance proceeds.

Selected Financial Information

(in thousands of Canadian dollars except per share amounts) (unaudited)	Three months ended September 30,
	2021		2020		% change
Revenue
Television	166,930		49,429		238	%
Kids and Family	27,191		23,538		16	%
Representation	9,211		5,042		83	%
Total revenue	203,332		78,009		161	%
Net loss	(1,758)		(22,990)		92	%
Adjusted EBITDA*	11,536		6,034		91	%

(in thousands of Canadian dollars except per share amounts) (unaudited)	Nine months ended September 30,
	2021		2020		% change
Revenue
Television	239,153		105,047		128	%
Kids and Family	51,501		47,158		9	%
Representation	27,260		18,984		44	%
Total revenue	317,914		171,189		86	%
Net loss	(15,593)		(43,544)		64	%
Adjusted EBITDA*	12,665		6,019		110	%

* See "Non-IFRS Measures"

Financial Review

Revenue for Q3 2021 was $203.3 million versus $78.0 million in the third quarter of 2020, an increase of $125.3 million or 161%, driven by the Television and Representation segments. Revenue for the nine months ended September 30, 2021 was $317.9 million compared with $171.2 million for the same period of 2020, an increase of $146.7 million or 86%. While revenue increased in all segments, production revenue in the Television segment rose by 128% due to a higher volume of content delivered in 2021 versus 2020, principally driven by two premium scripted series, American Rust and Invasion.

Adjusted EBITDA for Q3 2021 was $11.5 million compared with $6.0 million for the same period of 2020, an increase of 91%. This growth was largely driven by an increase in production revenue associated primarily with the delivery of episodes of American Rust and Invasion. Adjusted EBITDA for the nine months ended September 30, 2021 was $12.7 million compared with $6.0 million for the same period of 2020, an increase of 110%. Adjusted EBITDA is a non-IFRS measure. See "Non-IFRS Measures" below.

Net loss for Q3 2021 was $1.8 million, compared with $23.0 million in the same period of 2020, an improvement of $21.2 million. Net loss for the nine months ended September 30, 2021 was $15.6 million, compared with $43.5 million in the same period of 2020, an improvement of $28.0 million. The year-over-year change is attributable to certain non-cash expenses recognized in 2020, including an impairment to Goodwill, for which there were no comparable amounts in the current period.

Total cash at September 30, 2021 was $122.9 million, of which $54.3 million represents Cash Available for Use*. Boat Rocker's Initial Public Offering ("IPO") raised gross proceeds of $170.1 million and the Company used $90.5 million of the net proceeds from the IPO to repay all of its term debt under its corporate credit facility. The following table presents the breakdown of cash as at September 30, 2021 and December 31, 2020:

(Amounts in thousands CAD)	September 30, 2021				December 31, 2020				% change
Cash Available for Use*	$	54,331			$	32,162			69%
Cash Required for Use in Productions*	68,520				39,592				73%
Total cash	$	122,851			$	71,754			71%

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

Outlook

Boat Rocker is delivering a material step-up in its top-line performance in 2021, reporting an 86% revenue increase in the nine months ended September 30, 2021 compared to the same period last year. Revenue has increased in all three of the Company's segments, with Television and Representation  growing by approximately 128% and 44% for the year-to-date period, respectively. The Company's full year 2021 revenue expectations remain unchanged, representing an expected increase of more than two and a half times over 2020 revenue.

Boat Rocker has increased its Adjusted EBITDA each quarter in 2021, and expects this trend to continue in the fourth quarter. Given the underlying strength of the business and its projected growth over 2020 results, management expects 2021 Adjusted EBITDA to be in the range consistent with the original guidance provided in the Company's IPO prospectus. Management remains focused on Adjusted EBITDA as it believes this metric is the most important measure of the Company's performance.

Moving through the balance of the year, Boat Rocker will continue to deliver exceptional content, build original brands and franchises that resonate with audiences worldwide, and expand its commercial and creative capabilities. The Company sees continued global demand for premium content. Boat Rocker remains focused on bolstering its platform and strengthening its bottom line though a unique mix of revenues across its operating segments and a strong balance sheet, which provides optionality for future growth. The Company expects to maintain its strong momentum through the fourth quarter of 2021 and into 2022.

Fiscal 2021 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 10, 2021. To participate in the call, dial [phone] or [phone] (using the conference ID 19836448). 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, Net Cash, 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 and convertible debt, change in fair value of 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 and gain or loss on sale of assets. Adjusted EBITDA is used by management as a measure of the Company's profitability. 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 final prospectus. 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, 2021 and in the Company's annual MD&A of the same date. 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 and nine months ended September 30, 2021 and 2020:

(Amounts in thousands CAD)			Three months ended September 30,
			2021			2020
Net income (loss)			(1,758)			(22,990)
Amortization of property and equipment, right-of-use assets and other intangible assets			4,457			4,736
Finance costs, net			842			2,404
Income taxes			601			1,598
EBITDA*			4,142			(14,252)
Adjustments:
Change in fair value of convertible debt2			—			1,477
Change in fair value of contingent consideration3			132			—
Change in fair value of financial assets4			(117)			—
Change in fair value of other financial liabilities5			1,741			1,882
Loss on modification of loans and borrowings6			—			342
Amortization of acquired program intangibles7			972			719
IPO and transaction-related costs8			—			429
COVID-19 related costs9			3,800			—
Share-based compensation10			792			2,478
Goodwill impairment11			—			12,959
Reorganization costs12			74			—
Adjusted EBITDA*	—		11,536			6,034
* See "Non-IFRS Measures"

2	Change in fair value of convertible debt represents the non-cash gain on the conversion of certain debentures issued by the Company
3	Change in value of contingent consideration represents the non-cash expense associated with certain acquisitions
4	Change in fair value of financial assets represents the non-cash (income) expense on certain financial assets held by the Company
5	Change in fair value of other financial liabilities represents the non-cash expenses on certain put options and accretion on liabilities associated with certain acquisitions
6	Non-cash loss recorded on the modification of the Company's loans and borrowings
7	Amortization of program intangibles acquired in business combinations included in production, service and distribution expense
8	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
9	Incremental non-recoupable production costs specifically incurred due to COVID-19
10	Includes non-cash expenses associated with share-based compensation granted to certain officers and employees
11	Impairment of goodwill associated with the Unscripted cash generating unit
12	Restructuring charges primarily related to personnel costs

(Amounts in thousands CAD)			Nine months ended September 30,
			2021			2020
Net income (loss)			(15,593)			(43,544)
Amortization of property and equipment, right-of-use assets and other intangible assets			13,985			13,817
Finance costs, net			3,844			7,860
Income taxes			1,188			620
EBITDA*			3,424			(21,247)
Adjustments:
(Gain on settlement) loss on modification of loans and borrowings13			(2,334)			342
Change in fair value of convertible debt14			(4,382)			1,477
Change in fair value of contingent consideration15			398			880
Change in fair value of financial assets16			249			—
Change in fair value of other financial liabilities17			3,056			5,474
Amortization of acquired program intangibles18			2,650			2,208
IPO and transaction-related costs19			972			714
COVID-19 related costs20			4,651			—
Share-based compensation21			3,561			3,020
Goodwill impairment22			—			12,959
Reorganization costs23			420			192
Adjusted EBITDA*	—		12,665			6,019
* See "Non-IFRS Measures"

13	Non-cash (gain) loss recorded on the modification (settlement) of the Company's loans and borrowings
14	Change in fair value of convertible debt represents the non-cash gain on the conversion of certain debentures issued by the Company
15	Change in value of contingent consideration represents the non-cash expense associated with certain acquisitions
16	Change in fair value of financial assets represents the non-cash expense on certain financial assets held by the Company
17	Change in fair value of other financial liabilities represents the non-cash expenses on certain put options and accretion on liabilities associated with certain acquisitions
18	Amortization of program intangibles acquired in business combinations included in production, service and distribution expense
19	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 operations
20	Incremental non-recoupable production costs specifically incurred due to COVID-19
21	Includes non-cash expenses associated with share-based compensation granted to certain officers and employees
22	Impairment of goodwill associated with the Unscripted cash generating unit
23	Restructuring charges primarily related to personnel costs

 

SOURCE Boat Rocker Media Inc.

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