Record Revenues and Rigorous Cost Controls Resulted in 29% Adjusted EBITDA Improvement. The Company Exited 2023 with
TORONTO,
FY 2023 Financial Highlights
- Full-year 2023 revenue increased by
$1.5 million , or 11% relative to the prior year, to a record$15.7 million ,. This growth was driven by strong growth inLeague Revenues . - Operating Expenses decreased by
$3.2 million or 13% to$22.4 million relative to the prior year due to reduced corporate payroll expenses and lower team operating costs. - Adjusted EBITDA lossi improved by 29% to
$6.2 million relative to the prior year. - As at
December 31, 2023 the Company had cash and cash equivalents of$13.9 million , compared with$13.5 million as atDecember 31, 2022 .
Selected 2023 Achievements
- OverActive was awarded its second Gold Medal at the Sponsorship Marketing Awards for our
Toronto Ultra hosted Call of Duty Major. - OverActive was named to the
Glory Power 50 list ofCanada's most impactful companies alongside OVO, Lululemon and Shopify. - The Company's
MAD Lions League of Legends EMEA Championship team were the LEC Spring Split Champions, was one of only two LEC teams to qualify for the Mid-Season Invitational tournament, and one of only four LEC teams to qualify for theLeague of Legends World Championship . - OverActive's
Toronto Ultra won the Call of Duty Major III Championship inArlington, TX and was a finalist in the 2023 Call of Duty World Championship inLas Vegas, NV. - The Company hosted the Overwatch Grand Finals in
Toronto fromSeptember 28 to October 1, 2023 .
Fourth Quarter 2023 Financial Highlights
- Fourth quarter 2023 revenue increased by
$0.3 million relative to the prior year quarter. The year-over-year growth was primarily due to higherLeague Revenues . - Operating Expenses decreased by
$1.4 million or 21% to$5.2 million , primarily due to reduced corporate and team-related payroll and expenses. The improvement in Operating Expenses reflects management's focus on lowering costs and increasing productivity to support revenue growth and the path to profitability. - Adjusted EBITDA loss improved by
$1.7 million , or 71% relative to the prior year quarter, to a loss of$0.7 million . The significant improvement in EBITDA loss was due to growth to historically high revenues combined with reductions in costs and improvements in productivity.
Fourth Quarter 2023 Achievements
- All outstanding
Overwatch League entry fees, valued at$8.2 million (US$6 million ), were waived by Activision Blizzard. - The Company terminated its Team Participation Agreement in the
Overwatch League . Under the terms of the agreement, the Company received a termination payment of approximately$7.1 million (US$5.3 million ) from Activision Blizzard. This payment received during the quarter was net of approximately$0.9 million (US$0.7 million ) for payments paid in advance by theOverwatch League to Toronto Defiant . - OverActive announced that it will host the Call of Duty
League Major III tournament inToronto, Canada , fromMay 16 to 19, 2024 . - MAD Lions competed in the LEC 2023 Season Finals, reaching a peak match viewership of 1.3 millionii. Additionally, the team qualified for the World Championships for the fifth consecutive year, reaching a peak match viewership of 1.3 millioniii.
Significant Announcements Subsequent to Quarter End
- OverActive secured a new long-term agreement with the Call of
Duty League , resulting in elimination of$35.1 million in outstanding entry fees and a$2.8 million cash infusion into the Company. The new agreement also entitles the Company to new revenue streams, including direct team participation for digital in-game merchandise (MTX) and opportunities for licensed third-party tournaments. - The Company acquired esports organizations KOI and
Movistar Riders , creating a global esports powerhouse. The acquisitions marked a significant milestone for the Company and aligned with the Company's expansion strategy inSpain , EMEA, andLatin America . The acquisitions are expected to be accretive to adjusted EBITDA going forward and add$10-million to$12-million in revenues in 2024. In connection with these acquisitions,Gabriel Saenz de Buruaga and Gerard Piqué joined OverActive's board of directors. - OverActive announced Riot Games transfer approval of the VALORANT Champions Tour EMEA (VCT EMEA) team participation agreement (TPA) from KOI to a subsidiary of
OverActive Media . The team is operating asMovistar KOI for the 2024 season. The MAD Lions KOI League of Legends EMEA Championship match onFebruary 18 th became the most-watched LEC match since summer 2021 with 830,816 peak viewers. iv- Year to date, OverActive's professional esports teams have reached more than 50 million hours watched across all tournament matches.
- OverActive renewed its relationship with Scuf Gaming and signed a new partnership agreement with emerging lifestyle and gaming brand Blacklyte.
- The Company entered into the Overwatch Champions Series (OWCS) and were the Champions of Stage 1 North America.
- Telefónica extended its partnership with
Movistar Riders , resulting in the largest financial partnership in the Company's history. - OverActive signed new partnerships with Monster Energy and Cupra.
- The Company announced that
Neil Duffy has joined the company as Chief Commercial Officer,Americas .
"2023 was a transformative year for us, marked by resilience and growth as we continue to build a global esports powerhouse," said
The Company's consolidated audited financial statements, notes to financial statements, and Management's Discussion and Analysis for the three and twelve-month periods ended
The following table presents a reconciliation of net loss to adjusted EBITDA for the twelve months ended
Twelve months ended | ||
(In thousands of Canadian dollars) | $ | $ |
Net loss for the period | (12,519) | (36,925) |
Income tax recovery | (520) | (700) |
Depreciation | 1,800 | 1,465 |
Amortization and impairment | 399 | 35,069 |
Decrease in net present value of franchise obligations | (1,059) | (9,453) |
Finance income | (214) | (118) |
Finance cost | 5,050 | 5,251 |
Foreign exchange loss (gain) | 28 | 1,604 |
Share-based compensation | 152 | 2,433 |
Restructuring and business development costs | 676 | 214 |
Reversal of provision | - | (1,320) |
Adjusted EBITDA | (6,207) | (8,780) |
Conference Call
The Company will conduct a conference call tomorrow,
To access the conference call without operator assistance, please register and enter your phone number at https://emportal.ink/3JfHkZb to receive an instant automated callback. To dial directly to be entered into the call by an operator, please dial 1-888-390-0605, or for international callers, 416-764-8609. A replay will be available shortly after the call and can be accessed by dialling 1-888-390-0541 or, for international callers, 416-764-8677. The entry code for the replay is 102597#. The replay will expire on
A live conference call webcast can be accessed on OverActive's website at www.overactivemedia.com or directly via https://app.webinar.net/xjGb9zDVroD. An online webcast archive will be available via the same link for 90 days following the call.
Consolidated Statements of Financial Position
(expressed in thousands of Canadian dollars)
2023 | 2022 | ||||
Assets | |||||
Current assets: | |||||
Cash and cash equivalents | $ 13,933 | $ 13,557 | |||
Trade and other receivables | 3,997 | 6,589 | |||
Prepaid expenses and other current assets | 1,774 | 2,086 | |||
Total current assets | 19,704 | 22,232 | |||
Non-current assets: | |||||
Property and equipment | 2,178 | 2,531 | |||
Right-of-use assets | 625 | 1,297 | |||
Intangible assets | 41,124 | 55,624 | |||
5,846 | 5,958 | ||||
Total non-current assets | 49,773 | 65,410 | |||
Total assets | $ 69,477 | $ 87,642 | |||
Liabilities and Shareholders' Equity | |||||
Current liabilities: | |||||
Trade payable and accrued liabilities | $ 2,829 | $ 4,256 | |||
Provisions | 686 | 686 | |||
Notes payable | - | 63 | |||
Current portion of lease liabilities | 676 | 1,074 | |||
Contract liabilities | 864 | 820 | |||
Current portion of franchise payables | 5,832 | 1,581 | |||
Current portion of long-term debt | 178 | 163 | |||
Current portion of deferred grant income | 37 | 35 | |||
Total current liabilities | 11,102 | 8,678 | |||
Non-current liabilities: | |||||
Deferred tax liability | 7,118 | 8,160 | |||
Long-term portion of lease liabilities | - | 349 | |||
Long-term franchise payables | 15,824 | 22,638 | |||
Long-term debt | 52 | 228 | |||
Long-term deferred grant income | 9 | 46 | |||
Other long-term liabilities | - | 84 | |||
Total non-current liabilities | 23,003 | 31,505 | |||
Total liabilities | 34,105 | 40,183 | |||
Shareholders' equity: | |||||
Share capital | 133,638 | 133,638 | |||
Warrants reserve | - | 621 | |||
Contributed surplus | 9,687 | 8,914 | |||
Accumulated other comprehensive loss | (3,967) | (4,247) | |||
Deficit | (103,986) | (91,467) | |||
Total shareholders' equity | 35,372 | 47,459 | |||
Total liabilities and shareholders' equity | $ 69,477 | $ 87,642 |
Consolidated Statements of Net Loss and Comprehensive Loss
(expressed in thousands of Canadian dollars, except per share amounts)
Years ended
2023 | 2022 | |||
Revenue | $ 15,704 | $ 14,162 | ||
Operating costs | 22,416 | 25,622 | ||
Loss before the undernoted | (6,712) | (11,460) | ||
Undernoted expenses (income): | ||||
Depreciation | 1,800 | 1,465 | ||
Amortization and impairment on intangible assets | 399 | 35,069 | ||
Foreign exchange loss | 28 | 1,604 | ||
Decrease in net present value of franchise payables | (1,059) | (9,453) | ||
Finance income | (214) | (118) | ||
Finance cost | 5,050 | 5,251 | ||
Share-based compensation | 152 | 2,433 | ||
Other income | 171 | (3,786) | ||
Loss before income taxes | (13,039) | (43,925) | ||
Income tax recovery | (520) | (7,000) | ||
Net loss for the year | (12,519) | (36,925) | ||
Other comprehensive income: | ||||
Foreign currency translation | 280 | 405 | ||
Comprehensive loss for the year | $ (12,239) | $ (36,520) | ||
Loss per share: | ||||
Basic | ||||
Diluted | (0.16) | (0.46) |
Consolidated Statements of Cash Flows
(expressed in thousands of Canadian dollars)
Years ended
2023 | 2022 | |
Cash provided by (used in): | ||
Operating activities: | ||
Net loss for the year | $ (12,519) | $ (36,925) |
Adjustments for: | ||
Depreciation | 1,800 | 1,465 |
Amortization of intangible assets | 399 | 855 |
Foreign exchange loss | 28 | 1,604 |
Share-based compensation | 152 | 2,433 |
Finance cost | 5,050 | 5,251 |
Decrease in net present value of franchise | ||
payables | (1,059) | (9,453) |
Income tax recovery | (520) | (7,000) |
Impairment loss | - | 34,214 |
Other | (35) | (31) |
Change in non- cash operating working capital | ||
Decrease (increase) in trade and other receivables | 2,592 | (1,683) |
Decrease (increase) in prepaid expenses and | ||
other current assets | 194 | (1,251) |
Increase (decrease) in trade payable and | ||
accrued liabilities | (1,362) | 1,114 |
Decrease in contract and other long-term liabilities | (40) | (799) |
Decrease in notes payable | (63) | (1,301) |
Cash flows used in operating activities | (5,383) | (11,507) |
Financing activities: | ||
Repayment on long-term debt | (188) | (186) |
Repayments of franchise payables | - | (1,812) |
Principal payment of lease liability | (1,349) | (962) |
Payment on interest portion of lease liability | (120) | (152) |
Cash flows used in financing activities | (1,657) | (3,112) |
Investing activities: | ||
Purchase of property and equipment | (168) | (857) |
Proceeds from disposal of property and equipment | - | 505 |
Changes in non- cash working capital | ||
related to capital expenditures | - | (505) |
Purchase of player contracts | - | (823) |
Purchase of intangible assets | (8) | (14) |
Proceeds from League restructuring | 7,065 | - |
Cash flows from (used) in investing activities | 6,889 | (1,694) |
(Decrease) increase in cash and cash equivalents | (151) | (16,313) |
Cash and cash equivalents, beginning of year | 13,557 | 29,577 |
Effect of exchange rate changes on cash and cash equivalents | 527 | 293 |
Cash and cash equivalents, end of year | $ 13,933 | $ 13,557 |
About
OverActive Media Corp. (TSXV: OAM) (OTC:OAMCF) is headquartered in
Cautionary Note Regarding Forward-Looking Information
This press release contains statements which constitute "forward-looking statements" and "forward-looking information" within the meaning of applicable securities laws (collectively, "forward-looking statements"), including statements regarding the plans, intentions, beliefs and current expectations of OverActive with respect to future business activities and operating performance. Forward-looking statements are often identified by the words "may", "would", "could", "should", "will", "intend", "plan", "anticipate", "believe", "estimate", "expect" or similar expressions and includes information regarding the anticipated financial and operating results of OverActive in the future.
Investors are cautioned that forward-looking statements are not based on historical facts but instead OverActive management's expectations, estimates or projections concerning future results or events based on the opinions, assumptions and estimates of management considered reasonable at the date the statements are made. Although OverActive believes that the expectations reflected in such forward-looking statements are reasonable, such statements involve risks and uncertainties, and undue reliance should not be placed thereon, as unknown or unpredictable factors could have material adverse effects on future results, performance or achievements of the OverActive. Among the key factors that could cause actual results to differ materially from those projected in the forward-looking statements include the following: the potential impact of OverActive's qualifying transaction on relationships, including with regulatory bodies, employees, suppliers, customers and competitors; changes in general economic, business and political conditions, including changes in the financial markets; changes in applicable laws and regulations both locally and in foreign jurisdictions; compliance with extensive government regulation; the risks and uncertainties associated with foreign markets; the ability of the Company to continue to execute on its existing partnerships and business strategy; the ability of the MAD Lions and Call of Duty Leagues to maintain viewership; the successful completion of the Company's new venue; and other risk factors set out in OverActive's most recent annual information form and its other filings with Canadian securities regulators, copies of which may be found under OverActive's profile at www.sedarplus.ca. These forward-looking statements may be affected by risks and uncertainties in the business of OverActive and general market conditions, including COVID-19.
Should one or more of these risks or uncertainties materialize, or should assumptions underlying the forward-looking statements prove incorrect, actual results may vary materially from those described herein as intended, planned, anticipated, believed, estimated or expected. Although OverActive has attempted to identify important risks, uncertainties and factors which could cause actual results to differ materially, there may be others that cause results not to be as anticipated, estimated or intended and such changes could be material. OverActive does not intend and do not assume any obligation, to update the forward-looking statements except as otherwise required by applicable law.
Non-IFRS Measures
This press release includes references to adjusted EBITDA. Adjusted EBITDA is a non-IFRS financial measure and is defined by the Company as net income or loss before income taxes, finance costs, depreciation and amortization, decrease/increase in net present value of franchise obligations, foreign exchange gains/loss, assistance payments from
This non-IFRS financial measure is not an earnings or cash flow measure recognized by IFRS and does not have a standardized meaning prescribed by IFRS. Our method of calculating such a financial measure may differ from the methods used by other issuers and, accordingly, our definition of this non-IFRS financial measure may not be comparable to similar measures presented by other issuers. Investors are cautioned that non-IFRS financial measures should not be construed as an alternative to net income determined in accordance with IFRS as indicators of our performance or to cash flows from operating activities as measures of liquidity and cash flows.
A reconciliation of Adjusted EBITDA to net income/loss may be found in the Company's Management's Discussion and Analysis for the three and nine-month periods ended
Neither the TSXV nor its Regulation Services Provider (as that term is defined in the policies of the TSXV) accepts responsibility for the adequacy or accuracy of this release.
_______________________ |
i Adjusted EBITDA is a non-IFRS measure. Refer to "Non-IFRS Measures" at the end of this press release. |
ii https://escharts.com/ |
iii https://escharts.com/ |
iv https://escharts.com/tournaments/lol/lec-winter-2024 |
SOURCE
© Canada Newswire, source