YANGAROO INC. Toronto, Ontario--(Newsfile Corp. - June 26, 2024) - YANGAROO Inc. (TSXV: YOO) (OTC Pink: YOOIF) ("Yangaroo", "Company"), a software leader in media asset workflow and distribution solutions, today announced its financial results for the fiscal year ended December 31, 2023 and the first quarter ended March 31, 2024. The year end financial statements and corresponding management's discussion & analysis (the "Annual Filings") and the first quarter financial statements and corresponding management's discussion and analysis (the "First Quarter Filings") are available at www.yangaroo.com and at www.sedarplus.ca. Please note that all currency in this press release is denominated in United States dollars, unless otherwise noted.
Grant Schuetrumpf, CEO of Yangaroo, commented, "We are pleased to report significant advancements in our year-over-year operating results for both the first quarter of 2024 and fiscal year 2023. Our operating income notably improved, compared to the respective prior year's operating period, mostly due to increased sales volume and revenue in our Advertising Division, after adjusting for seasonality. We believe this growth is also owing in part to the acquisition of Millenia3 in November 2023, by providing additional revenue and other intangible value for the Advertising Division from late in the 2023 fiscal year and continuing into 2024."
For the year ended December 31, 2023, operating income and normalized EBITDA increased to $13,702 and $1,135,575, respectively, from an operating loss of $430,352 and normalized EBITDA of $536,209 in 2022.
In FY 2023, the Advertising Division experienced an increase in delivery volumes and sales per customer, along with expanded services and use across trafficking, production, and analytics. This growth was further bolstered by the acquisition of Millenia3 in November 2023. To date, the Millenia3 integration has gone smoothly with the team continuing to serve the transitioned customers while integrating and streamlining its operations and technology with our existing systems. The Entertainment Group's Music Division saw a decline in revenue year-over-year primarily due to major record labels reducing new music video deliveries, while music audio track promotional deliveries remained stable. The Awards Division experienced only a slight year-over-year decline in revenue largely due to the timing of certain Award Shows.
For the three months ended March 31, 2024, operating income and normalized EBITDA increased to $17,369 and $237,582, respectively, from an operating loss of $254,870 and normalized EBITDA of $116,293 in Q1'2023.
The year-over-year improvement in Q1 2024 results can largely be attributed to the full integration of the Millenia3 operations into our Advertising Division results as well as the continued expansion of our trafficking, production and analytics services. The Entertainment Group's Music Division saw a rebound in music delivery activity and achieved a modest year-on-year revenue increase while the Awards Division, with our normal roster of Award Show clients recommitted for 2024, experienced only a slight decline in revenue due to the timing of scheduled award show programming.
Mr. Schuetrumpf continued, "We are excited to announce our seventh consecutive quarter of positive Normalized EBITDA, which we see as a testament to our stable operations and unwavering commitment to exceptional client service. As we move through 2024, our focus will remain on executing our growth strategy, expanding our customer base, and investing in our technology platform. Despite the challenges and uncertainties in the advertising and music markets, we believe we are well-positioned to seize both organic and non-organic growth opportunities."
Fiscal 2023 Financial Highlights
- Revenue in fiscal 2023 was $7,885,482, an increase of $150,638 over $7,734,844 in 2022. This is largely driven by increased advertising revenue, partially offset by entertainment revenue.
(i) Advertising
The Company earned advertising revenue of $5,676,770 in the year ended December 31, 2023, an increase of $374,736 over the same period in 2022. The increase from the previous year is primarily attributed to additional revenue from Millenia3 acquisition, offset by a slow-down in the advertising industry and corresponding decline in our customer volumes.
(ii) Entertainment
The Company earned entertainment revenue of $2,208,712 in the year ended December 31, 2023, representing a decrease of $224,098 over the same period in 2022. The decrease from the prior year is primarily attributed to slower activity in Awards as well as lower volumes amongst Music customers.
- Total operating expenses for the year ended December 31, 2023 were $7,871,780, a decrease of $293,416 over the prior year period.
(i) Salaries and Consulting
Salaries and consulting expense for the year ended December 31, 2023 was $4,925,803 representing a significant decrease of $871,998 over the same period in the prior year, excluding a one-time, non-recurring, employment tax credit of $538,018 recognized in the Q4'2022. The management will continue focus on operational optimizations in the fiscal year of 2024.
(ii) Marketing and Promotion
Marketing and promotion expense for the year ended December 31, 2023 was $251,589, representing a slightly increase of $7,717 versus the prior year period. The increase from the prior year was primarily resulting from higher marketing and sales activities as the company revamp for business growth and development.
(iii) General and Administrative
General and administrative expenses for the year ended December 31, 2023 were $786,691 representing a decrease of $316,333 over the prior year. The decrease is primarily related to lower professional services fees.
(iv) Technology Development
Technology development expense for the year ended December 31, 2023, was $627,389 representing a decrease of $12,877 over the same period in the prior year. The decrease from the prior year is primarily attributed to lower costs from third-party software, hardware and cloud requirements, offset by a decrease from investment tax credits.
- For the year ended December 31, 2023, the Company's normalized EBITDA was $1,135,575 in comparison to normalized EBITDA of $536,209 in 2022. The increase in normalized EBITDA versus the prior year and prior quarter is primarily attributed to the lower headcount costs and reduced professional fees.
Q1'2024 Financial Highlights
Revenue in Q1'2024 was $1,922,631 compared to $1,845,253 in the first quarter of 2023.
Revenue increased by $77,378 or 4% versus Q1'2023. The increase in revenue was primarily driven by higher Advertising revenue and Music with an increase of $89,978 or 6% and $16,686 or 6%, respectively, slightly off-set by lower Awards revenue with a decrease of $29,287 or 20%. The increase in Advertising revenue is attributed to business growth from Millenia3 acquisition and the increase in Music revenue is attributed to higher new music video deliveries from major record labels and music audio deliveries.
Operating expenses in Q1'2024 were $1,905,262 compared $2,100,123 the first quarter of 2023, respectively.
Operating expenses decreased by $194,861 or 9% versus Q1'2023. The decrease in operating expenses is primarily attributed to headcount and general & administrative expenses, partially off-set by increased marketing and technology expenses.
Normalized EBITDA in Q1'2024 was $237,582 in comparison to normalized EBITDA of $116,293 in Q1'2023.
Normalized EBITDA increased by $121,289 compared to Q1'2023. The increase is primarily attributed to higher revenue from Advertising and Music and lower operating expenses from salary and general & administrative fees.
Financial Highlights
| Q1 2024 | Q4 2023 | Q3 2023 | Q2 2023 | |||||||||
| Cash | $ | 207,998 | $ | 150,928 | $ | 254,720 | $ | 284,178 | ||||
| Working capital (deficiency) | ($1,810,041 | ) | ($1,758,949 | ) | ($1,115,884 | ) | ($94,749 | ) | ||||
| Liquidity | $ | 521,092 | $ | 623,506 | $ | 975,794 | $ | 552,960 | ||||
| | ||||||||||||
| Revenue | $ | 1,922,631 | $ | 2,128,768 | $ | 1,708,931 | $ | 2,172,530 | ||||
| Operating expenses | $ | 1,905,262 | $ | 2,172,208 | $ | 1,696,777 | $ | 1,905,839 | ||||
| Other expenses (income) | ($146 | ) | $ | 3,756,134 | $ | 20,217 | $ | 230,473 | ||||
| Income (loss) for the period | $ | 15,565 | ($3,799,574 | ) | ($8,063 | ) | $ | 36,218 | ||||
| Income (loss) per share - basic | $ | 0.00 | ($0.06 | ) | ($0.00 | ) | $ | 0.00 | ||||
| Income (loss) per share - diluted | $ | 0.00 | ($0.06 | ) | ($0.00 | ) | $ | 0.00 | ||||
| EBITDA | $ | 356,705 | ($3,407,954 | ) | $ | 322,585 | $ | 384,490 | ||||
| EBITDA Margin % | 18.55% | (160%) | 18.88% | 17.70% | ||||||||
| Normalized EBITDA (loss) * | $ | 237,582 | $ | 211,061 | $ | 266,269 | $ | 541,952 | ||||
| Normalized EBITDA Margin % * | 12.36% | 9.91% | 15.58% | 24.95% |
* A non-IFRS measure. See "Non-IFRS financial measures" for definitions and reconciliation non-IFRS measures to the relevant IFRS measures
| Q1 2023 | Q4 2022 | Q3 2022 | Q2 2022 | | ||||||||
| Cash | $ | 204,604 | $ | 296,748 | $ | 346,744 | $ | 607,289 | | |||
| Working capital | ($224,819 | ) | $ | 217,710 | ($1,701,222 | ) | ($1,517,889 | ) | ||||
| Liquidity | $ | 781,378 | $ | 737,680 | $ | 639,320 | $ | 1,033,533 | ||||
| | ||||||||||||
| Revenue | $ | 1,845,253 | $ | 2,097,353 | $ | 1,733,140 | $ | 1,915,307 | ||||
| Operating expenses | $ | 2,100,123 | $ | 1,426,921 | $ | 1,987,591 | $ | 2,259,186 | ||||
| Other expenses (income) | $ | 109,749 | $ | 148,124 | ($109,995 | ) | ($2,133,145 | ) | ||||
| Income (loss) for the period | ($364,619 | ) | $ | 522,308 | ($144,456 | ) | $ | 1,789,266 | ||||
| Income (loss) per share - basic | ($0.01 | ) | $ | 0.01 | ($0.00 | ) | $ | 0.03 | ||||
| Income (loss) per share - diluted | ($0.01 | ) | $ | 0.01 | ($0.00 | ) | $ | 0.03 | ||||
| EBITDA | ($13,174 | ) | $ | 816,075 | $ | 108,087 | $ | 2,047,149 | ||||
| EBITDA Margin % | (0.71%) | 38.91% | 6.24% | 106.88% | ||||||||
| Normalized EBITDA (loss) * | $ | 116,293 | $ | 833,974 | $ | 1,927 | ($42,766 | ) | ||||
| Normalized EBITDA Margin % * | 6.30% | 39.76% | 0.11% | (2.23%) |
* A non-IFRS measure. See "Non-IFRS financial measures" for definitions and reconciliation non-IFRS measures to the relevant IFRS measures
Cease Trade Order and Suspension of Trading
The TSX Venture Exchange (the "TSXV") suspended trading in the common shares of the Company (the "Common Shares") effective May 8, 2024 as a result of a failure-to-file cease trade order issued by the Ontario Securities Commission (the "OSC") on May 7, 2024 (the "FFCTO"). As the filing of the Annual Filings (and the First Quarter Filings) have been made within 90 days of the date of the FFCTO, the filing of the Annual Filings (and First Quarter Filings) will constitute the application to revoke the FFCTO. Concurrently, the Company intends to apply to the TSXV for reinstatement of trading of the Company Shares. The Company will provide further updates as they become available.
About YANGAROO
Yangaroo is a technology provider in the media and entertainment industry, offering a cloud-based software platform for the management and distribution of digital media content. Yangaroo's Digital Media Distribution System ("DMDS") platform is a patented cloud-based platform that provides customers with a centralised and fully integrated workflow directly connecting radio and television broadcasters, digital display networks, and video publishers for centralised digital asset management, delivery and promotion. DMDS is used across the advertising, music, and entertainment awards show markets.
YANGAROO Inc. is a publicly listed company incorporated on July 28, 1999 under the laws of Ontario as Musicrypt.com Inc. and changed to its present name on July 17, 2007. YANGAROO trades on the TSX Venture Exchange ("TSX-V") under the symbol YOO and in the U.S. under OTCPK: YOOIF.
The address of the Company's corporate office and principal place of business is 360 Dufferin Street, Suite 203, Toronto, Ontario, M6K 3G1.
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For YANGAROO Investor Inquiries:
Grant Schuetrumpf
Ph: (416) 534 0607
investors@yangaroo.com
Neither the TSX Venture Exchange nor Its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the accuracy of this release.
Use of Non-IFRS Financial Measures
The following non-IFRS definitions are used in the press release because management believes that they provide useful information regarding the Company's ongoing operations. Readers are cautioned that the definitions are not recognized measures under IFRS, do not have standardized meanings prescribed by IFRS, and should not be construed to be alternatives to revenues and net earnings determined in accordance with IFRS or as an indicator of performance, liquidity or cash flows. The Company's method of calculating these measures may differ from the methods used by other entities and accordingly, these measures may not be comparable to similarly titled measures used by other entities or in other jurisdictions.
EBITDA as defined by the Company means Earnings Before Interest and financing costs (net of interest income), Income Taxes, Depreciation and Amortization. EBITDA is derived from the statements of comprehensive income (loss) and can be computed as revenues less salaries and consulting expenses and property, technology, marketing, administration expenses and any non-recurring items.
Normalized EBITDA as defined by the Company means EBTIDA adjusted for one-time non-recurring items or non-cash item such as stock-based compensation expenses, foreign-exchange expenses, and gain on revaluation of contingent consideration.
EBITDA Margin and Normalized EBITDA Margin as defined by the Company means EBITDA and Normalized EBITDA, respectively, as a percentage of revenue.
Working capital as defined by the Company means current assets less current liabilities.
Liquidity as defined by the Company means cash plus available capacity in the Company's revolving credit facility.
The Company believes EBITDA, EBITDA margin, liquidity, and working capital, are useful measures because they provide information to both management and investors with respect to the operating and financial performance of the Company.
Cautionary Note Regarding Forward-looking Statements
This news release contains certain forward-looking statements and forward-looking information (collectively referred to herein as "forward-looking statements") within the meaning of applicable Canadian securities laws. All statements other than statements of present or historical fact are forward-looking statements. Forward-looking statements are often, but not always, identified by the use of words such as "anticipate", "achieve", "could", "believe", "plan", "intend", "objective", "continuous", "ongoing", "estimate", "outlook", "expect", "may", "will", "project", "should" or similar words, including negatives thereof, suggesting future outcomes.
Forward looking statements are subject to both known and unknown risks, uncertainties and other factors, many of which are beyond the control of YANGAROO, that may cause the actual results, level of activity, performance or achievements of YANGAROO to be materially different from those expressed or implied by such forward looking statements, including but not limited to: management's business strategy for 2024; the revocation of the FFCTO; and the filing of the reinstatement application to the TSXV. Although YANGAROO has attempted to identify important factors that could cause actual results to differ materially from those contained in forward-looking statements, there may be other factors that cause results not to be as anticipated, estimated or intended.
Forward-looking statements are not a guarantee of future performance and involve a number of risks and uncertainties, some of which are described herein. Such forward-looking statements necessarily involve known and unknown risks and uncertainties, which may cause YANGAROO's actual performance and results to differ materially from any projections of future performance or results expressed or implied by such forward-looking statements. Any forward-looking statements are made as of the date hereof and, except as required by law, neither YANGAROO assumes no obligation to publicly update or revise such statements to reflect new information, subsequent or otherwise.
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