Record Full year Adjusted EBITDA1 of
Net income of
No corporate debt2
Selected Financial Highlights
- Adjusted EBITDA1 of
$17.2 million for Q4 2022 versus$19.0 million for Q4 2021, a decrease of 10%, and$36.2 million for the year endedDecember 31, 2022 versus$31.6 million in the same period of 2021, an increase of 14%. - Net income of
$5.7 million for Q4 2022 up from$3.5 million for Q4 2021, an increase of$2.2 million , and net income of$1.8 million for the year endedDecember 31, 2022 compared to a net loss of$12.1 million in the same period of 2021, an increase of$13.9 million . - Debt-free2 with total cash at
December 31, 2022 of$85.8 million . - Generated positive Free Cash Flow1 in the year ended
December 31, 2022 of$3.5 million versus negative Free Cash Flow1 in same period of 2021 of$49.7 million .
"In 2022, we delivered meaningfully improved Adjusted EBITDA margins1, which allowed us to generate a 14% increase in Adjusted EBITDA1 over our strong performance in the prior year, despite lower overall revenue as a result of timing of deliveries and a different mix of budget levels and owned IP versus service productions," 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 our Fourth Quarter 2022 Management's Discussion and Analysis. |
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. Representation, in particular, saw 12% year over year revenue growth. For 2022, 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 Q4 Boat Rocker had delivered 27 projects so far in 2022 with another 40 shows in various stages of production.
Recent highlights include:
General
- Boat Rocker productions were nominated for a total of 39 2023 Canadian Screen Awards across our Kids & Family and Unscripted divisions.
Television
- Girlshow, a new scripted series, was set up for development with Hulu. The show is being developed alongside
Dakota Johnson andRo Donnelly's TeaTime Pictures, in which Boat Rocker has a minority ownership stake. - Slip, created by and starring
Zoe Lister-Jones , had its world premiere at SXSW inAustin onMarch 16 th. The comedy-drama series is produced in partnership with TeaTime Pictures for The Roku Channel, where the series premieres on Roku onApril 21 st. - Partnered with Anonymous Content on a new political thriller feature documentary from award-winning filmmakers
Jesse Moss andTony Gerber . - The Great Canadian Baking Show was renewed for a seventh season by CBC.
Pretty Baby :Brooke Shields , a new documentary produced by Boat Rocker, premiered at the 2023Sundance Film Festival to positive reviews, and premieres on Hulu onApril 3 rd.- The 2023 Juno Awards aired live from
Edmonton onMarch 13 th and featured performances by Alexisonfire, Nickelback andJesse Reyez and was hosted bySimu Liu . - Big
Brother Canada Season 11 is currently airing on Global Television. - Canada's Ultimate Challenge, a new competition reality format that turns the entire country into a giant obstacle course, premiered
February 16 th on CBC.
Kids & Family
- Secured new deals for
Dino Ranch in the US, Canada, andLatin America with a multitude of new products including jigsaw puzzles, games, hand puppets, party goods, wheeled goods and protective gear, youth electronics, sound books and apparel. - Under a new new global partnership with Microids, a French video game developer and publisher based in
Paris , the firstDino Ranch video game is expected to roll out worldwide from Q4 2023. - Season two of Daniel Spellbound, produced by Boat Rocker and Industrial Brothers, premiered on Netflix on
January 26, 2023 .
Representation
- Untitled client
Andrea Riseborough was nominated for an Academy Award for Actress in a Leading Role for her performance in To Leslie. - Signed several new clients in the quarter, including:
Brooke Shields : Actress, model, producer of documentaryPretty Baby (produced with Boat Rocker).Paula Abdul : Singer, dancer, actress that has sold more 50 million records and is currently an American Idol judge.Erin Doherty : Actress, The Crown.- Cocaine Bear (produced and directed by Untitled client
Elizabeth Banks ) had a strong showing at the box office, premiering with$28 million its opening weekend. - Untitled client
Mark Consuelos is replacingRyan Seacrest as co-host of Live with Kelly and Ryan (to be rebranded as Live with Kelly and Mark) joining his wifeKelly Ripa . - Wednesday starring Untitled clients
Gwendoline Christie ,Christina Ricci andEmma Myers became Netflix's second most watched series ever.
Selected Financial Information
(Amounts in thousands CAD) | Three months ended | ||
2022 | 2021 | % change | |
Revenue | |||
Television | 74,833 | 218,879 | (66) % |
Kids and Family | 24,462 | 32,867 | (26) % |
Representation | 11,995 | 10,709 | 12 % |
Total revenue | 111,290 | 262,455 | (58) % |
Net income (loss) | 5,699 | 3,512 | 62 % |
Adjusted EBITDA* | 17,160 | 18,967 | (10) % |
(Amounts in thousands CAD) | Year ended | ||
2022 | 2021 | % change | |
Revenue | |||
Television | 172,463 | 458,032 | (62) % |
Kids and Family | 91,065 | 84,368 | 8 % |
Representation | 40,753 | 37,969 | 7 % |
Total revenue | 304,281 | 580,369 | (48) % |
Net income (loss) | 1,796 | (12,081) | 115 % |
Adjusted EBITDA* | 36,201 | 31,630 | 14 % |
Financial Review
Revenue for Q4 2022 was
Adjusted EBITDA* for Q4 2022 was
Net income for Q4 2022 was
The Company generated positive Free Cash Flow* in the year 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 years ended
(Amounts in thousands CAD) | Year ended | |||||||
2022 | 2021 | $ change | % change | |||||
Cash (used in) provided by operating activities | $ (74,131) | $ (16,875) | $ (57,256) | (339) % | ||||
Proceeds from interim production financing | 197,081 | 69,698 | 127,383 | 183 % | ||||
Repayments of interim production financing | (110,589) | (92,077) | (18,512) | (20) % | ||||
Repayment of lease liabilities | (7,718) | (7,701) | (17) | — % | ||||
Acquisition of property and equipment | (1,183) | (2,705) | 1,522 | 56 % | ||||
Free Cash Flow* | $ 3,460 | $ (49,660) | $ 53,120 | 107 % | ||||
Less: distributions to non-controlling interest shareholders | (8,735) | (7,638) | (1,097) | (14) % | ||||
Free Cash Flow Attributable to Owners of the Company* | $ (5,275) | $ (57,298) | $ 52,023 | 91 % |
*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. |
Total cash at
(Amounts in thousands CAD) | % change | ||||
Cash Available for Use* | $ 31,524 | $ 57,247 | (45) % | ||
Cash Required for Use in Productions* | 54,270 | 39,703 | 37 % | ||
Total cash | $ 85,794 | $ 96,950 | (12) % |
*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 owing to higher anticipated distribution and representation revenue. More broadly, management continues to expect sustained demand for new and returning series, with major domestic and international buyers looking for original premium scripted, unscripted and kids & family programming. However, management is mindful of the current and near-term backdrop, including increasingly uncertain macroeconomic conditions, ongoing challenges in the retail industry, cost cutting from major buyers, and the concern of potential U.S. guild strikes commencing as early as Spring 2023, which could impact the Company's outlook for the year.
Boat Rocker remains focused on Adjusted EBITDA* as the most important measure of the Company's performance. For 2023, management is targeting modest Adjusted EBITDA growth over 2022.
With prudent 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 ongoing 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 2022 Fourth Quarter Conference Call
Boat Rocker management will host a conference call to discuss its fiscal fourth quarter financial results at
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, 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 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, 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, 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 tables present the reconciliation from net income (loss) to Adjusted EBITDA for the three months and years ended
(Amounts in thousands CAD) | Three months ended | ||||
2022 | 2021 | ||||
Net income (loss) | 5,699 | 3,512 | |||
Amortization of property and equipment, right-of-use assets and other intangible | 6,606 | 4,576 | |||
Finance costs, net | 1,909 | 898 | |||
Income taxes | 5,226 | 4,965 | |||
EBITDA* | 19,440 | 13,951 | |||
Adjustments: | |||||
Change in fair value of contingent consideration1 | — | (3,684) | |||
Change in fair value of unsettled forward exchange contracts2 | (2,031) | 1,004 | |||
Change in fair value of other financial liabilities3 | (1,426) | 470 | |||
Amortization of acquired program intangibles4 | 493 | 730 | |||
IPO and transaction-related costs5 | 240 | 500 | |||
COVID-19 related costs6 | 77 | 4,948 | |||
Share-based compensation7 | (231) | 1,033 | |||
Reorganization costs8 | 598 | 15 | |||
Adjusted EBITDA* | 17,160 | 18,967 |
* See "Non-IFRS Measures" |
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1 Change in value of contingent consideration represents the non-cash expense associated with certain acquisitions. |
2 Change in fair value of the unrealized forward currency contracts. |
3 Change in fair value of other financial liabilities represents the non-cash expenses on certain put options and accretion and and changes in fair value on other liabilities. |
4 Amortization of program intangibles acquired in business combinations included in production, distribution and service costs. |
5 Includes professional fees and other expenses related to transactions such as the Company's IPO, acquisitions, and special projects which are not related to or are not reflective of regular business operation. |
6 Incremental non-recoupable production costs specifically incurred due to COVID-19. |
7 Non-cash expenses associated with share-based compensation granted to certain officers, directors and employees. |
8 Restructuring charges primarily related to personnel costs. |
(Amounts in thousands CAD) | Year ended | ||||
2022 | 2021 | ||||
Net income (loss) | 1,796 | (12,081) | |||
Amortization of property and equipment, right-of-use assets and other intangible | 19,801 | 18,561 | |||
Finance costs, net | 6,226 | 4,742 | |||
Income taxes | 5,456 | 6,153 | |||
EBITDA* | 33,279 | 17,375 | |||
Adjustments: | |||||
Change in fair value of convertible debt9 | — | (4,382) | |||
Change in fair value of contingent consideration10 | (6,533) | (3,286) | |||
Change in fair value of unsettled forward exchange contracts11 | (571) | 1,251 | |||
Change in fair value of other financial liabilities12 | 3,151 | 3,526 | |||
Gain on settlement of loans and borrowings13 | — | (2,334) | |||
Amortization of acquired program intangibles14 | 4,005 | 3,380 | |||
IPO and transaction-related costs15 | 240 | 1,472 | |||
COVID-19 related costs16 | 77 | 9,599 | |||
Share-based compensation17 | 1,089 | 4,594 | |||
Reorganization costs18 | 1,464 | 435 | |||
Adjusted EBITDA* | 36,201 | 31,630 |
* See "Non-IFRS Measures" |
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9 Change in fair value of convertible debt represents the non-cash gain on the conversion of certain debentures issued by the Company. |
10 Change in value of contingent consideration represents the non-cash expense associated with certain acquisitions. |
11 Change in fair value of the unrealized forward currency contracts. |
12 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. |
13 Non-cash gain recorded on the settlement of the Company's loans and borrowings. |
14 Amortization of program intangibles acquired in business combinations included in production, distribution and service costs. |
15 Includes professional fees and other expenses related to transactions such as the Company's IPO, acquisitions, and special projects which are not related to or are not reflective of regular business operation. |
16 Incremental non-recoupable production costs specifically incurred due to COVID-19. |
17 Non-cash expenses associated with share-based compensation granted to certain officers and employees. |
18 Restructuring charges primarily related to personnel costs. |
SOURCE
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