Q3 Adjusted EBITDA of
Total Cash of
Cash Available for Use of
Updates Fiscal 2023 Outlook
Selected Financial Highlights
- Total revenue of
$201.9 million for Q3 2023 versus$80.7 million for Q3 2022, an increase of 150%. Year-to-date revenue of$410.4 million versus$193 million , an increase of 112.7%. - Adjusted EBITDA2 of
$21.3 million for Q3 2023 versus$15.1 million for Q3 2022, an increase of 41%. Year-to-date Adjusted EBITDA of$25 million versus$17.3 million , an increase of 44.9%. - Net loss of
$8.5 million for Q3 2023 versus net income of$3.9 million for Q3 2022, a decrease of$12.4 million . Net loss for the quarter includes a non-cash goodwill impairment charge of$15.2 million ($0.27 loss per share). Adjusting for the impact of this, net income would be$6.6 million ($0.10 income per share) in the quarter. - Debt-free¹ with total cash at
September 30, 2023 of$85.5 million .$40.9 million of Cash Available for Use, an increase of$9.3 million year-to-date.
"Our performance this quarter demonstrates the strength of Boat Rocker's IP engine" said
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1 The Company currently has no corporate term debt, only interim production financing (including through two borrowing base facilities) in the ordinary course of operations. |
2 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 and nine months ended |
Selected Content Highlights
In 2023, Boat Rocker is producing high-quality Scripted, Unscripted and Kids and Family titles for major buyers around the world including Netflix, Apple TV+, Amazon Prime, MGM+,
Recent highlights include:
Television
Scripted
- Sold Beacon 23, starring
Lena Headey (Game of Thrones) andStephan James (Homecoming), to MGM+. The series will premiere in theU.S. on the steaming service onNovember 12 th. - Completed delivery of season two of American Rust, starring
Jeff Daniels (The Newsroom) andMaura Tierney (The Affair), to Amazon's Freevee. Robyn Hood , from Director X andChris Roberts , premiered on Global Television and STACK TV onSeptember 27 th.- Sold highly anticipated scripted series Orphan Black: Echoes, starring
Krysten Ritter (Jessica Jones ) andKeeley Hawes (Bodyguard), to multiple global buyers including ITV (UK ),Stan Entertainment (Australia ), and TVNZ (New Zealand ).
Unscripted
- The Great Canadian Baking Show season seven is currently airing on CBC.
- The Amazing
Race Canada was renewed for its 10th season by CTV. - Season one of Listing Large is currently airing on CTV Life Channel.
- The second annual Legacy Awards aired on
September 24 th on CBC. - Season three of
Mary Makes it Easy is currently airing on CTV Life Channel. - Disney+
UK commissioned World War Shoe: Adidas vs. Puma, a docuseries about the rivalry between the two brands. The three-part series is being produced alongside DavidBeckham's Studio 99. BS High (HBO) andPretty Baby :Brooke Shields (Hulu) were both nominated for Critics Choice Documentary Awards.
Kids and Family
- The Next Step has been greenlit for its ninth season by CBBC, making it Boat Rocker's longest-running scripted series.
Dino Ranch season three is now airing on Disney+ and CBC.- Announced partnership with global toy manufacturer Tonies to release
Love Monster andDino Ranch onto its bestselling interactive audio platform. Praise Petey premiered onJuly 21 st on Hulu.
Representation
- Client
Chris Rock is set to direct aUniversal Pictures biopic about the life ofMartin Luther King Jr . based on the acclaimed biography King: A Life. - Five Untitled clients were featured in Variety's coveted annual "Power of Young Hollywood" list:
Noah Schnapp (Stranger Things),Sophia Lillis (It),Lexi Underwood (Little Fires Everywhere),Maya Hawke (Stranger Things), andEmma Myers (Wednesday).
Selected Financial Information
(Amounts in thousands CAD) | Three months ended | |||
2023 | 2022 | % change | ||
Revenue | ||||
Television | 185,521 | 42,142 | 340 % | |
Kids and Family | 10,788 | 27,988 | (61) % | |
Representation | 5,612 | 10,580 | (47) % | |
Total revenue | 201,921 | 80,710 | 150 % | |
Net income (loss) | (8,547) | 3,872 | (321) % | |
Adjusted EBITDA* | 21,347 | 15,145 | 41 % |
(Amounts in thousands CAD) | Nine months ended | |||
2023 | 2022 | % change | ||
Revenue | ||||
Television | 341,984 | 97,631 | 250 % | |
Kids and Family | 45,121 | 66,603 | (32) % | |
Representation | 23,304 | 28,758 | (19) % | |
Total revenue | 410,409 | 192,992 | 113 % | |
Net income (loss) | (23,840) | (3,903) | (511) % | |
Adjusted EBITDA* | 25,014 | 17,262 | 45 % |
Financial Review
Revenue for Q3 2023 was
Adjusted EBITDA* for the three months ended
Net loss for the three months ended
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*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 our MD&A for the three and nine months ended |
3 Cash generating unit (CGU). For the purposes of allocating goodwill, the Company has determined it has six groups of CGUs: Scripted, Unscripted, Insight, Kids and Family, Animation and Representation. |
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 nine months ended
(Amounts in thousands CAD) | Nine months ended | ||||||
2023 | 2022 | $ change | |||||
Cash provided by (used in) operating activities | $ 39,048 | $ (31,684) | $ 70,732 | ||||
Proceeds from interim production financing | 119,486 | 122,128 | (2,642) | ||||
Repayments of interim production financing | (147,292) | (60,214) | (87,078) | ||||
Repayment of lease liabilities | (5,837) | (5,734) | (103) | ||||
Acquisition of property and equipment | (693) | (792) | 99 | ||||
Free Cash Flow* | $ 4,712 | $ 23,704 | $ (18,992) | ||||
Less: distributions to non-controlling interest shareholders | (4,560) | (6,277) | 1,717 | ||||
Free Cash Flow Attributable to Owners of the Company* | $ 152 | $ 17,427 | $ (17,275) |
Total cash at
(Amounts in thousands CAD) | $ change | % change | |||||
Cash Available for Use* | $ 40,858 | $ 31,524 | $ 9,334 | 30 % | |||
Cash Required for Use in Productions* | 44,678 | 54,270 | (9,592) | (18) % | |||
Total cash | $ 85,536 | $ 85,794 | $ (258) | — % |
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*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 our MD&A for the three and nine months ended |
Outlook
Boat Rocker is producing a high profile slate of premium scripted series this year and anticipates delivering all remaining episodes in 2023 while ramping up international distribution for its owned IP. However, with the WGA strike prolonged and the
Despite these challenges, with a strong cash position4, balance sheet and no corporate debt,** Boat Rocker believes that it is well positioned to successfully operate in a changing media and entertainment landscape over the long-term. Additionally, the Company has a multi-genre content creation engine, long track record of delivering programming at all budget levels to broadcasters and streamers internationally and highly diversified business lines across type and geography. Coupled with pro-active cost management, streamlined studio operations and strong discipline on investment spending, Boat Rocker anticipates it will continue to invest in owned IP and grow its content library.
The Company's expected performance in 2023 is based on certain assumptions that are outlined in the Company's annual MD&A dated
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*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 our MD&A for the three and nine months ended |
Fiscal 2023 Third Quarter Conference Call
Boat Rocker management will host a conference call to discuss its fiscal third quarter financial results at
The audio webcast can be accessed at https://app.webinar.net/d2yogELZrpw or on the Company's investor relations page at https://www.boatrocker.com/investor-relations/events-and-presentations/default.aspx
Or to participate by phone, dial 1-877-550-1875.
Listeners should access the webcast or call 10-15 minutes before the start time to ensure they are connected.
To access a replay of the call, dial 757-849-6722 (Local) or 800-645-7964 (
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 gains or losses on foreign exchange, unrealized gains or losses on forward currency contracts, and other costs not indicative of the Company's core operating results. 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
Contact:
Investors:
ir@boatrocker.com
(416) 591-0065
Media:
matt.salvatore@boatrocker.com
(416) 591-0065
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) | (8,547) | 3,872 | ||
Amortization of property and equipment, right-of-use assets and other intangible assets | 3,477 | 4,423 | ||
Finance costs, net | 2,518 | 1,765 | ||
Income taxes | 5,576 | 330 | ||
EBITDA* | 3,024 | 10,390 | ||
Adjustments: | ||||
Change in fair value of unsettled forward exchange contracts1 | 88 | 1,942 | ||
Change in fair value of other financial liabilities2 | 1,697 | 1,786 | ||
Unrealized losses on foreign exchange3 | (152) | (2,244) | ||
Amortization of acquired program intangibles4 | 105 | 2,252 | ||
Transaction-related and other costs5 | 256 | — | ||
Share-based compensation6 | 1,096 | 313 | ||
15,160 | — | |||
Reorganization costs8 | 73 | 706 | ||
Adjusted EBITDA* | 21,347 | 15,145 | ||
* See "Non-IFRS Measures" |
Note: Adjusted EBITDA as previously reported included the unrealized gains and losses on foreign exchange other than the change in fair value of unsettled forward exchange contracts. Management considers that all unrealized gains or losses on foreign exchange should be excluded from Adjusted EBITDA as they are not reflective of the Company's performance until such time that the amounts become realized. Adjusted EBITDA for the three months ended
The following table presents the reconciliation from net income (loss) to Adjusted EBITDA* for the nine months ended
(Amounts in thousands CAD) | Nine Months Ended | |||
2023 | 2022 | |||
Net income (loss) | (23,840) | (3,903) | ||
Amortization of property and equipment, right-of-use assets and other intangible assets | 11,009 | 13,195 | ||
Finance costs, net | 6,009 | 4,317 | ||
Income taxes | 6,682 | 230 | ||
EBITDA* | (140) | 13,839 | ||
Adjustments: | ||||
Change in fair value of contingent consideration9 | — | (6,533) | ||
Change in fair value of unsettled forward exchange contracts10 | (330) | 1,460 | ||
Change in fair value of other financial liabilities11 | 4,814 | 4,577 | ||
Unrealized losses on foreign exchange12 | 1,226 | (1,779) | ||
Amortization of acquired program intangibles13 | 705 | 3,512 | ||
Transaction-related and other costs14 | 296 | — | ||
COVID-19 related costs15 | 129 | — | ||
Share-based compensation16 | 2,533 | 1,320 | ||
15,160 | — | |||
Reorganization costs18 | 621 | 866 | ||
Adjusted EBITDA* | 25,014 | 17,262 | ||
* See "Non-IFRS Measures" |
Note: Adjusted EBITDA as previously reported included the unrealized gains and losses on foreign exchange other than the change in fair value of unsettled forward exchange contracts. Management considers that all unrealized gains or losses on foreign exchange should be excluded from Adjusted EBITDA as they are not reflective of the Company's performance until such time that the amounts become realized. Adjusted EBITDA for the nine months ended
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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 Movements in balances denominated in non-functional currencies not yet realized through settlement. |
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 Non-cash expenses associated with share-based compensation granted to certain officers, directors and employees. |
7 Impairment of goodwill associated with the Unscripted cash generating unit. |
8 Restructuring charges primarily related to personnel costs. |
9 Change in value of contingent consideration represents the non-cash expense associated with certain acquisitions. |
10 Change in fair value of the unrealized forward currency contracts. |
11 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. |
12 Movements in balances denominated in non-functional currencies not yet realized through settlement. |
13 Amortization of program intangibles acquired in business combinations included in production, distribution and service costs. |
14 Includes professional fees and other expenses related to transactions and special projects which are not related to or are not reflective of regular business operations. |
15 Incremental non-recoupable production costs specifically incurred due to COVID-19. |
16 Non-cash expenses associated with share-based compensation granted to certain officers, directors and employees. |
17 Impairment of goodwill associated with the Unscripted cash generating unit. |
18 Restructuring charges primarily related to personnel costs. |
SOURCE
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