Adjusted EBITDA1 of
Net income of
No corporate debt2
Selected Financial Highlights
- Adjusted EBITDA1 of
$17.4 million for Q3 2022 versus$11.6 million for Q3 2021, an increase of 50%, and$19.0 million for the nine months endedSeptember 30, 2022 versus$12.7 million in the same period of 2021, an increase of 50%. - Net income of
$3.9 million for Q3 2022 compared with a net loss of$1.8 million for Q3 2021, an increase of$5.6 million , and a net loss of$3.9 million for the nine months endedSeptember 30, 2022 compared to a net loss of$15.6 million in the same period of 2021, an increase of$11.7 million . - Debt-free2 with total cash at
September 30, 2022 of$106.4 million . - Generated positive Free Cash Flow1 in the nine months ended
September 30, 2022 of$18.2 million as compared to negative Free Cash Flow1 in same period of 2021 of$30.4 million .
"Our strong results this quarter reflect the anticipated improvement in both Adjusted EBITDA and Adjusted EBITDA margin as we began to deliver programming across multiple segments and make the first meaningful sales of
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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 Third 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 15% 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 Q3 Boat Rocker had delivered 16 shows so far in 2022 with another 40 in various stages of production.
Recent highlights include:
Television
- Season two of American Rust, starring
Jeff Daniels andMaura Tierney , is currently in pre-production. The second season will stream exclusively on Amazon Freevee and begins production at the end of November. Boat Rocker is producing and will distribute the series globally. Keeley Hawes (Bodyguard, Line of Duty) joinedKrysten Ritter (Breaking Bad,Jessica Jones ) as co-lead in Orphan Black: Echoes, the highly anticipated spin-off series of international hit show Orphan Black, currently in production inToronto .- New series, Sarah's Mountain Escape, starring acclaimed designer
Sarah Richardson , premiered on HGTV Canada onOctober 19 th. - Season six of The Great Canadian Baking Show premiered
October 2 nd on CBC. - Returning for an incredible 10th season with the biggest grand prize ever, Top
Chef Canada premieredSeptember 26 th on Food Network Canada. - Production has started on upcoming Bishop Sycamore football documentary, titled
B.S. High , which will debut onHBO in 2023. - Signed a first-look deal with actor, writer, director, and producer Jay Baruchel, under which Baruchel will develop and produce original television, film and digital projects for the Company.
Kids & Family
Dino Ranch was renewed for a third season (52 x 11 mins) and will air on Disney Junior and Disney+ in theU.S. in Fall 2023, followed by an international rollout on Disney Junior inLatin America and streaming on Disney+ in theUK ,Ireland ,Australia and New Zealand .Dino Ranch is now available to view in 170 countries with a total of 50 consumer product licensees globally.Dino Ranch remains the #1 preschoolU.S. cable show for kids aged two to five in its7pm time slot.- Boat Rocker's exciting new supernatural animated series, Daniel Spellbound, started streaming on Netflix on
October 27 th and debuted in the Netflix "Top 10 Kids" in most major markets globally, including Canada,U.S. ,UK ,Germany , andFrance . - Season eight of The Next Step premiered on
September 26th on CBBC (UK ) and Corus' YTV inCanada . - Two Boat Rocker Kids & Family productions have been nominated for Children's & Family Emmy Awards. A
Tale Dark & Grimm, is nominated for Outstanding Animated Series. The Kids Tonight Show is nominated for Outstanding Host. The inaugural awards ceremony takes place over two days,December 10-11 , inLos Angeles .
Representation
- This year was another stellar showing at the
Emmys , with more than 10 projects receiving nominations and clientJean Smart winning Best Actress in a Comedy for Hacks for the second consecutive year. - Cobra Kai Season 5, starring client
Ralph Macchio , debuted at #1 on Netflix's most watched TV series list with 107 million viewing hours in its first week. - Client
Rhea Seehorn was announced as the lead in an untitledVince Gilligan project for Apple TV+, which has received a two-season straight-to-series order. - Client
Laura Benanti was booked in Sony comedy No Hard Feelings, starring oppositeJennifer Lawrence . - Client
Emma Watson is the face of the new fragrance Prada Paradoxe, for which she also directed the commercial. The fragrance launch has been a major success to date.
Selected Financial Information
(Amounts in thousands CAD) | Three months ended | ||
2022 | 2021 | % change | |
Revenue | |||
Television | 42,142 | 166,930 | (75) % |
Kids and Family | 27,988 | 27,191 | 3 % |
Representation | 10,580 | 9,211 | 15 % |
Total revenue | 80,710 | 203,332 | (60) % |
Net income (loss) | 3,872 | (1,758) | 320 % |
Adjusted EBITDA* | 17,389 | 11,591 | 50 % |
(Amounts in thousands CAD) | Nine months ended | ||
2022 | 2021 | % change | |
Revenue | |||
Television | 97,631 | 239,153 | (59) % |
Kids and Family | 66,603 | 51,501 | 29 % |
Representation | 28,758 | 27,260 | 5 % |
Total revenue | 192,992 | 317,914 | (39) % |
Net income (loss) | (3,903) | (15,593) | 75 % |
Adjusted EBITDA* | 19,041 | 12,662 | 50 % |
Financial Review
Revenue for Q3 2022 was
Adjusted EBITDA* for Q3 2022 was
Net income for Q3 2022 was
*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 Third Quarter 2022 Management's Discussion and Analysis.
Total cash at
(Amounts in thousands CAD) | % change | ||||
Cash Available for Use* | $ 21,362 | $ 57,247 | (63) % | ||
Cash Required for Use in Productions* | 85,041 | 39,703 | 114 % | ||
Total cash | $ 106,403 | $ 96,950 | 10 % |
Outlook
As a result of ordinary course and COVID-related production schedule extensions, together with some delayed greenlights in the US unscripted business, Boat Rocker projects Adjusted EBITDA* will fall below its previously stated guidance for the year, as scripted deliveries and anticipated US unscripted greenlights push into next year.
However, management expects to generate appreciable growth in Adjusted EBITDA* for 2022 over its 2021 results as the Company continues to anticipate that its expanded slate of premium scripted dramas, expected continued success of its Kids & Family programming led by
For 2022, as in 2021, the Company expects a strong fourth quarter, supported principally by anticipated deliveries and consumer product revenue. Boat Rocker remains focused on annual Adjusted EBITDA* as the most important measure of the Company's performance, as well as Adjusted EBITDA* growth over multiple years given the length and variability of the Company's production cycles.
Management expects sustained demand for new and returning series in 2023, with major buyers having confirmed their commitment to continued content spend and international buyers eager for original premium scripted, unscripted and kids and family shows. Boat Rocker anticipates growth in each segment over the long term, including greater revenue from consumer products which is expected to contribute to higher margins, and further synergies attributable to Boat Rocker's enhanced scale. With its diverse content creation engine and long track record of successfully delivering multi-genre 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 Q4 is based on certain assumptions which 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 Third Quarter 2022 Management's Discussion and Analysis.
Fiscal 2022 Third Quarter Conference Call
Boat Rocker management will host a conference call to discuss its fiscal third quarter financial results 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
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 adjusted for 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 and unrealized gain or loss on forward currency contracts. 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. 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 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 repayments of interim production financing, payments of lease liabilities and distributions to non-controlling interests. While these types of cash flows are excluded from cash provided by operations, management believes they add value to evaluating the ability of the business to generate cash flow. In particular, interim production financing is crucial to the funding of productions and thus has been included in the calculation of Free Cash Flow. Similarly, repayment of lease liabilities and distributions made to non-controlling shareholders have also been included as management considers these to be operating cash flows.
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 and nine months ended
(Amounts in thousands CAD) | Three months ended | ||||
2022 | 2021 | ||||
Net income (loss) | 3,872 | (1,758) | |||
Amortization of property and equipment, right-of-use assets and other intangible assets | 4,423 | 4,457 | |||
Finance costs, net | 1,765 | 842 | |||
Income taxes | 330 | 601 | |||
EBITDA* | 10,390 | 4,142 | |||
Adjustments: | |||||
Change in fair value of contingent consideration3 | — | 132 | |||
Change in fair value of unsettled forward exchange contracts4 | 1,942 | (61) | |||
Change in fair value of other financial liabilities5 | 1,786 | 1,741 | |||
Amortization of acquired program intangibles6 | 2,252 | 971 | |||
COVID-19 related costs7 | — | 3,800 | |||
Share-based compensation8 | 313 | 792 | |||
Reorganization costs9 | 706 | 74 | |||
Adjusted EBITDA* | 17,389 | 11,591 | |||
* See "Non-IFRS Measures" |
Note: Adjusted EBITDA as previously reported included the change in fair value of unsettled forward exchange contracts and excluded the change in fair value of financial assets. Adjusted EBITDA for the three months ended |
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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 Third 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. |
3 Change in value of contingent consideration represents the non-cash expense associated with certain acquisitions. |
4 Change in fair value of the unrealized forward currency contracts. |
5 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. |
6 Amortization of program intangibles acquired in business combinations included in production, distribution and service costs. |
7 Incremental non-recoupable production costs specifically incurred due to COVID-19. |
(Amounts in thousands CAD) | Nine months ended | ||||
2022 | 2021 | ||||
Net income (loss) | (3,903) | (15,593) | |||
Amortization of property and equipment, right-of-use assets and other intangible assets | 13,195 | 13,985 | |||
Finance costs, net | 4,317 | 3,844 | |||
Income taxes | 230 | 1,188 | |||
EBITDA* | 13,839 | 3,424 | |||
Adjustments: | |||||
Change in fair value of convertible debt10 | — | (4,382) | |||
Change in fair value of contingent consideration11 | (6,533) | 398 | |||
Change in fair value of unsettled forward exchange contracts12 | 1,460 | 247 | |||
Change in fair value of other financial liabilities13 | 4,577 | 3,056 | |||
Gain on settlement of loans and borrowings14 | — | (2,334) | |||
Amortization of acquired program intangibles15 | 3,512 | 2,649 | |||
IPO and transaction-related costs16 | — | 972 | |||
COVID-19 related costs17 | — | 4,651 | |||
Share-based compensation18 | 1,320 | 3,561 | |||
Reorganization costs19 | 866 | 420 | |||
Adjusted EBITDA* | 19,041 | 12,662 | |||
* See "Non-IFRS Measures" |
Note: Adjusted EBITDA as previously reported included the change in fair value of unsettled forward exchange contracts and excluded the change in fair value of financial assets. Adjusted EBITDA for the nine months ended |
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8 Non-cash expenses associated with share-based compensation granted to certain officers and employees. |
9 Restructuring charges primarily related to personnel costs. |
10 Change in fair value of convertible debt represents the non-cash gain on the conversion of certain debentures issued by the Company. |
11 Change in value of contingent consideration represents the non-cash expense associated with certain acquisitions. |
12 Change in fair value of the unrealized forward currency contracts. |
13 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. |
14 Non-cash gain recorded on the settlement of the Company's loans and borrowings. |
15 Amortization of program intangibles acquired in business combinations included in production, distribution and service costs. |
16 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. |
17 Incremental non-recoupable production costs specifically incurred due to COVID-19. |
18 Non-cash expenses associated with share-based compensation granted to certain officers and employees. |
19 Restructuring charges primarily related to personnel costs. |
SOURCE
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