Achieved Anticipated Step-Up in Scale and Delivered Strongest Quarterly Financial Performance in Company's History

TORONTO, March 31, 2022 /CNW/ - Boat Rocker Media Inc. ("Boat Rocker" or the "Company") (TSX: BRMI), an independent, integrated global entertainment company, today reported its financial results for the three months ended December 31, 2021 ("fourth quarter" or "Q4") and for the year ended December 31, 2021. The Company's consolidated financial statements and accompanying notes for the years ended December 31, 2021 and 2020 and Management's Discussion and Analysis ("MD&A") for the three months and years ended December 31, 2021 and 2020 are available under the Company's profile on SEDAR (www.sedar.com). All dollar amounts are expressed in Canadian currency, unless otherwise noted. Certain metrics, including Adjusted EBITDA, are non-IFRS measures (see "Non-IFRS Measures" below). 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.

Selected Financial Highlights

  • Record Adjusted EBITDA1 of $19.0 million in Q4 2021 versus $7.4 million in Q4 2020, an increase of 155%, and $31.6 million for the full year versus $14.1 million in 2020, an increase of 125%.
  • Record revenue of $262.5 million in Q4 2021 compared with $55.6 million in Q4 2020, an increase of 372%, and $580.4 million for the full year versus $226.8 million in the same period of 2020, an increase of 156%.
  • Revenue growth for the full-year period was mainly driven by a 241% revenue increase in Television. Kids and Family also delivered 32% growth while Representation delivered 33% growth.
  • Net income of $3.5 million in Q4 2021 compared with net loss of $0.4 million in Q4 2020 and net loss of $12.1 million year-to-date compared with a loss of $44.0 million in the same period of 2020.
  • Debt-free2 with total cash at December 31, 2021 of $97.0 million.

"In the fourth quarter we recorded the strongest financial performance in the Company's history, closing out an extraordinary year in which we delivered a leap in scale, more than doubling both Adjusted EBITDA and revenue over the prior year," said John Young, Chief Executive Officer of Boat Rocker. "Our results for both the quarter and full year are proof of our ability to produce and deliver premium, multi-genre content, source and unlock the value of IP, and build brands with global reach and appeal. Our Adjusted EBITDA results in particular speak to our capacity to operate at our new scale, as well as the strength of our integrated platform. With a clean balance sheet, and against a backdrop of sustained and robust demand for content, we believe we have a long runway for continued success."

________________________

1 See "Non-IFRS Measures."

2 The Company currently has no corporate term debt, only interim production financing in the ordinary course of operations.

Selected Operational Highlights
In 2021, Boat Rocker delivered a material step-up in its content creation and financial performance across its three reporting segments: Television, Kids and Family, and Representation. All segments showed significant growth in both the fourth quarter and full-year periods. The Company's 2021 production slate spanned more than 60 high-quality Scripted, Unscripted, and Kids and Family titles for nearly every major buyer including Netflix, Apple TV+, Amazon Prime, HBO Max, Peacock, TBS, ViacomCBS, Discovery+ and Disney.  

Recent highlights include:

Television

  • In 2021, the Company fully delivered its two premium scripted series, American Rust to Showtime and Invasion to Apple TV+, the largest productions in the Company's history.
  • It was a strong year for Unscripted, with many new successes and returning favourites:
    • Boat Rocker produced one of 2021's top documentaries for Apple TV+, Billie Eilish: The World's A Little Blurry, which was nominated for four Emmy awards and short-listed for an Academy Award.
    • Returning shows on the 2021 slate included Go-Big Show season two (TBS), The Great Canadian Baking Show season five (CBC), Big Brother Canada season nine (Global), Top Chef Canada season nine (Food Network Canada), and Dear… season two (Apple TV+).
  • Boat Rocker's content, including Dino Ranch, Big Brother Canada, The Great Canadian Baking Show, and Mary Makes it Easy, was recognized with 28 Canadian Screen Award nominations.
  • As a cornerstone of Boat Rocker's mission to be the home for creative visionaries, the Company significantly expanded its relationships with creative talent in 2021 through two equity investments and five first-look deals:
    • Purchased a minority equity stake in TeaTime Pictures ("TeaTime"), founded by award-winning actor and producer Dakota Johnson and former Netflix executive Ro Donnelly. Concurrently, Boat Rocker extended its current first-look deal with TeaTime to develop and produce scripted and unscripted television and digital content. This partnership has already resulted in a greenlight for Slip, a new series created and written by, and starring Zoe Lister-Jones (CBS's Life in Pieces), for Roku. Several other high-profile projects are in various stages of development including an adaptation of Bexy Cameron's memoir Cult Following with HBO Max.
    • Partnered with veteran television executive Jessica Sebastian-Dayeh to launch Maven, a new production company focused on creating premium, female-led unscripted content. In 2021, Maven delivered two shows, Addison Rae Goes Home and Meme Mom for Snapchat, with a new documentary, Le Bal Paris, currently in production, with Boat Rocker planning to distribute internationally.
    • Entered into first-look deals with historian and antiracist scholar Dr. Ibram X. Kendi (How to Be An Antiracist) and his Maroon Visions production company, award-winning producer and director Scott Weintrob, founder of leading multidisciplinary creative studio LARGE EYES, veteran creative producers Cleve Keller and Dave Noll (Chopped franchise) of Keller Noll, indie film and television producer Stephanie Langhoff (HBO's Togetherness) and her High Tide Productions, and acting and producing brothers Shamier Anderson and Stephan James under their Bay Mills Studios production banner. Boat Rocker has a large slate of projects in development with all its new creative partners including a limited series with Bay Mills about the life of iconic artist Jean-Michel Basquiat, with James attached to star.
  • For 2022, the Company has already more than doubled its 2021 confirmed premium scripted slate to five titles:
    • Invasion was renewed for a second season by Apple TV+.
    • Mrs. American Pie, starring Kristen Wiig and executive produced by Laura Dern, has been greenlit by Apple TV+.
    • Robyn Hood, directed by Director X and written by Chris Roberts (Orphan Black), has been greenlit by Corus Entertainment. Boat Rocker plans to distribute the show internationally.
    • Slip (Roku) is expected to begin production in summer 2022 and Boat Rocker plans to distribute the show internationally.
    • Beacon 23 for Spectrum/AMC, starring Lena Headey (Game of Thrones) and Stephan James (If Beale Street Could Talk), is expected to begin production in April in Toronto. Boat Rocker plans to distribute the show internationally.

Kids and Family

  • Since its debut in January 2021, Dino Ranch has resonated with audiences worldwide, maintaining its ranking as the #1 preschool U.S. cable show for kids aged two to five in its time slot.
  • Dino Ranch was the most watched CBC Kids program of 2021 for kids aged two to 11 in Canada.
  • The show has sold to 170 countries and has been translated into 15 languages.
  • 2021 saw the initial launch of a consumer products program in Canada, the U.S., and Australia, rolling out to major in-store and e-retailers including Amazon, Target.com, Walmart.com, Toys'R'Us, Kohls, Barnes and Noble, and Big W.
  • Continued international retail expansion planned for 2022 across over 20 major retailers in more than 10 countries.
  • In 2021, Boat Rocker's large and diverse Kids and Family slate included a mix of live-action and animated titles including Amber Brown (Apple TV+), Rebel Cheer Squad: A Get Even Series season two (CBBC, Netflix), Love Monster season two (HBO Max), and Daniel Spellbound (Netflix).
  • Animation engine Jam Filled Entertainment operated at full capacity on new and returning favourites including Inside Job (Netflix), Bubble Guppies season five (Nickelodeon), The Loud House season six (Nickelodeon), and Dino Ranch season two (Disney, CBC).

Representation

  • Untitled Entertainment clients had an exceptional 2021, being recognized with more than 20 major international award nominations and 11 wins including:
    • Seven Critics Choice Award nominations.
    • Jean Smart won Emmy, Golden Globe, Screen Actors' Guild, and Critics Choice awards for her performance in HBO's breakout hit Hacks.
    • MJ Rodriguez won a Golden Globe and was nominated for an Emmy and several other awards for her ground-breaking performance in FX's Pose.
    • Penelope Cruz was nominated for a Best Actress Oscar for Pedro Almodovar's Parallel Mothers.

Selected Financial Information

(in thousands of Canadian dollars except per share amounts)

Three months ended December 31,


2021

2020

% change

Revenue




Television

218,879

29,251

648

%

Kids and Family

32,867

16,693

97

%

Representation

10,709

9,670

11

%

Total revenue

262,455

55,614

372

%

Net income (loss)

3,512

(446)

887

%

Adjusted EBITDA*

18,967

7,439

155

%

 

(in thousands of Canadian dollars except per share amounts)

Year ended December 31,


2021

2020

% change

Revenue




Television

458,032

134,298

241

%

Kids and Family

84,368

63,851

32

%

Representation

37,969

28,654

33

%

Total revenue

580,369

226,803

156

%

Net loss

(12,081)

(43,990)

73

%

Adjusted EBITDA*

31,630

14,054

125

%

* See "Non-IFRS Measures"

Financial Review

Revenue for Q4 2021 was $262.5 million versus $55.6 million in the fourth quarter of 2020, an increase of $206.8 million or 372%. Revenue for the year ended December 31, 2021 was $580.4 million compared with $226.8 million for the same period of 2020, an increase of $353.6 million or 156%. Revenue increased in all segments, with production revenue in Television rising by 241%. This significant growth reflects a higher volume of content deliveries in the period overall, but was principally driven by two premium scripted series, American Rust and Invasion.

Adjusted EBITDA for Q4 2021 was $19.0 million compared with $7.4 million for the same period of 2020, an increase of 155%. The increase in Adjusted EBITDA was predominantly driven by higher segment profit in Television owing to a higher volume of content deliveries, as well as higher segment profit in Representation. Adjusted EBITDA for the year ended December 31, 2021 was $31.6 million compared with $14.1 million for the same period of 2020, an increase of 125%. Adjusted EBITDA is a non-IFRS measure. See "Non-IFRS Measures" below.

Net income for Q4 2021 was $3.5 million, compared with a net loss of $0.4 million in the same period of 2020, an improvement of $4.0 million. Net loss for the year ended December 31, 2021 was $12.1 million, compared with $44.0 million in the same period of 2020, an improvement of $31.9 million. The year-over-year change is attributable to certain non-cash expenses recognized in 2020, including an impairment to Goodwill, for which there were no comparable amounts in the current period.

Total cash at December 31, 2021 was $97.0 million, of which $57.2 million represents Cash Available for Use*. Boat Rocker's Initial Public Offering ("IPO") raised gross proceeds of $170.1 million and the Company used $90.5 million of the net proceeds from the IPO to repay all of its term debt under its corporate credit facility. The following table presents the breakdown of cash as at December 31, 2021 and December 31, 2020:

(Amounts in thousands CAD)

December 31,
2021

December 31,
2020

% change

Cash Available for Use*

$

57,247

$

32,162

78%

Cash Required for Use in Productions*

39,703

39,592

—%

Total cash

$

96,950

$

71,754

35%

*Cash Available for Use and Cash Required for Use in Productions are non-IFRS measures. See "Non-IFRS Measures" below.

Outlook

Boat Rocker delivered a material step-up in its top-line performance in 2021, reporting an 156% revenue increase in the year ended December 31, 2021 compared with 2020. Revenue increased in all three of the Company's segments. Boat Rocker also delivered a 125% increase in Adjusted EBITDA and a 73% decrease in net loss in 2021 over 2020.

In 2022, management is expecting Adjusted EBITDA growth and margin expansion. It expects Adjusted EBITDA to be in the range of $40 to $50 million, which would represent approximately 25% - 60% growth from the $31.6 million generated in 2021.

Factors expected to contribute to these increases include growth in each segment, greater revenue from consumer products, which is expected to contribute to higher margins, and further synergies attributable to Boat Rocker's enhanced scale. Management remains focused on Adjusted EBITDA as it believes this metric is the most important measure of the Company's performance. As in 2021, management currently expects to deliver stronger results in the second half of the year. Expected improvement in performance is based on certain assumptions which are outlined in the Company's annual MD&A dated March 31, 2022 and subject to certain risks as outlined in the Company Annual Information form dated March 31, 2022.

Management expects industry tailwinds to remain strong throughout 2022, with the global demand for premium content and talent showing no signs of abating. With its diverse and scaled content creation engine and long track record of successfully delivering multi-genre content at all budget levels to the world's leading platforms, Boat Rocker believes that it is well positioned to capitalize on positive market trends. Operating in this dynamic setting, Boat Rocker will seek to continue to scale and enhance its capabilities as a next generation entertainment company for the years ahead.

COVID-19 Pandemic Update

The COVID-19 pandemic continued to impact Boat Rocker's financial results for the quarter and year ended December 31, 2021 although much less so than in 2020 when the content production industry experienced a significant pause on live-action production. Live-action production continued in Q4 2021 and the Company's animation teams continued to successfully work remotely to produce and deliver content. Although 2021 saw the roll-out of vaccines and the loosening of some COVID-19-related restrictions in the jurisdictions in which the Company operates, uncertainty remains and the global entertainment industry as a whole continues to experience the ongoing effects of the pandemic, including incremental costs, potential COVID-19-related production shutdowns on live action sets owing to cast or crew exposure, lack of affordable insurance coverage in the event of COVID-related claims, and supply chain disruptions affecting production and delivery of merchandise related to entertainment brands. Some of the Company's shows that were delivered in the second half of 2021 also incurred certain COVID-related costs in excess of budgeted amounts that could not have been anticipated when the budgets were finalized pre-pandemic and which will not be covered by the broadcasters of those series or by insurance proceeds. 2022 production budgets include expenses for COVID-19-related protocols.

Fiscal 2021 Fourth Quarter Conference Call

Boat Rocker management will host a conference call to discuss its fiscal fourth quarter financial results at 8:30 a.m. EDT on March 31, 2022. To participate in the call, dial (416) 764-8650 or (888) 664-6383 (using the conference ID 52039310). The audio webcast can be accessed 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 Untitled Entertainment. A selection of Boat Rocker's projects include: Invasion (Apple TV+), Orphan Black (BBC AMERICA, CTV Sci-Fi Channel), Dear…(Apple TV+), Billie Eilish: The World's a Little Blurry (Apple TV+), The Next Step (BBC, Family Channel, CBC), Daniel Spellbound (Netflix), and Dino Ranch (Disney+, Disney Junior, CBC). For more information, please visit www.boatrocker.com.

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 year end 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, Net Cash, 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 financial assets, 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 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 and cash equivalents 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 demand loans 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.

Forward-Looking Statements

This press release contains 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 including foreign exchange rates, the timing of greenlights and delivery schedules on various shows, and other assumptions as set out in the Outlook section of the Company's Annual MD&A dated March 31, 2021. Forward-looking information is subject to risks, many of which are beyond the Company's control, including the impacts of COVID-19, inflation, and global supply chain issues. A comprehensive summary of the risks and uncertainties that may affect the business of the Company is set out in the Company's Annual Information Form dated March 31, 2021. The risks and uncertainties described therein are not the only ones Boat Rocker faces. Additional risks and uncertainties not presently known to the Company or that it currently believes to be immaterial may also materially adversely affect the Company's business, assets, liabilities, financial condition, results of operations, prospects, cash flows and the future trading price of the Subordinate Voting Shares. Boat Rocker does not undertake any obligation to update forward-looking information, whether as a result of new information, future events or otherwise, except as expressly required under applicable securities laws.

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 year ended December 31, 2021 and 2020:

(Amounts in thousands CAD)

Three months ended December 31,


2021

2020







Net income (loss)

3,512

(446)

Amortization of property and equipment, right-of-use assets and other intangible assets

4,576

4,749

Finance costs, net

898

2,774

Income taxes

4,965

1,264

EBITDA*

13,951

8,341




Adjustments:



Change in fair value of convertible debt1

—

(43)

Change in fair value of contingent consideration2

(3,684)

(3,180)

Change in fair value of unsettled forward exchange contracts3

1,004

(845)

Change in fair value of other financial liabilities4

470

1,835

Amortization of acquired program intangibles5

730

718

IPO and transaction-related costs6

500

(460)

Gain on sale of assets7

—

(1,356)

COVID-19 related costs8

4,948

—

Share-based compensation9

1,033

2,429

Reorganization costs10

15

—

Adjusted EBITDA*

18,967

7,439

* See "Non-IFRS Measures"

Note: Adjusted EBITDA as previously reported included the change in fair value of unsettled forward exchange contracts. Management considers that these amounts should be excluded from Adjusted EBITDA as they are not reflective of the Company's performance until such time that the forward exchange contracts are settled. Adjusted EBITDA for the three months ended December 31, 2020 was previously reported as $8,284.

_________________________________

1 Change in fair value of convertible debt represents the non-cash gain on the conversion of certain debentures issued by the Company

2 Change in value of contingent consideration represents the non-cash expense associated with certain acquisitions

3 Change in fair value of the unrealized forward currency contracts

4 Change in fair value of other financial liabilities represents the non-cash expenses on certain put options and accretion on liabilities associated with certain acquisitions

5 Amortization of program intangibles acquired in business combinations included in production, service and distribution expense

6 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 operations

7 Represents gain on sale of an equity accounted investee

8 Incremental non-recoupable production costs specifically incurred due to COVID-19

9 Includes non-cash expenses associated with share-based compensation granted to certain officers and employees

10 Restructuring charges primarily related to personnel costs

 

(Amounts in thousands CAD)

Year ended December 31,


2021

2020







Net loss

(12,081)

(43,990)

Amortization of property and equipment, right-of-use assets and other intangible assets

18,561

18,566

Finance costs, net

4,742

10,634

Income taxes

6,153

1,884

EBITDA*

17,375

(12,906)




Adjustments:



(Gain on settlement) loss on modification of loans and borrowings11

(2,334)

342

Change in fair value of convertible debt12

(4,382)

1,434

Change in fair value of unsettled forward exchange contracts13

1,251

(249)

Change in fair value of contingent consideration14

(3,286)

(2,300)

Change in fair value of other financial liabilities15

3,526

7,309

Amortization of acquired program intangibles16

3,380

2,926

Gain on sale of assets17

—

(1,356)

IPO and transaction-related costs18

1,472

254

COVID-19 related costs19

9,599

—

Share-based compensation20

4,594

5,449

Goodwill impairment21

—

12,959

Reorganization costs22

435

192

Adjusted EBITDA*

31,630

14,054

* See "Non-IFRS Measures"

 

___________________________

11 Non-cash (gain) loss recorded on the modification (settlement) of the Company's loans and borrowings

12 Change in fair value of convertible debt represents the non-cash gain on the conversion of certain debentures issued by the Company

13 Change in fair value of the unrealized forward currency contracts

14 Change in value of contingent consideration represents the non-cash expense associated with certain acquisitions

15 Change in fair value of other financial liabilities represents the non-cash expenses on certain put options and accretion on liabilities associated with certain acquisitions

16 Amortization of program intangibles acquired in business combinations included in production, service and distribution expense

17 Represents gain on sale of an equity accounted investee

18 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 operations

19 Incremental non-recoupable production costs specifically incurred due to COVID-19 

20 Includes non-cash expenses associated with share-based compensation granted to certain officers and employees

21 Impairment of goodwill associated with the Unscripted cash generating unit

22 Restructuring charges primarily related to personnel costs

Note: Adjusted EBITDA as previously reported included the change in fair value of unsettled forward exchange contracts. Management considers that these amounts should be excluded from Adjusted EBITDA as they are not reflective of the Company's performance until such time that the forward exchange contracts are settled. Adjusted EBITDA for the year ended December 31, 2020 was previously reported as $14,303.

SOURCE Boat Rocker Media Inc.

© Canada Newswire, source Canada Newswire English