BRMI Boat Rocker Media Inc

TORONTO, May 15, 2024 /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 March 31, 2024 ("first quarter" or "Q1"). The Company's consolidated financial statements and accompanying notes and Management's Discussion and Analysis ("MD&A") for the three months ended March 31, 2024 and 2023 are available under the Company's profile on SEDAR+ (www.sedarplus.ca). All dollar amounts are expressed in Canadian currency, unless otherwise noted. Certain metrics, including those expressed on an adjusted basis, are non-IFRS measures (see "Non-IFRS Measures" below).

Selected Financial Highlights

• Q1 revenue of $51.3 million versus $79.8 million in Q1 2023, a decrease of 35.7%.
• Q1 Adjusted EBITDA¹ of $3.2 million versus a loss of $1.8 million in Q1 2023, an increase of 279.7%.
• Net loss of $2.5 million in Q1 versus a net loss of $9.5 million in Q1 2023, an improvement of $7.0 million.
• Debt-free² with total cash at March 31, 2024 of $98.2 million, including $35.9 million of Cash Available for Use³.

"The media and entertainment industry continues to seek its footing post-strikes but as our solid Q1 earnings demonstrate, there are signs of resilience," said John Young, Chief Executive Officer, Boat Rocker Media. "We saw strong output levels from our Canadian unscripted business and positively trending earnings in our Representation segment. We have also seen incredible response to our recently launched scripted series American Rust: Broken Justice which premiered in Amazon Prime Video's Top 10, while Palm Royale premiered as Apple TV+'s #1 show. Alongside our premieres and productions, we continue to focus on building for the long-term through investment in IP while retaining healthy cash reserves."

Selected Content Highlights

Television

Scripted

• Palm Royale, starring Kristen Wiig, Ricky Martin, with Laura Dern, Allison Janney, and extra special guest star Carol Burnett, premiered as the #1 show on Apple TV+'s Top 10.
• American Rust: Broken Justice, starring Jeff Daniels and Maura Tierney, premiered in Amazon Prime Video's Top 10 television series and movies.
• Beacon 23, starring Lena Headey and Stephan James, premiered in Amazon Prime Video Canada's Top 10 television series. Season two of Beacon 23 also premiered on MGM+ in the U.S. on April 7^th.
• Orphan Black: Echoes is premiering on ITVX in the UK on May 16^th and on June 23^rd on AMC, AMC+, and BBC America.
• Production is underway in Ireland on Video Nasty, a new scripted series co-production with Deadpan Pictures.
• Co-producing international live action scripted series Mix Tape with Ireland's Suboptica and Australia's Aquarius Films for Binge/Foxtel in Australia. Boat Rocker will also distribute the series internationally.

Unscripted

• Downey's Dream Cars, starring Oscar-winner Robert Downey Jr., secured two Daytime Emmy nominations for Sound Mixing/Sound Editing and Lifestyle Program.
• Season two of Canada's Ultimate Challenge premiered on CBC on April 28^th.
• War Game was selected as the closing night film at the Doc10 Chicago film festival.
• Partnered with Shark Teeth Films to distribute three upcoming unscripted shows, Secrets in the Ice season four and new factual series Discovered By Disaster and Secrets in the Dark.

Kids and Family

• The Next Step season nine premiered on YTV and CBBC on May 13^th.
• Production continues on Dino Ranch season three (Disney+, CBC), The Sunnyridge 3 (Disney EMEA), and The Loud House season eight (Nickelodeon).

Representation

• Nine Untitled clients participated in films selected for the 77^th Cannes Film Festival including Uma Thurman (Oh Canada), Demi Moore (The Substance), Hunter Schafer (Kinds of Kindness), and Diane Kruger (The Shrouds).
• Client Laura Dern to join George Clooney and Adam Sandler in a new untitled Netflix film directed by Noah Baumbach.
• Untitled clients' work was recognized with 10 2024 Tony Award nominations including Jessica Lange, Best Leading Actress in a Play in Mother Play, LaChanze in Best New Play nominee Jaja's African Hair Braiding and Best New Musical nominee The Outsiders, and Leslie Odom Jr., Best Leading Actor in a Play in Purlie Victorious.

Selected Financial Information

Financial Review

Revenue for the three months ended March 31, 2024 was $51.3 million versus $79.8 million in Q1 2023, a decrease of $28.4 million or 35.7%. The decrease is largely owing to the variance in scripted series deliveries between the two periods where the average revenue per episode is significantly higher than in other genres. Kids and Family recorded a modest decline due to lower service volumes in the quarter compared to the prior year, partially offset by stronger production revenues. The Representation segment is showing recovery from the 2023 U.S. labour strikes, although due to expected lags, it generated slightly lower revenues in the quarter than in the same period in 2023.

Adjusted EBITDA* for the three months ended March 31, 2024 was $3.2 million versus a loss of $1.8 million in Q1 2023. Representation segment performance and Canadian unscripted deliveries largely contributed to the Company's positive adjusted EBITDA results.

Net loss for the three months ended March 31, 2024 was $2.5 million versus a net loss of $9.5 million for the same period in 2023, a positive variance of $7.0 million.

Total cash at March 31, 2024 was $98.2 million, of which $35.9 million represents Cash Available for Use*. The following table presents the breakdown of cash as at March 31, 2024 and December 31, 2023:

Outlook

Owing to challenging industry-wide trends exacerbated by the 2023 WGA and SAG-AFTRA strikes, the Company continues to anticipate 2024 being a softer year as a result of the delays in new content commissions, renewals, production, and paid development, therefore impacting its overall financial performance. However, the Company is maintaining its target Adjusted EBITDA* of approximately $20 million for fiscal 2024. Management believes this downturn will be temporary and that industry conditions should normalize, resulting in production levels at Boat Rocker returning to those more typical of past performance.

Anticipating the improvement of macroeconomic dynamics, Boat Rocker is continuing to implement a content-first strategy with an increased focus on developing owned IP, particularly in scripted television and premium documentary programming, and its exploitation internationally. As part of this strategy, Boat Rocker is pursuing more international co-production and completion financing opportunities. These capabilities round out the Company's diversified portfolio, which will continue to include healthy margin service work across scripted, unscripted and kids and family content and steady performance in its Representation segment.

With $35.9 million of Cash Available for Use*, Management intends to assertively invest in content in 2024 in order to seed future growth. At the end of 2023, Boat Rocker's distribution library of owned and third party IP totaled approximately 9,700 half hours.

Boat Rocker's content strategy is supported by sound operational management and a continued focus on prudent cost management across production and corporate. In addition, Boat Rocker's balance sheet remains strong, with no corporate debt** and a healthy cash position.

The Company's expected future performance is based on certain assumptions that are outlined in the Company's MD&A dated May 15, 2024, and subject to certain risks as outlined in the Company's Annual Information Form for the year ended December 31, 2023.

_{*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 MD&A for the three months ended March 31, 2024.}

_{**The Company currently has no corporate term debt, only interim production financing (including through two borrowing base facilities) in the ordinary course of operations.}

Fiscal 2024 First Quarter Conference Call

Boat Rocker management will host a conference call to discuss its fiscal first quarter financial results at 8:30 a.m. EDT on May 15, 2024.

The audio webcast can be accessed at https://emportal.ink/3xjumXB or on the Company's investor relations page at https://www.boatrocker.com/investor-relations/events-and-presentations/event-details/2024/Q1-2024-Conference-Call/default.aspx

Or to participate by phone, dial 416-764-8650 (Local) or 888-664-6383 (North American Toll-Free).

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 416-764-8677 (Local) or 1-888-390-0541 (North American Toll-Free), Access Code 639723#. The replay will be available until midnight (EDT) on May 22, 2024.

About Boat Rocker

Boat Rocker (TSX: BRMI) is the home for creative visionaries. An independent, integrated global entertainment company, the Company'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 and 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+), Palm Royale (Apple TV+), American Rust: Broken Justice (Prime Video), Beacon 23 (MGM+), Pretty Baby: Brooke Shields (Hulu), Downey's Dream Cars (Max), BS High (HBO), 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, Corus, 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 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, 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, 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.

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 March 28, 2024. Forward-looking information is also subject to a number of specific and general risks. 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 for the year ended December 31, 2023. 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 value and 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 table presents the reconciliation from net income (loss) to Adjusted EBITDA* for the three months ended March 31, 2024 and 2023:

SOURCE Boat Rocker Media Inc.