Boat Rocker Media Reports Second Quarter 2022 Financial Results

Adjusted EBITDA of $7.8 million for Q2 2022 versus $2.7 million for Q2 2021;
Net income of $4.6 million for Q2 2022 versus a net loss of $8.8 million for Q2 2021;
Announces Intent to File Notice to Commence Normal Course Issuer Bid

TORONTO, Aug. 10, 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 June 30, 2022 ("second quarter" or "Q2"). The Company's consolidated financial statements and accompanying notes and Management's Discussion and Analysis ("MD&A") for the three and six months ended June 30, 2022 and 2021 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 those expressed on an adjusted basis, are non-IFRS measures (see "Non-IFRS Measures" below).

Selected Financial Highlights

• Revenue of $65.4 million for Q2 2022 compared with $62.1 million for Q2 2021, an increase of 5%, and $112.3 million for the six months ended June 30, 2022 versus $114.6 million in the same period of 2021, a decrease of 2%.
• Adjusted EBITDA¹ of $7.8 million for Q2 2022 versus $2.7 million for Q2 2021, an increase of 185%, and $1.7 million for the six months ended June 30, 2022 versus $1.1 million in the same period of 2021, an increase of 54%.
• Net income of $4.6 million for Q2 2022 compared with net loss of $8.8 million for Q2 2021, an increase of $13.4 million, and net loss of $7.8 million for the six months ended June 30, 2022 compared to a net loss of $13.8 million in the same period of 2021, an increase of $6.1 million.
• Debt-free² with total cash at June 30, 2022 of $100.8 million.
• Generated positive Free Cash Flow¹ in the six months ended June 30, 2022 of $7.6 million as compared to negative Free Cash Flow¹ in same period of 2021 of $44.0 million.

"This quarter we saw continued momentum across our business units with more than 40 shows in various stages of production and more greenlit to start in the second half of the year," said John Young, Chief Executive Officer of Boat Rocker. "With seven premium scripted series on our FY 2022 slate, including the recently renewed American Rust and a second season of Beacon 23, and our Kids & Family division delivering 61% quarter over quarter growth compared to the prior year, we continue to drive towards reaching our financial goals. Our results this quarter reflect the anticipated build in Adjusted EBITDA, which we expect to accelerate through the second half of the year as we begin to deliver on our scripted drama slate. We remain focused on investing in our owned IP, particularly in series we are distributing internationally, as well as the broader business."

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1 See "Non-IFRS measures

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. The Kids & Family division, in particular, saw 61% quarter over quarter 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.

Recent highlights include:

Television

• Recently announced the early renewal of the second season of sci-fi series Beacon 23 for Spectrum and AMC.
• Krysten Ritter (Breaking Bad, Jessica Jones) will star in Orphan Black: Echoes, the highly anticipated spin-off series of international hit show Orphan Black.
• Near-fi scripted series Robyn Hood began production in Toronto & Hamilton in June. The original series for Corus is created by and directed by frequent Drake collaborator, Director X and written by award winning screenwriter, Chris Roberts (Orphan Black). Boat Rocker is distributing the show internationally.
• Season two of Boat Rocker's premium scripted drama series, American Rust, starring Emmy winner Jeff Daniels and Golden Globe winner Maura Tierney, has been picked up by Amazon Freevee. The show will be produced and distributed worldwide by Boat Rocker and stream exclusively on Amazon Freevee.
• Insight Productions has wrapped up production on the first season of Canada's Ultimate Challenge for the CBC. The series is set to premiere in winter 2023.
• Downey's Dream Cars, (working title), featuring Robert Downey Jr., is being produced by Team Downey and Matador Content and is expected to launch in late 2022 on the Warner Bros. Discovery streaming platform.
• Matador Content also received a greenlight from Hulu for Drag Me to Dinner, a new cooking series created and executive produced by and featuring Neil Patrick Harris and David Burtka. The new series is slated to premiere on Hulu in 2023.

Kids & Family

• Dino Ranch remains the #1 preschool U.S. cable show for kids aged two to five in its 7pm time slot.
• All new season two episodes of Dino Ranch premiered July 22^nd on Disney Junior in the U.S. Dino Ranch is now available to view in 170 countries with a total of 45 licensee partners globally joining the excitement in bringing the Dino Ranch world to life through toys, apparel, publishing, costumes, footwear, bedding, and more.
• Rebel Cheer Squad: A Get Even Series, the teen thriller series adapted from the book series "Don't Get Mad" by Gretchen McNeil, premiered on Netflix worldwide in July.
• Amber Brown premiered on Apple TV+ on July 29^th. From Emmy Award-nominated writer and director Bonnie Hunt and based on the bestselling book series by Paula Danziger, with over 10 million copies in print.

Representation

• Untitled clients were associated with numerous projects which received Emmy nominations, including 5 acting nominations for Untitled clients:
• Jean Smart - Lead Actress in a Comedy Series – Hacks
• Christina Ricci –Supporting Actress in a Drama Series – Yellowjackets
• Rhea Seehorn - Supporting Actress in a Drama Series – Better Call Saul
• Alexandra Daddario – Supporting Actress in a Limited Series or TV Movie – The White Lotus
• Connie Britton - Supporting Actress in a Limited Series or TV Movie – The White Lotus
• Untitled added a number of new clients in Q2, including singer/songwriter Robbie Williams, Denis Hamill (writer/Co-Producer on Law & Order: SVU), and Dave Needham (story artist and Pixar director associated with projects including Trolls and Boss Baby).
• Buried in Barstow, starring Untitled client Angie Harmon and produced by Untitled, premiered on Lifetime to strong ratings.

Corporate Update

As part of its ongoing capital allocation strategy, the board of directors has approved Boat Rocker filing with the Toronto Stock Exchange ("TSX") a notice of intention to commence a normal course issuer bid ("NCIB"). The notice will be subject to regulatory approval by the TSX and there can be no assurance that it will be accepted.  The Company reviews its capital allocation strategy on an ongoing basis and given the trading price in the Company's stock and the volatility in the markets, management and the Board believe that the market price of the Company's Subordinate Voting Shares does not reflect the intrinsic value of the Company and the repurchase of the stock would be in the best interests of the Company and its shareholders and would represent an attractive and appropriate use of available funds. This intent to file follows a period of insider buying that saw more than 50,000 shares purchased by Board members and senior management after the Company's Q1 results were announced.

Selected Financial Information
(Amounts in thousands CAD)	Three months ended June 30,
	2022	2021	% change
Revenue
Television	36,736	41,669	(12) %
Kids and Family	19,112	11,843	61 %
Representation	9,585	8,576	12 %
Total revenue	65,433	62,088	5 %
Net income (loss)	4,557	(8,819)	152 %
Adjusted EBITDA*	7,813	2,746	185 %
(Amounts in thousands CAD)	Six months ended June 30,
	2022	2021	% change
Revenue
Television	55,489	72,223	(23) %
Kids and Family	38,615	24,310	59 %
Representation	18,178	18,049	1 %
Total revenue	112,282	114,582	(2) %
Net income (loss)	(7,775)	(13,835)	44 %
Adjusted EBITDA*	1,652	1,072	54 %

^* See "Non-IFRS Measures"

Financial Review

Revenue for Q2 2022 was $65.4 million versus $62.1 million in Q2 2021, an increase of $3.3 million. Revenue for the six months ended June 30, 2022 was $112.3 million compared with $114.6 million for the same period of 2021, a decrease of $2.3 million or 2%. While revenue decreased in the Television segment, revenue in both the Kids and Family and Representation segments increased. The variances are primarily due to the timing of delivery of productions.

Adjusted EBITDA* for Q2 2022 was $7.8 million compared with $2.7 million for the same period of 2021, an increase of $5.1 million. Adjusted EBITDA for six months ended June 30, 2022 was $1.7 million versus $1.1 million in 2021, an increase of $0.6 million.

Net income for Q2 2022 was $4.6 million compared with a loss of $8.8 million for the same period of 2021, an increase of $13.4 million.  Net loss for the six months ended June 30, 2022 was $7.8 million, compared with a net loss of $13.8 million in the same period of 2021, a variance of $6.1 million.

*Adjusted EBITDA is a non-IFRS measure. See "Non-IFRS Measures" below.

Total cash at June 30, 2022 was $100.8 million, of which $38.9 million represents Cash Available for Use*, a $9.6 million increase from March 31, 2022. The following table presents the breakdown of cash as at June 30, 2022 and December 31, 2021:

(Amounts in thousands CAD)	June 30, 2022		December 31, 2021		% change
Cash Available for Use*	$           38,884		$               57,247		(32) %
Cash Required for Use in Productions*	61,940		39,703		56 %
Total cash, net of restricted cash	$          100,824		$               96,950		4 %

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

Outlook

Management continues to forecast meaningful Adjusted EBITDA* growth and margin expansion in 2022. Boat Rocker commenced the year with an expectation that full-year Adjusted EBITDA* would be in the range of $40.0 million to $50.0 million, which would represent approximately 25% - 60% growth from the $31.6 million generated in 2021. At this point in the year, the Company has more certainty on the timing of greenlights and production schedules and anticipates that some episodes of both scripted and unscripted content currently in production and previously planned for delivery in Q4 will now be delivered in 2023. As such, the Company anticipates Adjusted EBITDA* for the year to be in the lower end of the range, but still reflective of significant growth over the prior year.

For 2022, as in 2021, the Company expects financial results to continue to improve in the second half of the year, supported principally by anticipated deliveries and the beginnings of a meaningful contribution from consumer products revenue. Revenue results may fluctuate from year to year depending on production budgets, the relative mix of service productions and owned IP on the Company's slate, and the timing of greenlights and deliveries. 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 of the Company's production cycles. The 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's Annual Information Form for the year ended December 31, 2021.

Management expects demand for new and returning series to remain robust through the balance of 2022. 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 demand for high quality programming.

^* See "Non-IFRS Measures"

Fiscal 2022 Second Quarter Conference Call

Boat Rocker management will host a conference call to discuss its fiscal second quarter financial results at 9:30 a.m. EDT on August 10, 2022. To participate in the call, dial [phone] or [phone] (using the conference ID 95619500). 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 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 financial assets, 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 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 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 31, 2022. 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, 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 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 tables present the reconciliation from net income (loss) to Adjusted EBITDA for the three and six months ended June 30, 2022 and 2021:

(Amounts in thousands CAD)		Three months ended June 30,
		2022		2021
Net income (loss)		4,557		(8,819)
Amortization of property and equipment, right-of-use assets and other intangible assets		4,413		4,849
Finance costs, net		1,316		727
Income taxes		652		724
EBITDA*		10,938		(2,519)
Adjustments:
Change in fair value of contingent consideration^1		(6,533)		139
Change in fair value of unsettled forward exchange contracts^2		867		66
Change in fair value of other financial liabilities^3		1,476		1,879
Amortization of acquired program intangibles^4		630		966
IPO and transaction-related costs^5		—		972
COVID-19 related costs^6		—		851
Share-based compensation^7		370		239
Reorganization costs^8		65		153
Adjusted EBITDA*		7,813		2,746

* 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 June 30, 2021 as previously reported was $2,780. The definition of Adjusted EBITDA has been changed to better reflect the Company's performance.

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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 non-recurring and 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 and employees.

⁸ Restructuring charges primarily related to personnel costs.

(Amounts in thousands CAD)		Six months ended June 30,
		2022		2021
Net income (loss)		(7,775)		(13,835)
Amortization of property and equipment, right-of-use assets and other intangible assets		8,772		9,528
Finance costs, net		2,552		3,002
Income taxes		(100)		587
EBITDA*		3,449		(718)
Adjustments:
Change in fair value of convertible debt^9		—		(4,382)
Change in fair value of contingent consideration^10		(6,533)		266
Change in fair value of unsettled forward exchange contracts^11		(482)		309
Change in fair value of other financial liabilities^12		2,791		1,315
Gain on settlement of loans and borrowings^13		—		(2,334)
Amortization of acquired program intangibles^14		1,260		1,678
IPO and transaction-related costs^15		—		972
COVID-19 related costs^16		—		851
Share-based compensation^17		1,007		2,769
Reorganization costs^18		160		346
Adjusted EBITDA*		1,652		1,072

* 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 non-recurring and 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.

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 six months ended June 30, 2021 as previously reported was  $1,129. The definition of Adjusted EBITDA has been changed to better reflect the Company's performance.

SOURCE Boat Rocker Media Inc.

Craig Armitage, Boat Rocker Media, Investor Relations, [email protected], [phone] Or Matt Salvatore, Boat Rocker Media, Corporate Communications, [email protected], [phone]