TORONTO, March 31, 2021 /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 fourth quarter and year ended
December 31, 2020. The Company's
audited financial statements and accompanying notes and
Management's Discussion and Analysis ("MD&A") for the
three-month period and year ended December
31, 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 those
expressed on an adjusted basis, are non-IFRS measures (see
"Non-IFRS Measures" below).
Selected Financial Highlights
- Revenue of $55.6 million in Q4
2020 vs $59.4 million in Q4 2019.
Full year 2020 revenue of $226.8
million vs $244.2 million in
2019.
- Net loss of $0.4 million in Q4
2020 vs net loss of $6.2 million in
Q4 2019. Full year 2020 net loss of $44.0
million vs net loss of $19.5
million in 2019.
- Adjusted EBITDA of $8.3 million
in Q4 2020 vs $7.1 million in Q4
2019. Full year 2020 adjusted EBTIDA was $14.3 million vs $32.5
million in 2019.
- On March 24, 2021, the Company
successfully completed its Initial Public Offering ("IPO") raising
gross proceeds of $170.1 million. A
significant portion of the net proceeds were used to repay all of
the Company's corporate credit facility, resulting in a positive
net cash position in excess of $100.0
million.
"Our financial performance for the fourth quarter and fiscal
year largely reflects the impact of the COVID-19 pandemic that
delayed live-action production and drove increased costs in 2020
but was partially offset by improved performance in our Kids and
Family segment, which benefitted from a smoother transition to
work-from-home protocols," said John
Young, Chief Executive Officer of Boat Rocker. "The expected
delay in delivery dates resulted in a substantial portion of
revenues that would have been recognized in 2020 being expected to
shift into 2021. With continued robust global demand for content,
our strengthened balance sheet in the wake of our recently
completed IPO and a strong slate of shows 'greenlit' or already in
production under enhanced COVID-19 protocols, including
approximately $475.0 million in
revenue already confirmed and expected to be delivered in the year
ahead, Boat Rocker is well positioned to act on an array of both
organic and inorganic initiatives to support growth over both the
near and longer term."
COVID-19 Pandemic Update
The COVID-19 pandemic is unprecedented and negatively impacted
Boat Rocker's financial results for the year ended December 31, 2020. The content production
industry experienced a temporary pause on live-action production
during the second quarter of 2020, which impacted Boat Rocker's
Television segment in both the scripted and unscripted production
groups. Expected delivery dates were delayed on several of the
Company's series resulting in a shift of revenue from 2020 into
2021. The Kids and Family segment was the least affected of Boat
Rocker's three segments. More than 200 new employees were hired
during the period from March to December
2020 to support the growth in the Company's animation
studio. Revenue earned in the Representation segment was negatively
affected as the Company's clients, mainly on-screen talent, had
less opportunity to work.
As jurisdictions began to lift restrictions on large gatherings
in the third quarter of 2020, Boat Rocker worked diligently to
pioneer and implement leading COVID-19 protocols, which allowed
many of the Company's series to resume production.
Selected Financial Information
(in thousands of
Canadian dollars) (audited)
|
Three months ended
December 31
|
Year ended
December 31
|
Revenue
|
2020
|
2019
|
2020
|
2019
|
Television
|
29,251
|
30,831
|
134,298
|
150,193
|
Kids and
Family
|
16,693
|
17,077
|
63,851
|
58,055
|
Representation
|
9,670
|
11,527
|
28,654
|
35,917
|
Total
revenue
|
55,614
|
59,435
|
226,803
|
244,165
|
Net loss attributable
to shareholders
|
(2,222)
|
(7,106)
|
(48,744)
|
(23,707)
|
Adjusted
EBITDA1
|
8,284
|
7,098
|
14,303
|
32,469
|
1 See
"Non-IFRS Measures"
|
|
|
|
|
Financial Review
Q4 2020 revenue was $55.6 million
compared with $59.4 million in the
same prior year quarter. Full year 2020 revenue decreased by
$17.4 million to $226.8 million compared with $244.2 million in the prior year. The decrease
for both periods was primarily attributed to declines in the
Television and Representation segments, driven by the impact of the
COVID-19 pandemic. In the full year 2020, the decrease was
partially offset by an increase in the Kids and Family segment
which delivered mainly animated content in 2020.
Net loss attributable to shareholders of the Company for the
three months ended December 31, 2020
was $2.2 million, compared to
$7.1 million in the same period of
2019, a decrease of $4.9 million. The
decrease was primarily driven by Canadian Emergency Wage Subsidy
(CEWS) funds recognized in the three months ended December 31, 2020. Net loss attributable to
shareholders of the Company for the year ended December 31, 2020 was $48.7 million, compared to $23.7 million in 2019, an increase of
$25.0 million. The increased loss was
mainly driven by the impact of the COVID-19 pandemic on revenue and
a goodwill impairment charge of $13.0
million, partially offset by CEWS funds recognized.
Adjusted EBITDA for the three months ended December 31, 2020 was $8.3
million, compared to $7.1
million in the same period of 2019, an increase of
$1.2 million. The increase is
primarily attributed to funds received from the CEWS and decreases
to general and administrative expenses attributed to
COVID-19. Adjusted EBITDA for the year ended
December 31, 2020 was $14.3 million, compared to $32.5 million in 2019, a decrease of $18.2 million. Adjusted EBITDA for 2020 included
the full year impact of operating costs incurred at Platform One
Media (now renamed Boat Rocker Studios, Scripted), which was
acquired on August 31, 2019. Until
delivery of the two scripted series in 2021, Boat Rocker Studios,
Scripted will continue to incur operating expenses but not earn any
revenue from these series. Adjusted EBITDA is a non-IFRS measure.
See "Non-IFRS Measures" below.
The following table presents the Company's net debt as at
December 31, 2020 and 2019.
(in thousands of
Canadian dollars) (audited)
|
|
|
Dec 31,
2020
|
Dec 31,
2019
|
Loans and borrowings,
excluding interim financing
|
|
|
93.595
|
87,869
|
Lease
liabilities
|
|
|
31,543
|
29,626
|
Plus: loan fees, net
of amortization
|
|
|
314
|
1,305
|
Less: loan
modification
|
|
|
(2,501)
|
(4,317)
|
Less: cash available
for use
|
|
|
(32,162)
|
(29,666)
|
Net
Debt
|
|
|
90,789
|
84,817
|
|
|
|
|
|
Cash Available for
Use
|
|
|
32,162
|
29,666
|
Cash Required for Use
in Productions
|
|
|
39,592
|
29,602
|
Total
cash
|
|
|
71,754
|
59,268
|
Net Debt at December 31, 2020
was $90.8 million, up 7.0% from $84.8
million at the end of the prior year. In July 2020, the Company amended its existing
corporate credit facility with the Bank of Montreal ("BMO") and drew down an additional
$13.4 million. On March 24, 2021 Boat Rocker completed its IPO,
raising gross proceeds of $170.1
million. The Company used $90.5
million of the net proceeds from the IPO to repay all of its
term debt under the BMO corporate credit facility. Net Debt, Cash
Available for Use, and Cash Required for Use in Productions are
non-IFRS measures. See "Non-IFRS Measures" below.
Outlook
As further set out in the Company's final prospectus dated
March 19, 2021 and filed on SEDAR in
respect of its IPO (the "Prospectus"), the Company expects
2021 to be a year of significant investment in content, funded in
part by a portion of the IPO net proceeds, and is forecasting
revenues in 2021 of approximately $700.0
million. This forecast is based on a
number of assumptions, as outlined in the Prospectus.
Management believes that, in light of the projected significant
growth in the demand for content by buyers worldwide, the Company
is well-positioned to continue to grow by capitalizing on its
competitive strengths and implementing its growth strategies.
Fiscal 2020 Fourth Quarter Conference Call
Boat Rocker will host a conference call to discuss its fiscal
2020 fourth quarter and fiscal year end financial results at
8:30 a.m. EDT on March 31, 2021. The call will be hosted by
John Young, CEO, and Michelle Abbott, CFO. To participate in the
call, dial (416) 764-8650 or (888) 664-6383 (using the conference
ID 94402000). 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 is an independent, integrated global entertainment
company that harnesses the power of creativity and commerce to tell
stories and build iconic brands for audiences around the world.
Boat Rocker Studios (the "Studio"), the Company's creative engine,
creates, produces and distributes award-winning content and
franchises across all major genres via its Scripted, Unscripted,
and Kids & Family divisions. The Studio distributes and
licenses thousands of hours of its own and third-party content
worldwide. Boat Rocker owns or invests in companies in the
entertainment industry that bolster the company's strategic and
operational goals, including Insight Productions (Unscripted), Jam
Filled Entertainment (2D and 3D Animation), Industrial Brothers
(Kids & Family Animation) and Untitled Entertainment, a leading
global talent management company that represents leading on-screen
talent and celebrities. A selection of Boat Rocker's projects
include: Orphan Black (BBC AMERICA, CTV Sci-Fi Channel),
Dear…(Apple TV+), Lip Sync Battle (Paramount
Network), The Amazing Race Canada (CTV), MasterChef
Canada (CTV), The Next Step (Family Channel, CBC),
The Loud House (Nickelodeon), Remy & Boo
(Universal Kids, CBC), and Dino
Ranch (CBC, Disney Junior). Boat Rocker's subordinate
voting shares are listed on the Toronto Stock Exchange under the
ticker BRMI. 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: EBTIDA, Adjusted EBITDA,
Cash Available for Use, Cash Required for Use in Productions,
Free Cash Flow, and Net Debt.
EBITDA is defined as net income or loss before interest,
taxes, depreciation and amortization ("EBITDA").
Adjusted EBITDA is defined as EBITDA adjusted for
amortization of non-cash program intangibles, change in fair value
of financial liabilities, change in fair value of contingent
consideration, share-based compensation, transaction and
reorganization costs, goodwill impairment, loss on debt
modifications and gain or loss on sale of assets. Adjusted EBITDA
is used by management as a measure of the Company's profitability.
For further details refer to the "Reconciliation of non-IFRS
measures" section of this press release.
Net Debt is defined as the carrying value of loans and
borrowings (excluding interim production financing and convertible
debentures), adjusted for the loss on loan modification and loan
fees, plus lease liabilities, less Cash Available for Use. Net Debt
represents obligations the Company has to fund from its earnings
and is viewed by management as a consistent measure of the
Company's liquidity position. In contrast, interim production
financing is drawn to bridge the timing between cash inflows from
the license fees and production service fees of the buyer, the film
and television tax credits earned on valid production expenses, and
cash outflows of the production expenses. As such, interim
production financing is excluded from management's calculation of
Net Debt. The Company does not include other liabilities in the Net
Debt calculation such as: other financial liabilities that are
based on estimates and probabilities, rather than specific amounts
owing, and liabilities that may not be payable in cash. For further
details, refer to the "Liquidity and Capital
Resources" section of the Company's MD&A.
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 and is subject to a number of
risks and uncertainties, many of which are beyond the Company's
control. Such assumptions, risks and uncertainties include, but are
not limited to, the factors discussed under "Risk Factors" and the
assumptions discussed under "Outlook" in the final prospectus.
Actual results could differ materially from those projected herein.
Boat Rocker does not undertake any obligation to update such
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 financial measures
(in thousands of
Canadian dollars) (audited)
|
Three months ended
December 31
|
Year ended
December 31
|
|
2020
|
2019
|
2020
|
2019
|
|
|
|
|
|
Net
loss
|
(446)
|
(6,204)
|
(43,990)
|
(19,483)
|
Amortization of
property and equipment, right-of-use assets and other intangible
assets
|
4,749
|
4,996
|
18,566
|
18,989
|
Finance costs,
net
|
2,774
|
2,116
|
10,634
|
8,415
|
Income
taxes
|
1,264
|
858
|
1,884
|
1,067
|
EBITDA1
|
8,341
|
1,766
|
(12,906)
|
8,988
|
Adjustments:
|
|
|
|
|
Amortization of program intangibles2
|
718
|
839
|
2,926
|
7,196
|
Change in fair value
of contingent consideration3
|
(3,180)
|
(18)
|
(2,300)
|
368
|
Gain on sale of
assets4
|
(1,356)
|
(3,079)
|
(1,356)
|
(3,079)
|
Transaction
costs5
|
(460)
|
840
|
254
|
4,292
|
Change in fair value
of embedded derivative and other financial
liabilities6
|
1,792
|
2,007
|
8,743
|
8,710
|
Share-based
compensation7
|
2,429
|
242
|
5,449
|
721
|
Goodwill
impairment8
|
-
|
-
|
12,959
|
-
|
Loss on debt
modification9
|
-
|
4,317
|
342
|
4,317
|
Reorganization
costs10
|
-
|
182
|
192
|
956
|
Adjusted
EBTIDA1
|
8,284
|
7,098
|
14,303
|
32,469
|
|
|
|
|
|
1) See "Non IFRS
Financial Measures".
|
2) Amortization of
program intangibles acquired from business combinations included in
production service and distribution expenses.
|
3) Change in value of
contingent consideration associated with acquisition of Platform
One.
|
4) Gain on sale of an
equity accounted investee in fourth quarter of 2020 and the sale of
land and a building in the fourth quarter of 2019.
|
5) Transaction costs
represent professional fees incurred in support of acquisitions in
2019.
|
6) Change in fair
value of other financial liabilities represent the non-cash
expenses on certain put options.
|
7) Share based
compensation related to non-cash expenses associated with stock
options granted to certain officers and employees.
|
8) Impairment of
Goodwill associated with the Unscripted cash generating unit in the
third quarter of 2020.
|
9) Non-cash expenses
incurred because of amendments to the Company's corporate credit
facility during 2020 and in the fourth quarter of 2019.
|
10) Restructuring
charges primarily related to personnel related costs.
|
SOURCE Boat Rocker Media Inc.