Mr. John Young reports

BOAT ROCKER MEDIA REPORTS FIRST QUARTER 2023 FINANCIAL RESULTS

Boat Rocker Media Inc. has released its financial results for the three months ended March 31, 2023. The company's consolidated financial statements, accompanying notes, and management's discussion and analysis (MD&A) for the three months ended March 31, 2023, and 2022, are available under the company's profile on SEDAR. All dollar amounts are expressed in Canadian currency, unless otherwise noted. Certain metrics, including those expressed on an adjusted basis, are non-IFRS (international financial reporting standards) measures.

Selected financial highlights:

• Revenue of $79.8-million for Q1 2023 versus $46.8-million for Q1 2022, an increase of 70 per cent.
• Adjusted EBITDA (earnings before interest, taxes, depreciation and amortization) loss of $2-million for Q1 2023 versus a loss of $6.2-million for Q1 2022, an improvement of 67 per cent.
• Net loss of $9.5-million for Q1 2023 compared with a loss of $12.3-million for Q1 2022, an improvement of $2.8-million.
• Debt-free with total cash at March 31, 2023, of $70.5-million.

"The year got off to a solid start as we generated improved revenue and adjusted EBITDA performance over the prior-year period," said John Young, chief executive officer of Boat Rocker. "Our first quarter results reflect our typical cadence, with the expectation that adjusted EBITDA will be biased to the second half of the year, although revenue was up sharply this quarter, largely due to the delivery of several episodes for two of our premium scripted dramas, with accelerating deliveries across the broader scripted slate as the year proceeds. As before, our primary focus remains on delivering against our robust production slate to help drive improved adjusted EBITDA performance versus the prior year. With many of those shows having completed production and working their way through postproduction, we are cautiously optimistic that a short-lived WGA strike (which commenced last week) will not meaningfully impact delivery of the current slate. That said, a prolonged labour action in the U.S. could slow the development, greenlight and production of new shows and follow-on seasons for existing IP, which could impact our results in 2023 and 2024."

Selected operational highlights

Boat Rocker continues to see high overall activity levels across its three reporting segments: television, kids and family, and representation. Television, in particular, saw 190-per-cent year-over-year revenue growth. For 2023, 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 Q1 Boat Rocker had 33 shows in various stages of production.

Recent highlights

General:

• Boat Rocker productions won a total of eight Canadian Screen Awards, which were presented during the first week of April.

Television:

• Partnered with Stephan James and Shamier Anderson's Bay Mills Studios, with whom Boat Rocker has a first-look deal, on developing a new scripted series titled Christopher Robin.
• Slip, created, directed by and starring Zoe Lister-Jones, premiered on the Roku Channel on April 21 and is receiving widespread critical acclaim.
• Production on season 2 of premium scripted drama American Rust, starring Jeff Daniels and Maura Tierney, for Amazon Freevee wrapped production in Pennsylvania.
• Pretty Baby: Brooke Shields premiered on April 3 and was ABC News' most watched program to ever debut on Hulu.
• BS High, a new premium documentary for HBO, was accepted into the prestigious Tribeca Film Festival in New York. The film will premiere at the festival on June 14.
• Season 2 of Lost Car Rescue premiered on the History Channel and StackTV.
• Boat Rocker's three unscripted shingles (Matador Content, Insight Productions and Proper Television) were included in the Realscreen Global 200 list. The annual list names the world's top production companies working in non-fiction and unscripted content.

Kids and family:

• New distribution deals across the EMEA (Europe, Middle East, Africa) and APAC (Asia Pacific) regions for season 2 of Dino Ranch were announced; Dino Ranch is now available to view in more than 170 countries worldwide.
• The Next Step season 8 was nominated for the 2023 Shaw Rocket Fund Kids' Choice Award. In addition, the season received three Canadian Screen Award nominations, including best children's or youth fiction program or series.

Representation:

• Five Untitled Entertainment clients were nominated for Tony Awards, with the awards set to be presented in June.
• Downtown Owl, a dark comedy based on the novel by Chuck Klosterman, has been slated for the Tribeca Film Festival in June. The film marks the directorial debut for Untitled client Hamish Linklater, stars Untitled client Vanessa Hudgens and was produced by Untitled in partnership with Laura Rister.
• Untitled client Abubakar Salim was cast in season 2 of HBO's House of the Dragon.

Financial review

Revenue for Q1 2023 was $79.8-million versus $46.8-million in Q1 2022, an increase of $32.9-million. A higher number of half-hours of content were delivered in the first quarter of 2023 (50) versus the first quarter of 2022 (30). Premium scripted dramas have higher average revenue per episode than the company's unscripted and kids and family shows. In the first quarter of 2023, this included two productions where Boat Rocker owns the intellectual property, which helped drive increased production revenue. This was offset by lower production revenue in the kids and family segment. Production revenue increased in the television segment, due in part to the mix in revenue types and timing of delivery, while distribution revenue increased due partly to continued sales of the company's flagship Orphan Black title, as well as the result of increased consumer product revenue. Revenue in the representation segment also saw a 12-per-cent increase in the first quarter of 2023 compared with the same period a year ago.

Adjusted EBITDA for Q1 2023 was a loss of $2-million compared with a loss of $6.2-million for the same period of 2022, an improvement of $4.1-million.

Net loss for the three months ended March 31, 2023, was $9.5-million, compared with a net loss of $12.3-million in the same period of 2022, an improvement of $2.9-million.

The company generated positive cash provided by operating activities due to increased collection from receivables and increased deferred revenue; however, free cash flow in the three months ended March 31, 2023, was negative $12.8-million compared with negative free cash flow in the three months ended March 31, 2022, of $9.6-million, primarily due to the timing of repayments of interim production financing.

Outlook

Boat Rocker expects to deliver improving financial performance again in 2023 as it anticipates delivering the balance of all episodes of the seven premium scripted shows that it commenced producing in 2022 and targets modest adjusted EBITDA growth over the prior year. However, management is mindful of the current and near-term headwinds, including the U.S. writers guild strike that commenced last week, increasingly uncertain macroeconomic conditions, continuing challenges in the retail industry and cost cutting from major buyers, which could impact the company's outlook for the year. In particular, if the U.S. writers strike is prolonged, it could moderate the company's outlook for late 2023 and into 2024.

With pro-active cost management of general and administrative expenses and strong discipline on investment spending, Boat Rocker anticipates it will continue to invest in owned IP and grow its content library, while generating positive free cash flow and remaining debt free in 2023.

With its multigenre content creation engine and long record of successfully delivering 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 sustained demand for high-quality programming.

The company's expected performance in 2023 is based on certain assumptions that are outlined in the company's annual MD&A dated March 30, 2023, and quarterly MD&A dated May 9, 2023, and subject to certain risks as outlined in the company's annual information form for the year ended Dec. 31, 2022.

Fiscal 2023 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 9, 2023. To participate in the call, dial 416-764-8650 or 888-664-6383 (using the conference ID 20727844).

The audio webcast can be accessed on the Boat Rocker website.

Listeners should access the webcast or call 10 to 15 minutes before the start time to ensure they are connected.

About Boat Rocker Media Inc.

Boat Rocker 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 and family television production, distribution, brand and franchise management, a world-class animation studio, and talent management through Untitled Entertainment. A selection of Boat Rocker's projects include: Invasion (Apple TV+), Pretty Baby: Brooke Shields (Hulu), Slip (Roku), 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).

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