Mr. John Young reports

BOAT ROCKER MEDIA REPORTS SECOND QUARTER 2023 FINANCIAL RESULTS

Boat Rocker Media Inc. has released its financial results for the three months ended June 30, 2023 (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, 2023, and 2022, are available under the company's profile on SEDAR+. Certain metrics, including those expressed on an adjusted basis, are non-IFRS (international financial reporting standards) measures.

Selected financial highlights:

• Total revenue of $128.7-million for Q2 2023 versus $65.4-million for Q2 2022, an increase of 96.7 per cent. Year-to-date revenue increased 85.7 per cent from $112.3-million to $208.5-million.
• Adjusted EBITDA (earnings before interest, taxes, depreciation and amortization) of $5.4-million for Q2 2023 compared with $8.1-million for Q2 2022, and year-to-date adjusted EBITDA increased 73.2 per cent from $2.1-million to $3.7-million.
• Net loss of $5.8-million for Q2 2023 versus net income of $4.6-million for Q2 2022.
• Debt-free with total cash at June 30, 2023, of $57-million.

"Our second-quarter results illustrate the strong year-over-year trajectory Boat Rocker is on, with improving overall performance," said John Young, chief executive officer of Boat Rocker. "While the company is gaining momentum, uncertainties in our macro environment, notably the current WGA [Writers Guild of America] and SAG-AFTRA [Screen Actors Guild American Federation of Television and Radio Artists] labour actions, are having a dampening effect. Although the strikes make for a more challenging 2023, our diversified business, healthy balance sheet and recently streamlined studio operations enable us to stay flexible, resilient, and an effective partner for content creators and buyers internationally. These factors, along with the delivery of our scripted slate as planned, give us confidence that Boat Rocker can continue to generate strong results."

Selected content highlights

In 2023, Boat Rocker is producing high-quality scripted, unscripted, and kids and family titles for major buyers around the world, including Netflix, Apple TV+, Amazon Prime, AMC, Roku, Disney and Discovery+, as well as key domestic platforms, including CTV, CBC and Global. At the end of Q2, Boat Rocker had 34 shows in various stages of production.

Recent highlights include:

• General:
  • Secured the No. 1 spot on leading Canadian media industry publication Playback's 2023 Indie List. The annual list measures production and development by volume on a calendar-year basis, including service production.
• Television:
  • The much anticipated second season of Invasion will premiere on Apple TV+ on Aug. 23.
  • Pretty Baby: Brooke Shields (ABC News, Hulu) was nominated for two Prime Time Emmy Awards for Best Directing and Best Editing.
  • The Marriage Pact from Boat Rocker's Maven, premiered on the Roku Channel on Aug. 4.
  • Drag Me to Dinner, starring Neil Patrick Harris, premiered on Hulu on May 31.
  • Downey's Dream Cars, starring Robert Downey Jr., premiered on Max on June 22.
  • Feature documentary BS High premiered at New York's Tribeca Film Festival and will launch on HBO on Aug. 23.
• Kids and family:
  • Dino Ranch season 3 will premiere on Disney+ in September.
  • French company Microids is manufacturing a Dino Ranch video game entitled Dino Ranch -- Ride to the Rescue. It will be available Oct. 12 on Nintendo Switch in physical and digital editions.
  • Producing the new animated comedy-mystery series The Sunnyridge 3 for Disney EMEA (Europe, Middle East and Africa).
  • Season seven of The Loud House premiered on Nickelodeon on May 19.
  • Animated show Praise Petey premiered on Hulu on July 21.
• Representation:
  • Untitled clients won four major Tony Awards: Victoria Clark (Best Leading Actress in a Musical: Kimberly Akimbo), Bonnie Milligan (Best Featured Actress in a Musical: Kimberly Akimbo), Michael Arden (Best Direction of a Musical: Parade) and LaChanze (Producer of Best Musical: Kimberly Akimbo and Producer of Best Play Revival: Topdog/Underdog).
  • Client David Corenswet is set to star as Superman in DC Studios' new franchise film Superman: Legacy.
  • Clients Christina Ricci and Jane Krakowski will each get a star on the Hollywood Walk of Fame.
  • Untitled clients were nominated for four Primetime Emmy Awards: Rhea Seehorn for Outstanding Supporting Actress in a Drama Series (Better Call Saul), Nathalie Emmanuel for Outstanding Actress in a Short-Form Comedy or Drama Series (Die Hart 2: Die Harter), Juliette Lewis for Outstanding Supporting Actress in a Limited or Anthology Series or Movie (Welcome to Chippendales) and Chris Rock for Best Variety Special (Live) (Chris Rock: Selective Outrage).

Corporate update

As part of its continuing capital allocation strategy, the company's board of directors has approved Boat Rocker filing with the Toronto Stock Exchange a notice of intention to renew its normal course issuer bid (NCIB). The company's current NCIB expires on Aug. 31, 2023. 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 continuing 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.

Financial review

Revenue for Q2 2023 was $128.7-million versus $65.4-million in Q2 2022, an increase of $63.3-million, or 96.7 per cent. Revenue for the six months ended June 30, 2023, was $208.5-million compared with $112.3-million for the same period of 2022, an increase of $96.2-million, or 86 per cent. This significant rise in each period is principally owing to the delivery of several episodes of scripted dramas. Premium scripted dramas have higher average revenue per episode than the company's unscripted, and kids and family shows. The revenue increase in the television segment was offset by modest decreases in revenue in both the kids and family, and representation segments.

Adjusted EBITDA for the three months ended June 30, 2023, was $5.4-million versus $8.1-million for the same period in Q2 2022. Adjusted EBITDA for the six months ended June 30, 2023, was $3.7-million compared with $2.1-million in the same period in 2022, a 73-per-cent increase.

Net loss for the three months ended June 30, 2023, of $5.8-million compared with a net income of $4.6-million for the same period in Q2 2022. Net loss for the six months ended June 30, 2023, was $15.3-million compared with a net loss of $7.8-million for the same period of 2022.

Total cash at June 30, 2023, was $57-million, of which $27.1-million represents cash available for use.

Outlook

Boat Rocker continues to target modest adjusted EBITDA growth over the prior year as it anticipates delivering the balance of all episodes of the seven premium scripted shows that it commenced producing in 2022 and ramps up international distribution of those titles. However, the company is facing macro uncertainties outside of its control. Chiefly, if the United States actors' and writers' guild strikes are prolonged into the fall of this year, they will impact Boat Rocker's representation and television segments, therefore moderating the company's outlook for 2023, and potentially impacting its results for 2024.

Despite these challenges, Boat Rocker believes that it is well positioned to successfully operate in a changing media and entertainment landscape. The company has a multigenre content creation engine, long record of delivering programming at all budget levels to broadcasters and streamers internationally, and highly diversified business lines across type and geography. Coupled with pro-active cost management, streamlined studio operations and strong discipline on investment spending, Boat Rocker anticipates it will continue to invest in owned IP (intellectual property) and grow its content library, while generating positive free cash flow and remaining debt free in 2023.

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 Aug. 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 second quarter conference call

Boat Rocker management will host a conference call to discuss its fiscal first quarter financial results at 8:30 a.m. ET on Aug. 9, 2023.

To rapidly join the call without operator assistance, please access on-line.

To participate in the call, dial 416-764-8650 or 888-664-6383 using the conference ID: 09237306.

The audio webcast can be accessed at the company's website.

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

About Boat Rocker

Boat Rocker (Toronto Stock Exchange: BRMI) is the home for creative visionaries. An independent, integrated global entertainment company, Boat Rocker has a purpose to tell stories and build iconic brands across all genres and mediums. With offices around the world, Boat Rocker has creative and commercial capabilities that 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 includes: Invasion (Apple TV+), Pretty Baby: Brooke Shields (Hulu), Downey's Dream Cars (Max), Slip (Roku), Orphan Black (BBC America and CTV Sci-Fi channel), Dear... (Apple TV+), Billie Eilish: The World's a Little Blurry (Apple TV+), The Next Step (BBC, Family Channel and CBC), Daniel Spellbound (Netflix) and Dino Ranch (Disney+, Disney Junior and CBC).

We seek Safe Harbor.