Mr. John Young reports

BOAT ROCKER MEDIA REPORTS THIRD QUARTER 2023 FINANCIAL RESULTS

Boat Rocker Media Inc. has released its financial results for the three months ended Sept. 30, 2023. The company's consolidated financial statements and accompanying notes and management's discussion and analysis (MD&A) for the three and nine months ended Sept. 30, 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:

• Total revenue of $201.9-million for Q3 2023 versus $80.7-million for Q3 2022, an increase of 150 per cent. Year-to-date revenue of $410.4-million versus $193-million, an increase of 112.7 per cent;
• Adjusted EBITDA (earnings before interest, taxes, depreciation and amortization) of $21.3-million for Q3 2023 versus $15.1-million for Q3 2022, an increase of 41 per cent. Year-to-date adjusted EBITDA of $25-million versus $17.3-million, an increase of 44.9 per cent;
• Net loss of $8.5-million for Q3 2023 versus net income of $3.9-million for Q3 2022, a decrease of $12.4-million. Net loss for the quarter includes a non-cash goodwill impairment charge of $15.2-million ($0.27 loss per share). Adjusting for the impact of this, net income would be $6.6-million (10 cents income per share) in the quarter;
• Debt-free with total cash at Sept. 30, 2023, of $85.5-million. Cash available for use of $40.9-million, an increase of $9.3-million year to date.

"Our performance this quarter demonstrates the strength of Boat Rocker's IP engine," said John Young, chief executive officer of Boat Rocker. "Our television segment generated significant results through the delivery and sale of our owned IP, notably our premium sci-fi series Beacon 23. Despite our solid output, we are still operating against a backdrop of considerable industry disruption. The WGA strike was prolonged and the SAG-AFTRA strike is ongoing, both of which have slowed progress in key areas of our business, therefore impacting our outlook for 2023 and 2024. Nevertheless, we remain confident in Boat Rocker's IP, diverse and international capabilities, strong balance sheet and cash position, and streamlined studio to build for and perform in the long term."

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, MGM+, Disney and Max, as well as key domestic platforms, including CTV, CBC and Global.

Recent highlights

Television

Scripted:

• Sold Beacon 23, starring Lena Headey (Game of Thrones) and Stephan James (Homecoming), to MGM+. The series will premiere in the United States on the steaming service on Nov. 12.
• Completed delivery of season 2 of American Rust, starring Jeff Daniels (The Newsroom) and Maura Tierney (The Affair), to Amazon's Freevee.
• Robyn Hood, from Director X and Chris Roberts, premiered on Global Television and StackTV on Sept. 27.
• Sold highly anticipated scripted series Orphan Black: Echoes, starring Krysten Ritter (Jessica Jones) and Keeley Hawes (Bodyguard), to multiple global buyers, including ITV (United Kingdom), Stan Entertainment (Australia) and TVNZ (New Zealand).

Unscripted:

• The Great Canadian Baking Show season 7 is currently airing on CBC.
• The Amazing Race Canada was renewed for its 10th season by CTV.
• Season 1 of Listing Large is currently airing on CTV Life Channel.
• The second annual Legacy Awards aired on Sept. 24 on CBC.
• Season 3 of Mary Makes it Easy is currently airing on CTV Life Channel.
• Disney+ U.K. commissioned World War Shoe: Adidas vs. Puma, a docuseries about the rivallry between the two brands. The three-part series is being produced alongside David Beckham's Studio 99.
• BS High (HBO) and Pretty Baby: Brooke Shields (Hulu) were both nominated for Critics Choice Documentary Awards.

Kids and family:

• The Next Step has been greenlit for its ninth season by CBBC, making it Boat Rocker's longest-running scripted series.
• Dino Ranch season three is now airing on Disney+ and CBC.
• Announced partnership with global toy manufacturer Tonies to release Love Monster and Dino Ranch onto its bestselling interactive audio platform.
• Praise Petey premiered on July 21 on Hulu.

Representation:

• Client Chris Rock is set to direct a Universal Pictures biopic about the life of Martin Luther King Jr. based on the acclaimed biography King: A Life.
• Five untitled clients were featured in Variety's coveted annual Power of Young Hollywood list: Noah Schnapp (Stranger Things), Sophia Lillis (It), Lexi Underwood (Little Fires Everywhere), Maya Hawke (Stranger Things) and Emma Myers (Wednesday).

Financial review

Revenue for Q3 2023 was $201.9-million versus $80.7-million in Q3 2022, an increase of $121.2-million or 150.2 per cent. Revenue for the nine months ended Sept. 30, 2023, was $410.4-million versus $193-million for the same period in 2022, an increase of $217.4-million or 113 per cent. This significant rise in the quarter was largely attributable to the sale of Beacon 23. The representation segment recorded lower revenues in the quarter than in the same period in 2022 owing to the U.S. labour strikes, while kids and family also recorded a decline due to lower content deliveries.

Adjusted EBITDA for the three months ended Sept. 30, 2023, was $21.3-million versus $15.1-million for the same period in Q3 2022. Adjusted EBITDA for the nine months ended Sept. 30, 2023, was $25-million versus $17.3-million in 2022. The delivery and sale of owned, scripted intellectual property in the television segment largely drove the significant increase, offset by declines in kids and family and representation.

Net loss for the three months ended Sept. 30, 2023, was $8.5-million versus net income of $3.9-million for the same period in Q3 2022, a negative variance of $12.4-million. Net loss for the nine months ended Sept. 30, 2023, was $23.8-million versus a net loss of $3.9-million for the same period in 2022, a negative variance of $19.9-million. The negative variance in the quarter and year-to-date periods reflects a non-cash goodwill impairment charge of $15.2-million in the company's unscripted cash-generating unit.

Total cash at Sept. 30, 2023, was $85.5-million, of which $40.9-million represents cash available for use. In Q3 2023, cash available for use increased $13.8-million from Q2 2023 and increased by $9.3-million year to date. As previously stated, cash available for use is the key cash metric used by management given the company's cash required for use in production and free cash flow fluctuate more significantly with the production cycle.

Outlook

Boat Rocker is producing a high-profile slate of premium scripted series this year and anticipates delivering all remaining episodes in 2023 while ramping up international distribution for its owned IP. However, with the WGA strike prolonged and the SAG-AFTRA strike continuing, the company's ability to conduct business in the normal course has been disrupted, particularly within its representation segment and in respect of the development and production of scripted series. As such, Boat Rocker is now targeting 2023 adjusted EBITDA to be approximately $30-million. The negative impact of the strikes on the media and entertainment industry as a whole will continue to be felt throughout 2024 given the current delays on development, greenlights and the time it will take for the industry to ramp up its production activities once the SAG-AFTRA strike is concluded. As a result, the company anticipates its 2024 performance to be affected, specifically in its television and representation segments.

Despite these challenges, with a strong cash position, balance sheet and no corporate debt, Boat Rocker believes that it is well positioned to successfully operate in a changing media and entertainment landscape over the long term. Additionally, 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 and grow its content library.

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 Nov. 8, 2023, and subject to certain risks as outlined in the company's annual information form for the year ended Dec. 31, 2022, and quarterly MD&A dated Nov. 8, 2023.

Fiscal 2023 third quarter conference call

Boat Rocker management will host a conference call to discuss its fiscal third quarter financial results at 8:30 a.m. EST on Nov. 8, 2023.

The audio webcast can be accessed on the company's investor relations page. Or to participate by phone, dial 1-877-550-1875.

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

To access a replay of the call, dial 757-849-6722 (local) or 800-645-7964 (North America), re-entry code 3054 followed by the pound key. The replay will be available until midnight EST on Nov. 15, 2023.

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), Downey's Dream Cars (Max), 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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