Boat Rocker Media Inc (BRMIF) Q2 2024 Earnings Call Highlights: Strategic Gains Amid Revenue ...
Total Revenue: $58.6 million for Q2 2024.
Adjusted EBITDA: $2.6 million for Q2 2024.
Net Income: $41.9 million for Q2 2024, benefiting from a $50.1 million after-tax gain from the sale of Untitled.
Cash Available: $77.6 million at the end of Q2 2024.
Television Production Revenue: $20.8 million for Q2 2024.
Service Revenue: $10.9 million for Q2 2024.
Distribution Revenue: $4.7 million for Q2 2024.
Kids and Family Segment Revenue: $11 million for Q2 2024.
Total Production, Distribution, and Service Expenses: $36.7 million for Q2 2024.
General and Administrative Costs: $14.9 million for Q2 2024, a 19% decline from Q2 2023.
Cash Proceeds from Sale of Untitled: $52.1 million.
Release Date: August 13, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
Boat Rocker Media Inc (BRMIF) reported a net income of $41.9 million in Q2 2024, a significant increase from a net loss of $5.8 million in Q2 2023.
The company successfully sold its 51% interest in Untitled Entertainment, resulting in a recognized after-tax gain of $50.3 million.
Boat Rocker Media Inc (BRMIF) remains debt-free with a healthy balance sheet, holding $77.6 million of cash available for use at the end of Q2 2024.
The company is executing a content investment plan, focusing on IP investment in scripted series, premium documentaries, and international productions.
Boat Rocker Media Inc (BRMIF) received 11 Primetime Emmy Award nominations for its high-profile scripted series, Palm Royale, for Apple TV+.
Negative Points
Total revenues for Q2 2024 were $58.6 million, a significant decrease from $128.7 million in the same period of 2023.
The Television production revenue dropped to $20.8 million in Q2 2024 from $89.7 million in Q2 2023, primarily due to the impact of industry strikes and reduced spending by buyers.
Adjusted EBITDA decreased to $2.6 million in Q2 2024 from $5.4 million in Q2 2023, reflecting a decline in profitability.
The Kids and Family segment saw a decline in revenue to $11 million in Q2 2024 from $18.7 million in Q2 2023, due to lower service output and distribution revenues.
The company is experiencing subdued demand in the US market, with reduced buying activity from major buyers and streamers.
Q & A Highlights
Q: With $77 million in cash and a market cap of $54 million, why not use the cash to buy back shares instead of investing in growth or acquisitions? A: John Young, CEO: The Board is considering all options to maximize shareholder value, including share buybacks. Currently, we're focused on deploying capital into areas with good returns, such as the NCIB, acquiring more of Insight Productions, and investing in IP. These strategies are expected to yield dividends for shareholders.
Q: Can you explain the current demand environment and the significant revenue drop? Is it due to the writers' and actors' strikes or a structural change in demand? A: David Fortier, Co-Executive Chairman: The market is subdued, especially in the US, due to a reset by major buyers and the impact of the strikes. Streamers have banked development from before the strikes, leading to reduced buying activity. However, there are opportunities in indie-financed projects and international markets.
Q: Is your strategy shifting from creating your own IP to joining existing projects at a more mature stage? A: David Fortier, Co-Executive Chairman: Yes, we're leveraging our distribution capabilities to add value to existing projects through equity investments or distribution rights. However, we continue to develop our own IP aggressively.
Q: Regarding cost efficiency, how much more can you streamline operations? A: John Young, CEO: We are centralizing leadership and streamlining operations, with more cost reductions expected in the back half of the year. The focus is on aligning costs with our IP investment strategy and distribution efforts.
Q: Can you provide an update on the Dino Ranch franchise? A: John Young, CEO: Dino Ranch continues to perform well, and we are developing the next iteration. It remains an important part of our Kids and Family division's future.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
This article first appeared on GuruFocus.