Yangaroo Announces Q3'2023 Results
- Fourth consecutive quarter of significant Normalized EBITDA
- Operating income and cash-flow generation improvements
- Reduction in operating expenses and head-count
- Asset purchase transaction with Millenia 3 Communications, Inc. expanding advertising service capabilities
- 21% decrease in revenue versus Q2'23
- 50% decrease in Advertising revenue
- 53% decrease in Normalized EBITDA compared to Q2'23
- 10% decrease in cash and cash equivalents versus Q2'23
Fourth Consecutive Quarterly Positive Normalized EBITDA
Toronto, Ontario--(Newsfile Corp. - November 29, 2023) - YANGAROO Inc. (TSXV: YOO) (OTC Pink: YOOIF) ("Yangaroo", "Company"), a software leader in media asset workflow and distribution solutions, today announced its financial results for the third quarter ended September 30, 2023. The full text of the Financial Statements and Management Discussion & Analysis is available at www.yangaroo.com and at www.sedar.com. Please note that all currency in this press release is denominated in United States dollars, unless otherwise noted.
Yangaroo is pleased to announce that during the third quarter of 2023 the Company realized significant improvements with respect to operating income and cash-flow generation, as compared to losses incurred in prior periods. These improvements are largely attributable to a modest increase in sales volumes combined with stringent cost controls across the business.
Historically, the Company's Q3 is a seasonally slow period. During the period, Advertising Division revenue remained flat year-over-year. The Awards Division results were behind compared to this time in the prior year, which is attributed to the timing of the award shows. The Music Division revenue continues to remain down year-over-year, which is mainly due to fewer audio and music video deliveries by our major record label clients.
Advertising Division
Revenue of
$1,054,157 in Q3'23 versus revenue of$1,065,204 in Q3'22
Entertainment Group (Music & Awards Divisions)
Revenue of
$654,774 in Q3'23 versus revenue of$667,936 in Q3'22
Operating Expenses and Normalized EBITDA
The Company completed additional head-count reductions in the first half of the year and resulted in current quarter salary expenses of
$1,097,390 or a savings of$236,108 versus the third quarter of 2023.General and administrative expenses continued to decline with savings of
$109,682 versus the third quarter of 2023 resulting from continued efforts to reduce over-head expenditures.The Company generated
$247,900 of normalized EBITDA in Q3'23 vs$2,205 in Q3'22.Fourth consecutive quarter of significant Normalized EBITDA; the Company has now generated
$247,900 of Normalized EBITDA in Q3'23,$526,202 of Normalized EBITDA in Q2'23,$116,143 of Normalized EBITDA in Q1'23 and$833,974 of Normalized EBITDA in Q4'22.
Grant Schuetrumpf, CEO of Yangaroo, stated, "We're pleased to provide consecutive and sequential quarters of Normalized EBITDA generation, primarily derived from stabilizing our operations whilst maintaining services for our valued clients. We are now focused on growth opportunities organically and through our continual interest in M&A. We continue to manage modest advancements in business development and sales opportunities compared to prior years and are hopeful some of the larger business development prospects will start to convert.
"On November 9, 2023, Yangaroo announced an asset purchase transaction with Millenia 3 Communications, Inc., Millenia3 has been a trusted partner to major global entertainment companies, media agencies, and consumer brands, providing tailor-made ad operations services, including media and traffic management, which will continue into the foreseeable future. This expansion extends Yangaroo's advertising service capabilities with premium multi-year contracted clients and will further utilize Yangaroo's technology to streamline the Millenia 3 service offering.
"The advertising division managed a modest increase in the volume of clients while seeking opportunities to expand current client's use of services. Our ancillary production services, including short-form versioning for the Direct Response customers, and long-form digitization, continues to bring in new project-based opportunities. Our closed captioning and analytics complete a full-service offering to the market where we are integrating Millenia 3 clients use of the workflows and technology. Innovation is always a priority, and with our development team, we continue improving the DMDS platform to streamline business-to-business workflows whilst expanding our platform capabilities for improved self-serve use. In particular, we have focused on our TV Traffic Instruction workflow and improved our TV Legal Clearance offering, connecting the required broadcasters across North America. Our advertising platform is becoming a one-stop solution for managing advertising logistics across linear and digital destinations.
"Our music promotion service has stabilized on the earlier 2023 quarterly reports of reduced orders, and we are actively seeking new growth opportunities. The Award Shows services remain consistent and to budget expectations as we move clients to the V3 platform, opening our capabilities to new clients in 2024.
"These results reflect our dedication to continuous improvement and strategic adaptation to the current market conditions. We are confident in our ability to navigate challenges and capitalize on opportunities as we work towards achieving our long-term goals."
Q3'2023 Financial Highlights
Revenue in Q3'2023 was
$1,708,931 compared to$2,172,530 and$1,733,140 in the second quarter of 2023 and the third quarter of 2022, respectively.Revenue decreased by
$463,599 or21% versus Q2'2023. The decrease in revenue was due to decreased Advertising revenue of$529,652 or50% , offset by increased Music and Awards revenue of$66,053 or10% . The increase in Advertising revenue is attributed to a decrease in revenue recognized from one of the Company's existing customers. The increase in Awards revenue is primarily attributed to cyclicality in our customer's award show schedules which typically peak in the summer periods.Revenue decreased by
$24,209 or1% versus Q3'2022. The decrease in revenue is the result of decreased Advertising revenue of$11,047 or1% and a decline in Awards and Music revenue of$13,162 or2% .
Operating expenses in Q3'2023 were
$1,696,777 compared to$1,905,839 and$1,987,591 in the second quarter of 2023 and the third quarter of 2022, respectively.Operating expenses decreased by
$209,662 or12% versus Q2'2023. The decrease in operating expenses is primarily attributed a lower head count in the current quarter compared to the previous quarter.Operating expenses decreased by
$290,814 or17% versus Q2'2022. The decrease in operating expenses is primarily attributed to a reduction of employee headcount earlier in the year in addition to the reversal of previously recorded bad debts.
Normalized EBITDA in Q3'2023 was
$247,900 in comparison to normalized EBITDA of$526,202 in the second quarter of 2023 and normalized EBITDA of$2,205 in the third quarter of 2022.Normalized EBITDA decreased by
$278,302 compared to Q2'2023. The decrease is primarily attributed to a decrease in revenue, partially offset by reductions in the Company's operating expenses, as discussed in further detail above.Normalized EBITDA increased by
$245,695 compared to Q3'2022. The increase is primarily attributed to significantly lower operating expenses, primarily attributed to reduced salaries, general and administrative costs and restructuring expenses, as discussed in further detail above.
Financial Highlights
| Q3 2023 | Q2 2023 | Q1 2023 | Q4 2022 | |||||||||
| Cash and cash equivalents | $ | 254,720 | $ | 284,178 | $ | 204,604 | $ | 296,748 | | |||
| Working capital | $ | (115,884 | ) | $ | (94,749 | ) | $ | (224,819 | ) | $ | 217,710 | |
| Liquidity | $ | 975,794 | $ | 552,960 | $ | 781,378 | $ | 737,680 | ||||
| | ||||||||||||
| Revenue | $ | 1,708,931 | $ | 2,172,530 | $ | 1,845,253 | $ | 2,097,353 | | |||
| Operating expenses | $ | 1,696,777 | $ | 1,905,839 | $ | 2,100,123 | $ | 1,426,919 | | |||
| Other expenses (income) | $ | 20,217 | $ | 230,473 | $ | 109,749 | $ | 148,123 | | |||
| Income (loss) for the period | $ | (8,063 | ) | $ | 36,218 | $ | (364,619 | ) | $ | 522,311 | | |
| Income (loss) per share - basic | $ | (0.00 | ) | $ | 0.00 | $ | (0.01 | ) | $ | 0.01 | | |
| Income (loss) per share - diluted | $ | (0.00 | ) | $ | 0.00 | $ | (0.01 | ) | $ | 0.01 | | |
| | ||||||||||||
| EBITDA | $ | 304,210 | $ | 368,740 | $ | (13,324 | ) | $ | 816,075 | | ||
| EBITDA Margin % | - | | ||||||||||
| Normalized EBITDA (loss) | $ | 247,900 | $ | 526,202 | $ | 116,143 | $ | 833,974 | | |||
| Normalized EBITDA Margin % | | |||||||||||
| Q3 2022 | Q2 2022 | Q1 2022 | Q4 2021 | | ||||||||
| Cash and cash equivalents | $ | 346,744 | $ | 607,289 | $ | 783,159 | $ | 768,251 | | |||
| Working capital | $ | (1,701,222 | ) | $ | (1,517,889 | ) | $ | (1,649,976 | ) | $ | 911,861 | |
| Liquidity | $ | 639,320 | $ | 1,033,533 | $ | 1,862,483 | $ | 2,148,594 | | |||
| | ||||||||||||
| Revenue | $ | 1,733,140 | $ | 1,915,307 | $ | 1,989,042 | $ | 2,305,594 | | |||
| Operating expenses | $ | 1,987,591 | $ | 2,259,186 | $ | 2,492,222 | $ | 2,611,535 | | |||
| Other expenses (income) | $ | (109,995 | ) | $ | (2,133,145 | ) | $ | 94,395 | $ | 24,783 | | |
| Income (loss) for the period | $ | (144,456 | ) | $ | 1,789,266 | $ | (597,575 | ) | $ | (330,724 | ) | |
| Income (loss) per share - basic | $ | (0.00 | ) | $ | 0.03 | $ | (0.01 | ) | $ | (0.01 | ) | |
| Income (loss) per share - diluted | $ | (0.00 | ) | $ | 0.03 | $ | (0.01 | ) | $ | (0.01 | ) | |
| | ||||||||||||
| EBITDA | $ | 108,087 | $ | 2,047,149 | $ | (340,172 | ) | $ | (99,125 | ) | ||
| EBITDA Margin % | - | - | | |||||||||
| Normalized EBITDA (loss) | $ | 2,205 | $ | (42,766 | ) | $ | (259,847 | ) | $ | (164,899 | ) | |
| Normalized EBITDA Margin % | - | - | - |
About YANGAROO
Yangaroo is a technology provider in the media and entertainment industry, offering a cloud-based software platform for the management and distribution of digital media content. Yangaroo's Digital Media Distribution System ("DMDS") platform is a patented cloud-based platform that provides customers with a centralised and fully integrated workflow directly connecting radio and television broadcasters, digital display networks, and video publishers for centralised digital asset management, delivery and promotion. DMDS is used across the advertising, music, and entertainment awards show markets.
YANGAROO Inc. is a publicly listed company incorporated on July 28, 1999 under the laws of Ontario as Musicrypt.com Inc. and changed to its present name on July 17, 2007. YANGAROO trades on the TSX Venture Exchange ("TSX-V") under the symbol YOO and in the U.S. under OTCPK: YOOIF.
The address of the Company's corporate office and principal place of business is 360 Dufferin Street, Suite 203, Toronto, Ontario, M6K 3G1.
# # #
For YANGAROO Investor Inquiries:
Grant Schuetrumpf
Ph: (416) 534 0607
grant.schuetrumpf@yangaroo.com
Neither the TSX Venture Exchange nor Its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the accuracy of this release.
Cautionary Note Regarding Forward-looking Statements
This news release contains certain forward-looking statements and forward-looking information (collectively referred to herein as "forward-looking statements") within the meaning of applicable Canadian securities laws. All statements other than statements of present or historical fact are forward-looking statements. Forward-looking statements are often, but not always, identified by the use of words such as "anticipate", "achieve", "could", "believe", "plan", "intend", "objective", "continuous", "ongoing", "estimate", "outlook", "expect", "may", "will", "project", "should" or similar words, including negatives thereof, suggesting future outcomes.
Forward looking statements are subject to both known and unknown risks, uncertainties and other factors, many of which are beyond the control of YANGAROO, that may cause the actual results, level of activity, performance or achievements of YANGAROO to be materially different from those expressed or implied by such forward looking statements, including but not limited to: the use of proceeds of the offering, receipt of all necessary approvals of the offering, general business, economic, competitive, political and social uncertainties; negotiation uncertainties and other risks of the technology industry. Although YANGAROO has attempted to identify important factors that could cause actual results to differ materially from those contained in forward-looking statements, there may be other factors that cause results not to be as anticipated, estimated or intended.
Forward-looking statements are not a guarantee of future performance and involve a number of risks and uncertainties, some of which are described herein. Such forward-looking statements necessarily involve known and unknown risks and uncertainties, which may cause YANGAROO's actual performance and results to differ materially from any projections of future performance or results expressed or implied by such forward-looking statements. Any forward-looking statements are made as of the date hereof and, except as required by law, neither YANGAROO assumes no obligation to publicly update or revise such statements to reflect new information, subsequent or otherwise.
To view the source version of this press release, please visit https://www.newsfilecorp.com/release/188992
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