Reservoir Media, Inc. (NASDAQ: RSVR) (“Reservoir” or the
“Company”), an award-winning independent music company, today
announced financial results for the fourth quarter and full year
for fiscal 2022 ended March 31, 2022.
Fourth Quarter 2022 & Recent
Highlights:
- Revenue of $35.1 million, increased
20% organically, or 46% including acquisitions year-over-year
- Music Publishing revenue rose 29% year-over-year
- Recorded Music revenue increased by 123% year-over-year
- Operating Income of $8.7 million,
increased by 28% year-over-year
- OIBDA (“Operating Income Before
Depreciation & Amortization”) of $13.9 million, an increase of
34% driven by Recording Music revenue
- Net Income of $8.9 million, or
$0.14 per share, three cents above the prior year period
- Adjusted EBITDA of $15.4 million,
up 47% year-over-year
- Completed several recent catalog
acquisitions, including Larry Smith, Henry Jackman, Larry Kusik and
others
- Signed multiple publishing and
futures deals over the last few months including Ali Tamposi,
Killer Mike, Phil Manzanera, Mohamed Ramadan and others
Fiscal Year 2022
Highlights:
- Revenue of $107.8 million,
increased 15% organically, or 34% including acquisitions
year-over-year
- Music Publishing revenue rose 17% year-over-year
- Recorded Music revenue increased by 126% year-over-year
- Net Income $13.1 million, or $0.22
per diluted share, one cent above the prior year period
- Adjusted EBITDA of $41.3 million,
up 29% year-over-year
- Exceeded previously increased
expectations for fiscal year 2022 for both top-line and Adjusted
EBITDA outlooks
- Closed numerous high-profile and
diverse deals throughout fiscal year 2022, including the Tommy Boy
record label, a Joni Mitchell administration deal, the recorded
music rights to supergroup Alabama, and expanded Middle East and
North Africa footprint with the signing of Egyptian rapper Mohamed
Ramadan and Moroccan rapper 7liwa.
- Deployed over $224 million in
capital across 110 deals during first year as a public company
- Provided outlook for 10% growth for
both revenue and Adjusted EBITDA in fiscal 2023, at the
midpoints
Management Commentary:
“We are pleased to report very strong results
for our fourth fiscal quarter, bringing a close to what has been a
record-breaking year for Reservoir. We delivered on our
financial commitments, driven by our strategic investments, and
continued to execute on our strategy of building a robust, curated,
and diversified portfolio of award-winning songwriters’ and
artists’ bodies of work,” said Golnar Khosrowshahi, Founder and
Chief Executive Officer of Reservoir. “As we close our first year
as a publicly traded company, we are proud to announce that we
outperformed relative to our expectations and exceeded our capital
deployment growth goals with $224 million deployed across 110
unique transactions. More importantly, we laid the foundation for
future growth by significantly expanding and diversifying our
roster, and we remain proud of our position within the music
industry as a trusted partner that can drive value for our talented
artists.”
Khosrowshahi continued, “Going forward, our
focus remains on growth, driven by continued execution against our
M&A pipeline, as well as through our industry leading value
enhancement initiatives. Our pipeline of potential deals remains
robust, and we expect to deploy over $100 million in new capital in
fiscal 2023 that will help us broaden and further diversify our
portfolio. We expect to continue to deliver consistent and
predictable results in fiscal 2023, supported by a resilient and
cash-generative business model. We look forward to leveraging our
growing brand and position in the music industry and believe we
have a strong platform and strategy to drive long-term growth.”
Fourth Quarter & Fiscal Year 2022
Financial Results
Summary Financials |
Q4’22 |
Q4’21 |
Change |
FY22 |
FY21 |
Change |
Total Revenue |
$ |
35.1 |
$ |
24.1 |
46 |
% |
$ |
107.8 |
$ |
80.2 |
34 |
% |
Music Publishing Revenue |
$ |
25.1 |
$ |
19.4 |
29 |
% |
$ |
77.1 |
$ |
66.1 |
17 |
% |
Recorded Music Revenue |
$ |
9.8 |
$ |
4.4 |
123 |
% |
$ |
29.5 |
$ |
13.1 |
126 |
% |
Operating Income |
$ |
8.7 |
$ |
6.8 |
28 |
% |
$ |
19.4 |
$ |
18.3 |
6 |
% |
OIBDA |
$ |
13.9 |
$ |
10.4 |
34 |
% |
$ |
38.4 |
$ |
32.4 |
18 |
% |
Net Income |
$ |
8.9 |
$ |
5.1 |
75 |
% |
$ |
13.1 |
$ |
9.3 |
41 |
% |
Adjusted EBITDA |
$ |
15.4 |
$ |
10.5 |
47 |
% |
$ |
41.3 |
$ |
31.9 |
29 |
% |
(Table Notes:
$ in millions; Quarters ended March 31st; Unaudited) |
|
Total revenue in the fourth quarter of fiscal
2022 increased 46% to $35.1 million, compared to $24.1 million in
the fourth quarter of fiscal 2021. Total revenue in fiscal 2022
increased 34% to $107.8 million, compared to $80.2 million in
fiscal 2021. The increases for both periods were primarily driven
by strong Recorded Music segment growth, inclusive of the
acquisitions of various catalogs, including Tommy Boy.
Operating income in the fourth quarter of fiscal
2022 was $8.7 million, an increase of 28%, compared to operating
income of $6.8 million in the fourth quarter of fiscal 2021. OIBDA
in the fourth quarter of fiscal 2022 increased 34% to $13.9
million, compared to $10.4 million in the prior year quarter.
Adjusted EBITDA in the fourth quarter of fiscal 2022 increased 47%
to $15.4 million, compared to $10.5 million last year. Operating
income in fiscal 2022 was $19.3 million, an increase of 5%,
compared to operating income of $18.3 million in fiscal 2021. OIBDA
in fiscal 2022 increased 18% to $38.4 million, compared to $32.4
million in the prior year quarter. Adjusted EBITDA in fiscal 2022
increased 29% to $41.3 million, compared to $31.9 million last
year. The increases in operating income, OIBDA, and Adjusted EBITDA
for both periods were all primarily driven by double-digit revenue
growth from both segments and offset by expenses related to being a
public company that did not exist in the prior year period. See
below for calculations and reconciliations of OIBDA and Adjusted
EBITDA to operating income and net income, respectively.
Net income attributable to common stockholders
in the fourth quarter of fiscal 2022 was $8.9 million, or $0.14 per
share, compared to a net income attributable to common stockholders
of $5.1 million, or $0.11 per share, in the year-ago quarter.
Net income attributable to common stockholders in fiscal 2022 was
$13.1 million, or $0.22 per diluted share, compared to a net income
attributable to common stockholders of $9.3 million, or $0.21 per
share, in the year-ago quarter. Net income for both periods was
driven by revenue growth from both segments, which was offset by
higher administration expenses associated with being a public
company, as well as higher amortization, interest expense and
income tax expenses.
Fourth Quarter & Fiscal Year 2022
Segment Review
Music Publishing |
Q4’22 |
Q4’21 |
Change |
FY22 |
FY21 |
Change |
Revenue by Type |
|
|
|
|
|
|
Digital |
$ |
10.9 |
$ |
9.2 |
18 |
% |
$ |
37.4 |
$ |
34.8 |
7 |
% |
Performance |
$ |
5.1 |
$ |
4.6 |
11 |
% |
$ |
15.6 |
$ |
16.3 |
(5 |
%) |
Synchronization |
$ |
4.7 |
$ |
3.6 |
31 |
% |
$ |
13.2 |
$ |
9.3 |
41 |
% |
Mechanical |
$ |
1.1 |
$ |
1.0 |
10 |
% |
$ |
3.2 |
$ |
3.0 |
6 |
% |
Other |
$ |
3.3 |
$ |
1.0 |
230 |
% |
$ |
7.7 |
$ |
2.6 |
198 |
% |
Total Revenue |
$ |
25.1 |
$ |
19.4 |
29 |
% |
$ |
77.1 |
$ |
66.1 |
17 |
% |
Operating Income |
$ |
4.0 |
$ |
5.7 |
(30 |
%) |
$ |
10.7 |
$ |
15.3 |
(30 |
%) |
OIBDA |
$ |
7.8 |
$ |
8.7 |
(10 |
%) |
$ |
24.5 |
$ |
27.0 |
(9 |
%) |
(Table Notes:
$ in millions; Quarters ended March 31st; Unaudited) |
|
Music Publishing revenue in the
fourth quarter of fiscal 2022 was $25.1 million, an increase of 29%
compared to $19.4 million in last year’s fourth quarter.
Music publishing revenue in fiscal 2022 was $77.1 million, an
increase of 17% compared to $66.1 million in fiscal 2021. Growth in
both periods was driven by strong performance within the
Synchronization and Other revenue streams. The fourth quarter
has revenue increases across all income types.
In the fourth quarter of fiscal 2022, Music
Publishing OIBDA decreased 10% to $7.8 million, compared to $8.7
million in the fourth quarter of fiscal 2021. During fiscal 2022,
Music Publishing OIBDA decreased 9% to $24.5 million, compared to
$27.0 million in fiscal 2021. Music Publishing OIBDA margin in the
fourth quarter decreased from 45% to 31%. Music Publishing OIBDA
margin in fiscal 2022 decreased from 41% to 32%. The decline in
Music Publishing OIBDA margin for both periods was primarily driven
by higher administration expenses associated with being a public
company.
Recorded Music |
Q4’22 |
Q4’21 |
Change |
FY22 |
FY21 |
Change |
Revenue by Type |
|
|
|
|
|
|
Digital |
$ |
6.4 |
$ |
2.3 |
178 |
% |
$ |
18.4 |
$ |
7.3 |
153 |
% |
Physical |
$ |
1.6 |
$ |
1.7 |
(6 |
)% |
$ |
6.4 |
$ |
3.9 |
65 |
% |
Neighboring Rights |
$ |
0.8 |
$ |
0.4 |
100 |
% |
$ |
2.1 |
$ |
1.5 |
42 |
% |
Synchronization |
$ |
1.0 |
$ |
0.0 |
NM |
|
$ |
2.6 |
$ |
0.5 |
483 |
% |
Total Revenue |
$ |
9.8 |
$ |
4.4 |
123 |
% |
$ |
29.5 |
$ |
13.1 |
126 |
% |
Operating Income |
$ |
4.8 |
$ |
1.0 |
380 |
% |
$ |
8.4 |
$ |
2.8 |
201 |
% |
OIBDA |
$ |
6.3 |
$ |
1.5 |
320 |
% |
$ |
13.5 |
$ |
5.0 |
170 |
% |
(Table Notes: $ in millions; Quarters ended March 31st;
Unaudited) |
|
Recorded Music revenue in the
fourth quarter of fiscal 2022 was $9.8 million, an increase of 123%
compared to $4.4 million in last year’s fourth quarter.
Recorded Music revenue in fiscal 2022 was $29.5 million, an
increase of 126% compared to $13.1 million in fiscal 2021. These
improvements in both periods were largely driven by the acquisition
of Tommy Boy, strong Digital revenue growth, and smaller growth in
other revenue types.
In the fourth quarter of fiscal 2022, Recorded
Music OIBDA increased 320%, to $6.3 million, compared to $1.5
million in the fourth quarter of fiscal 2021. During fiscal 2022,
Recorded Music OIBDA increased 170% to $13.5 million, compared to
$5.0 million in fiscal 2021. Recorded Music OIBDA margin in the
fourth quarter increased from 34% to 64%. Recorded Music OIBDA
margin in fiscal 2022 increased from 38% to 46%. The increase in
Recorded Music OIBDA margins for both periods was driven by a shift
towards Digital and Synchronization revenues which carry lower
costs. Additionally, the Company was able to leverage the
existing infrastructure while ingesting the acquired Tommy Boy
catalog.
Balance Sheet and Liquidity
During fiscal 2022, cash provided by operating
activities was $12.5 million, a decrease of $2.2 million compared
to the same period last year. The decreased cash provided by
operating activities was primarily attributable to increases in
cash used for working capital, including royalty advances (net of
recoupments), partially offset by higher earnings.
As of March 31, 2022, Reservoir had cash and
cash equivalents of $17.8 million and $74.4 million available for
borrowing under its revolving credit facility, for total available
liquidity of $92.2 million. Total debt was $269.9 million (net of
$5.8 million of deferred financing costs) and Net Debt was $252.0
million (defined as total debt, less cash and equivalents and
deferred financing costs). This compares to cash and cash
equivalents of $9.2 million and $32.9 million available for
borrowing on the revolving credit facility, for total available
liquidity of $42.1 million, total debt of $212.5 million (net of
$3.1 million of deferred financing costs), and Net Debt of $203.3
million as of March 31, 2021. The Company’s leverage ratio at March
31, 2022 was 5.7x using the trailing twelve month pro forma
adjusted EBITDA of $48.2 million which reflects the measurement per
its credit agreement.
Fiscal 2023 Outlook
Reservoir initiated the following financial
outlook range for fiscal year 2023, and expects the financial
results for the year ending March 31, 2023, to be as follows:
Outlook |
Guidance |
Growth(at mid-point) |
Revenue |
$116M - $121M |
10% |
Adjusted EBITDA |
$44M - $47M |
10% |
|
|
|
Jim Heindlmeyer, Chief Financial Officer of
Reservoir, concluded “Given the momentum we built in fiscal 2022,
which included numerous new additions to our growing roster of
talent, we expect to continue to drive strong growth in both our
top and bottom-lines next year. This growth will be supported by
the predictable cash flows that our powerful business model
produces. Our business model has proven resilient across historical
economic cycles, and we have the right strategy to drive long-term
value creation for our creative partners, the business and for our
shareholders.”
Accounting Adjustments
During the current fiscal year-end reporting
process, the Company identified certain immaterial prior period
adjustments related to the accounting for acquisitions. While
there was no impact on total cash flows, the prior period financial
information included in this release has been revised to give
effect to these immaterial adjustments. A detailed quantification
of the impact of these adjustments on each financial statement line
is included in the Company’s 10-K.
Conference Call Information
Reservoir is hosting a conference call for
analysts and investors to discuss its financial results for the
fourth quarter and fiscal year ended March 31, 2022, and its
business outlook at 10:00 a.m. EDT today, on June 21, 2022. The
conference call can be accessed via webcast in the investor
relations section of the Company’s website at
https://investors.reservoir-media.com/news-and-events/events-and-presentations,
or by calling 1-844-249-2008 (U.S. and Canada) and 224-619-3936
(International) and entering the conference ID 1156726. Shortly
after the conclusion of the conference call, a replay of the audio
webcast will be available in the investor relations section of
Reservoir’s website for 30 days after the event.
About Reservoir Media, Inc.
Reservoir is an independent music company based
in New York City and with offices in Los Angeles, Nashville,
Toronto, London, and Abu Dhabi. Reservoir is the first
female-founded and led publicly traded independent music company in
the U.S. Founded as a family-owned music publisher in 2007,
Reservoir has grown to represent over 140,000 copyrights and 36,000
master recordings with titles dating as far back as 1900 and
hundreds of #1 releases worldwide. Reservoir holds a regular Top 10
U.S. Market Share according to Billboard’s Publishers Quarterly,
was twice named Publisher of the Year by Music Business Worldwide’s
The A&R Awards, and won Independent Publisher of the Year at
both the 2020 and 2022 Music Week Awards.
Reservoir also represents a multitude of
recorded music through Chrysalis Records, Tommy Boy Records, and
Philly Groove Records and manages artists through its ventures with
Blue Raincoat Music and Big Life Management.
Forward-Looking Statements
This press release contains forward-looking
statements within the meaning of the “safe harbor” provisions of
the Private Securities Litigation Reform Act of 1995, as amended,
including statements with respect to the financial condition,
results of operations, earnings outlook and prospects of Reservoir.
Forward-looking statements are based on the current expectations
and beliefs of the management of Reservoir and are inherently
subject to a number of risks, uncertainties and assumptions and
their potential effects. There can be no assurance that future
developments will be those that have been anticipated. These
forward-looking statements involve a number of risks, uncertainties
or other assumptions that may cause actual financial condition,
results of operations, earnings and/or prospects to be materially
different from those expressed or implied by these forward-looking
statements. Any statements that refer to projections, forecasts or
other characterizations of future events or circumstances,
including any underlying assumptions, are forward-looking
statements. In addition, forward-looking statements are typically
identified by words such as “plan,” “believe,” “expect,”
“anticipate,” “intend,” “outlook,” “estimate,” “forecast,”
“project,” “continue,” “could,” “may,” “might,” “possible,”
“potential,” “predict,” “should,” “would” and other similar words
and expressions, but the absence of these words does not mean that
a statement is not forward-looking. The forward-looking statements
in this press release may include, among others:
- expectations regarding Reservoir’s
strategies and future financial performance, including its future
business plans or objectives, prospective performance and
opportunities and competitors, revenues, products, pricing,
operating expenses, market trends, liquidity, cash flows and uses
of cash, capital expenditures;
- Reservoir’s ability to invest in
growth initiatives and pursue acquisition opportunities;
- the ability to achieve the
anticipated benefits of the business combination, which may be
affected by, among other things, competition and the ability of
Reservoir to grow and manage growth profitably and retain its key
employees;
- the inability to maintain the
listing of Reservoir’s common stock on the Nasdaq Stock Market LLC
and limited liquidity and trading of Reservoir’s securities;
- geopolitical risk and changes in
applicable laws or regulations;
- the possibility that Reservoir may
be adversely affected by other economic, business and/or
competitive factors;
- risks related to the organic and
inorganic growth of Reservoir’s business and the timing of expected
business milestones;
- risk that the COVID-19 pandemic,
and local, state and federal responses to addressing the COVID-19
pandemic, may have an adverse effect on Reservoir’s business
operations, as well as its financial condition and results of
operations; and
- litigation and regulatory
enforcement risks, including the diversion of management time and
attention and the additional costs and demands on Reservoir’s
resources.
Should one or more of these risks or
uncertainties materialize or should any of the assumptions made by
the management of Reservoir prove incorrect, actual results may
vary in material respects from those projected in these
forward-looking statements.
Except to the extent required by applicable law
or regulation, Reservoir undertakes no obligation to update these
forward-looking statements to reflect events or circumstances after
the date of this press release or to reflect the occurrence of
unanticipated events. For a more detailed discussion of risks and
other factors that might impact forward-looking statements, see
Reservoir’s filings with the SEC available on the SEC’s website at
www.sec.gov or Reservoir’s website at
www.reservoir-media.com.
Reservoir Media, Inc. and
SubsidiariesCondensed Consolidated Statements of
IncomeThree and Twelve Months Ended March 31, 2022 versus
March 31, 2021(Unaudited)(Expressed in U.S. dollars)
|
|
Three Months Ended March 31, |
|
|
|
Fiscal Year Ended March 31, |
|
|
|
|
|
2022 |
|
|
|
2021 |
|
|
% Change |
|
|
2022 |
|
|
|
2021 |
|
|
% Change |
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenues |
|
$ |
35,121,894 |
|
|
$ |
24,061,474 |
|
|
46 |
% |
|
$ |
107,840,245 |
|
|
$ |
80,245,664 |
|
|
34 |
% |
Costs and expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
Cost of revenue |
|
|
12,965,367 |
|
|
|
9,034,721 |
|
|
44 |
% |
|
|
44,185,837 |
|
|
|
32,854,453 |
|
|
34 |
% |
Amortization and depreciation |
|
|
5,250,244 |
|
|
|
3,630,458 |
|
|
45 |
% |
|
|
19,022,131 |
|
|
|
14,077,473 |
|
|
35 |
% |
Administration expenses |
|
|
8,227,633 |
|
|
|
4,585,927 |
|
|
79 |
% |
|
|
25,279,256 |
|
|
|
14,986,085 |
|
|
69 |
% |
Total costs and expenses |
|
|
26,443,244 |
|
|
|
17,251,106 |
|
|
53 |
% |
|
|
88,487,224 |
|
|
|
61,918,011 |
|
|
43 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating income |
|
|
8,678,650 |
|
|
|
6,810,368 |
|
|
27 |
% |
|
|
19,353,021 |
|
|
|
18,327,653 |
|
|
6 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest expense |
|
|
(2,863,413 |
) |
|
|
(2,304,183 |
) |
|
|
|
|
(10,870,866 |
) |
|
|
(8,972,100 |
) |
|
|
Gain (loss) on foreign
exchange |
|
|
203,947 |
|
|
|
(361,091 |
) |
|
|
|
|
330,582 |
|
|
|
(910,799 |
) |
|
|
Gain on fair value of
swaps |
|
|
5,669,378 |
|
|
|
1,728,584 |
|
|
|
|
|
8,558,339 |
|
|
|
2,988,322 |
|
|
|
Interest and other income |
|
|
10,156 |
|
|
|
7,091 |
|
|
|
|
|
10,513 |
|
|
|
13,243 |
|
|
|
Income before income
taxes |
|
|
11,698,718 |
|
|
|
5,880,769 |
|
|
|
|
|
17,381,589 |
|
|
|
11,446,319 |
|
|
|
Income tax expense |
|
|
2,845,203 |
|
|
|
810,267 |
|
|
|
|
|
4,253,192 |
|
|
|
2,146,691 |
|
|
|
Net income |
|
|
8,853,515 |
|
|
|
5,070,502 |
|
|
|
|
|
13,128,397 |
|
|
|
9,299,628 |
|
|
|
Net (income) loss attributable
to noncontrolling interests |
|
|
43,669 |
|
|
|
(34,588 |
) |
|
|
|
|
(51,770 |
) |
|
|
(46,673 |
) |
|
|
Net income attributable to
Reservoir Media, Inc. |
|
$ |
8,897,184 |
|
|
$ |
5,035,914 |
|
|
|
|
$ |
13,076,627 |
|
|
$ |
9,252,955 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings per common
share: |
|
|
|
|
|
|
|
|
|
|
|
|
Basic |
|
$ |
0.14 |
|
|
$ |
0.18 |
|
|
|
|
$ |
0.23 |
|
|
$ |
0.21 |
|
|
|
Diluted |
|
$ |
0.14 |
|
|
$ |
0.11 |
|
|
|
|
$ |
0.22 |
|
|
$ |
0.21 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average common shares
outstanding: |
|
|
|
|
|
|
|
|
|
|
|
|
Basic |
|
|
64,145,552 |
|
|
|
28,539,299 |
|
|
|
|
|
52,611,175 |
|
|
|
28,370,281 |
|
|
|
Diluted |
|
|
64,700,513 |
|
|
|
44,714,705 |
|
|
|
|
|
58,450,019 |
|
|
|
44,545,687 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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|
Reservoir Media, Inc. and
SubsidiariesCondensed Consolidated Balance
SheetsMarch 31, 2022 versus March 31,
2021(Unaudited)(Expressed in U.S. dollars)
|
|
March 31,2022 |
|
March 31,2021 |
|
|
|
|
|
Assets |
|
|
|
|
Current assets |
|
|
|
|
Cash and cash equivalents |
|
$ |
17,814,292 |
|
|
$ |
9,209,920 |
|
Accounts receivable |
|
|
25,210,936 |
|
|
|
15,813,384 |
|
Current portion of royalty advances |
|
|
12,375,420 |
|
|
|
12,840,855 |
|
Inventory and prepaid expenses |
|
|
4,041,471 |
|
|
|
1,406,379 |
|
Total current assets |
|
|
59,442,119 |
|
|
|
39,270,538 |
|
|
|
|
|
|
Intangible assets, net |
|
|
571,383,855 |
|
|
|
391,149,163 |
|
Equity method and other
investments |
|
|
3,912,978 |
|
|
|
1,591,179 |
|
Royalty advances, net of
current portion |
|
|
44,637,334 |
|
|
|
28,741,225 |
|
Property, plant and equipment,
net |
|
|
342,080 |
|
|
|
321,766 |
|
Fair value of swap assets |
|
|
3,991,802 |
|
|
|
- |
|
Other assets |
|
|
559,922 |
|
|
|
781,735 |
|
Total assets |
|
$ |
684,270,090 |
|
|
$ |
461,855,606 |
|
|
|
|
|
|
Liabilities |
|
|
|
|
Current liabilities |
|
|
|
|
Accounts payable and accrued liabilities |
|
$ |
4,436,943 |
|
|
$ |
3,316,768 |
|
Royalties payable |
|
|
21,235,815 |
|
|
|
14,656,566 |
|
Accrued payroll |
|
|
1,938,281 |
|
|
|
1,634,852 |
|
Deferred revenue |
|
|
1,103,664 |
|
|
|
1,337,987 |
|
Other current liabilities |
|
|
12,272,577 |
|
|
|
2,615,488 |
|
Amounts due to related parties |
|
|
- |
|
|
|
290,172 |
|
Current portion of loans and secured notes payable |
|
- |
|
|
|
1,000,000 |
|
Income taxes payable |
|
|
77,496 |
|
|
|
527,172 |
|
Total current liabilities |
|
|
41,064,776 |
|
|
|
25,379,005 |
|
|
|
|
|
|
Loans and secured notes
payable |
|
|
269,856,169 |
|
|
|
211,531,875 |
|
Deferred income taxes |
|
|
24,884,170 |
|
|
|
19,267,617 |
|
Fair value of swaps |
|
|
- |
|
|
|
4,566,537 |
|
Other liabilities |
|
|
1,012,651 |
|
|
|
6,739,971 |
|
Total liabilities |
|
|
336,817,766 |
|
|
|
267,485,005 |
|
|
|
|
|
|
Contingencies and
commitments |
|
|
|
|
|
|
|
|
|
Shareholders' Equity |
|
|
|
|
Preferred stock |
|
|
- |
|
|
|
81,632,500 |
|
Common stock |
|
|
6,415 |
|
|
|
2,854 |
|
Additional paid-in
capital |
|
|
335,372,981 |
|
|
|
110,496,300 |
|
Retained earnings |
|
|
12,213,519 |
|
|
|
(863,108 |
) |
Accumulated other
comprehensive income (loss) |
|
|
(1,198,058 |
) |
|
|
2,096,358 |
|
Total Reservoir Media, Inc. shareholders' equity |
|
|
346,394,857 |
|
|
|
193,364,904 |
|
Noncontrolling interest |
|
|
1,057,467 |
|
|
|
1,005,697 |
|
Total shareholders' equity |
|
|
347,452,324 |
|
|
|
194,370,601 |
|
Total liabilities and shareholders' equity |
|
$ |
684,270,090 |
|
|
$ |
461,855,606 |
|
|
|
|
|
|
|
|
|
|
Supplemental Disclosures Regarding Non-GAAP Financial
Measures
This press release includes certain financial
information, such as OIBDA, OIBDA margin, EBITDA, Adjusted EBITDA,
Pro Forma Adjusted EBITDA and Net Debt, that has not been prepared
in accordance with United States generally accepted accounting
principles (“GAAP”). Reservoir’s management uses these non-GAAP
financial measures to evaluate Reservoir’s operations, measure its
performance and make strategic decisions. Reservoir believes that
the use of these non-GAAP financial measures provides useful
information to investors and others in understanding Reservoir’s
results of operations and trends in the same manner as Reservoir’s
management and in evaluating Reservoir’s financial measures as
compared to the financial measures of other similar companies, many
of which present similar non-GAAP financial measures. However,
these non-GAAP financial measures are subject to inherent
limitations as they reflect the exercise of judgments by
Reservoir’s management about which items are excluded or included
in determining these non-GAAP financial measures and, therefore,
should not be considered as a substitute for net income, operating
income or any other operating performance measures calculated in
accordance with GAAP. Using such non-GAAP financial measures in
isolation to analyze Reservoir’s business would have material
limitations because the calculations are based on the subjective
determination of Reservoir’s management regarding the nature and
classification of events and circumstances. In addition, although
other companies in Reservoir’s industry may report measures titled
OIBDA, OIBDA margin, Adjusted EBITDA and Net Debt, or similar
measures, such non-GAAP financial measures may be calculated
differently from how Reservoir calculates such non-GAAP financial
measures, which reduces their overall usefulness as comparative
measures. Because of these limitations, such non-GAAP financial
measures should be considered alongside other financial performance
measures and other financial results presented in accordance with
GAAP. You can find the reconciliation of these non‐GAAP financial
measures to the nearest comparable GAAP measures in the tables
below.
OIBDA
Reservoir evaluates operating performance based
on several factors, including its primary financial measure of
operating income before non-cash depreciation of tangible assets
and non-cash amortization of intangible assets (“OIBDA”). Reservoir
considers OIBDA to be an important indicator of the operational
strengths and performance of its businesses and believes this
non-GAAP financial measure provides useful information to investors
because it removes the significant impact of amortization from
Reservoir’s results of operations. However, a limitation of the use
of OIBDA as a performance measure is that it does not reflect the
periodic costs of certain capitalized tangible and intangible
assets used in generating revenues in Reservoir’s businesses and
other non-operating income (loss). Accordingly, OIBDA should be
considered in addition to, not as a substitute for, operating
income, net income attributable to us and other measures of
financial performance reported in accordance with GAAP. In
addition, our definition of OIBDA may differ from similarly titled
measures used by other companies. OIBDA Margin is defined as OIBDA
as a percentage of revenue.
EBITDA and Adjusted EBITDA
EBITDA is defined as earnings (net income or
loss) before net interest expense, income tax (benefit) expense,
non-cash depreciation of tangible assets and non-cash amortization
of intangible assets and is used by management to measure operating
performance of the business. Adjusted EBITDA, in addition to
adjusting net income to exclude income tax expense, interest
expense and depreciation and amortization, further adjusts net
income by excluding items or expenses such as, among others, (1)
any non-cash charges (including any impairment charges), (2) any
net gain or loss on foreign exchange, (3) any net gain or loss
resulting from interest rate swaps, (4) equity-based compensation
expense and (5) certain unusual or non-recurring items.
Adjusted EBITDA is a key measure used by
Reservoir’s management to understand and evaluate operating
performance, generate future operating plans and make strategic
decisions regarding the allocation of capital. However, certain
limitations on the use of Adjusted EBITDA include, among others,
(1) it does not reflect the periodic costs of certain capitalized
tangible and intangible assets used in generating revenue for
Reservoir’s business, (2) it does not reflect the significant
interest expense or cash requirements necessary to service interest
or principal payments on Reservoir’s indebtedness and (3) it does
not reflect every cash expenditure, future requirements for capital
expenditures or contractual commitments. In particular, Adjusted
EBITDA measure adds back certain non-cash, unusual or non-recurring
charges that are deducted in calculating net income; however, these
are expenses that may recur, vary greatly and are difficult to
predict. In addition, Adjusted EBITDA is not the same as net income
or cash flow provided by operating activities as those terms are
defined by GAAP and does not necessarily indicate whether cash
flows will be sufficient to fund cash needs.
Pro Forma Adjusted EBITDA
Pro Forma Adjusted EBITDA is defined as Adjusted
EBITDA plus the pro forma EBITDA of assets acquired in the previous
four quarters representing the earnings of those assets for the
portion of the prior four quarters before the Company’s acquisition
of such assets. This is the measurement defined in the Company’s
credit agreement. The Company believes that including the
supplemental adjustments that are made to calculate Pro Forma
Adjusted EBITDA provides additional information to investors about
the Company’s ability to comply with its financial covenants as
well as providing meaningful information about the historic
earnings of acquired assets. Pro Forma Adjusted EBITDA is not
defined by GAAP. Pro Forma Adjusted EBITDA is not a measure of
financial condition, liquidity or profitability, and should not be
considered as an alternative to net income determined in accordance
with GAAP or operating cash flows determined in accordance with
GAAP. Additionally, Pro Forma Adjusted EBITDA is not intended to be
a measure of free cash flow for management’s discretionary use, as
it does not take into account certain items such as interest and
principal payments on our indebtedness, depreciation and
amortization expense (because the Company uses capital assets,
depreciation and amortization expense is a necessary element of our
costs and ability to generate revenue), working capital needs, tax
payments (because the payment of taxes is part of our operations,
it is a necessary element of our costs and ability to operate),
non-recurring expenses and capital expenditures.
Net Debt
Reservoir defines Net Debt as total debt, less
cash and equivalents and deferred financing costs.
Reservoir Media, Inc. and
SubsidiariesReconciliation of Operating Income to
OIBDAThree and Twelve Months Ended March 31, 2022 versus
March 31, 2021(Unaudited)(Dollars in thousands)
|
For the Three Months Ended March 31, |
|
For the Fiscal Year Ended March 31, |
|
|
2022 |
|
|
|
2021 |
|
|
|
2022 |
|
|
|
2021 |
|
Operating Income |
$ |
8,678 |
|
|
$ |
6,811 |
|
|
$ |
19,353 |
|
|
$ |
18,328 |
|
Amortization and Depreciation
Expense |
|
5,251 |
|
|
|
3,630 |
|
|
|
19,022 |
|
|
|
14,077 |
|
OIBDA |
$ |
13,929 |
|
|
$ |
10,441 |
|
|
$ |
38,375 |
|
|
$ |
32,405 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reservoir Media, Inc. and
SubsidiariesReconciliation of Music Publishing
Segment Reporting Operating Income to OIBDAThree and
Twelve Months Ended March 31, 2022 versus March 31, 2021
(Unaudited)(Dollars in thousands)
|
For the Three Months Ended March 31, |
|
For the Fiscal Year Ended March 31, |
|
|
2022 |
|
|
|
2021 |
|
|
|
2022 |
|
|
|
2021 |
|
Operating Income |
$ |
4,024 |
|
|
$ |
5,674 |
|
|
$ |
10,731 |
|
|
$ |
15,279 |
|
Amortization and Depreciation
Expense |
|
3,768 |
|
|
|
3,023 |
|
|
|
13,769 |
|
|
|
11,749 |
|
OIBDA |
$ |
7,792 |
|
|
$ |
8,697 |
|
|
$ |
24,500 |
|
|
$ |
27,028 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reservoir Media, Inc. and
SubsidiariesReconciliation of Recorded Music
Segment Reporting Operating Income to OIBDAThree and
Twelve Months Ended March 31, 2022 versus March 31, 2021
(Unaudited)(Dollars in thousands)
|
For the Three Months Ended March 31, |
|
For the Fiscal Year Ended March 31, |
|
|
2022 |
|
|
|
2021 |
|
|
|
2022 |
|
|
|
2021 |
|
Operating Income |
$ |
4,817 |
|
|
$ |
978 |
|
|
$ |
8,386 |
|
|
$ |
2,787 |
|
Amortization and Depreciation
Expense |
|
1,458 |
|
|
|
501 |
|
|
|
5,155 |
|
|
|
2,222 |
|
OIBDA |
$ |
6,275 |
|
|
$ |
1,479 |
|
|
$ |
13,541 |
|
|
$ |
5,009 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reservoir Media, Inc. and
SubsidiariesReconciliation of Net Income to
Adjusted EBITDAThree and Twelve Months Ended March 31,
2022 versus March 31, 2021 (Unaudited)(Dollars in thousands)
|
For the Three Months Ended March 31, |
|
For the Fiscal Year Ended March 31, |
|
|
2022 |
|
|
|
2021 |
|
|
|
2022 |
|
|
|
2021 |
|
Net
Income |
$ |
8,853 |
|
|
$ |
5,071 |
|
|
$ |
13,128 |
|
|
$ |
9,300 |
|
Income Tax Expense |
|
2,845 |
|
|
|
811 |
|
|
|
4,253 |
|
|
|
2,147 |
|
Interest Expense |
|
2,864 |
|
|
|
2,304 |
|
|
|
10,871 |
|
|
|
8,972 |
|
Amortization and
Depreciation |
|
5,250 |
|
|
|
3,630 |
|
|
|
19,022 |
|
|
|
14,077 |
|
EBITDA |
|
19,812 |
|
|
|
11,816 |
|
|
|
47,274 |
|
|
|
34,496 |
|
(Gain) Loss on Foreign
Exchange(a) |
|
(204 |
) |
|
|
361 |
|
|
|
(331 |
) |
|
|
911 |
|
Gain on Fair Value of
Swaps(b) |
|
(5,669 |
) |
|
|
(1,728 |
) |
|
|
(8,558 |
) |
|
|
(2,988 |
) |
Non-cash Share-based
Compensation(c) |
|
1,465 |
|
|
|
26 |
|
|
|
2,891 |
|
|
|
103 |
|
Interest and Other Income |
|
(11 |
) |
|
|
(7 |
) |
|
|
(11 |
) |
|
|
(13 |
) |
Benefit of Forgiven PPP
Loan(d) |
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
(617 |
) |
Adjusted
EBITDA |
$ |
15,393 |
|
|
$ |
10,468 |
|
|
$ |
41,265 |
|
|
$ |
31,892 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
- Reflects the (gain) or loss on foreign exchange
fluctuations.
- Reflects the non-cash gain on the mark-to-market of interest
rate swaps.
- Reflects non-cash share-based compensation expense related to
the Reservoir Media, Inc. 2021 Omnibus Incentive Plan.
- Reflects loan forgiveness for the entire amount borrowed under
the Paycheck Protection Program.
Reservoir Media, Inc. and
SubsidiariesReconciliation of Net Income to Pro
Forma Adjusted EBITDATwelve Months Ended March 31,
2022(Unaudited)(Dollars in thousands)
Net income |
|
$ |
13,128 |
|
Income tax expense |
|
|
4,253 |
|
Interest expense |
|
|
10,871 |
|
Amortization and
depreciation |
|
|
19,022 |
|
EBITDA |
|
|
47,274 |
|
(Gain) loss on foreign
exchange (a) |
|
|
(331 |
) |
Gain on fair value of swaps
(b) |
|
|
(8,558 |
) |
Non-cash share-based
compensation (c) |
|
|
2,891 |
|
Interest and other income |
|
|
(11 |
) |
Adjusted EBITDA |
|
|
41,265 |
|
Pro forma EBITDA on
acquisitions (d) |
|
|
6,943 |
|
Pro forma Adjusted EBITDA |
|
$ |
48,208 |
|
|
|
|
|
|
- Reflects the (gain) or loss on foreign exchange
fluctuations.
- Reflects the non-cash gain on the mark-to-market of interest
rate swaps.
- Reflects non-cash share-based compensation expense related to
the Reservoir Media, Inc. 2021 Omnibus Incentive Plan.
- Reflects the pro forma EBITDA on acquisitions for the portion
of the prior twelve months that are not included in Reservoir’s
financial results.
Source: Reservoir Media, Inc.
Media Contact
Reservoir Media, Inc.
Suzy Arrabito
Vice President, Marketing & Communications
sa@reservoir-media.com
www.reservoir-media.com
Investor Contact
Alpha IR Group
Alec Buchmelter or Alec Steinberg
RSVR@alpha-ir.com
Reservoir Media (NASDAQ:RSVR)
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