Boat Rocker Media Inc

TSX:BRMI

Earnings Call Transcript 2021-Q4

[Operator]

Good morning. My name is [ Anis ], and I'll be your conference operator today. At this time, I would like to welcome everyone to the Boat Rocker Media Fourth Quarter 2021 Financial Results Conference Call. [Operator Instructions]

Forward-looking information is based on a number of assumptions, including foreign exchange rates. The timing of green lights and delivery schedules on various shows and other assumptions as set out in the outlook section of the company's annual MD&A dated March 31, 2021.

Forward-looking information is subject to risks, many of which are beyond the company's control, including the impacts of COVID-19, inflation and global supply chain issues. A comprehensive summary of the risks and uncertainties that may affect the business of the company is set out in the company's annual information form dated March 31, 2021. As such this forward-looking information represents management's expectations as of today and accordingly, is subject to change.

Such information is based on current assumptions that may not materialize and is subject to a number of important risks and uncertainties. Actual results may differ materially, and listeners are cautioned not to place undue reliance on this forward-looking information. Boat Rocker does not undertake any obligation to update forward-looking information, whether as a result of new information, future events or otherwise, except as expressly required under applicable securities laws. Boat Rocker's annual MD&A and annuation form are available on the corporate website and its filings with the Canadian Securities Administrators on SEDAR at www.sedar.com.

With that, I will now turn the call over to Mr. John Young, Chief Executive Officer of Boat Rocker Media. Mr. Young, you may begin your remarks.

[John Young, executive]

Thank you. Thank you, [ Anis ]. So good morning, everyone, and thank you for joining us for the Boat Rocker Media Fourth Quarter 2021 Results Conference Call. On the call with me today are Michelle Abbott, our CFO; Ivan Schneeberg and David Fortier, our Co-Executive Chairman and Co-Chairman of Boat Rocker Studios.

First off, I'll provide some introductory commentary on our record results for the quarter and year before turning over to Michelle for a brief financial review. Ivan will then discuss some recent creative highlights and I'll return for final remarks, including on our outlook for 2022, and we'll then open up the call to questions.

So 2021 marked the beginning of the next stage in Boat Rocker's evolution. We completed our IPO, as you know, in March, allowing us to strengthen our balance sheet and position us for a new phase of long-term growth. When we went public, we said we would deliver a material step-up in scale driven by increased deliveries of scripted, unscripted and kids and family content.

Our 2021 slate encompass more than 60 shows, including the 2 largest budget shows we've ever produced. And also series for the industry's major platforms, including Netflix, Apple TV+, Amazon Prime, HBO Max, Peacock, TBS, Viacom, Discover+ and Disney. The step-up was also to be fueled by growth in our representation segment and the introduction of a meaningful merchandising licensing program, especially for our series Dino Ranch, which quickly became the #1 preschool kid show in the U.S. in its time slot for all of 2021.

This was all against the backdrop, of course, of a very active industry and continued demand for content from audiences and buyers all over the world. Our full year results, the best in our company's 18-year operating history show that we achieved that step-up just as we said we would. We grew the fourth quarter revenue nearly fivefold over the same period of 2020, and generated more revenue in this most recent quarter than we did in all last year combined. While we intend to grow the top line over the longer term, we continue to maintain the adjusted EBITDA is the best metric to assess our performance pipe.

In this 2021, it was a banner year for us. We grew profitability to $31.6 million of adjusted EBITDA, more than doubling both our quarterly and full year results, demonstrating how effectively our scale, diversity and operating experience can work together.

I will return in a few minutes to talk more about our exciting outlook for 2022. But for now, I'm going to turn it over to Michelle for a brief financial review. Michelle, over to you.

[Michelle Abbott, executive]

Thank you, John, and good morning, everyone. Our 2021 results clearly illustrate our ability to generate meaningful growth and manage through and move beyond the disruptions to our performance in 2020 caused by the COVID-19 pandemic. During the fourth quarter, we completed the delivery of our first season of the largest budget shows produced in Boat Rocker's history, American Rust and Invasion, which translated into record top line performance and strong adjusted EBITDA.

Revenue for the 3 months ended December 31, 2021, was $262.5 million compared with $55.6 million for the same period of 2020, an increase of 372%. Revenue for the year was $580.4 million compared with $226.8 million in the same period of 2020, an increase of 156%. Revenue increased in all segments on a full year basis, driven by a significant increase in our Television segment to $286.5 million, which was due to increased content delivery in the period overall compared with 2020.

Kids and Family revenue increased by 32% in the 12-month period to $84.4 million. The production revenue we delivered in 2021 was predominantly fully funded by broadcasters presale, and our animation teams operated at full capacity throughout the year. Representation revenue grew 33% in the 12-month period to $38 million, a clear illustration of production industry levels bouncing back from the COVID disruptions experienced in 2020, and talent landing opportunities across a range of film, television and other projects.

Consistent with the increased production revenue and service revenue recognized in both periods, amortization of investment in content and service costs increased as well. Production distribution and service costs for the quarter were $223.3 million compared with $32.1 million for the same period of 2020. Full year costs were $477.6 million compared with $151.8 million in 2020. Net income increased significantly in the fourth quarter to $3.5 million compared with a net loss of $0.4 million in the same period of 2020. Net loss in 2021 was $12.1 million compared with $44 million in 2020. That's an improvement of $31.9 million.

A year-over-year change is reflected in both improved operating results as well as a decrease in certain noncash expenses that were recognized in 2020. Adjusted EBITDA for the quarter was $19 million compared with $7.4 million for the same period of 2020, an increase of $11.5 million or 125%. The company ended the year with total cash of $97 million compared with $71.8 million at December 31, 2020. We remain debt free other than our normal course interim production financing.

That concludes the financial review. I'll now turn it over to Ivan Schneeberg to talk about the extraordinary year in Boat Rocker Studio.

[Ivan Schneeberg, executive]

Thanks, Michelle. Good morning, everybody. As John mentioned in his opening remarks, it has been a truly extraordinary year for Boat Rocker, not just because of our IPO and weathering the COVID-19 pandemic, but because of what we've been able to accomplish as a company. We're bigger, we're more diversified than we've ever been. Our capabilities have never been more fully developed and integrated, and we're working with an enviable group of world-class creative partners to tell compelling stories to international audiences across all major genres.

When we went public last year, we did so on the foundation of imagination, creativity and integrity that we've built up over the past 18 years. 2021 was to some degree a test to that foundation. I along with my Co-Founder, Dave Fortier, John and the entire leadership team believe we have resoundingly passed the test. Our platform has delivered exceptional content in every genre and budget size for a range of audiences and buyers. We're building and managing new and expanding entertainment franchises, a diverse channel partnerships. We're delivering on the promise of our financial growth, and we're scaling and enhancing our capabilities to ensure we continue to evolve as a next-generation entertainment company.

As we look ahead, we remain focused on 3 key elements of our business: content, talent and commerce. I'm going to spend a few minutes talking about our achievements in each over the course of 2021 and how they fit into our plans going forward. We closed out the year producing a wide range of scripted, unscripted and kids and family content for major buyers and streamers around the world.

As both John and Michelle mentioned, we reached major milestones with our 2 premium scripted dramas, American Rust and Invasion. Not only were these the largest scale shows we've ever produced, but we completed them as and when required by our buyers at the highest quality production levels during a global pandemic. We're incredibly proud of the tireless work of our scripted division and the creative and production teams that made these shows happen. And we're tremendously excited about the growth in our scripted slate for 2022.

After producing these 2 scripted series in 2021, we currently have 6 scripted series green lighted to production for 2022. Invasion has been renewed for a second season by Apple TV+, and we received a green light also from Apple for Mrs. American Pie, a premium drama series starring Kristen Wiig, and executive produced by Laura Dern and Katie O’Connell Marsh. This show emerged from a first look deal Boat Rocker has with Laura's production company, Jaywalker Pictures.

We also recently announced a green light from Roku for Slip, a new comedy drama series created, written and directed by and also starring Zoe Lister-Jones, known for, among other things, for starring role in CBS' Life in Pieces. Slip is the first series to be produced in partnership with our creative partner, Teatime Pictures, which I'll speak about a bit more in a moment. We have a new green light for the Destopian drama series Robyn Hood from Director X and Orphan Black writer Chris Roberts for Course Entertainment. And we're just about to begin production on the premium Sci-Fi drama Beacon 23 from [indiscernible] for AMC and Spectrum, starring Lena Headey from Game of Thrones and Stephan James from the Street Could Talk. Boat Rocker owns the IP to all 3 of these series and our Boat Rocker rights team is set to distribute all 3 of them internationally.

We also expect to have an exciting announcement on our 6th series next week, so stay tuned for that. In 2021, we produced a broad range of unscripted programming from returning large-scale competition shows, including Go-Big Show Season 2 for TBS, and Top Chef Canada Season 9 for Food Network Canada. The new series like the Kids Tonight Show, which we made in partnership with Jimmy Fallon for Peacock. Mary Makes it Easy for CTV. And LOL: Last One Laughing Canada for Amazon Prime featuring Jay Baruchel.

We also produce season 2 of the documentary series Dear for Apple TV+ and the documentary Billie Eilish: The World's A Little Blurry, which was one of Apple TVs+'s top-performing titles was nominated for 4 Emmy awards and also shortlisted for an Academy Award. But building off our success with the Billie Eilish documentary and the strong demand for premium documentaries we're seeing in the marketplace, we just announced that we're going to be independently financing slate of premium docs for the global marketplace in 2022. The slate includes a new feature length documentary from our production pod, Maven, led by Jessica Sebastian-Dayeh called Le Bal Paris, which will offer viewers an exclusive behind-the-scenes look at the world's most prestigious debutant Bal currently in production. Boat Rocker rights is going to be distributing this feature internationally.

Between this new initiative and what's shaping up to be a robust and diverse unscripted slate overall, we're really excited about what 2022 is going to bring. 2021 was also a banner year for our Kids and Family division. Our animation teams continued to operate at full capacity, delivering new and returning favorites like Inside Job for Netflix, Bubble Guppies Season 6 and The Loud House for Nickelodeon and Boat Rocker's own Dino Ranch for Disney. We also produced several new live-action series, including Amber Brown, written and directed by Bonnie Hunt for Apple TV+, and Rebel Cheer Squad: AGet Even Series for CBBC and Netflix.

We expect 2022 to be another strong year for the segment, buoyed by continued domestic and international demand for kids and family content and our exceptional development and production pipeline. We talked about how Boat Rocker's goal is to be the home for creative visionaries and we're continually finding new ways to work with creative partners to empower them to tell the stories that they want to tell in all genres, and to enhance the value that accrues to them from their endeavors.

In 2021, we expanded on this strategy with 2 equity investments and 5 first-look deals. We started the year off with a partnership with a veteran television executive, Jess Sebastian-Dayeh, the launch of Maven, the new production single I mentioned earlier, which is focused on creating premium female-led unscripted content. Maven has hit the ground running with 2 new shows delivering in 2021.

Addison Rae Goes Home and Meme Mom for Snapchat. And of course, the new Le Bal Paris documentary, which I just mentioned for 2022. At the end of 2021, we announced our purchase of a minority equity stake in TeaTime, a production company founded by award-winning actor and producer Dakota Johnson and former Netflix executive Ro Donnelly. Katie O'Connell Marsh joined the company as a partner to help supercharge a slate and ambitions on the closing of that investment.

We also extended our existing first-look deal with TeaTime to develop and produce scripted and unscripted television and digital content. In addition to the production order for Slip, the series I mentioned earlier, we have several other high-profile projects in various stages of development with TeaTime, including an adoption of Bexy Cameron's memoir Cult Following with HBO Max with the Dakota and Riley Keough attached to star.

Meanwhile, TeaTime in Dakota, who is, by the way, an untitled entertainment client has been building incredible momentum. Two of the company's feature films in which Dakota start, Cha Cha Real Smooth and Am I OK? were among the buzziest at this year's Sundance Film Festival. And Dakota was just cast to play in Madame Web, the first female superhero star in Sony Picture's Universe of Marvel characters.

Our renewed and expanded partnership with Dakota Ro, Katie and TeaTime is a prime example of the synergistic overlap between our core areas of focus: content, talent and commerce and the many exciting ways this overlap can unlock significant value for our partners. We've previously shared details about our first looks with a diverse range of visionary creators, including renowned antiracist author, Dr. Ibram Kendi; award-winning producer and Director, Scott Weintrob; veteran and creative producers Cleve Keller and Dave Noll; indie film and television producer Stephanie Langhoff; and critically acclaimed actors, producers, entrepreneurs and activists, the Brothers Shamier Anderson and Stephan James through their Bay Mills Studios production banner.

Bay Mills and Boat Rocker recently announced the mini series in development on the life of iconic artist Jean-Michel Basquiat with Stephan to set as star. We're also going to be producing the Black Academy Award Show called the Legacy Awards in partnership with Bay Mills and CBC this fall through our production partner Insight Productions. Our talent-driven representation segment had another outstanding year with a full bounce back from COVID-related shutdowns or slowdowns in 2020.

Untitled entertainment clients were recognized with more than 20 major international award nominations and 11 wins. Jean Smart won Emmy, Golden Globe Screen Actors Guild and Critics' Choice Awards for her performance in HBO's breakout hit, Hacks. While Mj Rodriguez won a Golden Globe and was nominated for an Emmy in several other awards for her groundbreaking performance and FX's Pose. And of course, Penélope Cruz was nominated for Best Actress Academy Award for her performance in the film Parallel Mothers.

In early 2021, when we launched our premium Kids and Family brand, Dino Ranch, we set a number of milestones for its performance. Across viewership, international sales, consumer products and social channels, this original piece of owned IP has achieved or exceeded all of them despite a difficult year marked by COVID, supply chain challenges and other major global disruptions.

For the entirety of 2021, Dino Ranch was the #1 preschool U.S. cable show for kids aged 2 to 5 in its time slot, initially airing in the afternoon and then moving to a popular evening time slot on Disney. In Canada, it was the most watched CBC kids program of 2021 for kids aged 2 to 11. While in the U.K., it became the #3 show on Disney+ for kids aged 3 to 5 after its launch in April. International sales for Dino Ranch continued at an amazing pace throughout the year, with the first season ultimately selling to 170 countries and being translated into 15 languages.

So far, 2022 viewing numbers are extremely strong with 3.3 million viewed hours logged for January on Disney Junior, maintaining Dino Ranch's #1 ranking. Boat Rocker, together with our incredible creative partner, Industrial Brothers and our industry-leading animation studio Jam Filled Entertainment are currently producing the second season of Dino Ranch, which is expected to premiere in the summer of 2022. The Dino Ranch brand continues to perform exceptionally well across social and digital media channels with the show racking up over 100 million views and nearly 250 million impressions on YouTube to date.

By any measure, impressive figures for a new brand breaking into a crowded and coveted demographic. 2021 also saw the initiation of our consumer products program for the series, which quickly became global in nature. We launched in 12 major in-store and e-retailers, including Amazon, Target, Walmart, Toys “R” Us, Kohl's, CBS and Barnes & Noble in the U.S., Canada and Australia. We secured more than 25 licensees across all key consumer product categories, including poise, apparel, housewares, betting, games and publishing.

The strong performance in 2021 has set the brand up for a significantly expanded 2022 international rollout, including more than 20 major retailers in France, Germany, Italy, the Nordic countries in Israel as well as a mass rollout in the U.K., including at behemoth chains Sainsbury, Tesco and Selfridges, the vast majority of accounts are starting in 2022 with full stock available. Although it's still relatively early days for the brand, Dino Ranch's incredible debut across all key metrics, viewership, distribution sales, social and consumer products is evidence of its appeal to viewers and consumers and its ability to grow as a brand worldwide.

This fantastic franchise is also proof that our strategy of originating and expanding owned IP is working and that Boat Rocker has the necessary capabilities to fully execute on this plan. We look forward to updating you as we apply this strategy to other new and existing brands across all divisions of our studio.

Suffice it to say, we anticipate 2022 being another strong year for Boat Rocker as we continue to expand and deliver on our content slate across all of our divisions, forge new talent partnerships and catalyze the commercial relationships that stem from both. Thank you all again for joining us this morning. I'm now going to turn it back to John for a few closing comments.

[John Young, executive]

Thanks, Ivan. Thanks very much indeed. So as Ivan mentioned, 2021 was the starting point for a new phase for Boat Rocker. We're energized by what we've been able to accomplish and we now look forward to 2022 and beyond to build further and reinforce the new expanded scale of the company.

Before getting into the outlook, I just wanted to mention in our continuing effort to strive for straightforwardness, we've opted to set our growth goal for 2022 in terms of adjusted EBITDA. It's what we believe to be our key financial metric for success and certainly the main element of our leadership team's performance objectives. Our guidance for 2022 as per our last quarter was for an adjusted EBITDA margin in the high single digit to low double-digit range.

And based on our belief that revenue and by definition, margin aren't the best measures for Boat Rocker, we thought we'd take the opportunity to focus on our key metric. And before I get into that, again, in our outlook, let me stress that we believe we will have very meaningful margin expansion in 2022.

So to our financial outlook, we expect adjusted EBITDA to be in the range of $40 million to $50 million in 2022, which would represent approximately 25% to 60% growth from the $31.6 million we generated in 2021. This outlook is supported by the strong foundation of our content, our talents, our talent and commerce strategy, including growth in each of our segments expected this year.

As Ivan mentioned, in our scripted business, we have already grown the number of confirmed premium scripted shows we're producing this year to 6 up from 2 last year and expect additional green light announcements to come. Overall, our 2022 slat is shaping up to be strong, diverse across all genres.

We also expect consumer product growth through Dino Ranch, which offers higher margins as well as further synergies associated with our increased scale. As in 2021, and based on the anticipated timing of certain green lights and production schedules, we expect to deliver stronger results in the second half of the year versus the first.

In closing, I want to reiterate how proud we are of our team and the results in 2021, and how excited we are by the long-term prospects for the business as we move ahead from a position of new found strength. We remain supported by industry tailwinds that we expect to continue throughout this year and a scaled and diversified independent content company. We believe that we're extremely well positioned to benefit from those tailwinds.

A long track record of delivering high-quality premium content, financial growth and operating success means we can continue to evolve with a true next-generation entertainment company for the years ahead. We look forward to keeping all of you updated as well as all of our stakeholders on our progress and what we are sure will be a very exciting year ahead.

Operator, that concludes our prepared comments this morning. We'd love to turn it over now and begin the question-and-answer session.

[Operator]

[Operator Instructions] Your first question comes from Vince Valentini with TD Securities.

[Vince Valentini, analyst]

Let me start with Dino Ranch and the guidance for 2022. You relocked that long list of incredible success on viewership and ratings and the long list of retailers carrying a multitude of products and full shelves fully stocked in 2022.

It doesn't fully reconcile to me with the guidance you've put out. Can you shape this for us? If you have a full year of a successful deployment of merchandising across all those platforms for Dino Ranch, can that not be $10 million to $20 million of EBITDA by itself?

[John Young, executive]

Well, Vince, it's John here. So to tell you again, we've not given guidance specifically on Dino Ranch. As Ivan went through, there are some tremendous milestones being hit already on the show. As we go through and start getting the products fully on the shelf this year, we've still got modest revenue and margin in our forecast for 2022. It is the early part of this long-term approach to building this entertainment brand. So there's marketing. We're still building the team within Boat Rocker. We've got more costs in marketing and brand building that we still have to put in this year.

So I think the answer is and the takeaway I think we want to give to everybody is Dino Ranch is doing tremendously well. We're going to see some real milestones being hit when it comes to the consumer products at the end of this year. But the financial performance, the real upside coming from Dino Ranch is still heading into '23, '24 and beyond. So that's kind of the best way to look at it.

We're a little bit slowed in '21. We thought we'd have a bit more revenue in '21, just as the supply chain was affecting a few things, but really strong this year in terms of product on the shelf. I think it starts around sort of August, September, October, when most of the SKUs hit the main retailers in the U.S., the Walmarts and Targets and others physically on shelf. So it's more of that slow build still. But again, I want to make sure you understand it's still a very exciting prospect for us and let's say, hitting all the milestones that we set for it.

[Ivan Schneeberg, executive]

The one thing I would add, Vince, it's Ivan here, is it's important to focus on what John said at the end. The major retailers in the U.S. do not have product on their shelves yet. They only have it available online. We were just delayed because of supply chain issues. We were not able to deliver them, the product they wanted when they wanted it. So they now have significant shelfing orders, a high number of SKU orders.

This is all of them, Target, Walmart, Amazon. Amazon obviously is only online, but Target and Walmart and all the other major buyers. Those will not be on the shelves until the fall. So they won't even -- people won't be able to go and buy them until the fall in the U.S. and even later in the U.K. and some of those other rollouts. So those deals are done. The orders are in, but the products aren't yet on the shelves.

[Vince Valentini, analyst]

No, that's very helpful because your opening remarks left me with the impression that perhaps you're already at the full stride and full run rate there, but that's clearly not the case. So not to try to put words in your mouth, but this $40 million to $50 million guidance in no way reflects the full run rate profit potential of Dino Ranch?

[Ivan Schneeberg, executive]

You're absolutely 100% right there, Vince.

[Vince Valentini, analyst]

So second question, I think you're disappointed in -- I am as well at what the share price and the valuation have done, considering you've delivered pretty strong results in 2021 and expecting good growth in '22. Given that, I know you wanted to make acquisitions and continue to grow the business. But is there any consideration or saying, hey, we put some of our large cash balance to work to buyback shares at almost half of where we issued them, it could be quite accretive. Is there any thought of changing your capital priorities just to be opportunistic given where the share price is?

[John Young, executive]

Yes, is the answer. The Board is considering all of the options, Vince, that you mentioned there. With that we have had what we believe is fair value in our stock, we could have used that currency for a number of really opportunistic growth initiatives. Those initiatives are still there. And I think the job of this leadership team is to find the right way to fund them because the team wants to keep growing. We've got these tailwinds. There are some tremendous opportunities out there, but the stock price itself isn't necessarily lending itself to being able to use that.

So whether it is stock buybacks, values we believe makes sense for the company, whether it's looking more closely at leverage, we said at the IPO if the right opportunity comes up and there's modest leverage that we can add to the business. Remember, we have no debt right now, Vince. So again, we're going to look at all of those things. If we can't use the currency because we do not believe is reflective of the intrinsic value of the company, then we will look to other ways to deploy capital, raise capital and make the acquisitions or growth initiatives that we've got on the table. There's so much going on right now, it really is incredible. Ivan talked about the number of shows that we're going to make. It's just great -- there's great initiatives and great momentum right now.

[Vince Valentini, analyst]

But John, from the sound of your answer there, is this something you're analyzing and considering over time as opposed to basically you're imminently being at the point of starting a buyback program?

[John Young, executive]

I can't say we're imminently at that point, Vince, probably over the course of the next month or so as we get to our Q1 Board meeting, there might be some more conversation. It's a tricky one. We've got liquidity issues as we see them. There's not that much trading. So again, we've got to balance that stock buyback with the liquidity in itself, and it isn't necessarily too helpful there.

But I think the point to take away is we agree with the analysts. We agree with -- this company believes we're not being -- value is not being reflected in the share price and shareholders are not been rewarding. So we have a duty to look at all the opportunities that we might be able to take advantage of or do in order to create more value. So it's on the table. Vince, nothing imminent right now on that front, but definitely being discussed.

[Ivan Schneeberg, executive]

Yes. If I could just add again. I think the company and management definitely recognized the value in buying the shares at this price. We think they're badly undervalued. And I think the impediment really is what it will do to our liquidity. And I think that's the -- we have a very limited float as it is, and we're a little bit concerned of what it might do to our liquidity.

So we have to balance that out as we think about that. But I think that the starting point, we've had those conversations and the reason we've had those conversations is because we do believe there's tremendous value in our stock price right now.

[Vince Valentini, analyst]

Awesome. Okay. I'm going to throw one more just in case there's not too many people online. Representation. The revenue growth there was good at 11% in the fourth quarter, but it was certainly well below sort of 70% to 80% levels we've seen in Q2 and Q3. Is that simply timing issues of comparing versus those COVID periods the year before? Or is there something seasonal to that business we should be aware of where you might expect a re-acceleration from 11% in the next couple of quarters?

[John Young, executive]

Vince, I would think about the growth that you saw there in the last quarter as more than normal. That sort of double-digit growth is definitely in line with what we see for our representation segment. The big increase you mentioned earlier was definitely over the comp of the previous year going in -- coming out of COVID, 3, 4, 5 months of COVID in 2020, we're definitely played with shutdowns and stoppages, et cetera. So yes, we're looking at steady growth in that business for the next number of years, adding clients, adding more people to the roster and a nice steady growth we expect in '22 and beyond.

[Operator]

Your next question comes from Aravinda Galappatthige with Canaccord.

[Aravinda Galappatthige, analyst]

I'll start with the slate that you've indicated for '22. Obviously, the second season of Invasion and American Pie and Slip all the way down to Beacon 23, which you had sort of signaled in the past. Can you give us a sense of whether all -- you expect deliveries from all of these titles? Or is this just about starting production? And for the titles that we are perhaps a little less aware of, I mean, obviously, we know about Invasion and Beacon 23. Can you give us a sense of the magnitude in terms of the budget and then the size? I recognize that these are all premium scripted shows. But any color on that front will be helpful.

[Ivan Schneeberg, executive]

Sure. So this is Ivan and I can do what I can on the second one. On the first one, on all of the shows I mentioned, we will be starting production this year and anticipate that there will be delivery of some episodes, but I believe on all of them, delivery will be spread between '22 and '23. So as a result, particularly on the shows that we own, revenue recognition will also be spread between '22 and '23. It's obviously very difficult for us.

You guys can appreciate this, too. Try to budget and shoot and deliver following series within a fiscal year sort of situation. So inevitably, we tend to start production in the spring or the summer, deliveries start to happen in the fall and overlap into the next year. So that's the case, I believe, for all of the green lights on our scripted side.

In terms of the shows, I can try to give you a bit of color. Beacon, you guys are aware, is a premium scripted 1-hour drama at that kind of premium budget level. Invasion, you guys know, is one of the larger budgeted TV shows in production in the world right now. So big John Show. Slip is a 0.5-hour premium comedy drama. So again, it's a half hour, but a premium quality series being produced for a U.S. buyer.

Robyn Hood is a show that was commissioned by Chorus. So it's being funded by Chorus and Boat Rocker rights. But it is a -- it is also a sort of a premium scripted dystopian series. So you can sort of probably guess in terms of what the budget level of that would be. Mrs. American Pie is a 1-hour drama for Apple TV+, premium series starting 2 movie stars. So again, that is in the higher range of in terms of quality, production costs, et cetera. And then the last of the 6 series I can't talk about yet because it's going to get announced next week, but you guys should all say tuned because it's going to be an exciting announcement.

[Aravinda Galappatthige, analyst]

That's good color. And then a little bit on the financial side of the segmented level. I mean, clearly, a very solid quarter in Q4, but maybe slightly surprised by the split at a segment level. I mean, television, despite the deliveries, again, sort of just a 1% margin on the segment profit side of things, as I think was the case in Q3 when again, you had that big premium delivery.

I know that because the pandemic sort of the margins were affected and you had to take on additional cost. But I was still surprised I was wondering if you can kind of help us out there. Obviously, the inverse of that is family delivered really good margins and really good profit growth. I was wondering if you can sort of develop on that a little bit as well.

[John Young, executive]

Michelle, you want to take that?

[Michelle Abbott, executive]

Aravinda, it's Michelle. Just to start off with television. I think you should definitely take a look at the COVID overage that's in the adjusted EBITDA number and add that back. It's to do with the television series, and so you can add that back. We -- there were 2 scripted series in 2021. There's many more in 2022.

So we can see -- our expectation is that would be growing into 2022. Kids and Family did well. I think when I looked at it against 2020, it's down a little bit. But that is more related to the wage subsidy that we received in 2020. And even though we spoke about the consumer products on the Dino Ranch side, there will be some financials coming in -- financial results for that in 2022. And so I could see those margins expanding as well in Kids and Family as far as segment profit is concerned.

[Aravinda Galappatthige, analyst]

Sorry, just one quick follow-up maybe for Michelle. I mean, the burn -- cash burn was as expected, as I think you guys have predicted early on even during the IPO process. Is there any update as to what do you think would sort of be the trend in '22? Obviously primarily that sort of ratio between amortization and production spend.

[Michelle Abbott, executive]

Right. Yes, free cash flow in 2021 was a use of cash, $54.6 million. And so we're expecting a significant improvement in the free cash flow in 2022, much closer to neutral, plus or minus, some percentages. Certainly, we're intending to invest in content as well as it comes available, as we identify it, which may affect that number. But it shouldn't be in the range of $54 million at all in 2022.

[Operator]

Your next question comes from Drew McReynolds with RBC.

[Drew McReynolds, analyst]

Before I kind of get into a couple of others, just following up on Aravinda's question and maybe to you, Michelle, and maybe Ivan and John as well. Within the TV segment, when we look at profitability, covering kind of an Entertainment One before it was taken out. The profitability of their TV business, which certainly had a lot of premium in it, but also with a lot of genres.

It was always kind of 10%, 15% kind of margin. But my question, I think, for you is just when you size up projects, like what kind of visibility, I guess, would you have on a series-by-series type of profitability analysis for the IP that you ultimately begin to commercialize? So I'll start there and then I'll -- a couple of others after.

[Ivan Schneeberg, executive]

Drew, it's Ivan. I can start and then maybe Johnny can pick up. So I mean, I think the one thing I would mention sort of when you compare us to Eone and certainly the numbers you referenced, is this is a relatively young scripted slate in that all of the shows on our slate with the exception of Invasion are in their first season. And so right now, we are relying primarily on our production fees, and we aren't yet into that sort of meaty period where we're generating recurring revenues, which are generally more margin-friendly obviously, as we're outselling those shows and monetizing them over sort of the life of the series.

So we expect to be getting into those years in the next number of years as these series mature and get renewed and get out to the marketplace. We haven't yet even started selling any of them really. So I think that would be the first thing I would mention. And then in terms of how we evaluate them and Johnny can probably pick up on this, we've got a very robust approach to each piece of IP that we decide to invest in, in terms of the diligence that we do on the IP. And the greenlight packs we put together that will evidence the IRR we expect to ultimately receive from the series. And so we don't invest money in a piece of content or certainly a scripted series unless we believe very much in its ability to deliver long-term recurring revenues. And John, I don't know if you want to pick up on that.

[John Young, executive]

Yes, exactly, as you said, I think it's -- we're just getting started. We delivered 2 shows. They were -- you almost couldn't get bigger budgets, Drew, in some respects of those 2 shows. Now just a math, it kind of leads towards those kind of lower margins. But that's not the story really. It is about how we're building it this year. much more in the way of content being delivered in the television segment in 2022. And going into 2023, we're seeing, as we mentioned, some of the sort of the timing and the deliveries is moving around a little bit in '22 and '23.

But all very positive, and we will see real improvement in that margin. I think getting to that high single-digit, low double-digit margin is probably best in class, particularly in the scripted or unscripted space. So that's something where we're certainly going to be heading. And we'll see meaningful improvement as we go through this year and next year. As Ivan said, as the slate builds up as we get a good mix of shows that we own the IP on and we're investing in as well as shows that we are not taking necessarily production risk on, but getting nonwriting EP fees on.

So as the mix changes over time, the different shows that we're making, the different ways we recognize revenue, you'll see the improvement there. But I command where Eone got to on that level. And I think that's a goal for us, and I think we'll see us moving towards that.

[Drew McReynolds, analyst]

Yes, that makes a lot of sense. A couple of follow-ups. Just back to with Vince kick it off on the guidance. So I appreciate, I guess, for the analysts here that cover this industry to get the kind of dollar amount range of adjusted EBITDA guidance. So very much appreciated. Just from a management perspective, when you look at that range and just trying to kind of gauge what kind of gets you to $40 million versus $50 million?

Is it more of a timing type of a dynamic because we all know the quarter-to-quarter volatility in terms of deliveries in the business? Or is it just waiting to see based on existing projects in the works, just a degree of success on those? Just trying to kind of test a little bit more just where your mind is at with the $40 million to $50 million.

[John Young, executive]

No, thanks for that, Drew. We did -- we wanted to try to make it as clear as we could going into this year and obviously continue to do so for the years to come. It is -- you mentioned timing, Drew, and it really is about that. We've had so many new shows in the scripted arena and others in television and Kids and Family at such an exciting time. But just to manage the production, the delivery, the post-production, getting all the revenue recognition to sort of match up to everything that we had planned for is just not as easy, of course.

So there's definitely -- it's more of a timing issue. And we'll see that again as we think about growth in '23, which again we're very, very positive about. And there's also a little bit -- and Vince touched off on it with Dino Ranch and thinking about the timing again there of ramping up Dino Ranch, some supply chain issues coming out of the end of '21. There's a period in time in the year when the consumer product team really want to sort of drive the beginnings of those sales and retail actions that they carry out. And those are typically towards the end of the year and getting into the holiday period.

So having sort of missed it a little bit in '21, no meaningful revenue in '21 and the numbers we just announced there, we're not getting it right away in Q1, Q2, we'll be more getting into really Q4 before we start to see it. So again, timing has just moved out our expectations for that, but nothing that suggests that we are not on track to deliver that as a wonderful entertainment brand. So it really is about -- primarily about the timing against any material change whatsoever to our view of the outlook of Boat Rocker.

[Drew McReynolds, analyst]

Fantastic. One last one for me, more of a high-level question. And Ivan, I always like to kind of pick your brain on this because you are kind of ground zero in knowing what's going on out there. Just the theme of strong content demand across the board from streaming platforms, et cetera, obviously continues and will continue in 2022. Is there any kind of subtle nuances or changes that you see in the content market out there that would be kind of interesting to flag from a Boat Rocker perspective? Or is it just really continues to be kind of pedal to the metal in terms of delivering into that demand?

[Ivan Schneeberg, executive]

Yes. It's so funny because you'll keep looking for it to wane, and it just continues to surge. I would say that this year, going into this year is the best we've ever seen in terms of the market. the demand, the players. If you think about the market right now, you've got the 2 sort of market leaders, right, with Netflix and Disney, committing to spend a ridiculous amount of money in content as they compete against each other. You've got Amazon and Apple TV+ coming up behind them.

We still haven't really even yet seen the merger of Discovery and Warner Bros flex their muscles. John Malone and David Zaslav have said they will be a top 3 player alongside Netflix and Disney, which means a material ramp up in terms of their spend. You've got all the additional linears that you guys are all familiar with, coming along behind them, the Paramount+s, the -- so the Peacocks, et cetera. But what's really interesting when you talk, Drew, about changes in the marketplace, are I think 2 things. One is the fight by the linear is to continue to remain relevant.

So they want to continue to make premium content. They don't want to get out of the game. Obviously, they can't get out of the game. And they don't have the same capital supplies that they used to have. So they really need partners. They really need independence in particular, to be partnering with them as they make content. So that's a real -- there's a really interesting opportunity there that we are taking advantage of, for sure, partnering with linears and making great content.

And then importantly is the emergence of the AVODs. So Roku is a great example. Amazon, IMDB is a great example, which we understand will soon be rebranded. These guys are getting into the game of premium content. Slip, the series we're making with Zoe Lister-Jones, we're making with Roku. And they are committing to underwriting a meaningful quality premium content. They want to be in that game, and they also need independent partners to support them.

So we're seeing a really interesting market for us with the linears and the AVOD players, particularly when it comes to rights retention. The ability for us to partner with them, support international distribution and own the rights to those projects. I think of the 6 shows we're going to be making this year in scripted, we're going to own the IP to 4 of them, which is really cool. So...

[Operator]

[Operator Instructions] Your next question comes from David McFadgen with Cormark Securities.

[David McFadgen, analyst]

Let me just first of all I'll start off with a clarification. So when you look at the EBITDA margin for '22, are you sticking with that range of high single digit to low double digit? Or is that more of a '23-'24 target?

[John Young, executive]

It's a good question, David. I think it's clear on our side here that we can deliver really meaningful expansion margin this year. We're trying to get away from that revenue margin target given what we've talked about, and you're very familiar, Dave, as well with how our revenue can move around depending on the nature of the show. And definitely, as we've talked about for this year, some of the deliveries and all the shows that we're making, moving in quarter sometimes into '23. It's hard for us to sort of pin that down because a lot of the deals we're still working on right now in the unscripted space, we're not even sure what that deal might look like.

It might be a revenue recognition deal where we're the IP owner, and we've got it or it may not be in which case, it is harder to predict. So we're trying to keep away from that. What I will say, and as I said earlier in my remarks, we do believe we'll have a very strong meaningful margin expansion in '22, growing from the 5%, 6% that we put in 2021. And we talked earlier about that sort of high single-digit, low double-digit margin. I don't think those are beyond us at all.

But think of that as a sort of moving '22-'23 type of approach, but we will see strong improvement, David, just harder for us to sort of predict. And therefore, we'd rather move away to something that we can clarify every quarter, be really clear about it in terms of how our adjusted EBITDA bottom line is doing. But yes, hopefully, that's helpful.

[David McFadgen, analyst]

Okay. And then just a couple of questions on your production sites. So obviously, Invasion, big budget show, kind of know where that is on the budget. But how many other shows do you have in your '22 production slate that have a budget of north of $100 million?

[John Young, executive]

So I'll leave Ivan to sort of -- we don't typically go into the details of each budget, David. Ivan tried to get through that a little bit earlier. We've got 6 shows green light, which is an incredible amount of work and great work by our scripted team. And as you know, budget level is one thing, and we do have -- there are shows in there that are very, very sizable budgets, Nothing, of course, like Invasion. It's a very unique situation.

But again, that budget and the nature of that budget doesn't necessarily mean, David, as you know, whether that we recognize the revenue somewhat equivalent to that budget because the nature of our deal with the broadcaster or a buyer will dictate that. So that's why, again, in part why we're getting -- we're sort of trying to get away from that discussion around those particular budget levels or revenue recognition on those shows. Because it is hard to give everybody a color on a show-by-show basis.

And it can change in the forecast. What doesn't change is either our view of investing in the content and the returns we can get on it over time and what is clear that we make shows, and we look for a healthy margin on those shows, whether we are the nonwriting EP fee -- nonrating EP on the show or whether we're the studio, IP owner, producer and ultimately, the distributor. So there's a broad range. And I know that's been sort of maybe a bit of a -- I think we've not maybe done as good a job explaining to all of you in the market.

But now is the time where we want to try and get that across. It really is quite a difficult thing to predict exactly what type of revenue recognition will be prior to that show being green or prior to that show getting delivered. So for us to move away from that show, the margin and basically the adjusted EBITDA we can deliver, that's the profitability. And even if you take the midpoint of 2022, it's some 40%-plus growth over '21. So really strong.

[David McFadgen, analyst]

Okay. And just on Invasion, can you give us an idea of what percent of the episodes you expect to deliver and recognize in 2022?

[John Young, executive]

Sorry, David, how many episodes we were thinking of delivering in '22?

[David McFadgen, analyst]

Yes. I'm just wondering is the whole show being recognized and delivered in '23? Or how much are we going to get in '22?

[John Young, executive]

Right. So we're not -- again, David it's a tough one because the budget and the schedule of production is something, again, that we're obviously still working through. So part of the reason, again, of guidance of adjusted EBITDA as we know this broad range that we've put out there is something we can hit. The specific deliveries on all of those scripted shows could move around a little bit. And therefore, it's not something we want to sort of get into right now whether we're going to deliver all 10 episodes of this show or only 7 of them or only 3 of them.

It's tough right now to see that. A lot of things play out in the course of the year in terms of those deliveries. Again, that's why we go back to we are very confident of hitting this adjusted EBITDA range with our best view right now as to what shows what we can deliver in '22.

[David McFadgen, analyst]

Okay. And then just lastly on American Rust. In the past, you're optimistic that you could find a new buyer for the show. Just wondering if you can give an update on that.

[Ivan Schneeberg, executive]

David, it's Ivan. I don't want to get into the specifics. I think we mentioned when the show did not get renewed by Showtime that we had a great package, a great creative package and that we were going to take it out and sort of aggressively see if we could get it set up. I can say that we are in advanced conversations with another buyer, another partner on that series. Premature to say much more than that right now, but we are hopeful we'll have more to announce on that shortly.

[David McFadgen, analyst]

Okay. That wasn't what you were alluding to in terms of an announcement next week, is it?

[Ivan Schneeberg, executive]

No, that's a firm green light on a yet to be announced series that we're very excited about that will be announced next week by our broadcast partner. We don't want to steal their thunder. They'll be very mad if we announce it right now.

That would be -- to be clear, sorry, David. If we did sell American Rust, which as I said, we are in discussions on that would be additive to the 6 series that we've got green light.

[Operator]

There are no further questions at this time. Mr. Young, you may proceed...

[John Young, executive]

Okay. Well, thank you very much, [ Anis ]. Thank you all for joining us today. We look forward to continuing to update you on our progress. We look forward to speaking to you all on our Q1 conference call in May. And yes, thank you very much for joining us this morning.

[Ivan Schneeberg, executive]

Thanks, everybody.

[Operator]

Ladies and gentlemen, this concludes your conference call for today. We thank you for participating and ask that you please disconnect your lines. Have a great day.