Boat Rocker Media Inc

TSX:BRMI

Earnings Call Transcript 2022-Q4

[Operator]

Good morning. My name is Michelle, and I will be your conference operator today. At this time, I would like to welcome everyone to the Boat Rocker Media Fourth Quarter 2022 Financial Results Conference Call. [Operator Instructions]

Before turning the call over to management, I would like to remind listeners that today's remarks include non-IFRS measures. Reconciliations between Boat Rockers IFRS and non-IFRS results can be found in the company's MD&A. Additionally, management's outlook for 2023 and beyond, anticipated financial and operating results, trends and objectives and answers to your questions will contain forward-looking information within the meaning of applicable securities laws.

These forward-looking statements reflect management's current opinions, beliefs estimates and expectations and are based on information currently available to management, which includes assumptions about continued revenue based on historical past performance, perception of trends and current business conditions, expected future developments, including expectations around the impact and trajectory of the COVID-19 pandemic and other factors, which management considers appropriate and reasonable in the circumstances.

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 are contained in Boat Rockers annual MD&A dated March 30, 2023, and 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.

A description of the risks that may affect future results is contained in Boat Rockers annual information form, which is available on the corporate website. and in 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.

[John Young, executive]

Thank you very much, Michelle. Thank you, and good morning, everyone, and thank you all for joining us for the Board Rocker Media Fourth Quarter 2022 Results Conference Call. On the call with me today are Judy Adam, our CFO; and Ivan Schneeberg and David Fortier, our Co-Executive Chairman and Co-Chairman of Boat Rocker Studios. I will provide some introductory commentary on our results for the quarter before turning it over to Judy for a brief financial review. Ivan will then discuss some recent creative highlights before we open the call to questions.

So let me now turn to our fourth quarter and our full year results. In 2022, we delivered appreciable adjusted EBITDA growth. up 14% over the prior year as adjusted EBITDA margins climbed to 15% and 12% for the fourth quarter and full year periods, respectively, more than double the prior year values of 7% and 5%. We think this speaks favorably to the sort of operating leverage the business is capable of generating as we capitalize on the scale and diversity we have built over the last few years.

We did this in the face of lower revenue which was the result of the timing of green lights and deliveries, particularly of the premium scripted shows as well as the overall mix of our service productions and our owned IP. Our solid performance in the fourth quarter allowed us to grow net income from $3.5 million in 2021 by 62% to $5.7 million in 2022. In addition, on a full year basis, we generated positive free cash flow of $3.5 million, up from negative free cash flow of nearly $50 million last year. Overall, we believe this was a successful year for Boat Rocker.

From an industry perspective, we continue to operate against the backdrop of continued demand for content globally driven by both established and still emerging new broadcasters and streaming platforms. That said, we are mindful of potential volatility ahead in our industry as key buyers continue to seek to cut costs. COVID continues to still impact our productions and there exists the risk of one or more talent gilt strikes in the U.S. beginning as early as this spring.

More broadly, we've seen significant softening in the retail market and the specter of recession looms in the broader economic environment. These factors could temper our overall still cautiously optimistic outlook as we move through the rest of the year.

As we continue through the first half of 2023, we expect deliveries from our slate of 7 premium scripted series to ramp up, building on the delivery of the initial episodes of 2 series, Slip which premiered South by Southwest a couple of weeks ago to positive reviews and Robin Hood that we started to deliver in Q4 last year. We continue to view adjusted EBITDA as the most important indicator of our overall performance, especially over the mid, longer term, and we're targeting further growth albeit modest over the $36.2 million we delivered this past year.

Our near-term focus remains on delivering premium content across all genres utilizing our scale and flexibility to meet the evolving demand from buyers for content across a range of budget and show types, leveraging our strong content library to drive distribution revenue and maintaining the steady growth we have seen in the representation business.

So with that, I'm now going to turn it over to Judy, who will conduct a brief financial review. Judy?

[Judy Adam, executive]

Thank you, John, and good morning, everyone. This quarter's call continued high levels of activity across the business with more than 40 shows in various stages of production. While revenue dropped meaningfully, principally due to the timing of deliveries and overall mix of revenue types, adjusted EBITDA only declined very modestly over the prior year period. As a reminder, the company's delivery schedules vary from period to period and year-over-year, which shows being ordered produced and delivered at all times during the year.

As we have said previously, it is most meaningful to analyze the company's results over longer periods rather than quarter-over-quarter or even year-over-year as production deliveries committed across both quarter and year-end and we deliver work to deliver the highest of quality content expected by our wider range of buyers.

Total revenue for Q4 2022 was $111.3 million versus $262.5 million in Q4 2021, a decrease of 58%. Revenue for the year ended December 31, 2022, was $304.3 million compared with $580.4 million for the same period of 2021, a decrease of 48%. The main revenue variance was in the Television segment. In the 3 months ended December 31, 2021, we delivered 5 of 9 episodes of the scripted drama American Rust to Showtime and 7 of 10 episodes of the scripted drama Invasion to Apple TV. Despite having several premium scripted draws currently in production, there are only a few episodes delivered in the current year, which explains to area.

In the Television segment, 104 hours of content were delivered in the fourth quarter of 2022 versus 80 hours in the same period last year. Although a higher number of episodes were delivered in the fourth quarter, they fell predominantly in the lower budget on scripted drama. On a full year basis, 230 half hours were delivered in 2022 versus 246 half hours in 2021.

Revenue in the Kids and Family segment decreased 26% in the fourth quarter as we delivered 14 half hours this year. versus 46 half hours in the prior year period. On a full year basis, overall delivery and therefore, revenues were higher, up 8% as we delivered 62 half hours of content in 2022 and versus 46 half hours in 2021.

Revenue in the Representation segment increased by 12% in the fourth quarter of 2022 and 7% for the full year period compared with prior year periods, driven by timing and scale projects for on-screen talent, which can vary from period to period. On a consolidated basis, production, distribution and service costs for Q4 2022 were $68.9 million compared to $223.3 million for the same period of 2021, a decrease of 69%.

For the year ended December 31, 2022, production distribution and service costs were $181.8 million compared with $477.6 million for the same period in 2021, a decrease of 62%. The reduction in these costs for both periods is related to the decrease in revenue.

Adjusted EBITDA for the fourth quarter was $17.2 million compared with $19 million for the same period in 2021, a slight drop of $1.8 million or 10%. Adjusted EBITDA for the full year was $36.2 million compared with $31.6 million for the same period of 2021, an increase of $4.6 million or 14%. The increase for the full period was due primarily to higher segment property Television and lower corporate costs. partially offset by lower segment profit in Kids and Family.

Net income in the fourth quarter was $5.7 million compared with $3.5 million for the same period in 2021. Net income for the full year period was $1.8 million versus a net loss of $12.1 million in the prior year. Boat Rocker remains debt free, other than our normal course inter-production financing and as of December 31, 2022, the company had total cash of $85.8 million compared with $97 million at December 31, 2021.

Looking ahead, we expect to continue to invest in owned IP, particularly in series that we are distributing internationally as well as the go broader business. In the year ended December 31, 2022, the company generated positive free cash flow of $3.5 million, compared to negative free cash flow in the same period of 2021 of $49.7 million. With prudent cost management of general and administrative expenses and strong discipline on investment spending, we continue to forecast positive free cash flow in 2023.

I will now turn the call over to Ivan to talk about the studio highlights. Ivan?

[Ivan Schneeberg, executive]

Thanks, Judy. Good morning, everybody. The last quarter of 2022 was a busy time for Boat Rocker Studios, and we saw this trend continue in the first part of this year as we work to complete and deliver our slate of projects across all divisions including our premium scripted series, which we believe will be a key contributor to further improve financial performance in 2023.

On the scripted television front, as John mentioned, we expect to fulfill delivery on the current seasons of all of our premium scripted dramas and its positive progress has already been made towards the renewal of several of them, although notably, none of them have yet aired.

Our production partnerships, including our first looks with Peephole, that's with Lena Headey, Bay Mills with Shamier Anderson and Stephan James, and TeaTime with Ro Donnelly and Dakota Johnson, continue to expand their slates with diverse and exciting projects. TeaTime's first series produced with Boat Rocker, the Exceptional Slip is set to premiere next month on Roku, as John mentioned. And the series was showcased at South by Southwest for this month with fantastic fan and critical response. We encourage everyone to check this show out next month that it's excellent.

Turning to unscripted. Pretty Baby Brooke Shields, the new documentary produced by Boat Rocker premiered at the 2023 Sundance Film Festival, gained a very positive reviews. And if we will premiere on Hulu next week. Boat Rocker is also partnered with anonymous content on a new political thriller feature documentary from award-winning filmmakers Jesse Moss, the Co-Director of the excellent Boise State and Tony Gerber. We've also seen perennial fan favorites like Big Brother 11 now in its 11th season return with the new episodes currently are on local TV.

Also on the unscripted side, Canada's Ultimate Challenge, a new competition reality format that turns the entire country into a giant obstacle course premier mid-February on CBC. And of course, the Great Canadian Baking Show was renewed for a seventh season by CBC, proving the success of our Canadian take on the much loved British format.

Turning to Kids & Family, Dino Ranch remains a hit with young fans around the world. With the second season now airing, the show continues to occupy a leadership spot as a top 10 preschool show among kids channels and a top 5 rated series on Disney Junior through Q4 2022. The series is now available to view in more than 170 countries worldwide and has been translated into more than 15 languages.

During the fourth quarter, we secured new licensing deals for Dino Ranch in the U.S., Canada, Latin America with a range of new products, including jigsaw puzzles, games, handcuffs, party goods, wheeled goods and accessories, youth electronics, sound books and apparel. The franchise now has more than 50 licensees globally, producing an ever-growing array of Dino Ranch branded products. In addition, under a new global partnership with Mike Royds, a French video game developer and publisher, the very first Dino Ranch video game is expected to roll out worldwide in the fourth quarter of this year.

Dino Ranch's consumer products saw their first full-fledged holiday season on both digital and physical shelves to retailers across North America and around the world. We saw significant growth in consumer product revenue over 2021. That said, total revenue fell short of our expectations for the year. We believe this was due at least in part to broader macroeconomic volatility, which has created a softer retail environment overall. And that, as you're no doubt aware, has also impacted our peers and their brands in the space.

While early indications suggest strong retail sales for the first few months of this year, market realities are likely to adversely affect our ability to grow the brand to the pace we had attended. That said, Preston has shown us the brand building and kids animation is more often a marathon than a sprint, and we continue to collaborate with our licensees to build the franchise around the world.

We're working closely with our consumer products teams and our retail partners to navigate these challenging markets and taking them into account to further refine our go-to-market strategies for an increasingly broad portfolio of products. And of course, the core storytelling and world building essential to the brand's success continues to proceed unabated as production on the third season of Dino Ranch for Disney+ is underway, and our extensive list of international licensees continues to grow.

The Kids & Family also recently saw the premium of student of our exciting supernatural animated series Daniel Spellbound for Netflix. Daniel's first season, which launched at the end of October 2022 debuted on Netflix in the top 10 kids in most major markets globally, including Canada, U.S., U.K., Germany and France, and we're looking for similarly strong performance this time around as the show gains further traction internationally.

Our Representation clients continue to be recognized by major awards. Our Untitled client, Andrea Riseborough was nominated for an Academy Award for actors in a lead role roll for the performance in To Leslie. Untitled also continued to add new A-list stars to its roster clients, recently welcoming among others, actress model and now documentary producer, working with Boat Rocker, Brooke Shields; singer dancer and actress Paula Abdul, who has more than 50 million records sold worldwide in the period as a judge on numerous talent-based reality shows, including American Idol and Erin Doherty, who played the young Princess Anne in Seasons 3 and 4 of The Crown.

Representation clients also continue to appear in key projects with leading broadcaster Streamer Studios and Brands. This includes Guen Lim Christi, Cristina Ricci, Elma Myers who all star in Wednesday, which became Netflix's second most watched series ever. And finally, 39 Boat Rocker Productions were nominated for Canadian Screen Awards have been were across a diverse range of categories with the award set to be presented in mid-April during Canadian Screen Week. This type of recognition highlights the diversity, quality and appeal of the content across genres formats and budgets that Boat Rocker and its partners are able to produce.

In closing, we feel confident that 2023 is already shaping up to be another excellent year for Boat Rocker as we remain active prepping producing and delivering 40 projects across all genres and look to secure green lights for new and returning series. There's no doubt that the year ahead could pose some challenges with an expected slowdown in the growth of buyers' content spend and the possibility of entertainment labor strikes in the U.S.

But even with some headwinds facing the broader entertainment industry and greater macroeconomic uncertainty, we believe that our scale, our wide-ranging capabilities through diverse customer base and our clean balance sheet leave us well positioned for the year ahead.

Operator, that concludes our prepared comments this morning, and we'd now like to open the question-and-answer session.

[Operator]

[Operator Instructions] Your first question will come from Aravinda Galappatthige at Canaccord.

[Aravinda Galappatthige, analyst]

I just wanted to start by perhaps asking whether you could characterize the conversations you're having with streamers and also, I guess, linear platforms as well, but primarily the streamers, given to the shift that we've heard about for several quarters now with respect to the shift towards profitability, looking to taper sort of the rate of growth in programming spend and so forth. How has that sort of impacted your own conversations with them? And I guess connected to that, you've given some -- I think robust comments around outlook considering the conditions. How good is your visibility at this point given that we are sort of sitting at the end of March here?

[Ivan Schneeberg, executive]

Yes, I can start. It's Ivan. I can take maybe the first part of that. I think that -- I mean we're definitely seeing a slowdown in growth. But it's important to sort of say it's still meaningful growth. In other words, we're still feeling a definite need for content from all of the buyers. I think they're just being a little bit more cautious in terms of their assessment of projects. So I would say the strike environment and the strike issues, we're finding that when we take content out, there's still a real appetite for it, and buyers still really want to hear the pitches, and we're selling projects.

The real, I think, short-term issue that we're facing is the possibility of a writer strike, and that's causing a bit of buyer paralysis. They seem to be concerned about how long the strike might go. We're cautiously optimistic it's going to be relatively short, and that's what we're hearing, but there is concern about the length of the strike which makes it difficult to develop and actually order shows to green light.

So that's probably the biggest issue we're facing in terms of short-term delays in sales. But overall, while there's obviously talk of a slowdown, we're not feeling that at the buyer level because the buyers still need content, and overall, the market is still definitely growing.

[John Young, executive]

Aravinda, maybe I'll just pile on a little bit there with that the cautious optimism we have. As you recall, a lot of the revenue and segment profit in '23 is for a lot of shows that we work hard to create and build and produce throughout the end of '22 as well. So a lot of our revenue and segment profit is sort of built in, and we're actually going to be delivering a lot of that stuff this year as well. So that helps us with that, as you called it, robustness.

[Aravinda Galappatthige, analyst]

And just a quick follow-up. Given the visibility you have with respect to sort of the premium scripted shows and the delivery schedules, can you maybe just talk to what kind of cadence you expect through the year? I mean, I know that you are, at this point, looking for some degree of growth in top line. I suspect that that was my interpretation, considering you talked about, I think, Robin Hood and Slip, maybe some of the other bigger premium dramas, you can maybe talk to what they are and then when you expect to deliver? I think from recollection, I mean Beacon 23, I don't know if Invasion would, I think Invasion the second season hits this year as well, but I could be wrong. Maybe just a little bit more color on that.

[Ivan Schneeberg, executive]

Yes. I think that I think John mentioned that we delivered Slip last year in 2022 and some episodes of Robin Hood last year in 2022. The remainder of the space all deliveries. It's all we expect it all to deliver this year. So we are expecting to fully deliver out the other -- the remainder of our slate, the current season in production this year.

So that is -- when John talks about our cautious optimism, Certainly, some of that comes from the fact that we have no reason to believe we won't be able to deliver those and the strikes will not impact that because with the exception of American Rust, they've all finished shooting and American Rust finished shooting in April. So every single show will be finished in post production and delivered this year. And now we're, of course, working on Season 2s, and we are writing Season 2s for some of those shows. But it's our expectation that the bulk of those Season 2s will be for 2024.

[John Young, executive]

And just to talk about that cadence, I think you were getting at as well, Aravinda, I think typically, for us, we have really a large Q3 and Q4 quarters with deliveries typically taking place there. But because a lot of the deliveries that Ivan was just talking about, are finishing up in Q1, Q2, we'll have a more balanced cadence this year. So it won't be -- it will certainly be Q1 is typically our smaller quarter. in terms of revenue and segment profit. But I think we'll see a more balanced a Q2, Q3, Q4 this year. rather than very heavily weighted as it was last year or '21 and '22 into Q3 and Q4.

[Operator]

Your next question comes from Vince Valentini at TD Securities.

[Vince Valentini, analyst]

Just sticking with that last point, John. So pick up that -- I mean Q1 is basically over, so you know what happens. So not many of those big scripted shows got delivered and will turn into revenue in the first quarter. Is that correct?

[John Young, executive]

That's right. That's right, Vince. Yes. Most of that stuff is Q2, Q3 and Q4, but much more balanced than those than typically.

[Vince Valentini, analyst]

Second, on the risk of the strikes, is that impact animation and Dino Ranch productions as well? Or is it just for sort of live actor shows?

[Ivan Schneeberg, executive]

No. So I was just checking with Sam here. Our writers on Dino Ranch are Canadian. So they work under the WGC and there's no expected strikes under the WGC or the Canadian build. So anything that's being written by an order opinion gilts should be fine. It's the only ones that will be affected. And by the way, most reality shows an unscripted shows, the scripting there is, for the most part, non-guild. So unscripted, nonscripted documentary, most kids and family, certainly the stuff everything we make in Canada should be fine. The only thing that could be impacted by these drags are U.S. written WGA written series, which would be mostly our U.S.-oriented premium scripted series.

[Vince Valentini, analyst]

That's great color. But if that is the case. So I'm just trying to reconcile here with your cautious commentary that you already filmed and produced all of the big scripted shows that are expected to hit revenue in 2023. So even if there was a longer-than-expected strike. Would that not be more of a revenue impact in 2024 that you couldn't get the slate going and fill the pipeline of of new script you chose for next year, the ones for this year are already there and already in delivered anyway? And if there's not much impact on kids or reality shows, then it seems like you should be able to survive with financials that are reasonably unstated in 2023. So obviously, that's not the case given on what you're saying. So I'm just hoping you can connect your dots for me.

[Ivan Schneeberg, executive]

Yes, for sure. We have a couple of projects that we do plan to produce this year, Vince, that we have scripts either mostly written or entirely written for. The challenge is, if the WGA strikes, the way we make these shows is that the sort of lead rider is also kind of an onset producer. We call them a showrunner and they'll do like touchups on scripts or rewrites on scripts while we're in production. And the concern we've got is, though we got the scripts written and though we anticipate these shows getting ordered, if the strike happens because our showrunners are members of the WGA, that might prevent us to being able to produce those shows during the strike. So we'll then have to push out our production period after the strike.

We're obviously hopeful that the strike will be a relatively short line, and we should be fine. So that's the specific effect it can have on 2023. But you're right that when we sort of sound the alarm regarding these strikes, we're really more concerned about our ability to put new shows into development with the buyers because there is definitely a in the slowdown, there's a cautious kind of paralysis within the buyers as they wait to see how long they think the strike might go. That's definitely impacting our ability to continue to fill fresh shows into the pipe for '24 and beyond.

The good news is we've got a great slate of shows, and we think we've done a really good job with them, and we're hopeful that our circle gets renewed. But that is a concern, I think, for the industry, not just for Boat Rocker regarding '24, '25, a bit of challenge getting shows in the development.

[John Young, executive]

But your point is also true, Vince, with regard to '23. We are certainly sitting here in Q1, expecting significant improvement in revenue in '23.

[Vince Valentini, analyst]

And to wrap this up in terms of the EBITDA look than what modest growth means. So is it fair to say, I mean, you even with a strike, you think you can grow and maybe get up closer to $40 million. But if everything went well and the economy didn't totally tank and the strike doesn't last too long or it doesn't happen at all. I mean is 50% in sight, if the stars all aligned it's sort of a 40% to 50% range, depending on the macro and strike factors? Or is that unrealistic?

[John Young, executive]

Well, I think you know me well enough, Vince at this point. It's a bit too early to get into what that could look like in the numbers that you're suggesting there. That's why I think, for us, because there is a lot of things going on, not just what Ivan was talking about regarding the guilds, but just the general softness we're seeing in the retail markets whether or not we're into or not a recession, these interest rate inflationary time.

So there's a lot of things going on that we've sort of set ourselves. What we do think, and given the fact that we've got this slate that we're producing and delivering this year that we know of, we're going to see that significant improvement in revenue but it's hard for us to sort of look too far down the line and well cautiously optimistic, get ahead of ourselves on that adjusted EBITDA.

So we're calling out that modest growth. That's what we can see right now. for sure, depending on the nature of these events and where they end up, we can update that when we get into Q2.

[Ivan Schneeberg, executive]

The strikes are on uncertainty. It's that we're probably spending we're making maybe a bit too much of a meal on it. It is just a concern that we just want to make sure everybody is aware of, and it will affect the industry. But there's no certainty that there will even be a strike. But if there is, it will have an impact. And again, it sort of affects our ability to be overly aggressive in terms of what we're saying we'll do this year. But I think we're feeling good about what we're seeing.

[Operator]

Your next question will come from Drew McReynolds at RBC.

[Drew McReynolds, analyst]

Yes. Thanks very much. With respect to the free cash flow outlook for 2023, and I appreciate all the color around the strike, Ivan and John, very helpful. you've got a good balance sheet, obviously, given the outlook right now, expecting positive free cash flow if there is a strike and maybe goes on a little longer than expected, how does that generally impact your position for 2023?

And then secondly, just on Dino Ranch. I guess for you, John, still sounds like the piece of IP here is performing quite well. Just want to get a sense of just your level of confidence on that strength of the underlying IP versus a soft retail market. You guys sound like you're sure it's more cyclical driven and anything -- an issue with the IP itself, but just wanted to flush that out a little bit? And then just finally, on the pipeline of new IP within Kids and Family, if you can just speak to that, that would be great.

[John Young, executive]

Thank you, Drew. Thank you, good chatting, love to hear. So let me just break that down. So I think starting off with the 2020 positive free cash flow and other important aspect of our business and been able to generate that. And I'll pass over to Judy in a second. But yes, I don't -- just like we think we've got a lot of content being delivered and produced that will really perhaps not have that much of an impact or will be that impacted by some of the labor issues we were talking about equally so, our free cash flow is similarly likely unaffected by that as well because we've got a lot of these deliveries happening as we mentioned throughout the rest of the year.

And we've got other parts of the business representation that we're, again, solidly confident on our modest growth with that business as it has been year-over-year. I think on the Kids & Family side, I think 2 things there. you're absolutely about the strength of the underlying IP, we still feel very confident about with Dino Range. I have talked about the core store retailing aspect of this piece of IP is fantastic. And we're only into making -- delivering some season 2 episodes and making season 3 this year.

So we've still got a lot of runway, I think, on that one, definitely more of that retail softening, which we saw over the last quarter. So that made us sort of think about Kids and Family slate and the Kids and Family production and Kids and Family, the retail consumer products, a little more with a little more softness, I think, this year. So we will probably -- we're sort of calling that out softer in the Kids & Family segment for '23 based on again, disease macro the macro situation or environment that we think we're going to be in.

I'll pass over to Judy, if there's anything more on the cash flow you can add there?

[Judy Adam, executive]

Yes, maybe just a couple of comments there, John. Drew, yes, with the deliveries of our scripted shows that should also drive more cash inflows from the delivery sales as well as distribution sales as well. We're carefully managing our SG&A expense as we will also continue to invest in IP. So net-net, overall, we feel comfortable that we'll continue to generate positive free cash flow.

[Ivan Schneeberg, executive]

No, for sure. So yes, the pipeline -- deep pipeline really across scripted, both live act, both adult scripted and Kids and Family. Industrial Brothers, our partners there are coming up with some great new shows. We're just about to close a couple of deals with some very major buyers on a couple of their pieces of IP. They, of course, created Daniel Spellbound and Dino Ranch. So some exciting new projects on the horizon there.

And like I said, similarly, the scripted type is very, very deep, lots of great projects. We're going to be taking out some really strong projects even in the face of the strike, we've got some that we think are strong enough to take out. We're going to hold a few back until after the strike just because we think they're awesome as well, but we just -- we don't want to overload our selling pre-strike or if there is a strike.

But I just want to say one last in, I keep talking about the strike, and we keep talking about these potential headwinds for this year. And we're trying to get better at this every time we deal with you guys. And I think we have a tendency to want to be overly honest and make sure you guys are aware of all the potential issues. But maybe at the risk of being a little bit promotional. I think one of the advantages of Boat Rocker is because we are Canadian-based and because we have Canadian operations and because we're diversified, we do the Kids and Family and we do the unscripted, we're probably in a better position than most of our independent studio competitors if there is in fact a strike.

Because we were able to make shows Canadian content like we did with Slip or Robin Hood. We can do international co-productions that they can't do. And because we do unscripted, which is unaffected by any potential strike, we're able to really probably navigate any choppy waters resulting from labor unrest better than really any U.S. independent. So it's just something that may be worth considering.

[Operator]

[Operator Instructions] Your next question will come from David McFadgen at Cormark.

[David McFadgen, analyst]

A couple of questions. So earlier in the on this call, you talked about how some buyers are being cautious and a little more careful when it comes to green lighting new shows. So I'm just wondering how much of your outlook is predicated upon shows that you expect to be greenlit produced and delivered in '23? And what is the risk that some of those might slip into '24 or not happening at all?

[Ivan Schneeberg, executive]

Without getting too much in the details, I would say, as John and Judy both mentioned, because we've got so many shows already in production and being delivered this year, we've got probably a higher -- a lower level of risk and a higher level of confidence as a result of that. But there are definitely a couple of projects that are baked into our budget for this year that do need to get produced this year. There well into their cycle in terms of being sold and well developed.

And the truth is even with the strike, we feel we're in a good position to get those shows to where they need to be this year in order to be able to deliver on what we anticipate delivering this year. So we think we're in a good spot. We're probably in a better spot than most in that regard. But we're just calling out the fact that there's a prolonged strike. There is a better risk there in terms of our ability to get those shows to camera, which is where we need to get it. But we think we're in a really good spot.

[John Young, executive]

I think the color on that then translates into we got a significant chunk of our plan for revenue in '23 already. So it was comfortably delivering -- so financially, that's what Ivan's comments, I think, translates to in terms of our, if I say in the bag revenue in terms of what we know we can deliver this year.

[David McFadgen, analyst]

So I'm interpreting that you're not waiting for any new shows to be green that everything that you're expecting for '23 has already been greenlit, whether it gets produced or not? Or are there some billing production strike whatever but that could happen. But as far as green light goes, everything has been agreeing that so far. Is that correct?

[Ivan Schneeberg, executive]

No, that would be an overstatement, David. We definitely have a couple of projects that need final green light this year. It's simply that -- again, without being into too much detail, maybe you can -- we've got a project that's looking for a renewal that we feel really good about, but it does require that renewal. We've already been ordered in the scripts. We've written all the scripts. The buyer is very likely to order that renewal, but we don't have that yet. So there's a risk there. And then we have another project or 2 that are at that green life stage. We feel bullish about them, but they have not yet been fully agreement.

I think the point we're trying to make is we've got more fully baked, not only not greenlit, like done and in post production or in principle than we normally would have that probably any of our competitors would normally have. And that's why we feel more confident about this year perhaps than we might normally.

[David McFadgen, analyst]

Okay. And then just moving on to the EBITDA margins. In the past, you indicated that you were expecting EBITDA margin to continually grow every year. This year EBITDA margin in quite a bit. So I'm just wondering, do you expect the EBITDA margin to grow from here in '23? Or do you think it's going to be about the same or maybe even a bit lower.

[John Young, executive]

I think the best way to think of it, David, is we -- because the revenue was -- the mix of shows, the mix of service the mix of non-rating executive producer shows and IP, the mix was a certain way in 2022 that helped us deliver on that really outside sort of range of margins. So I would say, as we go back to last year, and I think even in the prospectus bearing in mind, we're only a couple of years out from that, we had guided to that high single-digit low double-digit margin as being a zone that we'd like to play in over time.

Obviously, we can improve revenue each year, then adjusted EBITDA should move somewhat in that direction. So if you think about that range, David, as being somewhere, I think, we're comfortable be tough to get, given what we know about the revenue and the types of shows this year, it would be tough to get to that. That sort of margin from -- that we achieved in '22, but still very solid EBITDA margin.

[David McFadgen, analyst]

Okay. And then just on Dino Ranch. Can you give us an update on the ratings, how the show seeing in the U.S.? And then when you talked about the merchandising sales being a bit soft just due to the retail environment that exists today. Can you give us an idea on the magnitude of how soft that was relative to your expectations?

[John Young, executive]

Maybe I can't go into the specifics, David. Let me try my best at this. I think to use Drew's line made earlier about the strength of the IP that's something we're very happy with the show continues to perform. It continues to perform in the U.S. with Disney+ as our partner there. There's 170-plus countries that continue to to buy it and are waiting for season 2 and 3 to be delivered as part of this year and part into '24. So we're really excited and so confident about that the storytelling within the show with sales.

I think what we saw in retail was that softened and the kind was a little bit less than we were hoping for, which is why we're, again, being far more may be more concerned than we need to be, but we're calling for those markets to continue right now. We're not seeing our ability to grow just as fast as we thought we could, based on the growth from '22 over '21, which was very significant on the revenue side. So we're still calling for, again, continue to press for these licensees and for all the work on the products to keep going. We've got lots more licensees coming to the brand. We're only in season 2 and 3, as I said. So lots of room here to continue with this.

And I think Ivan even mentioned that the first couple of months of this year, saw some really, again, encouraging revenue side to the point of sale compared to where we were in '21 and '22. So I guess, cautious optimism, but again, these retail markets are a bit sickle and the recessionary environment that we are in or about to be in, I think leaves us wanting to be a bit more cautious on that.

[Ivan Schneeberg, executive]

Yes. I think that maybe if I could just add, like the show itself, the TV show continues to perform at the same level. It's a top performer in the U.S. and around the world sold out basically around the world, did the order season 3. We're working on Season 3. We're hopeful for season 4. So the TV show, the television show continues to perform at top levels. The brand rollout is massive in terms of the licenses we have and the reach and the reality is it hasn't even launched yet outside of North America. That's the brand component side of the consumer product side.

The U.S. retail grew -- well, the sales of the consumer products in the U.S. grew meaningfully for us, a very, very good excellent growth from '21 to '22. But it did fell short of our expectations for '22. And we are concerned about -- and again, you're probably seeing this again from our competitors and some of our peers, we're concerned about the macroeconomics, the market, the softness, and it's just causing us to tamper our own ambitions and expectations in terms of our ability to grow the brand at the pace that we were hoping to grow. And we just want to share that information with you guys.

[Operator]

There are no further questions. So I will turn the conference back to Mr. John Young for any closing remarks.

[John Young, executive]

No closing remarks for me, other than to say thank you, Michelle, for organizing, and thanks to everyone for joining us this morning. We look forward to speaking to you all again soon and at our Q2 analyst call in a month or so this time. Thank you very much.

[Operator]

Ladies and gentlemen, this does conclude your conference call for this morning. We would like to thank you all for your participation and ask at this time, you please disconnect your lines.