Q2'2021 Earnings Call Scheduled
Toronto, Ontario--(Newsfile Corp. - August 30, 2021) - YANGAROO Inc. (TSXV: YOO) (OTC Pink: YOOIF) ("Yangaroo", "Company"), the software leader in media asset workflow and distribution solutions, today announced its financial results for the quarter ended June 30, 2021. The full text of the Financial Statements and Management Discussion & Analysis is available at www.yangaroo.com and at www.sedar.com. Please note that all currency in this press release is denominated in Canadian dollars.
On May 21, 2021, Yangaroo closed a milestone acquisition of Digital Media Services Inc. ("DMS"). DMS is an advertising and content management delivery business based in New York City. Total consideration for the DMS business was USD $5.5 million, inclusive of USD $2.5 million paid on closing in addition to customary closing adjustments and expenses, and USD $3.0M to be paid over three years contingent on the DMS business hitting certain revenue targets based on DMS' fiscal 2019 actual revenue.
The second quarter of 2021 observed 59% year-over-year revenue growth in the Advertising division. The increase is largely attributed to the inclusion of the DMS business into our Advertising division. We continue to observe actual sales, on a year-over-year basis, in line with the negative impact COVID-19 has on the advertising industry and are treating this impact as transitory in nature with an expected rebound to pre-pandemic volumes and revenue trends in the near-term. As part of the next phase of growth we are now working on several industry specific integration and technology innovations to enhance our current service offering which we expect to fuel volumes and revenue with our expanded list of advertising clients and new prospects.
Yangaroo's Award division showed strong revenue growth of 19%, quarter over quarter, primarily attributed to seasonality as we head into awards season and begin to recognize sales on contractual agreements with our customers. Overall, our Awards division customers continue to renew their multi-year agreements with modest increases to their annual recurring fees complemented by additional development requests to enhance the customers platforms. In the second quarter of 2021, this included releasing an awards platform for a global streaming company and the development of a mobile and streaming application for an internationally recognized organization.
Yangaroo's Music division observed flat revenues on a quarter over quarter and year over year basis primarily attributed to lower usage from the music labels. However, this was offset by higher platform usage by independent music artists. Independent artist subscriptions continue to show strong revenue growth on a year-over-year basis. Our new partnership with market monitorLATINO and radioNOTAS commenced in the third quarter of 2021 and is expected to further drive revenue growth with the independent music artists across the Latin American and the US Hispanic markets.
Q2'2021 Financial Highlights
- Revenue in Q2 2021 was $2,152,833 compared to $1,586,695 and $1,560,547 in the second quarter of 2020 and the first quarter of 2021, respectively. The increase in revenue in Q2'2021 is primarily attributed to the acquisition of DMS in May 2021, which had a direct positive contribution to our advertising business, as well as our awards management business which ramped up customer sales in anticipation of award season in the second half of the year.
- Normalized EBITDA in Q2 2021 was $645,514, inclusive of government assistance, during the quarter ended June 30, 2021, in comparison to normalized EBITDA of $453,129 in the first quarter of 2021 ended March 31, 2021 and normalized EBITDA of $118,701 in the prior year quarter ended June 30, 2020. The increase in normalized EBITDA is primarily attributed to higher advertising sales, primarily due to the acquisition of DMS' customers, and an increase in volumes in existing Yangaroo advertising customers, partially offset against the increase in higher salaries and general and administrative expenses, both of which were attributed to the acquisition of DMS' employees and operations.
- Balance Sheet Strength; cash and cash equivalents of $1,284,491, working capital of $2,474,561 and liquidity of $3,034,491 as of June 30, 2021.
Q2'2021 Commentary
Grant Schuetrumpf, CEO of Yangaroo, stated, "The second quarter acquisition of DMS was a significant milestone for Yangaroo. The acquisition was transformative as it provided significant new customers and their related volumes and revenue to our Advertising division, with an immediate positive impact to our revenue and normalized EBITDA, and which further demonstrated Yangaroo's ability to finance and execute on a complex transaction. The integration of the DMS business into our Advertising division is progressing very well and I am extremely pleased with our team's ability to execute in such a short time-frame."
"As we continue to integrate and execute on the DMS acquisition we continue to look at opportunities in the advertising, music, and technology spaces that would fit within our criteria as being accretive and with favourable valuation metrics."
Mr. Schuetrumpf further stated, "Although the Advertising division volumes from existing customers have not fully recovered in the second quarter of 2021, we continue to forecast existing customer volumes will recover to pre-pandemic levels as the advertising industry and general North American economy recovers. The second quarter did see incremental improvements in existing customer volumes and related volumes, on a quarter-over-quarter and year-over-year basis, and we expect that to continue going forward. Furthermore, one of the strengths of Yangaroo's business model is a diversified revenue stream, which continues to be displayed with revenue growth and strong EBITDA contribution from the Music and Awards divisions. Music and Awards have consistently shown strength during the COVID-19 pandemic and the second quarter of 2021 was no exception."
Dom Kizek, CFO of Yangaroo, added, "The ability to quickly and successfully integrate the DMS business and its respective customers has been a tremendous success for Yangaroo. We've seen significant cash generation subsequent to the closing of the acquisition and we expect to finish the year with a strong cash, working capital, and liquidity position, driven by strong revenue and EBITDA growth due to the DMS acquisition."
"Finally, the second quarter saw continued investment into our platform with capital being spent on development in our technology and service integrations, advertising and music analytics, TV clearance features, and improvements in the platforms user interface and platform functionality to improve the customers experience. We continue to focus on technology investment to drive higher recurring volumes and recurring revenue over the medium to long-term," Mr. Kizek added.
The Company's share buy-back program continues to be suspended and will continue to be evaluated on an on-going basis.
Conference Call & Webcast Information
Yangaroo will host a conference call and webcast to discuss the Company's Q2'2021 results on 10:00 am ET on Tuesday, August 31, 2021. To access:
Webcast Link: https://www.gowebcasting.com/11315
Canada/USA Toll Free Number: 1-800-319-4610
A replay of the conference call and webcast will be available for streaming on the Investor Relations website at: https://yangaroo.com/investor-relations/
Summary of Quarterly Results
| Three Months | Six Months | ||||||||||
| June 30, 2021 | June 30, 2020 | June 30, 2021 | June 30, 2020 | ||||||||
| Revenue | $ | 2,152,833 | $ | 1,586,695 | $ | 3,713,380 | $ | 3,959,462 | |||
| EBITDA (loss) | $ | 157,502 | $ | 4,124 | $ | 562,613 | $ | 708,662 | |||
| Normalized EBITDA (loss) | $ | 645,514 | $ | 118,701 | $ | 1,098,643 | $ | 678,743 | |||
| Normalized EBITDA (loss) Margin | 29.98% | 7.48% | 29.59% | 17.14% | |||||||
| Net Income (loss) | $ | (28,391) | $ | (69,867) | $ | 309,391 | $ | 558,740 | |||
| Basic EPS | $ | (0.00) | $ | (0.00) | $ | 0.01 | $ | 0.01 | |||
| Diluted EPS | $ | (0.00) | $ | (0.00) | $ | 0.00 | $ | 0.01 | |||
| As at | |||||||||||
| June 30, 2021 | March 31, 2021 | December 31, 2020 | September 30, 2020 | ||||||||
| Cash | $ | 1,284,491 | $ | 2,339,122 | $ | 1,861,253 | $ | 2,284,109 | |||
| Liquidity | $ | 3,034,491 | $ | 3,339,122 | $ | 2,861,253 | $ | 3,284,109 | |||
| Working Capital | $ | 2,474,561 | $ | 3,300,913 | $ | 3,104,469 | $ | 3,122,343 | |||
About YANGAROO
Yangaroo is a software leader in media asset workflow and distribution solutions for advertising, music, and awards industries. YANGAROO's patented Digital Media Distribution System is a leading secure business to business cloud-based solution that incorporates production services, traffic, clearance, delivery, analytics, and secure API integration for the industries various video and audio work-flow challenges.
YANGAROO has offices in Toronto, New York, and Los Angeles. YANGAROO trades on the TSX Venture Exchange (TSX-V) under the symbol YOO and in the U.S. under OTC Pink: YOOIF.
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For YANGAROO Investor Inquiries:
Dom Kizek
Ph: (416) 534 0607 #162
dom.kizek@yangaroo.com
Neither the TSX Venture Exchange nor Its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the accuracy of this release.
Cautionary Note Regarding Forward-looking Statements
This news release contains certain forward-looking statements and forward-looking information (collectively referred to herein as "forward-looking statements") within the meaning of applicable Canadian securities laws. All statements other than statements of present or historical fact are forward-looking statements. Forward-looking statements are often, but not always, identified by the use of words such as "anticipate", "achieve", "could", "believe", "plan", "intend", "objective", "continuous", "ongoing", "estimate", "outlook", "expect", "may", "will", "project", "should" or similar words, including negatives thereof, suggesting future outcomes.
Forward-looking statements are subject to both known and unknown risks, uncertainties and other factors, many of which are beyond the control of YANGAROO, that may cause the actual results, level of activity, performance or achievements of YANGAROO to be materially different from those expressed or implied by such forward-looking statements, including but not limited to: the use of proceeds of the offering, receipt of all necessary approvals of the offering, general business, economic, competitive, political and social uncertainties; negotiation uncertainties and other risks of the technology industry. Although YANGAROO has attempted to identify important factors that could cause actual results to differ materially from those contained in forward-looking statements, there may be other factors that cause results not to be as anticipated, estimated or intended.
Forward-looking statements are not a guarantee of future performance and involve a number of risks and uncertainties, some of which are described herein. Such forward-looking statements necessarily involve known and unknown risks and uncertainties, which may cause YANGAROO's actual performance and results to differ materially from any projections of future performance or results expressed or implied by such forward-looking statements. Any forward-looking statements are made as of the date hereof and, except as required by law, neither YANGAROO assumes no obligation to publicly update or revise such statements to reflect new information, subsequent or otherwise.
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