Significant Corporate Development Activities; Investment into Platform; Integration of Acquired Business
Toronto, Ontario–(Newsfile Corp. – May 2, 2022) – YANGAROO Inc. (TSXV: YOO) (OTC Pink: YOOIF) (“Yangaroo“, “Company“), a software leader in media asset workflow and distribution solutions, today announced its financial results for the quarter ended December 31, 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.
Q4’2021 Operational Highlights
Business Developments & Advancements
Yangaroo announced a partnership with INNOVID Corp. expanding on our TV broadcast destinations to now include Connected Television (CTV) and digital video publishers. As advertising spend and placement expands cross media and further into ad supported streaming services, this is a key strategic development for the Company.
Yangaroo launched an advertising Analytics service. The service expands our current TV ad delivery platform by offering further insight on factual ad occurrences, audience impressions, and ad space cost estimations to assist with advertiser’s media buying decisions.
Yangaroo announced a strategic alliance with ‘The TEAMS Company (TTC)’, owned by Cast & Crew, adding the ability to connect certain talent and rights management usage to Yangaroo’s TV advertising deliveries. This relationship aims to improve our advertiser’s ability to track and analyze their talent and rights management obligations.
Yangaroo launched its new TV Clearance online service, offering both a white glove and self-serve capability on the DMDS platform to manage TV legal clearance submissions and substantiations. The platform directly connects the advertiser or submitters submitting TV legal approval requests to the broadcasters legal/clearance departments.
These new advertising offerings aim to provide more powerful and comprehensive solutions for advertising customers. These advancements also further increase our unique selling proposition in the highly competitive advertising delivery industry.
- Yangaroo announced the signing of a multi-year agreement with Universal Music Canada, continuing with our leading music promotion services across Canada, USA, and Latin American markets. The long-term service agreement formalizes our long-standing business relationship with Universal Music Canada.
Our technology development efforts contributed to the aforementioned advancements, along with completing the following initiatives:
Single Page Application; A crucial evolution of the platform that allows the development team to add new features and functionality much more efficiently.
Released V3.0 of the Awards Platform; removing old software code constraints and providing an ability to sell and support the latest judging functionality to a broader customer base.
Implementing certain platform features within DMDS to support the final transitioning of the DMS acquired clients.
Update on the Digital Media Services (“DMS”) acquisition
Since acquiring the business of DMS on May 21, 2021, Yangaroo continues to finalize the remaining items required to fully integrate the business into its Advertising revenue stream. We completed the transitioning of all acquired customers from the acquired DMS platform onto Yangaroo’s DMDS platform. We discontinued DMS’s ad delivery platform and terminated the related 3rd party licensing and maintenance agreement which will provide annual estimated savings of more than USD $250,000, beginning in 2022.
Q4’2021 Financial Highlights
|BALANCE SHEET KPIs|
|Cash and cash equivalents||$ 973,988||$ 1,620,491||$ 1,284,491||$ 2,339,122|
|Working capital||$ 1,156,058||$ 2,529,705||$ 2,474,561||$ 3,300,913|
|Liquidity||$ 2,723,988||$ 3,370,491||$ 3,034,491||$ 3,339,122|
|INCOME STATEMENT KPIs|
|Revenue||$ 2,923,261||$ 3,059,383||$ 2,152,833||$ 1,560,547|
|Operating expenses||$ 3,261,105||$ 3,051,964||$ 2,049,286||$ 1,181,309|
|Other expenses (income)||$ 33,501||$ 4,960||$ 131,938||$ 41,456|
|Income (loss) for the period||$ (371,345)||$ 2,459||$ (28,391)||$ 337,782|
|EBITDA||$ (124,288)||$ 374,409||$ 157,502||$ 405,111|
|EBITDA Margin %||-4.25%||12.24%||7.32%||25.96%|
|Normalized EBITDA (loss)||$ (204,812)||$ 433,065||$ 645,514||$ 453,129|
|Normalized EBITDA Margin %||-7.01%||14.16%||29.98%||29.04%|
Revenue in Q4’2021 was $2,923,261 compared to $2,067,026 and $3,059,383 in the fourth quarter of 2020 and the third quarter of 2021, respectively.
Revenue increased by $856,235 versus Q4’2020 and decreased by $136,122 versus Q3’2021. The increase in revenue, as compared to 2020, was primarily attributed to the acquisition of DMS, and the inclusion of related customer revenue while the quarter over quarter decrease in revenue is primarily attributed to seasonality with annual recurring customers.
Operating expenses in Q4’2021 were $3,261,105 compared to $1,945,118 and $3,051,964 in the fourth quarter of 2020 and the third quarter of 2021, respectively.
Operating expenses increased by $1,315,987 versus Q4’2020 and $209,141 versus Q3’2021. The increase in operating expenses, as compared to 2020, is primarily attributed to the inclusion of operating expenditures related to the acquisition of DMS as well as increased investment in our technology stack, higher marketing expenditures related to promotion and sales activities as we exit the COVID-19 pandemic, higher salaries and consulting fees related to the issuance of restricted share units and related amortization costs, and higher administrative expenditures as they related to general legal work.
Normalized EBITDA loss in Q4’2021 was $204,812 in comparison to normalized EBITDA of $817,821 in the fourth quarter of 2020 and normalized EBITDA of $433,065 third quarter of 2021. The decrease in normalized EBITDA relative to the prior quarters is primarily attributed to higher salaries, consulting and technology expenses as well as higher general and administrative expenses much, of which can be attributed to the renewed effort to better position our DMDS platform to compete in the “post Covid” marketplace.
During 2021 the Company completed a change in functional currency from the Canadian dollar to the US dollar. Beginning with the first quarter of 2022, the Company plans to report in US dollars, with the final Canadian dollar reporting occurring in the current financial statements and MD&A for the fourth quarter ended 2021.
Q4’2021 Management Commentary
Grant Schuetrumpf, CEO of Yangaroo, stated, “During the fourth quarter of 2021, we continued to integrate and further rationalize the DMS business into Yangaroo. Thanks to the ongoing efforts of our employees, we expect to fully unify both businesses under the Yangaroo brand and realize the expected operating synergies in 2022.”
“The fourth quarter of 2021 also represented another milestone with a significant amount of new business development efforts being announced. Our advertising revenue stream announced an exciting new partnership with Innovid, the leading 3rd party ad-serving offering for the CTV market. The partnership streamlines our customers’ TV advertising cross-media and efficiently delivers advertising to all required TV and video campaign destinations for on-time airing and required ad-serving. These benefits drive efficiencies when advertising across traditional TV, and advertising supported video on demand streaming services. We are now exploring how these efficiencies learned can be integrated into other ad-serving technologies and related services.”
Mr. Schuetrumpf further stated, “As Analytics is becoming an increasingly important element within our industry, we are keenly focused on increasing our value proposition for our clients. Our new Analytics service offering measuring advertising impact and results across linear TV, CTV and video publishing networks supports advertisers with their understanding of advertising performance. This solution can be integrated within our traditional delivery service package and presented to the client in an easy-to-understand dashboard within our DMDS platform.”
“Yangaroo’s music video and audio track promotional service performance remains relatively consistent on a month-to-month basis. We experienced some “post Covid” softening within the segment as independent music artists have been focusing their energies on live performances; however, we are expecting a return to more normal revenue patterns throughout 2022.”
“Yangaroo’s Award Shows platform has also gone through a review and is in its early days of a significant upgrade. We are focusing firstly on new judging functionality of platform, which we expect to be completed in Q2 of 2022, then the submission functionality thereafter. The technology investment is expected to provide a refreshed and contemporary platform that provides a much improved user-experience, faster Award Shows customizations for our customers, and the ability to quickly scale and grow this service.”
Grant Schuetrumpf concluded, “In 2021 we made several significant technology development investments across our business in addition to the acquisition of DMS. Looking ahead, we are committed to developing more unique solutions to enhance our competitive advantage across our market sectors. As we complete some of the larger development objectives started in 2021, we will adjust our current rate of investment over the course of 2022 accordingly.”
Regarding the 2021 finances, Dom Kizek, CFO of Yangaroo, stated, “We experienced a significant increase in revenue in the fourth quarter in comparison to the previous year. The increase was primarily driven by the inclusion of DMS into our results. More broadly, we are still seeing some Covid related weakness across our business lines as our customers continue to work their way back to more normalized “pre-pandemic” spending trends. It is our hope that we will see our revenue return to a more predictable trajectory over the course of 2022 and beyond.”
Mr. Kizek further stated, “Our Normalized EBITDA earnings were negatively impacted over the latter part of the year due to significant overheads carried as a result of the absorption of the DMS business into Yangaroo as well as the Company’s continued investment into technology development and new business development efforts. Over the course of the year, we invested almost $750,000 on new software development initiatives. We expect this significant new investment to begin to drive incremental revenue as we move into 2022.”
“We completed a change in functional currency in 2021 from the Canadian dollar to the US dollar. We plan to start reporting in US dollars beginning with our Q1’2022 filing documents including our financial statements and MD&A. Our continued attention on the US marketplace with respect to Yangaroo operating revenue stream, acquisition of US based DMS, US investor outreach, and significant US shareholders were all factors in determining to use the US dollar as our presentation currency beginning in the first quarter of 2022,” Mr. Kizek added.
Conference Call & Webcast Information
Yangaroo’s management team will host a conference call to discuss fourth-quarter results at 1:00 p.m. ET on Tuesday, May 3, 2022. The conference call will be available at:
Webcast Link: https://www.gowebcasting.com/11823
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/
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 OTCBB: YOOIF.
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For YANGAROO Investor Inquiries:
Ph: (416) 534 0607 #162
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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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