PMKR Playmaker Capital Inc

• Q2 2023 revenue of US$12.6 million, an organic increase of 53% on a pro forma basis over Q2 2022
• Q2 2023 Adjusted EBITDA (excluding Corporate Segment) of US$3.3 million, an organic increase of 24% on a pro forma basis over Q2 2022
• Q2 2023 Adjusted EBITDA (including Corporate Segment) of US$2.2 million, an organic increase of 34% on a pro forma basis over Q2 2022
• User Sessions on Playmaker’s web properties exceeded 653 million in Q2 2023
• Playmaker’s North American-produced video podcasts generated a record 5.1 million streams in Q2 2023

Playmaker Capital Inc. (TSX-V: PMKR) (the “Company” or “Playmaker”), the digital sports media company that delivers authentic content experiences through its portfolio of sports media brands, is pleased to report its financial results for the second quarter ended June 30, 2023 (“Q2 2023”).

FINANCIAL HIGHLIGHTS (Figures in USD)

USD Millions

For the three months ended June 30

 

2023

2022

Growth

Pro Forma Revenue1

$12.6

 

$8.3

 

53

%

Pro Forma Adjusted EBITDA1 (excl. Corporate segment)

$3.3

 

$2.6

 

24

%

Pro Forma Adjusted EBITDA1 (incl. Corporate segment)

$2.2

 

$1.6

 

34

%

Revenue

$12.6

 

$6.7

 

89

%

Operating Loss

($0.9

)

($0.5

)

-

 

• Cash and Cash Equivalents – Cash and cash equivalents were $9.7 million at June 30, 2023 compared to $11.4 million at March 31, 2023.

MANAGEMENT COMMENTARY

“Q2 was a period of focused execution against our five strategic priorities for 2023, all aimed at better integrating our complementary businesses to drive organic revenue growth and realize efficiencies. During the quarter, our ecosystem of media and affiliate businesses refined internal processes, expanded syndication networks, enhanced video production and monetization capabilities, and extended strategic partnerships with tier-one advertisers and sports betting operators. Entering the sports-heavy Q3 and Q4 periods, Playmaker is better positioned than ever to drive value for fans, customers, and shareholders.”

Jordan Gnat continued, “Subsequent to the quarter-end, we acquired leading Quebec sports media group, La Poche Bleue, to round out our Canada-wide reach. La Poche Bleue plants a flag in the Quebec market, bolsters our video podcast portfolio, and strengthens our direct-to-consumer segment in advance of the upcoming NHL season. Additionally, founders Maxim Lapierre and Guillaume Latendresse, and Managing Director, Louis-Philippe Dorais, are tremendous additions to our senior leadership team.”

Mike Cooke, CFO of Playmaker added, “Though Q2 falls during a quiet period in the sporting calendar, we are very excited to have delivered another quarter of strong top-line growth. Meanwhile, our consistent focus on profitability is reflected in continued growth in Adjusted EBITDA – and in the fact that we have generated $6.9 million of year-to-date cash flow from operating activities. With $9.7 million of cash at quarter-end and $20.0 million of available credit – including $10.0 million in a new credit facility closed subsequent to quarter-end – we are in a strong financial position to continue executing on our strategy as we head into the second half of 2023 and beyond.”

OPERATIONAL HIGHLIGHTS

Media Businesses Continue to Scale & Grow Engagement

Playmaker experienced strong engagement metrics across its owned and operated media brands in Q2 2023. During the quarter, Playmaker’s web properties generated more than 653 million sessions and its video podcasts received over five million streams. The Company’s North American footprint grew significantly in Q2 2023, and subsequent to the second quarter, Playmaker acquired Quebec sports and entertainment group, La Poche Bleue, to bolster its North American audience reach.

• Futbol Sites maintained a strong leadership position in the Brazilian market, with core properties Bolavip Brazil, Fanaticos Por Futebol, and Antenados no Futebol generating more than 300 million sessions in the quarter.
• The Nation Network continued to grow engagement with its lineup of video podcasts and achieved a quarterly record 5.1 million streams in Q2 2023, an increase of more than 300% over Q2 2022. In June 2023, TNN generated a monthly record 2.02 million streams.
• Yardbarker attracted a monthly average of 8.9 million unique users in Q2 2023, an increase of 52% over Q2 2022. Additionally, Yardbarker generated a monthly average of 19 million user sessions during Q2 2023, an increase of 51% year-over-year.
• Subsequent to Q2 2023, Playmaker expanded its North American reach with the acquisition of La Poche Bleue (“LPB”). The addition of LPB enabled Playmaker to establish a presence in Quebec to round out its Canada-wide reach. Additionally, LPB expanded Playmaker’s growing lineup of video podcasts ahead of the upcoming NHL season, and bolstered its direct-to-consumer business.

Strong Partnership Demand from Corporate Advertisers, Sports Betting Operators & Leagues

Playmaker executed multiple long-term direct sales and partnerships in Q2 2023. Direct sales accounted for 54% of Playmaker’s core media advertising sales for the period, an increase of 25% over Q2 2022. Direct sales and affiliate are growing segments of Playmaker’s revenue generation, and the Company continues to expand these revenue streams to maximize higher-margin monetization opportunities.

• Futbol Sites executed numerous direct campaigns with leading iGaming and sports betting operators in Brazil. Additionally, Futbol Sites activated campaigns with global advertisers across branded content articles, podcast and video integrations, and widgets. Futbol Sites Q2 2023 direct sales revenue increased by 53% over Q2 2022, bolstered by 88% year-over-year growth of the sports betting customer segment.
• Playmaker has identified its affiliate business as a high-growth opportunity, particularly in the U.S. market as additional states regulate online sports betting and iGaming. Playmaker’s Senior Leadership and Revenue Operations teams continued their integration efforts with its digital media businesses and Wedge in Q2 to unlock value by combining its vast audience with Wedge’s user acquisition and conversion expertise.
• Futbol Sites affiliate revenue increased 119% in Q2 2023 over Q2 2022, driven primarily by the sports streaming category in the US.
• The Nation Network extended partnerships with key sports betting operators for the upcoming 2023-24 NHL season. The campaigns will be activated across both web and podcast properties, including Daily Faceoff, FlamesNation, OilersNation, TheLeafsNation, and Coming In Hot, among others.

CONFERENCE CALL

The Company will host a management conference call to discuss its Q2 2023 financial results on August 15, 2023, at 10:00 a.m. (Eastern Time). Hosting the call will be Jordan Gnat, Chief Executive Officer; Jake Cassaday, Chief Operating Officer; and Mike Cooke, Chief Financial Officer.

To participate in the conference call, please access the webcast link or dial-in using one of the following numbers approximately five minutes prior to commencement and ask to join the Playmaker call:

Webcast: https://event.choruscall.com/mediaframe/webcast.html?webcastid=dwk76tVo

Dial-In Number (Toll Free): 1-844-707-6933

Dial-In Number (International): 1-412-317-5796

A replay of the Conference Call will be made available at playmaker.fans/investors.

To sign up for Playmaker Investor Alerts, visit: PMKR Investor Alerts.

TSX VENTURE EXCHANGE DISCLAIMER

Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.

NON-IFRS MEASURES

Some of the information presented in this press release includes non-IFRS financial measures, including, “EBITDA”, “Adjusted EBITDA”, and metrics that are presented on a pro forma basis. These measures are not recognized measures under IFRS and do not have standardized meanings prescribed by IFRS and are therefore unlikely to be comparable to similar measures presented by other companies. Rather, these measures are provided as additional information to complement IFRS measures by providing further understanding of the Company’s results of operations from management’s perspective. Accordingly, these measures should not be considered in isolation nor as a substitute for analysis of the Company’s financial information reported under IFRS.

“EBITDA” is earnings before interest, taxes, depreciation and amortization.

“Adjusted EBITDA incl. Corporate Segment” is earnings of the Company before interest, taxes, depreciation and amortization, excluding the impact of stock based compensation expenses, acquisition-related costs, and any other one-time costs. “Adjusted EBITDA excl. Corporate Segment” also excludes the impact of head office costs.”

“pro forma” is an adjustment to incorporate the results of any acquisitions and dispositions made through June 30, 2023, assuming each acquisition or disposition occurred on the first day of the period being presented.

FORWARD-LOOKING STATEMENTS

This press release may contain forward-looking information within the meaning of applicable securities legislation, which reflects Playmaker’s current expectations regarding future events. The words “will”, “expects”, “anticipates”, “believes”, “plans”, “intends” and similar expressions are often intended to identify forward-looking information, although not all forward-looking information contains these identifying words. Forward-looking information is based on a number of assumptions and is subject to a number of risks and uncertainties, many of which are beyond Playmaker’s control, which could cause actual results and events to differ materially from those that are disclosed in or implied by such forward-looking information. Such risks and uncertainties include, but are not limited to: changes in general economic, business and political conditions. Playmaker undertakes no obligation to update such forward-looking information, whether as a result of new information, future events or otherwise, except as expressly required by applicable law.

ABOUT PLAYMAKER CAPITAL INC.

Playmaker Capital Inc. (TSX-V: PMKR; OTC: PMKRF) is a digital sports media company that acquires and integrates premier fan-centric media brands, curated to deliver highly engaged audiences of sports fans to tier one advertisers, online sports betting operators, and sports federations and leagues. Leveraging its in-house technology stack, Bench, and with a 360-degree view of sports fans, Playmaker delivers authentic digital content experiences for sports fans and best-in-class results for its partners across the Americas.

Playmaker reports in U.S. dollars, except where noted otherwise, and in accordance with International Financial Reporting Standards (“IFRS”).

For more information, visit: http://www.playmaker.fans or contact Playmaker Chief Executive Officer Jordan Gnat via email jgnat@playmaker.fans | T: (416) 815-4993

To sign up for Playmaker’s Investor Alerts, visit: playmaker.fans/investors.

 

Playmaker Capital Inc.

Condensed Consolidated Interim Statements of Financial Position

(Stated in U.S. dollars)

June 30,

December 31,

2023

2022

(Unaudited)

(Audited)

Assets

Current

Cash and cash equivalents

$

9,688,561

$

8,875,692

Accounts receivable

6,461,938

12,755,151

Income taxes receivable

56,700

241,540

Prepaid and other current assets

1,077,703

1,577,583

Total current assets

 

17,284,902

 

23,449,966

Property and equipment

846,222

939,996

Intangible assets

54,995,718

58,538,596

Goodwill

45,350,872

46,098,848

Deferred tax asset

1,774,074

1,734,875

Other long-term assets

36,261

33,418

Total assets

$

120,288,049

$

130,795,699

Liabilities

Current

Accounts payable

$

1,698,046

$

3,433,147

Income taxes payable

108,234

725,925

Deferred revenue

280,322

440,302

Accrued expenses and other current liabilities

3,187,325

4,281,061

Current portion of lease liability

161,776

157,150

Current portion of long-term debt

1,666,667

416,667

Current deferred consideration

1,591,000

2,000,000

Consideration payable

17,566,483

11,804,338

Total current liabilities

 

26,259,853

 

23,258,590

Long-term debt

8,333,333

9,583,333

Long-term lease liability

348,308

425,181

Deferred tax liability

7,221,060

7,297,935

Deferred consideration

914,000

2,438,000

Contingent consideration

8,114,400

17,957,182

Convertible debenture

16,317,812

15,425,130

Total liabilities

 

67,508,766

 

76,385,351

Shareholders' Equity

Share capital

66,356,487

65,816,073

Contributed surplus

2,396,235

2,057,531

Accumulated other comprehensive income (loss)

(3,142,682)

(1,735,978)

Retained earnings (deficit)

(12,830,757)

(11,727,278)

Total shareholders’ equity

 

52,779,283

 

54,410,348

Total liabilities and shareholders’ equity

$

120,288,049

$

130,795,699

Playmaker Capital Inc.

Condensed Consolidated Interim Statements of Net Loss

Unaudited

(Stated in U.S. dollars, except share information)

 

 

 

Three months ended June 30,

 

Six months ended June 30,

 

 

 

2023

 

2022

 

2023

 

2022

Revenue

$

12,636,648

$

6,693,825

$

28,325,394

$

12,054,914

Cost of Sales

 

2,253,659

 

355,100

 

4,272,393

 

735,914

Gross Profit

 

10,382,989

 

6,338,725

 

24,053,001

 

11,319,000

Operating expenses

Salary and wages

5,242,921

3,198,677

9,423,107

6,072,676

Advertising, commissions and fees

2,511,379

1,198,608

5,800,599

1,677,411

Web services and publishing

470,066

268,566

949,846

491,818

General and administration

475,576

462,190

934,947

868,601

Professional fees

442,873

211,180

802,359

673,222

Stock-based compensation

313,537

370,719

618,944

584,529

 

Depreciation and amortization

1,781,502

 

1,113,230

 

3,561,598

 

2,053,884

Total operating expenses

 

11,237,854

 

6,823,170

 

22,091,400

 

12,422,141

Operating income (loss)

(854,865)

(484,445)

1,961,601

(1,103,141)

Transaction costs

(1,178)

(100,398)

(66,215)

(749,332)

Interest expense

(627,155)

(92,720)

(1,154,625)

(103,203)

Listing and filing fees

(6,159)

(5,786)

(12,294)

(11,613)

Other income

24,217

4,454

46,354

12,277

Other expenses

(9,909)

(59,539)

(21,630)

(71,765)

Change in fair value of consideration

-

-

(166,930)

(1,896,772)

Change in fair value of convertible debenture

(279,562)

-

(884,311)

-

Foreign exchange gain (loss)

1,346,611

(139,514)

1,551,143

(276,828)

Income (loss) before taxes

 

(408,000)

 

(877,948)

 

1,253,093

 

(4,200,377)

 

Current tax

 

77,748

 

(26,995)

 

(1,100,429)

 

(49,134)

Net income (loss) from continuing operations

$

(330,252)

$

(904,943)

$

152,664

$

(4,249,511)

Net loss from discontinued operations, after tax

 

(934,105)

 

(207,902)

$

(1,256,143)

$

(262,217)

Net loss

$

(1,264,357)

$

(1,112,845)

$

(1,103,479)

$

(4,511,728)

Basic net income (loss) per share from continuing operations

$

-

$

-

$

-

$

(0.02)

Diluted net income (loss) per share from continuing operations

 

N/A

 

N/A

$

-

 

N/A

Basic weighted average number of shares

 

227,607,955

 

215,158,590

 

227,033,486

 

213,863,106

Diluted weighted average number of shares

 

N/A

 

N/A

 

238,960,457

 

N/A

Playmaker Capital Inc.

Condensed Consolidated Interim Statements of Cash Flow

Unaudited

(Stated in U.S. dollars)

 

For the six months ended June 30,

 

 

 

2023

 

2022

 

Operating activities

Net income (loss)

$

(1,103,479)

$

(4,511,728)

Depreciation and amortization

3,561,598

2,064,703

Stock based compensation

618,944

584,529

Non-cash interest

17,850

8,648

Loss on sale of technology segment, net of cash

781,936

-

Change in fair value of contingent consideration

166,930

1,896,772

Change in fair value of convertible debenture

884,311

-

Foreign exchange (gain) loss

(1,529,048)

276,109

Net change in non-cash working capital

3,521,381

(1,095,588)

Cash flows from (used in) operating activities

 

6,920,423

 

(776,555)

Investing activities

Acquisition of Futmarketing

-

(875,000)

Acquisition of SportsDrop

-

(1,200,000)

Settlement of consideration

(5,927,503)

(7,393,636)

Purchase of property and equipment

(92,505)

(109,076)

Purchase of intangibles

(28,572)

(73,633)

Cash flows used in investing activities

 

(6,048,580)

 

(9,651,345)

Financing activities

Warrants exercised

-

162,174

Long-term debt drawn

-

6,000,000

Long-term debt repayments

-

(111,112)

Cash payment for lease liability

(92,850)

(96,839)

Cash flows used in financing activities

 

(92,850)

 

5,954,223

Increase (decrease) in cash

778,993

(4,473,677)

Foreign exchange impact

33,876

(159,811)

Cash, beginning of period

 

8,875,692

 

7,111,728

Cash, end of period

$

9,688,561

$

2,478,240

_________________________ 1 Pro forma information includes the impact of all acquisitions & dispositions made through June 30, 2023. “Pro Forma Adjusted EBITDA” does not include impact of stock compensation, acquisition-related costs and other one-time costs. “Pro Forma Adjusted EBITDA (excl. Corporate segment)” also excludes the impact of head office costs.

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MEDIA & INVESTOR RELATIONS CONTACTS Jonathan Ross – E: jon.ross@loderockadvisors.com | T: (416) 283-0178 Elias Blahacek – E: elias@playmaker.fans | T: (416) 254-4345