Reservoir Media, Inc.. · NASDAQ:RSVR
Reservoir Media, Inc — Investor Presentation (May 2023)
35 slides from Reservoir Media, Inc's investor presentation, May 31, 2023
Slide 1: Investor Presentation May 2023
I N VE STO R PR E S E N TATI O N M AY 2 0 23
Slide 2: Forward Looking Statements
Forward Looking Statements This presentation contains “forward - looking statements” for purposes of the safe harbor provisions under the U.S. Private securities litigation reform act of 1995, as amended. These forward - looking statements are generally identified by words such as “anticipate,” “bel
Slide 3: Disclaimer
Disclaimer 3 Industry and Market Data The information in this presentation also includes information provided by third parties. None of Reservoir, its affiliates or any third parties that provide information to Reservoir or its affiliates, such as market research firms, guarantee the accuracy, compl
Slide 4: First U.S.-Based Publicly Traded Independent Music Company
First U.S. - Based Publicly Traded Independent Music Company Music Pu b li sh i n g 1 69% Recorded Music & Other 1 31% KEY FACTS • NASDAQ: RSVR • Market Cap: $416M (at 03/31/23) • Fiscal Year End: Mar 31 st • Shares Outstanding: 64M • 150K+ Copyrights • 36K+ master recordings • Offices in NYC (HQ),
Slide 5: Compelling Investment Highlights
1 As of 03 - 31 - 23 2 Wall Street Research 3 Based on 80% of LTM as of 03/31/23 Net Publisher Share (NPS) and Net Label Share (NLS) Compelling Investment Highlights Leading Independent Music Company With Proven Platform • $876M of invested capital since inception 1 • $722M of that amount in acquisi
Slide 6: Music industry ecosystem
Music 101 MUSIC PUBLISHING ARTISTS SONGWRITERS FOREIGN SUB - PUBLISHERS RECORD LABELS PERFORMING RIGHTS ORGANIZATIONS DIGITAL SERVICES THIRD PARTIES PUBLISHER • CATALOG • FUTURES RECORDED MUSIC CONSUMERS PLATFORMS RECORD LABEL ARTISTS 6
Slide 7: History of Growth
History of Growth — = a 2019 NICK LEE HENRY JACKMAN SONNY ROLLINS 2 8 ge 5 i wn Se Be e2 hb & i 9 JAMIE HARTMAN JOEY BADAS$ ALI TAMPOS! MIGOS ABOOGIE BENHARPER JONI MITCHELL if CHAINZ WIT DA HOODIE ZI fe) e f pg. Ph ia % 3 9 MAF Q &P&P SONGS: \ ih oe BIG LIFE | 9 k wea? Sas We g HANS ZIMMER ere BIG
Slide 8: Music Publishing overview
D i g it a l 53% Pe rf o r mance 20% S y nc h 19% Ot he r 5% M echan i cal 4% CATALOG EXAMPLES Legacy: Active Songwriters: • Joni Mitchell • Offset (Migos) • The Isley Brothers • Ali Tamposi • John Denver • 2 Chainz • Billy Strayhorn • Oak Felder • Commodores • Jamie Hartman Music Publishing represe
Slide 9: Music Publishing Top 10 Songs by NPS
1 LTM Net Publisher Share (NPS) as of 12 - 31 - 22 1,114 Songs Account For 80 % of L T M NPS with No Song Accounting For More Than 3% of LTM NPS 5 6 9 10 1 2 3 4 7 8 “It’s Your Thing” The Isley Brothers 2.2%, (1969) “Bring Me To Life” Evanescence 0.62%, (2003) “Gimme More” Britney Spears 0.6%, (2007
Slide 10: Recorded Music Segment Overview
Legacy: Active Recording Artists: • De La Soul • Sinéad O’Connor • Naughty by Nature • Generation X (Billy Idol) • • The Delfonics • Ben Harper • Laura Marling Liz Phair • Emeli Sandé • William The Conqueror Reservoir’s first foray into the recorded music business initially was in 2012 with the acqu
Slide 11: Recorded Music Top 10 Songs by NLS
234 Recordings Account For 80 % of L T M N LS and 100% are Owned for the Life of the Copyright Recorded Music Top 10 Songs by NLS 1 1 LTM Net Label Share (NLS) as of 12 - 31 - 22 1 2 5 6 9 10 3 7 4 8 “G angs t a ’ s Paradise” Coolio 13.3%, (1995) “The Humpty Dance” Digital Unde r g r o u n d 1.4%, (
Slide 12: Growth Drivers
Growth Drivers 12 STRONG SECULAR TAILWINDS VALUE ENHANCEMENT INITIATIVES PROVEN M&A PLATFORM & NEW SIGNINGS OPERATING LEVERAGE & CASH FLOW GENERATION
Slide 13: Music Industry: Strong Secular Tailwinds
Rise of Digital & Availability of Streaming Digital Revenue CAGR: 13% (2010 - 20) 12% (2020 - 30) Growth Of Paid Streaming Subscribers Paid Subs CAGR: 49% (2010 - 20) 11% (2020 - 30) Growth Of Streaming In Emerging Markets EM to contribute 43% of streaming revenue by 2030 Increased Government Interv
Slide 14: Music Industry: Strong Growth Forecasted
1 Wall Street Research Music Industry: Strong Growth Forecasted DIGITAL PE RFOR M ANCE SY NCH PHYSICAL & OTHER 14 INDUSTRY Publishing Recorded Music Paid Streaming Subs $32B $8B $2 4 B 8M 2010 2 5 % 1 5 % 5% 5 5 % $48B $13B $35B 43 4 M CAGR 4% 5% 4% 49% 2020 5 9 % 1 7 % 5% 1 9 % $ 1 15B $23B $9 2 B
Slide 15: Value Enhancement Initiatives
VALUE ENHANCEMENT SYNCHRONIZATION Placement of musical compositions into television, film, advertisements, gaming platforms, and toys DIGITAL LICENSING Digital licensing partnerships with emerging music platforms and in - home fitness brands SETTLEMENTS Representation on industry boards advocating f
Slide 16: Top Synch Highlights and Industry Advocacy
Top Synch Highlights “The Best” “Non, Je Ne Regrette Rien” “ Da y - O” “Lean On” “Take Me Home, Country Roads” Industry Advocate & Leader $13M GENERATED IN SETTLEMENT PAYMENTS Over the Past Five Years (FY19 - FY23) Value Enhancement Examples & Industry Advocacy Totaling IN LICENSING $3M 16 ELECTED B
Slide 17: Proven M&A Platform
$722M CAPITAL DEPLO Y E D since inception 2 91% of GROSS PROFIT & COST SYNERGIES FLOW to EBITDA 3 12% UNLEVERED IRR since 2007 4 1 Based on total offers made, deals into exclusivity, and deals closed as a percentage of new deals considered in FY2022, respectively 2 As of 03 - 31 - 23 3 For the perio
Slide 18: Proven M&A Platform: Bought-Down Multiples
Note: Reflects transactions of +$6M in value that are at least 12 months old as of 03 - 31 - 23 and did not contain young assets expected to decay at closing Proven M&A Platform 15.7x WEIGHTED AVERAGE ENTRY MULTIPLE 3.2x WEIGHTED AVERAGE REDUCTION IN MULTIPLE VALUE ENHANCEMENT LEADS TO BOUGHT - DOWN
Slide 19: New Roster Signings
Advance funds to established songwriters who are then under exclusive contract to create music with the benefit of long - term ownership. NOTABLE SIGNINGS • Ali Tamposi • Migos • 2 Chainz • Danja • James Fauntleroy • Jamie Hartman • A Boogie Wit Da Hoodie • Joyner Lucas PARTNERED WITH SONGWRITERS BE
Slide 20: New Roster Signings: Futures Investments Lead to High IRR
As of 03 - 31 - 23, writer signings with more than $2.5M invested IRRs based on actual performance to date and projected performance through end of deal 2011 deal for $6.5m recouped and futures created during deal were purchased 2018 deal for $8.9m includes reverting NPS, added pro - forma above, to
Slide 21: Operating Leverage & Cash Flow Generation
• Asset light model • Limited incremental expenses needed as new catalogs are added • Tommy Boy acquisition expanded platform in U.S. for Recorded Music > 91 % of Acquired Gross Profit Should Fall to Adj . EBITDA 1 Core Infrastructure Provides Substantial Operating Leverage as the Business Grows OPE
Slide 22: Financials
Financials 22
Slide 23: Q4 and Full Year Fiscal Year 2023 Results
Q4 and Full Year Fiscal Year 2023 Results 13% total revenue growth in 2023 year - over - year • Music Publishing revenue rose 9% year - over - year • Recorded Music revenue increased 18% year - over - year • Other revenue increased 188% year - over - year $23 $77 $84 $10 $25 $12 $31 $38 Q4'FY22 Q4'F
Slide 24: Strong Growth Track Record & Forecast – Fiscal Year 2024 Outlook
Strong Growth Track Record & Forecast – Issued Fiscal Year 2024 Outlook ($ in millions) Current Fiscal 2024 Outlook Growth (at mid - point) REVENUE $127 - $132 6% ADJUSTED EBITDA $49 - $52 9% $80 $108 $122 $66 $77 $84 $14 $31 $38 F Y 2 0 21 F Y 2 0 22 F Y 2 0 23 Publishing Recorded Music & Other REV
Slide 25: Improving Profitability
25 Note: Excludes the effect of any non - cash stock - based compensation expense related to the current stock incentive plan. $47 $64 $74 FY2021 FY2022 FY2023 GROSS PROFIT $32 $41 $46 FY2021 FY2022 FY2023 ADJUSTED EBITDA Improving Profitability $ MM $ MM
Slide 26: Solid Balance Sheet & Strong FCF Generator
$35 $40 $54 FY2021 FY2022 FY2023 $ MM ADJUSTED FREE CASH FLOW 1 1 Adjusted Free Cash Flow excludes cash flow used for acquisitions and signings (after de - SPAC) BALANCE SHEET METRICS as of 3 - 31 - 23 TOTAL DEBT: CASH: NET DEBT: CA P AC I T Y : $312M $15M $297M $132M Solid Balance Sheet & Strong FC
Slide 27: Strong Growth Outlook & Operating Leverage
$122 $46 $129 $50 Revenue Adjusted EBITDA 38% 39% Adj. EBITDA Margin FY 2023A FY 2024E 6% Growth • Assumes $ 28 M of reinvestments into new deals for Fiscal 2024 • Assumes a mix of publishing and recorded catalog acquisitions, as well as futures • No additional debt utilized for M&A Strong Growth Ou
Slide 28: Appendix
Append ix 28
Slide 29: Music Publishing
Music Publishing 101 IP RIGHTS: • Songs owned by publisher or songwriter • Catalog = previously released songs • Futures = songwriters under active contract who are writing new songs PROTECTED ASPECT OF WORK: • Notes & lyrics RESPONSIBILITY OF PUBLISHER: Monetization & Exploitation • Catalog : ident
Slide 30: Recorded Music
Recorded Music 101 IP RIGHTS: • Collection of master recordings owned by a record label or performing artist PROTECTED ASPECT OF WORK: • Sound recording of a composition RESPONSIBILITY OF RECORD LABEL: Monetization & exploitation • Identify songs and work with producers and artists to create, market
Slide 31: RSVR Financial Model
RSVR Financial Model 101 INFRASTRUCTURE PROVIDES SUBSTANTIAL OPERATING LEVERAGE, ALLOWING US TO ACQUIRE THE GROSS PROFIT CONTRIBUTION OF ADDITIONAL CATALOGS WITHOUT INCREMENTAL EXPENSE 31 LESS: OpEx (A&R, Licensing, G&A, Talent Expense) EB I TD A MUSIC PUBLISHING RECORDED MUSIC REVENUE Revenue / Gro
Slide 32: Income Statement Highlights
FISCAL YEAR END: March 31($ in M) 2019A 2020A 2021A 2022A 2023A Publishing Revenue $43 $53 $66 $77 $84 Recorded & Other Revenue $2 $9 $14 $31 $38 Total Revenue $45 $62 $80 $108 $122 Percentage Growth YoY 40% 38% 29% 35% 13% Net Publisher Share $24 $28 $37 $42 $45 Net Label Share & Other $2 $7 $10 $2
Slide 33: Cash Flow & Balance Sheet Highlights
FISCAL YEAR END: March 31 ($ in M) 2019A 2020A 2021A 2022A 2023A Cash Flow Highlights Adj. EBITDA $15 $23 $32 $41 $46 Recoupments 10 14 13 13 13 Interest, W/C Changes & Other (13) (5) (9) (14) (5) Cash From Operating (Adj. FCF) $12 $32 $35 $40 $54 Acquisitions (32) (108) ( 1 19) (197) (72) Advances
Slide 34: Consolidated EBITDA Reconciliation
FISCAL YEAR END: March 31 ($ in M) 2019A 2020A 2021A 2022A 2023A Net Income $ 3.8 $ 9.4 $ 9.3 $13 .1 $2.8 Adjustments Depreciation & Amortization 5.9 9.1 14.1 19.0 22.1 Income Tax Expense / (Benefit) 0.5 4.0 2.1 4.3 5.6 Interest Expense 6.2 5.8 9.0 10.9 14.8 EBITDA $ 16.4 $ 28.3 $ 34.5 $47 .3 $45.2
Slide 35: IR Contacts
IR Contacts Jackie Marcus or Alec Buchmelter Alpha IR Group R SV R@alpha - i r . com | 312 - 445 - 2870 35