Mr. Grant Schuetrumpf reports

YANGAROO ANNOUNCES Q3'2023 RESULTS

Yangaroo Inc. has released its financial results for the third quarter ended Sept. 30, 2023. The full text of the financial statements and management discussion and analysis is available on Yangaroo's and on SEDAR+. Please note that all currency in this press release is denominated in United States dollars, unless otherwise noted.

Yangaroo is pleased to announce that during the third quarter of 2023 the company realized significant improvements with respect to operating income and cash flow generation, as compared with losses incurred in prior periods. These improvements are largely attributable to a modest increase in sales volumes combined with stringent cost controls across the business.

Historically, the company's Q3 is a seasonally slow period. During the period, advertising division revenue remained flat year-over-year. The awards division results were behind compared with this time in the prior year, which is attributed to the timing of the award shows. The music division revenue continues to remain down year-over-year, which is mainly due to fewer audio and music video deliveries by the company's major record label clients.

• Advertising division:
  • Revenue of $1,054,157 in Q3 2023 versus revenue of $1,065,204 in Q3 2022.
• Entertainment group (music and awards divisions):
  • Revenue of $654,774 in Q3 2023 versus revenue of $667,936 in Q3 2022.
• Operating expenses and normalized EBITDA:
  • The company completed additional head count reductions in the first half of the year and resulted in current quarter salary expenses of $1,097,390 or a savings of $236,108 versus the third quarter of 2023;
  • General and administrative expenses continued to decline with savings of $109,682 versus the third quarter of 2023 resulting from continued efforts to reduce overhead expenditures;
  • The company generated $247,900 of normalized EBITDA (earnings before interest, taxes, depreciation and amortization) in Q3 2023 versus $2,205 in Q3 2022;
  • Fourth consecutive quarter of significant normalized EBITDA; the company has now generated $247,900 of normalized EBITDA in Q3 2023, $526,202 of normalized EBITDA in Q2 2023, $116,143 of normalized EBITDA in Q1 2023 and $833,974 of normalized EBITDA in Q4 2022.

Grant Schuetrumpf, chief executive officer of Yangaroo, stated: "We're pleased to provide consecutive and sequential quarters of normalized EBITDA generation, primarily derived from stabilizing our operations whilst maintaining services for our valued clients. We are now focused on growth opportunities organically and through our continual interest in M&A. We continue to manage modest advancements in business development and sales opportunities compared to prior years and are hopeful some of the larger business development prospects will start to convert.

"On Nov. 9, 2023, Yangaroo announced an asset purchase transaction with Millenia 3 Communications Inc. Millenia 3 has been a trusted partner to major global entertainment companies, media agencies and consumer brands, providing tailor-made ad operations services, including media and traffic management, which will continue into the foreseeable future. This expansion extends Yangaroo's advertising service capabilities with premium multiyear contracted clients and will further utilize Yangaroo's technology to streamline the Millenia 3 service offering.

"The advertising division managed a modest increase in the volume of clients while seeking opportunities to expand current client's use of services. Our ancillary production services, including short-form versioning for the direct response customers, and long-form digitization, continues to bring in new project-based opportunities. Our closed captioning and analytics complete a full-service offering to the market where we are integrating Millenia 3 clients use of the workflows and technology. Innovation is always a priority, and with our development team, we continue improving the DMDS platform to streamline business-to-business workflows whilst expanding our platform capabilities for improved self-serve use. In particular, we have focused on our TV traffic instruction workflow and improved our TV legal clearance offering, connecting the required broadcasters across North America. Our advertising platform is becoming a one-stop solution for managing advertising logistics across linear and digital destinations.

"Our music promotion service has stabilized on the earlier 2023 quarterly reports of reduced orders, and we are actively seeking new growth opportunities. The award shows services remain consistent and to budget expectations as we move clients to the V3 platform, opening our capabilities to new clients in 2024.

"These results reflect our dedication to continuous improvement and strategic adaptation to the current market conditions. We are confident in our ability to navigate challenges and capitalize on opportunities as we work towards achieving our long-term goals."

Q3 2023 financial highlights:

• Revenue in Q3 2023 was $1,708,931 compared with $2,172,530 and $1,733,140 in the second quarter of 2023 and the third quarter of 2022, respectively.
  • Revenue decreased by $463,599 or 21 per cent versus Q2 2023. The decrease in revenue was due to decreased advertising revenue of $529,652 or 50 per cent, offset by increased music and awards revenue of $66,053 or 10 per cent. The increase in advertising revenue is attributed to a decrease in revenue recognized from one of the company's existing customers. The increase in awards revenue is primarily attributed to cyclicality in the company's customer's award show schedules which typically peak in the summer periods;
  • Revenue decreased by $24,209 or 1 per cent versus Q3 2022. The decrease in revenue is the result of decreased advertising revenue of $11,047 or 1 per cent and a decline in awards and music revenue of $13,162 or 2 per cent.
• Operating expenses in Q3 2023 were $1,696,777 compared with $1,905,839 and $1,987,591 in the second quarter of 2023 and the third quarter of 2022, respectively.
  • Operating expenses decreased by $209,662 or 12 per cent versus Q2 2023. The decrease in operating expenses is primarily attributed a lower head count in the current quarter compared with the previous quarter;
  • Operating expenses decreased by $290,814 or 17 per cent versus Q2 2022. The decrease in operating expenses is primarily attributed to a reduction of employee head count earlier in the year in addition to the reversal of previously recorded bad debts.
• Normalized EBITDA in Q3 2023 was $247,900 in comparison to normalized EBITDA of $526,202 in the second quarter of 2023 and normalized EBITDA of $2,205 in the third quarter of 2022.
  • Normalized EBITDA decreased by $278,302 compared with Q2 2023. The decrease is primarily attributed to a decrease in revenue, partially offset by reductions in the company's operating expenses, as discussed in further detail above;
  • Normalized EBITDA increased by $245,695 compared with Q3 2022. The increase is primarily attributed to significantly lower operating expenses, primarily attributed to reduced salaries, general and administrative costs and restructuring expenses, as discussed in further detail above.

About Yangaroo Inc.

Yangaroo is a technology provider in the media and entertainment industry, offering a cloud-based software platform for the management and distribution of digital media content. Yangaroo's digital media distribution system (DMDS) platform is a patented cloud-based platform that provides customers with a centralized and fully integrated workflow directly connecting radio and television broadcasters, digital display networks, and video publishers for centralized digital asset management, delivery and promotion. DMDS is used across the advertising, music and entertainment awards show markets.

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