TBRD Thunderbird Entertainment Group Inc

Q2 2022 Revenue $33 million, 18% year-over-year increase with an overall 43% increase for the six months ended December 31, 2021

Q2 2022 Adjusted EBITDA $5 million, comparable to the prior year with an overall 13% increase for the six months ended December 31, 2021

Free cash flow $16.4 million, a year-over-year increase of $12 million

26 shows in production; 12 IP or Partner-Managed

Conference call and webcast scheduled for February 24 at 11 a.m. PT/ 2 p.m. ET

Thunderbird Entertainment Group Inc. (TSXV: TBRD, OTCQX: THBRF) (Thunderbird or the Company) today announced its financial results for Q2 2022, which ended December 31, 2021, and provided a corporate update.

Financial Highlights

• Consolidated revenue increased by $5.0 million (18%) to $33.0 million and $20.3 million (43%) to $68.0 million for the three and six months ended December 31, 2021, as compared to $28.0 million and $47.7 million for the comparative periods at December 31, 2020. These increases are related to growth in production service projects, partially offset by a decrease in IP revenues, due to timing.

• Adjusted EBITDA decreased by $0.2 million (4%) to $5.0 million and increased $1.3 million (13%) to $11.3 million for the three and six month ended December 31, 2021, respectively, as compared to $5.2 million and $10.0 million for the comparative periods at December 31, 2020. Gross margin on revenue in the current quarter was consistent year-over-year partially offset by an increase in salaries to facilitate continued growth.

• Free cash flow increased by $12.0 million to $16.4 million and $14.3 million to $19.9 million for the three and six months ended December 31, 2021, as compared to $4.4 million and $5.6 million for the comparative periods at December 31, 2020, respectively, mainly due to interim production borrowing in excess of repayment as the Company ramps up production volume.

“I am extremely proud of Thunderbird’s progress in Q2,” said Jennifer Twiner McCarron, Thunderbird CEO. “In Fiscal 2022, we have made significant investments into key strategic growth initiatives – including our Global Distribution and Consumer Products Division and investments in IP which are now starting to contribute to our business in a meaningful way. Initiatives like this build on our already solid foundation – further paving the way for Thunderbird to become the next major global studio.”

Thunderbird’s Q2 2022 Corporate Highlights

• At December 31, 2021, the Company had 26 programs in various stages of production, for Netflix, Disney+, Corus Entertainment, Bell Media's Discovery, Sony and others. Twelve of these projects are the Company’s intellectual property (“IP”) which the Company owns outright or partner-managed service productions where the Company receives a percentage of certain revenue streams.

• In Q2, the Kids and Family Division, Atomic Cartoons (“Atomic”) was in various stages of production on 17 animated television series/programs, including two feature length films. Productions in progress in the current quarter included: Molly of Denali (Season 2) for GBH/PBS; CoComelon Lane for Moonbug to stream on Netflix; Young Love for Sony and HBO Max; Trolls: TrollsTopia for Dreamworks and Peacock, and Marvel’s Spidey and His Amazing Friends (Season 1) for Disney Junior, among others.

• In Q2, the Factual Division, Great Pacific Media (“GPM”), was in production on seven series and one documentary: Highway Thru Hell (Season 11), Heavy Rescue: 401 (Season 7), Mud Mountain Haulers (Season 2), Deadman’s Curse (working title) (Season 1), Gut Job (Season 1), Styled (Season 1), Dr. Savannah: Wild Rose Vet (Season 1) in conjunction with Wapanatahk Media, and Teenager and the Lost Maya City.

• During and subsequent to Q2, the Company, senior management and members of the Board of Directors received industry and peer recognitions, such as:

• Thunderbird CFO Barb Harwood was named as one of Business in Vancouver’s 2021 BC CFO Award winners;
• Atomic’s Head of Production Joel Bradley was recognized as one of Business in Vancouver’s Top Forty Under 40 (2021);
• Board Director Linda Michaelson was recognized in Variety’s 2021 Dealmakers Impact Report;
• Atomic was named to Kidscreen’s Hot50 (2021), ranking eighth in the Production category;
• Molly of Denali was nominated for a Kidscreen Award in the Best One-off Special category, and The Last Kids on Earth was nominated for Best Alternative Game for the franchise’s first video game;
• CEO Jennifer Twiner McCarron was recognized by Business in Vancouver as one of the publication’s Most Influential Women in Business (2022);
• Board Director Frank Giustra was once again named to Vancouver’s Power 50 list;
• The Company received 12 nominations for Canadian Screen Awards, including Best Comedy Series for Strays, Best Factual Series for Highway Thru Hell, and 10 nominations for Kim’s Convenience; and
• Thunderbird was listed on the 2022 OTCQX Top 50 companies, a ranking of top performing companies traded on the OTCQX Best Market in the 2021 calendar year. This is the first time Thunderbird has been included on this list.

• At the leadership level, Matthew Berkowitz was promoted to the role of President of Thunderbird Entertainment, in addition to his current role as Chief Creative Officer (CCO).

• Thunderbird appointed Jérôme Levy to the Company’s Board of Directors, furthering the strategic alignment of the Board and management team to become the next major global studio under the guidance of seasoned media and industry experts.

• Subsequent to Q2, FilmRise, a New York-based streaming service, announced it acquired the FAST (free ad supported streaming TV services) rights to Kim’s Convenience. This is Thunderbird’s first production to be featured on a FAST channel, reaching new audiences.

• Also, subsequent to the quarter, GPM announced a new project in development titled Fandemonium with Paul Sun-Hyung Lee that will examine the sub-cultures of makers, artists and collectors who are inspired by larger-than-life franchises, such as Star Wars, Ghostbusters, Nintendo, anime and wrestling, among many others.

• Additionally, Thunderbird’s first US scripted series, Reginald the Vampire, announced the addition of two series regulars, Mandela Van Peebles (Mayor of Kingstown) and Em Haine (Fargo) appearing opposite series lead, Jacob Batalon, as well as four recurring cast members. The series was picked up in a straight-to-series 10-episode order by SyFy and is being co-produced with Modern Story Company and December Films.

 

Results of Operations

 

For the three months ended

For the six months ended

 

Dec 31, 2021

Dec 31, 2020

Dec 31, 2021

Dec 31, 2020

($000’s, except per share data)

$

$

$

$

 

 

 

 

 

Revenue

32,954

27,950

68,026

47,740

Expenses

31,561

26,422

64,748

44,744

Net income from continuing operations

1,393

1,528

3,278

2,996

Income from discontinued operation

-

97

-

16

Net income for the period

1,393

1,625

3,278

3,012

Foreign currency translation adjustment

(3)

(19)

3

(22)

Loss on translation of discontinued operation

-

(18)

-

(62)

Comprehensive net income for the period

1,390

1,588

3,281

2,928

 

 

 

 

 

Basic income per share – continuing operations

0.028

0.032

0.067

0.064

Diluted income per share – continuing operations

0.027

0.030

0.064

0.061

Basic income per share – discontinued operation

-

0.002

-

-

Diluted income per share – discontinued operation

-

0.002

-

-

 

EBITDA, Adjusted EBITDA and Free Cash Flow

 

For the three months ended

For the six months ended

 

Dec 31, 2021

Dec 31, 2020

Dec 31, 2021

Dec 31, 2020

($000’s)

$

$

$

$

 

 

 

 

 

Net income from continuing operations

1,393

1,528

3,278

2,996

 

 

 

 

 

Income tax expense

1,274

1,492

2,038

1,811

Deferred income tax recovery

(322)

(482)

(208)

(423)

Finance costs

 

 

 

 

Interest

467

314

879

791

Dividends on redeemable preferred shares

11

18

23

36

Amortization

 

 

 

 

Property and equipment

343

296

1,354

619

Right-of-use assets

1,760

1,614

3,238

3,537

Intangible assets

67

67

135

135

 

3,600

3,319

7,459

6,506

 

 

 

 

 

EBITDA

4,993

4,847

10,737

9,502

 

 

 

 

 

Share-based compensation

229

223

505

343

Unrealized foreign exchange gain

(296)

(417)

(293)

(702)

Loss on disposal of property and equipment

-

736

-

736

Gain on disposal of right-of-use assets

-

(266)

-

(266)

Severance costs

-

-

208

283

Other

32

58

101

58

 

(35)

334

521

452

 

 

 

 

 

Adjusted EBITDA

4,958

5,181

11,258

9,954

 

 

 

 

 

Cash inflows from continuing operations

6,581

8,877

5,646

10,391

Purchase of property and equipment

(499)

(347)

(1,542)

(615)

Net advances (repayment) of interim production financing

10,338

(4,109)

15,753

(4,127)

Free Cash Flow

16,420

4,421

19,857

5,649

Conference Call Webcast on Thursday, February 24, 2022, at 11 a.m. PT/ 2 p.m. ET

Thunderbird will hold a conference call and webcast to share the Company’s Q2 financial results on Thursday, February 24, 2022, at 11 a.m. PT/ 2 p.m. ET. The conference call will be webcast live and available for replay via the “Investors” section of the Thunderbird website.

Conference Call & Webcast Information: Date: Thursday, February 24, 2022 Time: 11 a.m. PT/ 2 p.m. ET Canada dial-in number (Toll Free): 1 (833) 950-0062 United States: 1 (844) 200-6205 All other locations: +1 (929) 526-1599 Access Code: 105684 Press *1 to ask a question, *2 to withdraw your question, or *0 for operator assistance. Webcast: https://events.q4inc.com/attendee/537790371

Participants joining by phone are requested to call the conference line 10 minutes early to avoid wait times while connecting to the call. The conference call will be webcast live and available for replay via the “Investors” section of the Thunderbird website. Investors can access a replay of the teleconference at: 1 226-828-7578 (CAN), 1 866-813-9403 (US) or +44 204-525-0658 (all other locations) three hours after the call's completion. The Access Code # is 972245. The teleconference replay will be available through March 10, 2022.

For information on Thunderbird and to subscribe to the Company’s investor list for news updates, go to www.thunderbird.tv.

ABOUT THUNDERBIRD ENTERTAINMENT GROUP Thunderbird Entertainment Group is a global award-winning, full-service multiplatform production, distribution and rights management company, headquartered in Vancouver, with additional offices in Los Angeles, Toronto, and Ottawa. Thunderbird creates award-winning scripted, unscripted, and animated programming for the world’s leading digital platforms, as well as Canadian and international broadcasters. Thunderbird’s vision is to produce high quality, socially responsible content that makes the world a better place. The Company develops, produces, and distributes animated, factual, and scripted content through its various divisions, including Thunderbird Kids and Family (Atomic Cartoons), Thunderbird Factual (Great Pacific Media) and Thunderbird Scripted. Productions under the Thunderbird umbrella include The Last Kids on Earth, Molly of Denali, Highway Thru Hell and Kim’s Convenience, among others. The Company also has a division dedicated to global distribution and consumer products. Thunderbird is on Facebook, Twitter, and Instagram at @tbirdent. For more information, visit: www.thunderbird.tv.

On Behalf of Thunderbird Entertainment Group Inc.

Jennifer Twiner McCarron Chief Executive Officer

SOURCE Thunderbird Entertainment Inc.

Neither the TSX-V nor its Regulation Services Provider (as that term is defined in the policies of the TSX-V) accepts responsibility of the adequacy or accuracy of this release, which has been prepared by management.

Cautionary Statement Regarding Forward-Looking Information This news release includes certain “forward-looking statements” under applicable Canadian securities legislation that are not historical facts. Forward-looking statements involve risks, uncertainties, and other factors that could cause actual results, performance, prospects, and opportunities to differ materially from those expressed or implied by such forward-looking statements. Forward-looking statements in this news release include, but are not limited to, statements with respect to the Company’s objectives, goals or future plans and the business and operations of the Company. Forward-looking statements are necessarily based on a number of estimates and assumptions that, while considered reasonable, are subject to known and unknown risks, uncertainties and other factors which may cause actual results and future events to differ materially from those expressed or implied by such forward-looking statements. Such factors include, but are not limited to: general business, economic and social uncertainties; litigation, legislative, environmental and other judicial, regulatory, political and competitive developments; those additional risks set out in the Company’s Filing Statement and other public documents filed on SEDAR at www.sedar.com; and other matters discussed in this news release. Although the Company believes that the assumptions and factors used in preparing the forward-looking statements are reasonable, undue reliance should not be placed on these statements, which only apply as of the date of this news release, and no assurance can be given that such events will occur in the disclosed time frames or at all. Except where required by law, the Company disclaims any intention or obligation to update or revise any forward-looking statement, whether as a result of new information, future events, or otherwise.

NON-IFRS MEASURES In addition to the results reported in accordance with IFRS, the Company uses various non-IFRS financial measures which are not recognized under IFRS, as supplemental indicators of our operating performance and financial position. These non-IFRS financial measures are provided to enhance the user’s understanding of our historical and current financial performance and our prospects for the future. Management believes that these measures provide useful information in that they exclude amounts that are not indicative of our core operating results and ongoing operations and provide a more consistent basis for comparison between periods. The following discussion explains the Company’s use of EBITDA, Adjusted EBITDA, Free Cash Flow, Cash Available for Use, Cash Required for Use in Productions and Gross Margin.

“EBITDA” is calculated based on earnings before interest, income taxes, depreciation and amortization. “Adjusted EBITDA” is calculated based on EBITDA before share-based compensation, unrealized foreign exchange gain/loss and items of an unusual or one-time nature that do not reflect our ongoing operations. EBITDA and Adjusted EBITDA are commonly reported and widely used by investors and lenders as an indicator of a company’s operating performance and ability to incur and service debt, and as a valuation metric. EBITDA and Adjusted EBITDA are not earnings measures recognized by IFRS and therefore do not have a standardized meaning prescribed by IFRS. Therefore, EBITDA and Adjusted EBITDA may not be comparable to similar measures presented by other issuers.

“Free Cash Flow” (“FCF”) is calculated based on cash flows from operations, purchase of property and equipment and net interim production financing. FCF represents the cash a company generates after accounting for cash outflows to support operations and maintain its capital assets.

“Cash Available for Use” is defined as the total cash and cash equivalents of the Company less Cash Required for Use in Productions. Cash Available for Use funds ongoing working capital requirements, principal and interest payments on corporate demand loans as well as ongoing development and growth efforts and thus is an important liquidity measure that management uses to monitor the business on an ongoing basis.

“Cash Required for Use in Productions” is defined as cash required for the funding of productions from the development stage through to completion that is not considered by the Company to be available for other uses. The cash is not legally restricted and has not been classified as Restricted Cash on the consolidated statement of financial position. This cash has been provided by buyers and third-party Intellectual Property (“IP”) owners that have engaged the Company to provide services, as well as banks with whom the Company has contracted to provide interim production financing. Management uses the amount of Cash Required for Use in Productions to determine the Company’s Cash Available for Use.

“Gross Margin” is calculated based on revenue less direct operating costs. Gross Margin is not an earnings measure recognized by IFRS and therefore does not have a standardized meaning prescribed by IFRS; accordingly, Gross Margin may not be comparable to similar measures presented by other issuers. Gross Margin is a useful measure of profitability before considering operating and other expenses and can be used to assess the Company’s ability to generate positive net earnings and cash flows.

View source version on businesswire.com: https://www.businesswire.com/news/home/20220224005299/en/

Investor Relations: Glen Akselrod, Bristol Capital Phone: + 1 905 326 1888 ext 1 Email: glen@bristolir.com

Media Relations: Lana Castleman, Director, Marketing & Communications Phone: 416-219-3769 Email: lcastleman@thunderbird.tv

Corporate Communications Julia Smith, Finch Media Email: Julia@finchmedia.net