Thunderbird Entertainment Group Reports Fiscal 2024 Q3 Results

Rhea-AI Summary

Thunderbird Entertainment Group (TSXV: TBRD, OTCQX: THBRF) released its fiscal Q3 2024 results, showcasing significant improvements in key financial metrics. Free Cash Flow increased to $13.4 million from $(15.8) million year-over-year, an astounding 185% rise. Net income reached $0.01 million, reversing a $2.3 million loss in the prior year. However, revenue declined to $35.4 million from $37.3 million, a 5% drop.

AEBITDA also decreased from $3.7 million to $3.3 million due to reduced IP deliveries. The company implemented cost reductions, achieving cumulative savings of over $3 million for fiscal 2024. Thunderbird expects Q4 to be the strongest quarter, with a 20% AEBITDA growth anticipated for fiscal 2024. New animation projects will add 30% more revenue in fiscals 2025 and 2026.

Thunderbird also repurchased 591,400 shares for $1.2 million under its Normal Course Issuer Bid. The company was involved in 22 productions, including high-profile projects for Netflix and Disney, and announced new series and distribution deals.

Positive

• Free Cash Flow increased to $13.4 million from $(15.8) million, a 185% improvement.
• Net income reached $0.01 million, reversing a $2.3 million loss in the prior year.
• Implemented cost reduction measures achieving over $3 million in savings for fiscal 2024.
• Thunderbird expects 20% AEBITDA growth for fiscal 2024.
• Expansion of an ongoing animation project will result in 30% additional revenue in fiscals 2025 and 2026.
• Involved in 22 productions, including high-profile projects for Netflix and Disney.
• Repurchased 591,400 shares for $1.2 million under Normal Course Issuer Bid.
• Proactive in optimizing operational efficiencies and exploring further cost reduction avenues.
• Second consecutive profitable quarter reported.

Negative

• Revenue declined from $37.3 million to $35.4 million, a 5% drop.
• AEBITDA decreased from $3.7 million to $3.3 million due to reduced IP deliveries.
• Net loss for the nine months ended March 31, 2024, was $0.1 million.
• Year-to-date revenue decreased from $129.0 million to $113.5 million, a 12% drop.
• Projected total revenue for fiscal 2024 to be approximately 3% less than the prior year.

Conference call and webcast today, May 23, at 11 a.m. PT/ 2 p.m. ET

VANCOUVER, British Columbia--(BUSINESS WIRE)-- Thunderbird Entertainment Group Inc. (TSXV: TBRD, OTCQX: THBRF) (“Thunderbird” or the “Company”) today announced its Q3 2024 financial results, which ended March 31, 2024, and provided a corporate update.

Financial Summary

• Free Cash Flow¹ increased from ($15.8) million to $13.4 million and ($3.7) million to $11.4 million for the three and nine months ended March 31, 2024, as compared to the comparative periods, variances of $29.2 million (185%) and $15.1 million (408%). The increase for the current quarter is primarily due to receipt of accounts receivables and tax credits.
• Net income for the three months ended March 31, 2024, was $0.01 million compared to a net loss of $2.3 million for the comparative period in the previous year, an improvement of $2.3 million (100%).
• Net loss for the nine months ended March 31, 2024, was $0.1 million compared to $2.4 million for the comparative period in the previous year, an improvement of $2.3 million (96%).
• AEBITDA¹ decreased from $3.7 million to $3.3 million and from $12.1 million to $9.7 million for the three and nine months ended March 31, 2024, as compared to the comparative periods, variances of $0.4 million (11%) and $2.4 million (20%). The decrease is attributable to the reduction in intellectual property (“IP”) deliveries over the comparative periods.
• Revenue decreased from $37.3 million to $35.4 million and from $129.0 million to $113.5 million for the three and nine months ended March 31, 2024, as compared to the comparative periods in the prior year, variances of $1.9 million (5%) and $15.5 million (12%).

¹ Free Cash Flow and AEBITDA are Non-IFRS Measures, see “Non-IFRS Measures” section below for their respective definitions, detailed calculations, and reconciliations.

Financial Outlook

Throughout the ongoing fiscal year, the Company, alongside the rest of the media industry, has encountered a slower-than-anticipated recovery in the content creation market, largely influenced by major buyers' adoption of cost-cutting measures and reduced greenlighting activities. In response to this, during the earlier part of the year, strategic cost reduction measures were implemented to navigate market uncertainties and pave the way for investment in future growth prospects, which are expected to yield cumulative savings exceeding $3 million for fiscal 2024. Management recalibrated its fiscal expectations accordingly.

For the quarter ended March 31, 2024, the Company reported its second consecutive profitable quarter and continues to expect the final quarter of the year to be its most robust. The Company remains proactive in optimizing operational efficiencies and exploring further avenues for cost reduction where possible while focusing on executing against its strategic initiatives. The Company remains steadfast in its commitment to maintaining a resilient balance sheet and exercising prudent management decisions to navigate evolving market dynamics while diligently pursuing sustainable growth.

At the end of the current quarter, the business continued to operate in line with expectations and has witnessed healthy levels of activity with our customers. One notable development was the expansion of one ongoing animation production in the current quarter, which will result in approximately 30% additional revenue over the term of this project. This expansion represents additional secured revenue for the Company for fiscals 2025 and 2026 and will positively impact results for both years respectively.

The short-term financial impact from this expansion is a slight reduction in expected revenue from that production during the fourth quarter. This is because the Company is required to recognize revenue based on the percentage of the project completed within the period.

While there are several compensating factors with other productions to counter this change, we now expect Thunderbird's total revenue to be approximately 3% less than the prior year. In spite of this, the Company anticipates AEBITDA¹ growth for fiscal 2024 to be above 20%. This projection is based on the completion of an additional 16 hours of IP delivery in the fourth quarter of the fiscal year, which would bring the total IP delivery for the year to 53 hours.

"We are delighted to inform our shareholders that Thunderbird has not only achieved profitability for the second consecutive quarter but is also on track to fulfill our AEBITDA¹ targets of more than 20% growth year over year for fiscal year 2024," said Jennifer Twiner McCarron, CEO and Chair of Thunderbird. "Facing industry headwinds and market volatility, we have concentrated on reducing costs to steer back towards robust growth, and we remain dedicated to continuing to enhance our operational efficiencies. This strategic adjustment positions us for significantly improved financial outcomes in the latter half of 2024, with Q4 anticipated to be our strongest quarter this fiscal. The momentum we've built provides clear insight into 2025 and 2026, setting the stage for sustained growth and a return to our historical profitability levels."

Normal Course Issuer Bid

Thunderbird implemented a normal course issuer bid (the “NCIB”) which is detailed in the Company’s December 1, 2023 news release, pursuant to which it may repurchase its own common shares for cancellation through the facilities of the TSXV in an amount not to exceed 10% of its public float, as may be permitted by the TSXV and applicable securities laws. During the nine months ended March 31, 2024, the Company repurchased for cancellation 591,400 common shares under its NCIB for total consideration of $1.2 million, representing an average price of $2.08 per common share. Purchases under the NCIB may continue for up to one year from the commencement day of December 7, 2023.

Thunderbird’s Q3 2024 Corporate Highlights

• In Q3 2024, the Company had 22 programs in various stages of production, and one podcast and was working with 18 clients. Of the 22 programs in production, seven were Thunderbird IP, and 15 were service productions.
• Thunderbird Kids & Family, producing under Atomic Cartoons, was in production on 16 programs, and working for 11 clients, including: CoComelon Lane for Moonbug for Netflix, Marvel's Spidey and His Amazing Friends (Seasons 3 and 4) for Disney Junior, Zombies: The Re-Animated Series for Disney TVA, among others, and Atomic original Mermicorno: Starfall (Warner Bros. Discovery).
• In Q3, Atomic announced that new series Super Team Canada, which is being produced alongside Will Arnett’s Electric Avenue and co-created by Canadian comedy writers Robert Cohen and Joel H. Cohen, was commissioned by Crave. Super Team Canada represents Atomic’s first adult animated original series, and Crave’s first commission of an original animated series.
• In Q3, Thunderbird Unscripted, producing under Great Pacific Media (“GPM”), was in production on five unscripted programs, one scripted and one podcast, and was working for seven clients. Unscripted productions include: Deadman’s Curse (Season 3) for History Channel, Wild Rose Vets (Season 1), a spinoff of Dr. Savannah: Wild Rose Vet, for APTN, Timber Titans (Season 1) for Discovery Canada, Rocky Mountain Wreckers (Season 1) for The Weather Channel (US) and Discovery Canada, Deadman's Curse: Slumach's Gold podcast (Season 2) and Highway Thru Hell (Season 13) for Discovery Canada.
• In Q3, GPM was also working on Reginald the Vampire (Season 2), a scripted series for SYFY, which debuted in May.
• In Q3, GPM announced that its latest original adventure docuseries, Rocky Mountain Wreckers, was commissioned by The Weather Channel in the US, with Bell Media serving as the Canadian production partner.
• GPM’s Highway Thru Hell also broadened its distribution in Q3 with a dedicated FAST (free ad-supported streaming TV) channel from partner Banijay Rights. The channel, which also features Heavy Rescue: 401, launched in March in the UK, and in Australia in April. Bell Media also launched the CTV Gridlock FAST channel, which also features classic episodes of Highway Thru Hell and the entire series of Heavy Rescue: 401.
• GPM also announced that preliminary filming for Prizefighter (working title), a series being produced in partnership with the World Boxing Council, is underway in Las Vegas.
• In Q3, GPM announced that two of its projects were acquired for distribution: Blue Fox Entertainment acquired international rights to GPM’s YA film Boot Camp, based on the popular Wattpad story by Gina Musa, and Blue Ant Media acquired Wild Rose Vets, a spin-off of docuseries Dr. Savannah: Wild Rose Vet, for Cottage Life Television. Wild Rose Vets is a Wapanatahk Media production and is being co-commissioned with APTN.
• The Company currently has 12 scripted projects in active development, as well as three projects in active network development.
• In Q3, Thunderbird Distribution had several programs in active media distribution, including company-owned comedies Strays and Kim’s Convenience, as well as owned kids series Mermicorno: Starfall and Rocket Saves the Day, and acquisitions Mittens & Pants and BooSnoo!. There was also an additional range of TV movies and series from the Thunderbird catalog in active media distribution.
• In Q3, Thunderbird Distribution had several company-owned IPs in active consumer products licensing. These include Mermicorno: Starfall from Kids and Family, and acquisitions Mittens & Pants, and BooSnoo!.

Results of Operations

	For the three months ended		For the nine months ended
	Mar 31, 2024	Mar 31, 2023	Mar 31, 2024	Mar 31, 2023
($000’s, except per share data)	$	$	$	$
Revenue	35,371	37,281	113,510	128,985
Expenses	35,366	39,531	113,614	131,428
Net income (loss) for the period	5	(2,250)	(104)	(2,443)
AEBITDA1	3,347	3,674	9,740	12,073
AEBITDA Margin1	9.5%	9.9%	8.6%	9.4%
Free Cash Flow1	13,389	(15,814)	11,392	(3,653)
Basic and diluted income (loss) per share	-	(0.045)	(0.002)	(0.049)

¹ AEBITDA, AEBITDA Margin, and Free Cash Flow are Non-IFRS Measures, see “Non-IFRS Measures” section below for their respective definitions, detailed calculations, and reconciliations.

For more information, please see the financial statements and the management’s discussion and analysis (MD&A) for Q3 fiscal 2024, which ended March 31, 2024, available on SEDAR+ and the Company’s website.

Thunderbird’s Q3 2024 Conference Call & Webcast Information

Conference Call & Webcast Information
Date: May 23, 2024
Time: 11 a.m. PT/ 2 p.m. ET

Pre-Registration:

To pre-register for this call, please go to the following link and you will receive access details via email: https://www.netroadshow.com/events/login?show=8ae70692&confId=63912

If you are unable to pre-register, please see the information for joining by webcast or telephone:

Webcast: https://events.q4inc.com/attendee/770484356
Canada Toll Free: +1 833 950 0062
United States (Toll-Free): +1 833 470 1428
All other locations: +1 929 526 1599
Access Code: 882255
Press *1 to ask a question, *2 to withdraw your question, or *0 for operator assistance.

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.

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 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. The Company develops, produces, and distributes animated, factual, and scripted content through its various content arms, including Thunderbird Kids and Family (Atomic Cartoons), Thunderbird Unscripted (Great Pacific Media) and Thunderbird Scripted. Productions under the Thunderbird umbrella include The Last Kids on Earth, Molly of Denali, Highway Thru Hell, Kim’s Convenience, Reginald the Vampire and Boot Camp. Thunderbird Distribution and Thunderbird Brands manage global media and consumer products rights, respectively, for the Company and select third parties. Thunderbird is on Facebook, Twitter, and Instagram at @tbirdent. For more information, visit: www.thunderbird.tv.

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

Cautionary Statement Regarding Forward-Looking Information

Thunderbird’s public communications may include written, or oral “forward-looking statements” and “forward-looking information” as defined under applicable Canadian securities legislation. To the extent any forward-looking information in this news release constitutes “financial outlooks” or “future-oriented financial information” within the meaning of applicable Canadian securities laws, the reader is cautioned not to place undue reliance on such information. All such statements may not be based on historical facts that relate to the Company’s current expectations and views of future events and are made pursuant to the “safe harbour” provisions of applicable securities laws.

Forward-looking statements or information may be identified by words such as “anticipate”, “continue”, “estimate”, “expect”, “forecast”, “may”, “will”, “plan”, “project”, “should”, “believe”, “intend”, or similar expressions concerning matters that are not historical facts. Forward-looking statements in this document include, but are not limited to, statements with respect to expectations regarding strategic cost reduction measures yielding savings for fiscal 2024; exploring further avenues for cost reduction; expectations regarding the final quarter of the year being the most robust; projections and forecasted growth in AEBITDA¹; expectations for total revenue to be approximately 3% less than the prior year; the Company's continued financial strength; the expansion of one ongoing animation production in the current quarter resulting in approximately 30% additional revenue over the term of the project and securing additional revenue for the Company for fiscals 2025 and 2026; expectations for IP delivery; maintaining a resilient balance sheet and exercising prudent management decisions to navigate evolving market dynamics while diligently pursuing sustainable growth; significantly improved financial outcomes in the latter half of 2024; and expectations for sustained growth and a return to the Company’s historical profitability levels.

Financial outlook and future-oriented financial information, as with forward-looking information generally, are, without limitation, based on the assumptions and subject to various risks. The targets included herein, and the related assumptions, involve known and unknown risks and uncertainties that may cause actual results to differ materially. The purpose of the information is to provide readers with a more complete perspective on the Company’s anticipated future operations and business activities. Readers are cautioned that the information may not be appropriate for other purposes. While management of Thunderbird believes there is a reasonable basis for these targets, such targets may not be met. The Company’s actual financial position and results of operations may differ materially from management’s current expectations and, as a result, the Company’s future revenue and AEBITDA¹ may differ materially from the financial outlooks and future-oriented information provided in this news release. Accordingly, investors are cautioned not to place undue reliance on the foregoing information.

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; market segment conditions; litigation, legislative, environmental and other judicial, regulatory, political and competitive developments; product capability and acceptance; international risk and currency exchange rates; and technology changes. An assessment of these risks that could cause actual results to materially differ from current expectations is contained in the “Risks and Uncertainty” section of June 30, 2023 MD&A. The foregoing is not an exhaustive list. Additional risks and uncertainties not presently known to Thunderbird or that management believes to be less significant may also adversely affect the Company. Although the Company believes that the assumptions and factors used in preparing the forward-looking statements or information contained in this document are reasonable, undue reliance should not be placed on these statements which represent our views as of the date hereof and as such information should not be relied upon as representing our views as of any date subsequent to the date of this document. The Company undertakes no obligation to update publicly or revise any forward-looking statements or information, whether as a result of new information, future events or otherwise, unless so required by applicable securities laws. Accordingly, readers are cautioned not to place undue reliance on forward-looking statements or information.

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, and therefore do not have standardized meanings prescribed by IFRS, as supplemental indicators of our operating performance and financial position. The Company’s method of calculating such financial measures may differ from the methods used by other issuers and, accordingly, our definition of these non-IFRS financial measures may not be comparable to similar measures presented by other issuers. 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 AEBITDA, Free Cash Flow, and AEBITDA Margins.

“AEBITDA” 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. AEBITDA is 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. The most directly comparable measure under IFRS is net income.

“Free Cash Flow” is calculated based on cash flows from operations, purchase of property and equipment and net interim production financing. Free Cash Flow represents the cash a company generates after accounting for cash outflows to support operations and maintain its capital assets. The most directly comparable measure under IFRS is cash flows from operations.

“AEBITDA Margins” is calculated as a ratio of AEBITDA over total revenues. Margin is a non-IFRS ratio when applied to non-IFRS financial measures.

Non-IFRS Measures Reconciliations

The following table presents the reconciliation from net income (loss) to AEBITDA, for the three and nine months ended March 31, 2024 and 2023.

	For the three months ended		For the nine months ended
	Mar 31, 2024	Mar 31, 2023	Mar 31, 2024	Mar 31, 2023
($000’s)	$	$	$	$
Net income (loss) for the period	5	(2,250)	(104)	(2,443)
Income tax expense (recovery)	569	(183)	344	401
Deferred income tax expense (recovery)	(563)	(198)	91	(1,130)
Finance costs
Interest	358	618	990	1,547
Dividends on redeemable preferred shares	7	7	22	22
Amortization
Property and equipment	390	550	1,376	1,699
Right-of-use assets	1,731	3,198	5,418	8,566
Intangible assets	67	68	203	203
	2,559	4,060	8,444	11,308
EBITDA	2,564	1,810	8,340	8,865
Share-based compensation	193	233	622	574
Unrealized foreign exchange loss (gain)	(46)	14	6	534
Loss (gain) on disposal of property and equipment	1	-	7	(1)
Loss on termination of leases	65	-	40	-
Restructuring and other costs	570	-	725	-
Proxy contest	-	1,617	-	2,101
	783	1,864	1,400	3,208
AEBITDA	3,347	3,674	9,740	12,073

The following table presents the reconciliation from cash flows from operations to Free Cash Flow, for the three and nine months ended March 31, 2024 and 2023.

Summary of Cash Flows

	For the three months ended		For the nine months ended
	Mar 31, 2024	Mar 31, 2023	Mar 31, 2024	Mar 31, 2023
($000’s)	$	$	$	$
Cash inflows (outflows) from operations	14,219	(13,125)	34,439	23,999
Purchase of property and equipment	(52)	(139)	(273)	(1,902)
Net repayment of interim production financing	(778)	(2,550)	(22,774)	(25,750)
Free Cash Flow	13,389	(15,814)	11,392	(3,653)

 

View source version on businesswire.com: https://www.businesswire.com/news/home/20240523989197/en/

Investor Relations Contacts:

Glen Akselrod, Bristol Capital

Phone: + 1 905 326 1888 ext 1

Email: glen@bristolir.com



Media Relations Contact:

Lana Castleman, Director, Marketing & Communications

Phone: 416-219-3769

Email: lcastleman@thunderbird.tv



Corporate Communications

Julia Smith, Finch Media

Email: Julia@finchmedia.net

Source: Thunderbird Entertainment Group Inc.

FAQ

What were Thunderbird Entertainment's Q3 2024 financial results?

Thunderbird reported a Free Cash Flow increase to $13.4 million from $(15.8) million and net income of $0.01 million, reversing a $2.3 million loss from the prior year. However, revenue declined to $35.4 million from $37.3 million.

How did Thunderbird Entertainment's revenue perform in Q3 2024?

Thunderbird's revenue for Q3 2024 decreased from $37.3 million to $35.4 million, a 5% decline.

What is Thunderbird Entertainment's financial outlook for the rest of fiscal 2024?

Thunderbird expects Q4 to be its strongest quarter and anticipates AEBITDA growth of over 20% for fiscal 2024.

How has Thunderbird Entertainment responded to industry challenges?

Thunderbird implemented cost reduction measures, achieving cumulative savings exceeding $3 million for fiscal 2024, and continues to optimize operational efficiencies.

What new projects are contributing to Thunderbird Entertainment's future revenue?

An ongoing animation project expansion will add 30% more revenue in fiscals 2025 and 2026.

How many shares did Thunderbird Entertainment repurchase under its Normal Course Issuer Bid?

Thunderbird repurchased 591,400 shares for $1.2 million under its Normal Course Issuer Bid.