Thunderbird Entertainment Group Reports Fiscal Year End 2022 Results

Rhea-AI Summary

Thunderbird Entertainment Group reported its fiscal 2022 results, showcasing a 34% increase in revenue to $149.0 million year-over-year. Adjusted EBITDA stood at $20.1 million, marking a 3% increase. Free cash flow reached $13.9 million with no corporate debt. Although revenue growth was driven by production services, gross margins declined due to timing of IP deliveries and increased investment in production talent. The company has 28 shows in production and will host a conference call on October 21, 2022 to discuss these results.

Positive

• 34% increase in fiscal 2022 revenue to $149.0 million
• Adjusted EBITDA rose 3% to $20.1 million
• Free cash flow of $13.9 million with no corporate debt
• 28 programs in production, indicating strong pipeline

Negative

• Gross margin percentage decreased due to timing of deliveries and increased production costs
• Free cash flow decreased by $5.5 million in the current quarter

Fiscal 2022 Revenue $149.0 million, 34% year-over-year increase

Fiscal 2022 Adjusted EBITDA $20.1 million, 3% year-over-year increase

Fiscal 2022 Free Cash Flow of $13.9 million, with no corporate debt

28 shows in production

Conference call and webcast scheduled for Friday, October 21 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 year end results for Fiscal 2022, which ended June 30, 2022, and provided a corporate update.

Financial Highlights

• Consolidated revenue increased by $18.0 million (69%) to $44.1 million and $37.5 million (34%) to $149.0 million for the three months and year ended June 30, 2022, compared to $26.1 million and $111.5 million for the comparative periods in the prior year. The increase in revenue in the current quarter is due primarily to the continued growth in production services.
• Adjusted EBITDA increased by $0.1 million (4%) to $2.4 million and $0.5 million (3%) to $20.1 million for the three months and year ended June 30, 2022, compared to $2.3 million and $19.6 million for the comparative periods in the prior year. Gross margin percentage in the current quarter and year decreased due to the timing of intellectual properties “IP” deliveries, changes in production services scheduling and increased investment in production talent. Adjusted EBITDA was relatively flat over both periods due to the Company investing in key new hires and software and technology upgrades to deliver industry-leading, quality programming to further facilitate long term growth.
• Free cash flow decreased by $5.5 million to ($0.7) million in the current quarter primarily due to an increase in investment in content as the Company ramps up production volume and increased by $1.6 million to $13.9 million for the year ended June 30, 2022 due to the timing of the receipt and repayment of interim production financing net of the ramp up of production volume, compared to $4.8 million and $12.3 million for the comparative periods in the prior year.

“In Fiscal 2022 Thunderbird invested in long term, sustainable growth," said Jennifer Twiner McCarron, Thunderbird’s Chief Executive Officer. “We are pleased with our performance and progress during this build year. Thunderbird remains a top content provider to all major buyers with a demonstrated ability to deliver top quality content. We have numerous projects coming up through our robust development pipeline and look forward to sharing more Company updates as we continue our journey to become the next big global studio.”

Thunderbird’s Fiscal 2022 Corporate Highlights 

• At June 30, 2022, the Company had 28 programs in various stages of production. The number of programs in production at any point in time generally reflects the timing of contracted deliveries and Thunderbird’s customers’ license period start dates.
• Of the 28 programs in production, eight were Thunderbird IP, and 20 were service productions. Two of the service productions were partner-managed, which are fully funded by the partner, but entirely managed by Thunderbird. As a result, Thunderbird is entitled to receive a percentage of the net profits from merchandise and licensing.
• Thunderbird Kids & Family, producing under the brand Atomic Cartoons (“Atomic”), was in production on the following programs in Fiscal 2022: Molly of Denali (Season 2) for GBH/PBS, CoComelon Lane for Moonbug for Netflix, Young Love for Sony and HBO Max, Dogs in Space for Netflix and Teenage Euthanasia (Season 2) for Adult Swim, among others.
• Atomic premiere announcements throughout Fiscal 2022 included Pinecone & Pony on Apple TV+; Marvel’s Spidey and His Amazing Friends (Season 2) on Disney Junior, with Season 3 being recently renewed; LEGO Star Wars Summer Vacation on Disney+; Little Demon on FX Network; and Oddballs for Netflix, among others.
• Following its October premiere, Oddballs, a new animated, partner-managed Atomic production produced with YouTube creator James Rallison, debuted at number one on Netflix Kids Top 10, and ranked as the #6 TV series globally - adult content included – during the week of October 10-16. The series had 11.9 million viewing hours during this week, which doesn’t include the first three days from its premiere.
• Subsequent to June 30, Princess Power, a partner-managed production for Netflix that Atomic developed with Allison Oppenheim, Savannah Guthrie and Drew Barrymore’s Flower Films, was announced to debut in early 2023. Atomic optioned and developed this production before Netflix acquired the series.
• Thunderbird Unscripted, producing under the brand Great Pacific Media (“GPM”), was in production on the following programs in Fiscal 2022: Mud Mountain Haulers (Season 2), Highway Thru Hell (Season 11) Heavy Rescue: 401 (Season 7), Deadman’s Curse (Season 1), Styled (Season 1), Dr. Savannah: Wild Rose Vet (Season 2), Gut Job (Season 1), The Teenager and the Lost Maya City documentary, and After the Storm, a documentary in production for Discovery Canada based on the 2021 flooding in B.C.
• Thunderbird was also in production on Season 2 of the scripted series Strays, which premiered on CBC and CBC Gem in September 2022. The scripted series Reginald the Vampire, featuring Spiderman breakout star Jacob Batalon, debuted on SyFy (U.S.) and Amazon Prime Video (Canada) in October.
• Company recognitions in Fiscal 2022 included GPM being named to Realscreen’s annual Global 100 (Canada) and as the 2022 Diversity and Inclusion Champion by BC Business; Atomic being named to Kidscreen’s Hot50 (2021), ranking eighth in the production category and Molly of Denali winning a 2022 NAMIC Vision Award and a 2022 BC Reconciliation Award by the BC Achievement Foundation. Thunderbird was also 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.
• Thunderbird promotions and appointments during Fiscal 2022 included Matthew Berkowitz being promoted to the role of President of Thunderbird Entertainment, in addition to his current role as Chief Creative Officer; Lindsay Macadam being promoted to the role of Executive Vice President of GPM, Lori Massini being promoted to the role of Senior Vice President of Legal and Business Affairs, and Lana Castleman joining the Company in the role of Director, Marketing & Communications.  
• In January 2022, Jérôme Levy joined 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.
• Thunderbird’s distribution team acquired, and is currently selling, global media and consumer product rights to the new preschool series, Mittens & Pants, which will debut on CBC and CBC Gem in Canada, and in the UK on Sky Kids in the late fall of 2022.

Results of Operations
	For the three months ended						For the year ended
	June 30, 2022			June 30, 2021			June 30, 2022		June 30, 2021
($000’s, except per share data)	$			$			$		$
Revenue	44,119			26,097			148,998		111,519
Expenses	45,939			26,984			145,400		105,829
Net income (loss) from continuing operations	(1,820	)		(887	)		3,598		5,690
Income from discontinued operation	-			-			-		47
Net income (loss) for the period	(1,820	)		(887	)		3,598		5,737
Foreign currency translation adjustment	3			(10	)		17		(47	)
Loss on translation of discontinued operation	-			-			-		(35	)
Comprehensive net income (loss) for the period	(1,817	)		(897	)		3,615		5,655
Basic income (loss) per share – continuing operations	(0.037	)		(0.018	)		0.073		0.119
Diluted income (loss) per share – continuing operations	(0.037	)		(0.018	)		0.070		0.113
Basic income per share – discontinued operation	-			-			-		0.001
Diluted income per share – discontinued operation	-			-			-		0.001

EBITDA, Adjusted EBITDA and Free Cash Flow
	For the three months ended						For the year ended
	June 30, 2022			June 30, 2021			June 30, 2022			June 30, 2021
($000’s)	$			$			$			$
Net income (loss) from continuing operations	(1,820	)		(887	)		3,598			5,690
Income tax expense	65			422			2,892			2,315
Deferred income tax expense (recovery)	(648	)		(371	)		(614	)		216
Finance costs
Interest	340			392			1,505			1,475
Dividends on redeemable preferred shares	8			11			39			67
Amortization
Property and equipment	535			419			2,311			1,356
Right-of-use assets	2,829			1,583			8,227			6,695
Intangible assets	67			67			270			270
	3,196			2,523			14,630			12,394
EBITDA	1,376			1,636			18,228			18,084
Share-based compensation	252			387			938			1,168
Unrealized foreign exchange loss (gain)	781			(103	)		578			(989	)
Loss on disposal of property and equipment	-			-			1			733
Gain on disposal of right-of-use assets	-			(11	)		-			(277	)
Severance costs	-			300			208			583
Other	-			70			108			309
	1,033			643			1,833			1,527
Adjusted EBITDA	2,409			2,279			20,061			19,611
Cash (outflows) inflows from continuing operations	(12,690	)		3,333			(5,562	)		22,275
Purchase of property and equipment	(1,078	)		(523	)		(4,131	)		(1,360	)
Net advances (repayment) of interim production financing	13,021			2,006			23,610			(8,622	)
Free Cash Flow	(747	)		4,816			13,917			12,293

Conference Call Webcast on Friday, October 21, 2022, at 11 a.m. PT/ 2 p.m. ET

Thunderbird will hold a conference call and webcast to share the Company’s year end financial results on Friday, October 21, 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: October 21, 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: 860196
Press *1 to ask a question, *2 to withdraw your question, or *0 for operator assistance.
Webcast: https://events.q4inc.com/attendee/636495393

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, 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 content arms, including Thunderbird Kids and Family (Atomic Cartoons), Thunderbird Unscripted (Great Pacific Media), formerly known as Thunderbird Factual, 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 team dedicated to global distribution and consumer products. 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 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/20221020006056/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's fiscal 2022 revenue and earnings results?

Thunderbird reported a fiscal 2022 revenue of $149.0 million, a 34% increase year-over-year, and an adjusted EBITDA of $20.1 million, which is a 3% increase.

What is Thunderbird's free cash flow for fiscal 2022?

Thunderbird's free cash flow for fiscal 2022 was $13.9 million, although it decreased by $5.5 million in the current quarter.

When is Thunderbird's next conference call?

Thunderbird's next conference call is scheduled for October 21, 2022, at 11 a.m. PT/2 p.m. ET.

How many programs is Thunderbird currently producing?

Thunderbird is currently producing 28 shows, including both its intellectual properties and service productions.

What contributed to Thunderbird's revenue growth in fiscal 2022?

The revenue growth in fiscal 2022 was primarily driven by continued growth in production services.