Thunderbird Entertainment Group Reports on Q3 2022 Results

Rhea-AI Summary

Thunderbird Entertainment Group reported its Q3 2022 financial results, revealing consolidated revenues of $36.9 million, a decrease of 2% year-over-year. However, revenues increased by 23% for the nine-month period, totaling $104.9 million. Adjusted EBITDA fell by 14% to $6.4 million for the quarter, although it rose 2% for the nine months to $17.7 million. The company is currently managing 26 productions, partnering with major platforms like Netflix and Disney+. A conference call is scheduled for May 16, 2022, to discuss the results further.

Positive

• Revenue growth of 23% for the nine months ended March 2022.
• Management of 26 productions with top-tier partners including Netflix and Disney+.

Negative

• Quarterly revenue decrease of 2% due to timing of IP project deliveries.
• Adjusted EBITDA decline of 14% to $6.4 million for the quarter.

Consolidated revenue of $36.9 million decreased by $0.8 million (2%) and increased $19.5 million (23%) to $104.9 million for the three and nine months ended March 31, 2022

Adjusted EBITDA decreased by $1 million (14%) to $6.4 million and increased $0.4 million (2%) to $17.7 million for the three and nine months ended March 31, 2022

26 shows in production; 12 IP or Partner-Managed

Conference call and webcast scheduled for May 16 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 financial results for Q3 2022, which ended March 31, 2022, and provided a corporate update.

Financial Highlights

• Consolidated revenue decreased by $0.8 million (2%) to $36.9 million and increased $19.5 million (23%) to $104.9 million for the three and nine months ended March 31, 2022, as compared to $37.7 million and $85.4 million for the comparative periods in the prior year. The slight decrease in revenue in the current quarter is due to the timing of deliveries of intellectual property (“IP”) projects, the majority of which are expected to be caught up by year end. The decrease was almost completely offset by the growth in production service projects.

• Adjusted EBITDA decreased by $1.0 million (14%) to $6.4 million and increased $0.4 million (2%) to $17.7 million for the three and nine months ended March 31, 2022, as compared to $7.4 million and $17.3 million for the comparative periods in the prior year. 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 decreased by $7.0 million to ($5.2) million in the current quarter primarily due to an increase in investment in content as the Company ramps up production volume and increased by $7.2 million to $14.7 million for the nine months ended March 31, 2022 due to the timing of the receipt and repayment of interim production financing net of the ramp of production volume compared to $1.8 million and $7.5 million for the comparative periods in the prior year.

“During the quarter, we continued our strategy of investing time and resources into a number of key initiatives that will set the stage for accelerated growth in fiscal 2023 and beyond,” said Jennifer Twiner McCarron, Thunderbird’s Chief Executive Officer. “We are on track for a solid year end and continue to forecast excellent organic growth ahead. The hard work and dedication of our talented team makes this possible, and I am so proud of them as we move forward.”

Thunderbird’s Q3 2022 Corporate Highlights

• At March 31, 2022, the Company had 26 programs in various stages of production, for 16 customers including Netflix, Disney+, Corus Entertainment, Bell Media's Discovery and Sony. 12 of these projects are the Company’s IP, which the Company owns outright, or partner-managed service productions where the Company receives a percentage of certain revenue streams.

• In Q3, the Company was in various stages of production on 16 animated television series reflecting a blend of both partner-managed and service-based work.

• Animation productions in progress included:  Molly of Denali (Season 2) for GBH/PBS, Pinecone & Pony for DreamWorks Animation and First Generation Films for Apple TV+, CoComelon Lane for Moonbug for Netflix, Dogs in Space for 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.

• During and subsequent to the quarter, Pinecone & Pony premiered on Apple TV+ and an adult animation series, Teenage Euthanasia (Season 2) was announced for Adult Swim.

• Also subsequent to Q3, LEGO Star Wars Terrifying Tales was nominated in the Animation: Children (5-10) Category and The Last Kids on Earth was nominated in the Interactive: Children (0-10) Category for The Banff World Media Festival’s Rockie Awards.

• In Q3, Thunderbird was in production on seven factual series, and one documentary: Highway Thru Hell (Season 11), Heavy Rescue: 401 (Season 7), Mud Mountain Haulers (Season 2), Deadman’s Curse (Season 1), Gut Job (Season 1), Styled (Season 1), Dr. Savannah: Wild Rose Vet (Season 2) in conjunction with Wapanatahk Media, and After the Storm, a documentary in production for Discovery Canada based on the 2021 flooding in B.C.

• In Q3, the Company was in production on two scripted series: Reginald the Vampire (Season 1), and Strays (Season 2).

• During the quarter, Great Pacific Media was named the 2022 Diversity and Inclusion Champion in BC Business’ Business of Good Awards and featured on Realscreen’s Global 100: Canada listing.

Results of Operations
	For the three months ended			For the nine months ended
	Mar 31, 2022	Mar 31, 2021		Mar 31, 2022	Mar 31, 2021
($000’s, except per share data)	$	$		$	$
Revenue	36,853	37,683		104,879	85,423
Expenses	34,715	34,104		99,462	78,848
Net income from continuing operations	2,138	3,579		5,417	6,575
Income from discontinued operation	-	31		-	47
Net income for the period	2,138	3,610		5,417	6,622
Foreign currency translation adjustment	11	(15	)	14	(37	)
Gain (loss) on translation of discontinued operation	-	27		-	(35	)
Comprehensive net income for the period	2,149	3,622		5,431	6,550
Basic income per share – continuing operations	0.043	0.074		0.111	0.138
Diluted income per share – continuing operations	0.041	0.070		0.105	0.132
Basic income per share – discontinued operation	-	0.001		-	0.001
Diluted income per share – discontinued operation	-	0.001		-	0.001

EBITDA, Adjusted EBITDA and Free Cash Flow
	For the three months ended				For the nine months ended
	Mar 31, 2022		Mar 31, 2021		Mar 31, 2022		Mar 31, 2021
($000’s)	$		$		$		$
Net income from continuing operations	2,138		3,579		5,417		6,575
Income tax expense	788		79		2,827		1,892
Deferred income tax recovery	242		1,014		34		589
Finance costs
Interest	287		293		1,165		1,084
Dividends on redeemable preferred shares	8		18		31		55
Amortization
Property and equipment	424		319		1,777		937
Right-of-use assets	2,160		1,575		5,398		5,112
Intangible assets	67		67		203		203
	3,976		3,365		11,435		9,872
EBITDA	6,114		6,944		16,852		16,447
Share-based compensation	182		438		686		781
Unrealized foreign exchange loss (gain)	90		(185	)	(204	)	(886	)
Loss (gain) on disposal of property and equipment	2		(3	)	2		733
Gain on disposal of right-of-use assets	-		-		-		(266	)
Severance costs	-		-		208		283
Other	6		181		108		239
	280		431		800		884
Adjusted EBITDA	6,394		7,375		17,652		17,331
Cash inflows from continuing operations	1,481		8,549		7,126		18,939
Purchase of property and equipment	(1,512	)	(222	)	(3,053	)	(837	)
Net advances (repayment) of interim production financing	(5,165	)	(6,500	)	10,589		(10,628	)
Free Cash Flow	(5,196	)	1,827		14,662		7,474

Conference Call Webcast on Monday, May 16, 2022, at 11 a.m. PT/ 2 p.m. ET

Thunderbird will hold a conference call and webcast to share the Company’s Q3 financial results on Monday, May 16, 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: Monday, May 16, 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/279950760

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 422982. The teleconference replay will be available through May 30, 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/20220516005238/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 Inc.

FAQ

What were Thunderbird Entertainment's Q3 2022 financial results for revenue and EBITDA?

Thunderbird reported consolidated revenue of $36.9 million, a 2% decrease year-over-year, and adjusted EBITDA of $6.4 million, a 14% decline.

When is the conference call for Thunderbird's Q3 2022 results?

The conference call is scheduled for May 16, 2022, at 11 a.m. PT/2 p.m. ET.

What was the total revenue for Thunderbird for the nine months ended March 2022?

The total revenue for the nine months ended March 2022 was $104.9 million, reflecting a 23% increase compared to the previous year.

How many productions is Thunderbird currently managing?

Thunderbird is currently managing 26 productions across various platforms.

What major platforms is Thunderbird Entertainment partnered with?

Thunderbird has partnerships with major platforms including Netflix, Disney+, and Corus Entertainment.