Thunderbird Entertainment Group Inc. (TSXV: TBRD, OTCQX: THBRF) (Thunderbird or the Company) today announced its financial results for fiscal Q3 2023, which ended March 31, 2023, and provided a corporate update.
Financial Summary
“I am very proud of the talented teams working hard to create many wins in spite of the headwinds we faced as an organization in fiscal 2023,” said Jennifer Twiner McCarron, Thunderbird CEO and Chair. “With the proxy contest and its impact on us complete and with more visibility into next year, including increased production bookings, we are on track for Thunderbird’s fiscal 2024 to be one of the Company’s strongest years on record. Our healthy balance sheet with zero debt has also served the Company well in this rising interest rate environment and we are well equipped to fuel growth and maximize shareholder value."
Strategic Review Advisory Committee Update
On May 15, 2023, Thunderbird announced that it has engaged ACF Investment Bank (ACF) as part of the Company’s strategic review process of assessing all opportunities to maximize shareholder value. ACF is a leading, global mergers and acquisitions advisor in the Media and Entertainment industry and has completed more than 100 deals in this sector with a total deal value of more than $6 billion. Working with ACF maintains alignment with the Cooperation Agreement between Thunderbird and Voss Capital, LLC, which is detailed in the Company’s January 19, 2023 news release, while providing the Company with an important next step in support of its growth trajectory.
Outlook
Industry-wide economic factors and the proxy contest delayed the start of several productions, moving them from fiscal 2023 to fiscals 2024 and 2025. While the Company did not lose any planned work, the Company is no longer anticipating fiscal 2023 to be its strongest, and it will have a lower Adjusted EBITDA compared to fiscal 2022. With the shift in the timing of the Company’s production slate, and visibility well into fiscals 2024 and 2025, Thunderbird anticipates continued growth in Adjusted EBITDA, and revenues due to its robust pipeline. This includes the addition of several fully owned IP productions with adjacent merchandise opportunities coming to fruition. With increased production bookings in 2024, the Company is projecting strong financial results in fiscal 2024.
Thunderbird Entertainment’s Q3 2023 Corporate Highlights
Results of Operations |
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For the three months ended |
For the nine months ended |
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|
Mar 31, 2023 |
Mar 31, 2022 |
Mar 31, 2023 |
Mar 31, 2022 |
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($000’s, except per share data) |
$ |
$ |
$ |
$ |
|||||
|
|
|
|
|
|||||
Revenue |
37,281 |
|
36,853 |
128,985 |
|
104,879 |
|||
Expenses |
39,531 |
|
34,715 |
131,428 |
|
99,462 |
|||
Net income (loss) for the period |
(2,250 |
) |
2,138 |
(2,443 |
) |
5,417 |
|||
Foreign currency translation adjustment |
(5 |
) |
11 |
(36 |
) |
14 |
|||
Comprehensive net income (loss) for the period |
(2,255 |
) |
2,149 |
(2,479 |
) |
5,431 |
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|
|
|
|
|
|||||
Basic income (loss) per share |
(0.045 |
) |
0.043 |
(0.049 |
) |
0.111 |
|||
Diluted income (loss) per share |
(0.045 |
) |
0.041 |
(0.049 |
) |
0.105 |
EBITDA, Adjusted EBITDA and Free Cash Flow |
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|
For the three months ended |
For the nine months ended |
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|
Mar 31, 2023 |
Mar 31, 2022 |
Mar 31, 2023 |
Mar 31, 2022 |
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($000’s) |
$ |
$ |
$ |
$ |
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|
|
|
|
|
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Net income (loss) for the period |
(2,250 |
) |
2,138 |
|
(2,443 |
) |
5,417 |
|
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|
|
|
|
|
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Income tax expense (recovery) |
(183 |
) |
788 |
|
401 |
|
2,827 |
|
||||
Deferred income tax expense (recovery) |
(198 |
) |
242 |
|
(1,130 |
) |
34 |
|
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Finance costs |
|
|
|
|
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Interest |
618 |
|
287 |
|
1,547 |
|
1,165 |
|
||||
Dividends on redeemable preferred shares |
7 |
|
8 |
|
22 |
|
31 |
|
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Amortization |
|
|
|
|
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Property and equipment |
550 |
|
424 |
|
1,699 |
|
1,777 |
|
||||
Right-of-use assets |
3,198 |
|
2,160 |
|
8,566 |
|
5,398 |
|
||||
Intangible assets |
68 |
|
67 |
|
203 |
|
203 |
|
||||
|
4,060 |
|
3,976 |
|
11,308 |
|
11,435 |
|
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|
|
|
|
|
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EBITDA |
1,810 |
|
6,114 |
|
8,865 |
|
16,852 |
|
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|
|
|
|
|
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Share-based compensation |
233 |
|
182 |
|
574 |
|
686 |
|
||||
Unrealized foreign exchange loss (gain) |
14 |
|
90 |
|
534 |
|
(204 |
) |
||||
Loss (gain) on disposal of property and equipment |
- |
|
2 |
|
(1 |
) |
2 |
|
||||
Severance costs |
- |
|
- |
|
- |
|
208 |
|
||||
Proxy contest |
1,617 |
|
- |
|
2,101 |
|
- |
|
||||
Other |
- |
|
6 |
|
- |
|
108 |
|
||||
|
1,864 |
|
280 |
|
3,208 |
|
800 |
|
||||
|
|
|
|
|
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Adjusted EBITDA |
3,674 |
|
6,394 |
|
12,073 |
|
17,652 |
|
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|
|
|
|
|
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Cash (outflows) inflows from operations |
(13,125 |
) |
1,481 |
|
23,998 |
|
7,126 |
|
||||
Purchase of property and equipment |
(139 |
) |
(1,512 |
) |
(1,902 |
) |
(3,053 |
) |
||||
Net (repayment) advances of interim production
|
(2,550 |
) |
(5,165 |
) |
(25,750 |
) |
10,589 |
|
||||
Free Cash Flow |
(15,814 |
) |
(5,196 |
) |
(3,654 |
) |
14,662 |
|
For more information please see the financial statements and the management’s discussion and analysis (MD&A) for the three and nine months ended March 31, 2023 available on SEDAR and the Company’s website.
Thunderbird will hold a conference call and webcast to share the Company’s Q3 2023 results today, Thursday, May 25, 2023, at 11 a.m. PT/ 2 p.m. ET.
Conference Call & Webcast Information
Date: May 25, 2023
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=caec08d7&confId=49955
If you are unable to pre-register, please see the information for joining by webcast or telephone:
Webcast: https://events.q4inc.com/attendee/508004502
Canada Toll Free: +1 833 950 0062
United States (Toll-Free): +1 833 470 1428
All other locations: +1 929 526 1599
Access Code: 413021
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, 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
Thunderbird’s public communications may include written, or oral “forward-looking statements” and “forward-looking information” as defined under applicable Canadian securities legislation. 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. These statements represent management’s current beliefs and are based on information currently available to management and inherently involve numerous risks and uncertainties, both known and unknown. Many factors could cause actual results to differ materially including general economic and market segment conditions, competitor activity, product capability and acceptance, international risk and currency exchange rates and technology changes. An assessment of the risks that could cause actual results to materially differ from current expectations is contained in the “Risks and Uncertainty” section of the June 30, 2022 and March 31, 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.
The forward-looking statements or information contained in this document 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.
Forward-looking statements in this document include, but are not limited to, statements with respect to the Company’s belief that fiscal 2024 will be one of the Company’s strongest years on record; Thunderbird being well equipped to fuel growth and maximize shareholder value; the Company’s expectation that growth in Adjusted EBITDA and revenues due to its robust pipeline will continue; adjacent merchandise opportunities will come to fruition; projections related to strong financial results in fiscal 2024; timing for hosting the conference call and webcast; and Thunderbird’s vision to produce high quality, socially responsible content making the world a better place. 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; 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 March 31, 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 are reasonable, undue reliance should not be placed on these statements, which only apply as of the date of this document, 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, and Cash Required for Use in Productions.
“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 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.
View source version on businesswire.com: https://www.businesswire.com/news/home/20230525005354/en/
For further information:
Investor Relations:
Glen Akselrod, Bristol Capital
Phone: + 1 905 326 1888 ext 1
Email: [email protected]
Media Relations:
Lana Castleman, Director, Marketing & Communications
Phone: 416-219-3769
Email: [email protected]
Corporate Communications
Julia Smith, Finch Media
Email: [email protected]