Conference call and webcast today, February
29, at 11 a.m. PT/ 2 p.m. ET
Thunderbird Entertainment Group Inc. (TSXV: TBRD, OTCQX:
THBRF) (“Thunderbird” or the “Company”) today announced its Q2
2024 financial results, which ended December 31, 2023, and provided
a corporate update.
Financial Summary
- Revenue decreased from $47.9 million to $44.5 million and from
$91.7 million to $78.1 million for the three and six months ended
December 31, 2023, as compared to the comparative periods in the
prior year, variances of $3.4 million (7%) and $13.6 million (15%).
The decrease in revenue is primarily due to a reduction in
intellectual property (“IP”) deliveries over the comparative
periods.
- Net income for the three months ended December 31, 2023, was
$0.6 million compared to a loss of $0.3 million for the comparative
period in the previous year, an improvement of $0.9 million
(315%).
- Net loss for the six months ended December 31, 2023 was $0.1
million compared to a loss of $0.2 million for the comparative
period in the previous year, an improvement of $0.1 million
(44%).
- Free Cash Flow1 decreased from $7.8 million to $0.4 million and
$12.2 million to ($2.0) million for the three and six months ended
December 31, 2023, as compared to the comparative periods,
variances of $7.4 million (94%) and $14.2 million (116%). The
decrease for the current quarter is primarily due to the repayment
of interim production financing, share repurchases and associated
costs under the Normal Course Issuer Bid (“NCIB”), severance
payments, non-recurring legal costs relating to the amended and
restated cooperation agreement and investments into animation
content creation.
- Adjusted EBITDA1 (“AEBITDA”) decreased from $4.3 million to
$3.9 million and decreased from $8.4 million to $6.4 million for
the three and six months ended December 31, 2023, as compared to
the comparative periods, variances of $0.4 million (10%) and $2.0
million (24%). The decrease is attributable to a reduction in IP
deliveries during the quarter.
Financial Outlook
- The Company has returned to profitability in Q2 2024, with the
last half of fiscal 2024 set to be the strongest, weighted to the
fourth quarter.
- The Company continues to expect over 20% growth in AEBITDA1 for
fiscal 2024.
- Several cost-reduction activities have been implemented and the
Company expects to realize in excess of $3 million in overall cost
reductions for fiscal 2024.
During the current fiscal year, the Company has also continued
to see a slower than expected recovery in the content-creation
market as major buyers remain engaged in cost-cutting measures and
reducing their number of greenlights. As a result of this,
management has adjusted their expectations for the remainder of the
fiscal year. Revenue is now expected to remain flat year-over-year
as compared to the Q1 2024 guidance of a 5% increase, with service
revenue moderately increasing over the prior year, offset by a
marginal reduction in revenue related to IP. Consistent with
guidance previously provided, AEBITDA1 is still expected to show
growth of more than 20% year over year. These projections are based
on the completion of an additional 29 hours of IP delivery in the
second half of the fiscal year, bringing the total IP delivered for
the year to 53 hours.
“Thunderbird remains poised for a robust and rewarding future,
with a series of incoming greenlit IP and service productions and
great visibility into FY25 and 26,” said Thunderbird’s CEO and
Chair, Jennifer Twiner McCarron. “Our focus is on the inherent
health of our business, and we’re zeroing-in on several key
priorities aimed at fostering growth and maintaining stability,
including the expansion of core brands, investments in proprietary
IP, and ensuring consistent service revenue across both established
and new series.”
During the quarter, several cost reduction activities were
implemented with the goal of addressing market uncertainties and
creating capacity for investment in growth opportunities.
Thunderbird also continues to remain proactive on streamlining
operational processes and looking for additional efficiencies and
cost reductions. Thunderbird is committed to maintaining a robust
balance sheet and exercising prudent management decisions to remain
adaptable in evolving conditions while steadfastly pursuing
sustainable growth.
Normal Course Issuer Bid
Thunderbird implemented 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 quarter ended December 31, 2023, the Company
repurchased for cancellation, 201,200 common shares under its NCIB
then in effect for a total consideration of $0.4 million,
representing an average price of $2.23 per common share. Subsequent
to December 31, 2023, the Company purchased for cancellation
390,200 common shares at an average price of $1.98 per common share
for a total cost of $0.8 million.
Thunderbird’s Q2 2024 Corporate Highlights
- In Q2 2024, the Company had 24 programs in various stages of
production and was working with 20 clients. Of the 24 programs in
production, eight were Thunderbird IP, and 16 were service
productions.
- Thunderbird Kids & Family, producing under Atomic Cartoons,
was in production on 18 programs, and working for 14 clients,
including: CoComelon Lane for Moonbug for Netflix, Marvel's Spidey
and His Amazing Friends (Seasons 3 and 4) for Disney Junior, My
Little Pony: Make Your Mark (Chapter 6) for eOne/Hasbro, The
Mindful Adventures of Unicorn Island for Headspace, Zombies: The
Re-Animated Series for Disney TVA, among others, and Atomic
originals Rocket Saves the Day (PBS KIDS) and Mermicorno: Starfall
(Warner Bros. Discovery).
- CoComelon Lane and My Little Pony: Make Your Mark (Chapter 6)
both premiered in Q2, hitting #1 and #2, respectively, on Netflix
Kids in the US during their launch week.
- Subsequent to Q2, Atomic became a Certified B Corporation,
joining a global community of businesses that meet high standards
of social and environmental impact.
- Also subsequent to Q2, Atomic announced one of its owned-IP
programs in production, its first adult animated series, Super Team
Canada, which is being co-produced with Will Arnett’s Electric
Avenue for Bell Media streamer Crave.
- In Q2, Thunderbird Unscripted, producing under Great Pacific
Media (“GPM”), was in production on six programs and one podcast,
and was working for six clients. 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, Rocky Mountain Wreckers (Season 1) for
The Weather Channel (US) and Discovery in Canada, and Highway Thru
Hell (Seasons 12 and 13) for Discovery. The Season 13 renewal of
Highway Thru Hell will see the series hit a historic 204
episodes.
- Subsequent to Q2, GPM announced the debut of new docuseries
Timber Titans, which premiered on February 5 on Discovery Canada
and February 18 on The Weather Channel (US), along with the
commissioning of new docuseries Rocky Mountain Wreckers by The
Weather Channel (US), with Bell Media serving as the Canadian
production partner.
- Also subsequent to Q2, GPM announced a partnership with the
World Boxing Council to create new docuseries Prizefighter (working
title). In addition, Blue Fox Entertainment acquired international
distribution rights, outside Canada and the US, for GPM and Wattpad
Studios film Boot Camp.
- The Company currently has 14 scripted projects in active
development, three of which are in active network development.
- In February, Thunderbird appointed Simon Bodymore as Chief
Financial Officer, effective March 4, 2024. Thunderbird also
welcomed David Lazzarato to its Board of Directors. Mr. Lazzarato
was also appointed as Chair of the Strategic Advisory
Committee.
- Thunderbird Distribution sold US media rights to the first
season of Windy Isle Entertainment’s preschool series Mittens &
Pants to NBCU’s Peacock and children’s free ad-supported streamers
HappyKids, Kidoodle.TV and Sensical.
- Thunderbird awards and accolades received during and subsequent
to Q2 include, but are not limited to:
- Thunderbird placing No. 263 of 425 companies on The Globe and
Mail’s 2023 list of Canada’s Top Growing Companies,
- Atomic ranking #3 on the annual Kidscreen Hot50 list of top
production companies,
- Molly of Denali receiving two nominations for the 2nd Annual
Children’s & Family Emmy® Awards: Writing for a Preschool
Animated Program and Short Form Program (for The Big
Gathering),
- GPM’s companion podcast Deadman's Curse: Slumach's Gold being
named one of the Best Podcasts of the Year for 2023 by Amazon
Music,
- Young Love receiving a nomination for Best Animated Series at
the Critics Choice Awards,
- Both Young Love and Marvel’s Spidey and His Amazing Friends
receiving nominations for Outstanding Animated Series at the 55th
annual NAACP Image Awards, and
- Both Princess Power and Pinecone & Pony receiving
nominations for the 35th annual GLAAD Media Awards in the category
of Outstanding Children’s Programming.
Results of Operations
Results of Operations
For the three months
ended
For the six months
ended
Dec 31, 2023
Dec 31, 2022
Dec 31, 2023
Dec 31, 2022
($000’s, except per share data)
$
$
$
$
Revenue
44,539
47,958
78,139
91,704
Expenses
43,920
48,246
78,248
91,899
Net income (loss) for the
period
619
(288)
(109)
(195)
AEBITDA1
3,904
4,333
6,392
8,398
AEBITDA Margin1
8.8%
9.0%
8.2%
9.2%
Free Cash Flow1
437
7,794
(1,998)
12,164
Basic and diluted income (loss) per
share
0.012
(0.006)
(0.002)
(0.004)
1 AEBITDA, AEBITDA Margin, and Free Cash Flow are Non-IFRS
Measures, see “Non-IFRS Measures” section below for their
respective definitions, and in the December 31, 2023 MD&A for
detailed calculations and reconciliations.
For more information, please see the financial statements and
the management’s discussion and analysis (MD&A) for Q2 fiscal
2024, which ended December 31, 2023, available on SEDAR+ and the
Company’s website.
Thunderbird’s Q2 2024 Conference Call & Webcast
Information
Conference Call & Webcast Information Date: February
29, 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=ae360ecf&confId=59902
If you are unable to pre-register, please see the information
for joining by webcast or telephone:
Webcast: https://events.q4inc.com/attendee/354984933
Canada Toll Free: +1 833 950 0062 United States
(Toll-Free): +1 833 470 1428 All other locations: +1 929
526 1599 Access Code: 371243
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 the
Company remaining poised for a robust and rewarding future;
incoming greenlit IP and service productions; visibility into FY25
and 26; the Company remaining on track to meet AEBITDA guidance;
the last half of the fiscal year being the Company’s largest; the
Company realizing in excess of $3 million in overall cost
reductions, plans for expansion of core brands, investments in
proprietary IP, and ensuring consistent service revenue across both
established and new series; projections and forecasted growth in
revenue and AEBITDA; completion of additional IP delivery; and
steadfastly pursuing sustainable growth.
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 AEBITDA 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 EBITDA, AEBITDA, Free Cash
Flow, and AEBITDA Margins.
“EBITDA” is calculated based on earnings before interest, income
taxes, depreciation and amortization. “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. EBITDA and AEBITDA 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. 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.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20240229133404/en/
For further information, please contact:
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
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