VANCOUVER, British Columbia--(BUSINESS WIRE)--Thunderbird Entertainment Group Inc. (TSXV: TBRD, OTCQX: THBRF) ("Thunderbird" or the "Company") today announced its Q1 fiscal 2025 results for the three-month period ended September 30, 2024, and provided a corporate update.
Financial Summary
- Revenue increased 36% year-over-year from $33.6 million to $45.7 million for the three-month period ended September 30, 2024. The strong quarterly result and overall fiscal 2024 performance demonstrate the health and success of the Company. This growth was attributable to an increase in production service engagements in the quarter.
- AEBITDA1 increased 64% year-over-year from $2.5 million to $4.1 million for the three-month period ended September 30, 2024. AEBITDA margins1 increased 150 basis points year-over-year from 7.4% to 8.9%. This increase was attributable to the growth in revenues and a reduction in general and administrative costs over the comparative quarter.
- Free Cash Flow1 of $9.7 million for the three-month period ended September 30, 2024, representing an increase of $12.1 million from ($2.4 million) over the three-month period in the comparative quarter. This was primarily attributed to the increase in deferred revenue, partially offset by the increase in tax credits receivable.
- Net income of $1.6 million for the three-month period ended September 30, 2024, representing an increase of $2.3 million from ($0.7 million) over the three-month period in the comparative quarter. This was attributable to the increase in revenues and a reduction in general and administrative costs and amortization over the comparative quarter.
Financial Outlook
The Company maintains its forecast of a return to top-line growth in fiscal 2025, targeting 20% revenue growth and over 10% AEBITDA1 growth. The variance between revenue and AEBITDA1 growth reflects the anticipated gross margin1 difference associated with the types of projects being forecasted in fiscal 2025 compared to fiscal 2024. These targets are supported by a strong content pipeline, strategic investments and signs of a stabilizing market environment.
The Company continues to search for efficiencies that will generate additional savings throughout 2025 without sacrificing the quality that the Company is known for. Thunderbird's balance sheet remains robust, with no corporate debt, providing the financial flexibility needed to pursue growth opportunities. This strength supports the Company's plans to invest in new content production, a key driver of future growth. By aligning its content strategy with disciplined financial oversight, Thunderbird is committed to delivering increased value to shareholders.
Thunderbird's fiscal 2025 outlook is based on the Company's latest internal projections, though certain risks remain, as detailed in the "Risk and Uncertainty" section of the Company's June 30, 2024, MD&A. With a clear focus on executing its strategic priorities, Thunderbird is well positioned to succeed in a competitive and evolving market landscape.
"Thunderbird's performance this quarter underscores our resilience and strategic focus on driving profitable growth in a challenging entertainment industry landscape. With a 36% increase in revenue, a 64% rise in AEBITDA, and a substantial boost in free cash flow, we are not only navigating industry headwinds but beginning to thrive once again," said Jennifer Twiner McCarron, CEO and Chair of Thunderbird. "The Company remains well positioned with our talent, multiple studios, Canadian tax credits and favourable exchange rate. Moving forward, we remain dedicated to enhancing shareholder value by increasing our visibility through consistently strong results and proactive engagement with the investment community to maximize liquidity and allow others to participate in our great story."
Ms. Twiner McCarron added, "It should also be noted that we are closely watching the negotiation process between the Alliance of Motion Picture and Television Producers ("AMPTP") and the International Alliance of Theatrical Stage Employees ("IATSE") Local 839, which represents animators and other related professionals. The key issues under discussion include job security and subcontracting, fair compensation, and addressing the use of Generative AI in animation production. We understand that they are making progress towards a new three-year deal, and hope for an equitable solution."
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.
To September 30, 2024, the Company repurchased for cancellation 591,400 common shares under its NCIB then in effect for a 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. The NCIB remains in place and the Company will continue to use it opportunistically.
Thunderbird's Fiscal 2025 Q1 Corporate Highlights
- In fiscal 2025 Q1, the Company had 25 programs in various stages of production and was working with 17 clients. Of the 25 programs in production, seven were Thunderbird IP, and 18 were service productions.
- Thunderbird Kids & Family, producing under Atomic Cartoons ("Atomic"), was in production on 18 programs, and working for 11 clients, including: Super Team Canada for Bell Media's Crave, The Day You Begin for PBS Kids, Marvel's Iron Man and his Awesome Friends for Disney Junior, Marvel's Spidey and His Amazing Friends (Seasons 3 and 4) for Disney Junior, among others, and Atomic original Mermicorno: Starfall for Warner Bros. Discovery.
- Thunderbird Unscripted, producing under Great Pacific Media ("GPM"), was in production on six unscripted series in Q1, including: Deadman's Curse (Season 3) for History Channel, Timber Titans (Season 2) for Discovery, Highway Thru Hell (Season 13) for Discovery, Rocky Mountain Wreckers (Season 1) for The Weather Channel (US) and Discovery in Canada.
- GPM was also in production on one scripted project in Q1 titled Sidelined: The QB and Me, which is based on a Wattpad novel. Blue Fox Entertainment is managing international distribution of this Tubi Original movie, announcing sales to partners in Europe, Latin America, South Africa, and more.
- During the quarter, the Company had 12 scripted projects in active development, of which three are in paid network development.
- Thunderbird Distribution announced that Banijay Rights, the global distribution arm of content powerhouse Banijay Entertainment and the longtime distributor of Highway Thru Hell internationally, acquired segment rights to the long-running hit docuseries. Banijay Rights now holds the rights to license, distribute, publish, and broadcast short-form segments and stories excerpted from the series, which is currently in pre-production on its 14th season. The official Highway Thru Hell YouTube and Facebook channels join the previously announced FAST channel as part of the brand's global expansion.
- Thunderbird Distribution announced multiple deals for innovative children's series BooSnoo!, a Sky Kids Original produced by Visionality Media and Mackinnon & Saunders. In addition to being broadcasted on Sky Kids in the U.K. and Ireland, it is also being distributed in nine more territories, including DR Denmark (Season 1), EBS South Korea (Seasons 1 and 2), NRK Norway (Seasons 1 and 2), PCCW/NOW Hong Kong (Season 1), SVT Sweden (Season 1), TVO Kids Canada (Seasons 1 and 2) and Canadian French-language broadcaster Téléquebec (Seasons 1 and 2). In the U.S., NBCU's Peacock, FOX's Tubi and Future Today's HappyKids have taken Season 1 of the series for their platforms.
- Thunderbird Distribution also expanded the reach of Windy Isle Entertainment's adorable live-action preschool series Mittens & Pants beyond its initial 34 territories. Tubi and public library-affiliated streamer Kanopy have taken the first season for the U.S. Internationally, new platforms acquiring the series include beIN (MENA, Season 1), NRK (Norway, Seasons 1 and 2) and Alibaba's Youku (China, Seasons 1 and 2). Additionally, China-based content distributor Beijing 24 Bridges will be selling both seasons of Mittens & Pants in the territory.
Results of Operations
For the three months ended | ||||
Sept 30, 2024 | Sept 30, 2023 | |||
($000's, except per share data) | $ | $ | ||
Revenue | 45,669 | 33,600 | ||
Expenses | 44,088 | 34,327 | ||
Net income (loss) for the period | 1,581 | (727) | ||
AEBITDA1 | 4,078 | 2,488 | ||
AEBITDA Margin1 | 8.9% | 7.4% | ||
Free Cash Flow1 | 9,667 | (2,433) | ||
Basic and diluted income (loss) per share | 0.03 | (0.02) | ||
For more information, please see the financial statements and the management's discussion and analysis (MD&A) for the Q1 results for fiscal 2025, which ended September 30, 2024, available on SEDAR+ and the Company's website.
Thunderbird's Q1 Fiscal 2025 Conference Call & Webcast Information
Conference Call & Webcast Information
Date: November 21, 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://registrations.events/direct/Q4I98438659
If you are unable to pre-register, please see the information for joining by webcast or telephone:
Webcast: https://events.q4inc.com/attendee/749061836
Canada Toll Free: +1 (800) 715-9871
United States (Toll-Free): +1 (800) 715-9871
All other locations: +1 (646) 307-1963
Access Code: 98438
Press *1 to ask a question, press *1 again 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.
The Company wishes to inform its shareholders that, due to the Canada Postal Service strike, the Q1 Fiscal 2025 documents will not be mailed out until the strike is over. The Q1 Fiscal 2025 Interim Financial Statements and MD&A are filed electronically and can be viewed on SEDAR+.
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 Mermicorno: Starfall, Super Team Canada, Molly of Denali, Highway Thru Hell, Kim's Convenience, Boot Camp and Sidelined: The QB and Me. Thunderbird Distribution and Thunderbird Brands manage global media and consumer products rights, respectively, for the Company and select third parties. Thunderbird is on Facebook, X, 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
Certain statements in this press release contain "forward-looking information" for the purposes of applicable securities laws ("forward-looking statements"). Forward-looking statements of 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. Examples of forward-looking statements in this press release include, but are not limited to, forecasting a return to top-line growth in fiscal 2025, forecasted 2025 growth in revenue and AEBITDA1; anticipated gross margin1 differences; being successful in increasing efficiencies and realizing additional savings throughout fiscal 2025; successfully investing in new content production; aligning content strategy with disciplined financial oversight to deliver increased value to shareholders; abilities to execute strategic priorities; the ability to retain talent; Canadian tax credits and exchange rates remaining favorable; increasing visibility through strong results and proactive engagement with the investment community to maximize liquidity; the impact of negotiations between AMPTP and IATSE Local 839 on green-lighting productions; continuing use of the NCIB.
Financial outlook and future-oriented financial information, as with forward-looking information generally, are, without limitation, based on the assumptions and estimates and subject to various risks. The targets, forecasts and projections included herein, and the related assumptions, involve known and unknown risks and uncertainties that may cause actual results to differ materially. While management of Thunderbird believes there is a reasonable basis for these targets, forecasts and projections, such targets, forecasts, or projections may not be achieved. The Company's actual financial position and results of operations may differ materially from management's current expectations and, as a result, among other things, 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; the ability to satisfy the criteria of the TSX to be able to uplist on the TSX and the timing related thereto; 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 the Company's June 30, 2024, 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 contained in this document (including statements containing future-oriented financial information) are reasonable, undue reliance should not be placed on these statements which represent the Company's views as of the date hereof and as such information should not be relied upon as representing the Company's views as of any date subsequent to the date of this press release. The Company undertakes no obligation to update publicly or revise any forward-looking statements, whether because 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.
1 AEBITDA, AEBITDA margins, gross margin and Free Cash Flow are Non-IFRS Measures, see "Non-IFRS Measures" section below for their respective definitions, detailed calculations and detailed reconciliation to IFRS measures. The most directly comparable financial measures of the Company are net income, gross profit and cash flows from operations, respectively as reported below.
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, AEBITDA Margins and Gross 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.
"Gross Margin" is calculated as a ratio of revenue that exceeds direct operating costs. Management considers Gross Margin a useful indicator of profitability before operating and other expenses, aiding in the assessment of the Company's ability to generate net earnings and cash flow. The most directly comparable measure under IFRS is gross profit.
Non-IFRS Measures Reconciliations
The following table presents the reconciliation from net income (loss) to EBITDA and AEBITDA, for the three months ended September 30, 2024 and 2023.
For the three months ended | ||||
Sept 30, 2024 | Sept 30, 2023 | |||
($000's) | $ | $ | ||
Net income (loss) for the period | 1,581 | (727) | ||
Income tax expense | 1,198 | 159 | ||
Deferred income tax recovery | (797) | (294) | ||
Finance costs | ||||
Interest | 371 | 527 | ||
Dividends on redeemable preferred shares | 7 | 7 | ||
Amortization | ||||
Property and equipment | 360 | 497 | ||
Right-of-use assets | 1,571 | 1,903 | ||
Intangible assets | 68 | 68 | ||
2,778 | 2,867 | |||
EBITDA | 4,359 | 2,140 | ||
Share-based compensation | 89 | 183 | ||
Unrealized foreign exchange loss (gain) | (118) | 195 | ||
Gain on disposal of property and equipment | (356) | - | ||
Gain on termination of leases | - | (54) | ||
Restructuring and other costs | 104 | 24 | ||
(281) | 348 | |||
AEBITDA | 4,078 | 2,488 | ||
The following table presents the reconciliation from Gross Profit to Gross Margin, for the three months ended September 30, 2024 and 2023.
Summary of Gross Profit
For the three months ended | ||||
Sept 30, 2024 | Sept 30, 2023 | |||
($000's) | $ | $ | ||
Revenue | 45,669 | 33,600 | ||
Direct Operating | 36,726 | 25,714 | ||
Gross Profit | 8,943 | 7,886 | ||
Gross Margin | 19.6% | 23.5% |
The following table presents the reconciliation from cash flows from operations to Free Cash Flow, for the three months ended September 30, 2024 and 2023.
For the three months ended | ||||
Sept 30, 2024 | Sept 30, 2023 | |||
($000's) | $ | $ | ||
Cash inflows from operations | 10,860 | 2,020 | ||
Net purchase of property and equipment | (286) | (959) | ||
Net repayment of interim production financing | (907) | (3,494) | ||
Free Cash Flow | 9,667 | (2,433) |
Contacts
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
