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Thunderbird Entertainment Group Reports Fiscal 2023 Year End Results, Fiscal 2023 Revenue up 12% YoY to $166.7 Million
Monday, October 16, 2023Company Profile | Follow Company
Fiscal 2023 revenue $166.7M; 12% year-over-year increase
28 shows in production; 10 are owned IP
Vancouver, BC, October 16, 2023--(T-Net)--Thunderbird Entertainment Group Inc. (TSXV: TBRD) today announced its year end results for fiscal 2023, which ended June 30, 2023, and provided a corporate update.
Financial Summary
"Thunderbird's steady growth is due to our robust - and diversified - production slate, which includes legacy IP like Highway Thru Hell and new Company originals like Rocket Saves the Day, as well as repeat service production on big brands such as our LEGO productions and Marvel's Spidey and His Amazing Friends for Disney Jr.," said Thunderbird's CEO and Chair, Jennifer Twiner McCarron.
"I am proud of the teams' hard work, and how they continue to create so many wins despite the headwinds the industry and Company faced in 2023. Our healthy balance sheet continues to serve Thunderbird well as we assess opportunities, including a liquidity event, to not only enhance but maximize shareholder value."
"We have made great strides with our owned IP work and we're thrilled to have started production on several exciting IP projects that span multiple genres - including the sale of our first original IP adult animated series. These projects were greenlit in 2023 and we expect net income to start hitting our books in fiscal 2025 and beyond. To see these efforts coming to fruition affirms the strategic decisions we have made on our path to becoming the next major global studio. We have several exciting announcements on the horizon, and look forward to sharing more about these productions when we are able," Twiner McCarron said.
Strategic Review Advisory Committee and Share Buyback Update
Pursuant to the Cooperation Agreement between Thunderbird and Voss Capital, LLC, which is detailed in the Company's January 19, 2023 news release, Thunderbird formed a Strategic Advisory Committee composed of three directors (including two of the independent directors put forward by Voss) and a Voss-appointed non-voting observer.
Since March 2023, the Committee has been assessing Thunderbird's capital allocation strategy and all opportunities to maximize shareholder value for ultimate recommendation to the board of directors.
This has involved working alongside ACF Investment Bank to evaluate any unsolicited inbound expressions of interest that may be received by the Company from time to time and handle the potential sale of Thunderbird in the event that an offer is received that meets the Company's standard for shareholder value creation.
The Committee's most recent analysis has indicated a considerable difference between the Company's internal assessment of Thunderbird's valuation, based on management's line of sight on production services bookings, promising owned IP pipeline, and expectations for margin expansion, versus the valuation that prospective buyers might be willing to currently offer given the negative macro environment in the media industry.
The Committee believes that this discrepancy does not reflect the true potential and long-term value of the Company. As such, it is in the best interest of the Company and its respective shareholders to wait until Thunderbird's strategic initiatives begin to materialize to demonstrate its true worth.
While the Committee will continue to evaluate any unsolicited inbound expressions of interest in Thunderbird, this approach will ensure that when proactive engagement begins with such opportunities, it will be from a position of strength, ensuring maximum value for shareholders.
In the interim, the Board has approved pursuing the implementation of a normal course issuer bid (the "NCIB"), pursuant to which the Company may repurchase its own common shares through the facilities of the TSX Venture Exchange, as may be permitted by the TSXV and applicable securities laws. Implementation of an NCIB remains subject to obtaining the prior acceptance of the TSXV. Further details regarding the proposed NCIB will be provided in a subsequent news release as they become available.
Outlook
With the majority of its forecasted service revenue contracted for the year, management is targeting double-digit revenue growth in fiscal 2024 as well as meaningful growth to AEBITDA1 to return to levels attained prior to fiscal 2023.
Looking to the next few years, the Company anticipates a double-digit compound annual revenue growth rate ("CAGR")1 from fiscals 2023 to 2026, with forecasted revenue of approximately $220M in fiscal 2026 (fiscals 2021 to 2023 revenue CAGR1 of 22%).
Additionally, management is targeting AEBITDA Margin1 growth with double-digit margins projected in fiscals 2025 and 2026. The Company greenlit multiple animated IP projects in fiscal 2023, all of which are currently in production, which are projected to contribute to net income starting in fiscal 2025.
Management is, however, mindful of the current industry challenges. Uncertain conditions including cost cutting from major buyers has led to a slowdown in greenlights which could impact the Company's outlook for the next fiscal year.
Thunderbird continues to focus on strategic priorities of growing key brands and investing in owned IP while continuing to expand and deliver consistent service revenue from a robust slate of returning and new series. To address the uncertain market conditions, the Company is committed to maintaining a strong balance sheet and prudently managing its cost base while pursuing sustainable growth.
1AEBITDA, CAGR and AEBITDA Margin are Non-IFRS Measures, see "Non-IFRS Measures" section below for their respective definitions, and in the MD&A for detailed calculations and reconciliations. |
Thunderbird's Fiscal 2023 Corporate Highlights
Financial Position |
|||||||||
($000's) |
|
June 30, |
|
June 30, |
|
June 30, |
|||
|
|
|
|
|
|
|
|||
Revenue |
$ |
166,730 |
|
$ |
148,998 |
$ |
111,519 |
||
Net income (loss) from operations |
$ |
(5,011 |
) |
$ |
3,598 |
$ |
5,690 |
||
Basic income (loss) per share |
$ |
(0.101 |
) |
$ |
0.073 |
$ |
0.119 |
||
|
|
|
|
|
|
|
|||
Total assets |
$ |
215,854 |
|
$ |
223,718 |
$ |
160,144 |
||
Total non-current liabilities |
$ |
23,960 |
|
$ |
26,834 |
$ |
26,828 |
||
Shareholders' equity |
$ |
66,670 |
|
$ |
69,823 |
$ |
63,960 |
||
Results of Operations |
|||||||||||||||
|
For the three months ended |
For the year ended |
|||||||||||||
($000's) |
June 30, |
June 30, |
June 30, |
June 30, |
|||||||||||
|
|
|
|
|
|||||||||||
Revenue |
$ |
37,745 |
|
$ |
44,119 |
|
$ |
166,730 |
|
$ |
148,998 |
|
|||
Expenses |
|
40,314 |
|
|
45,939 |
|
|
171,741 |
|
|
145,400 |
|
|||
Net income (loss) for the period |
$ |
(2,569 |
) |
$ |
(1,820 |
) |
$ |
(5,011 |
) |
$ |
3,598 |
|
|||
AEBITDA1 |
$ |
687 |
|
$ |
2,409 |
|
$ |
12,761 |
|
$ |
20,061 |
|
|||
AEBITDA Margin1 |
|
1.0 |
% |
|
5.5 |
% |
|
7.7 |
% |
|
13.5 |
% |
|||
Free Cash Flow1 |
$ |
7,984 |
|
$ |
(747 |
) |
$ |
4,331 |
|
$ |
13,917 |
|
|||
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 June 30, 2023 MD&A for detailed calculations and reconciliations. |
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.
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.
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, AEBITDA Margins and Compound Annual Growth Rate.
"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.
"Compound Annual Growth Rate" ("CAGR"). CAGR is a metric used to evaluate the growth in our business. It represents the growth rate over a period of time on an annual compounded basis. CAGR is a non-IFRS ratio when applied to non-IFRS financial measures.
_______________________
1 Free Cash Flow and AEBITDA are Non-IFRS Measures, see "Non-IFRS Measures" section below for their respective definitions, and in the MD&A for detailed calculations and reconciliations.
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