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May 28, 2019

Thunderbird Entertainment Announces Company Record EBITDA in Third Quarter and Provides Corporate Update


Conference Call and Webcast Scheduled May 29 at 9 a.m. ET

Vancouver, Canada, May 28, 2019 — Thunderbird Entertainment Group Inc. (TSXV:TBRD) (Thunderbird or the Company), a global, multiplatform entertainment company with offices in Los Angeles, London, Vancouver, Ottawa and Toronto, today provided a corporate update, and announced its financial and operating results for the third quarter ended March 31, 2019.

Financial Highlights:

  • The Company continued its focus on high quality, high margin revenue and delivered $10.6 million in adjusted EBITDA for the nine months ended March 31, 2019;
  • The Company’s adjusted EBITDA margin increased from 7% to 22% over the comparative nine month period from 2018, which is a 15% increase;
  • The Company successfully paid down $4 million of debt.

 Growth, Investment and Advancement in IP Stable, Strategic Partnerships and Business Highlights:

  • To date, the Company has eight Intellectual Property (IP) series in production, and has invested funds in developing more than 25 additional IP shows, demonstrating its focus on quality of revenue as part of its core business plan;
  • The Company has entered into a worldwide licensing agreement with Cyber Group StudiosforTheLast Kids on Earth, which was expanded with a JAKKS Pacific toy deal to diversify and enhance the Company’s revenue into long tail, consistent cash flow from existing IP.

Key Hires/ Promotions and Attention to the High Growth US Over-the-Top (OTT) Market:

  • The Company promoted Matthew Berkowitz, Aaron Behl and Wendy McKernan, and hiredKristin Cummingsfrom DreamWorks to service Thunderbird’s largest customers, including Netflix, Disney, NBC Universal, Bell Media, Corus and CBC;
  • The Company successfully reached its business objective of expanding into Ottawa, the company’s fifth office, ahead of schedule.

Core Business Update:

  • During the quarter, the Company had 17 television programs in various stages of production.
  • By quarter end, Thunderbird had grown to roughly 1,000 crew across its Vancouver, Los Angeles, London, Toronto and Ottawa offices.

 Thunderbird Kids and Family

  • The Company announced two strategic partnerships that continue to expand, leverage and monetize its IP acquisitions:
    • The first involved its kids and family division (Atomic Cartoons) partnering with the internationally-acclaimed pop-culture brand tokidoki to develop an original animated series based on tokidoki’s Mermicornocharacter family. The series represents another successful extension of the Mermicorno brand, which includes collectible figures, plush toys, bags, apparel and novelty items that are available globally in more than 20,000 stores.
    • The second involved the Company entering into a worldwide licensing agreement with Cyber Group Studios for the upcoming animated series based on Max Brallier’s books, The Last Kids on Earth. Under the terms of the agreement, Cyber Group Studios became the sole and exclusive representative worldwide for merchandising, ancillary and second window TV rights for the series.
  • During the quarter, the Company was in various stages of production on 11 animated television programs;
    • These programs reflect a blend of both proprietary and service-based series, and include The Last Kids on Earth (IP), Max & Ruby (IP), Molly of Denali (service), and 101 Dalmatian Street (service), among others.

Thunderbird Factual

  • Thunderbird’s factual division (Great Pacific Media) was in production with five shows:  Highway Thru Hell (Season 8), Heavy Rescue: 401 (Season 4), $ave my Reno (Season 2), High Arctic Haulers and Worst to First(Season 2);
  • The Company delivered 17 original hours of Heavy Rescue: 401 (Season 3), which is one of Canada’s highest rated factual series. The audiences for these episodes surpass one million viewers weekly on Discovery. The network has now ordered an additional 17 hours for broadcast in January 2020;
  • Heavy Rescue: 401 was also licensed by the Weather Channel in the US to broadcast in their primetime schedule. The Weather Channel is seen by more than 80 million households;
  • The Company also delivered the 14-episode second season of the lifestyle series $ave My Reno to HGTV Canada. The series continues to be a ratings success on the network.

Thunderbird Scripted

  • Thunderbird’s scripted division reached a distribution deal for the first three seasons of Kim’s Convenience with distributor Yoon & Company for a cable release in Korea and Japan, which commenced in early 2019.
  • The Company continued with production on the fourth season of its award-winning comedy series Kim’s Convenience during the quarter. Kim’s Convenience airs on CBC in Canada and is available on Netflix worldwide.
  • The Company also announced a collaboration with author Cherie Dimaline and TV writer/producer Jennica Harper to adapt Dimaline’s award-winning novel, The Marrow Thieves, for television.

Expansion of Leadership Team in High Growth US Market – New Hires / Promotions and Successful Ramp Up of Ottawa Animation Studio:

  • The Company continued to recruit and promote key talent, with the following appointments and new hires:
    • In Los Angeles, Matthew Berkowitz was promoted to the role of Chief Creative Officer (CCO) of Thunderbird Entertainment. As CCO, Berkowitz is instrumental to Thunderbird’s long-term growth strategy, which focuses on the continued expansion and development of its IP library;
    • In Los Angeles, Kristin Cummings was recruited from DreamWorks Animation to jointly serve with Aaron Behl as Vice President Originals in Thunderbird’s kids and family division. Behl was an internal promotion, most recently serving as Director of Development. Their joint focus is to lead both the kids and family portfolio at the Company, as well as to develop its emerging adult animation slate;
    • In Vancouver, Wendy McKernan, who is known as one of Canada’s most respected factual producers, was appointed Vice President of Thunderbird Factual. In her role, she oversees all production at Thunderbird Factual, including lifestyle and factual programming. She also became a senior member of a team working to develop fact-based events into scripted projects.
  • Ottawa Commences Robust Operations
    • As previously announced, the company was aiming to have this office up and running by June 2019. The Company is pleased to report that the office is fully-integrated and helping serve the Company’s rapidly expanding IP portfolio and customer base. The Company welcomes its fifth office, bringing its animation team to more than 500 talented, highly sought-after animators.

“2019 is moving at an unprecedented pace, and never in history has there been a better time to work in content creation,” says Jennifer Twiner McCarron, Thunderbird Entertainment’s CEO. “While investing in people and infrastructure in order to fuel our growth, we are continuing to demonstrate momentum and deliver strong financial results”

Q3 2019 Financial Update

Three months ended
Mar 31, 2019
Nine months ended
Mar 31, 2019
Revenue  $ 21.9  $47.8
Net income (loss)  $ 1.9  $ (2.7)
Adjusted EBITDA [1]  $ 5.0  $ 10.6
Cash  $ 17.7  $ 17.7

[1]Adjusted EBITDA is calculated based on EBITDA, or earnings before interest, income taxes, depreciation and amortization, asset impairment charges, accretion, share-based compensation expense, finance costs and income, share of loss of associates, unrealized foreign exchange gains and losses and losses and items of an unusual 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 is not an earnings measure recognized by IFRS and therefore does not have a standardized meaning prescribed by IFRS.  Therefore, EBITDA may not be comparable to similar measures presented by other issuers. See “Non-IFRS Measures” below in this press release.

Results for the three and nine months ended March 31, 2019 compared to the three and nine months ended March 31, 2018:

For the three months ended For the nine months ended
($000’s, except per share data) March 31, 2019 (unaudited) March 31, 2018 (unaudited) March 31, 2019 (unaudited) March 31, 2018 (unaudited)
Revenue $21,865 $12,131 $47,815 $131,024
Expenses 1 19,938 13,023 50,538 127,426
Net income (loss) from continuing operations 1,927 (892) (2,723) 3,598
Income from discontinued operations 93
Non-controlling interest (8)
Foreign currency translation adjustment (50) (35) (35) (87)
Comprehensive net income (loss) for the period attributable to owners of the parent $1,877 $ (927) $ (2,766) $3,604
Basic earnings (loss) per share – continuing operations  $0.041 $(0.043) $(0.088) $0.082
Diluted earnings (loss) per share – continuing operations  $0.039 $(0.043) $(0.088) $0.067
Adjusted EBITDA  $5,016  $(236)  $10,643  $8,871
Adjusted EBITDA Margin 22.94% (1.95%) 22.26% 6.77%

1Expenses includes a non-cash charge related to Public company listing of $5,316 in the nine months ended March 31, 2019.

  • Adjusted EBITDA was $5.0 million and $10.6 million for the three and nine months ending March 31, 2019, compared to ($0.2 million) and $8.9 million for the comparative periods of fiscal 2018, an increase of $5.2 million and $1.7 million, respectively. These increases were due to growth in the animation and factual divisions, offset partially by decreased deliveries in the scripted division and increased public company costs, such as investor relations, publicity, filing fees, legal and accounting costs.  
  • During the nine months ending March 31, 2019, the Company paid down $4 million of a $6 million three-year non-revolving term loan drawn in July 2018. The term loan was drawn in order to repurchase common shares of certain shareholders of Thunderbird Entertainment Inc. on an accretive basis and was part of an overall credit facility negotiated with the Royal Bank of Canada that also included an increased production line and an acquisition facility.
  • Consolidated revenue for the three months ended March 31, 2019 was $21.9 million as compared to $12.1 million in Q3 of fiscal 2018.Revenues for the nine months ended March 31, 2019 were $47.8 million as compared to $131 million for the comparative periods of fiscal 2018.  The majority of the nine month decrease ($69.6 million) was related to the Company’s decision to not renew its multi season service agreement to produce the live action television series Man in the High Castle. Although the series generated significant revenues, the profit margins were small and management decidedto re-direct valuable corporate resources to the creation of owned IP programming and other core operations.  A portion of the quarterly revenue increase ($9.3 million) specifically related to the adoption of IFRS 15, which delayed recognition of revenue on renewed scripted and factual television series to from Q2 to Q3.
  • Consolidated net income for the quarter was $1.9 million as compared to a consolidated loss of $0.9 million during the comparable quarter of the prior year. Net loss for the current nine months was $2.7 million as compared to net income of $3.6 million for the comparative nine months of fiscal 2018.  In addition to the implementation of IFRS 15 and other matters referenced above, which effected the timing of recognition of revenues between quarters, the nine month statements also reflected a one-time charge of $5.3 million relating to the reverse take over completed in the fall of 2018. This non- cash charge represented the difference between the net assets acquired and the fair value of the shares, options and warrants that were exchanged.

The Company’s unaudited interim financial statements along with its Management’s Discussion and Analysis for Q3 2019 are available on the Company’s website at http://www.thunderbird.tv and under the Company’s profile at www.sedar.com.

Conference Call on May 29

Thunderbird will hold a conference call and webcast on May 29, 2019 at 9 a.m. Eastern Time (6 a.m. Pacific Time) to provide a corporate update. The dial in numbers are: (+1) 416 764 8609 (Toronto), (+1) 778 383 7417 (Vancouver), or (+1) 888 390 0605  (North American toll-free). The Conference ID is: 56189613. A live webcast of the conference call can be accessed by clicking here.

The call will be recorded for webcasting purposes and will be available at www.thunderbird.tv. Alternatively, you may access a replay of the conference call by calling (+1) 416 764 8677 or toll-free at (+1) 888 390 0541 (passcode 189613).

About Thunderbird Entertainment Group Inc.

Thunderbird Entertainment Group is a Vancouver-based global multiplatform entertainment company with offices in Vancouver, Los Angeles, Toronto, Ottawa and London. 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 Productions.

On Behalf of Thunderbird Entertainment Group Inc.

Jennifer Twiner McCarron

Chief Executive Officer

For information on Thunderbird and to subscribe to the Company’s investor list for news updates, go to www.thunderbird.tv. For further information, please contact:

Investor Relations Contacts:

Lucas Cahill and Freddie Leigh

Phone:        + 1 604.683.3555
Email:        investors@thunderbird.tv

Media Relations Contact:

Julia Smith, Finch Media

Phone:        +1 604.803.0897
Email:        julia@finchmedia.net

 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

This news release contains references to certain measures that do not have a standardized meaning under International Financial Reporting Standards (“IFRS”) as prescribed by the International Accounting Standards Board and are therefore unlikely to be comparable to similar measures presented by other companies. Rather, these measures are provided as additional information to complement IFRS measures by providing a further understanding of operations from management’s perspective. Accordingly, non-IFRS measures should not be considered in isolation nor as a substitute for analysis of financial information reported under IFRS. The Company believes that non-IFRS measures, specifically EBITDA and Adjusted EBITDA, are frequently used by securities analysts, investors and other interested parties as measures of financial performance and to provide supplemental measures of operating performance and thus highlight trends that may not otherwise be apparent when relying solely on IFRS financial measures.