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October 15, 2020

Fiscal Year 2020 Financial Results

  • Fiscal 2020 Revenue $81.3 million, increasing 41% over Fiscal 2019
  • Year-end Adjusted EBITDA $15.5 million, increasing 21% over Fiscal 2019
  • Year-end Free Cash flow of $7.3 million, increasing $12.3 million over Fiscal 2019
  • Conference call and webcast scheduled for October 15 at 11 a.m. PST/ 2 p.m. EST

Vancouver, Canada, October 15, 2020 – Thunderbird Entertainment Group Inc. (TSXV:TBRD, OTC – THBRF) (Thunderbird or the Company), today announced its financial results for the fiscal year ended June 30, 2020 (“Fiscal 2020”), and provided a corporate update.

Financial Highlights

  • Revenue for the three months and the year ended June 30, 2020 was $21.1 million and $81.3 million as compared to $12.9 million and $57.7 million for the comparative periods of fiscal 2019, increases of $8.2 million and $23.6 million respectively.
  • Adjusted EBITDA was $2.9 million and $15.5 million for the three months and the year ended June 30, 2020 compared to $1.0 million and $12.8 million for the comparative periods of fiscal 2019, an increase of $1.9 million and $2.7 million, respectively.
  • Free cash flow was $7.3 million for the year ended June 30, 2020, as compared to a negative free cash flow of $5.0 million in the prior year.

“While 2020 has presented many unprecedented situations, the Thunderbird team continues to demonstrate resilience and adaptability. In March we successfully transitioned all 1000+ employees offsite without missing a beat; and in fact, our revenue has increased 41% over the prior year to $81.3 million,” said Jennifer Twiner McCarron, CEO, Thunderbird. “There is a strong demand for Thunderbird content, and we feel fortunate to be working in an industry experiencing accelerating trends. 2020 has also forced us all to look inward and challenge our assumptions around diversity and inclusion – Thunderbird is well-positioned to deliver on this and I am proud of the steps we have made as a company and will strive to continue to lead in this area.”

Thunderbird’s Fiscal 2020 & Q4 Corporate Highlights

  • Thunderbird ended Fiscal 2020 with 18 programs in various stages of production and deals with Netflix, NBCUniversal, Nickelodeon, PBS, GBH, Bell Media’s Discovery, APTN, Corus Entertainment and CBC, among others.
  • Twenty-nine half-hour episodes and 26 one-hour episodes were delivered collectively from the factual, scripted, and kids and family divisions. All of the one-hour episodes and a third of the half-hour episodes were Company owned-IP.
  • The factual division, Great Pacific Media, was in production on four series and one documentary special: Highway Thru Hell (Season 9), Heavy Rescue: 401 (Season 5), $ave My Reno (Season 4), Mud Mountain Haulers (Season 1) and The Teenager and the Lost Mayan City (Documentary for CBC).
  • Mud Mountain Haulers (working title) is the second spin-off of its hit series Highway Thru Hell. It demonstrated new safety protocols pioneered by the Company to ensure the crew stayed safe and work continued.
  • The kids and family division, Atomic Cartoons, was in various stages of production on 12 animated series. Service productions include co-producing Mighty Express with SpinMaster for Netflix, LEGO Star Wars Holiday Special for Disney+, Molly of Denali for GBH/ PBS KIDS and CBC and LEGO Jurassic World: The Secret Exhibit for NBCUniversal.
  • During the fourth quarter, the fourth season of Kim’s Convenience began streaming April 1, 2020 on Netflix outside of Canada (it remains available in Canada on CBC Gem). Kim’s Convenience was also renewed for seasons five and six, which are scheduled for 2021 and 2022 respectively.
  • Subsequent and during the quarter, the Company received the following recognitions: an Emmy Award (The Last Kids on Earth), a Peabody Award (Molly of Denali), a 2020 Television Critics Association Award (Molly of Denali), two 2020 Canadian Screen awards, nine Leo Award awards, and two Stevie International Business awards, which recognised the management team and overall Company. Thunderbird was also listed on Canadian Business’ 2020 Growth List, as one of Canada’s Fastest Growing Companies.

  • Effective July 1, 2019, the Company adopted and implemented IFRS 16, Leases (“IFRS 16”), which requires a lessee to recognize all leases on the balance sheet as a right-of-use asset and a corresponding lease liability, with limited exemptions. Previously, leases were classified as either operating leases (off-balance sheet) or financing leases (on-balance sheet), and rental payments were expensed in the income statement.
  • In fiscal 2020, the Company completed a change in accounting policy whereby it has capitalized certain overhead costs, such as salaries, rent, and computer maintenance, to investment in content, and has amortized these costs in the same manner as all other investment in content costs.  For service productions, these costs were reallocated to direct costs.  The change in accounting policy provides that the investment in content costs are more reflective of the  relevant costs of production.
  • Consolidated revenue for the three months and the year ended June 30, 2020 was $21.1 million and $81.3 million as compared to $12.9 million and $57.7 million for the comparative periods of fiscal 2019, increases of $8.2 million and $23.6 million respectively.  The majority of this revenue increase over the comparative periods in 2019 is related to growth in the kids and family division.
  • Consolidated net loss from continuing operations was $0.3 million for the three months ended June 30, 2020 and consolidated net income from continuing operations was $4.1 million for the year ended June 30, 2020.  This is compared to net income from continuing operations of $0.1 million and net loss from continuing operations of $1.6 million for the comparative periods of fiscal 2019.  Net loss was $0.6 million and net income $3.0 million, after loss from discontinued operations of $0.3 million and $1.1 million, for the three months and year ended June 30, 2020 as compared to net losses of $0.6 million and $2.4 million after loss from discontinued operations of $0.7 million and $0.8 million in the comparative periods of 2019. The Company incurred a one-time charge during the comparative period of fiscal 2019 relating to the RTO Transaction of $5.3 million.
  • Adjusted EBITDA was $2.9 million and $15.5 million for the three months and year ended June 30, 2020 compared to $1.0 million and $12.8 million for the comparative periods of fiscal 2019, an increase of $1.9 million and $2.7 million, respectively.  The three month increase was due to a large increase in production service work, as well as an increase in licensing and distribution revenues due to an increase in the number of proprietary shows delivered over the comparable quarter.  There was also a decrease in rent expense due to the adoption of IFRS 16 in which lease obligations for long-term leases are no longer recorded as rent expense, but capitalized as right-of-use (“ROU”) assets and amortized.
  • During the prior quarter, management decided to discontinue operation of its UK division.  The related assets and liabilities have been presented as held for sale, and the net revenues and expenses are shown as a loss from discontinued operations.
  • During the year, the Company paid down the remaining $1.4 million of a three-year non-revolving term loan that was initially drawn in July 2018 in the amount of $6.0 million.  The term loan was drawn in order to repurchase common shares of certain shareholders of Thunderbird and was part of an overall credit facility negotiated with the Royal Bank of Canada that also included an increased production line of credit and an acquisition facility.

Conference Call Webcast on October 15, 2020 at 11 a.m. PST/ 2 p.m. EST

Thunderbird will hold a conference call and webcast to share the Company’s year end financial results on October 15, 2020 at 11 a.m. PST/ 2 p.m. EST. Investors and analysts may access the call using the following online registration link: http://www.directeventreg.com/registration/event/9649827.

Upon registering, each participant will be provided with call details and a registrant ID. Reminders will also be sent to registered participants via email. Alternatively, the conference call will be available via a live webcast. To access the live webcast or a replay, visit the events page on our investor relations website here: https://thunderbird.tv/events-and-presentations/.

Investors can access a replay of the teleconference at: (+1) 416-621-4642 or toll-free at (+1) 800-585-8367 two hours after the call’s completion. The Conference ID # is 9649827. The teleconference replay will be available through October 29, 2020.

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

On Behalf of Thunderbird Entertainment Group Inc.

Jennifer Twiner McCarron
Chief Executive Officer

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.

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, and Free Cash Flow as measures of performance.

“EBITDA” is calculated based on earnings before interest, income taxes, depreciation and amortization. “Adjusted EBITDA” is calculated based on EBITDA, asset impairment charges, accretion, share-based compensation, share of loss of associates, 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.