Thunderbird Entertainment Group Inc (CVE:TBRD) (OTCQX:THBRF) (FRA:32GA) announced financial results Thursday for its fiscal second quarter ended December 31, 2020, revealing revenue and earnings that roughly doubled year-over-year.
The media company posted revenue of C$28 million and C$47.7 million in the three and six months ended December 31, respectively, representing increases of 98% and 56% year-over-year. Its adjusted EBITDA was C$5.2 million and C$10 million over the same periods, compared to C$2 million and C$5.7 million in fiscal 2020.
Thunderbird attributed the increases to major growth within its Kids and Family Division, Atomic Cartoons. During the quarter, the division was in various stages of production on 13 animated series and two feature-length animated productions, including co-producing Mighty Express with Spin Master for Netflix, LEGO Star Wars Holiday Special for Disney+ and Molly of Denali for GBH/ PBS KIDS.
READ: Thunderbird Entertainment announces creation of a new Global Distribution and Consumer Products Division
Production services revenue for the quarter increased 63% (C$7.4 million) due to an increase in the number and size of contracts, the company said, primarily due to animation production. Similarly, licensing and distribution revenues increased by 272% (C$6.4 million), thanks primarily to the delivery timing of the animated series The Last Kids on Earth.
Free cash flow was C$4.4 million in the quarter, compared to C$3.8 million in the same period of fiscal 2020.
“As we continue to grow Thunderbird into a major global studio, Q2 results further demonstrate that our long-term strategy and initiatives are paying off, with significant increases in revenue and adjusted EBITDA, year-over-year,” CEO Jennifer Twiner McCarron said in a statement. “In Q2, we were in production on 21 properties — including a growing percentage of owned-IP projects that offer higher economic value and for which we fully control the rights. This, in conjunction with our new consumer products division, allows us to fully leverage the world-class brands being created at Thunderbird.”
The company’s Factual and Scripted Division, Great Pacific Media, was in production on four series and one documentary special: Highway Thru Hell (seasons 9 and 10), Heavy Rescue: 401 (seasons 5 and 6), $ave My Reno (season 4), Mud Mountain Haulers (season 1) and The Teenager and the Lost Mayan City (documentary for CBC). The award-winning comedy Kim’s Convenience was in production on season 5.
In a note to clients, Canaccord Genuity analysts wrote that Thunderbird Entertainment’s financial results “marked the fourth successive quarterly beat in terms of our estimates, and the sharpest yet,” with the company’s “solid” growth led predominantly by its animation division.
“Despite the pandemic, Thunderbird Entertainment (TBRD) continues to produce new content using innovative filming techniques to limit COVID-19 risk and taking advantage of the growing demand for content from subscription video on demand (SVOD) players. During the quarter, the company had 21 programs in various stages of production, 10 of which were either proprietary or under IP partnership,” the analysts said.
“TBRD’s efforts to continue to move the production mix toward proprietary is key given the higher longer-term value associated with the model, and implications for valuation,” they added.
On Thunderbird’s upcoming conference call, the Canaccord Genuity analysts noted that they are focused on the company’s appetite and pipeline for acquisitions given its strong balance sheet position; additional traction on the partnership model (e.g. Hello Ninja) where Thunderbird Entertainment has revenue share rights to service contracts; early traction on merchandising with the initial products from Last Kids hitting the shelves (mainly digital shelves); prospects for larger production/licensing commitments from major SVOD platforms and; the expected rate of shift in production service to licensing revenue mix.
Canaccord Genuity analysts continue to maintain their 'Buy' rating on shares of Thunderbird Entertainment while leaving their target price unchanged at C$3.25 per share.
Thunderbird Entertainment shares gained nearly 9% to $3.91 in midday trading on the TSX Venture exchange Thursday.
Contact Andrew Kessel at andrew.kessel@proactiveinvestors.com
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