Thunderbird Entertainment generating record revenue as demand for content skyrockets

Produces award-winning, high-quality content with a track record of robust viewership 18 television programs currently in various stages of production A repeatable and scalable business model with proven earnings history Experienced management team in the media and entertainment sector and predominant board What Thunderbird Entertainment does: Thunderbird Entertainment Group (CVE:TBRD) (OTCMKTS:THBRF) is building global entertainment brands for the world’s biggest broadcasters and streaming giants. The Vancouver-based global multi-platform entertainment company produces award-winning scripted, unscripted and animated programming for the world’s leading digital platforms, as well as for Canadian and international broadcasters such as Netflix, Amazon Prime and Disney. Its underlying ethos is to make the world a better place, according to its CEO Jennifer Twiner McCarron. Through its three divisions: Kids and Family, Factual and Scripted, Thunderbird also has a division based in the United Kingdom dedicated to establishing partnerships with production companies to develop the company’s intellectual property. The company is behind popular titles such as ‘The Last Kids on Earth,’ ‘$ave My Reno,’ ‘Highway Thru Hell’ and the award-winning CBC sitcom ‘Kim’s Convenience.’ Thunderbird’s executive team and board of directors reads like a who’s who of the Canadian entertainment industry. CEO Twiner McCarron is a creative at heart, an Emmy-award winner and one of the leading women in the animation sector. Its board is stacked with names like film mogul and philanthropist Frank Giustra, noted investor Frank Holmes and Paul Sparkes, a former executive at CTVglobemedia (now Bell Media). With around 47 million shares outstanding and a C$59 million market capitalization, the Canadian company is poised to take on entertainment industry heavyweights like Lionsgate and Entertainment One as consumers search for new content. How is it doing: The coronavirus (COVID-19) pandemic forced Thunderbird to transition more than 1,000 workers “off-site”, but that didn't affect its bottom line as highlighted in its fiscal 2020 report. In fact, revenues are on the rise.  The company pulled in full-year revenue of C$83.1 million, up 41% year-over-year. Fourth-quarter revenue was $21.1, a 63% year-over-year increase. Its free cash flow was $7.3 million for the fiscal year, compared to negative free cash flow of C$5 million in FY2019.  Its adjusted EBITDA (earnings before interest, taxes, depreciation, and amortization) was C$2.9 million for the quarter and C$15.5 million for the year, compared to C$1 million and C$12.8 million, respectively in FY2019. Thunderbird ended the fiscal year with 18 programs in production and in deals with Netflix, NBCUniversal, Nickelodeon, PBS, GBH, Bell Media's Discovery, APTN, Corus Entertainment, CBC, and others. Heading into fall 2020 and winter 2021, the company is launching seven new and returning series with other steaming partners like Disney+, Peacock, and Discovery Canada. In a big move, Thunderbird expanded its kids and family division with the opening of its Los Angeles animation studio. The LA studio's first project is already in production with 80 crew members working remotely on it. On the programming front, the group’s hit show Molly of Denali was recently awarded an esteemed Peabody Award in the children and youth category. The show also won a 2020 Television Critics Association award for Outstanding Achievement in Youth Programming. Its flagship series The Last Kids On Earth recently debuted its second season on Netflix and production has begun on the fifth season of the hit series Kim’s Convenience, which also streams on Netflix. CBC has already renewed the series for a sixth season. Inflection points: Atomic developing a video game based on The Last Kids On Earth in conjunction with Outright Games, scheduled to be released in 2021 Continue buildout of content library across all three verticals Invested funds in developing 25 additional titles What the broker says: In a recent note to clients, Canaccord Genuity analyst Aravinda Galappatthige said Thunderbird’s "strong" fourth-quarter reinforces its "growth credentials."  The analyst maintained a "buy" rating on the stick but elevated his share price target for Thunderbird to $3.25 from $2.50. The stock recently traded around $2 a share,  "In our view, the Q3 and Q4 results highlight the solid underlying funnel of production opportunities at TBRD, particularly in kids,” Galappatthige wrote. “Notably, the company has a number of shows with Netflix currently including Last Kids on Earth (season II launched April 17), Hello Ninja (season II streamed April 24, season III July 10, 2020) and Kim's Convenience."  The analyst added: “In the meantime, the factual division continues to be very strong with four series and one documentary in production during Q4. The flagship show Highway Thru Hell is in season 9 and now has two spin-out shows." What the boss says: “We’re really lucky to be working in content,” Thunderbird CEO Jennifer Twiner McCarron recently told Proactive. “People need it more than ever – it’s a healthy escape. The company is doing such high work in factual and kid’s content. With all of the new players coming online and places to sell our content, it’s never been a better time to be in this business.” Contact the author: patrick@proactiveinvestors.com Follow him on Twitter @PatrickMGraham