Ms. Jennifer McCarron reports

THUNDERBIRD ENTERTAINMENT GROUP REPORTS FISCAL 2023 Q3 RESULTS

Thunderbird Entertainment Group Inc. has released its financial results for fiscal Q3 2023, which ended March 31, 2023, and provided a corporate update.

Financial summary:

• Revenue increased by $400,000 (1 per cent) to $37.3-million and $24.1-million (23 per cent) to $129-million for the three and nine months ended March 31, 2023, as compared with $36.9-million and $104.9-million for the comparative periods in the prior year. Both the number of episodes of IP (intellectual property) projects delivered and recognized, and the number and magnitude of production services projects remained consistent quarter-over-quarter (26 total half-hours of IP deliveries in the current quarter compared with 28 total half-hours in the prior year's third quarter).
• Adjusted EBITDA (earnings before interest, taxes, depreciation and amortization) decreased by $2.7-million (42 per cent) to $3.7-million and $5.6-million (32 per cent) to $12.1-million for the three and nine months ended March 31, 2023, compared with $6.4-million and $17.7-million for the comparative periods in the prior year. The decrease is attributable to an increase in general and administrative expenses, and the delay of several productions as a result of industry-wide economic factors and the proxy contest.

"I am very proud of the talented teams working hard to create many wins in spite of the headwinds we faced as an organization in fiscal 2023," said Jennifer Twiner McCarron, Thunderbird chief executive officer and chair. "With the proxy contest and its impact on us complete and with more visibility into next year, including increased production bookings, we are on track for Thunderbird's fiscal 2024 to be one of the company's strongest years on record. Our healthy balance sheet with zero debt has also served the company well in this rising interest rate environment, and we are well equipped to fuel growth and maximize shareholder value."

Strategic review advisory committee update

On May 15, 2023, Thunderbird announced that it has engaged ACF Investment Bank (ACF) as part of the company's strategic review process of assessing all opportunities to maximize shareholder value. ACF is a leading, global mergers and acquisitions adviser in the media and entertainment industry, and has completed more than 100 deals in this sector with a total deal value of more than $6-billion. Working with ACF maintains alignment with the co-operation agreement between Thunderbird and Voss Capital LLC, which is detailed in the company's Jan. 19, 2023, news release, while providing the company with an important next step in support of its growth trajectory.

Outlook

Industry-wide economic factors and the proxy contest delayed the start of several productions, moving them from fiscal 2023 to fiscals 2024 and 2025. While the company did not lose any planned work, the company is no longer anticipating fiscal 2023 to be its strongest, and it will have a lower adjusted EBITDA compared with fiscal 2022. With the shift in the timing of the company's production slate, and visibility well into fiscals 2024 and 2025, Thunderbird anticipates continued growth in adjusted EBITDA and revenues due to its robust pipeline. This includes the addition of several fully owned IP productions with adjacent merchandise opportunities coming to fruition. With increased production bookings in 2024, the company is projecting strong financial results in fiscal 2024.

Thunderbird Entertainment's Q3 2023 corporate highlights:

• In Q3, the company had 27 programs in various stages of production, up from 26 in the comparative period in the previous year. Of the 27 programs, 10 were Thunderbird IP and 17 were service productions. One of the service productions is a global IP buyout, where the production was originally optioned by the company, then acquired by the partner with Thunderbird receiving an increased percentage of net profits from merchandising and licensing as a result.
• Thunderbird kids and family content, which is produced under Atomic Cartoons, was composed of 19 programs in production for 17 different clients. Productions included Princess Power for Netflix, Marvel's Spidey and His Amazing Friends (season 2) for Disney Junior, CoComelon Lane for Moonbug for Netflix, My Little Pony: Make Your Mark for Eone/Hasbro, Young Love for Sony and HBO Max, and Teenage Euthanasia (season 2) for Adult Swim.
• Working for four different clients, Thunderbird's unscripted content, which is produced under Great Pacific Media (GPM), was composed of six unscripted series, including: Highway Thru Hell (season 12), Heavy Rescue: 401 (season 7), Deadman's Curse (season 2), Styled (season 2), Mud Mountain Haulers (season 3) and Dr. Savannah: Wild Rose Vet (season 2).
• During the quarter, GPM was in production on Reginald the Vampire (season 2), starring Jacob Batalon, and Boot Camp, a scripted production based on the popular Wattpad story by Gina Musa.
• Subsequent to the quarter, Warner Bros. Discovery licensed the new Atomic original series Mermicorno: Starfall, produced in partnership with tokidoki, for Max in the United States. The fully owned IP is also being distributed globally by Thunderbird Distribution, and a mass-market consumer products program will be co-managed by Thunderbird and tokidoki.
• Following Q3, Thunderbird also appointed Hillary Zwick Turner to the new role of senior vice-president, scripted content, and announced that the company had optioned New York Times bestselling novel Mad Honey, co-written by Jodi Picoult and Jennifer Finney Boylan for a premium series adaptation. Thunderbird's scripted team has 13 projects at various stages in the development pipeline.
• Several Thunderbird productions debuted during the quarter, including: Molly of Denali, season 3 (PBS Kids), Princess Power (Netflix) and Oddballs, season 2 (Netflix), among others. Thunderbird acquisition Mittens and Pants also made its United Kingdom debut in February on Sky TV's new Sky Kids channel.
• Company awards and accolades received during and subsequent to Q3 include, but are not limited to:
  • Thunderbird ranking in the top 10 of all independent production companies in Canada on Playback's 2023 Indie List;
  • Thunderbird chief operating officer Sarah Nathanson being recognized with a 2023 Best Executive award from Report on Business Magazine in the operations category;
  • Thunderbird being included on Report on Business Magazine's 2023 Women Lead Here list;
  • Thunderbird productions receiving 18 nominations from the 2023 Leo awards;
  • Wayne-Michael Lee being recognized as a 2023 Rising Star of Animation by Animation Magazine;
  • Atomic ranking No. 3 on BIV's list of the biggest digital arts companies in British Columbia; and
  • GPM being named to Realscreen's Global 200 list, for the 11th consecutive year.
• During the quarter, Thunderbird also welcomed Lisa Coulman to its board of directors and as chair of the audit committee.

For more information please see the financial statements and the management's discussion and analysis (MD&A) for the three and nine months ended March 31, 2023, available on SEDAR and the company's website.

Thunderbird will hold a conference call and webcast to share the company's Q3 2023 results today, Thursday, May 25, 2023, at 11 a.m. PT (2 p.m. ET).

Conference call and webcast information

Date:  May 25, 2023

Time:  11 a.m. PT (2 p.m. ET)

Preregistration

To preregister for this call, please register at the Netroadshow website and you will receive access details by e-mail.

If you are unable to preregister, please see the information below for joining by webcast or telephone.

Webcast:  access on-line

Canada toll-free:  1-833-950-0062

United States (toll-free):  1-833-470-1428

All other locations:  1-929-526-1599

Access code:  413021

Press star-one to ask a question, star-two to withdraw your question or star-zero for operator assistance.

Participants joining by phone are requested to call the conference line 10 minutes early to avoid wait times while connecting to the call. The conference call will be webcast live and available for replay through the investors section of the Thunderbird website.

About Thunderbird Entertainment Group Inc.

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, Toronto 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. 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 content arms, including Thunderbird Kids and Family (Atomic Cartoons), Thunderbird Unscripted (Great Pacific Media), formerly known as Thunderbird Factual, and Thunderbird Scripted. Productions under the Thunderbird umbrella include The Last Kids on Earth, Molly of Denali, Highway Thru Hell and Kim's Convenience, among others. The company also has a team dedicated to global distribution and consumer products.

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