Thunderbird Entertainment Group Inc.

Thank you for joining us. We are here to provide a corporate update and report on Thunderbird Entertainment Group's 2020 fiscal year and results, which ended June 20, 2020. Speaking on today's call are Ms. Jennifer Twiner-McCarran, Thunderbird's CEO, and Ms. Barb Harwood, Thunderbird's CFO. Ms. Twiner McCarron will provide a strategic overview of Thunderbird Entertainment Group, and Ms. Harwood will review the company's 2020 year-end financials. Following the corporate update and financial review, the call will open up for a question and answer session. If you'd like to ask a question during this time, simply press star then the number one on your telephone keypad. Alternatively, if you have a question, you can call plus 1-604-683-3555 or email investors at thunderbird.tv and the company will follow up directly after the call. At this time, all lines have been muted to prevent any background noise. I'd like to remind everyone that certain statements made on today's call will be forward-looking and constitute forward-looking statements or forward-looking information under applicable securities laws. forward-looking statements and information discussed on this conference call 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 risks none 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 SADAR at www.sadar.com and other matters discussed in the company's year-end news release. Although the company believes that the assumptions and factors used in preparing these forward-looking statements are reasonable, undue reliance should not be placed on these statements, which only apply as of the date of the presentation. and no assurance can be given that such events will occur in the disclosed timeframes or at all, except when 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. For your convenience, the press release, the MD&A, and audited financial statements for the fiscal year-end of Thunderbird Entertainment Group which ended June 30, 2020, are filed on SIDAR and are available online under the Investor section of our website. We do not expect to update forward-looking statements continually as conditions change. This conference call is being webcast live, and the archive will be available on the company's website at www.thunderbirdtv following today's call. Please note that the Thunderbird reports in Canadian dollars unless otherwise stated. Ms. Twyna McCarron will now provide the corporate update.

Hello. Thank you so much for joining us today. My name is Jennifer Twyna McCarron, and I am the CEO of Thunderbird Entertainment Group. Barb and I are thrilled to review Thunderbird's progress, which is rooted in our company's commitment to authentic, inspiring stories, that move hearts, connect people, and positively impact our world. Our mission remains to create content that makes the world a better place, makes people happy, and provides a much needed escape, especially during these unprecedented times. Fiscal 2020 has been an extraordinary year for Thunderbird on many levels. Programming created by Thunderbird airs daily in 40 different languages and 200 territories worldwide. Through Atomic Cartoons, our kids and family division, and Great Pacific Media, our factual division, and our scripted division, our company is a leader in developing and producing family-friendly entertainment that is the key cornerstone of all major media platform strategy to glue that key co-viewing audience, essentially families gathering together to watch content, more pertinent in 2020 than ever before. We are working with HBO Max, Nickelodeon, Discovery, Apple TV, Disney+, NBC Universal, CBC, Netflix, and many other streaming, VOD, broadcast, and cable partners around the world. I am personally extremely grateful to be working in a pandemic resistant business and in an industry that's thriving. I'm proud to report that through this unprecedented time, there's been no disruption to production, delivery dates, or to our security protocols. In fact, COVID-19 has forged new opportunities and staffing of productions is no longer constrained by location or studio space, thanks to new technology. While Barb will go through the financials more thoroughly, I am proud to share that Thunderbird has had a strong year, filled with growth and exciting opportunities. The company's revenues are $81.3 million, which is up 41% from fiscal 2019. Our year-end adjusted EBITDA also increased year-over-year by 21% to $15.5 million. And our free cash flow went from negative $5 million in fiscal 2019 to positive $7.3 million this year. We have zero corporate debt. which means Thunderbird is positioned for growth by leveraging relationships and intellectual property to launch more global brands and franchises. During the fourth quarter of fiscal 2020, we had 18 programs in production across all of our divisions. We delivered 29 half hour episodes and 26 full hour episodes. All of the full hour episodes and 10 of the half hour episodes are company owned IP, further building our already substantial library of premium quality content, which includes many longstanding hits like Intelligence and Da Vinci's City Hall, and by adding new content from Great Pacific Media and Atomic Cartoons, which can also be licensed, distributed, and exploited in many forms of cross-media exploitation, such as mobile games, console games, microtransactional games, merchandise, ice skating shows, you name it. we create additional revenues for years to come. At this time, I also want to highlight that during the quarter and subsequent to the quarter, several facets of the company and our productions were recognized. We received an Emmy Award for The Last Kids on Earth, a Peabody Award for Molly of Denali, a 2020 Television Critics Association Award, also for Molly of Denali, two 2020 Canadian Screen Awards for Kim's Convenience, nine Leo Awards across all divisions, and the Queen of the Oil Patch is shortlisted for a 2020 Content Innovation Award from the Television Business International. Thunderbird was also awarded two Stevie International Business Awards in the categories of Medium-Sized Medium and Entertainment Company of the Year and Management Team of the Year. And this morning, Thunderbird was listed on Canadian Business 2020 Growth Lists, as one of Canada's fastest-growing companies. At Thunderbird, we are deeply proud of our teams, how talented they are, and how dedicated everyone is to creating top-notch content that entertains and inspires. To have our work recognized by peer organizations is an incredible honor and a recognition of the high-quality content our amazing teams are creating. Moving on to the divisional update, Atomic, our kids and family division, was in various stages of production on 12 animated series during the quarter. For partners such as Disney+, Netflix, CBC, and NBCUniversal to list a few. And a snapshot of this remarkable work has already surfaced over the past few months. For example, Hello Ninja Season 3 was on Netflix. Lego Jurassic World Double Trouble was on Nickelodeon. Curious George, Go Wild, Go West was one of the debut properties on Peacock. Mighty Train Express with Spin Master debuted on Netflix. And our Emmy award-winning series, The Last Kids on Earth, is set to premiere tomorrow, 10 more episodes, October 16th on Netflix. And the highly anticipated Lego Star Wars Holiday Special will launch November 17th on Disney+. This production will reunite Rey, Rey, Poe, Chewie, Rose, and many favorite droids for a joyous feast on Life Day, which is the Star Wars holiday first introduced in 1978. Our LEGO Holiday Star Wars special is the first LEGO and Star Wars special to debut on the streaming platform. We are excited. Atomic Cartoon produces high-end content across multiple pipelines and genres, spanning preschool, comedy, action-adventure, adult, and everything in between. Our teams are firing on all cylinders and producing outstanding work, which continues to secure great partnerships with top talents, including the Jim Henson Group, Savannah Guthrie, and Drew Barrymore, to list a few. Fiscal year 2021 will see Atomic further build on the phenomenal work we are already producing, and also expand to capitalize on gaming, merchandise, and toy opportunities across all of our titles. During Q4, our Factual Division, Great Civic Media, was in production on four series and one documentary special, Highway Through Hell, Season 9, Heavy Rescue, 401, Season 5, Save My Reno, Season 4, Mud Mountain, Hollers, Season 1, and The Teenage and the Lost Mayan City, which is a documentary for CBC. On September 4th, the ninth season of Highway Through Hell premiered on Discovery Canada. This season is comprised of 18 episodes, its largest episode order to date. Highway Through Hell is one of the most successfully independently owned unscripted brand in the world with two spinoffs, both of which are produced by Great Pacific Media, Heavy Rescue 401 and Mad Mountain Haulers. The success of Highway Through Hell franchise lies within its authentic storytelling and and Great Pacific's AI data-driven approach, which increases probability of rating success while reducing production time and cost. It is also worth noting that work on Highway to Health's second spinoff, Mud Mountain Haulers, started this spring. The production was a true leader in applying new COVID-19 safety protocols, pioneered by the company to ensure crews stayed safe and work could continue during the pandemic. The teams at Great Pacific are specialists in the development, co-production, and financing of factual documentaries, game show, and reality TV. An interest in factual production is skyrocketing. In fact, Ted Sarandos of Netflix recently mentioned that factual television is a major focus area for the streaming giant because of the love that people have for this type of programming. The majority of content produced by Great Pacific is also IP-based. which distinctly positions Thunderbird as this content lives forever in our library and provides us with the full ability to leverage it for distribution, licensing, consumer product games, and all cross-media opportunities. The division also employs a vertically integrated studio model and owns all of its facilities and production equipment, which in turn generates multiple revenue streams. In our scripted division, which represents the team behind the hit comedy series, Kim's Convenience, the cast and the crew return to the studio in September. The award-winning series is still on track for its season five premiere in early 21. Kim's Convenience is also renewed for season six. And check out season one. It has 100% rating on Rotten Tomatoes. That is hard to do. Our company was able to nimbly adapt at a pivotal time to not only continue but also expand operations, even bringing on new crew members to keep up with demand. With a new fiscal year upon us, Thunderbird will continue to seek out strategic growth opportunities through IP, expansion within North America and potentially international, acquisitions, branching out into animated feature films, and exploring additional proven unscripted brands for new spinoffs increased season orders, and other derivative projects. Before passing things off to Barb, I want to acknowledge the massive shift that our industry is undergoing right now, as it collectively strives to be more inclusive, diverse, and honor authentic voices. This is reinforced by a new report from the UCLA-based Center for Scholars and Storytellers, where researchers found that bringing authentic diversity to film improves financial performance at the block office while a lack of diversity can result in losses for studios. Thunderbird is well-positioned to deliver on this with our dedication to authentic stories demonstrated through titles like Molly of Denali, Queen of the Oil Patch, and Kim's Convenience, to list a few. I am so proud of the steps we have made as a company thus far, and we will strive to continue to be leaders in this area. Molly of Denali season one had over 60 Indigenous staff and numerous interns that are now working in the industry full-time. On that note, in addition to creating meaningful, diverse and world-changing content that helps shift the status quo and places the spotlight on stories that might otherwise remain untold, Thunderbird is investing in internships, programs and organizations that are raising up the voices of those who have been underrepresented for far too long. Telling stories of diversity and inclusivity are what matters at Thunderbird. This is a cornerstone of our culture. and we have intentionally built a culture of people who align with this mission. In conclusion, fiscal year 21 is coming on stronger than ever. We are well on our way to being the next major global studio, and we are thankful that you as an investor are able to accompany us on this journey. Never has there been a better time to be in content, and never has there been a better company than Thunderbird to capitalize on it. Stay tuned for a short Q&A after Barb presents the numbers. Thank you so much.

Thanks, Jen, and thanks, everyone, for joining today. I'm Barb Harwood, and I'm the CFO of Thunderbird. As Jen mentioned, it's been a great year for Thunderbird, so I'll dive right into a summary of the results. Revenue for the three months and year end of 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 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 period of fiscal 2019. The company incurred a one-time non-cash charge in fiscal 2019 related to the RTO transaction of $5.3 million. Adjusted EBITDA was $2.9 million and $15.5 million for the three months and year-end of June 30, 2020, compared to $1 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 increases in production service work as well as increases in licensing and distribution revenues related to an increase in the number of company-owned IP 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 assets, otherwise known as ROU assets, and amortized. 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 from G&A to direct costs. The change in accounting policy provided the investment in content costs and the direct costs to be more reflective and relevant of the cost of production. Also effective July 1, 2019, as mentioned before, the company adopted and implemented IFRS 16 leases, which required the lessee to recognize all leases on the balance sheet as a right of use asset and a corresponding lease liability with limited exceptions. Previously, leases were classified as either operating leases or financing leases, and rental payments were expensed on the income statement. And finally, during the prior quarter of 2020, 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 operation. Thanks, and back to you, Jen. Actually, I think we're open for the Q&A now.