Thunderbird Entertainment Group Inc. (TBRD.V) Earnings Call Transcript
March 6, 2023
Earnings Call Speaker Segments
Good afternoon, and welcome to the Annual General and Special Meeting of the Shareholders of Thunderbird Entertainment Group Inc. My name is Jennifer Twiner McCarron, and I'm the Chair of the Board of Directors for the company. Before we commence the formal business of the meeting, I would like to provide some opening remarks. We are pleased to host today's meeting in person as well as online through the Lumi virtual meeting platform. This platform is accessible to all of our shareholders and duly appointed proxy holders and allows shareholders to participate with the questions and vote regardless of their physical location. Let's begin with a brief overview of the conduct of this meeting. To be able to vote or ask questions at the meeting, you must either be a registered shareholder or a newly appointed proxy holder. Guests and nonregistered shareholders are only permitted to listen. If you are a registered shareholder or a duly appointed proxy holder attending the meeting in person, questions may be asked following the completion of the formal business of the meeting. Registered shareholders and duly appointed proxy holders attending the meeting via the virtual platform may vote and submit questions and comments to the moderator to be read and addressed at the meeting. If you have a question or comment, please submit it by clicking on the messaging icon at the top of your screen, and we will answer at the appropriate time. Subsequent to the completion of the formal business of the meeting, I will give a brief presentation on the recent activities and future plans of the company. As Chair and Secretary, I will preside as Chair of the meeting. And with your approval, I will ask that Amy O'Donnell to act as Secretary of the meeting. I would also like to take a moment to acknowledge the members of the Thunderbird's Board of Directors who are here with us virtually today. Joining me virtually are Asha Daniere, Azim Jamal, Jérôme Levy, Linda Michaelson; and Mark Trachuk. Also joining in person from management are Lori Massini, our Senior Vice President of Legal; and Barb Harwood, our CFO. For the purposes of this meeting, Lia Zandvliet of Odyssey Trust Company will be appointed as a scrutineer. The company has been provided with an update of mailings from Odyssey Trust Company, confirming the mailing on February 1, 2023, of the applicable meeting materials to all shareholders of record as of the close of business on January 16, 2023, in accordance with applicable laws. I direct that the affidavit of mailing be attached to the minutes of this meeting as a schedule. The scrutineer has advised me that prior to the meeting, proxies were received from a sufficient number of shareholders to constitute a quorum. I, therefore, declare the meeting to be regularly called and properly constituted for the transaction of business. I direct that the formal report of the scrutineer's be annexed as a schedule to the minutes of this meeting. Voting on all matters before us today will be conducted by ballot, meaning every shareholder entitled to vote on the matter has 1 vote in respective each voting share held. Only registered shareholders who held shares in their name as of the close of business on January 16, 2023, or their validly appointed proxyholders are entitled to vote at this meeting. If you've already voted or sent in a proxy, there is no need for you to vote again at the meeting unless you would like to change your vote. For those shareholders or proxy holders that are attending the meeting in person, you will have received a ballot where you checked in. You should record your vote on the ballot by marking the appropriate box for each matter and ensure that you signed and print your name on the ballot. The scrutineers will collect all the ballots for all the resolutions at the end of the formal part of this meeting. For the other new attending online, the electronic voting system will be open for all resolutions at the same time. This will allow you to cast your ballot electronically on each resolution immediately or you may wait until each resolution discussion has concluded prior to casting your vote. I now declare the polls open on all resolutions for those attending online. In the interest of expediting the business of the meeting and in accordance with the corporate laws and Thunderbird's articles, no motion is needed to be seconded. We will now run through each of the items on the agenda. First will be the presentation of the audited financial statements of the company for the financial year ended June 30, 2022, together with the report of the auditor thereon. Second, shareholders will be asked to fix the number of directors at 6 and elect the directors of the company. Third, shareholders will be asked to reapprove the company's stock option plan. Fourth, shareholders will be asked to approve certain amendments to company's stock option plans. Fifth, shareholders will be asked to reapprove the company's equity compensation plan. Six, shareholders will be asked to approve certain amendments to the company's equity compensation plan. Lastly, shareholders will be asked to appoint the auditor of the company and authorize the directors of the company to fix their remuneration. As a point of information for the meeting, I have been advised by the scrutineer that proxies deposited for the meeting have been overwhelmingly voted for the resolution proposed for consideration at the meeting. The first item of business is the presentation of Thunderbird's audited financial statements for the year ended June 30, 2022. Copies of the financial statements have been mailed to those shareholders who requested to receive copies in accordance with applicable law. And with the permission of the meeting, I will dispense with reading them at this meeting. I would ask that any questions on the financial statements or auditor's reports be postponed until after formal business of the meeting has been completed. It is proposed that the number of directors of the company be set at 6 directors. Pursuant to Section 13.1 of the company's articles, the number of directors is set by ordinary resolution. I now ask for a motion that the number of directors of the company be set at 6.
I so move.
A motion has been made that the number of directors be set at 6. Registered shareholders and duly appointed proxy holders will be asked to vote by ballot on this resolution. I therefore direct that a poll by ballot be conducted. The next item of business is the election of the directors of the company for the ensuing year. I note the company's articles provide a process requiring advanced notice to the company in respect of any person seeking to be nominated for election at today's meeting. On November 4, 2022, the company received a notice from Voss Capital of its intention to nominate 6 persons for election to the Board pursuant to the Advanced Notice provision. The appointment of directors proposed by management for the election today include certain of the Voss nominees as agreed upon by Voss and the company. The company did not receive any other notice of director nominations in connection with the meeting within the prescribed time period. Accordingly, the only persons eligible to be nominated at meeting for election to the Board are the following nominees: Jennifer Twiner McCarron, Asha Daniere, Azim Jamal, Jérôme Levy, Linda Michaelson and Mark Trachuk. I now ask for a motion that each of Jennifer Twiner McCarron, Asha Daniere, Azim Jamal, Jérôme Levy, Linda Michaelson, and Mark Trachuk be elected as directors of the company to hold office until the next Annual Meeting of Shareholders or until their successors are elected or appointed.
I so move.
Registered shareholders and duly appointed proxy holders will be asked to vote by ballot on this resolution. I therefore direct that a poll by ballot be conducted. The next item of business is the reapproval of the company's stock option plan by ordinary resolution. Details of the stock option plan are set out in detail in the Information Circular prepared for the meeting. I now ask for a motion that the company's stock option plan be reapproved by the shareholders.
I so move.
A motion has been made to reapprove the company's stock option plan. Registered shareholders and duly appointed proxy holders will be asked to vote by ballot on this resolution, and therefore, direct that a poll by ballot be conducted. The next item of business is the approval of certain amendments to the company's stock option plan by ordinary resolution. Details of such amendments are set out in the Information Circular prepared for the meeting and a blackline copy of the stock option plan is appended thereto as Schedule C. I now ask for a motion that the amendment to the company's stock option plan be approved by the shareholders.
I so move.
A motion has been made to approve the amendment of the company's stock option plan. Registered shareholders and duly appointed proxy holders will be asked to vote by ballot on this resolution. I therefore direct that a poll by ballot be conducted. The next item of business is the reapproval of the company's equity compensation plan by ordinary resolution. Details of the equity compensation plan are set out in the details in the Information Circular prepared for the meeting. I now ask for a motion that the company's equity compensation plan be reapproved by the shareholders.
I so move.
A motion has been made to reapprove the company's equity compensation plan. Registered shareholders and duly appointed proxy holders will be asked to vote by ballot on this resolution. I therefore direct that a poll by ballot be conducted. The next item of business is the approval of certain amendments to the company's equity compensation plan [indiscernible]. Details of such amendments are set out in the Information Circular prepared by this meeting and a blackline copy of the equity compensation plan is appended thereto as Scheduled C. I now ask for a motion that the amendment to the company's equity compensation plan be approved by the shareholders.
I so move.
A motion has been made to approve the amendment to the company's equity compensation plan. Registered shareholders and duly appointed proxy holders will be asked to vote by ballot on this resolution. I therefore direct that a poll by ballot be conducted. The next item of business is the appointment of the auditor. I now ask for a motion that the PricewaterhouseCoopers be appointed as auditors of the company to hold office until the close of the next Annual Meeting of the Shareholders or until their successors are appointed and that the directors be authorized to fix their remuneration.
I so move.
A motion has been made to appoint PricewaterhouseCoopers as the auditor of Thunderbird for the ensuing year and that the directors be authorized to fix their remuneration. Registered shareholders and duly appointed proxy holders will be asked to vote by ballot on this resolution. I therefore direct that a poll by ballot be conducted. To those shareholders or proxy nominees here in person, once you've completed your ballot, please raise your hand and the scrutineer will collect them for you. For those of you online who have not voted on all resolutions, please do so now as I will shortly close the polls. Please be reminded that if you have already voted or sent in a proxy, there is no need for you to vote by a poll unless you would like to change your vote. I will close the poll all resolutions presented in 1 minute to allow online viewers to catch up. [Voting]
The polls are closed and the ballots are concluded. I have been advised by the scrutineers that based on the votes represented by proxy at this meeting, a sufficient number of votes has been cast in favor of each of the resolutions presented at this meeting. I, therefore, declare each of the resolutions carried. Rather than hold the meeting up to the final tabulation of votes, I direct that the final voting results be included within the minutes of this meeting. Unless there are questions from the floor, I would entertain a motion that the meeting be terminated.
I so move.
The scrutineer has advised me that today's vote is in favor of this motion. Accordingly, the motion is carried and the meeting is now concluded. Thank you. Now that the formal business of the meeting has concluded, I will provide a brief company presentation to share with you, and we will entertain any questions once concluded. I'll start by thanking you for attending and tuning into Thunderbird Fiscal Year '22 Annual General Meeting. I am very happy to be here today with Thunderbird's Board of Directors. As we move forward with the new Board, I'm encouraged by our shared commitment to creating outstanding content while strategically growing Thunderbird's business and maximizing stakeholder value. Before I begin, I'd like to remind everyone that certain statements made on today's call constitute forward-looking statements or forward-looking information under applicable securities laws. Forward-looking statements include, but are not limited to, statements with respect to becoming the next major global studio, the robustness of the production development place, anticipating a lower adjusted EBITDA in fiscal year '23, anticipating sizable growth in fiscal '24 and '25, and the company's objectives, goals or future plans. Forward-looking statements are necessary 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 forward-looking statements. Such factors include, but are not limited to, general business, economic and social uncertainties, litigation, legislation, environmental and other judicial regulatory, political and competitive developments. And these additional risks set out in the company's MD&A for the year ended June 30, 2022. Except where required by law, the company disclaims any intention or obligation to update or revise any forward-looking statements whether as a result of new information, future events or otherwise. We are, in fact, becoming the next major global studio. With solid industry relationships, we are renowned and known as a go-to company for producing and delivering AAA quality content for many of the major streamers, representing some of the world's top brands. This is all possible because of the incredibly talented teams at Thunderbird and we are proudly one of the highest retention rates in the industry. I speak on behalf of the company management team. When I say we are dedicated to remaining a top employer, keeping our people happy and retaining as much as possible our extraordinary talent. The future comes down to quality, which we [ provide in space ], thanks to the team, both in terms of content we develop and the people we trust to lead this work. I am so honored to highlight some of the incredible achievements and milestones we celebrated in '22 and early '23 and to talk about Thunderbird's incredibly bright future. As of December 31, '22, we had 26 programs in various stages of production. Of the 26 programs, 8 with Thunderbird IP and 18 with service production. 2 of the service productions were partner managed and one is a global IP buyout. Our pipeline remains robust with many, many more series in our development pipeline. Great Pacific Media has much to celebrate in '22 and early '23, with the debut of several new series, including Reginald The Vampire, Styled and Deadman’s Curse. All three series have been renewed for a second season. And Deadman's Curse ranked as one of the top 10 Canadian original series across specialty television this fall. It's also now available on Hulu in the U.S. Great Pacific Media also renewed several of its flagship series and developed 2-part special for Discovery about the 2021 floods in B.C. titled After The Storm. The Atomic team also delivered incredible content throughout the year. Among the series that were [indiscernible] Oddballs, which recently premiered Season 2 and Princess Power. The empowering messaging in this series clearly resonates with audiences as Princess Power ranked #8 on the Netflix Kids chart. In the U.S. Marvel, Spidey and His Amazing Friends was also renewed for Season 3 on Disney+. We also made huge strides forward on our IP strategy. We recently announced that Atomic Cartoon production on the first 26th by 22-minute episode season of the children's series Mermicorno, which is inspired by Tokidoki kids program of the same name. Atomic is producing this series of original IP in partnership with Tokidoki, and in early 2023, SMART Technologies launched a new digital battle-card game based on Thunderbird's IP called the Last Kids on Earth: Hit the Deck! In '22 and early '23, Thunderbird continued to receive industry and business accolades. Highlights include Atomic being named as one of the top 10 production companies on kids [indiscernible] receiving a 2022 BC Reconciliation award on behalf of Molly of Denali, Pinecone & Pony being nominated for GLAAD Media Award in the outstanding children's programming category and being selected by business in Vancouver as the winner of the 2022 BC Export Award, receiving 2 Children and Family Emmy nominations for Molly of Denali. Great Pacific Media was named the 2022 Diversity and Inclusion Champion and BC business of [indiscernible] being named to Realscreen's Annual Global 100 list which recognizes the top production companies working in unscripted content. Thunderbird bird production received 9 Canadian screen nominations and Thunderbird being recognized at the 2023 top 50 TSX Venture Exchange company, ranking A in the diversified industry category based on the company's performance during 2022. Thunderbird name was also front and center in media coverage throughout the year, with articles and report on Business magazine, deadlines, [indiscernible] the New York Times and more. Great Pacific Media's Reginald the Vampire scored an interview on the night show starting [indiscernible] and the Atomic Princess Power, which launched in January generated huge [indiscernible] actress Drew Barrymore and Savannah Guthrie. Our team now consists of 1,300-plus members across 4 offices with offices in Vancouver, Ottawa, Toronto and Los Angeles. We welcomed many new faces, celebrated internal promotions. And as I mentioned earlier, we are proud to have one of the better retention rates in the industry. Our company would not be where it is today without the incredible team and talent. As to this, we launched Thunderbird Scripted in Los Angeles, increasing our global footprint through elevated content while enhancing our overall library value. Currently, we have 5 scripted projects, representing [indiscernible] of New York Times best-selling books and award-winning authors at various stages in the development pipeline. Speaking of Scripted [indiscernible] services continue to gain momentum, and we were thrilled that [indiscernible]. Our first production to be featured on a [indiscernible] channel. This was a huge win for our global distribution and consumer product teams in addition to securing global media and consumer product rights to the CBC Kids and Sky kids preschool series Mittens & Pants. We closed out fiscal year '22 on a strong financial position, with year-end revenue of $149 million, a 34% year-over-year increase and adjusted EBITDA of $20.1 million, a 3% year-over-year increase and 0 corporate debt. While our subsequent quarterly reports have demonstrated that we are anticipating a lower adjusted EBITDA in fiscal 2023, we are anticipating sizable growth in fiscal '24 and '25. This is largely due to the addition of several fully owned IP production with adjacent merchandise opportunities coming to fruition. We continue to navigate working in a post-pandemic world and are proud of our permanent hybrid workplace solution. This allows our people to create optimal working environment so that they and Thunderbird can thrive. Sts'ailes First Nation hosted a name acknowledgement ceremony in December '22 to recognize Thunderbird Entertainment with the official Thunderbird name. We are so grateful for this honor, and we'll continue our commitment to find meaningful ways to work together. We're having a [ lunch ] [indiscernible] tomorrow to start. To this point, we also received the 2022 BC Reconciliation awards on behalf of the Molly of Denali team. We are so humbled by this and inspire truly to take even greater steps in advancing diversity and inclusion. Thunderbird also joined Creative BC as a new partner of the Real Green Advisory Committee. In addition to our ESG action plan and road map, this is one of the many ways we are taking meaningful actions that is relevant to our business and that aligns with our goals for the future. As CEO and Chair of Thunderbird, I get to witness firsthand all of the phenomenal things taking place within the company. Thunderbird again is where it's at today because of the team's dedication. It is this commitment that allows us to capitalize on the opportunity to continue to position Thunderbird as an industry leader. Personally, I'm incredibly grateful to be CEO and Chair of its exceptional company and I look forward to continuing on this journey together. Thank you so much for joining us today.
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