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KEW MEDIA GROUP Reports Third Quarter 2019 Financial Results Strong Year-to-Date Growth in Revenue with Adjusted EBITDA Shift from FY19 to FY20

Company Revises FY19 Outlook

Toronto, ON, November 14, 2019 – KEW MEDIA GROUP INC. (“KEW MEDIA”, “KEW” or the “Company”)

(TSX:KEW and KEW.WT) today released its financial results for the three and nine months ended September 30,

2019 (“Q3 2019”). KEW MEDIA’s interim condensed financial statements along with its Management’s

Discussion and Analysis for Q3 2019 are available on the Company’s investor relations website at

https://investors.kewmedia.com and under the Company’s profile at www.sedar.com. All financial results are

reported in Canadian dollars unless otherwise stated.

Q3 2019 Highlights

• Revenue of $47.5 million (2018: $52.8 million)

• Gross Profit1 of $13.2 million (2018: $18.2 million)

• General and Administrative expenses2 (“G&A”) of $13.9 million (2018: $12.5 million)

• Adjusted EBITDA3 of $0.1 million (2018: $6.4 million)

• Net loss of $(6.4) million (2018: $(2.3) million)

• Adjusted net loss4 after tax5 of $(2.5) million (2018: $5.1 million)

• Free Cash Flow (FCF)6 before movements in working capital and film and television rights of $(3.1)

million (2018: $4.3 million)

• FCF after movements in working capital and investments in film and television rights of $(11.1) million

(2018: $(16.0) million)

1 Gross Profit is revenue less cost of sales.

2 The increase in general and administrative costs in the quarter is attributable to increased corporate overheads necessary to support the

business. For the nine month period ended September 30, 2019, the increase over the same period in prior year, also includes the impact of the

Essential Media Acquisition.

3 Adjusted EBITDA is EBITDA excluding certain items to better analyze trends in performance and after non-controlling interests. These

adjustments result in a truer economic representation on a comparative basis. Adjusted EBITDA includes the add-backs made to calculate the

Adjusted Net Income and additional add-backs for interest expense, net of interest income, depreciation and any non-cash amortization (to the

extent not added to Adjusted Net Income). See “Non-IFRS Measures” and “Forward-Looking Statements” below in this press release.

4 Adjusted Net Income is income (loss) before income tax recovery then includes add-back adjustments for items such as transaction costs,

reorganization and exceptional costs, share-based compensation, deferred compensation, other intangibles amortization, amortization of right-

of-use asset, interest expense on lease obligations, gain on change in fair value of financial liabilities, and gain (loss) on foreign exchange on

financial liabilities. See “Non-IFRS Measures” and “Forward-Looking Statements” below in this press release.

5 Adjusted Net Income after tax is Adjusted Net Income less income tax recovery.

6 Free Cash Flow is Adjusted EBITDA adjusted for additions to Property and Equipment, Interest and cash taxes.

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(in millions of Canadian dollars, except per share data) Three months ended Six months ended

September 30,

2019 September 30,

2018 % Change September 30,

2019 September 30,

2018 % Change

Revenue

Production $27.5 $36.0 23.6 % $107.1 $97.9 9.4 %

Distribution $20.0 $16.8 19.0 % $61.5 $44.5 38.2 %

Total $47.5 $52.8 (10.0) % $168.6 $142.4 18.4 %

Gross Profit

Production $7.6 $10.7 (29.0) % $28.2 $25.1 12.4 %

Distribution $5.7 $7.6 (25.0) % $20.3 $19.3 5.2 %

Total $13.2 $18.2 (27.5) % $48.5 $44.4 9.2 %

Gross Profit Margin - Production 27.6 % 29.7 % 26.3 % 25.6 %

Gross Profit Margin - Distribution 28.5 % 45.2 % 33.0 % 43.4 %

Gross Profit Margin Total 27.8 % 34.5 % 28.8 % 31.2 %

Adjusted EBITDA after NCI $0.1

$6.4

N.M. $7.7

$11.5

N.M.

Net loss for the period $(6.4)

$(2.3 ) N.M. $(14.1 ) $(7.4 ) N.M.

Adjusted net income (loss) after tax $(2.5)

$5.1

N.M. $2.6

$8.2

N.M.

Basic and diluted loss per share $(0.45 ) $(0.18 ) N.M. $(1.11 ) $(0.68 ) N.M.

Adjusted earnings (loss) per share $(0.18)

$0.40

N.M. $0.19

$0.68

N.M.

Steven Silver, Chief Executive Officer of KEW MEDIA, commented, "We experienced strong momentum coming

out of the MIPCOM sales market in Cannes, France and through the first few weeks of Q4. While the loss of a key

buyer due to a channel re-brand and delivery timing shifts have impacted our Q3 results and will negatively impact

our full year production group performance, we don't believe this is indicative of our ongoing growth trend. We

expect to realize the revenue associated with the delivery timing shifts in 2020. Our diverse portfolio of companies

is healthy and showing impressive trading in the market."

Peter Sussman, Executive Chairman of KEW MEDIA, commented, "There’s never been a better time to be in our

business. KEW remains firmly positioned to take advantage of unprecedented growth in content spend. We have a

global, diverse platform which continues to attract traditional and new buyers. Following a very busy production

season and robust sales trading at the MIPCOM market, KEW remains nimble and focused on feeding buyers'

evolving needs as we enhance our position as one of the world’s most significant independent content companies.”

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Financial Highlights for the Three Months Ended September 30, 2019

KEW MEDIA’s results in any given quarter or year can be affected by seasonality and/or specific product mix

timing. Typically, production occurs over the summer and starts delivering in the fall and winter months, when the

majority of our revenues and profits are achieved.

Q3 2019’s revenue of $47.5 million was comprised of $27.5 million from Production and $20.0 million from

Distribution. Gross Profit of $13.2 million included $7.6 million from Production and $5.7 million from

Distribution. Gross Profit Margin was 27.8%, with segmented Gross Profit Margin of 27.6% for Production and

28.5% for Distribution. Adjusted EBITDA was $0.1 million, the Net loss was $(6.4) million, the loss attributable to

the equity holders of the parent was $(0.45) per share and Adjusted Net loss after tax was $(2.5) million, or $(0.18)

per share.

KEW generates organic growth by exploiting the significant benefits of the Company's integrated platform,

including combining production and distribution. This platform enables KEW to deliver a diverse range of high

margin product to the market quickly and efficiently.

Segment Information

Production

During the third quarter, Revenues were $27.5 million, a decrease from the same period in 2018 of $8.5 million.

Gross Profit was $7.6 million, a decrease of $3.1 million, and the Gross Margin percentage was 27.6% (2018:

29.7%). G&A increased by $0.7 million to $7.1 million. Adjusted EBITDA decreased by $4.1 million to $0.4

million.

The fall in profitability in our production segment in the third quarter is predominantly due to the performance of

Essential, a wholly-owned subsidiary of KEW. As a result of Discovery re-branding the DIY channel as the

Magnolia Network, Essential lost some key series including Texas Flip 'N Move. Essential and the rest of the KEW

group anticipated replacing the loss in gross margin with new show orders from anticipated greenlights this year.

However, the timing for the delivery of these shows has now shifted into 2020.

Titles produced in the third quarter include: Essential's Ghost Loop for the Travel Channel in the U.S. and Off the

Grid on the Beach for HGTV in the U.S., Jigsaw's Death Row Stories S4 for CNN in the U.S. and Dirty Money S2

for Netflix, Architect's Home to Win S4 and Fire Masters for Corus in Canada, and Our House Media's Forbidden

Love and Killer Affairs for Oxygen in the U.S. and Silent Witness for Discovery in the U.S.

Distribution

Our Distribution unit is performing strongly. During the third quarter, Revenues were $20.0 million, an increase of

19.0%, Gross Profit was $5.7 million, a decrease of $1.9 million, and the Gross Margin percentage was 28.5%

(2018: 45.2%). G&A increased by $0.2 million to $4.3 million. Adjusted EBITDA decreased by $2.1 million to

$1.5 million. While Revenues increased, Gross Profit margins decreased compared to Q3 last year, which had a

product mix with comparatively higher margin titles. Additionally, some expected revenue and margin moved from

Q3 to Q4. Titles distributed across the segment in Q3 include: Decades of Movies, 2019 Emmy® Awards, In Plain

Sight (Frantic Films), Cleared for Chaos (BGM), Underground Worlds, World's Greatest Palaces, and World War

Weird S3.

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Gross Profit and G&A

KEW MEDIA focuses on Gross Profit as a performance indicator given that the Company has a diverse product

range with low revenue items sometimes attracting 100% Gross Profit Margins and other high revenue items having

Gross Profit Margins as low as 5%. Gross Profit for Q3 2019 was $13.2 million compared to $18.2 million last

year, an overall decrease of $5.0 million. The decline was primarily due to the weakness in Essential.

G&A increased in the quarter to $13.9 million compared to $12.5 million last year.

Recent Highlights

There were a number of recent positive developments in our business including:

• KEW's Distribution unit launched 458 hours of content at MIPCOM with 160 hours and 18 collaboration

titles with KEW's group of production companies from KEW MEDIA Distribution ("KMD"), and 298

hours of content from TCB Media Rights ("TCB")

• Jigsaw Productions' hit show for Netflix, Dirty Money, is in production on a much anticipated second

season

• KMD-Distributed Leaving Neverland won an Emmy® Award for Outstanding Documentary or Non-fiction

Special

• Year-to-date, TCB completed bulk deals totaling over 400 hours to numerous Australian and New Zealand

broadcasters, as well as 175 hours to Bell Media Canada, Viasat and BBC Studios Global Channels

• Alex Gibney-directed Citizen K, an Amazon Original, from Jigsaw Productions, was sold by KMD to U.S.

outfit Greenwich Entertainment. Greenwich intends to launch an Oscar campaign for the 2020 awards race.

The film enjoyed its World Premiere at the Venice Film Festival in August and its North American premiere

at the Toronto International Film Festival (TIFF) in September

Balance Sheet, Debt and Net Debt

As of September 30, 2019, the Company had cash and cash equivalents of $21.7 million, and Net Debt7 of $117.1

million.

Adjusted Net Debt8 as of September 30, 2019 was $104.9 million. This figure takes into account foreign exchange

movements since the beginning of the year and amounts expended by KEW's treasury on interim production

financing.

The Adjusted Net Debt of $104.9 million to Pro forma 2018 Adjusted EBITDA of $31.9 million is 3.3:1.

Just prior to the end of Q2 2019, the Company increased availability in its senior secured revolver facility by USD

$10 million to accommodate seasonally high working capital funding requirements. The Company utilized those

funds throughout the quarter and maintained cash balances in the business units, which explains the increase in

debt.

The Company expects its debt to decrease and liquidity to increase over Q4 and into Q1 next year due to: (i) strong

trading in Q4, (ii) the introduction of an interim distribution product acquisition fund, (iii) the introduction of

7 Net Debt is debt less any cash and cash equivalent balances.

8 Adjusted Net Debt is Net Debt less interim production loans provided by KEW MEDIA treasury less effect of foreign exchange movements. See

“Non-IFRS Measures” and “Forward-Looking Statements” below in this press release.

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centralized treasury operations, and (iv) a cost cutting and restructuring program across under-performing business

units including Essential.

Subsequent to the end of Q3, our long-term loan facility was amended (“the Amendment”) such that the leverage

ratio covenant was deleted in its entirety. Additionally, the loan facility was restructured to increase the term loan

component of the facility by USD $22.5 million and the amortization on the term loan was increased from USD

$0.5 million each quarter to USD $1.5 million, to reflect the expected decrease in our senior debt. Additionally,

interest rates were increased by 0.5% to December 31, 2019 and 0.25% to June 30, 2020, whereupon they will

return to previous rates of effectively U.S. LIBOR +3.5%. The Amendment means that the Company no longer has

covenants related to its profitability other than the fixed charges ratio, which is comfortably in compliance.

Under accounting standards, the above means that the loan is disclosed temporarily as short-term and reverts to

long-term at the date of the Amendment and, therefore, is long-term at the date of this release.

The Company has the ability to extend the accordion to its loan facility by a further USD $15 million, but does not

currently intend to do so given the expectation of debt reduction.

Free Cash Flow (FCF)

FCF before movements in working capital and before movements in film and television rights was $(3.1) million

compared to $4.3 million last year. FCF after movements in working capital but before investments in film and

television rights was $2.7 million compared to $(2.4) million last year. After movements in both working capital

and investments in film and television rights, FCF was $(11.1) million compared to $(16.0) million last year.

At the segment level, Production FCF before movements in working capital and investments in film and television

rights was $0.03 million. FCF after movements in working capital but before movements in investments in film and

television rights was $8.4 million. After movements in both working capital and investments in film and television

rights, FCF was $(3.8) million.

Distribution FCF before movements in working capital and movements in investments in film and television rights

was $1.0 million. FCF after movements in working capital but before movements in investments in film and

television rights was $(1.6) million. After movements in both working capital and investments in film and television

rights, FCF was $(3.2) million.

Outlook9

The fundamental drivers of KEW's business have not changed. While there has been under-performance at Essential

and some timing issues in Production, Distribution continues to outperform. The underlying platform continues to

grow with Production and Distribution becoming more integrated. Nonetheless, Essential was expected to be our

largest production company profit contributor and its weakness will negatively affect our Adjusted EBITDA in

FY19. As a result, the Company is revising its Adjusted EBITDA guidance for FY19 to be between $18 and $24

million on a pre-IFRS 16 basis (or between $22 and $28 million on a post-IFRS 16 basis) to reflect the under-

performance of Essential and the shift in the timing of delivery of certain shows into 2020.

9 The statements set out in this Outlook section are based on management’s assumptions, current strategies and assessment of the outlook for

the business. Given the seasonal and other fluctuations in KEW MEDIA’s business, the Company may not be in a position to provide periodic

updates on its progress in meeting its expectations. These statements constitute forward looking information for purposes of applicable

Canadian securities legislation and readers are cautioned that KEW MEDIA’s actual result may vary from these forward looking statements and

that variation could be material. See “Forward Looking Statements” for a description of the assumptions and risks associated with these forward

looking statements.

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Conference Call

KEW MEDIA will host a conference call to discuss the third quarter 2019 financial results on November 15, 2019

at 9:00 a.m. ET. The conference call can be accessed live over the phone by dialing 877-407-0784 (USA and

Canada) or 201-689-8560 (International). The conference call replay will be available via webcast through KEW

MEDIA's Investor Relations website. The telephone replay will be available from 12:00 p.m. Eastern Time on

November 15, 2019, through November 22, 2019, by dialing 844-512-2921 (USA and Canada) or 412-317-6671

(International). The replay passcode will be 13694838.

The call will also be webcast live from KEW MEDIA’s investor relations website at

https://investors.kewmedia.com. Following completion of the call, a recorded replay of the webcast will be

available on the website.

About KEW MEDIA GROUP INC.

KEW MEDIA GROUP is a leading publicly-listed content company that produces and distributes multi-genre

content worldwide. Companies included in the KEW family are the production companies: Architect Films,

Awesome Media & Entertainment, Bristow Global Media, Collins Avenue Productions, Essential Media Group,

4East Media, Frantic Films, Jigsaw Productions, Media Headquarters, Our House Media, Sienna Films, Spirit

Digital Media, and Two Rivers Media; and the distribution companies: KEW Media Distribution and TCB Media

Rights.

With primary offices in London, Los Angeles, New York, Sydney and Toronto, the KEW MEDIA GROUP

companies develop, produce and distribute more than 2,000 new hours of content every year, as well as manage a

library of more than 14,000 hours of content, for almost every available viewing platform worldwide. KEW aspires

to offer great content from all over the world to viewers of all ages and tastes. KEW promotes transparency,

equality, respect, and inclusiveness and plans to grow with the benefit of people from a wide range of perspectives

and backgrounds.

Forward-Looking Statements

This news release may include forward-looking statements. All such statements constitute forward looking

information within the meaning of securities law and are made pursuant to the “safe harbour” provisions of

applicable securities laws. Forward-looking statements may include, but are not limited to, statements about

anticipated future events or results including comments with respect to the Company’s objectives and priorities for

2019 and beyond, and strategies or further actions with respect to the Company, its business operations, financial

performance and condition. Forward-looking statements are statements that are predictive in nature, depend upon

or refer to future events or conditions and are identified by words such as “will”, “expects”, “anticipates”,

“intends”, “plans”, “believes”, “estimates” or similar expressions concerning matters that are not historical facts.

Such statements are based on current expectations of the Company’s management and inherently involve numerous

risks and uncertainties, known and unknown, including economic factors.

In particular, our expectation that we will realize the revenue associated with the delivery timing shifts in 2020, that

our debt will decrease and liquidity will increase over Q4 and into Q1 next year (and as a result we won’t need to

extend the accordion feature in our loan facility), and the statements set out in the Outlook section of this press

release regarding our expectations for Adjusted EBITDA for FY19 and financial performance for FY20 constitute

forward-looking statements. These statements are based on management’s current strategies, assumptions

concerning growth and assessment of the outlook for the business. In particular, such statements assume that: (i)

our production companies will continue to develop, produce and deliver successful productions in a manner

consistent with past experience and on expected delivery schedules (including that the deliveries we expect to be

shifted to 2020 are actually delivered in 2020); (ii) the product mix of the Company’s revenues will continue to be

skewed towards higher margin titles; (iii) we will continue to acquire and distribute content in a manner consistent

with past experience; (iv) our operating and overhead costs will be within budget; and (v) ongoing organic growth

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of the underlying business will meet our expectations. Our expectation that our debt will decrease and liquidity will

increase over Q4 and into Q1 next year assumes (i) strong trading in Q4, (ii) the introduction of an interim

distribution product acquisition fund, (iii) the introduction of centralized treasury operations, and (iv) a reduction

in costs as a result of a cost cutting and restructuring program across under-performing business units including

Essential. We consider the foregoing assumptions to be reasonable in the circumstances given the time period for

such outlook. However, readers are cautioned that KEW’s actual results may vary from these forward-looking

statements and that variation could be material. The forward-looking information contained in this news release is

presented for the purpose of assisting readers in understanding the Company’s business and strategic priorities and

objectives as at the periods indicated and may not be appropriate for other purposes. A number of risks,

uncertainties and other factors may cause actual results to differ materially from the forward-looking statements

contained in this news release, including, among other factors, those referenced in the section entitled “Risk

Factors” in the Company’s annual information form for the year ended December 31, 2018, a copy of which is

available on the SEDAR website at www.sedar.com under the Company’s profile. In particular, KEW’s results of

operations fluctuate significantly quarter to quarter depending on the number and timing of content delivered or

made available to various media. As in past years, KEW anticipates that its 2019 financial results will be heavily

weighted in the fourth quarter and as a result, KEW may not have visibility on its ability to meet the revised 2019

Adjusted EBITDA guidance until the end of the fourth quarter of 2019.

Forward-looking statements contained in this news release are not guarantees of future performance and, while

forward-looking statements are based on certain assumptions that the Company considers reasonable, actual events

and results could differ materially from those expressed or implied by forward-looking statements. Readers are

cautioned to consider these and other factors carefully when making decisions with respect to the Company and not

place undue reliance on forward-looking statements. Circumstances affecting the Company may change rapidly.

Except as may be expressly required by applicable law, KEW does not undertake any obligation to update publicly

or revise any such forward-looking statements, and as a result of new information, future events or otherwise.

Non-IFRS Measures

This news release contains references to certain measures that do not have a standardized meaning under

International Financial Reporting Standards (“IFRS”) as prescribed by the International Accounting Standards

Board and are therefore unlikely to be comparable to similar measures presented by other companies. Rather, these

measures are provided as additional information to complement IFRS measures by providing a further

understanding of operations from management’s perspective. Accordingly, non-IFRS measures should not be

considered in isolation nor as a substitute for analysis of financial information reported under IFRS. This news

release makes reference to Gross Profit, Gross Profit Margin, Adjusted Net Income, Adjusted EBITDA, Free Cash

Flow, Net debt, and Adjusted Net Debt, each of which is a non-IFRS financial measure. The Company believes these

non-IFRS financial measures are frequently used by securities analysts, investors and other interested parties as

measures of financial performance and it is therefore helpful to provide supplemental measures of operating

performance and thus highlight trends that may not otherwise be apparent when relying solely on IFRS financial

measures.

The Company’s definitions of non-IFRS financial measures are as follows:

• Gross Profit is revenue less cost of sales.

• Gross Profit Margin is gross profit as a percentage of revenue.

• Adjusted Net Income is Income (Loss) before income tax recovery then includes add-back adjustments for

items such as transaction costs, reorganization and exceptional costs, share-based compensation, deferred

compensation, other intangibles amortization, gain on change in fair value of financial liabilities, and

(gain) loss on sale of subsidiary.

• Adjusted EBITDA is also provided to better analyze trends in performance and present a truer economic

representation on a comparative basis. Adjusted EBITDA is Adjusted Net Income including additional add-

back adjustments for Interest Expense, net of Interest Income, Depreciation and any non-cash amortization

(to the extent not added back to Adjusted Net Income).

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• Free Cash Flow is Adjusted EBITDA adjusted for additions to Property and Equipment, Interest and cash

taxes.

• Adjusted Free Cash Flow is Free Cash Flow adjusted for additions to film and television rights, net of

amortization.

• Adjusted Net Income after tax is adjusted net income less income tax recovery.

• Adjusted Net Debt is Net Debt less intra-group interim production financing and adjusted for the impact of

foreign exchange

• Adjusted Earnings Per Share is Adjusted Net Income divided by weighted average number of common

shares in the capital of the Company

Please see the Company’s management’s discussion and analysis for the three and nine months ended September

30, 2019 for a detailed description of these measures and a reconciliation of these measures to the nearest IFRS

measure.

Source: KEW MEDIA GROUP INC.

Investor Relations Contact:

Steven Silver

Chief Executive Officer

647-957-2194

investors@kewmedia.com

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Selected Comparative Information

Below is selected information from the consolidated statements of loss for the three and nine months ended

September 30, 2019 and the three and nine months ended September 30, 2018.

Three months

ended

September 30,

2019

Three months

ended

September 30,

2018

Nine months

ended

September 30,

2019

Nine months

ended

September 30,

2018

Revenue

Production and distribution revenue 47,516 52,817 168,604 142,368

Cost of sales 34,284 34,575 120,080 97,921

Gross profit(1) 13,232 18,242 48,524 44,447

Expenses

General and administrative expenses 13,900 12,499 41,564 34,628

Amortization of other intangible assets 2,157 3,506 6,472 7,843

Amortization of right-of-use asset 1,336 — 4,062 —

Transaction costs — 443 — 3,203

Deferred compensation (recovery) expense (1,152 ) 3,057 825 4,760

Share-based compensation 947 655 2,325 1,253

Interest expense, net of interest income 2,901 1,779 7,656 4,292

Depreciation 455 240 1,333 639

Gain (loss) on change in fair value of financial liabilities (733 ) 49 (904 ) (3,101 )

Gain on disposition of a business — (964 ) — (964 )

Foreign exchange gain on financial liabilities (64 ) (43 ) (135 ) (192 )

Total expenses 19,747 21,221 63,198 52,361

Loss before income tax recovery (6,515 ) (2,979 ) (14,674 ) (7,914 )

Income tax recovery 127 705 558 472

Net loss for the period (6,388 ) (2,274 ) (14,116 ) (7,442 )

Net (loss) income attributable to:

Equity holders of the parent (6,248 ) (2,258 ) (15,288 ) (8,287 )

Non-controlling interest (140 ) (16 ) 1,172 845

Net loss for the period (6,388 ) (2,274 ) (14,116 ) (7,442 )

Loss per share attributable to equity holders of the parent:

Basic and diluted loss per share (0.45 ) (0.18 ) (1.11 ) (0.68 )

Weighted average number of Common Shares outstanding

– basic and diluted 13,835,904

12,866,878

13,798,686

12,174,319

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Three months

ended

September 30,

2019

Three months

ended

September 30,

2018

Nine months

ended

September 30,

2019

Nine months

ended

September 30,

2018

Calculation of Adjusted net income (loss) (1) and Adjusted

EBITDA: (1)

Loss before income tax recovery (6,515 ) (2,979 ) (8,159 ) (4,935 )

Amortization of other intangible assets 2,157 3,506 4,315 4,337

Amortization of right-of-use asset (3) 1,336 — — 2,760

Transaction costs — 443 1,977 1,703

Deferred compensation (recovery) expense (1,152 ) 3,057 1,378 598

Share-based compensation 947 655 (171 ) (3,150 )

(Gain) loss on change in fair value of financial liabilities (733 ) 49 (71 ) (149 )

Gain on disposition of a business — (964 ) — 315

Foreign exchange on financial liabilities (64 ) (43 ) 1,935 1,878

Interest expense on lease obligations(3) 443 — 1,204 3,357

Corporate reorganization costs (2) — — 878 399

Exceptional costs (2) 924 686 2,726 —

Adjusted net income for the period (2,657 ) 4,410

3,974

2,513

Depreciation 455 240 781 —

Interest expense, net of interest income, on long-term borrowings 2,458 1,779 9,563 6,269

Adjusted EBITDA before NCI 256 6,429 (1,948 ) (1,143 )

Non-controlling interest (146 ) (12 ) 7,615 5,126

(1) Refer to the “Use of Non-IFRS Financial Measures” section of the MD&A.

(2) Included in general and administrative expenses.

(3) On January 1, 2019, Kew adopted IFRS 16, Leases. No adjustment was made to the nine month period ended September 30, 2018. The

amounts reflected in the three and nine months ended September 30, 2019 reflect the relevant changes under the standard. As noted in the

interim condensed consolidated financial statements, payments made under lease obligations for the three and nine months ended

September 30, 2019 were $1,254 and $3,651 respectively and having factored in the impact of NCI were 1,036 and 2,995 respectively.

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Revenue, Cost of Sales, Gross Profit and Segmental Analysis

Three months

ended September

30, 2019

Three months

ended September

30, 2018

Nine months

ended September

30, 2019

Nine months

ended September

30, 2018

Revenue

Production and distribution revenue 47,516 52,817 168,604 142,368

Cost of sales 34,284 34,575 120,080 97,921

Gross profit(1) 13,232 18,242 48,524 44,447

The Company’s business activities are conducted through two segments: Production and Distribution

Three months ended September 30, 2019 Nine months ended September 30, 2019

Production Distribution Corporate Consolidated Production Distribution Corporate Consolidated

Revenues 27,537 19,979 — 47,516 107,104 61,500 — 168,604

Cost of sales 19,978 14,306 — 34,284 78,867 41,213 — 120,080

Gross profit(1) 7,559 5,673 — 13,232 28,237 20,287 — 48,524

General and administrative expenses 7,085

4,287

2,528

13,900

20,578

13,596

7,390

41,564

Segment profit (loss) 474 1,386 (2,528 ) (668 ) 7,659 6,691 (7,390 ) 6,960

Exceptionals and corporate reorganization costs 67

147

710

924

157

306

2,396

2,859

NCI (146 ) — — (146 ) (2,094 ) — — (2,094 )

Adjusted EBITDA(1) 395 1,533 (1,818 ) 110 5,722 6,997 (4,994 ) 7,725

Three months ended September 30, 2018 Nine months ended September 30, 2018

Production Distribution Corporate Consolidated Production Distribution Corporate Consolidated

Revenues 36,001 16,816 — 52,817 97,880 44,488 — 142,368

Cost of sales 25,332 9,243 — 34,575 72,771 25,150 — 97,921

Gross profit(1) 10,669 7,573 — 18,242 25,109 19,338 — 44,447

General and administrative expenses 6,390

4,048

2,061

12,499

16,528

11,786

6,314

34,628

Segment profit (loss) 4,279 3,525 (2,061 ) 5,743 8,581 7,552 (6,314 ) 9,819

Exceptionals and corporate reorganization costs 226

83

377

686

541

241

2,097

2,879

NCI (12 ) — — (12 ) (1,155 ) — — (1,155 )

Adjusted EBITDA(1) 4,493 3,608 (1,684 ) 6,417 7,967 7,793 (4,217 ) 11,543

(1) Refer to the “Use of Non-IFRS Financial Measures” section of the MD&A.

12

Adjusted EBITDA and Free Cash Flow (FCF)

Three months ended September

30, 2019

Three months ended September

30, 2018

Nine months ended September

30, 2019

Nine months ended September

30, 2018

Adjusted EBITDA after NCI 110 6,417 7,725 11,543

Additions to property and equipment (294 ) (378 ) (1,534 ) (901 )

Interest expense (2,901 ) (1,779 ) (7,656 ) (4,292 )

Cash taxes — — — —

FCF before movements in working capital and before movements in film and television rights (3,085 ) 4,260

(1,465 ) 6,350

Net change in non cash working capital balance related to operations 5,818

(6,704 ) 8,124

(15,455 )

FCF after movements in working capital and before movements in film and television rights 2,733

(2,444 ) 6,659

(9,105 )

Net additions to film and television rights (13,812 ) (13,585 ) (18,798 ) (17,818 )

FCF (11,079 ) (16,029 ) (12,139 ) (26,923 )

Segmental FCF

Three months ended September 30, 2019 Nine months ended September 30, 2019

Production Distribution Corporate Consolidated Production Distribution Corporate Consolidated

Adjusted EBITDA after NCI 395 1,533 (1,818 ) 110 5,722 6,997 (4,994 ) 7,725

Additions to property and equipment (39 ) (255 ) —

(294 ) (1,193 ) (319 ) (22 ) (1,534 )

Interest expense (329 ) (290 ) (2,282 ) (2,901 ) (808 ) (677 ) (6,171 ) (7,656 )

Cash taxes — — — — — — — —

FCF before movements in working capital and before movements in film and television rights 27

988

(4,100 ) (3,085 ) 3,721

6,001

(11,187 ) (1,465 )

Net change in non cash working capital balance related to operations 8,410

(2,587 ) (5 ) 5,818

7,989

(2,664 ) 2,799

8,124

FCF after movements in working capital and before movements in film and television rights 8,437

(1,599 ) (4,105 ) 2,733

11,710

3,337

(8,388 ) 6,659

Net additions to film and television rights (12,237 ) (1,575 ) —

(13,812 ) (15,825 ) (2,973 ) —

(18,798 )

FCF (3,800 ) (3,174 ) (4,105 ) (11,079 ) (4,115 ) 364 (8,388 ) (12,139 )

13

Earnings per share (EPS) and Adjusted EPS

Three months

ended

September 30,

2019

Three months

ended

September 30,

2018

Nine months

ended

September 30,

2019

Nine months

ended

September 30,

2018

Adjusted EBITDA after NCI 110 6,417 7,725 11,543

Depreciation (455 ) (240 ) (1,333 ) (639 )

Interest expense on long term borrowings (2,458 ) (1,779 ) (6,432 ) (4,292 )

Income tax recovery 127 705 558 472

Non-controlling interest from EBITDA 146 12 2,094 1,155

Adjusted net (loss) income after tax (2,530 ) 5,115 2,612 8,239

Adjusted EPS- basic and diluted (0.18) 0.40 0.19 0.68

Exceptional costs (924 ) (686 ) (2,859 ) (2,564 )

Corporate restructuring costs — — — (315 )

Transaction costs — (443 ) — (3,203 )

Share-based compensation (947 ) (655 ) (2,325 ) (1,253 )

Deferred compensation recovery (expense) 1,152 (3,057 ) (825 ) (4,760 )

Amortization of right-of-use asset (1,336 ) — (4,062 ) —

Amortization of other intangible assets (2,157 ) (3,506 ) (6,472 ) (7,843 )

Interest expense on lease obligations (443 ) — (1,224 ) —

Gain (loss) on change in fair value of financial liabilities 733 (49 ) 904 3,101

Gain on disposition of a business — 964 — 964

Foreign exchange gain on financial liabilities 64 43 135 192

Net loss for the period (6,388 ) (2,274 ) (14,116 ) (7,442 )

EPS - basic and diluted (0.45 ) (0.18) (1.11 ) (0.68)