Halifax, Canada – October 1, 2012 – DHX Media Ltd. (“DHX Media” or the “Company”) (TSX: DHX), a leading independent international producer, distributor and licensor of mainly children’s entertainment content, is pleased to announce its audited financial results for the year ended June 30, 2012.
Highlights of Fiscal 2012 Results:
(All amounts in Canadian dollars)
- Revenues of $72.7 million, up 31% from $55.4 million in fiscal 2011;
- Gross margin increased to $24.7 million (34% of revenues), up 11% from $22.3 million in fiscal 2011 (40% of revenues);
- EBITDA1 of $9.1 million, an increase of 34% from $6.8 million for fiscal 2011; and,
- Net income of $3.0 million, or $0.05 per share, up from $1.3 million, or $0.02 per share, an increase of 131%, from fiscal 2011.
1 EBITDA represents income of the Company before amortization, finance income (expense), taxes, share of loss of associates, development expenses, stock-based compensation expense, and other one-time adjustments. (See Annual MD&A definition of EBITDA for full details).
Michael Donovan, Chairman and CEO, DHX Media commented, “We are very pleased to report our financial results for fiscal 2012 which show continued profitable growth. This growth sets the stage for the completion of our recently announced, acquisition of Cookie Jar. We look forward to an exciting year ahead as a significantly larger business and the benefits that scale will bring.”
Analyst call details
The Company will hold a conference call for analysts to discuss its fiscal 2012 financial results on Monday, October 1st at 10:00 am EDT. Media and others may access this call on a listen-in basis. Conference call details are as follows:
To access the call, please dial +1(888)231-8192 toll-free or +1(647)427-7451 internationally. Please allow 10 minutes to be connected to the conference call.
Replay: Instant replay will be available beginning approximately one hour after the call on +1(855)859-2056 toll free or +1(416)849-0833, and passcode 35154416, until midnight EST Monday, October 8th.
Consolidated Statements of Income and Comprehensive Income Data
|
Fiscal |
Fiscal 2011 |
|
|
|
($000) |
($000) |
|
|
(except per |
(except per share data) |
|
Consolidated Statements of Income (Loss) |
IFRS |
IFRS |
|
Revenues… |
72,647 |
55,409 |
|
Direct costs and amortization of film and |
(47,728) |
(33,137) |
|
Gross margin… |
24,719 |
22,272 |
|
Selling, general, and administrative… |
(16,077) |
(15,930) |
|
Impairment in value of certain investment in film |
(515) |
(450) |
|
Share of gain (loss) of associates… |
(146) |
(333) |
|
Amortization, interest and other expenses, net… |
(4,001) |
(3,929) |
|
Provision for (recovery of) income taxes… |
(933) |
(314) |
|
Net income (loss)… |
3,047 |
1,316 |
|
Cumulative translation adjustment… |
602 |
(476) |
|
Realized loss on available for sale investments, |
80 |
– |
|
Change in fair value of available-for-sales |
7 |
7 |
|
Comprehensive income (loss)… |
3,736 |
847 |
|
Basic earnings (loss) per common share… |
0.05 |
0.02 |
|
Diluted earnings (loss) per common share… |
0.05 |
0.02 |
|
Weighted average common shares outstanding |
||
|
Basic… |
57,836 |
61,622 |
|
Diluted… |
58,160 |
61,944 |
|
N/A – Not applicable |
Revenues
Revenues for Fiscal 2012 were $72.65 million, up 31% from $55.41 million for Fiscal 2011. The increase in Fiscal 2012 was due to significant increases in merchandising and licensing (M&L), producer and service fee, and new media revenues.
Proprietary production revenues: Proprietary production revenues for Fiscal 2012 of $12.60 million decreased by 22% compared to $16.10 million for Fiscal 2011. The overall decrease was made up of a 34% decrease to $8.01 million (Fiscal 2011-$12.10 million) for Children’s and Family, a 91% decrease to $0.17 million for Fiscal 2012 (Fiscal 2011-$1.94 million) for Drama and MOW’s (“Drama”), and a 115% increase to $4.42 million for comedy productions (“Comedy”) (Fiscal 2011-$2.06 million).
For Fiscal 2012, the Company added 131.0 half-hours to the library. The breakdown for Fiscal 2012 is 86.0 half-hours or $12.60 million of proprietary film and television program production revenue versus the 138.0 half-hours or $16.10 million for Fiscal 2011, where the programs have been delivered and the license periods have commenced for consolidated entities and 45.0 half-hours in intellectual property (“IP”) rights for third party produced titles (36.5 half-hours in Fiscal 2011). Fiscal 2012 proprietary deliveries were in line with scheduled deliveries and Management’s expectations.
For Fiscal 2012, the Company earned $31.28 million for producer and service fee revenues, an increase of 102% versus the $15.48 million for Fiscal 2011. DHX Vancouver earned $12.39 million, an increase of 74% (Fiscal 2011-$7.14 million), and DHX Wildbrain earned $18.89 million for Fiscal 2012, an increase of 126% (Fiscal 2011-$8.34 million). For Fiscal 2012, the breakdown for major projects over $0.10 million for DHX Vancouver was $5.11 million for My Little Ponyseasons 1-3, $0.13 million for Sarah Solves It Pilot, $2.10 million for Little Pet Shop season I, and $5.05 million for Pound Puppies seasons 1-3. For Fiscal 2012, the breakdown for major projects over $0.10 million for DHX Wildbrain was $3.01 million for Monster High seasons 5-6 and 13, $4.28 million for The Ricky Gervais Show seasons 2-3, $3.61 million forOki’s Oasis Pilot and season I, $0.57 million for Team Smithereen Pilot, and $7.34 million for How to Train Your Dragonseason 1.
For Fiscal 2012, distribution revenues were down 14% to $6.91 million from $8.02 million for Fiscal 2011, generally due to timing of license periods for existing contracts on hand. The Company achieved the low end of its range for its Fiscal 2012 target for distribution revenue. For Fiscal 2012, the Company recognized revenue on several contracts throughout its existing library and delivered episodes of newer titles. Some of the more significant sales were on the following titles: Pokoseasons 1-3, Animal Mechanicals seasons 1-4, Save Ums! seasons 1-2, Super Why! seasons 1-2, Kid vs. Kat seasons 1-2, Bo on the Go! seasons 1-3, Radio Free Roscoe seasons 1-2, Martha Speaks seasons 1-2, Franny’s Feet seasons 1-3, Naturally Sadie seasons 1-3, Latest Buzz seasons 1-3, Pirates seasons 1-2, How to be Indie seasons 1-2, Ha Ha Hairies season 1, and Rastamouse season 1.
Intellectual property (“IP”) rights on third party produced titles: As part of the maturation of DHX, specifically the experience gained by our in house international television distribution team along with the licensing expertise within DHX Wildbrain, we continue to strategically target third party produced titles for IP rights. As noted above, for Fiscal 2012 the Company added 45.0 half-hours to the library (26 half-hours for Ha Ha Hairies, 6 half-hours for How to be Indie and 13 half-hours for the UK breakout property Rastamouse). For Fiscal 2011, the Company added 36.5 half-hours to the library (3.5 half-hours for Grandpa in my Pocket, 20.0 half-hours for How to be Indie, and 13 half-hours for Rastamouse).
Management was very pleased that for Fiscal 2012, M&L, music, and royalty revenues increased 24% to $15.80 million (Fiscal 2011-$12.73 million). Traditional DHX music, M&L, and royalty revenues were up 54% to $2.47 million for Fiscal 2012 (Fiscal 2011-$1.60 million). Final gross Yo Gabba Gabba revenues were $8.41 million for the calendar 2011 tour forYo Gabba Gabba Live!, up 4% versus Fiscal 2011, calendar 2010 tour, of $8.06 million, and $4.64 million for other Yo Gabba Gabba! M&L, up 51% over Fiscal 2011 of $3.07 million. Management also reported its first Rastamouse M&L revenues for Fiscal 2012 in the UK for the Christmas 2011 season of $0.26 million (Fiscal 2011-nil).
For Fiscal 2012, new media revenues increased 119% to $5.77 million (Fiscal 2011-$2.64 million) including $4.54 million, up 85%, for UMIGO (you make it go) (Fiscal 2011-$2.45 million) and $1.23 million, up 547%, (Fiscal 2011-$0.19 million) for other new media projects.
Gross Margin
Gross margin for Fiscal 2012 was $24.72 million, an increase in absolute dollars of 11% compared to $22.27 million for Fiscal 2011. The overall margin at 34% of revenue for Fiscal 2012 was at the low end, but in line with Management’s Fiscal 2012 expectations.
Operating Expenses
Operating expenses for Fiscal 2012 were $21.74 million compared to $20.64 million for Fiscal 2011, an increase of 4%.
SG&A
SG&A costs for Fiscal 2012 were up slightly (1%) at $16.08 million compared to $15.93 million for Fiscal 2011. Specifically, SG&A costs (excluding DHX Wildbrain) were $11.14 million (Fiscal 2011-$12.13 million) and SG&A costs for DHX Wildbrain for Fiscal 2012 were $4.94 million (Fiscal 2011-$3.80 million, however, was for only 289 days activity). Management was pleased with SG&A costs for Fiscal 2012 (excluding DHX Wildbrain) at $11.14 million as these were down 8% (ahead of Management’s expectations of a 5% reduction) as compared to Fiscal 2011.
EBITDA
For Fiscal 2012, EBITDA was $9.13 million, up $2.30 million or 34% over $6.83 million for Fiscal 2011. For Fiscal 2012, this increase was due to the increase in gross margin dollars of $2.45 million, offset by an increase in SG&A of $0.15 million.
DHX Media’s complete financial statements are available at www.dhxmedia.com or on www.sedar.com.
Enquiries:
David A. Regan – EVP, Corporate Development & IR
+1 902-423-0260
About DHX Media Ltd.
DHX Media, together with its subsidiary, W!LDBRAIN Entertainment, is a leading international family entertainment rights creation and management company with three-award-winning production facilities, worldwide distribution and a global consumer products business. DHX Media has produced over 40 original television series and maintains a library of over 2,500 half-hours of animation and live-action programming. DHX Media has offices in Toronto, Halifax, Vancouver, Los Angeles and London. DHX Media is listed on the TSX (Toronto Stock Exchange). www.dhxmedia.com
Disclaimer
This press release contains forward looking statements with respect to the Company, including statements about the value of the substantial issuer bid to the Company’s remaining shareholders and its effects on the Company’s earnings per share. Although the Company believes that the expectations reflected in such forward looking statements are reasonable, such statements involve risks and uncertainties and are based on information currently available to the Company. Actual results may differ materially from those expressed or implied by such forward looking statements. Factors that could cause actual results or events to differ materially from current expectations, among other things, include risks related to market factors, including changing popularity of the titles in the Company’s production library, application of accounting policies and principles, and production related risks, and other factors discussed in materials filed with applicable securities regulatory authorities from time to time including matters discussed under “Risk Factors” in the Company’s short form prospectus dated September 25, 2012. These forward-looking statements are made as of the date hereof, and the Company assumes no obligation to update or revise them to reflect new events or circumstances.