Investor News


HALIFAX,  May 14, 2013- 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 financial results for the quarter ended March 31, 2013.

Highlights of Q3 2013 Results:

(All amounts in Canadian dollars)

  • Revenues of $31.23 million, up 88% from $16.62 million for Q3 2012, driven by an increase in distribution revenue (digital buyers and contribution of Cookie Jar) and increased revenue for the quarter from Yo Gabba Gabba! Live!;
  • Gross margin  increased to $14.41 million, an increase in absolute dollars of 136% compared to $6.12 million for Q3 2012;
  • Adjusted EBITDA1 of $7.21 million, an increase of  $5.11 million or 243%, compared to $2.10 million for Q3 2012;
  • One-time charges of $2.79 million for acquisition costs associated with the  Cookie Jar Acquisition;
  • Normalized net income of $2.73 million (up 396% or $0.03 per share), after adding back one-time Cookie Jar related costs; and
  • Cost synergy target of $8 million exceeded by 25% as the Company has now met the revised $10 million target for the Cookie Jar acquisition.

EBITDA represents income of the Company before amortization, finance income (expense), taxes, share of loss of associates, development expenses and any impairments, share-based compensation expense, and Adjusted EBITDA includes adjustments for other one-time charges. (See Q3 2013 MD&A definition of EBITDA and Adjusted EBITDA for full details).

Michael Donovan, CEO, DHX Media commented, “We are very pleased to announce our third quarter financial results, the first with a full contribution from our Cookie Jar acquisition.  Not only did we achieve record levels of adjusted EBITDA but we have also met our revised synergy target of $10 million.  The business was propelled by sales from our library of 8,500 half hours of kids programming to new and emerging digital channels which continue to proliferate.”

Dividend Declaration

The board of directors has declared a dividend of $0.0075 on each common share outstanding, payable on June 14th to the shareholders of record at the close of business May 31st.  The Company advises that the dividend will be designated as an “eligible dividend” for Canadian income tax purposes.

Analyst Call Details

The Company will hold a conference call for analysts to discuss its third quarter financial results on Tuesday, May 14th at 10:00 am EST, following the release of its financial results. 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) 231-8191 toll-free or +1 (647) 427-7450 internationally. Please allow 10 minutes to be connected to the conference call.Replay: Instant replay will be available beginning approximately two hours after the call on +1 (855) 859-2056 toll free or +1 (416) 849-0833, and passcode 70374470, until midnight EST May 21, 2013

Consolidated Statements of Income and Comprehensive Income Data


Revenues for Q3 2013 were $31.23 million, up 88% from $16.62 million for Q3 2012. The increase in Q3 2013 was due to a significant increase in distribution revenue (driven by a proliferation of new digital buyers and the acquisition of DHX Cookie Jar), an increase in proprietary production revenue and M&L-owned (driven by Yo Gabba Gabba! Live!), and offset somewhat by a reduction in producer and service fee revenue (driven by Management’s decision to wind down lower margin service work in its LA studio).

 Proprietary production revenues: Proprietary production revenues for Q3 2013 were $4.19 million, an increase of 86% compared to $2.25 million for Q3 2012. The overall increase was mainly due to scheduled timing of deliveries.

For Q3 2013, the Company added 28.0 half-hours to the library. The breakdown for Q3 2013 is 19.0 half-hours – $4.19 million of proprietary film and television program production revenue versus the 28.0 half-hours for Q3 2012, where the programs have been delivered and the license periods have commenced for consolidated entities and 9.0 half-hours in intellectual property (“IP”) rights for third party produced titles (10.0 half-hours in Q3 2012). Q3 2013 proprietary deliveries were in line with scheduled deliveries and Management’s expectations.

DHX continued to strategically target third party produced titles for IP rights. As noted above, for Q3 2013, the Company added to the library 2.0 half-hours for Deadtime Stories and 7.0 half-hours for She-Zow. For Q3 2012, the Company added 10.0 half-hours for Ha Ha Hairies.

Distribution revenues: For Q3 2013, Management is pleased to report distribution revenues were up 267% to $6.94 million from $1.89 million for Q3 2012, primarily due to the proliferation of new digital customers and the addition of DHX Cookie Jar. For Q3 2013, the Company closed significant deals, among others previously announced, as follows: Gaiam Vivendi Entertainment, Dish Network LLC, Viacom Media Networks, PBS, Daily Motion, Turner Broadcasting System Europe, and Kidoodle.TV.

M&L-owned (including music and other royalty revenues): For Q3 2013, Management was pleased that M&L-owned increased 244% to $12.16 million (Q3 2012-$3.54 million), ahead of expectations. For Q3 2013, there were 107 Yo Gabba Gabba! Live! shows generating $7.72 million as compared to wrapping up the Fiscal 2012 tour and recording $1.00 million in revenue for Q3 2012. For Q3 2013, other Yo Gabba Gabba! M&L was $1.12 million, down 19% from $1.38 million for Q3 2012. The remaining M&L-owned was $3.32 million ($2.06 million related to DHX Cookie Jar), up 186% as compared to $1.16 million for Q3 2012.

Producer and service fee revenues: For Q3 2013, the Company earned $3.89 million for producer and service fee revenues, a decrease of 53% versus the $8.32 million for Q3 2012. This was due to Management’s decision, coming out of its integration with DHX Cookie Jar and specifically to lower SG&A on less profitable parts of the business, to wind down its lower margin LA service studio and focus on its higher margin animation studios in Canada. The transition is proving out in higher gross margins for the category (as evidenced by a 35% margin for Q3 2013 versus 25% for Q3 2012) but is taking slightly longer (1-2 quarters) than expected. This, along with the unexpected scheduling delays in two productions, has resulted in producer and service fee revenues for Q3 2013 being off expectations.

 M&L-represented revenues: For Q3 2013, M&L-represented revenue was $2.76 million from CPLG (Q3 2012-nil) which was acquired as part of the acquisition of DHX Cookie Jar.

New Media and Rental revenues: For Q3 2013, new media revenues increased 125% to $1.24 million (Q3 2012-$0.55 million) based primarily on scheduled timing of certain UMIGO deliverables. For Q3 2013, rental revenues were $0.04 million, down 43% from Q3 2012 of $0.07 million, as a result of the reduction of rental revenues of studio and office facilities to third parties of the Company’s Toronto office.

 Gross Margin

Gross margin for Q3 2013 was $14.41 million, an increase in absolute dollars of 136% compared to $6.12 million for Q3 2012. DHX is pleased to report the overall gross margin for Q3 2013 at 46% of revenue was above the high end of Management’s expectations, driven by a strong quarter for margins on new digital distribution deals, proprietary production, producer and service fee, and M&L-owned revenues. Gross margin for Q3 2013 was calculated as revenues of $31.23 million less direct production costs and amortization of investment in film of $15.32 million and less $1.50 million amortization of the acquired DHX Cookie Jar library (Q3 2012-$16.62 million less $10.50 million and less nil, respectively).

Operating Expenses

Operating expenses for Q3 2013 were $12.79 million compared to $5.33 million for Q3 2012, an increase of 140%.


SG&A costs for Q3 2013 were up 120% at $8.97 million compared to $4.07 million for Q3 2012. The increase in SG&A in Q3 2013 is due to the inclusion of $3.93 million (Q3 2012-nil) for DHX Cookie Jar which was acquired on October 22, 2012 and $1.51 million (Q3 2012-nil) for severance and workforce harmonization costs related to the integration of DHX Cookie Jar.

EBITDA and Adjusted EBITDA

For Q3 2013, EBITDA was $4.42 million, up $2.32 million or 110% versus $2.10 million for Q3 2012. For Q3 2013, Adjusted EBITDA was $7.21 million, up $5.11 million or 243% over $2.10 million for Q3 2012. For Q3 2013, Adjusted EBITDA includes add backs for one-time charges, noted herein, relating to the Cookie Jar Acquisition totalling $2.79 , consisting of $1.51 million, shown in salaries and employee benefits in SG&A, for severance costs, and $0.93 million for terminated or abandoned development contracts, shown in development expenses and other, and $0.35 million for acquisition costs. 

DHX Media’s complete financial statements are available at or on

David A. Regan – EVP, Corporate Development & IR
+1 (902) 423-0260

About DHX Media Ltd.:

DHX Media ( is a leader in the creation, production and licensing of family entertainment rights. DHX Media owns, markets and distributes over 8,500 half hours of children’s entertainment content, and exploits owned properties through its consumer products licensing business. DHX Media is  recognized for  brands such asCaillouRichard Scarry’s Busytown MysteriesInspector GadgetJohnny TestAnimal MechanicalsKid vs. Kat,Super WHY!Rastamouse, and Yo Gabba Gabba!. The company also provides programming for Cookie Jar TV, the weekend morning block on CBS. DHX Media’s full-service international licensing agency, Copyright Promotions Licensing Group, (CPLG), represents numerous entertainment, sport and design brands. DHX Media has offices in Toronto, Los Angeles, Vancouver, Halifax, London, Paris, Barcelona, Milan, Munich, Netherlands and is listed on the Toronto Stock Exchange.


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.