DHX Announces Profitable Q3 and Record Nine Months



    www.dhxmedia.com
    AIM and TSX ticker: "DHX"

    HALIFAX, May 15 /CNW/ - DHX Media Ltd. ("DHX Media" or the "Company")
(AIM & TSX ticker: "DHX"), a leading independent international producer and
distributor of mainly children's television programming and interactive
content, announces its unaudited consolidated interim results for the three
month period ended March 31, 2009.

    
    Highlights of Q3 2009 Results:
    (All amounts expressed in Canadian dollars)

    - Revenue of $12.1 million and $50.4 million for the three and nine
      months ended March 31, 2009 ("Q3 2009" and "Nine Months 2009"
      respectively) , a decrease of 36% and an increase of 30%, respectively
      (Q3 2008: $18.8 million, Nine Months 2008: $38.8 million);

    - Gross profit of $5.0 million and $16.7 million for Q3 2009 and Nine
      Months 2009, a decrease of 14% and an increase of 33%, respectively
      (Q3 2008: $5.8 million, Nine Months 2008: $12.6 million);

    - EBITDA(1) of $1.6 million and $6.5 million for Q3 2009 and Nine Months
      2009, a decrease of 41% and an increase of 33% (Q3 2008: $2.7 million,
      Nine Months 2008: $4.9 million);

    - Net income of $0.44 million and $0.65 million for Q3 2009 and Nine
      Months 2009, a decrease of 50% and 54%, respectively (Q3 2008: $0.88
      million, Nine Months 2008: $1.4 million);

    - EPS of $0.01 and $0.02 for Q3 2009 and Nine Months 2009(Q3 2008: $0.02,
      Nine Months 2008: $0.04);

    (1) EBITDA represents net earnings (loss) of the Company before
        amortization expense, interest and other income (expense),
        non-controlling interest, equity income (loss), development expenses
        and stock-based compensation expense.
    

    Michael Donovan, Chairman and CEO, commented, "The financial results for
Q3 2009 were in line with management expectations for the quarter, however,
down compared to Q3 2008 as the timing of actual deliveries of proprietary
productions are uneven throughout quarterly periods. We are pleased to see the
continued improvement of a 30% increase when comparing revenue for the
nine-months ended March 31, 2009 to the nine months ended March 31, 2008. The
underlying business continues to perform well with several significant
international sales having been made at strong prices."

    Operating Review

    DHX continued to deliver on its strategic objectives including:

    
    - January 26, 2009: Announced the commissioning of the teen live-action
      comedy series That's So Weird! Consisting of 13 half-hour episodes, the
      series will air on YTV in Canada.

    - March 19, 2009: Announced the entry into a normal course issuer bid
      ("NCIB") through the facilities of the Toronto Stock Exchange, allowing
      the Company to purchase, in aggregate, up to 2,841,913 DHX Common
      Shares in the period up to March 22, 2010, subject to the requirements
      of the Toronto Stock Exchange.

    - March 26, 2009: Announced the issuance of 219,802 common shares to key
      employees pursuant to a performance-based agreement, as approved by
      shareholders.

    - March 31, 2009: Entered into an automatic share purchase plan, allowing
      the Company's designated broker, GMP Securities L.P., to make purchases
      under the Company's NCIB at any time, including during regulatory and
      self-imposed blackout periods.

    Announcements since Q3 2009:

    - April 29, 2009: Announced six new international sales of its hit
      live-action youth series The Latest Buzz.

    - May 14, 2009: Announced completion of the successful earn-out
      associated with the December 3, 2007 acquisition of Studio B
      Productions Inc.


    Financial Results
    (expressed in Canadian dollars)

    -------------------------------------------------------------------------
                                           Three Months        Nine Months
                                          Ended March 31,     Ended March 31,
                                      ---------------------------------------
                                          2009      2008      2009      2008
                                      ---------------------------------------
                                          $000      $000      $000      $000
                                       (except   (except   (except   (except
                                           per       per       per       per
                                         share     share     share     share
                                          data)     data)     data)     data)
                                      ---------------------------------------
    Consolidated Statements of Income
     and Comprehensive Income Data:(1)
    Revenues                            12,061    18,827    50,445    38,796
    Direct production costs and
     amortization of film and
     television programs produced        7,060    12,991    33,718    26,180
                                      ---------------------------------------
    Gross margin                         5,001     5,836    16,727    12,616
                                      ---------------------------------------
    Selling, general, and
     administrative                      3,546     3,306    10,809     8,113
    Income before the following
     and discontinued operations         1,323     1,987     5,553     3,532
    Loss from strategic investments         (6)      (10)      (18)      (18)
    Costs associated with
     uncompleted transactions                -         -    (1,144)        -
    Interest and other (expenses), net    (666)     (575)   (1,924)   (1,305)
    Provision for income taxes             190       520       780       815
    Net income and comprehensive
     income before discontinued
     operations                            461       883     1,686     1,394
    Discontinued operations, net of
     income taxes                          (17)       (7)   (1,039)       (7)
    Net income  and comprehensive
     income                                444       876       647     1,387
    Basic earnings per common share
     before discontinued operations       0.01      0.02      0.04      0.04
    Fully diluted earnings per
     common share before discontinued
     operations                           0.01      0.02      0.04      0.04
    Basic earnings  per common share      0.01      0.02      0.02      0.04
    Fully diluted earnings  per
     common share                         0.01      0.02      0.02      0.04
    Weighted average common shares
     outstanding
      Basic                             42,846    42,620    42,820    37,818
      Fully Diluted                     42,846    42,620    42,826    37,818
                                      ---------------------------------------


                                         As at     As at
                                      March 31,  June 30,
                                          2009      2008
                                          $000      $000
                                      -------------------
    Consolidated Balance Sheet
     Data:
    Cash, restricted cash and
     short-term investments              8,153     9,570
    Investment in film and
     television programs                37,715    49,981
    Total assets                       157,239   143,974
    Total debts                         96,773    85,781
    Shareholder equity                  60,467    58,193
    -------------------------------------------------------------------------

    (1) The financial information for the three months ended March 31, 2009
        in the table includes full quarterly results for Halifax Film,
        Decode, Studio B, and imX. The financial information for the nine
        months ended March 31, 2009 in the table includes full results for
        Halifax Film, Decode, and Studio B, but only 254 days of activity for
        imX. The three months ended March 31, 2008 includes full quarterly
        results for Halifax Film, Decode, and Studio B, but no activity for
        imX. The nine months ended March 31, 2008 includes results for
        Halifax Film, Decode, 118 days of activity for Studio B, but no
        activity for imX.
    

    Revenues

    Revenues for Q3 2009 were $12.06 million, down from $18.83 million for Q3
2008, a decrease of 36%. The decrease in Q3 2009 was generally due to lower
deliveries of proprietary programs versus Q3 2008. Proprietary deliveries are
seasonal and Q3 2008 was an extremely robust quarter for deliveries.
Deliveries for Q3 2009 were generally in line with Management's expectations.
    Proprietary production revenues: Proprietary production revenues for Q3
2009 of $6.10 million were down 54% compared to $13.36 million for Q3 2008.
The decrease included a 53% decrease to $3.66 million (Q3 2008-$7.80 million)
in proprietary production revenue for the Halifax Film division (generally due
to fewer scheduled deliveries and specifically no deliveries in Q3 2009 of The
Guard versus $4.20 million-12 half-hours deliveries on Season I in Q3 2008), a
60% decrease to $1.71 million for Q3 2009 (Q3 2008-$4.31 million) for the
Decode division (generally due to fewer scheduled deliveries), and the
inclusion of $0.73 million, a full quarter of activity (Q3 2008-$1.25
million), for the Studio B division.
    For Q3 2009 the Company recognized $6.10 million - 41.0 half-hours of
proprietary film and television program production revenue, a 48% decrease
over the 78.5 half-hours for Q3 2008, where the programs have been delivered
and the license periods have commenced.
    In addition, in Q3 2009 the Company delivered in total an additional 18
half-hours made up of: $1.10 million - 8 half-hours of Latest Buzz Season III,
$0.15 million - 5 half-hours of Super Why (CBC) Season I, and $0.04 million -
5 half-hours of Poppets Town Season I where the license periods had not yet
commenced by March 31, 2009, and therefore the revenue recognition criteria
had not been met to recognize in Q3 2009. The license periods are scheduled to
commence in future quarters and will be recognized in the corresponding
quarter. In summary, total deliveries in Q3 2009 were 59 half-hours made up
of: 41 half-hours (proprietary television recognizable) and 18 half-hours
(proprietary television not recognizable).
    Producer and service fee revenues: For Q3 2009 the Company earned $1.33
million for producer and service fee revenues whereas for Q3 2008 the Company
recorded $0.72 million for producer and service fees revenue.
    Distribution revenues: For Q3 2009 distribution revenues were down
modestly 11% to $3.96 million from $4.43 million for Q3 2008. Given the
current economic climate Management is very pleased with the Q3 2009 results.
(see "Outlook" section of the Q3 2009 MD&A for further details).
    Music and royalty revenues: For Q3 2009 music and royalty revenues
increased 30% to $0.26 million (Q3 2008-$0.20 million) while new media
revenues decreased in Q3 2009 to $0.01 million (Q3 2008-$0.07 million). These
revenue streams have remained in line with Management's expectations.

    Gross Margin

    Gross margin for Q3 2009 was $5.00 million a decrease in absolute dollars
of 32% compared to $5.84 million for Q3 2008. The overall margin at 41% of
revenue for Q3 2009 was above Management's expectations and was a result of
unusually high margins (66%) on distribution revenues for Q3 2009 due to an
increased number of sales on titles with lower net book values and an increase
in rental revenues.

    EBITDA

    In Q3 2009 EBITDA was $1.62 million (including $0.01 million loss from
strategic investments), a 39% decrease as compared to $2.67 million (including
$0.01 million loss from strategic investments) for Q3 2008.
    As at March 31, 2009, DHX reported cash, restricted cash, and short-term
investments of $8.15 million and working capital of $16.7million.
    The Company's full financial statements and MD&A can be found on SEDAR at
www.sedar.com as well as the Company's website (www.dhxmedia.com).

    About DHX Media Ltd.

    DHX Media Ltd. is a leading international producer and distributor of
television programming and interactive content with an emphasis on children,
family and youth markets. DHX Media Ltd. shares trade on AIM and are listed on
the TSX, the Toronto Stock Exchange. DHX Media's production companies, Decode
Entertainment, Halifax Film, Studio B Productions and imX Communications, are
the producers or co-producers of 14 original television series and theatrical
releases currently commissioned for production and maintain a growing library
of over 2,200 half-hours of mostly children and youth-oriented television
productions. www.dhxmedia.com

    Disclaimer

    This press release contains forward looking statements with respect to
the Company. 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, customer contract interpretation,
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
November 7, 2007 and in the Company's Amended Annual Information Form
incorporated by reference therein. 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.
    %SEDAR: 00023380E




For further information:

For further information: DHX Media Ltd.: David A. Regan - EVP, Corporate
Development & IR, (902) 423-0260; AIM Nominated Advisors: Grant Thornton UK
LLP: Gerry Beaney, Troy MacDonald, +44 (0) 20 7383 5100

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DHX Media Ltd.

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