TIDMDHX
RNS Number : 8202Z
DHX Media Ltd
29 September 2009
DHX MEDIA LTD
www.dhxmedia.com
AIM and TSX: DHX
DHX MEDIA REPORTS RECORD FULL-YEAR RESULTS
Halifax, Canada - September 29, 2009 - DHX Media Ltd. ("DHX Media" or the
"Company") (AIM & TSX ticker: "DHX"), a leading independent international
producer and distributor of mainly children's entertainment content, is pleased
to announce its audited financial results for the year ended June 30, 2009.
Highlights of Fiscal 2009 Results:
(All amounts in Canadian dollars)
* Revenues increased 18% to $62.0 million, up from $52.4 million in fiscal 2008;
* Gross profit increased 33% to $22.8 million, up from $17.2 million in 2008;
* EBITDA1 increased 61% to $9.8 million, up from $6.1 million for fiscal 2008;
* Net income before discontinued operations was $1.8 million ($0.04 per share), a
significant increase from a loss of $0.9 million ($0.02 per share) in fiscal
2008;
* Net income was $0.4 million ($0.01 per share) (net of a $1.5 million loss from
discontinued operations and one-time cost associated with abandoned transactions
of $1.4 million), an improvement over the loss of $1.0 million for 2008 ($0.03
per share); and
* Television production deliveries totaled 226.5 half-hours, a decrease of 3% from
233.5 in 2008.
1 EBITDA represents net income of the Company before amortization, interest and
other income (expense), taxes, non-controlling interest, equity income,
development expenses, stock-based compensation expense, costs associated with
abandoned transactions, and impairment in value of certain investment in film
and television programs.
Michael Donovan, Chairman and CEO, DHX Media commented, "Our continuing
profitable growth again highlights the effectiveness of our content aggregation
strategy. Our strengthening margins for 2009 have driven revenue and EBITDA to
record levels, and demonstrate the success of both our acquisitions and organic
production growth. We are extremely pleased to announce such strong results in
spite of the hardened economic conditions over the past year."
Consolidated Statements of Income and Comprehensive Income Data
+--------------------------------------------------+------------+------------+------------+
| | Year Ended June 30, |
+--------------------------------------------------+--------------------------------------+
| | 2009 | 2008 | 2007 |
+ +------------+------------+------------+
| | ($000) | ($000) | ($000) |
+--------------------------------------------------+--------------------------------------------------+------------+------------+
| | (except | (except | (except |
| | per share | per share | per share |
| | data) | data) | data) |
+--------------------------------------------------+------------+------------+------------+
| Consolidated Statements of Income and | | | |
| Comprehensive Income Data:1 | | | |
+--------------------------------------------------+------------+------------+------------+
| Revenues............................................................................................. | 61,969 | 52,379 | 25,971 |
+--------------------------------------------------+------------+------------+------------+
| Direct production costs and amortization of film | | | |
| and television | | | |
+--------------------------------------------------+------------+------------+------------+
| produced............................................................................................ | 39,168 | 35,145 | 16,273 |
+--------------------------------------------------+------------+------------+------------+
| Gross margin......................................................................................... | 22,801 | 17,234 | 9,734 |
+--------------------------------------------------+------------+------------+------------+
| Selling, general, and | 14,001 | 12,045 | 7,341 |
| administrative............................................................... | | | |
+--------------------------------------------------+------------+------------+------------+
| Impairment in value of certain investment in | 494 | 2,782 | - |
| film and television programs............... | | | |
+--------------------------------------------------+------------+------------+------------+
| Income before the following and discontinued | 7,145 | 960 | 1,381 |
| operations ................................... | | | |
+--------------------------------------------------+------------+------------+------------+
| Income (loss) from strategic | 122 | (59) | 1,737 |
| investments....................................................... | | | |
+--------------------------------------------------+------------+------------+------------+
| Costs associated with abandoned | (1,360) | (104) | (288) |
| transactions................................................. | | | |
+--------------------------------------------------+------------+------------+------------+
| Amortization, interest and other (expenses), | (2,689) | (1,646) | (1,039) |
| net............................................... | | | |
+--------------------------------------------------+------------+------------+------------+
| Provision for income | 1,375 | 40 | 590 |
| taxes........................................................................ | | | |
+--------------------------------------------------+------------+------------+------------+
| Net income (loss) and comprehensive income | 1,843 | (889) | 1,201 |
| (loss) before discontinued operations.... | | | |
+--------------------------------------------------+------------+------------+------------+
| Discontinued operations, net of income | (1,468) | (141) | - |
| tax..................................................... | | | |
+--------------------------------------------------+------------+------------+------------+
| Net income (loss) and comprehensive income | 375 | (1,030) | 1,201 |
| (loss) .......................................... | | | |
+--------------------------------------------------+------------+------------+------------+
| Basic earnings (loss) before discontinued | 0.04 | (0.02) | 0.04 |
| operations per common share................... | | | |
+--------------------------------------------------+------------+------------+------------+
| Diluted earnings (loss) before discontinued | 0.04 | (0.02) | 0.03 |
| operations per common share................. | | | |
+--------------------------------------------------+------------+------------+------------+
| Basic earnings (loss) per common | 0.01 | (0.03) | 0.04 |
| share......................................................... | | | |
+--------------------------------------------------+------------+------------+------------+
| Diluted earnings (loss) per common | 0.01 | (0.03) | 0.03 |
| share....................................................... | | | |
+--------------------------------------------------+------------+------------+------------+
| Weighted average common shares outstanding | | | |
+--------------------------------------------------+------------+------------+------------+
| Basic................................................................................................. | 43,066 | 39,039 | 32,699 |
+--------------------------------------------------+------------+------------+------------+
| Diluted............................................................................................... | 43,096 | 39,039 | 35,733 |
+--------------------------------------------------+------------+------------+------------+
| | | | |
+--------------------------------------------------+------------+------------+------------+
| | | | |
+--------------------------------------------------+------------+------------+------------+
| | | | |
+--------------------------------------------------+------------+------------+------------+
| Consolidated Balance Sheet Data: | | | |
+--------------------------------------------------+------------+------------+------------+
| Cash, restricted cash and short-term | 11,086 | 9,570 | 5,779 |
| investments............................................. | | | |
+--------------------------------------------------+------------+------------+------------+
| Investment in film and television | 35,827 | 49,981 | 47,025 |
| programs..................................................... | | | |
+--------------------------------------------------+------------+------------+------------+
| Total assets.......................................................................................... | 148,803 | 143,976 | 103,005 |
+--------------------------------------------------+------------+------------+------------+
| Total liabilites...................................................................................... | 88,253 | 85,783 | 61,544 |
+--------------------------------------------------+------------+------------+------------+
| Shareholders' equity............................................................................... | 60,550 | 58,193 | 41,461 |
+--------------------------------------------------+------------+------------+------------+
| | | | |
+--------------------------------------------------+------------+------------+------------+
Revenues
Revenues for Fiscal 2009 were $62.0 million, up from $52.4 million for Fiscal
2008, an increase of 18%. The increase was generally due to increases in the
Company's proprietary production and producer service fee revenue categories.
Management was especially pleased with the growth given the general downturn in
the overall economic climate over the past year and sees it as validation of the
Company's business model.
Proprietary production revenues for Fiscal 2009 of $39.4 million were up 15%
over the $34.3 million for Fiscal 2008.
For Fiscal 2009 the Company recognized $39.4 million of proprietary film and
television program production revenue (226.5 half-hours), where the programs
have been delivered and the license periods have commenced.
In addition, by June 30, 2009 the Company delivered 26 half-hours of Latest Buzz
Season III and 8 half-hours of Super Why (CBC) Season I, for which the license
periods had not yet commenced by June 30, 2009, and therefore the revenue
recognition criteria had not been met to recognize in Fiscal 2009. The license
periods are scheduled to commence in Fiscal 2010 and will be recognized in the
corresponding quarter, when the license periods have commenced and all revenue
recognition criteria have been met.
For Fiscal 2009 distribution revenues were down by 16% to $12.4 million from
$14.7 million for Fiscal 2008. Some of the more significant sales were on the
following titles: Chop Socky Chooks Season I, The Latest Buzz Seasons I, II, and
III, Bo on the Go! Seasons I and II, The Mighty Jungle Season II, Animal
Mechanicals Seasons I and II, Super Why Season I, Kid vs. Kat Season I, and
Martha Speaks Season I. Management was very pleased with the Q4 2009 and overall
performance of its distribution activities for Fiscal 2009 given the economic
climate over the past year.
For Fiscal 2009 the Company earned $7.3 million for producer and service fee
revenues, up substantially over $1.7 million for Fiscal 2008.
For Fiscal 2009 music and royalty revenues increased 155% to $2.0 million
(Fiscal 2008-$0.8 million). For Fiscal 2009 $0.7 million related to the
recognition of the minimum guarantee from the Hasbro Franny's Feet Merchandising
and Licensing deal that has been put on indefinite hold. New media revenues
decreased in Fiscal 2009 to $0.2 million (Fiscal 2008-$0.6 million).
Gross Margin
Gross margin for Fiscal 2009 was $22.8 million, an increase in absolute dollars
of 33% compared to $17.2 million for Fiscal 2008. The overall margin at 37% of
revenue was up over the 33% overall margin for Fiscal 2008.
Operating Expenses
Operating expenses for Fiscal 2009 were $15.7 million compared to $16.3 million
for Fiscal 2008, a decrease of 4%. In Fiscal 2009, SG&A increased 17% to $14.0
million from $12.0 million for Fiscal 2008. SG&A costs have increased as a
result of the addition of Studio B and imX (amounting to approximately $2
million of the increase) and the Company's revenue growth. Operating expenses
for Fiscal 2009, as a percentage of revenues, at 25% are improving compared to
Fiscal 2008 at 31%.
EBITDA
In Fiscal 2009 EBITDA was $9.8 million, a 61% increase as compared to
$6.1 million for Fiscal 2008. For Fiscal 2009 this was due to the increase in
gross margin dollars of $5.6 million, adding back an increase of non-cash
stock-based compensation expense of $0.1 million, and offset by the increase in
SG&A, net of income from strategic investments, of $1.8 million, for a positive
total dollar change of $3.9 million.
Impairment in Value of Certain Investments in Film and Television Programs
During Q4 and for Fiscal 2009 the Company recorded an impairment in value of
certain investment in film and television programs of $0.5 million ($2.8 million
for Fiscal 2008).
Discontinued Operations
The Company recorded a loss on discontinued operations, net of income tax, of
$1.5 million for Fiscal 2009 (Fiscal 2008-$0.1 million). In December 2008, the
Company decided to dispose of its Bulldog subsidiary due to a slow down in
franchisee opportunities resulting from the global economic slowdown. The
Company decided the working capital required in achieving break even and
profitability was significant and was sufficiently pushed forward due to the
current economic climate. Given that the remainder of the Company's subsidiaries
are generating positive cash flow, the Company felt it was prudent to not fund
losses of Bulldog. The Company is exploring its options for a potential sale or
wind up and will report on its final determination in the coming quarters.
Costs Associated with Abandoned Transactions, Equity Income, and Non-Controlling
Interest
For Fiscal 2009 the Company recorded a charge for the costs associated with
abandoned transactions of $1.4 million (Fiscal 2008-$0.1 million), approximately
$1.2 million of which related to the cancellation of a reverse-takeover
transaction.
DHX Media's complete financial statements are available at www.dhxmedia.com or
on www.sedar.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 16 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
Enquiries:
DHX Media Ltd. +1
902-423-0260
David A. Regan - EVP, Corporate Development & IR
AIM Nominated Advisers:
Grant Thornton Corporate Finance +44 (0) 20 7383 5100
Gerry Beaney
Troy MacDonald
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.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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