DHX Earnings Slip in Q3

HALIFAX: Revenue for DHX Media in the third quarter of fiscal 2016 was C$84.1 million ($65 million), down 2 percent from the year-ago figure but in line with the management’s expectation.

DHX said that the revenue decrease was largely because of a tough comparison resulting from Q3 2015 distribution revenues having included C$12.78 million ($9.9 million) in streaming revenues for Degrassi.

Adjusted EBITDA rose 10 percent to C$32.7 million ($25 million) from the prior-year quarter, while net income was C$10.2 million ($7.9 million), a decline of 43 percent, largely due to fluctuations in currency exchange rates.

“Our strategy to be the ‘go-to’ company for children’s content in an expanding on-demand market is delivering strong results,” said Dana Landry, the CEO of DHX. “Our top-rated original productions are generating strong demand from major digital and linear customers around the globe. We have built a large and growing online audience for both our own content and third-party brands through our WildBrain multiplatform kids’ network. Furthermore, we are expanding our lineup of high-profile brands with the inherent potential for multiple revenue streams.”

Proprietary production revenues for Q3 2016 were C$12.11 million ($9.4 million), a decrease of 20 percent from the comparable period. Distribution revenues were down 21 percent to C$23.93 million ($18.5 million). DHX Television revenues were down 23 percent to C$15.73 million ($12.1 million). Approximately 92 percent or C$14.49 million ($11.2 million) of the television revenues were subscriber revenues, while advertising, promotion and digital revenues accounted for a combined 8 percent or C$1.24 million ($958,000) of the total television revenues.

The M&L-owned revenues were C$10.43 million ($8 million), up 63 percent, as the quarter included C$3.65 million ($2.8 million) from the 22 city Canadian leg of The Next Step Wild Rhythm Tour. M&L-represented revenues were up C$3.92 million ($3 million) to C$7.42 million ($5.7 million).

The company earned C$14.05 million ($10.9 million) for producer and service fee revenues, an increase of 71 percent. New-media revenues were down 71 percent to C$0.44 million ($340,000) based primarily on apps and games as the UMIGO project has now been completed, accounting for the decline in revenues.