DHX Media reports 2nd quarter results and institutes dividend

www.dhxmedia.com
TSX: DHX 
INITIAL QUARTER WITH COOKIE JAR RESULTS - GROSS MARGIN UP 82%, ADJUSTED EBITDA 
INCREASES 90% 
HALIFAX, Feb. 14, 2013 /CNW/ - 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 December 31, 2012 and its first 
ever quarterly dividend. 
Highlights of Q2 2013 Results:
(All amounts in Canadian dollars) 


    --  Revenues of $26.36 million, up 7% from $24.68 million for Q2
        2012, due to the contribution of the Cookie Jar, generally
        driven by distribution revenue growth and offset by timing
        shift of Yo Gabba Gabba live tour;
    --  Gross margin increased to $13.98 million (53% of revenues), up
        82% from $7.69 million for Q2 2012 (31% of revenues);
    --  Adjusted EBITDA(1) of $6.87 million, an increase of 90% from
        $3.62 million in EBITDA for Q2 2012;
    --  One-time charges of $3.43 million ($2.23 million after-tax) for
        acquisition-related costs associated with the Cookie Jar
        transaction;
    --  Normalized net income of $2.52 million (up 38% over Q2
        2012-$1.83 million), or $0.03 per share, after adding back
        one-time Cookie Jar acquisition-related costs. Q2 2013 reported
        net income was $0.29 million, or $0.00 per share, down from a
        net income of $1.83 million, or $0.03 per share, a decrease of
        84%, from Q2 2012; and
    --  Cost synergy target from Cookie Jar acquisition up 25% to $10
        million from previous target of $8 million.

(1) 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 Q2 2013 MD&A definition 
of EBITDA and Adjusted EBITDA for full details).

Dividend Declaration

The board of directors has declared a dividend of $0.0075 on each common share 
outstanding, payable on March 15, 2013 to the shareholders of record at the 
close of business February 25, 2013. The board of directors will regularly 
assess the quarterly dividend payout level.

Michael Donovan, CEO, DHX Media commented, "We are very pleased to announce 
our initial quarterly results including a contribution from our Cookie Jar 
acquisition which closed on October 22, as well as the initiation of a regular 
dividend of $0.0075 per common share for the quarter.This acquisition has 
delivered a significant increase in our gross margin, adjusted EBITDA and 
adjusted net income. We are also pleased to raise the target for our cost 
synergy run-rate by 25% to $10 million, the majority of which will be achieved 
by our June 30(th) year end."

Analyst call details

The Company will hold a conference call for analysts to discuss its Q2 2013 
financial results on Thursday, February 14(th) 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 one hour 
after the call on +1(855)859-2056 toll free or +1(416)849-0833, and passcode 
93149281, until midnight ESTThursday, February 21(st).

Consolidated Statements of Income and Comprehensive Income Data
                                                                    
                         Three Months Ended     Three Months Ended
                         December 31, 2012       December 31, 2011
                                  ($000)                 ($000)
                          (except per share  (except per share data)
                                data)

Consolidated Statements                     
of Income (Loss) and
Comprehensive Income
(Loss) Data:                                                        
                                                                    

Revenues                              26,358                  24,675

Direct production costs             (10,900)
and amortization of film
and television produced                                     (16,990)

Amortization of book                 (1,474)
value of acquired DHX
Cookie Jar library                                                 -

Gross margin                          13,984                   7,685

Selling, general, and                (9,346)
administrative                                               (4,140)

Impairment in value of                     -
investment in film and
television programs                                                -

Share of loss of                        (56)
associates                                                       (7)

Amortization, finance                (3,834)
and other expenses, net                                      (1,001)

Provision for income                   (461)
taxes                                                          (702)

Net income                               287                   1,835

Cumulative translation                   130
adjustment                                                     (352)

Realized loss on                          29
available for sale
investments                                                        -

Change in fair value of                (228)
available-for-sale
investments, net of tax                                           55

Comprehensive income                     218
(loss)                                                         1,538

Basic earnings per                      0.00
common share                                                    0.03

Diluted earnings per                    0.00
common share                                                    0.03

Weighted average common                     
shares outstanding
(expressed in thousands)                                            

  Basic                               90,392                  60,648

  Diluted                             93,537                  60,724

Revenues

Revenues for Q2 2013 were $26.36 million, up 7% from $24.68 million for Q2 
2012. The increase in Q2 2013 was generally due to a significant increase in 
distribution revenue driven by a proliferation of new digital buyers and the 
acquisition of DHX Cookie Jar and offset generally 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) and scheduled timing of Yo Gabba Gabba! 
Live! shows.

Proprietary production revenues: Proprietary production revenues for Q2 2013 
were $3.66 million, a decrease of 26% compared to $4.92 million for Q2 2012. 
The overall decrease was mainly due to scheduled timing of deliveries and in 
particular no activity in Q2 2013 for DHX Cookie Jar.

For Q2 2013, the Company added 21.0 half-hours to the library. The breakdown 
for Q2 2013 is 14.0 half-hours - $3.66 million of proprietary film and 
television program production revenue versus the 31.0 half-hours for Q2 2012, 
where the programs have been delivered and the license periods have commenced 
for consolidated entities and 7.0 half-hours in intellectual property ("IP") 
rights for third party produced titles (1.0 half-hours in Q2 2012). Q2 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 Q2 2013, the Company added to the library 7.0 
half-hours for Rastamouse. For Q2 2012, the Company added 1.0 half-hours for 
Rastamouse.

Producer and service fee revenues: For Q2 2013, the Company earned $5.82 
million for producer and service fee revenues, a decrease of 41% versus the 
$9.85 million for Q2 2012. This was due to Management's decision, coming out 
of its integration with DHX Cookie Jar, to lower SG&A on lower margin parts of 
the business, to wind down its lower margin LA service studio and focus on its 
higher margin animation studios in Canada. Also, it was further due to the 
delay in scheduling of two productions (approximately representing $2-3 
million in revenue). Management expects service production revenue to 
generally be caught up in Q3 and Q4 2013.

Distribution revenues: For Q2 2013, Management is pleased to report 
distribution revenues were up 417% to $9.26 million from $1.79 million for Q2 
2012, primarily due to the proliferation of new digital customers and the 
addition of DHX Cookie Jar. For the Q2 2013, the Company closed significant 
deals, among others previously announced, as follows: Gaiam Vivendi 
Entertainment, Dish Network LLC, Viacom Media Networks, PBS, Daily Motion, and 
Turner Broadcasting System Europe.

M&L-owned (including music and other royalty revenues): For Q2 2013, M&L-owned 
decreased 40% to $4.19 million (Q2 2012-$7.01 million). For Q2 2013, there 
were 13 scheduled Yo Gabba Gabba! Live! shows generating $2.28 million 
(representing approximately 25% of expected revenue for the 2013 fiscal year 
tour) as compared to Q2 2012 of several tour stops representing $5.15 million 
in revenue. For Q2 2013, other Yo Gabba Gabba! M&L was $0.94 million, down 14% 
from $1.09 million for Q2 2012. The remaining M&L-owned was $0.82 million, up 
8% as compared to $0.76 million for Q2 2012.

M&L-represented revenues: For Q2 2013, M&L-represented revenue was $2.10 
million from CPLG (Q2 2012-nil) which only included 70 days of activity and 
was acquired as part of the acquisition of DHX Cookie Jar.

New Media and Rental revenues: For Q2 2013, new media revenues increased 20% 
to $1.26 million (Q2 2012-$1.05 million) based primarily on scheduled timing 
of certain UMIGO deliverables. For Q2 2013, rental revenues were $0.07 
million, up 17% from Q2 2012 of $0.06 million, as a result of rental revenues 
of studio and office facilities to third parties of the Company's Toronto 
office.

Gross Margin

Gross margin for Q2 2013 was $13.99 million, an increase in absolute dollars 
of 82% compared to $7.69 million for Q2 2012. DHX is pleased to report the 
overall gross margin for Q2 2013 at 53% of revenue was above the high end of 
Management's expectations, driven by a strong quarter for margins on new 
digital distribution deals, production, and M&L revenues. Gross margin for Q2 
2013 was calculated as revenues of $26.36 million less direct production costs 
and amortization of investment in film of $10.90 million and less $1.47 
million amortization of the acquired DHX Cookie Jar library (Q2 2012-$24.68 
million less $16.99 million and less nil, respectively).

Operating Expenses

Operating expenses for Q2 2013 were $13.24 million compared to $5.15 million 
for Q2 2012, an increase of 157%.

SG&A

SG&A costs for Q2 2013 were up 126% at $9.35 million compared to $4.14 million 
for Q2 2012. The increase in SG&A in Q2 2013 is due to the inclusion of $2.84 
million (Q2 2012-nil) for DHX Cookie Jar which was acquired on October 22, 
2012 and $2.00 million (Q2 2012-nil) for severance and workforce harmonization 
costs related to the integration of DHX Cookie Jar.

EBITDA and Adjusted EBITDA

For Q2 2013, EBITDA was $3.45 million, down $0.17 million or 5% versus $3.62 
million for Q2 2012. For Q2 2013, Adjusted EBITDA was $6.87 million, up $3.25 
million or 90% over $3.62 million for Q2 2012. For Q2 2013, Adjusted EBITDA 
includes add backs for one-time charges, noted herein, relating to the Cookie 
Jar Acquisition totalling $3.43 million, consisting of $2.00 million, shown in 
salaries and employee benefits in SG&A, for severance costs, and $0.57 million 
for terminated development contracts, shown in development expenses and other, 
and $0.86 million for acquisition costs.

DHX Media's complete financial statements are available at www.dhxmedia.com or 
on www.sedar.com.

About DHX Media Ltd.:

DHX Media (www.dhxmedia.com) 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 as Caillou, Richard Scarry's 
Busytown Mysteries, Inspector Gadget, Johnny Test, Animal Mechanicals, Kid 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, Lisbon, Milan, Munich, Netherlands and is listed on the Toronto 
Stock Exchange.

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.



Enquiries:

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

SOURCE: DHX MEDIA LTD.

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CO: DHX MEDIA LTD.
ST: Nova Scotia
NI: ENT TVNEWS ERN FIN CONF 

-0- Feb/14/2013 12:00 GMT