DHX Media Reports 3rd Quarter Results

www.dhxmedia.com
TSX: DHX 
REVENUE UP 88%, ADJUSTED EBITDA INCREASES 243% 
HALIFAX, May 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 endedMarch 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 EBITDA(1 )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.

(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 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 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 two hours 
after the call on +1 (855) 859-2056 toll free or +1 (416) 849-0833, and 
passcode 70374470, until midnight ESTMay 21, 2013

Consolidated Statements of Income and Comprehensive Income Data
                                               
                         Three Months Ended      Three Months Ended
                            March 31, 2013          March 31, 2012
                                  ($000)                  ($000)
                         (except per share
                               data)          (except per share data)

Consolidated Statements                      
of Income and
Comprehensive Income
(Loss) Data:(1)                                                      

Revenues                             31,227                    16,619

Direct production costs                      
and amortization of film
and television produced            (15,322)                  (10,504)

Amortization of book                         
value of acquired DHX
Cookie Jar library                  (1,492)                         -

Gross margin(2)                      14,413                     6,115

Selling, general, and                        
administrative(3)                   (8,968)                   (4,084)

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

Share of loss of                             
associates                             (91)                      (55)

Amortization, finance                        
and other expenses, net
(3)                                 (3,727)                   (1,188)

Provision for income                         
taxes                                 (721)                     (242)

Net income                              906                       546

Cumulative translation                       
adjustment                            (490)                     (252)

Realized loss on                             
available for sale
investments                               -                         -

Change in fair value of                      
available-for-sale
investments, net of tax                   -                      (64)

Comprehensive income                    416                       230

Basic earnings per                           
common share                           0.01                      0.01

Diluted earnings per                         
common share                           0.01                      0.01
                                                                     

Weighted average common                      
shares outstanding
(expressed in thousands)                                             

  Basic                             102,124                    53,095

  Diluted                           105,191                    53,512
    Revenues

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 millioncompared to$5.33 
millionfor Q3 2012, an increase of 140%.

SG&A

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 
atwww.dhxmedia.comor onwww.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, 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.

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 CONF FIN 

-0- May/14/2013 11:00 GMT