HALIFAX – The new Peanuts and Strawberry Shortcake assets are paying off for DHX Media which saw a jump in first quarter revenues and profits.
Q1 2018 revenue rose 83% to $98.6 million year-over-year, which included 16% organic growth, and 67% acquisitive growth, primarily from Peanuts and Strawberry Shortcake, the company said Tuesday.
“During the quarter, our production and distribution businesses grew 51% to $43.3 million, as we realized on a healthy pipeline for our kids' content”, reads the company’s press release. “With the acquisition, we have significantly grown the scale of our licensing business, including our in-house agency, CPLG, to 42% of total revenue. We will leverage this scale to continue to grow consumer products across a broader portfolio of our own brands to drive cash generation.”
Net income for the period was $8.1 million, well above the $1.4 million posted in Q1 2017, while adjusted EBITDA grew from $14.8 million last year to $22.8 million.
The company added that its gross margin of 44% reflected the new mix of its business as well as higher third-party revenues from distribution and WildBrain, and continued advancement of the Mattel partnership projects during the first quarter of 2018.
Both the Peanuts integration and cost-reduction program continue to progress on plan, continues the release, adding that the company is on track to realize its target of $11 million in total annualized acquisition-related synergies and cost reductions by the end of Fiscal 2019, of which $5.8 million is expected to be recognized in Fiscal 2018.
CEO Dana Landry said the company is focused on cash generation and delivering incremental returns on the investments it’s made over the past few years in new content, and that it will use this cash flow primarily to de-lever and to deliver on organic growth opportunities as they arise.
"We are encouraged by the organic revenue growth in our core production and distribution businesses, and the fact that the newly acquired Peanuts and Strawberry Shortcake assets significantly expand our consumer products portfolio”, Landry added. “With this acquisition, we are now positioned to meet the unprecedented global demand for kids' and family content."
