HALIFAX – DHX Media saw revenues fall and recorded a $18.4 million net loss attributable to its shareholders for its third quarter ended March 31, 2019.
The children's content and brands company said Tuesday that the net loss, which was more than double the loss posted in the same period last year, was impacted by a $34.2 million write-down this quarter related to its investment in film, licensed television programs, acquired content, and intangible assets.
Revenue for Q3 2019 revenue was $110.0 million, down from $116.5 million year-over-year. In the quarter, distribution revenue (excluding WildBrain) dropped $5.9 million to was $20.7 million, which the company said reflected “a sequential improvement of 51% from the last quarter as we realized on a stronger pipeline in Q3.”
Adjusted EBITDA was $20.1 million, down from $26.7 million in Q3 2018, partly due to an increase in the non-controlling interest in Peanuts, primarily related to the Sony transaction, which reduced adjusted EBITDA by $5.0 million this quarter.
WildBrain continued to grow its audience, with views rising 15% to over 8.7 billion in Q3 2019, accompanied by a 4% increase in revenue to $14.9 million.
“The moderation in revenue growth highlights that monetization continues to lag behind expansion in views as the market on YouTube continues to evolve,” reads the news release accompanying the financial results. “Initiatives to realize further value from WildBrain's large user base was reflected in a 90% growth in revenue derived from paid media and production services in Q3 2019, compared with a year ago.”
Subsequent to quarter-end, DHX Media announced an agreement to sell a building that it owns in Toronto for $12.0 million. The sale is expected to close in June, subject to customary closing conditions, with net proceeds to be used to further pay down debt.
DHX Media also confirmed that it has officially kicked off a search for a new CEO.
"When I stepped back into the role of CEO a year ago I had several priorities,” said executive chair and CEO Michael Donovan, in the release. “These included: building our premium content strategy; repositioning our assets to align with current market opportunities; expanding WildBrain, our industry-leading children's AVOD network; reducing debt; and finding my successor. We have made significant progress on all these fronts. Once the new CEO is appointed I look forward to continuing on as Executive Chair."
The full Q3 financial report is available here.
