HALIFAX — DHX Media has had a major rethink about its corporate identity, announcing Monday it is rebranding as “WildBrain” as part of a company-wide organizational restructuring that also includes the appointment of a new chief financial officer.
DHX Media’s rebranding news came down the same day as the company released its fourth quarter and full-year 2019 fiscal results for the period ending June 30, 2019.
“In fiscal 2019, we advanced our priorities of creating premium content, growing our AVOD business, improving our cash flow and strengthening our balance sheet. In Q4 2019, revenue rose 12% to $108.8 million and adjusted EBITDA was up 26% to $20.2 million,” said Eric Ellenbogen, the company’s recently appointed CEO and vice-chair, in a news release announcing its year-end fiscal results.
“Rebranding as WildBrain embraces our commitment to creativity, imagination and innovation, and our 360-degree approach to brand management. For many years, our WildBrain group has been at the leading edge of the digital media business. As that landscape continues to rapidly evolve, now is time to unify all the parts of our company under both the name and entrepreneurial culture that WildBrain represents,” Ellenbogen said.
The company’s rebranding to WildBrain includes a new logo, website and tagline for the company — “Imagination runs wild”. The company’s YouTube business, formerly known as WildBrain, has been renamed “WildBrain Spark”. Shareholders of the company will be asked to approve a special resolution to change the corporate name to WildBrain at the upcoming 2019 annual meeting of shareholders, which is expected to take place in December 2019. Following approval, the company expects to change its ticker on the Toronto Stock Exchange and NASDAQ to “WILD”. Until that time, the company will continue to report under the DHX Media name and to trade on both stock exchanges under its present symbols, DHX on the TSX and DHXM on the NASDAQ.
As part of the company’s reorganization, Aaron Ames, chief operating officer, has been appointed chief financial officer effective immediately. Ames succeeds Doug Lamb, who has decided to step down, DHX Media said in its news release. Lamb is remaining with the company in an advisory role until October 31, 2019. The COO position will not be replaced, the company said.
“Aaron has a lengthy history with the company and has made significant contributions as COO. I’m confident that with his deep knowledge of our operations and a background in business improvement, integration and synergies, Aaron will be a strong leader of our finance function. We thank Doug for his considerable contributions to the company,” Ellenbogen said in the news release.
As noted by Ellenbogen, the company’s Q4 2019 revenue rose 12% to $108.8 million, when compared to its revenue of $97.4 million in Q4 2018. The fourth quarter 2019 results were driven by higher revenues earned from the company’s non-WildBrain distribution, WildBrain, proprietary production and its consumer products-owned businesses. The company’s full-year revenue grew to $439.8 million compared to $434.4 million in fiscal 2018.
WildBrain revenue rose 25% to $17.9 million, compared to Q4 2018, and was up 20% year-over-year to $69.0 million. Distribution revenue (excluding WildBrain) grew 46% to $16.6 million vs. Q4 2018 and was down 10% year-over-year to $59.8 million. Consumer products-owned revenue grew 22% to $38.6 million, compared to Q4 2018, and rose 11% year-over-year to $160.3 million, driven by Peanuts product revenue.
During its 2019 fiscal year, DHX Media signed a worldwide exclusive agreement to create new Peanuts content for Apple, which the company said it expects to contribute steady EBITDA for the coming years. Production is underway on the first new original Peanuts series, Snoopy in Space, to debut on November 1 on Apple’s new Apple TV+ streaming service. DHX Media’s new space-themed merchandising activities with companies such as McDonald’s and Hallmark have begun to roll out to support the franchise.
DHX Media’s adjusted EBITDA grew to $20.2 million in Q4 2019, compared to $16.0 million in Q4 2018. Adjusted EBITDA for fiscal 2019 was $79.6 million vs. $97.5 million in the prior year. Fiscal 2019 adjusted EBITDA was reduced by $17.5 million due to the sale of a minority stake in Peanuts to Sony, the company explained.
Cash flow from operations increased to $44.5 million for fiscal 2019, of which $28.7 million was generated in Q4 2019, compared to $13.4 million positive operating cash flow generated for the full 2018 fiscal year. The company said it continued to emphasize debt reduction by paying down $223.8 million on its term loan and $16.4 million on its revolving credit facility during fiscal 2019.
Overall, the company’s net loss for Q4 2019 was $62.8 million, or ($0.47) per share, compared to a net loss of $21.6 million, or ($0.16) per share in Q4 2018. Net loss for fiscal 2019 was $101.5 million, or ($0.75) per share, vs. a net loss of $14.1 million, or ($0.10) per share, a year ago. Net loss for the full year was mainly due to a $104.9 million write-down in the second half of 2019 and a higher portion of net income to non-controlling interests of $23.3 million, the company said.
For more details regarding DHX Media’s 2019 fiscal results and its corporate reorganization, please see the news release.
