Halifax, Canada – November 14, 2012 – 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 September 30, 2012, as well as a new sale to PBS KIDS of a fourth season of 26 episodes of its hit pre-school series Caillou.  

Highlights of Q1 2013 Results:
(All amounts in Canadian dollars)

• Revenues of $13.51 million, down 20% from $16.94 million for Q1 2012;
• Gross margin increased to $5.42 million (40% of revenues), up 6% from $5.10 million for Q1 2012 (30% of revenues);
• Adjusted EBITDA1 of $1.85 million, an increase of 11% from $1.66 million in EBITDA for Q1 2012;
• One-time charges of $0.91 million ($0.75 million after-tax) for acquisition-related costs associated with the Cookie Jar transaction;  and
• Normalized net income of $0.68 million (up 113% over Q1 2012-$0.32 million), or $0.01 per share, after adding back one-time Cookie Jar acquisition-related costs. Q1 2013 reported net loss was $0.07 million, or $0.00 per share, down from a net income of $0.32 million, or $0.01 per share, a decrease of 122%, from Q1 2012. 

1EBITDA 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 Q1 2013 MD&A definition of EBITDA and Adjusted EBITDA for full details).

Michael Donovan, Chairman and CEO, DHX Media commented, “Our first quarter results do not reflect the effect of the Cookie Jar acquisition which closed on October 22.  For this period, we are pleased to report growth in our adjusted EBITDA1, gross profit margin and normalized net income for the quarter. We are also pleased to report that significant progress has been made towards the integration of Cookie Jar since closing and we can now confirm that the target run-rate cost synergies of $8 million have been fully identified and implementation is well underway.” 

Analyst call details
The Company will hold a conference call for analysts to discuss its Q1 2013 financial results on Wednesday, November 14th 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 68879764, until midnight EST Wednesday, November 21st.

Consolidated Statements of Income and Comprehensive Income Data

Revenues
Revenues for Q1 2013 were $13.51 million, down 20% from $16.94 million for Q1 2012. The decrease in Q1 2013 was generally due to decreases in proprietary revenue and scheduled timing of Yo Gabba Gabba! Live! and timing of deliverables for certain new media revenues.
Proprietary production revenues: Proprietary production revenues for Q1 2013 were $1.52 million, a decrease of 64% compared to $4.20 million for Q1 2012. The overall decrease, mainly due to scheduled timing of deliveries, was made up of a 68% decrease to $1.13 million (Q1 2012-$3.56 million) in Children’s and Family, a decrease to nil for Q1 2013 (Q1 2012-$0.04 million) for Drama and a decrease to $0.39 million for comedy productions (Q1 2012-$0.60 million).

For Q1 2013, the Company added 15 half-hours to the library. The breakdown for Q1 2013 is 8.0 half-hours - $1.52 million of proprietary film and television program production revenue versus the 15.0 half-hours for Q1 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 (18.0 half-hours in Q1 2012). Q1 2013 proprietary deliveries were in line with scheduled deliveries and Management’s expectations.

As part of the maturation of DHX, specifically the experience gained by our in house international television distribution team along with the licensing within DHX Wildbrain, we continue to strategically target third party produced titles for IP rights. As noted above, for Q1 2013, the Company added to the library 6.0 half-hours for Rastamouse and 1.0 half-hour for She-Zow. For Q1 2012, the Company added 6.0 half-hours for How to be Indie and 12.0 half-hours for Rastamouse.

Producer and service fee revenues: For Q1 2013, the Company earned $6.84 million for producer and service fee revenues, an increase of 7% versus the $6.40 million for Q1 2012, which marks the 5th consecutive quarter of growth in this category when compared to the same quarter for the previous fiscal period. DHX Vancouver earned $4.25 million, an increase of 100% (Q1 2012-$2.13 million), and DHX Wildbrain earned $2.59 million, a decrease of 39%, for Q1 2013 (Q1 2012-$4.27 million). For Q1 2013, the breakdown for major projects over $0.10 million for DHX Vancouver was $0.91 million for My Little Pony Seasons 2-4, $1.83 million for Little Pet Shop Season I, and $1.51 million for Pound Puppies Seasons 1-3. For Q1 2013, the breakdown for major projects over $0.10 million for DHX Wildbrain was $0.73 million for Monster High Season 13 and $1.68 million for Oki’s Oasis Season 1.

Distribution revenues: For Q1 2013, distribution revenues were generally in line (down 3%) to $1.33 million from $1.37 million for Q1 2012. For Q1 2013, the Company recognized revenue on several contracts throughout its existing library and delivered episodes of newer titles. Some of the more significant sales were on the following titles: Super Why! Seasons 1-2, Martha Speaks Seasons 1-2, Grandpa in my Pocket Seasons 1-3, Pirates Seasons 1-2, Ha Ha Hairies Season 1, and Rastamouse Season 1.

M&L and music royalty revenues: For Q1 2013, M&L, music, and royalty revenues decreased 6% to $2.36 million (Q1 2012-$2.51 million). Traditional DHX music, M&L, and royalty revenue was up 203% to $0.82 million for Q1 2013 as compared to Q1 2012 of $0.27 million. For Q1 2013, there were no scheduled Yo Gabba Gabba! Live! tour stops as compared to Q1 2012 of several tour stops representing $1.11 million.  For Q1 2013, Management was encouraged that Yo Gabba Gabba! M&L was $1.54 million, up 54% from $1.13 million for Q1 2012.

New Media Revenues: For Q1 2013, new media revenues decreased 41% to $1.39 million (Q1 2012-$2.37 million) including a 40% decrease to $1.13 million for UMIGO (you make it go), based on scheduled timing of certain deliverables, as compared to Q1 2012 of $1.90 million and a decrease to $0.26 million (Q1 2012-$0.47 million) for other new media projects. 

Gross Margin
Gross margin for Q1 2013 was $5.42 million, an increase in absolute dollars of 6% compared to $5.10 million for Q1 2012.  The overall margin for Q1 2013 at 40% of revenue was above the high end of Management’s expectations, driven by a strong quarter for margins on productions and M&L revenues.

Operating Expenses
Operating expenses for Q1 2013 were $5.65 million compared to $4.62 million for Q1 2012, an increase of 22%.
SG&A
SG&A costs for Q1 2013 were up 11% at $4.07 million compared to $3.67 million for Q1 2012. SG&A costs include the non-cash item of $0.49 million of share-based compensation (Q1 2012-$0.23 million) which included a one-time charge of $0.39 million related to warrants granted in connection with the Cookie Jar Acquisition. SG&A costs excluding share-based compensation were $3.58 million, up slightly (4%) compared to Q1 2012 of $3.44 million. Specifically, SG&A cash costs (excluding DHX Wildbrain) were $2.22 million, down 2% compared to Q1 2012 of $2.27 million and SG&A costs for DHX Wildbrain for Q1 2013 were up 15% to $1.36 million (Q1 2012-$1.17 million) based on increased sales and marketing activities for M&L.

EBITDA and Adjusted EBITDA
For Q1 2013, Adjusted EBITDA was $1.85 million, up $0.19 million or 11% over $1.66 million in EBITDA for Q1 2012. For Q1 2013, Adjusted EBITDA includes add backs for one-time charges, relating to the Cookie Jar Acquisition, totalling $0.91 million comprised of $0.39 million for warrants granted, and $0.52 million for acquisition costs.
DHX Media’s complete financial statements are available at www.dhxmedia.com or on www.sedar.com.

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

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.
About PBS KIDS
PBS KIDS, the #1 educational media brand for kids, offers all children the opportunity to explore new ideas and new worlds through television, online and community-based programs. For more information on specific PBS KIDS programs supporting literacy, science, math and more, visit PBS.org/pressroom, or follow PBS KIDS on Twitter and Facebook.

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.