DHX Media, the Halifax-based part-owner of the Peanuts cartoons, is renaming itself WildBrain after appointing a new head of finance as it attempts to rebound from an annual loss that ballooned more than sevenfold.
The company’s net loss for the year to June 30 jumped to $101.5 million from $14.1 million in 2018, DHX Media said in a statement. Revenue grew slightly to $439.8 million in 2019 versus $434.4 million a year earlier, it said.
Earnings before interest, tax, depreciation and amortization slid to $79.6 million in 2019 from $97.5 million in the previous year after the company sold 39 per cent of Peanuts to Sony Music Entertainment (Japan) Inc. in the first quarter. It still holds 41 per cent of Peanuts while the family of creator Charles Shultz owns 20 per cent.
“Fiscal 2019 was primarily impacted by a $104.9 million write-down in the back-half of 2019,” the company said. These included “certain titles related to investment in film, licensed television programs, acquired content, and intangible assets and a higher portion of net income attributable to non-controlling interests of $23.3 million,” it said.
“We’re a major supplier of children’s and family content to platforms like Netflix and Hulu,” DHX Media spokesman Shaun Smith said by phone in Toronto. “We signed a deal last year with Apple to produce new Peanuts content for their Apple TV+ that’s launching in November.”
The company has begun a reorganization and a $10 million a year cost-cutting program overseen by new CEO Eric Ellenbogen, it said. Former chief operating officer Aaron Ames replaced Doug Lamb as chief financial officer and the COO post is discontinued, Ellenbogen said.
DHX Media also owns all of Teletubbies, Inspector Gadget and Degrassi as it produces the new Peanuts material, Snoopy in Space, which is expected to contribute “steady” earnings, the company said.
The WildBrain moniker comes from the company’s advertising-supported video-on-demand-content as one of the largest networks of children’s channels on YouTube with 109 million subscribers, it said. Shareholders will be asked to approve the name change in December and the ticker for the Toronto stock exchange would change to WILD from DHX.
“For many years, our WildBrain group has been at the leading edge of the digital media business,” Ellenbogen said in the statement. “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.”
Wildbrain unit’s fourth quarter revenue rose nearly 25 per cent to $17.9 million from $14.4 million in the same period in 2018, while the full-year amount rose 20 per cent to $69 million, it said.
“We continue to pursue multiple ways to monetize our large user base amid a market environment on YouTube that continues to evolve,” the company said. “We continued to see growing royalties from consumer products derived from our owned intellectual property, primarily driven by Peanuts.”
Ellenbogen noted how the company is improving cash flow and strengthening its balance sheet. DHX Media generated $44.5 million in operating cash flow for 2019 of which $28.7 million came in the fourth quarter versus $13.4 million for all of 2018, the company said. It also paid down $223 million on a term loan and $16.4 million on revolving credit, it said.
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Copyright Postmedia Network Inc., 2019
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