Shares in Halifax-based DHX Media closed the market down Thursday more than 33 per cent, after the company issued a revenue warning.
Stock in the children’s entertainment and brands company fell 56 cents to $1.13.
The drop came on news of anticipated losses for the 2018 fourth-quarter and full year, ended June 30, ahead of the release of final financial results on Sept. 25.
The company said it expects fourth-quarter net losses to be in the range of $18 to $20 million, with a full-year net loss of $6 to $8 million.
DHX says the results reflect the company’s ongoing efforts to refocus its business to improve margins and generate cash. It says top-line growth was primarily driven by its Peanuts and Strawberry Shortcake brands, which it acquired for $345 million U.S. in 2017, and by continued growth of its WildBrain pre-school YouTube network.
Excluding acquisitions, revenue for Fiscal 2018 is expected to be down three per cent year-over-year, with the net loss partially due to a $12 million combined write-down of investment in film, television programs, acquired and library content and intangible assets. Cash provided by operating activities for Fiscal 2018 was $13 million, or $37.4 million before acquisition & related refinancing costs of $24.4 million.
“We have taken significant corrective actions to return to strong and sustainable organic growth, which are not yet reflected in our reported results,” said Michael Donovan, executive chair and CEO, DHX Media, in a press release. “DHX Media intends to earn back the confidence of shareholders in the value of the company’s assets and the management team’s ability to execute and surface value…furthermore, management firmly believes that the recent decline in the company’s share price is not reflective of the current financial health of the business, the value of the company’s assets or the future earnings potential of DHX Media.”
The company will report its Fiscal 2018 fourth quarter and full year results before the market opens on Sept. 25. At that time, the Special Committee of the DHX Board of Directors is also expected to provide an update on its strategic review.
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