Weakening revenues lead DHX Media to ponder sale

Teletubbies didn't take off as well as the Canadian company had hoped, and now the board is weighing its options.

shutterstock_peopleThe board of directors at Halifax-based kids entertainment co. DHX Media has launched a strategic review to evaluate the company’s options following disappointing quarterly results released last week.

In a statement to investors, DHX Media said the board is considering strategic alternatives to maximize shareholder value, including the sale of part or all of the company, a sale of the assets of the company, a merger with another party, or other options.

In its fiscal 2017 statement released on Sept. 28, the company reported revenue of $298.7 million and EBITDA of $87.3 million. Revenues were down 2% from fiscal 2016, while EBITDA fell 16% from $103.69 million for fiscal 2016.

The company’s share price dropped  to $5.05 on Sept. 28 from $6.02 at market close on Sept. 27, following the announcement of the results. They’ve since rebounded to $5.52 at close Oct. 2.

In a release, CEO Dana Landry said management was “disappointed” with the results, adding that Teletubbies underperformed in the U.S. market. The company said the brand failed to gain the traction management had expected.

“The Board of Directors of the Company has not set a timetable for this process nor has it made any decisions related to any strategic alternatives at this time. There can be no assurance that the exploration of strategic alternatives will result in a transaction,” states the release.

A representative for DHX Media said the company would not provide any additional details while the review is underway.