DHX Media Ltd. has undergone a management shakeup, announcing the departure of its CEO and CFO amid a "strategic review" of the company that has been ongoing for months.
The Halifax-based owner of children's entertainment content including Teletubbies, Caillou, Inspector Gadget and the storied Peanuts franchise announced on Monday that chief executive officer Dana Landry is leaving to "pursue other projects," and will be replaced by DHX's co-founder and executive chairman, Michael Donovan, who was CEO from the company's founding in 2006 until 2014. Chief financial officer Keith Abriel will also leave once a handover of his position to new CFO Doug Lamb is complete.
The management changes signal internal friction at the company, which announced in October that it would seek strategic alternatives for the future, including a possible sale of all or part of the company.
"Dana has been with us from the beginning, from startup to global media company, and we thank him for his significant contributions to our growth. We wish him well with his future projects," Mr. Donovan said in a statement on Monday. DHX declined a request for an interview with any of its executives.
DHX put itself on the block five months after announcing the US$345-million acquisition of Iconix Brand Group Inc.'s entertainment unit, including 80 per cent of Peanuts Worldwide LLC (20 per cent remains in the hands of creator Charles Schulz's family.)
While the deal was a high-profile addition of a beloved brand to DHX's portfolio, it also added a significant chunk of debt. The company's long-term debt and obligations under finance leases rose to $748.5-million as of June 30, the day the transaction closed, up from $278.4-million at the end of the prior quarter.
Then at the end of September, DHX reported fourth-quarter results that missed expectations. Its net loss slipped to $18.3-million, compared with a $1.7-million loss in the same period a year earlier.
"When your results are not like you want them to be and what have you, there's a certain impetus to look at the value of everything and surface value for our shareholders. We take that responsibility very much to heart," board director Donald Wright said less than a week later, when the company announced it would set up a board committee headed by Mr. Wright to explore options for the company.
In its most recent earnings report earlier this month, the company provided no update on the strategic review.
"The work of the special committee validates our strategy of focusing on unlocking further value in our core [intellecutal property] assets," Mr. Donovan said on the company's conference call with analysts. "And I'd like to assure the investors – our investors – that the special committee is continuing its work, which is progressing well and we'll be updating investors when we have news to report."
DHX's stock has lost roughly 30 per cent of its value since the end of June, when the Iconix deal closed, and was trading at $4 a share at the end of the day on Monday.
Mr. Donovan is a veteran of the Canadian television industry. As co-founder of Salter Street Films, he was a producer on the Academy Award-winning film Bowling for Columbine and the CBC news satire show This Hour Has 22 Minutes, which is now produced by DHX. Alliance Atlantis acquired Salter Street in 2001.
Mr. Lamb's media industry experience is in newspapers, having served as CFO of Postmedia Network Inc. from that company's creation in 2010 until January of last year. He has also worked as CFO at CanWest MediaWorks, and held executive positions as Torstar Corp.'s Metroland division, Hollinger International Ltd. and Southam Inc.
"His depth of experience at senior levels in the Canadian media sector and his experience with respect to capital markets will serve the company well," Mr. Donovan said in the statement.