Nancy Chan Palmateer - IR Michael Donovan - Executive Chairman Dana Landry - CEO Keith Abriel - CFO David Reagan - EVP, Strategy and Corporate Development

Aravinda Galappathige - Canaccord Genuity Corp. Rob Goff - Echelon Bentley Cross - TD Securities Drew McReynolds - RBC Dominion Securities Inc.

Jeff Fan - Deutsche Bank Tim Casey - BMO Deepak Kaushal - GMT Eric Wold - B. Riley Adam Shine - National Bank

Thank you, operator and thank you everyone for joining us today. Speaking on the call with us today are Michael Donovan, our Executive Chairman; Dana Landry, our Chief Executive Officer; and Keith Abriel, our Chief Financial Officer.

Also with us on the call and available during the question-and-answer session is David Reagan, our Executive Vice President of Strategy and Corporate Development. Turning to Slide 2 now, we have some standard cautionary statements.

The matters discussed on this call include forward-looking statements under applicable securities laws with respect to DHX Media, including, but not limited to, statements regarding the Peanuts and Strawberry Shortcake acquisition, including the integration of those businesses and the expected synergies and other financial and operational benefits, cost reduction initiatives and associated financial impacts of such initiatives, expected returns on investments made by the company, the markets and industries in which the company operates, the business strategies and operational activities of the company, and the future growth and financial and operating performance of the company. Such statements are based on information currently available and are subject to a number of risks and uncertainties.

Actual results or events in the future could differ materially and adversely from those described in the forward-looking statements, as a result of various important factors, including the Risk Factors set out in the company's most recent MD&A and Annual Information Form. For the question-and-answer session that will follow, we ask that each analyst keeps to one question with one follow-up, so that everyone has a chance to ask a question.

If you would like to ask an additional question, please re-join the queue. Turning to Slide 3, I will now hand the call over to our Executive Chairman, Michael Donovan.

Thank you, Nancy and welcome. I’m happy to report that the company has extended the growth trends reported last quarter.

The quarter’s strong showing points to organic revenue growth in our core business, especially from distribution of our library coupled with steady cash flows from Peanuts, the [indiscernible] growth and scale have resulted in strong revenue and positive free cash flow for the quarter. We know that investors are waiting on the results of our strategic review.

That process is ongoing and robust. The strong results reported in the last two quarters confirm the underlying value of our IP.

The work of the special committee validates our strategy of focusing on unlocking further value in our core IP assets, and I would like to assure our investors that the special committee is continuing its work, which is progressing well, and we will be updating investors when we have news to report. I’ll turn the call over to Dana.

Thank you Michael, and thanks everyone for joining us on the call today. Turning to Slide 4 now please, management is encouraged with the continued growth of the business in Q2, contributing to a solid first half of fiscal 2018.

We continue to see the benefits of the Peanuts and Strawberry Shortcake acquisition, and we continue to deliver organic revenue growth in our core businesses. Revenues in the quarter were up 55% compared to Q2 last year, and for the first six months of fiscal 2018 revenues rose 66% compared to 2017.

9% of this growth in the first half was organic, highlighting the returns being realized on our investments in content and the value of our library and brands. We also remain on plan to achieve $11 million in targeted annualized synergies from Peanuts and through company-wide cost reductions by the end of fiscal 2019.

As noted last quarter, we expect to realize $5-$6 million of these savings in fiscal 2018. Turning to Slide 5 now please, our key priorities remain unchanged as we continue to execute against three core businesses.

First is producing world leading kids and family content, a business segment that was up 11% in the first six months of fiscal 2018. Second is the distribution of that content worldwide through traditional linear television, streaming platforms such as Netflix and Hulu, and our [WildBrain] network.

The combined revenue for our distribution business grew 55% overall and 39% organically in the first-half of fiscal 2018. And the third priority is consumer products, which is up 545% as a result of the Peanuts acquisition in the first half.

The Peanuts acquisition is working, and there is plenty of runway to extend the brand. Turning to Slide 6 now, content remains a key driver for our business.

Through original [ground floor] development of IP we are able to drive significant revenues across all streams. One current example is our original series, Massive Monster Mayhem.

Following a successful launch in the US last fall, the series has now been picked up by Nickelodeon in 140 territories worldwide. This news has triggered leading toy manufacturer, Alpha Group, to come onboard as the brand’s global toy licensee.

We are confident this brand has future potential. We are also accelerating monetization of digital content through WildBrain.

In just the first six months of 2018, WildBrain has doubled its watch times, reporting 55 billion minutes across its network, which is the same number reported for the entirety of 2017. This has resulted in an increase of 86% in revenues for WildBrain for the first half of 2018.

Strategic partnerships are driving incremental revenues across multiple streams. Partnerships on brands like Bob the Builder and Fireman Sam helped us realize approximately $7 million in distribution and consumer products royalties in Q2.

We anticipate reporting further such returns going forward. Turning to Slide 7 now please, a portfolio approach and scale is also key to our business.

With the acquisition of Peanuts we have diversified and scaled up our high margin consumer products business. Peanuts is a top 10 character brand in global retail sales.

It has enduring global appeal across consumer products and content. Turning now to Slide 8 now, I’ll turn the call to Keith for an overview of the numbers.

Thank you, Dana. Management is pleased with the quarter.

I would like now to touch on some key metrics and highlights for the quarter. Revenues for Q2 2018 were 121.9 million, up 55% from 78.9 million for Q2 2017.

For the quarter, 68% of revenue was organic and 32% was acquisitive. The organic revenue was largely driven by the continued strong performance of WildBrain.

Other highlights for the quarter included consumer products owned revenues were up 412% compared to Q2 2017 as a result of the Peanuts acquisition, WildBrain revenue increased 87% compared to Q2 2017 and traditional distribution revenue increased 28% compared to Q2 2017. Now, turning to gross margin; total gross margin for Q2 2018 was 53.9 million, an increase in absolute dollars of 11.9 million compared to 42 million for Q2 2017.

Overall gross margin at 44% of revenue was on plan and as expected compared to 53% of revenue for Q2 2017. Gross margin for the quarter was impacted by, amongst other things, the acquisition of Peanuts, which carried a lower percentage gross margin as a result of the talent fees paid to the estate of Charles M.

Schulz, growth in WildBrain, which is being driven increasingly by third party brands, and the blend of production service work being completed at our animation studios. Adjusted EBITDA is tracking within range at 32 million, up 8 million or 34% over Q2 2017.

Net income was 7.4 million for the quarter or $0.06 basic and $0.05 diluted earnings per share, compared to net income of 5.8 million or $0.04 basic and diluted earnings per share for Q2 2017. Free cash flow for Q2 was $5.8 million and for the first half of fiscal 2018 was a use of cash of $26.6 million, which was impacted by, amongst others things, three items which recurred and included in payables at June 30, 2017.

First, a payment of 13.5 million in early redemption penalties related to the repayment of our senior unsecured notes on July 11, 2017. Second, payments of 10.9 million in debt issue and acquisition costs related to the Peanuts and Strawberry Shortcake transaction; and third, payments of 16.4 million related to our strategic partnerships.

We continue to track within our full range of EBITDA and free cash flow. We will use this cash to delever, while continuing to build the business for the long term.

For specifics on our fiscal 2018 Q2 results and various other information including a reconciliation of GAAP and non-GAAP financial measures, I refer you to the company’s fiscal 2018 Q2 MD&A, which was posted on SEDAR and EDGAR this morning. Turning to Slide 9 now, I will hand it back to Dana.

Thank you, Keith. To sum up, management is encouraged by the strong first half of fiscal 2108 and continuing strength of the global market for kids and content brands.

With that we will take some questions operator.

Good morning. Thanks for taking my question.

I just wanted to focus on the distribution side, good numbers in Q2. In addition to some of the flagship [platforms] you talked about in the past, obviously Netflix, Amazon etcetera, can you talk about traction you are getting with some of the newer entrants?

There is a fair bit obviously, YouTube Red is there now, and there is a fair bit of discussion around Facebook and Apple, so jumping in with sizable programming budgets, are you able to discuss whether your are in discussions with them, or there are sort of ongoing projects that are being contemplated, some additional color there please?

Thanks Aravinda. Thanks for that question.

So the results so far are basically from the - our existing clients. That will be traditional linear television plus the SVOD services that we have been selling too for a while.

That is Netflix, Hulu, Amazon. The future is of course the services you mentioned and all of them we have conversations ongoing and we expect further traction in the quarters to come.

Thanks, and just connected to the distribution side on WildBrain again good numbers there, but are you able to discuss are you sort of at - where you are at in terms of profitability, are you ramping up investments there, or are you sort of starting to see more meaningful margins?

Yes, thanks for that. We are seeing more meaningful margins as we have now recovered [indiscernible] the fixed costs of that business.

Although it is important to note that over the last year we have done a couple of smaller tuck-in acquisitions, and so our view on cash flows related to WildBrain are to recycle those to drive growth because we are seeing no end in the growth - no end in sight for that growth. So lots of opportunities and we are recycling.

Okay, thanks Dana. I will get back in line.

Thank you.

Thank you very much and good morning. A follow-up question on the SVODs, we are hearing so much about their focus on proprietary content as with acquiring new subscribers, can you talk to how that is impacting both your production decisions and your distribution sales, and are both considerations independent or is there any linkage across?

So, thanks Rob for that and good morning. So, we your sort of a perfect partner for the SVODs because we have obviously access to the studios and the talent, and so we have been able to sort of leverage that relationship across multiple streams, right down to our production services, and also through distribution.

So we are not seeing really them as a competitor so to speak, but really much as a partner and a collaborator. And the second part, I wasn't quite sure what you meant by independent of those two things, could you clarify?

Are you able to lever the strength of your library to gain better production terms or vice versa, are you able to lever your production to get better library terms?

Right, okay. Yes, thanks for that clarity.

So, we are able to leverage our library, number one, but we are also able to hold back the rights that we need to hold back, for instance, on [ADVOD] because of our scale. And so, some instances we are doing exclusive deals within certain territories, some we are doing original content, but we are still doing a fair number of some non-exclusive deals I should say.

Does that clarify?

Yes, thank you.

Thank you.

Good morning gentlemen.

Good morning Bentley.

Hi, Bentley.

First wanted to ask just on the merger front, I don't know if there is some degree of seasonality or what, maybe you could just walk me through because when I calculate the year-to-date margins on the core business, if I put a 25% margin on Peanuts and Strawberry, which was roughly indicative of what you guys had presented before. It is just that the core business is down, and the messaging I am getting from you is that is not the case.

So maybe there is just some seasonality here, if you could just walk me through it will be helpful?

Yes. So margins, obviously year-over-year are down from roughly low 50s to around 43% or 44%.

Obviously the Peanuts transaction has impacted that because that comes in at a lower margin because of the fees paid to Schulz. Our production service margins are off a little bit primarily because we are doing a lot of work on our partnership projects, and WildBrain margins have come off slightly on a percentage basis because of third-party brands.

Okay. So, wrapping that all together Keith does that suggest that margins for the core business, or EBITDA for the core business is actually down year-to-date?

No, we are tracking the guidance.

And I think the - I would just add here, there is the seasonality point that you made particularly on the Peanuts business given that there is a fair bit that comes in our Q3 related to the Christmas season.

Okay. All right, that's helpful.

Thanks guys.

Thanks very much. Good morning.

Just a follow-up to the last question, maybe just put it another way. In terms of the adjusted EBITDA growth from the core business, you are guiding 10% to 15% for the full year; can you tell us Keith just what that was for the first half, if it is relevant at all?

We manage the business as a consolidated unit. So we don't split it out, but as you can see, look at the distribution side of the business, look at the parts of the business that are bellwethers for the health of the business, and you will see that those top line revenues are growing.

Okay, and maybe one for you, Dana, just on the WildBrain, obviously a notable up tick in revenue performance, is that all traffic driven and monetization or are there other kind of things that are underneath the hood that you would want to flag or point out?

Well, that is - I mean that is our -a little bit this is our secret sauce so to speak high-level. There are sort of three things - factors that are driving that.

One is consumption is up materially within that platform. Number two, we are getting better at monetizing within the platform; and number three, we are attracting some very high-profile brands, which are adding to the leverage, and so we view this very much as sort of a virtuous circle that feeds upon itself.

And each quarter we are seeing some tremendous traction there.

Okay, thank you. I'll hop back in line.

Thanks, good morning. Maybe another way of getting at this, I think what everyone is trying to get to is the core business, but maybe we can just look forward, your guidance is 125 million to 155 million on adjusted EBITDA, you have done roughly I guess $32 million in Q2 and $23 million in the first quarter, it does imply a pretty significant ramp especially with respect to the mid-to high-end of that range, I am wondering if you can just help us maybe walk through what some of the factors that you expect to see in the second half that would get us to maybe the bottom versus the middle versus the high-end of the range so that we can assess what is more likely given the wide range on the guidance?

Yes, sure. So if you go back historically you will see that Q3 is typically a very strong quarter for us as is Q4.

Normally that's where it comes, if you go back a couple of years through the business you will see that seasonality is part of our business. Q1 is traditionally light.

Q2 tend to be a little stronger and Q3 and Q4 tend to be our stronger quarters during the year.

Okay. Thank you.

Thanks. I was wondering, can you talk a little bit about how your thinking regarding the what I call the new Peanuts is evolving when you are going to start working to re-position the brand and producing new IT how is your thought process evolving now that you’ve had the asset for another quarter?

And just one sub-question, are you able to quantify the talent fees that you paid to Schulz or provide some color on other calculated, so we would expect [ph] more color there? Thanks.

Okay. So thanks for that, Tim.

So the second one I’ll refer to Keith on. But so what I would say on the thought process for Peanuts everything is sort of as we expected, except slightly better, and I think one of the things that we really have noticed is that because we are a content company and that our strategy with respect to Peanuts is to obviously make new content, alongside and collaborating with Family, and our current partners there has been a new shift that's been shot in the arm for the brand across all licensees and we’ve had inbound licensees that have for many years coveted coming after the brand, which now that there is a thought of new content are coming to bear.

The other thing that I would just point to which is -- which puts page to that is last month for instance we had our highest number of approvals within our approvals group that 15,000 for the month which roughly is about 500 per day which is up materially from the month before. So we are not only seeing that in terms of excitement, but we are seeing it in actual businesses as well.

Keith can you?

Sorry. Yes the talent fees are disclosed in note 4.2 of the financial statements page 3 the notes.

You’ll see the number.

Thank you.

Hi, guys. Good morning.

Thanks for taking my questions. Dana, I wanted to ask you about your views on the advertising environment in general.

Two parts of the question please. First, on the WildBrain side on the online platforms for AVOD.

We read sometimes in the mainstream press of some major brands threatening to pull or being wary of the online environment. What are you seeing in general in the advertising for online and in particular for your WildBrain properties and kids content?

And then I’ve got a follow-up on linear side. Thanks.

Sure. So excellent question.

Thank you. Yes there has been a lot reported on this obviously deep back over the last quarter or so.

So what's really important to note is that the content that's been affected in the Google system, YouTube system has been ones that are certainly not core kids content and so because our content typically skews younger, we’ve actually seen touch-wood, an increase over the last through the turmoil because what we are finding is advertisers are going towards that safe place, and what our portfolio offers is that safe, secured environment. And so, since we have been such a successful, loyal, good partners for Google and YouTube, we’ve been the beneficiary of actually considerable uptick as a result of other pulling this side.

And just to clarify, is the uptick in terms of volumes, or you are seeing a pricing uptick?

Both. Because what tends to happen within the YouTube universe is the consumption doesn't go away.

So if one channel gets turned off, it just get’s spread amongst the other channels. And what its happening is as your views increase, your ability to monetize those views increase.

So you have a two prong positive effect.

Got it. And the on the linear side, I know that -- I believe correct me if I am wrong, but you had approval on changes of your licensing with the CRTC to allow you to do advertising over your linear channels.

Any thoughts or progress on that side of the business and if that’s something we should think about in terms of forecasting at some point in the future?

Yes so that's been slow off the start. I think we are even down from the previous year by about 3% or 4% for the quarter.

We are having a hard time getting scale with three or four channels. Now having said that, we do have a new plan in place and we are optimistic that we will see some progress on this in the coming quarters.

And is that something typically that comes with renewals when you discuss changes like that or can you do those kind of on the fly?

We - we does know we have the right ability to do that now. It really is a -- strategy is to how you go about that.

And so that includes sponsorship, includes working with our partners. It includes obviously all sorts of things.

Programming, schedule, the time slots in the evening, there is many many factors that go into that. And that we are working on a comprehensive plan to update the shareholders and so progress on that in the coming quarters.

Great. Thank you very much.

Looking forward to that. Appreciate taking my questions.

Thank you.

Thank you. Good morning.

Two questions I guess. One, you have spoken about acquisition that at WildBrain brand as being a driver of growth.

You talked about kind of what level of content is available out there, kind of what your types of content you are looking at and acquiring and what multiples you are currently seeing out there for acquisitions. And then two, I know the strategic review remains on going, but thinking high level around the TV, DHX Television division, is there a way to structure something on that where maybe it’s still not fully owned by DHX based or retain the benefits they have had on the production side on that?

Thank you.

Okay. Thanks for your questions, Eric.

So maybe what we’ll do, is I’ll put the strategic review question to you Michael, but David maybe I could get you to David, David Reagan our head of corporate development and strategy turnover about the acquisition vis-à-vis WildBrain.

Thanks Eric for that. We’ve actually been doing some analysis recently to look at the two top ten acquisitions that Dana referenced.

And they have both exceeded in terms of revenue, pricing, and watch time. And I would go back and confirm that part of the prior question where we talked about the effects of the advertising pull back on YouTube has been an effective call of some of the smaller channels that showed a pronounced lift for our network as a result of that.

So those are acquisitions that are exceeding expectations right now and we look forward to doing more of those and are working on more of those.

Yes. Eric with respect to the -- your suggestion vis-à-vis the TV channels committee, the special committee has really been exploring every option.

There are no separate channels [ph] and definitely that various options with respect to the TV channels are being considered.

Any more questions?

Hi, thanks a lot. Maybe I will start with one for you Dana and Keith.

Just on the consumer products revenues, you highlight 16% organic growth mostly acquisitive otherwise in the context of Peanuts and strawberry shortcake, when I take that out, it’s actually down in terms of the revenues partly because it’s not a reputation of the live tours, take the live tours out from a year ago, you then jump higher. So, couple of questions around consumer products.

One, relatively seasonally important period for consumer products, Q2 curious what exactly you are seeing X; some of the M&A contribution and then perhaps more specifically for Keith, how you are deriving that 15% organic number because I am not sure how you get there, and then I will follow-up one for Michael later. Thanks.

Okay. Thanks for that.

So one thing I would just -- so make a comment on the mentioned live tours. Obviously live tours are seasonal, and those tend to not occur in the first two quarters.

So although last year we did have a bit of anomaly there was revenue within the comparative quarter. And we have got a lot of plans on the live side of the business.

In terms of what we are seeing in terms of trends obviously there has been much chatter about retail etcetera. It's really important to point out that Peanuts is very very diversified.

Many of these licensees and partnerships are many many years in the making and so we are seeing still seeing positive momentum on the Peanuts licensing side of the business. So I hope that clarifies in terms of the consumer products side.

Keith, I…

Yes. On the revenue side ad, and that’s 16% of the total consumer products revenue for the quarter is the organic portion of the revenue.

And any more questions on that and you may show it afterwards in all…

Okay, and then I’ll have to dig in with you. Let’s turn to Michael.

Michael, I guess when you - when the guidance was originally given for F'18, you were very bullish. You kind of characterize it as conservative.

Jeff asked his question in the context of how do we step up from each one to get towards to the numbers, and obviously there is a seasonality effect in the context of the second half. Do you -- if we go back to your original comments from September how are you seeing the business?

How are you seeing the momentum heading into the second half? Are there areas of perhaps growth and R&D tracking, perhaps better than expected as a look ahead into the next six months?

Thanks.

Yes. Thank you for that question.

No, we -- I have been in this business for very long time. And this is the best environment ever literally in 37 years, because streaming is massively monetizing content.

And as the delivery mechanism become proliferate and new entrance with large bank accounts realize the importance of content, our unique library is positioned to increasingly leverage that. And I think someone earlier in the call asked question what are the new players?

Well that's the headline here. New players are stepping in.

The old players are stepping up. The new players are stepping in.

And we have a fixed set of offerings and also some pretty exciting new shows that are coming down the pipe. So that is the basis of our optimism.

In the past, we haven't always executed perfectly. I look forward to executing much better going forward and I believe that will where this team will take us, and take this company.

And not withstanding obviously as you just alluded to Michael, some of the execution that you guys spoke of to close out last fiscal in the context of the acquisition distractions, but I guess similarly no distractions as you go ahead with the strategic review and continue to execute on the core business, correct?

Well exactly, and the strategic review process has actually been extraordinarily positive one inside this company in my opinion for the board, but I - for management as well in terms of taking a very sharp focus going sharp pencil to every single line of business in order to figure out how to optimize this tremendously positive environment with our assets. And most important thing, that we - and our intention is to report, when we report but nevertheless what I can say is that the more that we look the more we realize how much of a differentiator our very large, unique one of a kind library is, the largest independent library, outside the studios in the world in family and children.

And animation lives forever, and gets more valuable overtime. That is our differentiator and our focus is narrowing in on how to truly produce revenue and EBITDA that drives value for our shareholders leveraging our library.

That's our focus.

Great. Thank you very much.

Thank you.

Thanks. I just want to follow-up perhaps with Keith on the working capital on this half.

For the first half of the year, including the interim production movements you are looking at about 42 million, 42.7 million working capital use, and you broke down a couple of items the early redemption cost of $13.5 million and the debt issuance and the acquisition cost of $10.9. So those two together about $24 million, I suspect that the strategic partnership component is not in the working capital.

Am I wrong there?

Some of that actually wasn't the working capital Arvinda. We had in the MD&A I quote a number, we had a fair amount of that accrued at June 30, so it actually does impact the working capital.

It's normal course business, but it was a large number that was in the working capital number at June.

Okay. Was the 16.4 million related predominantly to the Mattel partnership, or that was..?

It was our partnership projects and funding our portion of the production.

Okay. So the Mattel partnership is now going through, is that kind of broken up between proprietary and producing service fees or where is the revenues there?

The revenues are included in production service. And I always put a little asterisk beside that because there are certain proprietary elements to that.

Okay. So from that perspective, if we take it from there, and look at sort of your guidance for free cash flow, I think you talked about after the net investment in program in selling TV, I think you’ve got about a number of 30 to 40 million, and then within that you’ve identified that 25 million these transaction payments that you’re going to have to make which kind of gives you range of 5 to 15.

Is that like when you look at the clean free cash flow number for the year as we look ahead is that still what you expect to achieve?

Yes. We are actually we are right on plan for our free cash flow guidance.

As we have said not only is EBITDA in this company traditionally weighted to the second half of the year because of that natural production cycles of the business the free cash flow is even more so weighted to the second half of the year. So we are on plan for free cash flow

Okay. Great.

Thank you.

Thank you, just a couple of follow-up. Regarding your TV business it looks like your revenue was down about 8%, a large part of that now is coming from subscriber revenues coming down.

I am wondering if you can just help us gauge what is the components that drive that, is it still fees from per subscriber or are you actually seeing the actual lower numbers subscribers for the quarter and how do we expect to see this trend going forward? And then the second follow-up is just regarding WildBrain, you’ve mentioned that the percentage of your third party content has ramped up and that's the reason why margins are slightly down.

I am wondering if you can help us think about what the mix of proprietary versus third party content will look like going forward for WildBrain?

Okay. I think I have all your questions here.

Jeff. Let me just work through them here.

So on a high level, I will speak to the TV revenues and then if Keith if you need to clarify or correct me, please do. So it's around half of it, half of the down is related to the advertising that we spoke about earlier.

The other half about 4% is sub-loss plus some small deals that have in terms of waterfall have come down slightly from the previous years. So it's probably around 2% or 3% and 1% and 2%, 2% or 3% on the sub-loss and 1% and 2% on the per feet sub.

So that is sort of now base lined going forward to the back half. We do expect that our sub-loss would be tracking in line with the industry 2% to 3% is what we would say.

In terms of, so I think that covers the first one. The second one the traditionally we haven't broken out exactly what the mix I don't believe Keith in terms of the organic side versus the third party side is but it's probably closer to 50-50 now.

And I will expect that probably will settle in in the 60-40 sort of the third party to proprietary maybe as high as two thirds, one third. So the proprietary will be third party, third party being slightly higher.

Great. And maybe just a very quick on YouTube.

I guess Google recently talked about some stricter requirement for rev share. In light of that, how does that impact it at all, the rev share arrangements that you have with Google?

No impact on us.

Okay. Thanks.

I just want to follow on from Michael's comment earlier Michael you mentioned that it's kind of the best environment you have ever seen, is that just from the size of the check perspective or you are still seeing the ability to sell the complete library like you are few years ago?

Well, the answer is both. Check with more players entering the space.

There is more demand for I mean and the product is expanding but in our space the children space particularly pre-school the value equation is primarily with the recognized brand, the brands that parents recognize. So that's more money talking against a relatively fixed size the result of which is larger checks.

Also just more checks. The whole business is producing much bigger checks than it used to certainly than ten years ago and even since last year every year it's up.

It's just a function of more and more parties entering bidding up and paying more for product, and we have our library greatly amortized. But there is and there was question earlier that the there is a risk towards more exclusive, more holding on, more original production.

That is much less so in the children space. We are hardly, we are seeing a more than we did before which was none before year ago and two years ago and now we are seeing a little bit more not materially though in our space.

And not materially affecting us. So we are able to get higher prices for our library, higher prices for our new products and keep pretty much as many of the rights not quite as many it's different but the much much better.

Now how do we leverage that into reassert our growth forward given that environment, that’s the challenge that this company has confronted over the last six months spent a great deal of time distracted by acquisitions. The new focus is that, how do we realize the opportunity with our large library.

Thank you Michael. And then just one follow-up just related to a specific property.

It's kind of taken the back seat lately, but just wondering if you can give us a holiday update for quality update for Teletubbies.

Yes, I’ll let Dana add to this. That we are essentially retooling, it's continuing to work in certain territories very well that is particularly and I think we mentioned this earlier the UK and Germany where we have other territories that we are in the process of rolling it out to, and the key though is to re-imagine it for the United States and that's a very high priority in the company.

Dana?

Yes. Bentley the other one is China.

We see some big potential in China as well for the Teletubbies

Yes. That's right.

Yes. That's the material.

Thank you guys.

Thanks very much. Just two additional for me.

Maybe Michael back to just the strong environment out there. Can you just comment specifically on the demand from your traditional television broadcasters just given a lot of obviously some pressure on the traditional at TV ecosystem there?

And second question just on the balance sheet target for fiscal 2019, just re-assuring that from your perspective you are in track to achieve that? Thank you.

Yes. So with respect to your first question, yes the general I mean that's one of the fundamental issues of the linear world.

For years, the broadcasters were able to dictate prices. And that but now there is real competition and more and more and bigger and bigger bank accounts.

So linear has had to step up which linear has done a very good job of doing. It's complicated in children space because it's different, but because where libraries are so important, and the traditional and recognized old brands are important fully amortized.

So it's but nevertheless that's the, you are right, that's the general trend in linear to increase prices as well and rather dramatically. But for me as someone who has been around, it's tremendously satisfying to see this and I am glad that I have stayed around to see it because the essence of the business for years was how to survive as a price taker and that has definitely shifted.

A few years ago shifted but it continues to shift. And now we have a different or interesting challenge which is how to now optimize that given our library and given where we fit in the ecosystem to produce the maximum benefit for our shareholders and create a plan consistent with that, and that's what we have been doing for last six months as our primary focus.

And so there was a second question I would try not to forget. Yes on the subject of our debt restructuring targets that was it

Yes that's right Michael. Just on the kind of balance sheet targets.

Yes. We are I am 100% convinced and that those targets are achievable and we are - and by the way that's also very high priority to deliver on those targets.

Then so we can reiterate those with confidence. Keith or Dana do you have anything to add?

No. okay.

Thank you.

Thank you very much. And we look forward to reporting on next quarter.

Have a good day.

Thank you all.