Corus Entertainment Announces Fiscal 2012 First Quarter Results

  • Monthly dividend increased by 10%
  • Consolidated revenues up 7% and segment profit up 1%
  • Television revenue up 10% and segment profit maintained
  • Radio revenue down 5% and segment profit down 11%
  • Net income attributable to equity shareholders from continuing operations up 9%

TORONTO, Jan. 10, 2012 /CNW/ - Corus Entertainment Inc. (TSX: CJR.B) announces its first quarter financial results.

"We are very pleased with our Q1 results and in particular, the renewed signs of strength we witnessed in the ad economy," said John Cassaday, President and CEO of Corus Entertainment.  "Double digit ad sales growth for our Women's networks, continued growth on our Kids business powered by strong merchandising sales and strong evidence of a turnaround underway in our Vancouver Radio cluster, are all positive indicators that we are poised to achieve our growth targets in fiscal 2012."

Financial Highlights    
(unaudited) Three months ended
(in thousands of Canadian dollars except per share amounts) November 30,
  2011     2010
Revenues        
  Television 185,027     167,517
  Radio(1) 51,864     54,639
  236,891     222,156
Segment profit        
  Television 80,495     80,269
  Radio(1) 16,402     18,514
  Corporate (5,683)     (8,124)
  91,214     90,659
         
Net income attributable to equity shareholders:        
From continuing operations 50,548     46,197
From discontinued operations     1,523
  50,548     47,720
         
Basic earnings per share attributable to equity shareholders:        
From continuing operations $ 0.61     $ 0.57
From discontinued operations $        $ 0.02
  $ 0.61     $ 0.59

(1) Reflects the disposition of the Quebec Radio operations, which occurred on February 1, 2011, as discontinued operations in all periods presented.

Adoption of IFRS

For fiscal years beginning after January 1, 2011, Canadian Generally Accepted Accounting Principles ("GAAP"), as used by publicly accountable enterprises, were fully converged to International Financial Reporting Standards ("IFRS"). Accordingly, the interim condensed consolidated financial statements for the three months ended November 30, 2011 are the first financial statements the Company has prepared in accordance with IFRS. Prior to the adoption of IFRS, for all periods up to and including the year ended August 31, 2011, the Company's consolidated financial statements were prepared in accordance with Canadian GAAP. IFRS uses a conceptual framework similar to Canadian GAAP, but there are differences related to recognition, measurement and disclosures.  For additional details regarding the IFRS restatements of fiscal 2011, please refer to the Company's Management's Discussion and Analysis and/or Interim Condensed Consolidated Financial Statements.

Consolidated Results from Continuing Operations

Consolidated revenues for the three months ended November 30, 2011 were $236.9 million, up 7% from $222.2 million last year.  Consolidated segment profit was $91.2 million, up 1% from $90.7 million last year.  Net income attributed to equity shareholders for the first quarter 2012 was $50.5 million ($0.61 basic and diluted), compared to $46.2 million ($0.57 basic and $0.56 diluted) last year.

Operational Results - Highlights

Television

  • Segment revenues increased by 10%
  • Segment profit unchanged versus the prior year
  • Specialty advertising revenues increased by 3%
  • Subscriber revenues increased by 1%
  • Merchandise, distribution and other revenues increased 66%
  • Movie Central finished the quarter with 973,000 subscribers

Radio(1)

  • Segment revenues declined 5%
  • Segment profit decreased 11%

(1) Radio results reflect the disposition of the Quebec Radio operations, which occurred on February 1, 2011, as discontinued operations in all periods presented.

Corus Entertainment Inc. reports in Canadian dollars.

About Corus Entertainment Inc.

Corus Entertainment Inc. is a Canadian-based media and entertainment company.  Corus is a market leader in specialty television and radio with additional assets in pay television, television broadcasting, children's book publishing and children's animation.  The company's multimedia entertainment brands include YTV, Treehouse, Nickelodeon (Canada), W Network, OWN: Oprah Winfrey Network (Canada), CosmoTV, Sundance Channel (Canada), Movie Central, HBO Canada, Nelvana, Kids Can Press and radio stations including CKNW AM 980, 99.3 The FOX, Country 105, 630 CHED, Q107, and 102.1 the Edge.  Corus creates engaging branded entertainment experiences for its audiences across multiple platforms.  A publicly traded company, Corus is listed on the Toronto Stock Exchange (CJR.B).  Experience Corus on the web at www.corusent.com.

The unaudited consolidated financial statements and accompanying notes for the three months ended November 30, 2011 and Management's Discussion and Analysis are available on the Company's website at www.corusent.com in the Investor Relations section.

A conference call with Corus senior management is scheduled for January 10, 2012 at 12:30 p.m. ET.  While this call is directed at analysts and investors, members of the media are welcome to listen in.  The dial-in number for the conference call for North America is 1.800.941.1366 and for local/international callers is 416.981.9030.  PowerPoint slides for the call will be posted at 12:15 p.m. ET on January 10, 2012 and can be found on the Corus Entertainment website at www.corusent.com in the Investor Relations section.

This press release contains forward-looking information and should be read subject to the following cautionary language:

To the extent any statements made in this report contain information that is not historical, these statements are forward-looking statements and may be forward-looking information within the meaning of applicable securities laws (collectively, "forward-looking statements").  These forward-looking statements related to, among other things, our objectives, goals, strategies, intentions, plans, estimates and outlook, including advertising, distribution, merchandise and subscription revenues, operating costs and tariffs, taxes and fees, and can generally be identified by the use of the words such as "believe", "anticipate", "expect", "intend", "plan", "will", "may" and other similar expressions.  In addition, any statements that refer to expectations, projections or other characterizations of future events or circumstances are forward-looking statements.  Although Corus believes that the expectations reflected in such forward-looking statements are reasonable, such statements involve risks and uncertainties and undue reliance should not be placed on such statements.  Certain material factors or assumptions are applied in making forward-looking statements, including without limitation factors and assumptions regarding advertising, distribution, merchandise and subscription revenues, operating costs and tariffs, taxes and fees and actual results may differ materially from those expressed or implied in such statements.  Important factors that could cause actual results to differ materially from these expectations include, among other things: our ability to attract and retain advertising revenues; audience acceptance of our television programs and specialty and pay networks; our ability to recoup production costs, the availability of tax credits and the existence of co-production treaties; our ability to compete in any of the industries in which we do business; the opportunities (or lack thereof) that may be presented to and pursued by us; conditions in the entertainment, information and communications industries and technological developments therein; changes in laws or regulations or the interpretation or application of those laws and regulations; our ability to integrate and realize anticipated benefits from our acquisitions and to effectively manage our growth; our ability to successfully defend ourselves against litigation matters arising out of the ordinary course of business;  and changes in accounting standards. Additional information about these factors and about the material assumptions underlying such forward-looking statements may be found in our Annual Information Form.  Corus cautions that the foregoing list of important factors that may affect future results is not exhaustive.  When relying on our forward-looking statements to make decisions with respect to Corus, investors and others should carefully consider the foregoing factors and other uncertainties and potential events. Unless otherwise required by applicable securities laws, we disclaim any intention or obligation to publicly update or revise any forward-looking statements whether as a result of new information, events or circumstances that arise after the date thereof or otherwise.

 

CORUS ENTERTAINMENT INC.
CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
                 
(unaudited)     As at November 30,     As at August 31,     As at September 1,
(in thousands of Canadian dollars)     2011      2011      2010 
ASSETS                  
Current                  
Cash and cash equivalents     58,009      55,922      7,969 
Accounts receivable     217,119      178,531      175,134 
Income taxes recoverable     —      603      1,781 
Prepaid expenses and other     15,058      13,497      18,008 
                   
Total current assets     290,186      248,553      202,892 
                   
Tax credits receivable     50,151      43,108      39,597 
Intangibles, investments and other assets     37,808      39,980      22,699 
Property, plant and equipment     166,758      169,600      161,585 
Program and film rights     276,029      256,970      244,963 
Film investments     77,476      83,133      80,611 
Broadcast licenses     569,505      569,505      610,423 
Goodwill     671,827      671,827      695,029 
Deferred tax assets     31,012      30,915      32,130 
      2,170,752      2,113,591      2,089,929 
                   
LIABILITIES AND SHAREHOLDERS' EQUITY                  
Current                  
Accounts payable and accrued liabilities     233,383      206,770      192,839 
Provisions     4,105      5,267      13,048 
Income taxes payable     2,363      —      — 
Total current liabilities     239,851      212,037      205,887 
                   
Long-term debt     601,482      600,796      691,891 
Other long-term liabilities     97,516      104,574      95,840 
Deferred tax liability     142,750      141,361      146,044 
Total liabilities     1,081,599      1,058,768      1,139,662 
                   
SHAREHOLDERS' EQUITY                  
Share capital     886,957      882,679      856,655 
Contributed surplus     10,572      10,299      12,706 
Retained earnings     174,540      143,720      62,509 
Accumulated other comprehensive income (loss)     (25)      (1,075)      342 
Total equity attributable to equity shareholders     1,072,044      1,035,623      932,212 
Equity attributable to non-controlling interest     17,109      19,200      18,055 
Total shareholders' equity     1,089,153      1,054,823      950,267 
      2,170,752      2,113,591      2,089,929 

 
CORUS ENTERTAINMENT INC.
CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME
     
  Three months ended
(unaudited) November 30,
(in thousands of Canadian dollars except per share amounts) 2011      2010 
Revenues 236,891      222,156 
Direct cost of sales, general and administrative expenses 145,677      131,497 
Depreciation 6,239      6,108 
Interest expense 13,427      14,073 
Restructuring —      2,250 
Other expense (income), net 447      (117) 
         
Income before income taxes 71,101      68,345 
Income tax expense 18,421      20,328 
         
Net income for the period from continuing operations 52,680      48,017 
Income after tax for discontinued operations —      1,523 
Net income for the period 52,680      49,540 
         
Net income attributable to:        
     Equity shareholders 50,548      47,720 
     Non-controlling interest 2,132      1,820 
  52,680      49,540 
         
Basic earnings per share attributable to equity shareholders:        
     From continuing operations $ 0.61      $ 0.57 
     From discontinued operations —      0.02 
  $ 0.61      $ 0.59 
         
Diluted earnings per share attributable to equity shareholders:        
     From continuing operations $ 0.61      $ 0.56 
     From discontinued operations —      0.02 
  $ 0.61      $ 0.58 
         
         
Net income for the period 52,680      49,540 
Other comprehensive income (loss), net of tax        
     Unrealized foreign currency translation adjustment 1,124      (753) 
     Unrealized change in fair value of available-for-sale        
          investments, net of tax (74)      171 
  1,050      (582) 
         
Comprehensive income for the period 53,730      48,958 
         
Comprehensive income attributable to        
     Equity shareholders 51,598      47,138 
     Non-controlling interest 2,132      1,820 
  53,730      48,958 
         

CORUS ENTERTAINMENT INC.
CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY
                                       
  Share capital     Contributed
surplus
    Retained
earnings
    Accumulated
other
comprehensive
loss
    Total attributable
to equity
shareholders
    Non-
controlling
interest
    Total equity
(unaudited)
(in thousands of Canadian dollars)
At August 31, 2011 882,679      10,299      143,720      (1,075)     1,035,623      19,200      1,054,823 
Comprehensive income —      —      50,548      1,050     51,598     2,132      53,730
Dividends declared —      —      (17,950)      —      (17,950)      (4,223)     (22,173) 
Issuance of shares under stock option plan 106      (20)       —      —      86      —      86 
Issuance of shares under dividend reinvestment plan 6,282      —      —      —      6,282      —      6,282 
Share repurchased (2,110)      —      (1,778)      —      (3,888)      —      (3,888) 
Share-based compensation expense —      293      —      —      293      —      293 
At November 30, 2011 886,957      10,572      174,540      (25)      1,072,044      17,109      1,089,153 
                                       
At September 1, 2010 856,655      12,706      62,509      342      932,212      18,055      950,267 
Comprehensive income (loss) —      —      47,720      (582)      47,138      1,820      48,958 
Dividends declared —      —      (15,258)      —      (15,258)      (4,206)      (19,464) 
Issuance of shares under stock option plan 2,924      (621)      —      —      2,303      —      2,303 
Issuance of shares under dividend reinvestment plan 1,604      —      —      —      1,604      —      1,604 
Share-based compensation expense —      253      —      —      253      —      253 
At November 30, 2010 861,183      12,338      94,971      (240)      968,252      15,669      983,921 
                                       

CORUS ENTERTAINMENT INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
     
  Three months ended
(unaudited) November 30,
(in thousands of Canadian dollars) 2011      2010
OPERATING ACTIVITIES        
Net income for the period 52,680      49,540 
Earnings from discontinued operations —      (1,523) 
Add (deduct) non-cash items:        
   Depreciation 6,239      6,108 
   Amortization of program rights 47,055      42,542 
   Amortization of film investments 9,987      8,286 
   Deferred income taxes 1,362      472 
   Share-based compensation expense 293      253 
   Imputed interest 3,034      2,600 
   Other (243)      (267) 
Net change in non-cash working capital        
   balances related to operations (41,391)      (32,677) 
Payment of program and film rights (35,429)      (38,153) 
Net additions to film investments (17,136)      (21,850) 
Cash provided by operating activities from continuing operations 26,451      15,331 
Cash provided by operating activities from discontinued operations —      112 
Cash provided by operating activities 26,451      15,443 
         
INVESTING ACTIVITIES        
Additions to property, plant and equipment (3,370)      (13,266) 
Net cash flows for intangibles, investments and other assets 1,131      (885) 
Other (153)      (225) 
Cash used in investing activities from continuing operations (2,392)      (14,376) 
         
FINANCING ACTIVITIES        
Increase in bank loans —      30,192 
Issuance of shares under stock option plan 86      2,303 
Shares repurchased (3,888)      — 
Dividends paid (11,675)      (11,591) 
Dividend paid to non-controlling interest (4,223)      (4,206) 
Capital lease payments and other (2,272)      (2,180) 
Cash (used in) provided by financing activities from continuing operations (21,972)      14,518 
         
Net change during the period in cash and cash equivalents from continuing operations 2,087      15,473 
Net change during the period in cash and cash equivalents from discontinued operations —      112 
Net increase in cash and cash equivalents during the period 2,087      15,585 
Cash and cash equivalents, beginning of period 55,922      7,969 
Cash and cash equivalents, end of period 58,009      23,554 

                         
CORUS ENTERTAINMENT INC.
BUSINESS SEGMENT INFORMATION
(unaudited)                        
(in thousands of Canadian dollars)                        
                           
Three months ended November 30, 2011                        
        Radio     Television     Corporate     Consolidated
Revenues     51,864      185,027      —      236,891 
Direct cost of sales, general and administrative expenses     35,462      104,532      5,683      145,677 
Segment profit (loss)     16,402      80,495      (5,683)      91,214 
Depreciation     778      565      4,896      6,239 
Interest expense     122      6,858      6,447      13,427 
Other expense (income), net         1,367      (928)      447 
Income (loss) before income taxes and non-controlling interest     15,494      71,705      (16,098)      71,101 
                           
Three months ended November 30, 2010                        
        Radio     Television     Corporate     Consolidated
Revenues     54,639      167,517      —      222,156 
Direct cost of sales, general and administrative expenses     36,125      87,248      8,124      131,497 
Segment profit (loss)     18,514      80,269      (8,124)      90,659 
Depreciation     758      1,703      3,647      6,108 
Interest expense     1,506      4,712      7,855      14,073 
Restructuring charges     678          1,570      2,250 
Other expense (income), net     14      (632)      501      (117) 
Income (loss) before income taxes and non-controlling interest     15,558      74,484      (21,697)      68,345 
                         
Revenues by type                        
                    Three months ended
                    November 30,
                    2011      2010 
Advertising                 119,449      120,320 
Subscriber fees                 74,141      73,762 
Merchandising, distribution and other                 43,301      28,074 
                    236,891      222,156 

 

  

SOURCE Corus Entertainment Inc.

For further information:

John Cassaday      Tom Peddie      Sally Tindal
President and Chief Executive Officer      Executive Vice President and Chief       Director, Communications
Corus Entertainment Inc.      Financial Officer        Corus Entertainment Inc. 
416.479.6018      Corus Entertainment Inc.      416.479.6107
      416.479.6080

 


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