Corus Entertainment announces first quarter results



    
    -   Earnings per share of $0.51 for first quarter, up 9% from prior year
    -   Combined Radio and Television revenues up 1% for first quarter
    -   Segment profit of $81.3 million, down 2% for first quarter
    

    TORONTO, Jan. 14 /CNW/ - Corus Entertainment Inc. (TSX: CJR.B; NYSE:   CJR)
announced its first quarter financial results today.

    
    First Quarter Results
    ---------------------
    

    Consolidated revenues for the three months ended November 30, 2008 were
$216.8 million, up 1% from $214.8 million last year. Consolidated segment
profit was $81.3 million, down 2% from $83.4 million last year. Net income for
the quarter was $40.6 million ($0.51 basic and $0.50 diluted), compared to net
income of $39.4 million ($0.47 basic and $0.46 diluted) last year.

    Corus Television contributed quarterly revenues of $141.3 million, up 4%
from $135.4 million last year, led by subscriber revenue growth of 12% and
continued strong growth in advertising targeted to women. Quarterly segment
profit increased to $64.3 million, up 1% from $63.6 million last year.

    Corus Radio revenues were $75.5 million, down 5% from $79.5 million last
year. Segment profit was $22.0 million, down 14% from $25.5 million last year.

    "This was a strong quarter for Corus, as we continued to grow the top
line in a challenging market," said John Cassaday, President and Chief
Executive Officer, Corus Entertainment Inc. "We incurred significant expenses
in the quarter to support the launches of Cosmopolitan TV, VIVA and HBO Canada
and in Nickelodeon digital rights. These investments, which represented an
incremental expense of almost $5.5 million, position us well for the future."

    
    Revised 2009 Fiscal Guidance
    ----------------------------
    

    Despite first quarter revenue growth, the Company expects that the
slowdown in Canada's GDP growth will have a negative impact on advertising
spending. Given that a significant portion of the Company's revenues are
derived from advertising, the Company has reduced its segment profit guidance
to between $255.0 million and $265.0 million from the original guidance of
$270.0 million and $280.0 million.

    The Company expects that this challenging advertising market will
continue to have a greater effect on its Radio division results given that
division's reliance on advertising revenues, particularly local ad revenues,
and its greater reliance on advertising sectors that have seen larger declines
than average.

    The Company's free cash flow guidance of between $70.0 million and $90.0
million remains unchanged.

    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, advertising and digital audio services,
television broadcasting, children's book publishing and children's animation.
The company's multimedia entertainment brands include YTV, Treehouse, W
Network, CosmoTV, VIVA, Movie Central, HBO Canada, Nelvana, Kids Can Press and
radio stations including CKNW, CKOI and Q107. Corus creates engaging branded
entertainment experiences for its audiences across multiple platforms. A
publicly traded company, Corus is listed on the Toronto (CJR.B) and New York
(CJR) exchanges. Experience Corus on the web at www.corusent.com.

    The unaudited consolidated financial statements and accompanying notes
for the quarter ended November 30, 2008 and Management's Discussion and
Analysis are available on the Company's website www.corusent.com in the
Investor Relations section.

    A conference call with Corus senior management is scheduled for January
14, 2009 at 9 a.m. ET / 8 a.m. CT / 7 a.m. MT / 6 a.m. PT. 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 is 1-866-321-6651 (toll-free
North America) or 416-642-5212 (local or international). The pass code for
this call is: 8042208. PowerPoint slides for the call will be posted at 8:45
a.m. ET on January 14, 2009 and can be found on the Corus Entertainment
website www.corusent.com in the Investor Relations section.

    This statement 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, program, 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, program, 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 cable 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 arises after the date thereof
or otherwise.


    
                           CORUS ENTERTAINMENT INC.
                         CONSOLIDATED BALANCE SHEETS

                                                    As at            As at
    (unaudited)                                  November 30,      August 31,
    (in thousands of Canadian dollars)               2008             2008
    -------------------------------------------------------------------------
    ASSETS
    Current
    Cash and cash equivalents                        23,064           19,642
    Accounts receivable                             191,964          157,440
    Income taxes recoverable                              -            1,615
    Prepaid expenses and other                       10,537           10,135
    Program and film rights                         137,496          131,301
    Future tax asset                                  9,740            9,593
    -------------------------------------------------------------------------
    Total current assets                            372,801          329,726
    -------------------------------------------------------------------------

    Tax credits receivable                           25,701           21,952
    Investments and other assets                     27,279           93,086
    Property, plant and equipment                    70,613           73,562
    Program and film rights                         108,116          103,163
    Film investments                                 87,796           80,819
    Broadcast licenses                              560,383          533,491
    Goodwill                                        856,495          797,854
    -------------------------------------------------------------------------
                                                  2,109,184        2,033,653
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    LIABILITIES AND SHAREHOLDERS' EQUITY
    Current
    Accounts payable and accrued liabilities        189,922          196,026
    Income taxes payable                             12,269                -
    -------------------------------------------------------------------------
    Total current liabilities                       202,191          196,026
    -------------------------------------------------------------------------

    Long-term debt                                  723,637          692,750
    Other long-term liabilities                      86,226           59,936
    Future tax liability                             97,415           87,699
    -------------------------------------------------------------------------
    Total liabilities                             1,109,469        1,036,411
    -------------------------------------------------------------------------

    Non-controlling interest                         19,361           20,237
    -------------------------------------------------------------------------

    SHAREHOLDERS' EQUITY
    Share capital                                   840,165          848,257
    Contributed surplus                              13,115           17,304
    Retained earnings                               153,655          131,594
    Accumulated other comprehensive loss            (26,581)         (20,150)
    -------------------------------------------------------------------------
    Total shareholders' equity                      980,354          977,005
    -------------------------------------------------------------------------
                                                  2,109,184        2,033,653
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------



                           CORUS ENTERTAINMENT INC.
                      CONSOLIDATED STATEMENTS OF INCOME

                                                        Three months ended
    (unaudited)                                             November 30,
    (in thousands of Canadian dollars                 -----------------------
     except per share amounts)                         2008             2007
    -------------------------------------------------------------------------
    Revenues                                        216,785          214,825
    Direct cost of sales, general and
     administrative expenses                        135,443          131,435
    Depreciation                                      4,992            5,769
    Interest expense (notes 6 and 9)                 10,402           10,989
    Disputed regulatory fees (note 19)                1,690                -
    Other expense, net (notes 10 and 16)              1,400            3,887
    -------------------------------------------------------------------------
    Income before income taxes
     and non-controlling interest                    62,858           62,745
    Income tax expense (note 11)                     20,875           22,138
    Non-controlling interest                          1,350            1,220
    -------------------------------------------------------------------------
    Net income for the period                        40,633           39,387
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    Earnings per share (note 8)
      Basic                                           $0.51            $0.47
      Diluted                                         $0.50            $0.46
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

               CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

                                                        Three months ended
                                                            November 30,
    (unaudited)                                       -----------------------
    (in thousands of Canadian dollars)                 2008             2007
    -------------------------------------------------------------------------
    Net income for the period                        40,633           39,387
    Other comprehensive loss, net of tax
      Unrealized foreign currency translation
       adjustment                                     1,825             (972)
      Unrealized change in fair value of
       available- for-sale investments                 (925)             183
      Unrealized change in fair value of
       cash flow hedges                              (7,331)          (6,002)
    -------------------------------------------------------------------------
                                                     (6,431)          (6,791)
    -------------------------------------------------------------------------
    Comprehensive income for the period              34,202           32,596
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------



                           CORUS ENTERTAINMENT INC.
          CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS EQUITY

                                                        Three months ended
                                                            November 30,
    (unaudited)                                       -----------------------
    (in thousands of Canadian dollars)                 2008             2007
    -------------------------------------------------------------------------
    Share capital
    Balance, beginning of period                    848,257          882,244
    Issuance of shares under stock option plan          358            6,768
    Shares repurchased                               (8,450)         (13,960)
    -------------------------------------------------------------------------
    Balance, end of period                          840,165          875,052
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    Contributed surplus
    Balance, beginning of period                     17,304           10,250
    Stock-based compensation                            949            1,869
    Settlement of long-term incentive plan
     liability                                       (5,138)               -
    Exercise of stock options                             -             (585)
    -------------------------------------------------------------------------
    Balance, end of period                           13,115           11,534
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    Retained earnings
    Balance, beginning of period                    131,594           95,568
    Cumulative impact of accounting changes               -           (1,594)
    -------------------------------------------------------------------------
    Adjusted opening balance                        131,594           93,974
    Net income for the period                        40,633           39,387
    Dividends                                       (11,939)         (10,403)
    Share repurchase excess (note 8)                 (6,633)         (18,380)
    -------------------------------------------------------------------------
    Balance, end of period                          153,655          104,578
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    Accumulated other comprehensive loss
    Balance, beginning of period                    (20,150)         (12,169)
    Cumulative impact of accounting changes               -            7,007
    -------------------------------------------------------------------------
    Adjusted opening balance                        (20,150)          (5,162)
    Other comprehensive loss, net of tax             (6,431)          (6,791)
    -------------------------------------------------------------------------
    Balance, end of period                          (26,581)         (11,953)
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------



                           CORUS ENTERTAINMENT INC.
                    CONSOLIDATED STATEMENTS OF CASH FLOWS


                                                        Three months ended
                                                            November 30,
    (unaudited)                                       -----------------------
    (in thousands of Canadian dollars)                 2008             2007
    -------------------------------------------------------------------------
    OPERATING ACTIVITIES
    Net income for the period                        40,633           39,387
    Add non-cash items:
      Depreciation                                    4,992            5,769
      Amortization of program and film rights        37,483           36,077
      Amortization of film investments                3,349            4,916
      Future income taxes                             4,723            4,921
      Non-controlling interest                        1,350            1,220
      Stock-based compensation                          581            2,884
      Imputed interest and other                      1,992            2,538
    Net change in non-cash working capital
     balances related to operations                 (29,655)         (33,683)
    Payment of program and film rights              (49,248)         (42,297)
    Net additions to film investments               (11,485)         (17,744)
    -------------------------------------------------------------------------
    Cash provided by operating activities             4,715            3,988
    -------------------------------------------------------------------------

    INVESTING ACTIVITIES
    Additions to property, plant and equipment       (1,995)          (4,219)
    Business combinations                           (74,950)             332
    Cash held in escrow                              74,950                -
    Net cash flows for investments and
     other assets                                      (328)          (1,135)
    Decrease in public benefits associated with
     acquisitions                                      (408)          (1,896)
    -------------------------------------------------------------------------
    Cash used in investing activities                (2,731)          (6,918)
    -------------------------------------------------------------------------

    FINANCING ACTIVITIES
    Increase in bank loans                           30,849           19,828
    Issuance of shares under stock option plan          358            6,183
    Shares repurchased                              (15,083)         (32,340)
    Dividends paid                                  (12,017)         (10,480)
    Dividend paid to non-controlling interest        (2,669)          (1,603)
    Other                                                 -             (158)
    -------------------------------------------------------------------------
    Cash provided by (used in) financing
     activities                                       1,438          (18,570)
    -------------------------------------------------------------------------
    Increase (decrease) in cash and cash
     equivalents during the period                    3,422          (21,500)
    Cash and cash equivalents, beginning of period   19,642           33,347
    -------------------------------------------------------------------------
    Cash and cash equivalents, end of period         23,064           11,847
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------


                           CORUS ENTERTAINMENT INC.
                         BUSINESS SEGMENT INFORMATION

    Three months ended November 30, 2008
                                      Tele-                Elimi-   Consoli-
                           Radio     vision  Corporate    nations      dated
    -------------------------------------------------------------------------
    Revenues              75,528    141,257          -          -    216,785
    Direct cost of
     sales, general
     and administrative
     expenses             53,517     76,987      4,939          -    135,443
    -------------------------------------------------------------------------
    Segment profit        22,011     64,270     (4,939)         -     81,342
    Depreciation           1,642      2,341      1,009          -      4,992
    Interest expense         226      1,043      9,133          -     10,402
    Disputed regulatory
     fees                    836        854          -          -      1,690
    Other expense, net       180      2,319     (1,099)         -      1,400
    -------------------------------------------------------------------------
    Income before
     income taxes and
     non-controlling
     interest             19,127     57,713    (13,982)         -     62,858
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    Three months ended November 30, 2007
                                      Tele-                Elimi-   Consoli-
                           Radio     vision  Corporate    nations      dated
    -------------------------------------------------------------------------

    Revenues              79,525    135,351          -        (51)   214,825
    Direct cost of
     sales, general
     and administrative
     expenses             54,054     71,786      5,646        (51)   131,435
    -------------------------------------------------------------------------
    Segment profit        25,471     63,565     (5,646)         -     83,390
    Depreciation           1,419      2,662      1,688          -      5,769
    Interest expense         247      1,517      9,225          -     10,989
    Other expense, net       (34)     4,212       (291)         -      3,887
    -------------------------------------------------------------------------
    Income before
     income taxes and
     non-controlling
     interest             23,839     55,174    (16,268)         -     62,745
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    

    %SEDAR: 00013131EF          %CIK: 0001100868




For further information:

For further information: John Cassaday, President and Chief Executive
Officer, Corus Entertainment Inc., (416) 642-3770; Tom Peddie, Senior Vice
President and Chief Financial Officer, Corus Entertainment Inc., (416)
642-3780; Tracy Ewing, Vice President, Communications, Corus Entertainment
Inc., (416) 642-3792


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