Corus Entertainment announces second quarter results



    
    -   Combined Radio and Television revenues up 1% for second quarter
    -   Segment profit of $51.0 million, up 3% for second quarter
    

    TORONTO, April 8 /CNW/ - Corus Entertainment Inc. (TSX: CJR.B; NYSE:   CJR)
announced its second quarter financial results today.
    "We are proud to have delivered both revenue and segment profit growth in
such challenging economic times," said John Cassaday, President and Chief
Executive Officer, Corus Entertainment Inc. "Strong brands, superior
programming, rigorous cost controls and multiple revenue streams helped offset
the effects of a cyclically soft Canadian advertising market."

    
    Second Quarter Results
    ----------------------
    

    Consolidated revenues for the three months ended February 28, 2009 were
$181.4 million, up 1% from $178.7 million last year. Consolidated segment
profit was $51.0 million, up 3% from $49.7 million last year. Net income for
the quarter was $29.0 million ($0.36 basic and diluted), compared to net
income of $35.4 million ($0.42 basic and $0.41 diluted) last year. The current
year's quarter was positively impacted by a gain of $7.2 million related to
the disposition of a residential audio business, while the prior year's
quarter benefited from $13.2 million in recoveries related to income tax
changes. Removing the impact of these items results in adjusted basic earnings
per share of $0.29 in the current year, and $0.26 in the prior year.
    Corus Television contributed quarterly revenues of $123.4 million, up 5%
from $117.3 million last year, led by subscriber revenue growth of 12% and
continued strong growth in advertising targeted to women. Quarterly segment
profit increased to $47.5 million, up 7% from $44.2 million last year.
    Corus Radio revenues were $57.9 million, down 6% from $61.5 million last
year. Segment profit was $7.1 million, down 31% from $10.3 million last year.

    
    Year-to-Date Results
    --------------------
    

    Consolidated revenues for the six months ended February 28, 2009 were
$398.1 million, up 1% from $393.6 million last year. Consolidated segment
profit was $132.4 million, down 1% from $133.1 million last year. Net income
for the six months was $69.7 million ($0.87 basic and $0.86 diluted), compared
to net income of $74.8 million ($0.89 basic and $0.87 diluted) last year.
    Corus Television contributed six month revenues of $264.7 million, up 5%
from $252.7 million last year. Segment profit increased to $111.8 million, up
4% from $107.8 million last year.
    Corus Radio revenues for the six months were $133.5 million, down 5% from
$141.0 million last year. Segment profit was $29.1 million, down 19% from
$35.8 million last year.
    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 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 February 28, 2009 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 April 8,
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 1-866-322-2356 (toll-free North
America) or 416-640-3405 (local or international). The pass code for this call
is: 3654143. PowerPoint slides for the call will be posted at 8:45 a.m. ET on
April 8, 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)                                      February 28,  August 31,
    (in thousands of Canadian dollars)                      2009        2008
    -------------------------------------------------------------------------
    ASSETS
    Current
    Cash and cash equivalents                             39,424      19,642
    Accounts receivable                                  149,323     157,440
    Income taxes recoverable                               1,872       1,615
    Prepaid expenses and other                            10,012      10,135
    Program and film rights                              136,144     131,301
    Future tax asset                                       3,421       9,593
    -------------------------------------------------------------------------
    Total current assets                                 340,196     329,726
    -------------------------------------------------------------------------

    Tax credits receivable                                30,264      21,952
    Investments and other assets                          28,948      93,086
    Property, plant and equipment                         70,500      73,562
    Program and film rights                              120,141     103,163
    Film investments                                      88,411      80,819
    Broadcast licenses                                   560,383     533,491
    Goodwill                                             852,596     797,854
    -------------------------------------------------------------------------
                                                       2,091,439   2,033,653
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    LIABILITIES AND SHAREHOLDERS' EQUITY
    Current
    Accounts payable and accrued liabilities             186,420     196,026
    -------------------------------------------------------------------------

    Long-term debt                                       705,415     692,750
    Other long-term liabilities                           88,838      59,936
    Future tax liability                                  93,448      87,699
    -------------------------------------------------------------------------
    Total liabilities                                  1,074,121   1,036,411
    -------------------------------------------------------------------------

    Non-controlling interest                              17,798      20,237
    -------------------------------------------------------------------------

    SHAREHOLDERS' EQUITY
    Share capital                                        840,363     848,257
    Contributed surplus                                   14,516      17,304
    Retained earnings                                    170,684     131,594
    Accumulated other comprehensive loss                 (26,043)    (20,150)
    -------------------------------------------------------------------------
    Total shareholders' equity                           999,520     977,005
    -------------------------------------------------------------------------
                                                       2,091,439   2,033,653
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------



                          CORUS ENTERTAINMENT INC.
                      CONSOLIDATED STATEMENTS OF INCOME

    (unaudited)                   Three months ended       Six months ended
    (in thousands of                  February 28,            February 28,
     Canadian dollars           ---------------------------------------------
     except per share amounts)      2009        2008        2009        2008
    -------------------------------------------------------------------------
    Revenues                     181,358     178,738     398,143     393,563
    Direct cost of sales,
     general and
     administrative expenses     130,349     129,005     265,792     260,440
    Depreciation                   5,199       5,510      10,191      11,279
    Interest expense               9,666      10,073      20,068      21,062
    Disputed regulatory fees       1,022           -       2,712           -
    Other expense (income), net   (5,009)         38      (3,609)      3,925
    -------------------------------------------------------------------------
    Income before income
     taxes and non-controlling
     interest                     40,131      34,112     102,989      96,857
    Income tax expense
     (recovery)                   10,831      (2,547)     31,706      19,591
    Non-controlling interest         271       1,291       1,621       2,511
    -------------------------------------------------------------------------
    Net income for the period     29,029      35,368      69,662      74,755
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    Earnings per share (note 8)
      Basic                        $0.36       $0.42       $0.87       $0.89
      Diluted                      $0.36       $0.41       $0.86       $0.87
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------



               CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

                                  Three months ended       Six months ended
    (unaudited)                       February 28,            February 28,
    (in thousands of            ---------------------------------------------
     Canadian dollars)              2009        2008        2009        2008
    -------------------------------------------------------------------------
    Net income for the period     29,029      35,368      69,662      74,755
    Other comprehensive income
     (loss), net of tax
      Unrealized foreign
       currency translation
       adjustment                    492        (295)      2,317      (1,267)
      Unrealized change in fair
       value of available-for-
       sale investments,
       net of tax                    145           -        (780)        183
      Recognition of change
       in fair value of
       available-for sale assets
       in net income               2,077           -       2,077           -
      Unrealized change in
       fair value of cash flow
       hedges, net of tax         (2,176)     (5,788)     (9,507)    (11,790)
    -------------------------------------------------------------------------
                                     538      (6,083)     (5,893)    (12,874)
    -------------------------------------------------------------------------
    Comprehensive income for
     the period                   29,567      29,285      56,315      61,881
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------



                          CORUS ENTERTAINMENT INC.
          CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS EQUITY

                                  Three months ended       Six months ended
    (unaudited)                       February 28,            February 28,
    (in thousands of            ---------------------------------------------
     Canadian dollars)              2009        2008        2009        2008
    -------------------------------------------------------------------------
    Share capital
    Balance, beginning of
     period                      840,165     875,052     848,257     882,244
    Issuance of shares under
     stock option plan                 -       3,070         358       9,838
    Shares repurchased                 -      (3,441)     (8,450)    (17,401)
    Repayment of executive
     stock purchase loans            198         230         198         230
    -------------------------------------------------------------------------
    Balance, end of period       840,363     874,911     840,363     874,911
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    Contributed surplus
    Balance, beginning of
     period                       13,115      11,534      17,304      10,250
    Stock-based compensation       1,401       2,050       2,350       3,919
    Settlement of long-term
     incentive plan                    -           -      (5,138)          -
    Exercise of stock options          -         (69)          -        (654)
    -------------------------------------------------------------------------
    Balance, end of period        14,516      13,515      14,516      13,515
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    Retained earnings
    Balance, beginning of
     period                      153,655     104,578     131,594      95,568
    Cumulative impact of
     accounting changes                -           -           -      (1,594)
    -------------------------------------------------------------------------
    Adjusted opening balance     153,655     104,578     131,594      93,974
    Net income for the period     29,029      35,368      69,662      74,755
    Dividends                    (12,000)    (12,488)    (23,939)    (22,891)
    Share repurchase excess            -      (4,206)     (6,633)    (22,586)
    -------------------------------------------------------------------------
    Balance, end of period       170,684     123,252     170,684     123,252
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    Accumulated other
     comprehensive loss
    Balance, beginning of
     period                      (26,581)    (11,953)    (20,150)    (12,169)
    Cumulative impact of
     accounting changes                -           -           -       7,007
    -------------------------------------------------------------------------
    Adjusted opening balance     (26,581)    (11,953)    (20,150)     (5,162)
    Other comprehensive income
     (loss), net of tax              538      (6,083)     (5,893)    (12,874)
    -------------------------------------------------------------------------
    Balance, end of period       (26,043)    (18,036)    (26,043)    (18,036)
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------



                          CORUS ENTERTAINMENT INC.
                    CONSOLIDATED STATEMENTS OF CASH FLOWS

                                  Three months ended       Six months ended
    (unaudited)                       February 28,            February 28,
    (in thousands of            ---------------------------------------------
     Canadian dollars)              2009        2008        2009        2008
    -------------------------------------------------------------------------
    OPERATING ACTIVITIES
    Net income for the period     29,029      35,368      69,662      74,755
    Add (deduct) non-cash items:
      Depreciation                 5,199       5,510      10,191      11,279
      Amortization of program
       and film rights            39,034      35,910      76,517      71,987
      Amortization of film
       investments                 6,689       7,695      10,038      12,611
      Future income taxes          2,887      (9,984)      7,610      (5,063)
      Non-controlling interest       271       1,291       1,621       2,511
      Stock-based compensation     1,431         804       2,012       3,688
      Imputed interest             1,522       1,563       3,311       3,137
      Other gains and losses      (5,632)        173      (5,429)      1,137
    Net change in non-cash
     working capital balances
     related to operations        22,148       8,772      (7,507)    (24,911)
    Payment of program and
     film rights                 (45,927)    (35,385)    (95,175)    (77,682)
    Net additions to film
     investments                 (13,431)    (11,734)    (24,916)    (29,478)
    -------------------------------------------------------------------------
    Cash provided by operating
     activities                   43,220      39,983      47,935      43,971
    -------------------------------------------------------------------------

    INVESTING ACTIVITIES
    Additions to property,
     plant and equipment          (3,789)     (2,908)     (5,784)     (7,127)
    Business combinations              -      (1,106)    (74,950)       (774)
    Cash held in escrow                -           -      74,950           -
    Net cash flows for
     investments and
     other assets                  6,961        (286)      6,633      (1,421)
    Decrease in public
     benefits associated
     with acquisitions              (726)        (49)     (1,134)     (1,945)
    -------------------------------------------------------------------------
    Cash provided by (used in)
     investing activities          2,446      (4,349)       (285)    (11,267)
    -------------------------------------------------------------------------

    FINANCING ACTIVITIES
    Increase (decrease) in
     bank loans                  (17,179)        579      13,670      20,407
    Issuance of shares under
     stock option plan                 -       3,001         358       9,184
    Shares repurchased                 -      (7,647)    (15,083)    (39,987)
    Dividends paid               (12,000)    (11,111)    (24,017)    (21,591)
    Dividend paid to
     non-controlling interest       (325)          -      (2,994)     (1,603)
    Other                            198          79         198         (79)
    -------------------------------------------------------------------------
    Cash used in financing
     activities                  (29,306)    (15,099)    (27,868)    (33,669)
    -------------------------------------------------------------------------
    Net change in cash and
     cash equivalents during
     the period                   16,360      20,535      19,782        (965)
    Cash and cash equivalents,
     beginning of period          23,064      11,847      19,642      33,347
    -------------------------------------------------------------------------
    Cash and cash equivalents,
     end of period                39,424      32,382      39,424      32,382
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------



                          CORUS ENTERTAINMENT INC.
                        BUSINESS SEGMENT INFORMATION

    Three months ended February 28, 2009

                                      Tele-                Elimi-     Conso-
                           Radio     vision  Corporate    nations    lidated
    -------------------------------------------------------------------------
    Revenues              57,935    123,423          -          -    181,358
    Direct cost of
     sales, general
     and administrative
     expenses             50,825     75,932      3,592          -    130,349
    -------------------------------------------------------------------------
    Segment profit         7,110     47,491     (3,592)         -     51,009
    Depreciation           1,631      2,444      1,124          -      5,199
    Interest expense         228      1,357      8,081          -      9,666
    Disputed regulatory
     fees                    526        496          -          -      1,022
    Other expense, net      (751)    (5,960)     1,702          -     (5,009)
    -------------------------------------------------------------------------
    Income before
     income taxes and
     non-controlling
     interest              5,476     49,154    (14,499)         -     40,131
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------


    Three months ended February 29, 2008

                                      Tele-                Elimi-     Conso-
                           Radio     vision  Corporate    nations    lidated
    -------------------------------------------------------------------------
    Revenues              61,478    117,309          -        (49)   178,738
    Direct cost of
     sales, general
     and administrative
     expenses             51,192     73,069      4,793        (49)   129,005
    -------------------------------------------------------------------------
    Segment profit        10,286     44,240     (4,793)         -     49,733
    Depreciation           1,754      2,638      1,118          -      5,510
    Interest expense         270        861      8,942          -     10,073
    Other expense, net       (94)       497       (365)         -         38
    -------------------------------------------------------------------------
    Income before
     income taxes and
     non-controlling
     interest              8,356     40,244    (14,488)         -     34,112
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------


    Six months ended February 28, 2009

                                      Tele-                Elimi-     Conso-
                           Radio     vision  Corporate    nations    lidated
    -------------------------------------------------------------------------
    Revenues             133,463    264,680          -          -    398,143
    Direct cost of
     sales, general
     and administrative
     expenses            104,342    152,919      8,531          -    265,792
    -------------------------------------------------------------------------
    Segment profit        29,121    111,761     (8,531)         -    132,351
    Depreciation           3,273      4,785      2,133          -     10,191
    Interest expense         454      2,400     17,214          -     20,068
    Disputed regulatory
     fees                  1,362      1,350          -          -      2,712
    Other expense, net      (571)    (3,641)       603          -     (3,609)
    -------------------------------------------------------------------------
    Income before
     income taxes and
     non-controlling
     interest             24,603    106,867    (28,481)         -    102,989
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------


    Six months ended February 29, 2008

                                      Tele-                Elimi-     Conso-
                           Radio     vision  Corporate    nations    lidated
    -------------------------------------------------------------------------
    Revenues             141,003    252,660          -       (100)   393,563
    Direct cost of
     sales, general
     and administrative
     expenses            105,246    144,855     10,439       (100)   260,440
    -------------------------------------------------------------------------
    Segment profit        35,757    107,805    (10,439)         -    133,123
    Depreciation           3,173      5,300      2,806          -     11,279
    Interest expense         517      2,378     18,167          -     21,062
    Other expense, net      (128)     4,709       (656)         -      3,925
    -------------------------------------------------------------------------
    Income before
     income taxes and
     non-controlling
     interest             32,195     95,418    (30,756)         -     96,857
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    

    %SEDAR: 00013131E          %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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