CORUS ENTERTAINMENT ANNOUNCES FISCAL 2011 FIRST QUARTER RESULTS

  • Consolidated revenues up 8% and segment profit up 11%.
  • Television specialty ad growth of 17%.
  • Radio revenue growth of 3% with Ontario up 9%.
  • Basic earnings per share of $0.57 for the quarter compared to $0.92 last year ($0.61 on an adjusted basis).

TORONTO, Jan. 11 /CNW/ - Corus Entertainment Inc. (TSX: CJR.B) announced its first quarter financial results today.

"Our advertising sales momentum continued in our first quarter and, in combination with our cost control
initiatives, we delivered double digit segment profit growth.  An outstanding start to our fiscal year," said John Cassaday, President and CEO of Corus Entertainment.  "We are also very encouraged by the strong viewer response to OWN in the USA and the positive reaction from Canadian advertisers." 

Financial Highlights    
     
(unaudited) Three months ended
(in thousands of Canadian dollars except per share amounts) November 30,
  2010 2009 
Revenues    
  Radio 73,134 71,074
  Television 167,517 151,255
  240,651 222,329
Segment profit    
  Radio 22,157 21,821
  Television 78,100 67,068
  Corporate (7,960) (5,664)
  92,297 83,225
     
Net income 46,221 73,908
Earnings per share    
  Basic $ 0.57 $ 0.92
  Diluted $ 0.56 $ 0.91

Consolidated Results

Consolidated revenues for the three months ended November 30, 2010 were $240.7 million, up 8% from $222.3 million last year.  Consolidated segment profit was $92.3 million, up 11% from $83.2 million last year.  Net income for the quarter was $46.2 million ($0.57 basic and $0.56 diluted), compared to $73.9 million ($0.92 basic and $0.91 diluted) last year.  Net income for the prior year includes a $16.2 million reversal of a disputed regulatory fee accrual and a $14.2 million recovery due to income tax rate changes.  Removing the impact of these items results in an adjusted first quarter basic earnings per share of $0.61 in the prior year.

Operational Results - Highlights

Radio

  • Segment revenues increased by 3%.
  • Segment profit increased by 2%.
  • Revenues for Ontario Radio increased 9%.

Television

  • Segment revenues increased by 11%.
  • Segment profit increased by 16%.
  • Specialty advertising revenues increased by 17%.
  • Subscriber revenues increased by 9%.
  • Movie Central finished the quarter with 976,000 subscribers, up 2% from Q1 of fiscal 2010.

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, CosmoTV, VIVA, Sundance Channel (Canada), Movie Central, HBO Canada, Nelvana, Kids Can Press and radio stations including CKNW, CFOX, CKOI, 98.5 FM, 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, 2010 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 11, 2011 at 4 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 1.800.685.7816 and for local/international callers is 416.981.9076.  PowerPoint slides for the call will be posted at 3:45 p.m. ET on January 11, 2011 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, 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 arise after the date thereof or otherwise.

 







CORUS ENTERTAINMENT INC.
CONSOLIDATED BALANCE SHEETS

     
(unaudited) As at November 30, As at August 31,
(in thousands of Canadian dollars) 2010 2010
ASSETS    
Current    
Cash and cash equivalents 23,554  7,969 
Accounts receivable 223,381  175,134 
Income tax recoverable 1,781 
Prepaid expenses and other 18,549  18,008 
Program and film rights 153,098  159,726 
Future tax asset 5,914  6,423 
Total current assets 424,496  369,041 
     
Tax credits receivable 44,023  39,597 
Investments and other assets 23,682  22,699 
Capital assets 169,380  161,585 
Program and film rights 105,425  88,684 
Film investments 100,760  100,454 
Broadcast licenses 582,166  582,166 
Goodwill 695,029  695,029 
  2,144,961  2,059,255 
     
LIABILITIES AND SHAREHOLDERS' EQUITY    
Current    
Accounts payable and accrued liabilities 222,668  203,422 
Income taxes payable 5,820 
Total current liabilities 228,488  203,422 
Long-term debt 722,816  691,891 
Other long-term liabilities 89,025  91,423 
Future tax liability 98,494  98,516 
Total liabilities 1,138,823  1,085,252 
     
Non-controlling interest 15,669  18,055 
     
SHAREHOLDERS' EQUITY    
Share capital 861,183  856,655 
Contributed surplus 11,392  11,780 
Retained earnings 129,632  98,669 
Accumulated other comprehensive income (11,738) (11,156)
Total shareholders' equity 990,469  955,948 
  2,144,961  2,059,255 



CORUS ENTERTAINMENT INC.
CONSOLIDATED STATEMENTS OF INCOME
           
        Three months ended
(unaudited)       November 30,
(in thousands of Canadian dollars except per share amounts)       2010  2009
Revenues       240,651 222,329
Direct cost of sales, general and          
  administrative expenses       148,354 139,104
Depreciation       6,622 4,516
Interest expense       14,883 8,148
Disputed regulatory fees       - (16,194)
Restructuring charges       2,378 -
Other income, net       (219) (1,784)
Income before income taxes and          
  non-controlling interest       68,633 88,539
Income tax expense       20,592 13,453
Non-controlling interest       1,820 1,178
Net income for the period       46,221 73,908
           
Earnings per share          
  Basic       $ 0.57 $ 0.92
  Diluted       $ 0.56 $ 0.91
           
           
           
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
        Three months ended
(unaudited)       November 30,
(in thousands of Canadian dollars except per share amounts)       2010  2009 
Net income for the period       46,221  73,908 
Other comprehensive income (loss), net of tax          
  Unrealized foreign currency translation adjustment       (753) (445)
  Unrealized change in fair value of available-for-sale          
     investments, net of tax       171  39 
  Unrealized change in fair value of cash flow hedges,          
     net of tax       1,446 
  Recognition of change in fair value of cash flow          
        (582) 1,040 
Comprehensive income for the period       45,639  74,948 



CORUS ENTERTAINMENT INC.
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY
     
  Three months ended
(unaudited) November 30,
(in thousands of Canadian dollars) 2010 2009
Share capital    
Balance, beginning of period 856,655 840,602
Issuance of shares under stock option plan 2,924 1,402
Other 1,604 336
Balance, end of period 861,183 842,340
     
Contributed surplus    
Balance, beginning of period 11,780 17,303
Stock-based compensation 233 899
Settlement and modification of long-term incentive plan - (3,473)
Exercise of stock options (621) (335)
Balance, end of period 11,392 14,394
     
Retained earnings    
Balance, beginning of period 98,669 20,380
Net income for the period 46,221 73,908
Dividends (15,258) (12,017)
Balance, end of period 129,632 82,271
     
Accumulated other comprehensive loss    
Balance, beginning of period (11,156) (24,007)
Other comprehensive income (loss), net of tax (582) 1,040 
Balance, end of period (11,738) (22,967)


CORUS ENTERTAINMENT INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
     
  Three months ended
(unaudited) November 30,
(in thousands of Canadian dollars) 2010 2009
OPERATING ACTIVITIES    
Net income (loss) for the period 46,221 73,908
Add (deduct) non-cash items:    
   Depreciation 6,622 4,516
   Amortization of program and film rights 42,132 41,726
   Amortization of film investments 10,922 5,533
   Future income taxes 472 (15,336)
   Non-controlling interest 1,820 1,178
   Stock option expense 233 204
   Imputed interest 2,600 1,696
   Other (267) (91)
Net changes in non-cash working capital    
   balances related to operations (35,309) (21,436)
Payment of program and film rights (38,153) (41,610)
Net additions to film investments (21,850) (17,961)
Cash provided by operating activities 15,443  32,327 
     
INVESTING ACTIVITIES    
Additions to property, plant and equipment (13,266) (6,106)
Business combinations - (36,000)
Net cash flows for investments and other assets (885) 1,091
Decrease in public benefits associated with    
   acquisitions (225) (238)
Cash used in investing activities (14,376) (41,253)
     
FINANCING ACTIVITIES    
Decrease in bank loans 30,192 39,885
Issuance of shares under stock option plan 2,303 1,067
Dividends paid (11,591) (11,674)
Dividend paid to non-controlling interest (4,206) (3,860)
Other (2,180) (3,444)
Cash used in financing activities 14,518 21,974
Net change in cash and cash equivalents    
   during the period 15,585 13,048
Cash and cash equivalents, beginning of period 7,969 10,922
Cash and cash equivalents, end of period 23,554 23,970



CORUS ENTERTAINMENT INC.
BUSINESS SEGMENT INFORMATION
(unaudited)
(in thousands of Canadian dollars except per share amounts)
           
Three months ended November 30, 2010        
    Radio Television Corporate Consolidated
Revenues 73,134 167,517 - 240,651
Direct cost of sales, general        
  and administrative expenses 50,977 89,417 7,960 148,354
Segment profit (loss) 22,157 78,100 (7,960) 92,297
Depreciation 1,272 1,703 3,647 6,622
Interest expense 880 6,148 7,855 14,883
Restructuring charges 806 2 1,570 2,378
Other expense (income), net (88) (632) 501 (219)
Income (loss) before income taxes and        
  non-controlling interest 19,287 70,879 (21,533) 68,633
           
Three months ended November 30, 2009        
    Radio Television Corporate Consolidated
Revenues 71,074 151,255 - 222,329
Direct cost of sales, general        
  and administrative expenses 49,253 84,187 5,664 139,104
Segment profit (loss) 21,821 67,068 (5,664) 83,225
Depreciation 1,670 1,906 940 4,516
Interest expense 188 1,175 6,785 8,148
Disputed regulatory fees (8,901) (7,293) - (16,194)
Other expense (income), net 91 (1,253) (622) (1,784)
Income (loss) before income taxes and        
  non-controlling interest 28,773 72,533 (12,767) 88,539

Revenues by segment                                                                                      
                                                                                      Three months ended
                                                                                      November 30,
                                                                                      2010 2009
Radio                                                                                      
West                                                                                   26,065 26,233
Ontario                                                                                   26,704 24,504
Quebec and other                                                                                   20,365 20,337
                                                                                      73,134 71,074
                                                                                         
Television                                                                                      
Kids                                                                                   78,013 68,499
Specialty and Pay                                                                                   89,504 82,756
                                                                                      167,517 151,255
                                                                                         
Segment profit                                                                                              
                                                                                              Three months ended
                                                                                              November 30,
                                                                                              2010 2009
Radio                                                                                              
West                                                                                           8,998 9,701
Ontario                                                                                           9,472 8,475
Quebec and other                                                                                           3,687 3,645
                                                                                              22,157 21,821
                                                                                                 
Television                                                                                              
Kids                                                                                           41,426 33,309
Specialty and Pay                                                                                           36,674 33,759
                                                                                              78,100 67,068
                                                                                                 
Revenues by type                                                                                              
                                                                                              Three months ended
                                                                                              November 30,
                                                                                              2010 2009
Advertising                                                                                           137,051 127,120
Subscriber fees                                                                                           73,762 67,419
Other                                                                                           29,838 27,790
                                                                                              240,651 222,329

SOURCE Corus Entertainment Inc.

For further information:

John Cassaday 
President and Chief Executive Officer 
Corus Entertainment Inc. 
416.479.6018 




























Tom Peddie
Executive Vice President and Chief
FinancialOfficer
Corus Entertainment Inc.
416.479.6080
                 
Sally Tindal
Director, Communications
Corus Entertainment Inc.
416.479.6107


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