-- Monthly dividend increased 6.25%
-- Net income attributable to shareholders up 3%
-- Basic earnings per share attributable to shareholders up 3%
-- Segment profit up 2%
-- Strong segment profit margins for Television (45%) and Radio
(36%)
Corus Entertainment Inc. (TSX: CJR.B) announced its first quarter financial results today.
"Corus has delivered a solid first quarter, achieving double-digit
segment profit growth in Radio, strong Women's advertising sales,
subscriber gains on Pay television and continued success in controlling
costs, which was partially offset by soft results in our Kids
business," said John Cassaday, President and Chief Executive Officer,
Corus Entertainment. "Looking ahead, we expect our strong ratings
momentum on Oprah Winfrey Network, ABC Spark and Nickelodeon will
contribute to revenue growth as the fiscal year progresses."
Financial Highlights
Three months ended
November 30,
(unaudited - in thousands of Canadian dollars except 2012 2011
per share amounts)
Revenues
Television 173,823 185,027
Radio 52,324 51,864
226,147 236,891
Segment profit ((1))
Television 78,698 80,495
Radio 18,956 16,402
Corporate (4,961) (5,683)
92,693 91,214
Net income attributable to:
Shareholders 52,159 50,548
Non-controlling interest 1,857 2,132
54,016 52,680
Earnings per share attributable to shareholders:
Basic $ 0.63 $ 0.61
Diluted $ 0.62 $ 0.61
Free cash flow ((1)) 37,885 24,059
((1)) See definitions and discussion under Key Performance Indicators
in MD&A.
Consolidated Results from Continuing Operations
Consolidated revenues for the three months ended November 30, 2012 were
$226.1 million, down 5% from $236.9 million last year. Consolidated
segment profit was $92.7 million, up 2% from $91.2 million last year.
Net income attributable to shareholders for the quarter was $52.2
million ($0.63 basic and $0.62 diluted per share), up 3% compared to
$50.5 million ($0.61 basic and diluted per share) last year.
Operational Results - Highlights
Television
-- Segment revenues decreased 6%
-- Segment profit((1)) decreased 2%
-- Specialty advertising revenues decreased 3%
-- Subscriber revenues increased 1%
-- Movie Central finished the quarter with 998,000 subscribers, up
22,000 from the fourth quarter of fiscal 2012
-- Merchandising, distribution and other revenues decreased 25%
-- Segment profit margins of 45%
Radio
-- Segment revenues increased 1%
-- Segment profit((1)) increased 16%
-- Segment profit margins of 36%
((1) )See definitions and discussion under Key Performance Indicators in MD&A.
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, children's animation and animation
software. The Company's multimedia entertainment brands include YTV,
Treehouse, Nickelodeon (Canada), ABC Spark, W Network, OWN: Oprah
Winfrey Network (Canada), CosmoTV, Sundance Channel (Canada), Movie
Central, HBO Canada, Nelvana, Kids Can Press, Toon Boom and 37 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, 2012 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
15, 2013 at 4:00 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 1.800.909.4795 and
for local/international callers is 416.641.6684. PowerPoint slides for
the call will be posted 15 minutes prior to the start of the call 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 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 STATEMENTS OF FINANCIAL POSITION
As at November 30, As at August 31,
(unaudited - in thousands of 2012 2012
Canadian dollars)
ASSETS
Current
Cash and cash equivalents 50,483 24,588
Accounts receivable 206,036 173,421
Income taxes recoverable â?? 9,542
Prepaid expenses and other 14,633 12,664
Total current assets 271,152 220,215
Tax credits receivable 45,571 43,865
Intangibles, investments and other 42,067 42,390
assets
Property, plant and equipment 160,691 163,563
Program and film rights 276,743 271,244
Film investments 69,684 67,983
Broadcast licenses 569,505 569,505
Goodwill 674,393 674,393
Deferred tax assets 29,318 28,327
2,139,124 2,081,485
LIABILITIES AND SHAREHOLDERS'
EQUITY
Current
Accounts payable and accrued 203,214 185,991
liabilities
Income taxes payable 16 â??
Provisions 1,638 2,322
Total current liabilities 204,868 188,313
Long-term debt 528,898 518,258
Other long-term liabilities 83,357 87,853
Deferred tax liabilities 150,714 150,971
Total liabilities 967,837 945,395
SHAREHOLDERS' EQUITY
Share capital 916,085 910,005
Contributed surplus 8,175 7,835
Retained earnings 229,798 198,445
Accumulated other comprehensive (232) (812)
loss
Total equity attributable to 1,153,826 1,115,473
shareholders
Equity attributable to 17,461 20,617
non-controlling interest
Total shareholders' equity 1,171,287 1,136,090
2,139,124 2,081,485
CORUS ENTERTAINMENT INC.
CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME
Three months ended
November 30,
(unaudited - in thousands of Canadian dollars except 2012 2011
per share amounts)
Revenues 226,147 236,891
Direct cost of sales, general and administrative 133,454 145,677
expenses
Depreciation and amortization 6,429 6,239
Interest expense 12,132 13,427
Other expense, net 506 447
Income before income taxes 73,626 71,101
Income tax expense 19,610 18,421
Net income for the period 54,016 52,680
Net income attributable to:
Shareholders 52,159 50,548
Non-controlling interest 1,857 2,132
54,016 52,680
Earnings per share attributable to shareholders:
Basic $ 0.63 $ 0.61
Diluted $ 0.62 $ 0.61
Net income for the period 54,016 52,680
Other comprehensive income, net of tax:
Items that may be reclassified subsequently to
income:
Unrealized foreign currency translation 290 1,124
adjustment
Unrealized change in fair value of 290 (74)
available-for-sale investments
580 1,050
Comprehensive income for the period 54,596 53,730
Comprehensive income attributable to:
Shareholders 52,739 51,598
Non-controlling interest 1,857 2,132
54,596 53,730
CORUS ENTERTAINMENT INC.
CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY
(unaudited - Accumulated Total equity
in thousands other attributable Non-
of Canadian Share Contributed Retained comprehensive to controlling Total
dollars) capital surplus earnings loss shareholders interest equity
At August 31, 910,005 7,835 198,445 (812) 1,115,473 20,617 1,136,090
2012
Comprehensive
income â?? â?? 52,159 580 52,739 1,857 54,596
Dividends
declared â?? â?? (20,050) â?? (20,050) (5,013) (25,063)
Issuance of
shares under
dividend
reinvestment
plan 6,788 â?? â?? â?? 6,788 â?? 6,788
Shares (708) â?? (756) â?? (1,464) â?? (1,464)
repurchased
Share-based
compensation â??
expense 340 â?? â?? 340 â?? 340
At November 916,085 8,175 229,798 (232) 1,153,826 17,461 1,171,287
30, 2012
At August 31, 882,679 10,299 143,717 (1,075) 1,035,620 19,200 1,054,820
2011
Comprehensive â?? â?? 50,548 1,050 51,598 2,132 53,730
income
Dividends â?? â?? (17,950) â?? (17,950) (4,223) (22,173)
declared
Issuance of
shares under
stock option
plan 106 (20) â?? â?? 86 â?? 86
Issuance of
shares under
dividend
reinvestment
plan 6,282 â?? â?? â?? 6,282 â?? 6,282
Shares (2,110) â?? (1,778) â?? (3,888) â?? (3,888)
repurchased
Share-based â?? 293 â?? â?? 293 â?? 293
compensation
expense
At November 886,957 10,572 174,537 (25) 1,072,041 17,109 1,089,150
30, 2011
CORUS ENTERTAINMENT INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
Three months ended
November 30,
(unaudited - in thousands of Canadian dollars) 2012 2011
OPERATING ACTIVITIES
Net income for the period 54,016 52,680
Add (deduct) non-cash items:
Depreciation and amortization 6,429 6,239
Amortization of program and film rights 45,693 47,055
Amortization of film investments 6,207 9,987
Deferred income taxes (1,294) 1,362
Share-based compensation expense 340 293
Imputed interest 2,525 3,034
Other (304) (243)
Net change in non-cash working capital
balances related to operations (29,133) (41,391)
Payment of program and film rights (27,626) (35,429)
Net additions to film investments (16,074) (17,136)
Cash provided by operating activities 40,779 26,451
INVESTING ACTIVITIES
Additions to property, plant and equipment (3,542) (3,370)
Net cash flows for intangibles, investments and 73 1,131
other assets
Other (88) (153)
Cash used in investing activities (3,557) (2,392)
FINANCING ACTIVITIES
Increase in bank loans 9,985 â??
Issuance of shares under stock option plan â?? 86
Shares repurchased (1,464) (3,888)
Dividends paid (13,223) (11,675)
Dividends paid to non-controlling interest (4,313) (4,223)
Other (2,312) (2,272)
Cash used in financing activities (11,327) (21,972)
Net change in cash and cash equivalents during the 25,895 2,087
period
Cash and cash equivalents, beginning of the period 24,588 55,922
Cash and cash equivalents, end of the period 50,483 58,009
CORUS ENTERTAINMENT INC.
BUSINESS SEGMENT INFORMATION
(unaudited - in thousands of Canadian dollars)
Three months ended November 30, 2012
Radio Television Corporate Consolidated
Revenues 52,324 173,823 â?? 226,147
Direct cost of sales, general
and administrative expenses 33,368 95,125 4,961 133,454
Segment profit (loss)((1)) 18,956 78,698 (4,961) 92,693
Depreciation and amortization 6,429
Interest expense 12,132
Other expense, net 506
Income before income taxes 73,626
Three months ended November 30, 2011
Radio Television Corporate Consolidated
Revenues 51,864 185,027 â?? 236,891
Direct cost of sales, general
and administrative expenses 35,462 104,532 5,683 145,677
Segment profit (loss)((1)) 16,402 80,495 (5,683) 91,214
Depreciation and amortization 6,239
Interest expense 13,427
Other expense, net 447
Income before income taxes 71,101
((1)) See definitions and discussion under Key Performance
Indicators in MD&A.
Revenues by type
Three months ended
November 30,
2012 2011
Advertising 117,894 119,449
Subscriber fees 74,981 74,141
Merchandising, distribution and other 33,272 43,301
226,147 236,891
SOURCE: Corus Entertainment Inc.
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SOURCE: Corus Entertainment Inc.
416.479.6018 Tom Peddie Executive Vice President and Chief Financial Officer
Corus Entertainment Inc. 416.479.6080 Sally Tindal Director, Communications Corus
Entertainment Inc. 416.479.6107