-- 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 per share amounts) 2012 2011
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 Canadian dollars) 2012 2012
ASSETS
Current
Cash and cash equivalents 50,483 24,588
Accounts receivable 206,036 173,421
Income taxes recoverable — 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 assets 42,067 42,390
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 liabilities 203,214 185,991
Income taxes payable 16 —
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 loss (232) (812)
Total equity attributable to shareholders 1,153,826 1,115,473
Equity attributable to non-controlling interest 17,461 20,617
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 per share amounts) 2012 2011
Revenues 226,147 236,891
Direct cost of sales, general and administrative expenses 133,454 145,677
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 adjustment 290 1,124
Unrealized change in fair value of available-for-sale investments 290 (74)
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 - in thousands of Canadian dollars) Share Contributed Retained Accumulated Total equity Non- Total equity
capital surplus earnings other attributable to controlling
comprehensive shareholders interest
loss
At August 31, 2012 910,005 7,835 198,445 (812) 1,115,473 20,617 1,136,090
Comprehensive income — — 52,159 580 52,739 1,857 54,596
Dividends declared — — (20,050) — (20,050) (5,013) (25,063)
Issuance of shares under dividend 6,788 — — — 6,788 — 6,788
reinvestment plan
Shares repurchased (708) — (756) — (1,464) — (1,464)
Share-based compensation expense — 340 — — 340 — 340
At November 30, 2012 916,085 8,175 229,798 (232) 1,153,826 17,461 1,171,287
At August 31, 2011 882,679 10,299 143,717 (1,075) 1,035,620 19,200 1,054,820
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 106 (20) — — 86 — 86
plan
Issuance of shares under dividend 6,282 — — — 6,282 — 6,282
reinvestment plan
Shares repurchased (2,110) — (1,778) — (3,888) — (3,888)
Share-based compensation expense — 293 — — 293 — 293
At November 30, 2011 886,957 10,572 174,537 (25) 1,072,041 17,109 1,089,150
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 other assets 73 1,131
Other (88) (153)
Cash used in investing activities (3,557) (2,392)
FINANCING ACTIVITIES
Increase in bank loans 9,985 —
Issuance of shares under stock option plan — 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 period 25,895 2,087
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 — 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 — 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.