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
First Quarter Results
---------------------
Consolidated revenues for the three months ended
Corus Television contributed quarterly revenues of
Corus Radio revenues were
“This was a strong quarter for Corus, as we continued to grow the top line in a challenging market,” said
Revised 2009 Fiscal Guidance
----------------------------
Despite first quarter revenue growth, the Company expects that the slowdown in
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
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
The unaudited consolidated financial statements and accompanying notes for the quarter ended
A conference call with Corus senior management is scheduled for
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
-------------------------------------------------------------------------
-------------------------------------------------------------------------
SOURCE Corus Entertainment Inc.