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
“We are proud to have delivered both revenue and segment profit growth in such challenging economic times,” said
Second Quarter Results
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Consolidated revenues for the three months ended
Corus Television contributed quarterly revenues of
Corus Radio revenues were
Year-to-Date Results
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Consolidated revenues for the six months ended
Corus Television contributed six month revenues of
Corus Radio revenues for the six months were
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
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) February 28, August 31,
(in thousands of Canadian dollars) 2009 2008
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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
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Total current assets 340,196 329,726
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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
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2,091,439 2,033,653
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LIABILITIES AND SHAREHOLDERS' EQUITY
Current
Accounts payable and accrued liabilities 186,420 196,026
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Long-term debt 705,415 692,750
Other long-term liabilities 88,838 59,936
Future tax liability 93,448 87,699
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Total liabilities 1,074,121 1,036,411
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Non-controlling interest 17,798 20,237
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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)
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Total shareholders' equity 999,520 977,005
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2,091,439 2,033,653
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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
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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
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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
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Net income for the period 29,029 35,368 69,662 74,755
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Earnings per share (note 8)
Basic $0.36 $0.42 $0.87 $0.89
Diluted $0.36 $0.41 $0.86 $0.87
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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
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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)
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538 (6,083) (5,893) (12,874)
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Comprehensive income for
the period 29,567 29,285 56,315 61,881
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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
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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
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Balance, end of period 840,363 874,911 840,363 874,911
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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)
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Balance, end of period 14,516 13,515 14,516 13,515
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Retained earnings
Balance, beginning of
period 153,655 104,578 131,594 95,568
Cumulative impact of
accounting changes - - - (1,594)
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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)
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Balance, end of period 170,684 123,252 170,684 123,252
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Accumulated other
comprehensive loss
Balance, beginning of
period (26,581) (11,953) (20,150) (12,169)
Cumulative impact of
accounting changes - - - 7,007
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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)
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Balance, end of period (26,043) (18,036) (26,043) (18,036)
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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
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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)
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Cash provided by operating
activities 43,220 39,983 47,935 43,971
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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)
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Cash provided by (used in)
investing activities 2,446 (4,349) (285) (11,267)
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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)
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Cash used in financing
activities (29,306) (15,099) (27,868) (33,669)
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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
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Cash and cash equivalents,
end of period 39,424 32,382 39,424 32,382
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CORUS ENTERTAINMENT INC.
BUSINESS SEGMENT INFORMATION
Three months ended February 28, 2009
Tele- Elimi- Conso-
Radio vision Corporate nations lidated
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Revenues 57,935 123,423 - - 181,358
Direct cost of
sales, general
and administrative
expenses 50,825 75,932 3,592 - 130,349
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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)
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Income before
income taxes and
non-controlling
interest 5,476 49,154 (14,499) - 40,131
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Three months ended February 29, 2008
Tele- Elimi- Conso-
Radio vision Corporate nations lidated
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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
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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
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Income before
income taxes and
non-controlling
interest 8,356 40,244 (14,488) - 34,112
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Six months ended February 28, 2009
Tele- Elimi- Conso-
Radio vision Corporate nations lidated
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Revenues 133,463 264,680 - - 398,143
Direct cost of
sales, general
and administrative
expenses 104,342 152,919 8,531 - 265,792
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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)
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Income before
income taxes and
non-controlling
interest 24,603 106,867 (28,481) - 102,989
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Six months ended February 29, 2008
Tele- Elimi- Conso-
Radio vision Corporate nations lidated
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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
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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
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Income before
income taxes and
non-controlling
interest 32,195 95,418 (30,756) - 96,857
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SOURCE Corus Entertainment Inc.