Corus Entertainment announces third quarter results
- Bakugan, Pay TV and Women's advertising sales contribute to strong
quarter for Television
- The Company invests in future growth with the acquisition of SexTV
and Drive-In Classics
- Broadcast license and goodwill impairment charge recorded in Radio
“We continue to position our Company for growth in an improving economy,” said
Third 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
--------------------
Consolidated revenues for the nine months ended
Corus Television contributed nine month revenues of
Corus Radio revenues for the nine months were
Acquisition of SexTV and Drive-In Classics
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On
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 arise after the date thereof or otherwise.
CORUS ENTERTAINMENT INC.
CONSOLIDATED BALANCE SHEETS
As at As at
(unaudited) May 31, August 31,
(in thousands of Canadian dollars) 2009 2008
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ASSETS
Current
Cash and cash equivalents 32,377 19,642
Accounts receivable 161,875 157,440
Income taxes recoverable - 1,615
Prepaid expenses and other 9,658 10,135
Program and film rights 135,938 131,301
Future tax asset 1,346 9,593
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Total current assets 341,194 329,726
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Tax credits receivable 29,938 21,952
Investments and other assets 29,008 93,086
Property, plant and equipment 69,962 73,562
Program and film rights 118,741 103,163
Film investments 91,793 80,819
Broadcast licenses 548,883 533,491
Goodwill 689,096 797,854
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1,918,615 2,033,653
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LIABILITIES AND SHAREHOLDERS' EQUITY
Current
Accounts payable and accrued liabilities 184,375 196,026
Income taxes payable 5,024 -
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Total current liabilities 189,399 196,026
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Long-term debt 681,426 692,750
Other long-term liabilities 91,658 59,936
Future tax liability 92,883 87,699
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Total liabilities 1,055,366 1,036,411
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Non-controlling interest 19,784 20,237
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SHAREHOLDERS' EQUITY
Share capital 840,495 848,257
Contributed surplus 15,870 17,304
Retained earnings 13,652 131,594
Accumulated other comprehensive loss (26,552) (20,150)
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Total shareholders' equity 843,465 977,005
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1,918,615 2,033,653
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CORUS ENTERTAINMENT INC.
CONSOLIDATED STATEMENTS OF INCOME (LOSS)
(unaudited) Three months ended Nine months ended
(in thousands of May 31, May 31,
Canadian dollars except ------------------------------------------
per share amounts) 2009 2008 2009 2008
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Revenues 195,354 207,819 593,497 601,382
Direct cost of sales, general
and administrative expenses 133,938 136,047 399,730 396,487
Depreciation 4,795 4,974 14,986 16,253
Interest expense 8,945 10,345 29,013 31,407
Broadcast license and goodwill
impairment 175,000 - 175,000 -
Disputed regulatory fees 1,476 9,734 4,188 9,734
Other expense (income), net 2,330 63 (1,279) 3,988
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Income (loss) before income
taxes and non-controlling
interest (131,130) 46,656 (28,141) 143,513
Income tax expense 12,417 7,533 44,123 27,124
Non-controlling interest 1,483 1,449 3,104 3,960
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Net income (loss) for the
period (145,030) 37,674 (75,368) 112,429
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Earnings (loss) per share
Basic $(1.81) $0.45 $(0.94) $1.35
Diluted $(1.81) $0.45 $(0.94) $1.32
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CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)
Three months ended Nine months ended
(unaudited) May 31, May 31,
(in thousands of ------------------------------------------
Canadian dollars) 2009 2008 2009 2008
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Net income (loss) for the
period (145,030) 37,674 (75,368) 112,429
Other comprehensive income
(loss), net of tax
Unrealized foreign currency
translation adjustment (1,791) 213 526 (1,054)
Unrealized change in fair
value of available-for-sale
investments, net of tax 425 (1,121) (355) (938)
Recognition of change in fair
value of available-for sale
assets in net income - - 2,077 -
Unrealized change in fair
value of cash flow hedges,
net of tax 857 390 (8,650) (11,400)
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(509) (518) (6,402) (13,392)
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Comprehensive income (loss)
for the period (145,539) 37,156 (81,770) 99,037
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CORUS ENTERTAINMENT INC.
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS EQUITY
Three months ended Nine months ended
(unaudited) May 31, May 31,
(in thousands of ------------------------------------------
Canadian dollars) 2009 2008 2009 2008
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Share capital
Balance, beginning of period 840,363 874,911 848,257 882,244
Issuance of shares under
stock option plan 132 945 490 10,783
Shares repurchased - (10,170) (8,450) (27,571)
Repayment of executive stock
purchase loans - - 198 230
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Balance, end of period 840,495 865,686 840,495 865,686
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Contributed surplus
Balance, beginning of period 14,516 13,515 17,304 10,250
Stock-based compensation 1,363 2,237 3,713 6,156
Settlement of long-term
incentive plan - - (5,138) -
Exercise of stock options (9) (11) (9) (665)
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Balance, end of period 15,870 15,741 15,870 15,741
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Retained earnings
Balance, beginning of period 170,684 123,252 131,594 95,568
Cumulative impact of
accounting changes - - - (1,594)
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Adjusted opening balance 170,684 123,252 131,594 93,974
Net income (loss) for the
period (145,030) 37,674 (75,368) 112,429
Dividends (12,002) (12,347) (35,941) (35,238)
Share repurchase excess - (8,420) (6,633) (31,006)
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Balance, end of period 13,652 140,159 13,652 140,159
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Accumulated other
comprehensive loss
Balance, beginning of period (26,043) (18,036) (20,150) (12,169)
Cumulative impact of
accounting changes - - - 7,007
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Adjusted opening balance (26,043) (18,036) (20,150) (5,162)
Other comprehensive loss,
net of tax (509) (518) (6,402) (13,392)
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Balance, end of period (26,552) (18,554) (26,552) (18,554)
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CORUS ENTERTAINMENT INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
Three months ended Nine months ended
(unaudited) May 31, May 31,
(in thousands of ------------------------------------------
Canadian dollars) 2009 2008 2009 2008
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OPERATING ACTIVITIES
Net income (loss) for the
period (145,030) 37,674 (75,368) 112,429
Add (deduct) non-cash items:
Depreciation 4,795 4,974 14,986 16,253
Broadcast license and
goodwill impairment 175,000 - 175,000 -
Amortization of program
and film rights 41,191 35,875 117,708 107,862
Amortization of film
investments 5,686 8,885 15,724 21,496
Future income taxes 1,200 (1,966) 8,810 (7,029)
Non-controlling interest 1,483 1,449 3,104 3,960
Stock-based compensation 1,520 2,284 3,532 5,972
Imputed interest 1,833 1,591 5,144 4,728
Other gains and losses 197 543 (5,232) 1,680
Net change in non-cash working
capital balances related to
operations 3,087 (5,029) (4,420) (29,940)
Payment of program and
film rights (48,792) (40,657) (143,967) (118,339)
Net additions to film
investments (8,806) (13,212) (33,722) (42,690)
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Cash provided by operating
activities 33,364 32,411 81,299 76,382
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INVESTING ACTIVITIES
Additions to property, plant
and equipment (4,259) (2,975) (10,043) (10,102)
Business combinations - - (74,950) (774)
Cash held in escrow - - 74,950 -
Net cash flows for investments
and other assets (5) (2,600) 6,628 (4,021)
Decrease in public benefits
associated with acquisitions (302) (958) (1,436) (2,903)
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Cash used in investing
activities (4,566) (6,533) (4,851) (17,800)
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FINANCING ACTIVITIES
Increase (decrease) in bank
loans (23,968) 636 (10,298) 21,043
Issuance of shares under
stock option plan 123 934 481 10,118
Shares repurchased - (18,590) (15,083) (58,577)
Dividends paid (12,000) (12,436) (36,017) (34,027)
Dividend paid to
non-controlling interest - (139) (2,994) (1,742)
Other - (147) 198 (226)
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Cash used in financing
activities (35,845) (29,742) (63,713) (63,411)
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Net change in cash and cash
equivalents during the period (7,047) (3,864) 12,735 (4,829)
Cash and cash equivalents,
beginning of period 39,424 32,382 19,642 33,347
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Cash and cash equivalents,
end of period 32,377 28,518 32,377 28,518
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CORUS ENTERTAINMENT INC.
BUSINESS SEGMENT INFORMATION
Three months ended May 31, 2009
Tele- Elimi- Conso-
Radio vision Corporate nations lidated
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Revenues 65,508 129,846 - - 195,354
Direct cost of sales,
general and
administrative
expenses 49,436 79,174 5,328 - 133,938
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Segment profit 16,072 50,672 (5,328) - 61,416
Depreciation 1,677 2,174 944 - 4,795
Interest expense 243 1,467 7,235 - 8,945
Goodwill and
broadcast license
impairment 175,000 - - - 175,000
Disputed regulatory
fees 821 655 - - 1,476
Other expense
(income), net 3,165 (1,324) 489 - 2,330
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Income (loss) before
income taxes and
non-controlling
interest (164,834) 47,700 (13,996) - (131,130)
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Three months ended May 31, 2008
Tele- Elimi- Conso-
Radio vision Corporate nations lidated
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Revenues 76,964 130,957 - (102) 207,819
Direct cost of sales,
general and
administrative
expenses 52,276 77,553 6,320 (102) 136,047
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Segment profit 24,688 53,404 (6,320) - 71,772
Depreciation 1,615 2,309 1,050 - 4,974
Interest expense 262 1,147 8,936 - 10,345
Disputed regulatory
fees 5,421 4,313 - - 9,734
Other expense
(income), net (35) 940 (842) - 63
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Income (loss) before
income taxes and
non-controlling
interest 17,425 44,695 (15,464) - 46,656
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Nine months ended May 31, 2009
Tele- Elimi- Conso-
Radio vision Corporate nations lidated
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Revenues 198,971 394,526 - - 593,497
Direct cost of sales,
general and
administrative
expenses 153,778 232,093 13,859 - 399,730
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Segment profit 45,193 162,433 (13,859) - 193,767
Depreciation 4,950 6,959 3,077 - 14,986
Interest expense 697 3,867 24,449 - 29,013
Goodwill and
broadcast license
impairment 175,000 - - - 175,000
Disputed regulatory
fees 2,183 2,005 - - 4,188
Other expense
(income), net 2,594 (4,965) 1,092 - (1,279)
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Income (loss) before
income taxes and
non-controlling
interest (140,231) 154,567 (42,477) - (28,141)
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Nine months ended May 31, 2008
Tele- Elimi- Conso-
Radio vision Corporate nations lidated
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Revenues 217,967 383,617 - (202) 601,382
Direct cost of sales,
general and
administrative
expenses 157,522 222,408 16,759 (202) 396,487
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Segment profit 60,445 161,209 (16,759) - 204,895
Depreciation 4,788 7,609 3,856 - 16,253
Interest expense 779 3,525 27,103 - 31,407
Disputed regulatory
fees 5,421 4,313 - - 9,734
Other expense
(income), net (163) 5,649 (1,498) - 3,988
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Income (loss) before
income taxes and
non-controlling
interest 49,620 140,113 (46,220) - 143,513
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SOURCE Corus Entertainment Inc.