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CORUS ENTERTAINMENT ANNOUNCES FISCAL 2010 FOURTH QUARTER AND YEAR-END RESULTS

October 27, 2010
  • Specialty advertising revenue growth of 22% in the fourth quarter and 9%
    for the fiscal year
  • Radio advertising growth of 6% in the fourth quarter
  • Subscriber growth of 6% in the fourth quarter and 10% for the fiscal
    year
  • Segment profit up 5% for the fiscal year and achieved within stated
    guidance range, despite additional regulatory fees and copyright
    tariffs of almost $7 million over the same period
  • Consolidated revenues increase 4% in the fourth quarter and 6% for the
    fiscal year

TORONTO, Oct. 27 /PRNewswire-FirstCall/ – Corus Entertainment Inc. (TSX: CJR.B) announced
its fourth quarter and year-end financial results today.

“The advertising recovery continued in the fourth quarter, particularly
for our Specialty assets.  This continues a trend we have seen for
three successive quarters,” said John Cassaday, President and CEO of
Corus Entertainment. “We have also seen a return to growth in western
Canada radio markets.  Corus is well positioned to meet its guidance
once again for fiscal 2011.  Ad markets continue to track well and we
will benefit from our investment in technology at our newly opened

Corus Quay facilities at Toronto’s waterfront.” 

Financial Highlights        
         
(unaudited) Three months ended Twelve months ended
(in thousands of Canadian dollars except per share amounts) August 31, August 31,
  201 2009  201 2009 
Revenues        
  Radio 62,934  59,941  261,124  258,912 
  Television 139,855  135,488  575,097  530,014 
  Eliminations (208) (208)
  202,789  195,221  836,221  788,718 
Segment profit        
  Radio 13,265  15,145  65,531  60,338 
  Television 46,955  46,712  226,679  209,145 
  Corporate (8,639) (4,434) (28,141) (18,293)
  51,581  57,423  264,069  251,190 
         
Net income (loss) 6,81 18,733  126,734  (56,635)
Earnings (loss) per share        
  Basic $ 0.08 $ 0.23 $ 1.57 $ (0.71)
  Diluted $ 0.08 $ 0.23 $ 1.56 $ (0.71)

Consolidated Results

Consolidated revenues for the three months ended August 31, 2010 were
$202.8 million, up 4% from $195.2 million last year.  Consolidated
segment profit was $51.6 million, down 10% from $57.4 million last
year.  Net income for the quarter was $6.8 million ($0.08 basic and
diluted), compared to net income of $18.7 million ($0.23 basic and
diluted) last year. Net income for the current year’s quarter includes
a Radio tariff accrual of $7.9 million ($0.06 per basic share) and
restructuring charges of $12.9 million ($0.10 per basic share). 

Consolidated revenues for the twelve months ended August 31, 2010 were
$836.2 million, up 6% from $788.7 million last year.  Consolidated
segment profit was $264.1 million, up 5% from $251.2 million last
year.  Net income for the fiscal year was $126.7 million ($1.57 basic
and $1.56 diluted), compared to a net loss of $56.6 million (loss of
$0.71 basic and diluted) last year.  Net income for the prior year
includes a $172.5 million ($2.15 per basic share) after-tax broadcast
license and goodwill impairment charge.

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 and children’s animation.  The company’s
multimedia entertainment brands include YTV, Treehouse, Nickelodeon
(Canada), W Network, CosmoTV, VIVA, Sundance Channel (Canada), Movie
Central, HBO Canada, Nelvana, Kids Can Press and radio stations
including CKNW, CFOX, CKOI, 98.5 FM, 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 and twelve months ended August 31, 2010 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 October
27, 2010
at 4 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 1.800.919.1728 and
for local/international callers is 416.981.9025.  PowerPoint slides for
the call will be posted at 3:45 p.m. ET on October 27, 2010 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, 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
(unaudited) As at August 31, As at August 31,
(in thousands of Canadian dollars) 2010  2009 
ASSETS    
Current    
Cash and cash equivalents 7,969  10,922 
Accounts receivable 175,134  146,784 
Income tax recoverable 1,781  7,267 
Prepaid expenses and other 18,008  14,377 
Program rights 159,726  146,195 
Future tax asset 6,423  1,788 
Total current assets 369,041  327,333 
     
Tax credits receivable 39,597  26,698 
Investments and other assets 22,699  23,693 
Capital assets 161,585  76,450 
Program rights 88,684  92,579 
Film investments 100,454  92,180 
Broadcast licenses 582,166  561,741 
Goodwill 695,029  674,029 
  2,059,255  1,874,703 
     
LIABILITIES AND SHAREHOLDERS’ EQUITY    
Current    
Accounts payable and accrued liabilities 203,422  171,055 
Long-term debt 691,891  651,767 
Other long-term liabilities 91,423  73,360 
Future tax liability 98,516  102,842 
Total liabilities 1,085,252  999,024 
     
Non-controlling interest 18,055  21,401 
     
SHAREHOLDERS’ EQUITY    
Share capital 856,655  840,602 
Contributed surplus 11,780  17,303 
Retained earnings 98,669  20,380 
Accumulated other comprehensive income (11,156) (24,007)
Total shareholders’ equity 955,948  854,278 
  2,059,255  1,874,703 
 
 
CORUS ENTERTAINMENT INC.
CONSOLIDATED STATEMENTS OF INCOME (LOSS)
         
  Three months ended Twelve months ended
(unaudited) August 31, August 31,
(in thousands of Canadian dollars except per share amounts) 2010  2009  2010  2009 
Revenues 202,789  195,221  836,221  788,718 
Direct cost of sales, general and        
  administrative expenses 151,208  137,798  572,152  537,528 
Depreciation 8,018  5,718  23,151  20,704 
Interest expense 14,878  8,413  47,223  37,426 
Broadcast license and goodwill impairment 175,000 
Disputed regulatory fees 1,070  (16,194) 5,258 
Debt refinancing loss 14,256 
Restructuring charges 12,924  5,440  12,924  8,632 
Other expense (income), net 7,627  4,267  14,972  (204)
Income before income taxes and        
  non-controlling interest 8,134  32,515  167,737  4,374 
Income tax expense (94) 12,227  35,119  56,350 
Non-controlling interest 1,416  1,555  5,884  4,659 
Net income (loss) for the period 6,812  18,733  126,734  (56,635)
         
Earnings (loss) per share        
  Basic $ 0.08 $ 0.23 $ 1.57 $ (0.71)
  Diluted $ 0.08 $ 0.23 $ 1.56 $ (0.71)
         
 
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)
  Three months ended Twelve months ended
(unaudited) August 31, August 31,
(in thousands of Canadian dollars except per share amounts) 2010  2009  2010  2009 
Net income (loss) for the period 6,812  18,733  126,734  (56,635)
Other comprehensive income (loss), net of tax        
  Unrealized foreign currency translation adjustment 516  192  (24) 718 
  Unrealized change in fair value of available-for-sale        
     investments, net of tax (89) 102  200  (253)
  Recognition of change in fair value of available-        
     for-sale assets in net income (385) 1,692 
  Unrealized change in fair value of cash flow hedges,        
     net of tax 2,636  3,431  (6,014)
  Recognition of change in fair value of cash flow        
     hedge in net income, net of tax 9,244 
  427  2,545  12,851  (3,857)
Comprehensive income (loss) for the period 7,239  21,278  139,585  (60,492)
 
 
CORUS ENTERTAINMENT INC.
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY
         
  Three months ended Twelve months ended
(unaudited) August 31, August 31,
(in thousands of Canadian dollars) 2010  2009  2010  2009 
Share capital        
Balance, beginning of period 853,833  840,495  840,602  848,257 
Issuance of shares under stock option plan 1,517  107  12,027  597 
Shares repurchased (8,450)
Issuance of shares under dividend reinvestment plan 1,275  3,731 
Repayment of executive stock purchase loans 30  295  198 
Balance, end of period 856,655  840,602  856,655  840,602 
         
Contributed surplus        
Balance, beginning of period 11,901  15,870  17,303  17,304 
Stock-based compensation 235  1,441  907  5,154 
Settlement and modification of long-term incentive plan (4,659) (5,138)
Exercise of stock options (356) (8) (1,771) (17)
Balance, end of period 11,780  17,303  11,780  17,303 
         
Retained earnings        
Balance, beginning of period 104,027  13,652  20,380  131,594 
Net income for the period 6,812  18,733  126,734  (56,635)
Dividends (12,170) (12,005) (48,445) (47,946)
Share repurchase excess (6,633)
Balance, end of period 98,669  20,380  98,669  20,380 
         
Accumulated other comprehensive loss        
Balance, beginning of period (11,583) (26,552) (24,007) (20,150)
Other comprehensive income (loss), net of tax 427  2,545  12,851  (3,857)
Balance, end of period (11,156) (24,007) (11,156) (24,007)
 
 
CORUS ENTERTAINMENT INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
         
  Three months ended Twelve months ended
(unaudited) August 31, August 31,
(in thousands of Canadian dollars) 2010  2009  2010  2009 
OPERATING ACTIVITIES        
Net income (loss) for the period 6,812  18,733  126,734  (56,635)
Add (deduct) non-cash items:        
   Depreciation 8,018  5,718  23,151  20,704 
   Broadcast license and goodwill impairment 175,000 
   Amortization of program rights 41,976  41,824  166,150  159,532 
   Amortization of film investments 12,330  9,821  38,456  25,545 
   Future income taxes (550) 4,827  (14,167) 13,637 
   Non-controlling interest 1,416  1,555  5,884  4,659 
   Stock option expense 235  343  907  1,314 
   Imputed interest 2,709  1,910  8,635  7,054 
   Debt refinancing loss 14,256 
   Other losses (gains) 2,393  4,800  1,945  (432)
Net changes in non-cash working capital        
   balances related to operations (5,511) (2,790) 3,476  (4,649)
Payment of program rights (41,765) (45,616) (167,310) (189,583)
Net additions to film investments (17,208) (9,185) (64,051) (42,907)
Cash provided by operating activities 10,855  31,940  144,066  113,239 
         
INVESTING ACTIVITIES        
Additions to property, plant and equipment (30,982) (12,460) (83,049) (22,503)
Business combinations (4,000) (1,583) (40,000) (76,533)
Cash held in escrow 74,950 
Net cash flows for investments and other assets 461  338  2,745  6,966 
Decrease in public benefits associated with        
   acquisitions 259  (1,308) (820) (2,744)
Cash used in investing activities (34,262) (15,013) (121,124) (19,864)
         
FINANCING ACTIVITIES        
Increase (decrease) in bank loans 9,638  (29,921) (444,938) (40,219)
Issuance of senior unsecured guaranteed notes 500,000 
Financing and swap termination fees (30,997)
Issuance of shares under stock option plan 1,161  99  10,256  580 
Shares repurchased (15,083)
Dividends paid (10,880) (12,004) (44,605) (48,021)
Dividend paid to non-controlling interest (960) (10,220) (2,994)
Other (2,212) 3,444  (5,391) 3,642 
Cash used in financing activities (3,253) (38,382) (25,895) (102,095)
Net change in cash and cash equivalents        
   during the period (26,660) (21,455) (2,953) (8,720)
Cash and cash equivalents, beginning of period 34,629  32,377  10,922  19,642 
Cash and cash equivalents, end of period 7,969  10,922  7,969  10,922 
 
 
CORUS ENTERTAINMENT INC.
BUSINESS SEGMENT INFORMATION
(unaudited)
(in thousands of Canadian dollars except per share amounts)
             
Three months ended August 31, 2010
    Radio Television Corporate Eliminations Consolidated
Revenues 62,934 139,855 - - 202,789
Direct cost of sales, general          
  and administrative expenses 49,669  92,900  8,639  151,208 
Segment profit 13,265  46,955  (8,639) 51,581 
Depreciation 2,241  4,404  1,373  8,018 
Interest expense 176  1,440  13,262  14,878 
Restructuring charges 5,506  5,055  2,363  12,924 
Other expense (income), net 2,419 1,585  3,623 7,627 
Income before income taxes and          
  non-controlling interest 2,923 34,471  (29,260) 8,134 
             
Three months ended August 31, 2009
    Radio Television Corporate Eliminations Consolidated
Revenues 59,941  135,488  (208) 195,221 
Direct cost of sales, general          
  and administrative expenses 44,796  88,776  4,434  (208) 137,798 
Segment profit 15,145  46,712  (4,434) 57,423 
Depreciation 1,848  2,634  1,236  5,718 
Interest expense 231  1,296  6,886  8,413 
Disputed regulatory fees 563  507  1,070 
Restructuring charges 5,440  5,440 
Other expense (income), net (146) 5,818  (1,405) 4,267 
Income before income taxes and          
  non-controlling interest 7,209  36,457  (11,151) 32,515 
             
Twelve months ended August 31, 2010          
    Radio Television Corporate Eliminations Consolidated
Revenues 261,124  575,097  836,221 
Direct cost of sales, general          
  and administrative expenses 195,593  348,418  28,141  572,152 
Segment profit 65,531  226,679  (28,141) 264,069 
Depreciation 7,088  10,000  6,063  23,151 
Interest expense 788  5,091  41,344  47,223 
Disputed regulatory fees (8,901) (7,293) (16,194)
Debt refinancing loss 14,256  14,256 
Restructuring charges 5,506  5,055  2,363  12,924 
Other expense (income), net 2,488 2,148  10,336 14,972 
Income before income taxes and          
  non-controlling interest 58,562 211,678  (102,503) 167,737 
           
Twelve months ended August 31, 2009          
    Radio Television Corporate Eliminations Consolidated
Revenues 258,912  530,014  (208) 788,718 
Direct cost of sales, general          
  and administrative expenses 198,574  320,869  18,293  (208) 537,528 
Segment profit 60,338  209,145  (18,293) 251,190 
Depreciation 6,798  9,593  4,313  20,704 
Interest expense 928  5,163  31,335  37,426 
Broadcast license and goodwill impairment 175,000  175,000 
Disputed regulatory fees 2,746  2,512  5,258 
Restructuring charges 8,632  8,632 
Other expense (income), net (744) 853  (313) (204)
Income before income taxes and          
  non-controlling interest (133,022) 191,024  (53,628) 4,374 
Revenues by segment        
    Three months ended Twelve months ended
    August 31, August 31,
    2010  2009  2010  2009 
Radio        
West 22,251  21,881  93,470  100,544 
Ontario 23,934  22,364  92,052  85,185 
Quebec and other 16,749  15,696  75,602  73,183 
    62,934  59,941  261,124  258,912 
           
Television        
Kids 58,497  58,648  240,568  222,925 
Specialty and Pay 81,35 76,840  334,529  307,089 
    139,855  135,488  575,097  530,014 
           
Segment profit        
    Three months ended Twelve months ended
    August 31, August 31,
    2010  2009  2010  2009 
Radio        
West 6,333  7,678  30,295  35,319 
Ontario 7,257  8,219  27,417  23,681 
Quebec and other (325) (752) 7,819  1,338 
    13,265  15,145  65,531  60,338 
           
Television        
Kids 18,327  21,709  97,126  89,745 
Specialty and Pay 28,628  25,003  129,553  119,400 
    46,955  46,712  226,679  209,145 
           
Revenues by type        
    Three months ended Twelve months ended
    August 31, August 31,
    2010  2009  2010  2009 
Advertising 99,353  90,238  435,024  418,992 
Subscriber fees 71,946  67,995  283,170  257,471 
Other 31,490  36,988  118,027  112,255 
    202,789  195,221  836,221  788,718 

SOURCE Corus Entertainment Inc.


Source: newswire



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