Corus Entertainment Announces Fiscal 2013 Second Quarter Results

  • Adjusted net income attributable to shareholders of $24.4 million for the second quarter and $76.6 million year-to-date
  • Free cash flow up 12% year-to-date
  • Consolidated segment profit margins of 30% for the second quarter and 36% year-to-date
  • Movie Central finished the quarter above 1 million subscribers

TORONTO, April 11, 2013 /PRNewswire/ - Corus Entertainment Inc. (TSX: CJR.B) announced its second quarter and six months year-to-date financial results today.

"The second quarter business results were soft, as expected, but we were able to end the first half of the year with significant increases in year-to-date free cash flow and improved margins," said John Cassaday, President and Chief Executive Officer of Corus Entertainment.  "The highlight of the quarter was the successful refinancing of our Senior Unsecured Guaranteed Notes, which resulted in a 300 basis point reduction in our financing costs.  This activity was followed up by a series of significant transactions subsequent to the quarter, certain of which are subject to CRTC approval, which will enable us to expand our presence in Radio, consolidate our position in TELETOON and ABC Spark, enter the Quebec specialty television market and realize substantial gains on the sale of our minority interest in the Food Network (Canada) and on the revaluation of TELETOON."

Financial Highlights

          Three months ended       Six months ended
        February 28,   February 29,       February 28,   February 29,
(unaudited - in thousands of Canadian dollars except per share amounts)         2013    2012        2013    2012 
Revenues                          
  Television         143,423    163,299       317,246   348,326
  Radio         40,277    42,384       92,601   94,248
          183,700    205,683       409,847   442,574
                           
Segment profit (1)                          
  Television         51,796    60,421       130,494   140,916
  Radio         9,654    9,879       28,610   26,281
  Corporate         (6,802)   (8,053)       (11,763)   (13,736)
          54,648    62,247       147,341   153,461
                             
Net income attributable to shareholders         5,944    31,571       58,103   82,119
Adjusted net income attributable to shareholders (1) (2)         24,432    31,571       76,591   82,119
                           
                       
Basic earnings per share         $ 0.07   $ 0.38       $ 0.70   $ 0.99
Adjusted basic earnings per share (1) (2)         $ 0.29   $ 0.38       $ 0.92   $ 0.99
Diluted earnings per share         $ 0.07   $ 0.38       $ 0.69   $ 0.99
                         
Free cash flow (1)         45,974   50,772       83,859   74,831
(1) See definitions and discussion under Key Performance Indicators in MD&A
(2) Excludes the impact of debt refinancing costs of $25.0 million ($0.22 per share)



Consolidated Results from Continuing Operations

Consolidated revenues for the three months ended February 28, 2013 were $183.7 million, down 11% from $205.7 million last year.  Consolidated segment profit was $54.6 million, down 12% from $62.2 million last year.  Net income attributable to shareholders for the quarter was $5.9 million ($0.07 basic and diluted per share), compared to $31.6 million ($0.38 basic and diluted per share) last year.  Net income for the current quarter includes a pre-tax charge for debt refinancing of $25.0 million.  Removing the impact of this item results in adjusted net income attributable to shareholders of $24.4 million ($0.29 per share) in the current quarter.

Consolidated revenues for the six months ended February 28, 2013 were $409.8 million, down 7% from $442.6 million last year.  Consolidated segment profit was $147.3 million, down 4% from $153.5 million last year.  Net income attributable to shareholders for the six months was $58.1 million ($0.70 basic and $0.69 diluted per share), compared to $82.1 million ($0.99 basic and diluted per share) last year.  Removing the impact of the debt refinancing costs results in adjusted net income attributable to shareholders of $76.6 million ($0.92 per share) in the current year.

Operational Results - Highlights

Television

  • Movie Central finished the quarter with 1,013,000 subscribers, up 37,000 year-to-date
  • Segment profit margin of 41% year-to-date
  • Segment revenues decreased 12% in Q2 2013 and 9% year-to-date
  • Segment profit(1) decreased 14% in Q2 2013 and 7% year-to-date

Radio

  • Segment profit margin of 31% year-to-date
  • Segment revenues decreased 5% in Q2 2013 and 2% year-to-date
  • Segment profit(1) decreased 2% in Q2 2013, but increased 9% year-to-date

Other

  • Issued $550.0 million of 4.25% Senior Unsecured Guaranteed Notes due in 2020
  • Agreements completed, subsequent to the quarter, to extend Radio presence into Ottawa, consolidate ownership of TELETOON and ABC Spark, acquire 100% of Historia and Séries+, and divest Corus' minority interest in the Food Network (Canada)

(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), Cosmopolitan TV, 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 and six months ended February 28, 2013 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 April 11, 2013 at 2:00 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 1.800.732.6870 and for local/international callers is 416.981.9030.  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 February 28,       As at August 31,
(unaudited - in thousands of Canadian dollars)   2013        2012 
ASSETS            
Current            
Cash and cash equivalents   573,781        24,588 
Accounts receivable   181,842        173,421 
Income taxes recoverable   961        9,542 
Prepaid expenses and other   12,134        12,664 
Asset held-for-sale   9,881       
Total current assets   778,599        220,215 
             
Tax credits receivable   45,799        43,865 
Intangibles, investments and other assets   39,361        42,390 
Property, plant and equipment   157,070        163,563 
Program and film rights   274,749        271,244 
Film investments   79,382        67,983 
Broadcast licenses   569,505        569,505 
Goodwill   674,393        674,393 
Deferred tax assets   35,096        28,327 
    2,653,954        2,081,485 
             
LIABILITIES AND SHAREHOLDERS' EQUITY            
Current            
Accounts payable and accrued liabilities   191,672        185,991 
Provisions   1,198        2,322 
Current portion of long-term debt   518,125        — 
Total current liabilities   710,995        188,313 
             
Long-term debt   537,957        518,258 
Other long-term liabilities   88,167        87,853 
Deferred tax liabilities   151,071        150,971 
Total liabilities   1,488,190        945,395 
             
             
SHAREHOLDERS' EQUITY            
Share capital   923,806        910,005 
Contributed surplus   8,322        7,835 
Retained earnings   214,347        198,445 
Accumulated other comprehensive income (loss)   995        (812)
Total equity attributable to shareholders   1,147,470        1,115,473 
Equity attributable to non-controlling interest   18,294        20,617 
Total shareholders' equity   1,165,764        1,136,090 
    2,653,954        2,081,485 
             




CORUS ENTERTAINMENT INC.
CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME
                 
    Three months ended Six months ended
(unaudited - in thousands of Canadian dollars except per share amounts)   February 28,
2013
  February 29,
2012
  February 28,
2013
  February 29,
2012
Revenues   183,700    205,683    409,847    442,574 
Direct cost of sales, general and administrative expenses   129,052    143,436    262,506    289,113 
Depreciation and amortization   7,517    6,653    13,946    12,892 
Interest expense   13,271    13,410    25,403    26,837 
Debt refinancing   25,033    —    25,033    —  
Other (income) expense, net   (426)   (1,617)   80    (1,170)
                 
Income before income taxes   9,253    43,801    82,879    114,902 
Income tax expense   2,373    10,262    21,983    28,683 
                 
Net income for the period   6,880    33,539    60,896    86,219 
                 
Net income attributable to:                
     Shareholders   5,944    31,571    58,103    82,119 
     Non-controlling interest   936    1,968    2,793    4,100 
    6,880    33,539    60,896    86,219 
                 
Earnings per share attributable to shareholders:                
     Basic   $ 0.07   $ 0.38   $ 0.70   $ 0.99
     Diluted   $ 0.07   $ 0.38   $ 0.69   $ 0.99
                 
Net income for the period   6,880    33,539    60,896    86,219 
Other comprehensive income (loss), net of tax:                
Items that may be reclassified subsequently to income:                
     Unrealized foreign currency translation adjustment   1,191    (587)   1,481    537 
     Unrealized change in fair value of available-for-sale investments   36    (17)   326    (91)
    1,227    (604)   1,807    446 
Comprehensive income for the period   8,107    32,935    62,703    86,665 
                 
Comprehensive income attributable to:                
     Shareholders   7,171    30,967    59,910    82,565 
     Non-controlling interest   936    1,968    2,793    4,100 
    8,107    32,935    62,703    86,665 
                   




CORUS ENTERTAINMENT INC.
CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY
               
               
               
(unaudited - in thousands of Canadian
dollars)
Share
capital
Contributed
surplus
Retained
earnings
Accumulated
other
comprehensive
income (loss)
Total equity
attributable
to
shareholders
Non-
controlling
interest
Total
equity
               
At August 31, 2012 910,005  7,835  198,445  (812) 1,115,473  20,617  1,136,090 
Comprehensive income —   —   58,103  1,807  59,910  2,793  62,703 
Dividends declared —   —   (41,445) (41,445) (5,116) (46,561)
Issuance of shares under stock option plan 994  (245) —   749  —  749 
Issuance of shares under dividend reinvestment plan 13,515  —   —   13,515  —  13,515 
Shares repurchased (708) —   (756) (1,464) —  (1,464)
Share-based compensation expense —   732  —   732  —  732 
               
At February 28, 2013 923,806  8,322  214,347  995  1,147,470  18,294  1,165,764 
               
               
At August 31, 2011 882,679  10,299  143,717  (1,075) 1,035,620  19,200  1,054,820 
Comprehensive income —   —   82,119  446  82,565  4,100  86,665 
Dividends declared —   —   (37,968) —   (37,968) (4,423) (42,391)
Issuance of shares under stock option plan 11,448  (3,111) —   —   8,337  —   8,337 
Issuance of shares under dividend reinvestment plan 12,839  —   —   —   12,839  —   12,839 
Shares repurchased (2,110) —   (1,778) —   (3,888) —   (3,888)
Share-based compensation expense —   592  —   —   592  —   592 
               
At February 29, 2012 904,856  7,780  186,090  (629) 1,098,097  18,877  1,116,974 
               




CORUS ENTERTAINMENT INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
               
  Three months ended Six months ended
(unaudited - in thousands of Canadian dollars)   February 28,
2013
  February 29,
2012
  February 28,
2013
  February 29,
2012
OPERATING ACTIVITIES                
Net income for the period   6,880    33,539    60,896    86,219 
Add (deduct) non-cash items:                
   Depreciation and amortization   7,517    6,653    13,946    12,892 
   Amortization of program and film rights   46,908    46,433    92,601    93,488 
   Amortization of film investments   3,501    7,960    9,708    17,947 
   Deferred income taxes   (5,432)   3,424    (6,726)   4,786 
   Share-based compensation expense   392    299    732    592 
   Imputed interest   2,628    2,976    5,153    6,010 
   Debt refinancing   25,033    —     25,033    —  
   Other   590    (547)   286    (790)
Net change in non-cash working capital                
   balances related to operations   19,587    20,665    (9,546)   (20,726)
Payment of program and film rights   (39,806)   (50,997)   (67,432)   (86,426)
Net additions to film investments   (18,160)   (16,837)   (34,234)   (33,973)
Cash provided by operating activities   49,638    53,568    90,417    80,019 
                 
INVESTING ACTIVITIES                
Additions to property, plant and equipment   (3,930)   (4,714)   (7,472)   (8,084)
Net cash flows for intangibles, investments and other assets   (7,039)   (122)   (6,966)   1,009 
Other   (236)   (165)   (324)   (318)
Cash used in investing activities   (11,205)   (5,001)   (14,762)   (7,393)
                 
FINANCING ACTIVITIES                
Decrease in bank loans   (39,910)   (34,674)   (29,925)   (34,674)
Issuance of notes   550,000    —     550,000    —  
Financing fees   (8,607)   —     (8,607)   —  
Issuance of shares under stock option plan   749    8,251    749    8,337 
Shares repurchased   —     —     (1,464)   (3,888)
Dividends paid   (13,775)   (12,145)   (26,998)   (23,820)
Dividends paid to non-controlling interest   (803)   (200)   (5,116)   (4,423)
Other   (2,789)   (2,233)   (5,101)   (4,505)
Cash provided by (used in) financing activities   484,865    (41,001)   473,538    (62,973)
Net change in cash and cash equivalents during the period   523,298    7,566    549,193    9,653 
Cash and cash equivalents, beginning of the period   50,483    58,009    24,588    55,922 
Cash and cash equivalents, end of the period   573,781    65,575    573,781    65,575 
                   




CORUS ENTERTAINMENT INC.
BUSINESS SEGMENT INFORMATION
 
(unaudited - in thousands of Canadian dollars)
                   
Three months ended February 28, 2013
      Radio   Television   Corporate   Consolidated
Revenues   40,277    143,423    —     183,700 
Direct cost of sales, general and administrative expenses   30,623    91,627    6,802    129,052 
Segment profit (loss)(1)   9,654    51,796    (6,802)   54,648 
Depreciation and amortization               7,517 
Interest expense               13,271 
Debt refinancing               25,033 
Other expense (income), net               (426)
Income before income taxes               9,253 
                   
Three months ended February 29, 2012
      Radio   Television   Corporate   Consolidated
Revenues   42,384    163,299    —     205,683 
Direct cost of sales, general and administrative expenses   32,505    102,878    8,053    143,436 
Segment profit (loss)(1)   9,879    60,421    (8,053)   62,247 
Depreciation and amortization               6,653 
Interest expense               13,410 
Other expense (income), net               (1,617)
Income before income taxes               43,801 
                   
Six months ended February 28, 2013                
      Radio   Television   Corporate   Consolidated
Revenues   92,601    317,246    —     409,847 
Direct cost of sales, general and administrative expenses   63,991    186,752    11,763    262,506 
Segment profit (loss)(1)   28,610    130,494    (11,763)   147,341 
Depreciation and amortization               13,946 
Interest expense               25,403 
Debt refinancing               25,033 
Other expense (income), net               80 
Income before income taxes               82,879 
                   
Six months ended February 29, 2012                
      Radio   Television   Corporate   Consolidated
Revenues   94,248    348,326    —     442,574 
Direct cost of sales, general and administrative expenses   67,967    207,410    13,736    289,113 
Segment profit (loss)(1)   26,281    140,916    (13,736)   153,461 
Depreciation and amortization               12,892 
Interest expense               26,837 
Other expense (income), net               (1,170)
Income before income taxes               114,902 
(1) See definitions and discussion under Key Performance Indicators in MD&A.
                 


Revenues by type                  
      Three months ended     Six months ended
      February 28,   February 29,     February 28,   February 29,
      2013    2012      2013    2012 
Advertising   80,506    83,870      198,400    203,319 
Subscriber fees   73,798    75,924      148,779    150,065 
Merchandising, distribution and other   29,396    45,889      62,668    89,190 
      183,700    205,683      409,847    442,574 



  

SOURCE Corus Entertainment Inc.



More by this Source


Custom Packages

Browse our custom packages or build your own to meet your unique communications needs.

Start today.

 

PR Newswire Membership

Fill out a PR Newswire membership form or contact us at (888) 776-0942.

Learn about PR Newswire services

Request more information about PR Newswire products and services or call us at (888) 776-0942.