Corus Entertainment Announces Fiscal 2021 Second Quarter Results

Sequential revenue recovery with significant streaming subscriber and content
licensing gains, strong free cash flow and reduction of leverage target

• Consolidated revenues declined 5% for the quarter and 8% year-to-date
• Consolidated segment profit⁽¹⁾  decreased 3% for both the quarter and year-to-date
• Consolidated segment profit margin⁽¹⁾ of 31% for the quarter and 37% year-to-date
• Net income attributable to shareholders of $35.3 million ($0.17 per share basic) for the quarter and $112.0 million ($0.54 per share basic) year-to-date
• Net debt to segment profit⁽¹⁾ of 3.02 times at February 28, 2021, down from 3.18 times at August 31, 2020
• Significant reduction of leverage target to under 2.5 times net debt to segment profit⁽¹⁾
• Free cash flow⁽¹⁾ of $89.7 million for the quarter and $152.1 million year-to-date
• Achieved recent milestone of over 500,000 paying subscribers on streaming platforms, doubled from the prior year

TORONTO, April 9, 2021 /PRNewswire/ - Corus Entertainment Inc. (TSX: CJR.B) announced its second quarter financial results today.

"Our Q2 results demonstrate strong operational momentum, bolstered by sequential Television advertising revenue recovery, robust paid streaming subscriber gains and double digit growth in our content licensing business," said Doug Murphy, President and Chief Executive Officer. "Notably, we are excited to announce the achievement of a significant milestone, with over half a million paid subscriptions to our streaming platforms. We have reached an inflection point in this dynamic industry environment, one that will build on the strength of our diversified portfolio and free cash flow as the economy recovers. Our focus remains on delivery of consolidated revenue growth year over year, driven by the ongoing advancement of our strategic plan and expansion of our financial flexibility commensurate with a reduction in our leverage target."

Financial Highlights

Segment Revenues

Operational Highlights

• The decline in Television's advertising revenues of 7% were, again, sequentially improved from declines of 31%, 25% and 14% for the three months ended May 31, 2020, August 31, 2020, and November 30, 2020, respectively
• Subscriber revenues remained flat in both Q2 and year-to-date as increases to paid subscriptions on streaming platforms offset linear subscriber declines and channel shutdowns
• Merchandising, distribution and other revenues increased in Q2 and year-to-date primarily as a result of strong content licensing sales from Corus Studios
• The decline in Radio segment revenues in Q2 were consistent with the three months ended November 30, 2020, while sequentially improved from declines of 52% and 43% for the three months ended May 31, 2020 and August 31, 2020, respectively

The Company furthered its expansion onto new platforms, announcing streaming subscriber metrics and several new initiatives:

• As of April 9, 2021, the Company has over 500,000 paying subscribers to its STACKTV, Nick+ and other streaming platforms, an increase from more than 400,000 paying subscribers in January 2021
• Distribution of the Company's premium kids streaming service Nick+ has been expanded to Bell Fibe TV, Alt TV and Virgin TV building on its presence on Amazon Prime Video Channels and Apple TV
• The Company's Global News announced the addition of four new regional news streams to its offering on the Global TV app, expanding Global News' roster to 14 free news streams within the app

Financial Position & Liquidity

• Free cash flow⁽¹⁾ of $89.7 million in Q2 and $152.1 million year-to-date compared to $65.1 million and $118.1 million, respectively, in the prior year. The six months ended February 28, 2021 benefited from CEWS receipts of $28.6 million, offset by the payment of deferred corporate income tax installments from fiscal 2020 of $17.2 million
• Net debt to segment profit⁽¹⁾ was 3.02 times at February 28, 2021, down from 3.18 times at August 31, 2020, principally due to bank loan repayments of $94.6 million year-to-date, and as a result the long-term objective has been revised to below 2.5 times
• As of February 28, 2021, the Company had $59.2 million of cash and a committed $300 million revolving credit facility that remains undrawn

Corus Entertainment Inc. reports its financial results in Canadian dollars.

The unaudited interim condensed consolidated financial statements and accompanying notes for the three and six months ended February 28, 2021 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 9, 2021 at 8:00 a.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 local and international callers is 1.647.427.7450 and for North America is 1.888.231.8191. More information can be found on the Corus Entertainment website at www.corusent.com in the Investor Relations section.

COVID-19 Update
All provinces and territories have begun mass vaccination programs to inoculate Canadians against COVID-19, however the phased-in roll-outs remain fluid as public health authorities continue to make adjustments to their plans due to the timing and expected volume of shipments from vaccine suppliers to the Federal government and then to each community. Current government forecasts indicate that Canadians could be fully immunized before the end of September 2021, which is dependent on approved vaccine suppliers continuing to meet delivery targets. Many provinces and territories had begun to ease restrictions subsequent to February 28, 2021, but the growing emergence of COVID-19 variants of concern that are more transmissible and carry increased health risks are causing a surge in cases and an increase in hospitalizations, which has led to most communities reintroducing emergency measures to counter any resurgence of COVID-19 cases. Disruptions caused by the imposition of these emergency measures, particularly in the retail and tourism sectors, continue to negatively impact advertising revenues. Although emergency measures are expected to ease in many provinces and territories in the third quarter of fiscal 2021 as more Canadians begin to receive vaccinations, the uncertainty created by variants of concern and closures of many small businesses could continue to adversely impact advertising and other revenues for a prolonged period. There can be no certainty that inoculations will reduce the impact of the COVID-19 pandemic on the Company's business in the short to medium term.

The extent to which COVID-19 and any other pandemic or public health crisis impacts the Company's business, affairs, operations, financial condition, liquidity, availability of credit and results of operations will depend  on  future  developments  that  are  highly uncertain and cannot be predicted with any meaningful precision, including new information which may emerge concerning the  severity of the COVID-19 virus and the actions required to continue to contain the COVID-19 virus or remedy its impact, among others.

The Company's financial priorities remain unchanged. Importantly, the Company remains committed to increasing its financial flexibility over the longer term as evidenced by the reduction in the leverage target to under 2.5 times net debt to segment profit. In this environment the Company believes it is prudent to conserve cash out of an abundance of caution. The Company is constantly evaluating the situation and monitoring any impacts or potential impacts to its business.

Use of Non-IFRS Financial Measures
This press release includes the non-IFRS financial measures of segment profit, segment profit margin, adjusted net income attributable to shareholders, adjusted basic earnings per share, free cash flow and net debt to segment profit that are not in accordance with, nor an alternate to, generally accepted accounting principles ("IFRS") and may be different from non-IFRS measures used by other companies. In addition, these non-IFRS measures are not based on any comprehensive set of accounting rules or principles.

Non-IFRS financial measures should not be considered as a substitute for, or superior to, measures of financial performance prepared in accordance with IFRS. They are limited in value because they exclude charges that have a material effect on the Company's reported results and, therefore, should not be relied upon as the sole financial measures to evaluate the Company's financial results. The non-IFRS financial measures are meant to supplement, and to be viewed in conjunction with, IFRS financial results. A reconciliation of the Company's non-IFRS measures is included in the Company's most recent Report to Shareholders which is available on Corus' website at www.corusent.com as well as on SEDAR at www.sedar.com.

Caution Concerning Forward-Looking Information
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 press release 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 information"). These forward-looking statements relate to, among other things, our objectives, goals, strategies, intentions, plans, estimates and outlook, including the adoption and anticipated impact of our new strategic plan, advertising and our expectations of advertising trends for fiscal 2021, distribution, merchandise and subscription revenues, operating costs and tariffs, taxes and fees, and can generally be identified by the use of words such as "believe", "anticipate", "expect", "intend", "plan", including the adoption and anticipated impact of our new strategic plan, "will", "may" and other similar expressions. In addition, any statements that refer to expectations, projections or other characterizations of future events or circumstances may be considered forward-looking information. Although Corus believes that the expectations reflected in such forward-looking information are reasonable, such information involves assumptions, risks and uncertainties and undue reliance should not be placed on such statements. Certain material factors or assumptions are applied with respect to the forward-looking information, including without limitation, factors and assumptions regarding the general market conditions and general outlook for the industry, interest rates, stability of the advertising, distribution, merchandise and subscription markets, operating and capital costs and tariffs, taxes and fees, our ability to source desirable content and our capital and operating results being consistent with our expectations. Actual results may differ materially from those expressed or implied in such information. 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; failure to meet covenants under our senior credit facility; epidemics, pandemics or other public health crises, including the current outbreak of COVID-19 and changes in accounting standards. Additional information about these factors and about the material assumptions underlying any forward-looking information may be found under the heading "Risks and Uncertainties" in the Management's Discussion and Analysis for the year ended August 31, 2020 and the second quarter ended February 28, 2021 and under the heading "Risk Factors" in our Annual Information Form. Corus cautions that the foregoing list of important assumptions and factors that may affect future results is not exhaustive. When relying on our forward-looking information to make decisions with respect to Corus, investors and others should carefully consider the foregoing factors and other uncertainties and potential events. Unless otherwise specified, all forward-looking information in this document speaks as of the date of this document. Unless otherwise required by applicable securities laws, Corus disclaims any intention or obligation to publicly update or revise any forward-looking information whether as a result of new information, events or circumstances that arise after the date thereof or otherwise.

About Corus Entertainment Inc.
Corus Entertainment Inc. (TSX: CJR.B) is a leading media and content company that develops and delivers high quality brands and content across platforms for audiences around the world. Engaging audiences since 1999, the company's portfolio of multimedia offerings encompass 33 specialty television services, 39 radio stations, 15 conventional television stations, a suite of digital and streaming assets, animation software, technology and media services. Corus is an internationally-renowned content creator and distributor through Nelvana, a world class animation studio expert in all formats and Corus Studios, a globally recognized producer of hit scripted and unscripted content. The company also owns innovative full-service social digital agency so.da, lifestyle entertainment company Kin Canada, leading 2D animation software supplier Toon Boom and children's book publishing house, Kids Can Press. Corus' roster of premium brands includes Global Television, W Network, HGTV Canada, Food Network Canada, HISTORY®, Showcase, Adult Swim, National Geographic, Disney Channel Canada, YTV, Global News, Globalnews.ca, Q107, Country 105, and CFOX, along with broadly distributed Canadian streaming platforms STACKTV, Nick+, the Global TV App and Curiouscast. For more information visit www.corusent.com.

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SOURCE Corus Entertainment Inc.