Corus Entertainment announces fiscal 2010 first quarter results
- Consolidated segment profit increases 2% in the first quarter
- Consolidated revenues increase 3% in the first quarter
- Earnings per share increase 80% in the first quarter
- Movie Central subscribers up 6% versus year ago
- Kids ad revenues and Ontario Radio ad revenues show signs of recovery
"We are pleased with our continued strong results in the first quarter, particularly the advertising sales momentum we experienced in the month of November," said
Financial Highlights
--------------------
(unaudited)
(in thousands of Canadian dollars except per
share amounts) Three months ended
November 30,
---------------------------
2009 2008
---------------------------
Revenues
Radio 71,074 75,528
Television 151,255 141,257
---------------------------
222,329 216,785
---------------------------
---------------------------
Segment profit
Radio 21,821 22,011
Television 67,068 64,270
Corporate (5,664) (4,939)
---------------------------
83,225 81,342
---------------------------
---------------------------
Net income 73,908 40,633
---------------------------
---------------------------
Earnings per share
Basic $0.92 $0.51
Diluted $0.91 $0.50
Consolidated Results
--------------------
Consolidated revenues for the three months ended
Operational Results
-------------------
Radio
- Revenues decreased by 6% in the first quarter.
- Segment profit decreased by less than 1% in the first quarter.
- Revenues increased modestly in Ontario, decreased slightly in Quebec
and decreased 16% in the West.
Television
- Revenues increased by 7% in the first quarter.
- Segment profit increased by 4% in the first quarter.
- Advertising revenues decreased by 1% in the first quarter.
- Specialty advertising revenues flat in the first quarter.
- Subscriber revenues increased by 8% in the first quarter.
- Movie Central finished the quarter with 958,000 subscribers, up 6%
from last year.
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
The unaudited consolidated financial statements and accompanying notes for the three months ended
A conference call with Corus senior management is scheduled for
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
As at As at
(unaudited) November 30, August 31,
(in thousands of Canadian dollars) 2009 2009
-------------------------------------------------------------------------
ASSETS
Current
Cash and cash equivalents 23,970 10,922
Accounts receivable 181,977 146,784
Income taxes recoverable - 7,267
Prepaid expenses and other 12,123 14,377
Program and film rights 140,403 146,195
Future tax asset 3,686 1,788
-------------------------------------------------------------------------
Total current assets 362,159 327,333
-------------------------------------------------------------------------
Tax credits receivable 29,106 26,698
Investments and other assets 27,801 23,693
Property, plant and equipment 77,928 76,450
Program and film rights 108,331 92,579
Film investments 102,030 92,180
Broadcast licenses 587,138 561,741
Goodwill 692,632 674,029
-------------------------------------------------------------------------
1,987,125 1,874,703
-------------------------------------------------------------------------
-------------------------------------------------------------------------
LIABILITIES AND SHAREHOLDERS' EQUITY
Current
Accounts payable and accrued liabilities 170,408 171,055
Income taxes payable 12,676 -
-------------------------------------------------------------------------
Total current liabilities 183,084 171,055
-------------------------------------------------------------------------
Long-term debt 691,925 651,767
Other long-term liabilities 87,030 73,360
Future tax liability 89,984 102,842
-------------------------------------------------------------------------
Total liabilities 1,052,023 999,024
-------------------------------------------------------------------------
Non-controlling interest 19,064 21,401
-------------------------------------------------------------------------
SHAREHOLDERS' EQUITY
Share capital 842,340 840,602
Contributed surplus 14,394 17,303
Retained earnings 82,271 20,380
Accumulated other comprehensive loss (22,967) (24,007)
-------------------------------------------------------------------------
Total shareholders' equity 916,038 854,278
-------------------------------------------------------------------------
1,987,125 1,874,703
-------------------------------------------------------------------------
-------------------------------------------------------------------------
CORUS ENTERTAINMENT INC.
CONSOLIDATED STATEMENTS OF INCOME
Three months ended
(unaudited) November 30,
(in thousands of Canadian dollars except per ---------------------------
share amounts) 2009 2008
-------------------------------------------------------------------------
Revenues 222,329 216,785
Direct cost of sales, general and administrative
expenses 139,104 135,443
Depreciation 4,516 4,992
Interest expense 8,148 10,402
Disputed regulatory fees (16,194) 1,690
Other expense (income), net (1,784) 1,400
-------------------------------------------------------------------------
Income before income taxes and non-controlling
interest 88,539 62,858
Income tax expense 13,453 20,875
Non-controlling interest 1,178 1,350
-------------------------------------------------------------------------
Net income for the period 73,908 40,633
-------------------------------------------------------------------------
-------------------------------------------------------------------------
Earnings per share
Basic $0.92 $0.51
Diluted $0.91 $0.50
-------------------------------------------------------------------------
-------------------------------------------------------------------------
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
Three months ended
November 30,
(unaudited) ---------------------------
(in thousands of Canadian dollars) 2009 2008
-------------------------------------------------------------------------
Net income for the period 73,908 40,633
Other comprehensive income (loss), net of tax
Unrealized foreign currency translation
adjustment (445) 1,825
Unrealized change in fair value of
available-for-sale investments, net of tax 39 (925)
Unrealized change in fair value of cash flow
hedges, net of tax 1,446 (7,331)
-------------------------------------------------------------------------
1,040 (6,431)
-------------------------------------------------------------------------
Comprehensive income for the period 74,948 34,202
-------------------------------------------------------------------------
-------------------------------------------------------------------------
CORUS ENTERTAINMENT INC.
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY
Three months ended
November 30,
(unaudited) ---------------------------
(in thousands of Canadian dollars) 2009 2008
-------------------------------------------------------------------------
Share capital
Balance, beginning of period 840,602 848,257
Issuance of shares under stock option plan 1,402 358
Shares repurchased - (8,450)
Shares issued under dividend reinvestment plan 336 -
-------------------------------------------------------------------------
Balance, end of period 842,340 840,165
-------------------------------------------------------------------------
-------------------------------------------------------------------------
Contributed surplus
Balance, beginning of period 17,303 17,304
Stock-based compensation 899 949
Settlement of long-term incentive plan (3,473) (5,138)
Exercise of stock options (335) -
-------------------------------------------------------------------------
Balance, end of period 14,394 13,115
-------------------------------------------------------------------------
-------------------------------------------------------------------------
Retained earnings
Balance, beginning of period 20,380 131,594
Net income for the period 73,908 40,633
Dividends (12,017) (11,939)
Share repurchase excess - (6,633)
-------------------------------------------------------------------------
Balance, end of period 82,271 153,655
-------------------------------------------------------------------------
-------------------------------------------------------------------------
Accumulated other comprehensive loss
Balance, beginning of period (24,007) (20,150)
Other comprehensive income (loss), net of tax 1,040 (6,431)
-------------------------------------------------------------------------
Balance, end of period (22,967) (26,581)
-------------------------------------------------------------------------
-------------------------------------------------------------------------
CORUS ENTERTAINMENT INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
Three months ended
November 30,
(unaudited) ---------------------------
(in thousands of Canadian dollars) 2009 2008
-------------------------------------------------------------------------
OPERATING ACTIVITIES
Net income for the period 73,908 40,633
Add (deduct) non-cash items:
Depreciation 4,516 4,992
Amortization of program and film rights 41,726 37,483
Amortization of film investments 5,533 3,349
Future income taxes (15,336) 4,723
Non-controlling interest 1,178 1,350
Stock-based compensation 1,185 581
Imputed interest 1,696 1,789
Other gains and losses (91) 203
Net change in non-cash working capital
balances related to operations (22,417) (29,655)
Payment of program and film rights (41,610) (49,248)
Net additions to film investments (17,961) (11,485)
-------------------------------------------------------------------------
Cash provided by operating activities 32,327 4,715
-------------------------------------------------------------------------
INVESTING ACTIVITIES
Additions to property, plant and equipment (6,106) (1,995)
Business combinations (36,000) (74,950)
Cash held in escrow - 74,950
Net cash flows for investments and other assets 1,091 (328)
Decrease in public benefits associated with
acquisitions (238) (408)
-------------------------------------------------------------------------
Cash used in investing activities (41,253) (2,731)
-------------------------------------------------------------------------
FINANCING ACTIVITIES
Increase in bank loans 39,885 30,849
Issuance of shares under stock option plan 1,067 358
Shares repurchased - (15,083)
Dividends paid (11,674) (12,017)
Dividend paid to non-controlling interest (3,860) (2,669)
Other (3,444) -
-------------------------------------------------------------------------
Cash provided by financing activities 21,974 1,438
-------------------------------------------------------------------------
Net change in cash and cash equivalents
during the period 13,048 3,422
Cash and cash equivalents, beginning of period 10,922 19,642
-------------------------------------------------------------------------
Cash and cash equivalents, end of period 23,970 23,064
-------------------------------------------------------------------------
-------------------------------------------------------------------------
CORUS ENTERTAINMENT INC.
BUSINESS SEGMENT INFORMATION
(unaudited)
(in thousands of Canadian dollars)
Three months ended November 30, 2009
Radio Television Corporate Consolidated
-------------------------------------------------------------------------
Revenues 71,074 151,255 - 222,329
Direct cost of
sales, general and
administrative
expenses 49,253 84,187 5,664 139,104
-------------------------------------------------------------------------
Segment profit 21,821 67,068 (5,664) 83,225
Depreciation 1,670 1,906 940 4,516
Interest expense 188 1,175 6,785 8,148
Disputed regulatory
fees (8,901) (7,293) - (16,194)
Other expense
(income), net 91 (1,253) (622) (1,784)
-------------------------------------------------------------------------
Income before income
taxes and
non-controlling
interest 28,773 72,533 (12,767) 88,539
-------------------------------------------------------------------------
-------------------------------------------------------------------------
Three months ended November 30, 2008
Radio Television Corporate Consolidated
-------------------------------------------------------------------------
Revenues 75,528 141,257 - 216,785
Direct cost of sales,
general and
administrative
expenses 53,517 76,987 4,939 135,443
-------------------------------------------------------------------------
Segment profit 22,011 64,270 (4,939) 81,342
Depreciation 1,642 2,341 1,009 4,992
Interest expense 226 1,043 9,133 10,402
Disputed regulatory fees 836 854 - 1,690
Other expense
(income), net 180 2,319 (1,099) 1,400
-------------------------------------------------------------------------
Income before income
taxes and
non-controlling
interest 19,127 57,713 (13,982) 62,858
-------------------------------------------------------------------------
-------------------------------------------------------------------------
Revenues by segment
Three months ended
November 30,
(unaudited) ---------------------------
(in thousands of Canadian dollars) 2009 2008
-------------------------------------------------------------------------
Radio
West 26,233 31,100
Ontario 24,504 23,888
Quebec and other 20,337 20,540
-------------------------------------------------------------------------
71,074 75,528
-------------------------------------------------------------------------
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Television
Kids 68,499 63,029
Specialty and Pay 82,756 78,228
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151,255 141,257
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Segment profit
Three months ended
November 30,
(unaudited) ---------------------------
(in thousands of Canadian dollars) 2009 2008
-------------------------------------------------------------------------
Radio
West 9,701 12,574
Ontario 8,475 7,526
Quebec and other 3,645 1,911
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21,821 22,011
-------------------------------------------------------------------------
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Television
Kids 33,309 30,944
Specialty and Pay 33,759 33,326
-------------------------------------------------------------------------
67,068 64,270
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%SEDAR: 00013131E %CIK: 0001100868
For further information: John Cassaday, President and Chief Executive Officer, Corus Entertainment Inc., (416) 642-3770; Tracy Ewing, Vice President, Communications, Corus Entertainment Inc., (416) 642-3792; Tom Peddie, Senior Vice President and Chief Financial Officer, Corus Entertainment Inc., (416) 642-3780
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