Corus Entertainment Announces Fiscal 2012 First Quarter Results

• Monthly dividend increased by 10%
• Consolidated revenues up 7% and segment profit up 1%
• Television revenue up 10% and segment profit maintained
• Radio revenue down 5% and segment profit down 11%
• Net income attributable to equity shareholders from continuing operations up 9%

TORONTO, Jan. 10, 2012 /CNW/ - Corus Entertainment Inc. (TSX: CJR.B) announces its first quarter financial results.

"We are very pleased with our Q1 results and in particular, the renewed signs of strength we witnessed in the ad economy," said John Cassaday, President and CEO of Corus Entertainment.  "Double digit ad sales growth for our Women's networks, continued growth on our Kids business powered by strong merchandising sales and strong evidence of a turnaround underway in our Vancouver Radio cluster, are all positive indicators that we are poised to achieve our growth targets in fiscal 2012."

Financial Highlights
(unaudited)		Three months ended
(in thousands of Canadian dollars except per share amounts)		November 30,
		2011					2010
Revenues
Television		185,027					167,517
Radio^(1)		51,864					54,639
		236,891					222,156
Segment profit
Television		80,495					80,269
Radio^(1)		16,402					18,514
Corporate		(5,683)					(8,124)
		91,214					90,659
Net income attributable to equity shareholders:
From continuing operations		50,548					46,197
From discontinued operations		—					1,523
		50,548					47,720
Basic earnings per share attributable to equity shareholders:
From continuing operations		$ 0.61					$ 0.57
From discontinued operations		$    —					$ 0.02
		$ 0.61					$ 0.59

⁽¹⁾ Reflects the disposition of the Quebec Radio operations, which occurred on February 1, 2011, as discontinued operations in all periods presented.

Adoption of IFRS

For fiscal years beginning after January 1, 2011, Canadian Generally Accepted Accounting Principles ("GAAP"), as used by publicly accountable enterprises, were fully converged to International Financial Reporting Standards ("IFRS"). Accordingly, the interim condensed consolidated financial statements for the three months ended November 30, 2011 are the first financial statements the Company has prepared in accordance with IFRS. Prior to the adoption of IFRS, for all periods up to and including the year ended August 31, 2011, the Company's consolidated financial statements were prepared in accordance with Canadian GAAP. IFRS uses a conceptual framework similar to Canadian GAAP, but there are differences related to recognition, measurement and disclosures.  For additional details regarding the IFRS restatements of fiscal 2011, please refer to the Company's Management's Discussion and Analysis and/or Interim Condensed Consolidated Financial Statements.

Consolidated Results from Continuing Operations

Consolidated revenues for the three months ended November 30, 2011 were $236.9 million, up 7% from $222.2 million last year.  Consolidated segment profit was $91.2 million, up 1% from $90.7 million last year.  Net income attributed to equity shareholders for the first quarter 2012 was $50.5 million ($0.61 basic and diluted), compared to $46.2 million ($0.57 basic and $0.56 diluted) last year.

Operational Results - Highlights

Television

• Segment revenues increased by 10%
• Segment profit unchanged versus the prior year
• Specialty advertising revenues increased by 3%
• Subscriber revenues increased by 1%
• Merchandise, distribution and other revenues increased 66%
• Movie Central finished the quarter with 973,000 subscribers

Radio⁽¹⁾

• Segment revenues declined 5%
• Segment profit decreased 11%

⁽¹⁾ Radio results reflect the disposition of the Quebec Radio operations, which occurred on February 1, 2011, as discontinued operations in all periods presented.

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, OWN: Oprah Winfrey Network (Canada), CosmoTV, Sundance Channel (Canada), Movie Central, HBO Canada, Nelvana, Kids Can Press and 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 months ended November 30, 2011 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 January 10, 2012 at 12:30 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 1.800.941.1366 and for local/international callers is 416.981.9030.  PowerPoint slides for the call will be posted at 12:15 p.m. ET on January 10, 2012 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 specialty and pay 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
(unaudited)			As at November 30,			As at August 31,			As at September 1,
(in thousands of Canadian dollars)			2011			2011			2010
ASSETS
Current
Cash and cash equivalents			58,009			55,922			7,969
Accounts receivable			217,119			178,531			175,134
Income taxes recoverable			—			603			1,781
Prepaid expenses and other			15,058			13,497			18,008
Total current assets			290,186			248,553			202,892
Tax credits receivable			50,151			43,108			39,597
Intangibles, investments and other assets			37,808			39,980			22,699
Property, plant and equipment			166,758			169,600			161,585
Program and film rights			276,029			256,970			244,963
Film investments			77,476			83,133			80,611
Broadcast licenses			569,505			569,505			610,423
Goodwill			671,827			671,827			695,029
Deferred tax assets			31,012			30,915			32,130
			2,170,752			2,113,591			2,089,929
LIABILITIES AND SHAREHOLDERS' EQUITY
Current
Accounts payable and accrued liabilities			233,383			206,770			192,839
Provisions			4,105			5,267			13,048
Income taxes payable			2,363			—			—
Total current liabilities			239,851			212,037			205,887
Long-term debt			601,482			600,796			691,891
Other long-term liabilities			97,516			104,574			95,840
Deferred tax liability			142,750			141,361			146,044
Total liabilities			1,081,599			1,058,768			1,139,662
SHAREHOLDERS' EQUITY
Share capital			886,957			882,679			856,655
Contributed surplus			10,572			10,299			12,706
Retained earnings			174,540			143,720			62,509
Accumulated other comprehensive income (loss)			(25)			(1,075)			342
Total equity attributable to equity shareholders			1,072,044			1,035,623			932,212
Equity attributable to non-controlling interest			17,109			19,200			18,055
Total shareholders' equity			1,089,153			1,054,823			950,267
			2,170,752			2,113,591			2,089,929

CORUS ENTERTAINMENT INC.
CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME
	Three months ended
(unaudited)	November 30,
(in thousands of Canadian dollars except per share amounts)	2011			2010
Revenues	236,891			222,156
Direct cost of sales, general and administrative expenses	145,677			131,497
Depreciation	6,239			6,108
Interest expense	13,427			14,073
Restructuring	—			2,250
Other expense (income), net	447			(117)
Income before income taxes	71,101			68,345
Income tax expense	18,421			20,328
Net income for the period from continuing operations	52,680			48,017
Income after tax for discontinued operations	—			1,523
Net income for the period	52,680			49,540
Net income attributable to:
Equity shareholders	50,548			47,720
Non-controlling interest	2,132			1,820
	52,680			49,540
Basic earnings per share attributable to equity shareholders:
From continuing operations	$ 0.61			$ 0.57
From discontinued operations	—			0.02
	$ 0.61			$ 0.59
Diluted earnings per share attributable to equity shareholders:
From continuing operations	$ 0.61			$ 0.56
From discontinued operations	—			0.02
	$ 0.61			$ 0.58
Net income for the period	52,680			49,540
Other comprehensive income (loss), net of tax
Unrealized foreign currency translation adjustment	1,124			(753)
Unrealized change in fair value of available-for-sale
investments, net of tax	(74)			171
	1,050			(582)
Comprehensive income for the period	53,730			48,958
Comprehensive income attributable to
Equity shareholders	51,598			47,138
Non-controlling interest	2,132			1,820
	53,730			48,958

CORUS ENTERTAINMENT INC.
CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY
	Share capital			Contributed surplus			Retained earnings			Accumulated other comprehensive loss			Total attributable to equity shareholders			Non- controlling interest			Total equity
(unaudited) (in thousands of Canadian dollars)
At August 31, 2011	882,679			10,299			143,720			(1,075)			1,035,623			19,200			1,054,823
Comprehensive income	—			—			50,548			1,050			51,598			2,132			53,730
Dividends declared	—			—			(17,950)			—			(17,950)			(4,223)			(22,173)
Issuance of shares under stock option plan	106			(20)			—			—			86			—			86
Issuance of shares under dividend reinvestment plan	6,282			—			—			—			6,282			—			6,282
Share repurchased	(2,110)			—			(1,778)			—			(3,888)			—			(3,888)
Share-based compensation expense	—			293			—			—			293			—			293
At November 30, 2011	886,957			10,572			174,540			(25)			1,072,044			17,109			1,089,153
At September 1, 2010	856,655			12,706			62,509			342			932,212			18,055			950,267
Comprehensive income (loss)	—			—			47,720			(582)			47,138			1,820			48,958
Dividends declared	—			—			(15,258)			—			(15,258)			(4,206)			(19,464)
Issuance of shares under stock option plan	2,924			(621)			—			—			2,303			—			2,303
Issuance of shares under dividend reinvestment plan	1,604			—			—			—			1,604			—			1,604
Share-based compensation expense	—			253			—			—			253			—			253
At November 30, 2010	861,183			12,338			94,971			(240)			968,252			15,669			983,921

CORUS ENTERTAINMENT INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
	Three months ended
(unaudited)	November 30,
(in thousands of Canadian dollars)	2011				2010
OPERATING ACTIVITIES
Net income for the period	52,680				49,540
Earnings from discontinued operations	—				(1,523)
Add (deduct) non-cash items:
Depreciation	6,239				6,108
Amortization of program rights	47,055				42,542
Amortization of film investments	9,987				8,286
Deferred income taxes	1,362				472
Share-based compensation expense	293				253
Imputed interest	3,034				2,600
Other	(243)				(267)
Net change in non-cash working capital
balances related to operations	(41,391)				(32,677)
Payment of program and film rights	(35,429)				(38,153)
Net additions to film investments	(17,136)				(21,850)
Cash provided by operating activities from continuing operations	26,451				15,331
Cash provided by operating activities from discontinued operations	—				112
Cash provided by operating activities	26,451				15,443
INVESTING ACTIVITIES
Additions to property, plant and equipment	(3,370)				(13,266)
Net cash flows for intangibles, investments and other assets	1,131				(885)
Other	(153)				(225)
Cash used in investing activities from continuing operations	(2,392)				(14,376)
FINANCING ACTIVITIES
Increase in bank loans	—				30,192
Issuance of shares under stock option plan	86				2,303
Shares repurchased	(3,888)				—
Dividends paid	(11,675)				(11,591)
Dividend paid to non-controlling interest	(4,223)				(4,206)
Capital lease payments and other	(2,272)				(2,180)
Cash (used in) provided by financing activities from continuing operations	(21,972)				14,518
Net change during the period in cash and cash equivalents from continuing operations	2,087				15,473
Net change during the period in cash and cash equivalents from discontinued operations	—				112
Net increase in cash and cash equivalents during the period	2,087				15,585
Cash and cash equivalents, beginning of period	55,922				7,969
Cash and cash equivalents, end of period	58,009				23,554

CORUS ENTERTAINMENT INC.
BUSINESS SEGMENT INFORMATION
(unaudited)
(in thousands of Canadian dollars)
Three months ended November 30, 2011
				Radio			Television			Corporate			Consolidated
Revenues				51,864			185,027			—			236,891
Direct cost of sales, general and administrative expenses				35,462			104,532			5,683			145,677
Segment profit (loss)				16,402			80,495			(5,683)			91,214
Depreciation				778			565			4,896			6,239
Interest expense				122			6,858			6,447			13,427
Other expense (income), net				8			1,367			(928)			447
Income (loss) before income taxes and non-controlling interest				15,494			71,705			(16,098)			71,101
Three months ended November 30, 2010
				Radio			Television			Corporate			Consolidated
Revenues				54,639			167,517			—			222,156
Direct cost of sales, general and administrative expenses				36,125			87,248			8,124			131,497
Segment profit (loss)				18,514			80,269			(8,124)			90,659
Depreciation				758			1,703			3,647			6,108
Interest expense				1,506			4,712			7,855			14,073
Restructuring charges				678			2			1,570			2,250
Other expense (income), net				14			(632)			501			(117)
Income (loss) before income taxes and non-controlling interest				15,558			74,484			(21,697)			68,345
Revenues by type
										Three months ended
										November 30,
										2011			2010
Advertising										119,449			120,320
Subscriber fees										74,141			73,762
Merchandising, distribution and other										43,301			28,074
										236,891			222,156

 

  

John Cassaday			Tom Peddie			Sally Tindal
President and Chief Executive Officer			Executive Vice President and Chief			Director, Communications
Corus Entertainment Inc.			Financial Officer			Corus Entertainment Inc.
416.479.6018			Corus Entertainment Inc.			416.479.6107
			416.479.6080