Corus Entertainment announces second quarter results
Corus Entertainment announces second quarter results
- Combined Radio and Television revenues up 1% for second quarter - Segment profit of $51.0 million, up 3% for second quarter
TORONTO, April 8 /PRNewswire-FirstCall/ -- Corus Entertainment Inc. (TSX: CJR.B; NYSE: CJR) announced its second quarter financial results today.
"We are proud to have delivered both revenue and segment profit growth in such challenging economic times," said John Cassaday, President and Chief Executive Officer, Corus Entertainment Inc. "Strong brands, superior programming, rigorous cost controls and multiple revenue streams helped offset the effects of a cyclically soft Canadian advertising market."
Second Quarter Results ----------------------
Consolidated revenues for the three months ended February 28, 2009 were $181.4 million, up 1% from $178.7 million last year. Consolidated segment profit was $51.0 million, up 3% from $49.7 million last year. Net income for the quarter was $29.0 million ($0.36 basic and diluted), compared to net income of $35.4 million ($0.42 basic and $0.41 diluted) last year. The current year's quarter was positively impacted by a gain of $7.2 million related to the disposition of a residential audio business, while the prior year's quarter benefited from $13.2 million in recoveries related to income tax changes. Removing the impact of these items results in adjusted basic earnings per share of $0.29 in the current year, and $0.26 in the prior year.
Corus Television contributed quarterly revenues of $123.4 million, up 5% from $117.3 million last year, led by subscriber revenue growth of 12% and continued strong growth in advertising targeted to women. Quarterly segment profit increased to $47.5 million, up 7% from $44.2 million last year.
Corus Radio revenues were $57.9 million, down 6% from $61.5 million last year. Segment profit was $7.1 million, down 31% from $10.3 million last year.
Year-to-Date Results --------------------
Consolidated revenues for the six months ended February 28, 2009 were $398.1 million, up 1% from $393.6 million last year. Consolidated segment profit was $132.4 million, down 1% from $133.1 million last year. Net income for the six months was $69.7 million ($0.87 basic and $0.86 diluted), compared to net income of $74.8 million ($0.89 basic and $0.87 diluted) last year.
Corus Television contributed six month revenues of $264.7 million, up 5% from $252.7 million last year. Segment profit increased to $111.8 million, up 4% from $107.8 million last year.
Corus Radio revenues for the six months were $133.5 million, down 5% from $141.0 million last year. Segment profit was $29.1 million, down 19% from $35.8 million 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 Canada, Nelvana, Kids Can Press and radio stations including CKNW, CKOI and Q107. Corus creates engaging branded entertainment experiences for its audiences across multiple platforms. A publicly traded company, Corus is listed on the Toronto (CJR.B) and New York (CJR) exchanges. Experience Corus on the web at www.corusent.com.
The unaudited consolidated financial statements and accompanying notes for the quarter ended February 28, 2009 and Management's Discussion and Analysis are available on the Company's website www.corusent.com in the Investor Relations section.
A conference call with Corus senior management is scheduled for April 8, 2009 at 9 a.m. ET/8 a.m. CT/7 a.m. MT/6 a.m. PT. 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 is 1-866-322-2356 (toll-free North America) or 416-640-3405 (local or international). The pass code for this call is: 3654143. PowerPoint slides for the call will be posted at 8:45 a.m. ET on April 8, 2009 and can be found on the Corus Entertainment website www.corusent.com in the Investor Relations section.
This statement 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 arises after the date thereof or otherwise.
CORUS ENTERTAINMENT INC. CONSOLIDATED BALANCE SHEETS As at As at (unaudited) February 28, August 31, (in thousands of Canadian dollars) 2009 2008 ------------------------------------------------------------------------- ASSETS Current Cash and cash equivalents 39,424 19,642 Accounts receivable 149,323 157,440 Income taxes recoverable 1,872 1,615 Prepaid expenses and other 10,012 10,135 Program and film rights 136,144 131,301 Future tax asset 3,421 9,593 ------------------------------------------------------------------------- Total current assets 340,196 329,726 ------------------------------------------------------------------------- Tax credits receivable 30,264 21,952 Investments and other assets 28,948 93,086 Property, plant and equipment 70,500 73,562 Program and film rights 120,141 103,163 Film investments 88,411 80,819 Broadcast licenses 560,383 533,491 Goodwill 852,596 797,854 ------------------------------------------------------------------------- 2,091,439 2,033,653 ------------------------------------------------------------------------- ------------------------------------------------------------------------- LIABILITIES AND SHAREHOLDERS' EQUITY Current Accounts payable and accrued liabilities 186,420 196,026 ------------------------------------------------------------------------- Long-term debt 705,415 692,750 Other long-term liabilities 88,838 59,936 Future tax liability 93,448 87,699 ------------------------------------------------------------------------- Total liabilities 1,074,121 1,036,411 ------------------------------------------------------------------------- Non-controlling interest 17,798 20,237 ------------------------------------------------------------------------- SHAREHOLDERS' EQUITY Share capital 840,363 848,257 Contributed surplus 14,516 17,304 Retained earnings 170,684 131,594 Accumulated other comprehensive loss (26,043) (20,150) ------------------------------------------------------------------------- Total shareholders' equity 999,520 977,005 ------------------------------------------------------------------------- 2,091,439 2,033,653 ------------------------------------------------------------------------- ------------------------------------------------------------------------- CORUS ENTERTAINMENT INC. CONSOLIDATED STATEMENTS OF INCOME (unaudited) Three months ended Six months ended (in thousands of February 28, February 28, Canadian dollars --------------------------------------------- except per share amounts) 2009 2008 2009 2008 ------------------------------------------------------------------------- Revenues 181,358 178,738 398,143 393,563 Direct cost of sales, general and administrative expenses 130,349 129,005 265,792 260,440 Depreciation 5,199 5,510 10,191 11,279 Interest expense 9,666 10,073 20,068 21,062 Disputed regulatory fees 1,022 - 2,712 - Other expense (income), net (5,009) 38 (3,609) 3,925 ------------------------------------------------------------------------- Income before income taxes and non-controlling interest 40,131 34,112 102,989 96,857 Income tax expense (recovery) 10,831 (2,547) 31,706 19,591 Non-controlling interest 271 1,291 1,621 2,511 ------------------------------------------------------------------------- Net income for the period 29,029 35,368 69,662 74,755 ------------------------------------------------------------------------- ------------------------------------------------------------------------- Earnings per share (note 8) Basic $0.36 $0.42 $0.87 $0.89 Diluted $0.36 $0.41 $0.86 $0.87 ------------------------------------------------------------------------- ------------------------------------------------------------------------- CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME Three months ended Six months ended (unaudited) February 28, February 28, (in thousands of --------------------------------------------- Canadian dollars) 2009 2008 2009 2008 ------------------------------------------------------------------------- Net income for the period 29,029 35,368 69,662 74,755 Other comprehensive income (loss), net of tax Unrealized foreign currency translation adjustment 492 (295) 2,317 (1,267) Unrealized change in fair value of available-for- sale investments, net of tax 145 - (780) 183 Recognition of change in fair value of available-for sale assets in net income 2,077 - 2,077 - Unrealized change in fair value of cash flow hedges, net of tax (2,176) (5,788) (9,507) (11,790) ------------------------------------------------------------------------- 538 (6,083) (5,893) (12,874) ------------------------------------------------------------------------- Comprehensive income for the period 29,567 29,285 56,315 61,881 ------------------------------------------------------------------------- ------------------------------------------------------------------------- CORUS ENTERTAINMENT INC. CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS EQUITY Three months ended Six months ended (unaudited) February 28, February 28, (in thousands of --------------------------------------------- Canadian dollars) 2009 2008 2009 2008 ------------------------------------------------------------------------- Share capital Balance, beginning of period 840,165 875,052 848,257 882,244 Issuance of shares under stock option plan - 3,070 358 9,838 Shares repurchased - (3,441) (8,450) (17,401) Repayment of executive stock purchase loans 198 230 198 230 ------------------------------------------------------------------------- Balance, end of period 840,363 874,911 840,363 874,911 ------------------------------------------------------------------------- ------------------------------------------------------------------------- Contributed surplus Balance, beginning of period 13,115 11,534 17,304 10,250 Stock-based compensation 1,401 2,050 2,350 3,919 Settlement of long-term incentive plan - - (5,138) - Exercise of stock options - (69) - (654) ------------------------------------------------------------------------- Balance, end of period 14,516 13,515 14,516 13,515 ------------------------------------------------------------------------- ------------------------------------------------------------------------- Retained earnings Balance, beginning of period 153,655 104,578 131,594 95,568 Cumulative impact of accounting changes - - - (1,594) ------------------------------------------------------------------------- Adjusted opening balance 153,655 104,578 131,594 93,974 Net income for the period 29,029 35,368 69,662 74,755 Dividends (12,000) (12,488) (23,939) (22,891) Share repurchase excess - (4,206) (6,633) (22,586) ------------------------------------------------------------------------- Balance, end of period 170,684 123,252 170,684 123,252 ------------------------------------------------------------------------- ------------------------------------------------------------------------- Accumulated other comprehensive loss Balance, beginning of period (26,581) (11,953) (20,150) (12,169) Cumulative impact of accounting changes - - - 7,007 ------------------------------------------------------------------------- Adjusted opening balance (26,581) (11,953) (20,150) (5,162) Other comprehensive income (loss), net of tax 538 (6,083) (5,893) (12,874) ------------------------------------------------------------------------- Balance, end of period (26,043) (18,036) (26,043) (18,036) ------------------------------------------------------------------------- ------------------------------------------------------------------------- CORUS ENTERTAINMENT INC. CONSOLIDATED STATEMENTS OF CASH FLOWS Three months ended Six months ended (unaudited) February 28, February 28, (in thousands of --------------------------------------------- Canadian dollars) 2009 2008 2009 2008 ------------------------------------------------------------------------- OPERATING ACTIVITIES Net income for the period 29,029 35,368 69,662 74,755 Add (deduct) non-cash items: Depreciation 5,199 5,510 10,191 11,279 Amortization of program and film rights 39,034 35,910 76,517 71,987 Amortization of film investments 6,689 7,695 10,038 12,611 Future income taxes 2,887 (9,984) 7,610 (5,063) Non-controlling interest 271 1,291 1,621 2,511 Stock-based compensation 1,431 804 2,012 3,688 Imputed interest 1,522 1,563 3,311 3,137 Other gains and losses (5,632) 173 (5,429) 1,137 Net change in non-cash working capital balances related to operations 22,148 8,772 (7,507) (24,911) Payment of program and film rights (45,927) (35,385) (95,175) (77,682) Net additions to film investments (13,431) (11,734) (24,916) (29,478) ------------------------------------------------------------------------- Cash provided by operating activities 43,220 39,983 47,935 43,971 ------------------------------------------------------------------------- INVESTING ACTIVITIES Additions to property, plant and equipment (3,789) (2,908) (5,784) (7,127) Business combinations - (1,106) (74,950) (774) Cash held in escrow - - 74,950 - Net cash flows for investments and other assets 6,961 (286) 6,633 (1,421) Decrease in public benefits associated with acquisitions (726) (49) (1,134) (1,945) ------------------------------------------------------------------------- Cash provided by (used in) investing activities 2,446 (4,349) (285) (11,267) ------------------------------------------------------------------------- FINANCING ACTIVITIES Increase (decrease) in bank loans (17,179) 579 13,670 20,407 Issuance of shares under stock option plan - 3,001 358 9,184 Shares repurchased - (7,647) (15,083) (39,987) Dividends paid (12,000) (11,111) (24,017) (21,591) Dividend paid to non-controlling interest (325) - (2,994) (1,603) Other 198 79 198 (79) ------------------------------------------------------------------------- Cash used in financing activities (29,306) (15,099) (27,868) (33,669) ------------------------------------------------------------------------- Net change in cash and cash equivalents during the period 16,360 20,535 19,782 (965) Cash and cash equivalents, beginning of period 23,064 11,847 19,642 33,347 ------------------------------------------------------------------------- Cash and cash equivalents, end of period 39,424 32,382 39,424 32,382 ------------------------------------------------------------------------- ------------------------------------------------------------------------- CORUS ENTERTAINMENT INC. BUSINESS SEGMENT INFORMATION Three months ended February 28, 2009 Tele- Elimi- Conso- Radio vision Corporate nations lidated ------------------------------------------------------------------------- Revenues 57,935 123,423 - - 181,358 Direct cost of sales, general and administrative expenses 50,825 75,932 3,592 - 130,349 ------------------------------------------------------------------------- Segment profit 7,110 47,491 (3,592) - 51,009 Depreciation 1,631 2,444 1,124 - 5,199 Interest expense 228 1,357 8,081 - 9,666 Disputed regulatory fees 526 496 - - 1,022 Other expense, net (751) (5,960) 1,702 - (5,009) ------------------------------------------------------------------------- Income before income taxes and non-controlling interest 5,476 49,154 (14,499) - 40,131 ------------------------------------------------------------------------- ------------------------------------------------------------------------- Three months ended February 29, 2008 Tele- Elimi- Conso- Radio vision Corporate nations lidated ------------------------------------------------------------------------- Revenues 61,478 117,309 - (49) 178,738 Direct cost of sales, general and administrative expenses 51,192 73,069 4,793 (49) 129,005 ------------------------------------------------------------------------- Segment profit 10,286 44,240 (4,793) - 49,733 Depreciation 1,754 2,638 1,118 - 5,510 Interest expense 270 861 8,942 - 10,073 Other expense, net (94) 497 (365) - 38 ------------------------------------------------------------------------- Income before income taxes and non-controlling interest 8,356 40,244 (14,488) - 34,112 ------------------------------------------------------------------------- ------------------------------------------------------------------------- Six months ended February 28, 2009 Tele- Elimi- Conso- Radio vision Corporate nations lidated ------------------------------------------------------------------------- Revenues 133,463 264,680 - - 398,143 Direct cost of sales, general and administrative expenses 104,342 152,919 8,531 - 265,792 ------------------------------------------------------------------------- Segment profit 29,121 111,761 (8,531) - 132,351 Depreciation 3,273 4,785 2,133 - 10,191 Interest expense 454 2,400 17,214 - 20,068 Disputed regulatory fees 1,362 1,350 - - 2,712 Other expense, net (571) (3,641) 603 - (3,609) ------------------------------------------------------------------------- Income before income taxes and non-controlling interest 24,603 106,867 (28,481) - 102,989 ------------------------------------------------------------------------- ------------------------------------------------------------------------- Six months ended February 29, 2008 Tele- Elimi- Conso- Radio vision Corporate nations lidated ------------------------------------------------------------------------- Revenues 141,003 252,660 - (100) 393,563 Direct cost of sales, general and administrative expenses 105,246 144,855 10,439 (100) 260,440 ------------------------------------------------------------------------- Segment profit 35,757 107,805 (10,439) - 133,123 Depreciation 3,173 5,300 2,806 - 11,279 Interest expense 517 2,378 18,167 - 21,062 Other expense, net (128) 4,709 (656) - 3,925 ------------------------------------------------------------------------- Income before income taxes and non-controlling interest 32,195 95,418 (30,756) - 96,857 ------------------------------------------------------------------------- -------------------------------------------------------------------------
First Call Analyst:
FCMN Contact:
Source: Corus Entertainment Inc.
CONTACT: John Cassaday, President and Chief Executive Officer, Corus
Entertainment Inc., (416) 642-3770; Tom Peddie, Senior Vice President and
Chief Financial Officer, Corus Entertainment Inc., (416) 642-3780; Tracy
Ewing, Vice President, Communications, Corus Entertainment Inc., (416)
642-3792
Profile: International Entertainment
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