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Press release from CNW Group

Corus Entertainment Announces Fiscal 2012 First Quarter Results

Tuesday, January 10, 2012

Corus Entertainment Announces Fiscal 2012 First Quarter Results07:01 EST Tuesday, January 10, 2012Monthly dividend increased by 10%Consolidated revenues up 7% and segment profit up 1%Television revenue up 10% and segment profit maintainedRadio 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  2010Revenues      Television185,027  167,517  Radio(1)51,864  54,639 236,891  222,156Segment profit      Television80,495  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 operations50,548  46,197From discontinued operations—  1,523 50,548  47,720     Basic earnings per share attributable to equity shareholders:    From continuing operations$ 0.61  $ 0.57From 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 IFRSFor 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 OperationsConsolidated 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 - HighlightsTelevisionSegment revenues increased by 10%Segment profit unchanged versus the prior yearSpecialty 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 subscribersRadio(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 Revenues236,891   222,156 Direct cost of sales, general and administrative expenses145,677   131,497 Depreciation6,239   6,108 Interest expense13,427   14,073 Restructuring—   2,250 Other expense (income), net447   (117)      Income before income taxes71,101   68,345 Income tax expense18,421   20,328      Net income for the period from continuing operations52,680   48,017 Income after tax for discontinued operations—   1,523 Net income for the period52,680   49,540      Net income attributable to:         Equity shareholders50,548   47,720      Non-controlling interest2,132   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 period52,680   49,540 Other comprehensive income (loss), net of tax         Unrealized foreign currency translation adjustment1,124   (753)      Unrealized change in fair value of available-for-sale              investments, net of tax(74)   171  1,050   (582)      Comprehensive income for the period53,730   48,958      Comprehensive income attributable to         Equity shareholders51,598   47,138      Non-controlling interest2,132   1,820  53,730   48,958      CORUS ENTERTAINMENT INC.CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY                     Share capital  Contributedsurplus  Retainedearnings  Accumulatedothercomprehensiveloss  Total attributableto equityshareholders  Non-controllinginterest  Total equity(unaudited)(in thousands of Canadian dollars)At August 31, 2011882,679   10,299   143,720   (1,075)  1,035,623   19,200   1,054,823 Comprehensive income—   —   50,548   1,050  51,598  2,132   53,730Dividends declared—   —   (17,950)   —   (17,950)   (4,223)  (22,173) Issuance of shares under stock option plan106   (20)    —   —   86   —   86 Issuance of shares under dividend reinvestment plan6,282   —   —   —   6,282   —   6,282 Share repurchased(2,110)   —   (1,778)   —   (3,888)   —   (3,888) Share-based compensation expense—   293   —   —   293   —   293 At November 30, 2011886,957   10,572   174,540   (25)   1,072,044   17,109   1,089,153                     At September 1, 2010856,655   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 plan2,924   (621)   —   —   2,303   —   2,303 Issuance of shares under dividend reinvestment plan1,604   —   —   —   1,604   —   1,604 Share-based compensation expense—   253   —   —   253   —   253 At November 30, 2010861,183   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   2010OPERATING ACTIVITIES    Net income for the period52,680   49,540 Earnings from discontinued operations—   (1,523) Add (deduct) non-cash items:       Depreciation6,239   6,108    Amortization of program rights47,055   42,542    Amortization of film investments9,987   8,286    Deferred income taxes1,362   472    Share-based compensation expense293   253    Imputed interest3,034   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 operations26,451   15,331 Cash provided by operating activities from discontinued operations—   112 Cash provided by operating activities26,451   15,443      INVESTING ACTIVITIES    Additions to property, plant and equipment(3,370)   (13,266) Net cash flows for intangibles, investments and other assets1,131   (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 plan86   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 operations2,087   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 period2,087   15,585 Cash and cash equivalents, beginning of period55,922   7,969 Cash and cash equivalents, end of period58,009   23,554              CORUS ENTERTAINMENT INC.BUSINESS SEGMENT INFORMATION(unaudited)            (in thousands of Canadian dollars)                           Three months ended November 30, 2011                 Radio  Television  Corporate  ConsolidatedRevenues  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  ConsolidatedRevenues  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    For further information: John Cassaday      Tom Peddie      Sally TindalPresident and Chief Executive Officer      Executive Vice President and Chief       Director, CommunicationsCorus Entertainment Inc.      Financial Officer        Corus Entertainment Inc. 416.479.6018      Corus Entertainment Inc.      416.479.6107       416.479.6080