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Press release from PR Newswire

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, 2012 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 /PRNewswire/ - 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       SOURCE Corus Entertainment Inc.For further information: <table border="0"> <tr> <td> <b>John Cassaday </b> </td> <td>   </td> <td>   </td> <td> <b>Tom Peddie </b> </td> <td>   </td> <td>   </td> <td> <b>Sally Tindal</b> </td> </tr> <tr> <td> <b>President and Chief Executive Officer </b> </td> <td>   </td> <td>   </td> <td> <b>Executive Vice President and Chief  </b> </td> <td>   </td> <td>   </td> <td> <b>Director, Communications</b> </td> </tr> <tr> <td> <b>Corus Entertainment Inc. </b> </td> <td>   </td> <td>   </td> <td> <b>Financial Officer   </b> </td> <td>   </td> <td>   </td> <td> <b>Corus Entertainment Inc. </b> </td> </tr> <tr> <td> <b>416.479.6018 </b> </td> <td>   </td> <td>   </td> <td> <b>Corus Entertainment Inc. </b> </td> <td>   </td> <td>   </td> <td> <b>416.479.6107</b> </td> </tr> <tr> <td>   </td> <td>   </td> <td>   </td> <td> <b>416.479.6080</b> </td> </tr> </table> <p>   </p>