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Press release from CNW Group

Corus Entertainment Announces Fiscal 2012 Second Quarter Results

Thursday, April 12, 2012

Corus Entertainment Announces Fiscal 2012 Second Quarter Results07:00 EDT Thursday, April 12, 2012Net income attributable to shareholders from continuing operations up 16%Consolidated revenues up 8% and segment profit up 4%Television revenue up 10% and segment profit up 1%Radio revenue down 1% and segment profit up 2%TORONTO, April 12, 2012 /CNW/ - Corus Entertainment Inc. (TSX: CJR.B) announced its second quarter financial results today."We are delighted with our second quarter results as we continued to grow our revenue and net income, despite a challenging ad sales environment," said John Cassaday, President and CEO of Corus Entertainment.  "Our portfolio of Women's brands delivered double digit ad growth, and our Kids business continued to grow on the strength of our Beyblade sales. Our Radio business also experienced a return to growth in the quarter.  The introduction of ABC Spark in March represents another exciting growth opportunity for Corus, and expands on our relationship with Disney."Financial Highlights                 (unaudited) Three months ended Six months ended(in thousands of Canadian dollars except per share amounts) February 29, February 28, February 29, February 28,  2012 2011 2012 2011Revenues         Television 163,299 148,429 348,326 315,946 Radio (1) 42,384 42,647 94,248 97,286  205,683 191,076 442,574 413,232Segment profit         Television 60,421 59,923 140,916 140,192 Radio (1) 9,879 9,672 26,281 28,186 Corporate (8,053) (9,617) (13,736) (17,740)  62,247 59,978 153,461 150,638         Net income attributable to shareholders:          From continuing operations 31,571 27,291 82,119 73,489 From discontinued operations      — 3,501       — 5,023  31,571 30,792 82,119 78,512         Basic earnings per share attributable to shareholders:         From continuing operations $ 0.38 $ 0.34 $ 0.99 $ 0.90 From discontinued operations     — $ 0.04     — $ 0.06  $ 0.38 $ 0.38 $ 0.99 $ 0.96(1)Reflects the disposition of the Quebec Radio operations, which occurred on February 1, 2011, as discontinued operations in all periods presented. Consolidated Results from Continuing OperationsConsolidated revenues for the three months ended February 29, 2012 were $205.7 million, up 8% from $191.1 million last year.  Consolidated segment profit was $62.2 million, up 4% from $60.0 million last year.  Net income attributable to Shareholders for the second quarter 2012 was $31.6 million ($0.38 basic and diluted), compared to $27.3 million ($0.34 basic and $0.33 diluted) last year.Consolidated revenues for the six months ended February 29, 2012 were $442.6 million, up 7% from $413.2 million last year.  Consolidated segment profit was $153.5 million, up 2% from $150.6 million last year.  Net income attributable to Shareholders for the six month period was $82.1 million ($0.99 basic and diluted), compared to $73.5 million ($0.90 basic and diluted) last year.Operational Results - HighlightsTelevisionSegment revenues increased 10% in Q2 2012 and year-to-dateSegment profit increased 1% in Q2 2012 and year-to-dateSpecialty advertising revenues increased 4% in Q2 2012 and year-to-dateSubscriber revenues consistent with the prior year in Q2 2012 and year-to-dateMerchandise, distribution and other revenue increased 46% in Q2 2012 and 55% year-to-dateMovie Central finished Q2 2012 with 988,000 paid subscribersRadio(1)Segment revenues down 1% in Q2 2012 and down 3% year-to-dateSegment expenses down 1% in Q2 2012 and down 2% year-to-dateSegment profit increased 2% in Q2 2012 and down 7% year-to-date(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), ABC Spark, 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 February 29, 2012 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 April 12, 2012 at 1:00 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 1.800.734.8583 and for local/international callers is 416.981.9001.  PowerPoint slides for the call will be posted 15 minutes prior to the start of the call 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 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 STATEMENTS OF FINANCIAL POSITION   As at February 29,  As at August 31,  As at September 1,(unaudited - in thousands of Canadian dollars) 2012  2011  2010ASSETS        Current        Cash and cash equivalents 65,575  55,922  7,969Accounts receivable 175,170  178,531  175,134Income taxes recoverable 4,692  603  1,781Prepaid expenses and other 12,296  13,497  18,008Total current assets 257,733  248,553  202,892         Tax credits receivable 56,671  43,108  39,597Intangibles, investments and other assets 40,767  39,980  22,699Property, plant and equipment 164,837  169,600  161,585Program and film rights 264,572  256,970  244,963Film investments 78,842  83,133  80,611Broadcast licenses 569,505  569,505  610,423Goodwill 671,827  671,827  695,029Deferred tax asset 28,058  30,915  32,130  2,132,812  2,113,591  2,089,929         LIABILITIES AND SHAREHOLDERS' EQUITY        Current        Accounts payable and accrued liabilities 213,694  206,773  192,839Provisions 3,057  5,267  13,048Total current liabilities 216,751  212,040  205,887         Long-term debt 567,387  600,796  691,891Other long-term liabilities 88,572  104,574  95,840Deferred tax liability 143,128  141,361  146,044Total liabilities 1,015,838  1,058,771  1,139,662         SHAREHOLDERS' EQUITY        Share capital 904,856  882,679  856,655Contributed surplus 7,780  10,299  12,706Retained earnings 186,090  143,717  62,509Accumulated other comprehensive income (loss) (629)  (1,075)  342Total equity attributable to shareholders 1,098,097  1,035,620  932,212Equity attributable to non-controlling interest 18,877  19,200  18,055Total shareholder's equity 1,116,974  1,054,820  950,267  2,132,812  2,113,591  2,089,929 CORUS ENTERTAINMENT INC.CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME       Three months ended Six months ended February 29, February 28, February 29, February 28,(unaudited - in thousands of Canadian dollars)2012 2011 2012 2011Revenues205,683 191,076 442,574 413,232Direct cost of sales, general and  administrative expenses143,436 131,098 289,113 262,594Depreciation6,653 6,053 12,892 12,161Interest expense13,410 14,717 26,837 28,790Restructuring— — — 2,250Other income, net(1,617) (1,125) (1,170) (1,242)Income before income taxes43,801 40,333 114,902 108,679Income tax expense10,262 11,034 28,683 31,362Net income for the period from continuing operations33,539 29,299 86,219 77,317Net income for the period from discontinued operations— 3,501 — 5,023Net income for the period33,539 32,800 86,219 82,340        Net income attributable to:            Shareholders from continuing operations31,571 27,291 82,119 73,489      Shareholders from discontinued operations— 3,501 — 5,023      Non-controlling interest1,968 2,008 4,100 3,828 33,539 32,800 86,219 82,340        Basic earnings per share attributable to shareholders:          From continuing operations$ 0.38 $ 0.34 $ 0.99 $ 0.90    From discontinued operations— 0.04 — 0.06 $ 0.38 $ 0.38 $ 0.99 $ 0.96        Diluted earnings per share attributable to shareholders:           From continuing operations$ 0.38 $ 0.33 $ 0.99 $ 0.90    From discontinued operations— 0.04 — 0.06 $ 0.38 $ 0.37 $ 0.99 $ 0.96        Net income for the period33,539 32,800 86,219 82,340Other comprehensive income (loss), net of tax           Unrealized foreign currency translation adjustment(587) (1,108) 537 (1,861)    Unrealized change in fair value of available-for-sale investments, net of tax(17)  (95)  (91)  76      Actuarial gain on employee future benefits— 433 — 433 (604) (770) 446 (1,352)Comprehensive income for the period32,935 32,030 86,665 80,988        Comprehensive income attributable to:           Shareholders30,967 30,022 82,565 77,160    Non-controlling interest1,968 2,008 4,100 3,828 32,935 32,030 86,665 80,988 CORUS ENTERTAINMENT INC.CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY                 (unaudited - in thousands of Canadian dollars)Sharecapital Contributedsurplus  Retainedearnings Accumulatedothercomprehensiveincome (loss)  Totalattributabletoshareholders  Non-controllinginterest  Totalequity               At August 31, 2011882,679 10,299 143,717 (1,075) 1,035,620 19,200 1,054,820Comprehensive income— — 82,119 446 82,565 4,100 86,665Dividends declared— — (37,968) — (37,968) (4,423) (42,391)Issuance of shares under stock option plan11,448 (3,111) — — 8,337 — 8,337Issuance of shares under dividend reinvestment plan12,839 — — — 12,839 — 12,839Shares repurchased(2,110) — (1,778) — (3,888) — (3,888)Share-based compensation expense— 592 — — 592 — 592              At February 29, 2012904,856 7,780 186,090 (629) 1,098,097 18,877 1,116,974                             Sharecapital Contributedsurplus  Retainedearnings Accumulatedothercomprehensiveincome (loss)  Totalattributabletoshareholders   Non-controllinginterest Totalequity               At September 1, 2010856,655 12,706 62,509 342 932,212 18,055 950,267Comprehensive income (loss)— — 78,512 (1,352) 77,160 3,828 80,988Actuarial gain transfer— — 433 (433) — — —Dividends declared— — (30,612) — (30,612) (4,366) (34,978)Issuance of shares under stock option plan7,911 (2,028) — — 5,883 — 5,883Issuance of shares under dividend reinvestment plan5,056 — — — 5,056 — 5,056Share-based compensation expense— 548 — — 548 — 548              At February 28, 2011869,622 11,226 110,842 (1,443) 990,247 17,517 1,007,764 CORUS ENTERTAINMENT INC.CONSOLIDATED STATEMENTS OF CASH FLOWS         Three months ended Six months ended February29, February 28, February 29, February 28,(unaudited - in thousands of Canadian dollars)2012 2011 2012 2011OPERATING ACTIVITIES       Net income for the period33,539 32,800 86,219 82,340Deduct earnings from discontinued operations— (3,501) — (5,023)Add (deduct) non-cash items:         Depreciation6,653 6,053 12,892 12,161  Amortization of program rights46,433 42,847 93,488 85,389  Amortization of film investments7,960 10,591 17,947 18,877  Deferred income taxes3,424 352 4,786 824  Share-based compensation expense299 295 592 548  Imputed interest2,976 2,484 6,010 5,084  Other(547) (1,327) (790) (1,594)Net change in non-cash working capital balances related to operations20,665 30,277 (20,726) (2,400)Payment of program and film rights(50,997) (34,975) (86,426) (73,128)Net additions to film investments(16,837) (11,270) (33,973) (33,120)Cash provided by operating activities from continuing operations53,568 74,626 80,019 89,958Cash used in operating activities from discontinued operations— (13,374) — (13,262)Cash provided by operating activities53,568 61,252 80,019 76,696        INVESTING ACTIVITIES       Additions to property, plant and equipment(4,714) (13,948) (8,084) (27,215)Net cash flows for intangibles, investments and other assets(122) (3,382) 1,009 (4,267)Other(165) (357) (318) (582)Cash used in investing activities from continuing operations(5,001) (17,687) (7,393) (32,064)Cash provided by investing activities from discontinued operations— 74,996 — 74,996Cash provided by (used in) investing activities (5,001) 57,309 (7,393) 42,932        FINANCING ACTIVITIES       Decrease in bank loans(34,674) (74,956) (34,674) (44,764)Issuance of shares under stock option plan8,251 3,581 8,337 5,884Shares repurchased— — (3,888) —Dividends paid(12,145) (11,958) (23,820) (23,549)Dividend paid to non-controlling interest(200) (160) (4,423) (4,366)Other(2,233) (2,144) (4,505) (4,324)Cash used in financing activities from continuing operations(41,001) (85,637) (62,973) (71,119)Net change during the period in cash and cash equivalents from continuing operations7,566  (28,698)  9,653 (13,225)Net change during the period in cash and cash equivalents from discontinued operations  — 61,622 — 61,734Net increase in cash and cash equivalents during the period7,566 32,924 9,653 48,509Cash and cash equivalents, beginning of period58,009 23,554 55,922 7,969Cash and cash equivalents, end of period65,575 56,478 65,575 56,478 CORUS ENTERTAINMENT INC.BUSINESS SEGMENT INFORMATION            (unaudited - in thousands of Canadian dollars)                         Three months ended February 29, 2012               Radio  Television  Corporate  ConsolidatedRevenues 42,384  163,299  —  205,683Direct cost of sales, general and administrative expenses 32,505  102,878  8,053  143,436Segment profit (loss) 9,879  60,421  (8,053)  62,247Depreciation 779  787  5,087  6,653Interest expense (26)  6,374  7,062  13,410Other expense (income), net 5  (2,363)  741  (1,617)Income (loss) before income taxes  9,121  55,623  (20,943)  43,801              Three months ended February 28, 2011               Radio  Television  Corporate  ConsolidatedRevenues 42,647  148,429  —  191,076Direct cost of sales, general and administrative expenses 32,975  88,506  9,617  131,098Segment profit (loss) 9,672  59,923  (9,617)  59,978Depreciation 738  816  4,499  6,053Interest expense 966  5,165  8,586  14,717Other expense (income), net (514)  (1,585)  974  (1,125)Income (loss) before income taxes  8,482  55,527  (23,676)  40,333              Six months ended February 29, 2012               Radio  Television  Corporate  ConsolidatedRevenues 94,248  348,326  —  442,574Direct cost of sales, general and administrative expenses 67,967  207,410  13,736  289,113Segment profit (loss) 26,281  140,916  (13,736)  153,461Depreciation 1,557  1,352  9,983  12,892Interest expense 96  13,232  13,509  26,837Other expense (income), net 13  (995)  (188)  (1,170)Income (loss) before income taxes  24,615  127,327  (37,040)  114,902              Six months ended February 28, 2011               Radio  Television  Corporate  ConsolidatedRevenues 97,286  315,946  —  413,232Direct cost of sales, general and administrative expenses 69,100  175,754  17,740  262,594Segment profit (loss) 28,186  140,192  (17,740)  150,638Depreciation 1,496  2,519  8,146  12,161Interest expense 2,472  9,877  16,441  28,790Restructuring 671  3  1,576  2,250Other expense (income), net (494)  (2,218)  1,470  (1,242)Income (loss) before income taxes  24,041  130,011  (45,373)  108,679            Revenues by type               Three months ended  Six months ended    February 29,  February 28,  February 29,  February 28,    2012  2011  2012  2011Advertising 83,870  82,179  203,319  202,499Subscriber fees 75,924  75,599  150,065  149,361Merchandising, distribution and other 45,889  33,298  89,190  61,372    205,683  191,076  442,574  413,232    For further information: John Cassaday President and Chief Executive Officer Corus Entertainment Inc. 416.479.6018 Tom Peddie Executive Vice President and Chief Financial Officer   Corus Entertainment Inc. 416.479.6080Sally TindalDirector, CommunicationsCorus Entertainment Inc.416.479.6107