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Press release from CNW Group

Corus Entertainment Announces Fiscal 2013 First Quarter Results

Monday, January 14, 2013

Corus Entertainment Announces Fiscal 2013 First Quarter Results18:50 EST Monday, January 14, 2013Monthly dividend increased 6.25%Net income attributable to shareholders up 3%Basic earnings per share attributable to shareholders up 3%Segment profit up 2%Strong segment profit margins for Television (45%) and Radio (36%)TORONTO, Jan. 14, 2013 /CNW/ - Corus Entertainment Inc. (TSX: CJR.B) announced its first quarter financial results today."Corus has delivered a solid first quarter, achieving double-digit segment profit growth in Radio, strong Women's advertising sales, subscriber gains on Pay television and continued success in controlling costs, which was partially offset by soft results in our Kids business," said John Cassaday, President and Chief Executive Officer, Corus Entertainment.  "Looking ahead, we expect our strong ratings momentum on Oprah Winfrey Network, ABC Spark and Nickelodeon will contribute to revenue growth as the fiscal year progresses."Financial Highlights      Three months ended November 30,(unaudited - in thousands of Canadian dollars except per share amounts)2012 2011 Revenues    Television173,823 185,027   Radio52,324 51,864  226,147 236,891 Segment profit (1)    Television78,698 80,495   Radio18,956 16,402   Corporate(4,961)(5,683) 92,693 91,214    Net income attributable to:  Shareholders52,159 50,548 Non-controlling interest1,857 2,132  54,016 52,680    Earnings per share attributable to shareholders:  Basic$ 0.63$ 0.61Diluted$ 0.62$ 0.61   Free cash flow (1)37,885 24,059    (1) See definitions and discussion under Key Performance Indicators in MD&A.Consolidated Results from Continuing OperationsConsolidated revenues for the three months ended November 30, 2012 were $226.1 million, down 5% from $236.9 million last year.  Consolidated segment profit was $92.7 million, up 2% from $91.2 million last year.  Net income attributable to shareholders for the quarter was $52.2 million ($0.63 basic and $0.62 diluted per share), up 3% compared to $50.5 million ($0.61 basic and diluted per share) last year.Operational Results - HighlightsTelevisionSegment revenues decreased 6%Segment profit(1) decreased 2%Specialty advertising revenues decreased 3%Subscriber revenues increased 1%Movie Central finished the quarter with 998,000 subscribers, up 22,000 from the fourth quarter of fiscal 2012Merchandising, distribution and other revenues decreased 25%Segment profit margins of 45%RadioSegment revenues increased 1%Segment profit(1) increased 16%Segment profit margins of 36%(1) See definitions and discussion under Key Performance Indicators in MD&A.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, children's animation and animation software.  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, Toon Boom and 37 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, 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 January 15, 2013 at 4:00 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 1.800.909.4795 and for local/international callers is 416.641.6684.  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 November 30,As at August 31,(unaudited - in thousands of Canadian dollars)2012 2012 ASSETS  Current  Cash and cash equivalents50,483 24,588 Accounts receivable206,036 173,421 Income taxes recoverable— 9,542 Prepaid expenses and other14,633 12,664 Total current assets271,152 220,215    Tax credits receivable45,571 43,865 Intangibles, investments and other assets42,067 42,390 Property, plant and equipment160,691 163,563 Program and film rights276,743 271,244 Film investments69,684 67,983 Broadcast licenses569,505 569,505 Goodwill674,393 674,393 Deferred tax assets29,318 28,327  2,139,124 2,081,485    LIABILITIES AND SHAREHOLDERS' EQUITY  Current  Accounts payable and accrued liabilities203,214 185,991 Income taxes payable16— Provisions1,638 2,322 Total current liabilities204,868 188,313    Long-term debt528,898 518,258 Other long-term liabilities83,357 87,853 Deferred tax liabilities150,714 150,971 Total liabilities967,837 945,395    SHAREHOLDERS' EQUITY  Share capital916,085 910,005 Contributed surplus8,175 7,835 Retained earnings229,798 198,445 Accumulated other comprehensive loss(232)(812)Total equity attributable to shareholders1,153,826 1,115,473 Equity attributable to non-controlling interest17,461 20,617 Total shareholders' equity1,171,287 1,136,090  2,139,124 2,081,485 CORUS ENTERTAINMENT INC.CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME    Three months ended November 30,(unaudited - in thousands of Canadian dollars except per share amounts)2012 2011 Revenues226,147 236,891 Direct cost of sales, general and administrative expenses133,454 145,677 Depreciation and amortization6,429 6,239 Interest expense12,132 13,427 Other expense, net506 447    Income before income taxes73,626 71,101 Income tax expense19,610 18,421    Net income for the period54,016 52,680    Net income attributable to:  Shareholders52,159 50,548 Non-controlling interest1,857 2,132  54,016 52,680    Earnings per share attributable to shareholders:       Basic$ 0.63$ 0.61     Diluted$ 0.62$ 0.61   Net income for the period54,016 52,680 Other comprehensive income, net of tax:    Items that may be reclassified subsequently to income:       Unrealized foreign currency translation adjustment290 1,124      Unrealized change in fair value of available-for-sale investments290 (74) 580 1,050    Comprehensive income for the period54,596 53,730    Comprehensive income attributable to:       Shareholders52,739 51,598      Non-controlling interest1,857 2,132  54,596 53,730 CORUS ENTERTAINMENT INC. CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY                            (unaudited  - in thousands of Canadian dollars)SharecapitalContributedsurplusRetainedearningsAccumulatedothercomprehensivelossTotal equityattributable toshareholdersNon-controllinginterestTotal equityAt August 31, 2012910,0057,835 198,445 (812)1,115,473 20,617 1,136,090 Comprehensive income——52,159 580 52,739 1,857 54,596 Dividends declared——(20,050)—(20,050)(5,013)(25,063)Issuance of shares under dividend    reinvestment plan6,788——— 6,788 — 6,788 Shares repurchased(708)—(756)— (1,464)— (1,464)Share-based compensation expense—340 — — 340 — 340 At November 30, 2012916,0858,175 229,798 (232)1,153,826 17,461 1,171,287                 At August 31, 2011882,67910,299 143,717 (1,075)1,035,620 19,200 1,054,820 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  plan106 (20)— — 86 — 86 Issuance of shares under dividend  reinvestment plan6,282 — — — 6,282 — 6,282 Shares repurchased(2,110)— (1,778)— (3,888)— (3,888)Share-based compensation expense— 293 — — 293 — 293 At November 30, 2011886,95710,572 174,537 (25)1,072,041 17,109 1,089,150         CORUS ENTERTAINMENT INC.CONSOLIDATED STATEMENTS OF CASH FLOWS    Three months ended November 30,(unaudited - in thousands of Canadian dollars)2012 2011 OPERATING ACTIVITIES  Net income for the period54,016 52,680 Add (deduct) non-cash items:     Depreciation and amortization6,429 6,239    Amortization of program and film rights45,693 47,055    Amortization of film investments6,207 9,987    Deferred income taxes(1,294)1,362    Share-based compensation expense340 293    Imputed interest2,525 3,034    Other(304)(243)Net change in non-cash working capital     balances related to operations(29,133)(41,391)Payment of program and film rights(27,626)(35,429)Net additions to film investments(16,074)(17,136)Cash provided by operating activities40,779 26,451    INVESTING ACTIVITIES  Additions to property, plant and equipment(3,542)(3,370)Net cash flows for intangibles, investments and other assets73 1,131 Other(88)(153)Cash used in investing activities(3,557)(2,392)   FINANCING ACTIVITIES  Increase in bank loans9,985 — Issuance of shares under stock option plan—86 Shares repurchased(1,464)(3,888)Dividends paid(13,223)(11,675)Dividends paid to non-controlling interest(4,313)(4,223)Other(2,312)(2,272)Cash used in financing activities (11,327)(21,972)   Net change in cash and cash equivalents during the period25,895 2,087 Cash and cash equivalents, beginning of the period24,588 55,922 Cash and cash equivalents, end of the period50,483 58,009 CORUS ENTERTAINMENT INC.BUSINESS SEGMENT INFORMATION (unaudited - in thousands of Canadian dollars)      Three months ended November 30, 2012  RadioTelevisionCorporateConsolidatedRevenues52,324 173,823 —226,147 Direct cost of sales, general and administrative expenses33,368 95,125 4,961 133,454 Segment profit (loss)(1)18,956 78,698 (4,961)92,693 Depreciation and amortization   6,429 Interest expense   12,132 Other expense, net   506 Income before income taxes    73,626       Three months ended November 30, 2011  RadioTelevisionCorporateConsolidatedRevenues51,864 185,027 —236,891 Direct cost of sales, general and administrative expenses35,462 104,532 5,683 145,677 Segment profit (loss)(1)16,402 80,495 (5,683)91,214 Depreciation and amortization   6,239 Interest expense   13,427 Other expense, net   447 Income before income taxes    71,101       (1) See definitions and discussion under Key Performance Indicators in MD&A. Revenues by type     Three months ended   November 30,   2012 2011   Advertising117,894 119,449   Subscriber fees74,981 74,141   Merchandising, distribution and other33,272 43,301    226,147 236,891  SOURCE: Corus Entertainment Inc.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