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Press release from PR Newswire

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, 2013 Monthly 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 /PRNewswire/ - 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       Television 173,823  185,027    Radio 52,324  51,864    226,147  236,891  Segment profit (1)       Television 78,698  80,495    Radio 18,956  16,402    Corporate (4,961) (5,683)   92,693  91,214        Net income attributable to:     Shareholders 52,159  50,548  Non-controlling interest 1,857  2,132    54,016  52,680        Earnings per share attributable to shareholders:     Basic $ 0.63 $ 0.61 Diluted $ 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 Operations Consolidated 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 - Highlights Television Segment 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 2012 Merchandising, distribution and other revenues decreased 25% Segment profit margins of 45% Radio Segment 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 equivalents 50,483  24,588  Accounts receivable 206,036  173,421  Income taxes recoverable ?  9,542  Prepaid expenses and other 14,633  12,664  Total current assets 271,152  220,215        Tax credits receivable 45,571  43,865  Intangibles, investments and other assets 42,067  42,390  Property, plant and equipment 160,691  163,563  Program and film rights 276,743  271,244  Film investments 69,684  67,983  Broadcast licenses 569,505  569,505  Goodwill 674,393  674,393  Deferred tax assets 29,318  28,327    2,139,124  2,081,485        LIABILITIES AND SHAREHOLDERS' EQUITY     Current     Accounts payable and accrued liabilities 203,214  185,991  Income taxes payable 16 ?  Provisions 1,638  2,322  Total current liabilities 204,868  188,313        Long-term debt 528,898  518,258  Other long-term liabilities 83,357  87,853  Deferred tax liabilities 150,714  150,971  Total liabilities 967,837  945,395        SHAREHOLDERS' EQUITY     Share capital 916,085  910,005  Contributed surplus 8,175  7,835  Retained earnings 229,798  198,445  Accumulated other comprehensive loss (232) (812) Total equity attributable to shareholders 1,153,826  1,115,473  Equity attributable to non-controlling interest 17,461  20,617  Total shareholders' equity 1,171,287  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  Revenues 226,147  236,891  Direct cost of sales, general and administrative expenses 133,454  145,677  Depreciation and amortization 6,429  6,239  Interest expense 12,132  13,427  Other expense, net 506  447        Income before income taxes 73,626  71,101  Income tax expense 19,610  18,421        Net income for the period 54,016  52,680        Net income attributable to:     Shareholders 52,159  50,548  Non-controlling interest 1,857  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 period 54,016  52,680  Other comprehensive income, net of tax:       Items that may be reclassified subsequently to income:          Unrealized foreign currency translation adjustment 290  1,124       Unrealized change in fair value of available-for-sale investments 290  (74)   580  1,050        Comprehensive income for the period 54,596  53,730        Comprehensive income attributable to:          Shareholders 52,739  51,598       Non-controlling interest 1,857  2,132    54,596  53,730  CORUS ENTERTAINMENT INC.   CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY                                                         (unaudited  - in thousands of Canadian dollars) Share capital Contributed surplus Retained earnings Accumulated other comprehensive loss Total equity attributable to shareholders Non- controlling interest Total equity At August 31, 2012 910,005 7,835  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 plan 6,788 ? ? ?  6,788  ?  6,788  Shares repurchased (708) ? (756) ?  (1,464) ?  (1,464) Share-based compensation expense ? 340  ?  ?  340  ?  340  At November 30, 2012 916,085 8,175  229,798  (232) 1,153,826  17,461  1,171,287                                  At August 31, 2011 882,679 10,299  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   plan 106  (20) ?  ?  86  ?  86  Issuance of shares under dividend   reinvestment plan 6,282  ?  ?  ?  6,282  ?  6,282  Shares repurchased (2,110) ?  (1,778) ?  (3,888) ?  (3,888) Share-based compensation expense ?  293  ?  ?  293  ?  293  At November 30, 2011 886,957 10,572  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 period 54,016  52,680  Add (deduct) non-cash items:        Depreciation and amortization 6,429  6,239     Amortization of program and film rights 45,693  47,055     Amortization of film investments 6,207  9,987     Deferred income taxes (1,294) 1,362     Share-based compensation expense 340  293     Imputed interest 2,525  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 activities 40,779  26,451        INVESTING ACTIVITIES     Additions to property, plant and equipment (3,542) (3,370) Net cash flows for intangibles, investments and other assets 73  1,131  Other (88) (153) Cash used in investing activities (3,557) (2,392)       FINANCING ACTIVITIES     Increase in bank loans 9,985  ?  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 period 25,895  2,087  Cash and cash equivalents, beginning of the period 24,588  55,922  Cash and cash equivalents, end of the period 50,483  58,009  CORUS ENTERTAINMENT INC. BUSINESS SEGMENT INFORMATION   (unaudited - in thousands of Canadian dollars)             Three months ended November 30, 2012     Radio Television Corporate Consolidated Revenues 52,324  173,823  ? 226,147  Direct cost of sales, general and administrative expenses 33,368  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     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)(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    Advertising 117,894  119,449    Subscriber fees 74,981  74,141    Merchandising, distribution and other 33,272  43,301      226,147  236,891    SOURCE Corus Entertainment Inc.For further information: <p> <b>John Cassaday </b><br/> <b>President and Chief Executive Officer </b><br/> <b>Corus Entertainment Inc. </b><br/> <b>416.479.6018  </b> </p> <p> <b>Tom Peddie </b><br/> <b>Executive Vice President and Chief  </b><br/> <b>Financial Officer   </b><br/> <b>Corus Entertainment Inc. </b><br/> <b>416.479.6080</b> </p> <p> <b>Sally Tindal</b><br/> <b>Director, Communications</b><br/> <b>Corus Entertainment Inc.</b><br/> <b>416.479.6107 </b> </p>