Corus Entertainment Announces Fiscal 2013 First Quarter Results
- 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.
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