Corus Entertainment Announces Fiscal 2012 Second Quarter Results
- Net 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 /PRNewswire/ - 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 | 2011 | ||||||
| Revenues | |||||||||
| 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 | 413,232 | ||||||
| Segment 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 Operations
Consolidated 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 - Highlights
Television
- Segment revenues increased 10% in Q2 2012 and year-to-date
- Segment profit increased 1% in Q2 2012 and year-to-date
- Specialty advertising revenues increased 4% in Q2 2012 and year-to-date
- Subscriber revenues consistent with the prior year in Q2 2012 and year-to-date
- Merchandise, distribution and other revenue increased 46% in Q2 2012 and 55% year-to-date
- Movie Central finished Q2 2012 with 988,000 paid subscribers
Radio(1)
- Segment revenues down 1% in Q2 2012 and down 3% year-to-date
- Segment expenses down 1% in Q2 2012 and down 2% year-to-date
- Segment 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 | 2010 | |||||
| ASSETS | ||||||||
| Current | ||||||||
| Cash and cash equivalents | 65,575 | 55,922 | 7,969 | |||||
| Accounts receivable | 175,170 | 178,531 | 175,134 | |||||
| Income taxes recoverable | 4,692 | 603 | 1,781 | |||||
| Prepaid expenses and other | 12,296 | 13,497 | 18,008 | |||||
| Total current assets | 257,733 | 248,553 | 202,892 | |||||
| Tax credits receivable | 56,671 | 43,108 | 39,597 | |||||
| Intangibles, investments and other assets | 40,767 | 39,980 | 22,699 | |||||
| Property, plant and equipment | 164,837 | 169,600 | 161,585 | |||||
| Program and film rights | 264,572 | 256,970 | 244,963 | |||||
| Film investments | 78,842 | 83,133 | 80,611 | |||||
| Broadcast licenses | 569,505 | 569,505 | 610,423 | |||||
| Goodwill | 671,827 | 671,827 | 695,029 | |||||
| Deferred 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 | 192,839 | |||||
| Provisions | 3,057 | 5,267 | 13,048 | |||||
| Total current liabilities | 216,751 | 212,040 | 205,887 | |||||
| Long-term debt | 567,387 | 600,796 | 691,891 | |||||
| Other long-term liabilities | 88,572 | 104,574 | 95,840 | |||||
| Deferred tax liability | 143,128 | 141,361 | 146,044 | |||||
| Total liabilities | 1,015,838 | 1,058,771 | 1,139,662 | |||||
| SHAREHOLDERS' EQUITY | ||||||||
| Share capital | 904,856 | 882,679 | 856,655 | |||||
| Contributed surplus | 7,780 | 10,299 | 12,706 | |||||
| Retained earnings | 186,090 | 143,717 | 62,509 | |||||
| Accumulated other comprehensive income (loss) | (629) | (1,075) | 342 | |||||
| Total equity attributable to shareholders | 1,098,097 | 1,035,620 | 932,212 | |||||
| Equity attributable to non-controlling interest | 18,877 | 19,200 | 18,055 | |||||
| Total 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 | 2011 | ||||
| Revenues | 205,683 | 191,076 | 442,574 | 413,232 | ||||
| Direct cost of sales, general and administrative expenses | 143,436 | 131,098 | 289,113 | 262,594 | ||||
| Depreciation | 6,653 | 6,053 | 12,892 | 12,161 | ||||
| Interest expense | 13,410 | 14,717 | 26,837 | 28,790 | ||||
| Restructuring | — | — | — | 2,250 | ||||
| Other income, net | (1,617) | (1,125) | (1,170) | (1,242) | ||||
| Income before income taxes | 43,801 | 40,333 | 114,902 | 108,679 | ||||
| Income tax expense | 10,262 | 11,034 | 28,683 | 31,362 | ||||
| Net income for the period from continuing operations | 33,539 | 29,299 | 86,219 | 77,317 | ||||
| Net income for the period from discontinued operations | — | 3,501 | — | 5,023 | ||||
| Net income for the period | 33,539 | 32,800 | 86,219 | 82,340 | ||||
| Net income attributable to: | ||||||||
| Shareholders from continuing operations | 31,571 | 27,291 | 82,119 | 73,489 | ||||
| Shareholders from discontinued operations | — | 3,501 | — | 5,023 | ||||
| Non-controlling interest | 1,968 | 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 period | 33,539 | 32,800 | 86,219 | 82,340 | ||||
| Other 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 period | 32,935 | 32,030 | 86,665 | 80,988 | ||||
| Comprehensive income attributable to: | ||||||||
| Shareholders | 30,967 | 30,022 | 82,565 | 77,160 | ||||
| Non-controlling interest | 1,968 | 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) | Share capital |
Contributed surplus |
Retained earnings |
Accumulated other comprehensive income (loss) |
Total attributable to shareholders |
Non-controlling interest |
Total equity |
||||||
| At August 31, 2011 | 882,679 | 10,299 | 143,717 | (1,075) | 1,035,620 | 19,200 | 1,054,820 | ||||||
| Comprehensive income | — | — | 82,119 | 446 | 82,565 | 4,100 | 86,665 | ||||||
| Dividends declared | — | — | (37,968) | — | (37,968) | (4,423) | (42,391) | ||||||
| Issuance of shares under stock option plan | 11,448 | (3,111) | — | — | 8,337 | — | 8,337 | ||||||
| Issuance of shares under dividend reinvestment plan | 12,839 | — | — | — | 12,839 | — | 12,839 | ||||||
| Shares repurchased | (2,110) | — | (1,778) | — | (3,888) | — | (3,888) | ||||||
| Share-based compensation expense | — | 592 | — | — | 592 | — | 592 | ||||||
| At February 29, 2012 | 904,856 | 7,780 | 186,090 | (629) | 1,098,097 | 18,877 | 1,116,974 | ||||||
| Share capital |
Contributed surplus |
Retained earnings |
Accumulated other comprehensive income (loss) |
Total attributable to shareholders |
Non-controlling interest |
Total equity |
|||||||
| At September 1, 2010 | 856,655 | 12,706 | 62,509 | 342 | 932,212 | 18,055 | 950,267 | ||||||
| Comprehensive income (loss) | — | — | 78,512 | (1,352) | 77,160 | 3,828 | 80,988 | ||||||
| Actuarial gain transfer | — | — | 433 | (433) | — | — | — | ||||||
| Dividends declared | — | — | (30,612) | — | (30,612) | (4,366) | (34,978) | ||||||
| Issuance of shares under stock option plan | 7,911 | (2,028) | — | — | 5,883 | — | 5,883 | ||||||
| Issuance of shares under dividend reinvestment plan | 5,056 | — | — | — | 5,056 | — | 5,056 | ||||||
| Share-based compensation expense | — | 548 | — | — | 548 | — | 548 | ||||||
| At February 28, 2011 | 869,622 | 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 | |||||||
| February 29, | February 28, | February 29, | February 28, | |||||
| (unaudited - in thousands of Canadian dollars) | 2012 | 2011 | 2012 | 2011 | ||||
| OPERATING ACTIVITIES | ||||||||
| Net income for the period | 33,539 | 32,800 | 86,219 | 82,340 | ||||
| Deduct earnings from discontinued operations | — | (3,501) | — | (5,023) | ||||
| Add (deduct) non-cash items: | ||||||||
| Depreciation | 6,653 | 6,053 | 12,892 | 12,161 | ||||
| Amortization of program rights | 46,433 | 42,847 | 93,488 | 85,389 | ||||
| Amortization of film investments | 7,960 | 10,591 | 17,947 | 18,877 | ||||
| Deferred income taxes | 3,424 | 352 | 4,786 | 824 | ||||
| Share-based compensation expense | 299 | 295 | 592 | 548 | ||||
| Imputed interest | 2,976 | 2,484 | 6,010 | 5,084 | ||||
| Other | (547) | (1,327) | (790) | (1,594) | ||||
| Net change in non-cash working capital balances related to operations | 20,665 | 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 operations | 53,568 | 74,626 | 80,019 | 89,958 | ||||
| Cash used in operating activities from discontinued operations | — | (13,374) | — | (13,262) | ||||
| Cash provided by operating activities | 53,568 | 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 | — | 74,996 | ||||
| Cash 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 plan | 8,251 | 3,581 | 8,337 | 5,884 | ||||
| Shares 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 operations |
7,566 |
(28,698) |
9,653 |
(13,225) |
||||
| Net change during the period in cash and cash equivalents from discontinued operations | — | 61,622 | — | 61,734 | ||||
| Net increase in cash and cash equivalents during the period | 7,566 | 32,924 | 9,653 | 48,509 | ||||
| Cash and cash equivalents, beginning of period | 58,009 | 23,554 | 55,922 | 7,969 | ||||
| Cash and cash equivalents, end of period | 65,575 | 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 | Consolidated | |||||||||
| Revenues | 42,384 | 163,299 | — | 205,683 | ||||||||
| Direct cost of sales, general and administrative expenses | 32,505 | 102,878 | 8,053 | 143,436 | ||||||||
| Segment profit (loss) | 9,879 | 60,421 | (8,053) | 62,247 | ||||||||
| Depreciation | 779 | 787 | 5,087 | 6,653 | ||||||||
| Interest expense | (26) | 6,374 | 7,062 | 13,410 | ||||||||
| Other 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 | Consolidated | |||||||||
| Revenues | 42,647 | 148,429 | — | 191,076 | ||||||||
| Direct cost of sales, general and administrative expenses | 32,975 | 88,506 | 9,617 | 131,098 | ||||||||
| Segment profit (loss) | 9,672 | 59,923 | (9,617) | 59,978 | ||||||||
| Depreciation | 738 | 816 | 4,499 | 6,053 | ||||||||
| Interest expense | 966 | 5,165 | 8,586 | 14,717 | ||||||||
| Other 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 | Consolidated | |||||||||
| Revenues | 94,248 | 348,326 | — | 442,574 | ||||||||
| Direct cost of sales, general and administrative expenses | 67,967 | 207,410 | 13,736 | 289,113 | ||||||||
| Segment profit (loss) | 26,281 | 140,916 | (13,736) | 153,461 | ||||||||
| Depreciation | 1,557 | 1,352 | 9,983 | 12,892 | ||||||||
| Interest expense | 96 | 13,232 | 13,509 | 26,837 | ||||||||
| Other 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 | Consolidated | |||||||||
| Revenues | 97,286 | 315,946 | — | 413,232 | ||||||||
| Direct cost of sales, general and administrative expenses | 69,100 | 175,754 | 17,740 | 262,594 | ||||||||
| Segment profit (loss) | 28,186 | 140,192 | (17,740) | 150,638 | ||||||||
| Depreciation | 1,496 | 2,519 | 8,146 | 12,161 | ||||||||
| Interest expense | 2,472 | 9,877 | 16,441 | 28,790 | ||||||||
| Restructuring | 671 | 3 | 1,576 | 2,250 | ||||||||
| Other 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 | 2011 | |||||||||
| Advertising | 83,870 | 82,179 | 203,319 | 202,499 | ||||||||
| Subscriber fees | 75,924 | 75,599 | 150,065 | 149,361 | ||||||||
| Merchandising, distribution and other | 45,889 | 33,298 | 89,190 | 61,372 | ||||||||
| 205,683 | 191,076 | 442,574 | 413,232 | |||||||||
SOURCE Corus Entertainment Inc (IR Group)
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