CORUS ENTERTAINMENT ANNOUNCES FISCAL 2022 FOURTH QUARTER AND YEAR END RESULTS

• Consolidated revenue decreased 6% for the quarter and increased 4% for the year
• Consolidated segment profit⁽¹⁾ decreased 45% for the quarter and 15% for the year
• Consolidated segment profit margin⁽¹⁾ of 17% for the quarter and 28% for the year
• Net loss attributable to shareholders of $367.1 million ($1.82 loss per share basic) for the quarter and $245.1 million ($1.19 loss per share basic) for the year, which includes non-cash impairment charges related to goodwill of $350.0 million
• Net debt to segment profit⁽¹⁾ of 3.02 times at August 31, 2022, up from 2.76 times at August 31, 2021
• Free cash flow⁽¹⁾ of $44.7 million for the quarter and $239.6 million for the year

TORONTO, Oct. 21, 2022 /PRNewswire/ - Corus Entertainment Inc. (TSX: CJR.B) announced its fourth quarter and year end financial results today.

"In Q4 we experienced meaningfully lower financial results given the impacts of an uncertain economic environment on advertising demand," said Doug Murphy, President and CEO, Corus Entertainment. "Despite these cross-currents in the advertising market, our portfolio of businesses is delivering impressive subscriber revenue growth and increased international content sales. In addition, the ongoing expansion of our premium digital video business, with STACKTV, TELETOON+, the Global TV App and the upcoming launch of Pluto TV, underscores our progress in maximizing multi-platform television opportunities. We are taking appropriate actions to tightly manage our expenses while maintaining a disciplined focus on capital allocation, shareholder yield and the ongoing execution of our strategic plan and priorities. 

Corus advanced its Strategic Priorities on multiple fronts. The Company expanded its premium digital video offerings for subscribers and advertisers; set up its successful Fall programming lineup for Global TV and Corus' portfolio of Specialty Networks, and expanded the scope of its content business. The Company advanced its capital allocation priorities through investments in the business to support future growth opportunities, maintaining dividends, and making bank debt repayments and share repurchases.

• Corus and Paramount Global to launch Pluto TV. Pluto TV, the world's leading FAST (free ad-supported streaming television) service, will launch in Canada on December 1, 2022. Corus' leading ad sales capabilities will be combined with Pluto TV's best-in- class platform and technology, serving compelling content to audiences and providing a differentiated model for advertisers. In addition, viewers will have access to a selection of Canadian series and shows from Corus' portfolio, spanning a variety of genres. The service will launch with more than 100 live channels and over 20,000 hours of content, available on all major platforms including web, mobile and connected TVs.
• Corus launched TELETOON+. Corus launched its new premium kids and family streaming service. TELETOON+ is available to subscribers through Amazon Prime Video Channels, Bell Fibe TV App or RiverTV. The Company's previous kids and family streaming service, Nick+, was transitioned to TELETOON+ effective September 1, 2022.

• Free cash flow⁽¹⁾ of $44.7 million in Q4 and $239.6 million for the year compared to $35.2 million and $251.9 million, respectively, in the same comparable prior year periods. The increase in free cash flow in the fourth quarter is attributable to an increase in cash provided by operating activities of $5.7 million, as well as a decrease of $9.7 million in cash used in investing activities. The decrease in free cash flow for the year ended August 31, 2022 is mainly attributable to a decrease in cash provided by operating activities of $57.7 million, offset by an increase in cash provided by investing activities, as a result of a $43.5 million venture fund distribution.
• Net debt to segment profit⁽¹⁾ was 3.02 times at August 31, 2022, up from 2.76 times at August 31, 2022. Although net debt decreased from the repayment of bank loans, partially offset by the issuance of Senior Unsecured Notes due 2030 and production financing for an acquired subsidiary, the main driver to the increase in this ratio is the decrease of segment profit⁽¹⁾ for the most recent four quarters.
• In the fourth quarter, the Company purchased 2,774,300 of its Class B Non-Voting Participating Shares under a normal course issuer bid at an average acquisition price of $3.89.
• As of August 31, 2022, the Company had $54.9 million of cash and cash equivalents and the committed $300.0 million Revolving Facility that remains undrawn.
• The macroeconomic environment became increasingly uncertain in the fourth quarter of fiscal 2022, characterized by persistently high inflation and continuing supply chain constraints, and as a result advertising demand and spending across the North American television industry contracted meaningfully. In addition, there was a significant decline in the Company's share price from August 31, 2022, which resulted in the Company's carrying value being greater than its current market enterprise value. As the Television operating segment had actual results that fell short of previous estimates and an outlook that is less robust, a non-cash goodwill impairment charge of $350.0 million was recorded in the Television operating segment.

Corus Entertainment Inc. reports its financial results in Canadian dollars.

The unaudited interim condensed consolidated financial statements and accompanying notes for the three months and year ended August 31, 2022 and Management's Discussion and Analysis are available on the Company's website at www.corusent.com in the Investor Relations section and under the Company's SEDAR profile at www.sedar.com.

A conference call with Corus senior management is scheduled for October 21, 2022 at 8:00 a.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 local and international callers is 1.647.794.4605 and for North America is 1.888.394.8218. More information can be found on the Corus Entertainment website at www.corusent.com in the Investor Relations section.

Many provinces and territories have lifted many of the health restrictions related to COVID 19, which has led to an increase in hybrid work arrangements, which in turn has seen a reduced return to on-site work across various sectors. However, disruptions caused by prior imposition of public health restrictions, public sentiment about the pandemic and continuing COVID-19 infection rates, including labour shortages, employee absenteeism at the Company or its clients and suppliers, changes in consumer demand, and supply chain shortages or disruptions, particularly in the automotive, retail, tourism, and entertainment sectors, can negatively impact the Company's operations and financial performance, including advertising demand and revenue. There can be no certainty that current vaccination and public health measures can mitigate negative impacts caused by the COVID-19 pandemic on the Company's business in the short to medium term.

As discussed further in the 2021 MD&A under the heading "Economic Conditions", the Company's operating performance is affected by general Canadian and worldwide economic conditions. Changes or volatility in domestic or international economic conditions, economic uncertainty or geopolitical conflict and tensions, may affect discretionary consumer and business spending, resulting in increased or decreased demand for Corus' product offerings. In addition, elevated consumer price index inflation driven by sharp increases in energy and food prices as well as supply disruptions and strong demand for goods can also affect the Company's business operations and financial performance. All of the foregoing factors may adversely affect the Company through disruption to supply chains, increased costs of labour or disruption to availability of labour, related reduced advertising demand or spending, or lower demand for the Company's products and services, all of which may lead to decreased revenue or profitability. Finally, in all cases, the Company's business and financial condition are subject to audience and consumer acceptance of Corus' brands, programming and talent.

This press release includes the non-GAAP or non-IFRS financial measures of segment profit, segment profit margin, free cash flow, adjusted net income (loss) attributable to shareholders, adjusted basic earnings (loss) per share, net debt to segment profit, as well as supplementary financial measures not presented in the financial statements such as optimized advertising revenue, and new platform revenue. Non-GAAP or non-IFRS measures that are not in accordance with, nor an alternate to, generally accepted accounting principles ("GAAP") and may be different from non-GAAP or non-IFRS measures used by other companies. In addition, these non-GAAP measures are not based on any comprehensive set of accounting rules or principles.

Non-GAAP financial measures should not be considered as a substitute for, or superior to, measures of financial performance prepared in accordance with IFRS. They are limited in value because they exclude charges that have a material effect on the Company's reported results and, therefore, should not be relied upon as the sole financial measures to evaluate the Company's financial results. The non GAAP financial measures are meant to supplement, and to be viewed in conjunction with, IFRS financial results. A reconciliation of the Company's non-GAAP measures is included in the Company's most recent Report to Shareholders for the three months and year ended August 31, 2022, which is available on Corus' website at www.corusent.com as well as on SEDAR at www.sedar.com.

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 press release 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 information"). This forward-looking information relates to, among other things, the Company's objectives, goals, strategies, targets, intentions, plans, estimates and outlook, including the adoption and anticipated impact of the Company's strategic plan, advertising and expectations of advertising trends for fiscal 2023, subscriber revenue and anticipated subscription trends, distribution, production and other revenue, the Company's dividend policy and the payment of future dividends; the Company's leverage target; the Company's proposed share purchases, including the number of Class B non-voting shares to be repurchased under its normal course issuer bid, if any, and timing thereof; the Company's ability to manage retention and reputation risks related to its on-air talent; expectations regarding financial performance, including capital allocation strategy and capital structure management, operating costs and tariffs, taxes and fees, and can generally be identified by the use of words such as "believe", "anticipate", "expect", "intend", "plan", "will", "may" or the negatives of these terms and other similar expressions. In addition, any statements that refer to expectations, projections or other characterizations of future events or circumstances may be considered forward-looking information.

Although Corus believes that the expectations reflected in such forward-looking information are reasonable, such information involves assumptions, risks and uncertainties and undue reliance should not be placed on such statements. Certain material factors or assumptions are applied with respect to the forward-looking information, including without limitation, factors and assumptions regarding the general market conditions and general outlook for the industry including: the impact of recessionary conditions and continuing supply chain constraints; the potential impact of new competition and industry mergers and acquisitions; changes to applicable tax, licensing and regulatory regimes; inflation and interest rates, stability of the advertising, subscription, production and distribution markets; changes to key suppliers or clients; operating and capital costs and tariffs, taxes and fees, the Company's ability to source, produce or sell desirable content and the Company's capital and operating results being consistent with its expectations. Actual results may differ materially from those expressed or implied in such information.

Important factors that could cause actual results to differ materially from these expectations include, among other things: the Company's ability to attract, retain and manage fluctuations in advertising revenue; the Company's ability to maintain relationships with key suppliers and clients and on anticipated financial terms and conditions; audience acceptance of the Company's television programs and cable networks; the Company's ability to manage retention and reputation risks related to its on-air talent; the Company's ability to recoup production costs; the availability of tax credits; the availability of expected news, production and related credits, programs and funding; the existence of co-production treaties; the Company's ability to compete in any of the industries in which it does business including with competitors which may not be regulated in the same way or to the same degree; the business and strategic opportunities (or lack thereof) that may be presented to and pursued by the Company; 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 including statements, decisions or positions by applicable regulators including, without limitation, the Canadian Radio-television and Telecommunications Commission ("CRTC"), Canadian Heritage and Innovation, Science and Economic Development Canada ("ISED"); changes to licensing status or conditions; unanticipated or unmitigatable programming costs; the Company's ability to integrate and realize anticipated benefits from its acquisitions and to effectively manage it's growth; the Company's ability to successfully defend itself against litigation matters and complaints; failure to meet covenants under the Company's senior credit facility, senior unsecured notes or other instruments or facilities; epidemics, pandemics or other public health and safety crises in Canada and globally, including COVID-19; physical and operational changes to the Company's key facilities and infrastructure; cybersecurity threats or incidents to the Company or its key suppliers and vendors; and changes in accounting standards.

Additional information about these factors and about the material assumptions underlying any forward looking information may be found under the heading "Risks and Uncertainties" in the Company's Management's Discussion and Analysis for the year ended August 31, 2021 and under the heading "Risk Factors" in the Company's Annual Information Form for the year ended August 31, 2021. Corus cautions that the foregoing list of important assumptions and factors that may affect future results is not exhaustive. When relying on the Company's forward-looking information to make decisions with respect to Corus, investors and others should carefully consider the foregoing factors and other uncertainties and potential events. Unless otherwise specified, all forward-looking information in this document speaks as of the date of this document and may be updated or amended from time to time. Except as otherwise required by applicable securities laws, Corus disclaims any intention or obligation to publicly update or revise any forward-looking information whether as a result of new information, events or circumstances that arise after the date thereof or otherwise.

Corus Entertainment Inc. (TSX: CJR.B) is a leading media and content company that develops and delivers high quality brands and content across platforms for audiences around the world. Engaging audiences since 1999, the Company's portfolio of multimedia offerings encompass 33 specialty television services, 39 radio stations, 15 conventional television stations, a suite of digital and streaming assets, animation software, technology and media services. Corus is an internationally-renowned content creator and distributor through Nelvana, a world class animation studio expert in all formats and Corus Studios, a globally recognized producer of hit scripted and unscripted content. The Company also owns innovative full-service social digital agency so.da, lifestyle entertainment company Kin Canada, leading 2D animation software supplier Toon Boom and children's book publishing house, Kids Can Press. Corus' roster of premium brands includes Global Television, W Network, HGTV Canada, Food Network Canada, Magnolia Network Canada, The HISTORY® Channel, Showcase, Adult Swim, National Geographic, Disney Channel Canada, YTV, Global News, Globalnews.ca, Q107, Country 105, and CFOX, along with broadly distributed Canadian streaming platforms STACKTV, TELETOON+, the Global TV App and Curiouscast.

For more information visit www.corusent.com. 

SOURCE Corus Entertainment Inc.