- Earnings per share of $0.46 for second quarter, up from a loss of $1.54 in the prior year - Combined Radio and Television revenues up 6% for quarter and 7% for year-to-date - Combined Radio and Television segment profit up 10% for quarter and 12% for year-to-date - Positive segment profit from Content
TORONTO, April 3 /CNW/ - Corus Entertainment Inc. (TSX: CJR.B; NYSE: CJR) announced second quarter financial results today, led by strong revenue growth from its broadcasting businesses.
"Excellent specialty television advertising growth and solid segment profit contribution from all our divisions contributed to our strong second quarter results," said John Cassaday, President and Chief Executive Officer, Corus Entertainment Inc.
Second Quarter Results
----------------------
Consolidated revenues for the second quarter ended February 28, 2007 were $174.7 million, up 6% from $164.4 million last year. Consolidated segment profit was $47.3 million, up 12% from $42.2 million last year. Net income for the quarter was $19.5 million ($0.46 basic and $0.45 diluted), compared to a loss of $65.7 million (loss of $1.54 basic and diluted) last year. The prior year's quarter included a pre-tax debt refinancing loss of $132.0 million.
Corus Television contributed quarterly revenues of $100.2 million, up 8% from $92.9 million last year, led by continued specialty advertising growth of 14% and subscriber revenue growth of 7%. Quarterly segment profit increased to $40.8 million, up 12% from $36.5 million last year.
Corus Radio revenues were $58.8 million, up 2% from $57.8 million last year. Segment profit was $9.9 million, up 5% from $9.5 million last year.
Corus Content revenues were $17.3 million, up 15% from $15.1 million last year. Segment profit was $2.1 million, compared to $1.8 million last year.
Year-to-date Results
--------------------
Consolidated revenues for the six months ended February 28, 2007 were $383.9 million, up 7% from $359.7 million last year. Consolidated segment profit was $127.2 million, up 14% from $111.9 million last year. Net income for the six months was $56.2 million ($1.33 basic and $1.30 diluted), compared to a loss of $34.3 million (loss of $0.80 basic and diluted) last year. The prior year's six-month period included a pre-tax debt refinancing loss of $132.0 million.
Corus Television, led by specialty advertising growth of 13% and subscriber growth of 9%, contributed six-month revenues of $222.8 million, up 9% from $204.4 million last year. Movie Central increased its subscriber base from 822,000 at August 31, 2006 to 870,000 at the end of the second quarter, an increase of 9% from the same time last year. Segment profit for the six-month period increased to $101.3 million, up 14% from $89.0 million last year.
Corus Radio revenues were $134.4 million for the six-month period, up 3% from $130.2 million last year. Segment profit was $33.6 million, up 7% from $31.4 million last year.
Corus Content revenues were $29.1 million, up 3% from $28.2 million last year. Segment profit for the six-month period was $3.1 million, up from $1.8 million last year.
Corus has continued to purchase shares under its Normal Course Issuer Bid announced in fiscal 2006 and renewed in February 2007. In the first six months of fiscal 2007, the Company purchased for cancellation 62,900 Class B Non-Voting Shares at an average price of $41.28 per share.
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, advertising and digital audio services, television broadcasting, children's book publishing and children's animation. The company's multimedia entertainment brands include YTV, Treehouse, W Network, Movie Central, Nelvana, Kids Can Press and radio stations including CKNW, CKOI and Q107. Corus creates engaging branded entertainment experiences for its audiences across multiple platforms. A publicly traded company, Corus is listed on the Toronto (CJR.B) and New York (CJR) exchanges. Experience Corus on the web at www.corusent.com.
The unaudited consolidated financial statements and accompanying notes for the six months ended February 28, 2007 and Management's Discussion and Analysis are available on the Company's website at http://www.corusent.com/corporate/investor_information/press_releases.asp.
A conference call with Corus senior management is scheduled for April 3, 2007 at 9 a.m. ET/8 a.m. CT/7 a.m. MT/6 a.m. PT. 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 is 1-800-475-3716. PowerPoint slides for the call will be posted at 8:45 a.m. ET on April 3 and can be found on the Corus Entertainment website at http://www.corusent.com/corporate/investor_information/index.asp.
This statement 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 within the meaning of applicable securities laws. These forward-looking statements related to, among other things, our objectives, goals, strategies, intentions, plans, estimates and outlook 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 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 arises after the date thereof or otherwise.
CORUS ENTERTAINMENT INC.
CONSOLIDATED BALANCE SHEETS
As at As at
(unaudited) February 28, August 31,
(in thousands of Canadian dollars) 2007 2006
-------------------------------------------------------------------------
ASSETS
Current
Cash and cash equivalents 36,737 43,636
Accounts receivable 156,161 142,934
Prepaid expenses and other 9,210 7,332
Program and film rights 114,955 104,723
Future tax asset 16,739 14,535
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Total current assets 333,802 313,160
-------------------------------------------------------------------------
Tax credits receivable 19,608 13,226
Investments and other assets 30,353 29,642
Property, plant and equipment, net 77,517 78,417
Program and film rights 102,264 79,380
Film investments 64,015 60,779
Deferred charges 4,700 5,655
Broadcast licenses 519,075 505,212
Goodwill 790,813 756,738
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1,942,147 1,842,209
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-------------------------------------------------------------------------
LIABILITIES AND SHAREHOLDERS' EQUITY
Current
Accounts payable and accrued liabilities 188,029 176,384
Income taxes payable 3,139 4,583
-------------------------------------------------------------------------
Total current liabilities 191,168 180,967
-------------------------------------------------------------------------
Long-term debt 621,236 596,362
Deferred credits 25,866 28,691
Future tax liability 95,210 80,447
Other long-term liabilities 22,039 26,865
Non-controlling interest 12,547 11,379
-------------------------------------------------------------------------
Total liabilities 968,066 924,711
-------------------------------------------------------------------------
SHAREHOLDERS' EQUITY
Share capital 887,821 870,563
Contributed surplus 8,450 6,878
Retained earnings 88,329 51,585
Cumulative translation adjustment (10,519) (11,528)
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Total shareholders' equity 974,081 917,498
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1,942,147 1,842,209
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CORUS ENTERTAINMENT INC.
CONSOLIDATED STATEMENTS OF INCOME (LOSS) AND RETAINED EARNINGS
(unaudited)
(in thousands of Three months ended Six months ended
Canadian dollars February 28, February 28,
except per share amounts) 2007 2006 2007 2006
-------------------------------------------------------------------------
Revenues 174,729 164,388 383,927 359,729
Direct cost of sales,
general and administrative
expenses 127,409 122,237 256,690 247,827
Depreciation 5,336 4,988 10,502 10,026
Amortization 389 631 955 1,483
Interest on long-term debt 9,035 11,076 17,907 25,540
Debt refinancing loss - 131,951 - 131,951
Other expense (income), net 41 (573) 6,563 (1,251)
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Income (loss) before income
taxes and non-controlling
interest 32,519 (105,922) 91,310 (55,847)
Income tax expense
(recovery) 11,768 (41,113) 32,406 (23,362)
Non-controlling interest 1,208 923 2,692 1,840
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Net income (loss) for
the period 19,543 (65,732) 56,212 (34,325)
Retained earnings, beginning
of period 78,451 80,077 51,585 50,802
Dividends (9,151) (4,264) (18,192) (6,396)
Share repurchase excess (514) (3,079) (1,276) (3,079)
-------------------------------------------------------------------------
Retained earnings, end
of period 88,329 7,002 88,329 7,002
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-------------------------------------------------------------------------
Earnings (loss) per share
Basic $0.46 $(1.54) $1.33 $(0.80)
Diluted 0.45 (1.54) 1.30 (0.80)
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Weighted average number of
shares outstanding
(in thousands)
Basic 42,269 42,802 42,169 42,805
Diluted 43,450 42,802 43,292 42,805
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CORUS ENTERTAINMENT INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(unaudited) Three months ended Six months ended
(in thousands of February 28, February 28,
Canadian dollars) 2007 2006 2007 2006
-------------------------------------------------------------------------
OPERATING ACTIVITIES
Net income (loss) for
the period 19,543 (65,732) 56,212 (34,325)
Add (deduct) non-cash items:
Depreciation 5,336 4,988 10,502 10,026
Amortization of program
and film rights 33,963 31,246 66,164 60,135
Amortization of film
investments 11,100 6,645 18,968 14,150
Other amortization 389 631 955 1,483
Future income taxes 5,329 (47,958) 8,047 (44,107)
Non-controlling interest 1,208 923 2,692 1,840
Foreign exchange
losses (gains) 13 (325) 33 (325)
Stock-based compensation 4,132 2,104 6,051 3,787
Debt refinancing loss - 131,951 - 131,951
Other (173) 816 537 1,153
Net change in non-cash
working capital balances
related to operations (6,664) 17,694 (31,640) (22,815)
Payment of program and
film rights (40,958) (34,058) (78,904) (62,382)
Net additions to film
investments (15,116) (9,205) (29,502) (21,953)
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Cash provided by operating
activities 18,102 39,720 30,115 38,618
-------------------------------------------------------------------------
INVESTING ACTIVITIES
Additions to property,
plant and equipment (4,061) (6,728) (9,553) (7,963)
Business combinations - - (46,645) -
Increase (decrease) in
other investments, net (130) 258 (76) (239)
Decrease in public benefits
associated with
acquisitions (1,345) (2,321) (2,603) (4,046)
Proceeds from sale of assets 1,471 1,569 1,471 10,569
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Cash provided used in
investing activities (4,065) (7,222) (57,406) (1,679)
-------------------------------------------------------------------------
FINANCING ACTIVITIES
Increase (decrease) in
bank loans (24,696) 633,354 24,931 633,354
Notes repurchase and swap
termination (81) (726,621) (81) (726,621)
Additions to deferred
financing charges - (6,000) - (6,000)
Decrease in other long-term
liabilities (162) (176) (330) (352)
Issuance of shares under
stock option plan 15,689 2,404 17,837 2,574
Shares repurchased (1,014) (7,649) (2,597) (7,649)
Dividends paid (9,039) (2,132) (18,078) (2,132)
Dividends paid to
non-controlling interest (1,524) (630) (1,524) (630)
Other 234 230 234 230
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Cash provided by (used in)
financing activities (20,593) (107,220) 20,392 (107,226)
-------------------------------------------------------------------------
Net decrease in cash and
cash equivalents during
the period (6,556) (74,722) (6,899) (70,287)
Cash and cash equivalents,
beginning of period 43,293 142,521 43,636 138,086
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Cash and cash equivalents,
end of period 36,737 67,799 36,737 67,799
-------------------------------------------------------------------------
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CORUS ENTERTAINMENT INC.
BUSINESS SEGMENT INFORMATION
Three months ended February 28, 2007
Tele- Elimi- Conso-
Radio vision Content Corporate nations lidated
-------------------------------------------------------------------------
Revenues 58,836 100,168 17,320 - (1,595) 174,729
Direct cost of
sales, general
and adminis-
trative
expenses 48,888 59,364 15,191 5,642 (1,676) 127,409
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Segment profit 9,948 40,804 2,129 (5,642) 81 47,320
Depreciation 1,454 2,012 881 989 - 5,336
Amortization - 89 - 300 - 389
Interest on
long-term debt - - - 9,035 - 9,035
Other expense
(income), net 316 (38) 465 (702) - 41
-------------------------------------------------------------------------
Income (loss)
before income
taxes and non-
controlling
interest 8,178 38,741 783 (15,264) 81 32,519
-------------------------------------------------------------------------
-------------------------------------------------------------------------
Three months ended February 28, 2006
Tele- Elimi- Conso-
Radio vision Content Corporate nations lidated
-------------------------------------------------------------------------
Revenues 57,784 92,897 15,054 - (1,347) 164,388
Direct cost of
sales, general
and adminis-
trative
expenses 48,280 56,403 13,263 5,815 (1,524) 122,237
-------------------------------------------------------------------------
Segment profit 9,504 36,494 1,791 (5,815) 177 42,151
Depreciation 1,621 1,870 698 799 - 4,988
Amortization - 188 - 443 - 631
Interest on
long-term debt - - - 11,076 - 11,076
Debt refinancing
loss - - - 131,951 - 131,951
Other expense
(income), net 150 318 (2) (1,039) - (573)
-------------------------------------------------------------------------
Income (loss)
before income
taxes and non-
controlling
interest 7,733 34,118 1,095 (149,045) 177 (105,922)
-------------------------------------------------------------------------
-------------------------------------------------------------------------
Six months ended February 28, 2007
Tele- Elimi- Conso-
Radio vision Content Corporate nations lidated
-------------------------------------------------------------------------
Revenues 134,427 222,809 29,066 (2,375) 383,927
Direct cost of
sales, general
and adminis-
trative
expenses 100,830 121,523 25,930 11,040 (2,633) 256,690
-------------------------------------------------------------------------
Segment profit 33,597 101,286 3,136 (11,040) 258 127,237
Depreciation 2,823 4,003 1,725 1,951 - 10,502
Amortization - 355 - 600 - 955
Interest on
long-term debt - - - 17,907 - 17,907
Other expense
(income), net 751 5,378 1,687 (1,253) - 6,563
-------------------------------------------------------------------------
Income (loss)
before income
taxes and non-
controlling
interest 30,023 91,550 (276) (30,245) 258 91,310
-------------------------------------------------------------------------
-------------------------------------------------------------------------
Six months ended February 28, 2006
Tele- Elimi- Conso-
Radio vision Content Corporate nations lidated
-------------------------------------------------------------------------
Revenues 130,176 204,352 28,158 (2,957) 359,729
Direct cost of
sales, general
and adminis-
trative
expenses 98,809 115,307 26,365 10,600 (3,254) 247,827
-------------------------------------------------------------------------
Segment profit 31,367 89,045 1,793 (10,600) 297 111,902
Depreciation 3,189 3,674 1,449 1,714 - 10,026
Amortization - 376 - 1,107 - 1,483
Interest on
long-term debt - - - 25,540 - 25,540
Debt refinancing
loss - - - 131,951 - 131,951
Other expense
(income), net 284 338 (4) (1,869) - (1,251)
-------------------------------------------------------------------------
Income (loss)
before income
taxes and non-
controlling
interest 27,894 84,657 348 (169,043) 297 (55,847)
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-------------------------------------------------------------------------
%SEDAR: 00013131EF %CIK: 0001100868
