Corus Entertainment announces second quarter results

Corus Entertainment announces second quarter results

- Earnings per share of $0.42 for the second quarter, up 83% from prior year - Combined Radio and Television revenues up 4% for second quarter - Combined Radio and Television segment profit up 6% for second quarter - Segment profit of $49.7 million, up 5% for the second quarter

TORONTO, April 10 /PRNewswire-FirstCall/ -- Corus Entertainment Inc. (TSX: CJR.B; NYSE: CJR) announced its second quarter financial results today, led by continued revenue growth from its broadcasting businesses.

"The strength of the Corus brands was evident once again in the second quarter" said John Cassaday, President and CEO of Corus Entertainment Inc. "Our specialty television advertising revenue increased by 8% and our Radio revenue increased by 4%. Our Content division is on track and profitable once again in the quarter. Unfortunately, Quebec Radio remains stalled due to continued soft markets, which we attribute to a general softness in the Quebec economy and an unsettled television advertising market which we believe is affecting radio demand."

Second Quarter Results
----------------------

Consolidated revenues for the second quarter ended February 29, 2008 were $178.7 million, up 2% from $174.7 million last year. Consolidated segment profit was $49.7 million, up 5% from $47.3 million last year. Net income for the quarter was $35.4 million ($0.42 basic and $0.41 diluted), compared to net income of $19.5 million ($0.23 basic and $0.22 diluted) last year. The current quarter benefited from $13.2 million in recoveries related to income tax changes.

Corus Television contributed quarterly revenues of $104.6 million, up 4% from $100.2 million last year, led by specialty advertising growth of 8% and subscriber revenue growth of 1%. Quarterly segment profit increased to $43.6 million, up 7% from $40.8 million last year.

Corus Radio revenues were $61.5 million, up 4% from $58.8 million last year. Segment profit was $10.3 million, up 3% from $9.9 million last year.

Corus Content revenues were $13.2 million, down 24% from $17.3 million last year. Segment profit was $0.4 million, compared to $2.1 million last year.

Year-to-Date Results
--------------------

Consolidated revenues for the six months ended February 29, 2008 were $393.6 million, up 3% from $383.9 million last year. Consolidated segment profit was $133.1 million, up 5% from $127.2 million last year. Net income for the six-month period was $74.8 million ($0.89 basic and $0.87 diluted), up 33% compared to net income of $56.2 million ($0.67 basic and $0.65 diluted) last year. The current period benefited from $13.2 million in recoveries related to income tax rate changes.

Corus Television contributed revenues of $230.7 million, up 4% from $222.8 million last year, led by specialty advertising growth of 4% and subscriber revenue growth of 3%. Segment profit increased to $106.4 million, up 5% from $101.3 million last year.

Corus Radio revenues were $141.0 million, up 5% from $134.4 million last year. Segment profit was $35.8 million, up 6% from $33.6 million last year.

Corus Content revenues were $22.8 million, down 22% from $29.1 million last year. Segment profit was $0.9 million, compared to $3.1 million last year.

Corus began to purchase shares under its renewed Normal Course Issuer Bid on February 19, 2008. Corus had reached its full allotment on its previous bid in early December 2007 and had been out of the market since that time. In the first six months of fiscal 2008, the Company purchased for cancellation 1,644,100 Class B Non-Voting Shares at an average price of $24.32 per share. In March 2008, a further 298,900 Class B Non-Voting Shares were purchased and cancelled.

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 quarter ended February 29, 2008 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 10, 2008 at 9 a.m. ET / 8 a.m. CT/7 a.m. MT/6 a.m. PT. While this call is directed to analysts and investors, members of the media are welcome to listen in. The dial-in number for the conference call is (866) 321-6651 (North America) or (416) 642-5212 (international). PowerPoint slides for the call will be posted at 8:45 a.m. ET on April 10, 2008 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 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, program, 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, program, 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 arises after the date thereof or otherwise.

CORUS ENTERTAINMENT INC.
CONSOLIDATED BALANCE SHEETS

As at As at
(unaudited) February 29, August 31,
(in thousands of Canadian dollars) 2008 2007
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ASSETS
Current
Cash and cash equivalents 32,382 33,347
Accounts receivable 157,559 151,380
Income taxes recoverable 972 -
Prepaid expenses and other 10,328 10,921
Program and film rights 127,654 125,068
Future tax asset 15,062 13,518
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Total current assets 343,957 334,234
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Tax credits receivable 25,601 16,875
Investments and other assets 18,769 17,492
Property, plant and equipment, net 73,911 78,342
Program and film rights 105,291 90,687
Film investments 69,161 66,593
Deferred charges - 4,100
Broadcast licenses 533,876 532,812
Goodwill 795,817 795,832
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1,966,383 1,936,967
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LIABILITIES AND SHAREHOLDERS' EQUITY
Current
Accounts payable and accrued liabilities 164,058 166,083
Income taxes payable - 1,474
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Total current liabilities 164,058 167,557
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Long-term debt 626,649 610,697
Other long-term liabilities 68,318 64,773
Future tax liability 96,472 102,851
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Total liabilities 955,497 945,878
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Non-controlling interest 17,244 15,196

SHAREHOLDERS' EQUITY
Share capital 874,911 882,244
Contributed surplus 13,515 10,250
Retained earnings 123,252 95,568
Accumulated other comprehensive loss (18,036) (12,169)
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Total shareholders' equity 993,642 975,893
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1,966,383 1,936,967
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CORUS ENTERTAINMENT INC.
CONSOLIDATED STATEMENTS OF INCOME

(unaudited)
(in thousands of Three months ended Six months ended
Canadian dollars February February February February
except per share amounts) 29, 2008 28, 2007 29, 2008 28, 2007
-------------------------------------------------------------------------
Revenues 178,738 174,729 393,563 383,927
Direct cost of sales,
general and administrative
expenses 129,005 127,409 260,440 256,690
Depreciation 5,510 5,336 11,279 10,502
Amortization - 389 - 955
Interest expense 10,073 9,035 21,062 17,907
Other expense, net 38 41 3,925 6,563
-------------------------------------------------------------------------
Income before income taxes
and non-controlling
interest 34,112 32,519 96,857 91,310
Income tax expense
(recovery) (2,547) 11,768 19,591 32,406
Non-controlling interest 1,291 1,208 2,511 2,692
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Net income for the period 35,368 19,543 74,755 56,212
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Earnings per share
Basic $0.42 $0.23 $0.89 $0.67
Diluted $0.41 $0.22 $0.87 $0.65
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CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(unaudited) Three months ended Six months ended
(in thousands of February February February February
Canadian dollars) 29, 2008 28, 2007 29, 2008 28, 2007
-------------------------------------------------------------------------
Net income for the period 35,368 19,543 74,755 56,212
Other comprehensive income
(loss), net of tax
Unrealized foreign currency
translation adjustment (295) 388 (1,267) 1,009
Unrealized change in fair
value of available-for-
sale investments - - 183 -
Unrealized change in
fair value of cash
flow hedges (5,788) - (11,790) -
-------------------------------------------------------------------------
(6,083) 388 (12,874) 1,009
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Comprehensive income for
the period 29,285 19,931 61,881 57,221
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-------------------------------------------------------------------------

CORUS ENTERTAINMENT INC.
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS EQUITY

(unaudited) Three months ended Six months ended
(in thousands of February February February February
Canadian dollars) 29, 2008 28, 2007 29, 2008 28, 2007
-------------------------------------------------------------------------
Share capital
Balance, beginning of
period 875,052 872,113 882,244 870,563
Issuance of shares under
Stock Option Plan 3,070 15,974 9,838 18,345
Shares repurchased (3,441) (500) (17,401) (1,321)
Repayment of executive
stock purchase loans 230 234 230 234
-------------------------------------------------------------------------
Balance, end of period 874,911 887,821 874,911 887,821
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Contributed surplus
Balance, beginning of period 11,534 7,573 10,250 6,878
Stock-based compensation 2,050 1,162 3,919 2,080
Exercise of stock options (69) (285) (654) (508)
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Balance, end of period 13,515 8,450 13,515 8,450
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Retained earnings
Balance, beginning of period 104,578 78,451 95,568 51,585
Cumulative impact of
accounting changes - - (1,594) -
-------------------------------------------------------------------------
Adjusted opening balance 104,578 78,451 93,974 51,585
Net income for the period 35,368 19,543 74,755 56,212
Dividends (12,488) (9,151) (22,891) (18,192)
Share repurchase excess (4,206) (514) (22,586) (1,276)
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Balance, end of period 123,252 88,329 123,252 88,329
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Accumulated other
comprehensive loss
Balance, beginning of
period (11,953) (10,907) (12,169) (11,528)
Cumulative impact of
accounting changes - - 7,007 -
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Adjusted opening balance (11,953) (10,907) (5,162) (11,528)
Other comprehensive income
(loss), net of tax (6,083) 388 (12,874) 1,009
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Balance, end of period (18,036) (10,519) (18,036) (10,519)
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CORUS ENTERTAINMENT INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS

(unaudited) Three months ended Six months ended
(in thousands of February February February February
Canadian dollars) 29, 2008 28, 2007 29, 2008 28, 2007
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OPERATING ACTIVITIES
Net income for the period 35,368 19,543 74,755 56,212
Add (deduct) non-cash items:
Depreciation 5,510 5,336 11,279 10,502
Amortization of program
and film rights 35,910 33,963 71,987 66,164
Amortization of film
investments 7,695 11,100 12,611 18,968
Other amortization - 389 - 955
Future income taxes (9,984) 5,329 (5,063) 8,047
Non-controlling interest 1,291 1,208 2,511 2,692
Stock-based compensation 804 4,132 3,688 6,051
Other 1,736 (160) 4,274 570
Net change in non-cash
working capital balances
related to operations 8,772 (6,664) (24,911) (31,640)
Payment of program and
film rights (35,385) (40,958) (77,682) (78,904)
Net additions to film
investments (11,734) (15,116) (29,478) (29,502)
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Cash provided by operating
activities 39,983 18,102 43,971 30,115
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INVESTING ACTIVITIES
Additions to property,
plant and equipment (2,908) (4,061) (7,127) (9,553)
Business combinations (1,106) - (774) (46,645)
Net change in other
investments and assets (286) 1,341 (1,421) 1,395
Decrease in public benefits
associated with acquisitions (49) (1,345) (1,945) (2,603)
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Cash used in investing
activities (4,349) (4,065) (11,267) (57,406)
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FINANCING ACTIVITIES
Increase (decrease) in
bank loans 579 (24,696) 20,407 24,931
Issuance of shares under
Stock Option Plan 3,001 15,689 9,184 17,837
Shares repurchased (7,647) (1,014) (39,987) (2,597)
Dividends paid (11,111) (9,039) (21,591) (18,078)
Dividend paid to
non-controlling interest - (1,524) (1,603) (1,524)
Other 79 (9) (79) (177)
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Cash provided by (used in)
financing activities (15,099) (20,593) (33,669) 20,392
-------------------------------------------------------------------------
Increase (decrease) in
cash and cash equivalents
during the period 20,535 (6,556) (965) (6,899)
Cash and cash equivalents,
beginning of period 11,847 43,293 33,347 43,636
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Cash and cash equivalents,
end of period 32,382 36,737 32,382 36,737
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CORUS ENTERTAINMENT INC.
BUSINESS SEGMENT INFORMATION

Three months ended February 29, 2008

Tele- Elimi- Conso-
Radio vision Content Corporate nations lidated
-------------------------------------------------------------------------
Revenues 61,478 104,574 13,218 - (532) 178,738
Direct cost of
sales, general
and admini-
strative
expenses 51,192 60,994 12,773 4,793 (747) 129,005
-------------------------------------------------------------------------
Segment profit 10,286 43,580 445 (4,793) 215 49,733
Depreciation 1,754 2,624 14 1,118 - 5,510
Interest expense 270 812 49 8,942 - 10,073
Other expense,
net (94) 213 284 (365) - 38
-------------------------------------------------------------------------
Income before
income taxes
and non-
controlling
interest 8,356 39,931 98 (14,488) 215 34,112
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-------------------------------------------------------------------------

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 admini-
strative
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 2,863 30 989 - 5,336
Amortization - 89 - 300 - 389
Interest expense 242 - 176 8,617 - 9,035
Other expense,
net 316 (38) 465 (702) - 41
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Income before
income taxes
and non-
controlling
interest 7,936 37,890 1,458 (14,846) 81 32,519
-------------------------------------------------------------------------
-------------------------------------------------------------------------

Six months ended February 29, 2008

Tele- Elimi- Conso-
Radio vision Content Corporate nations lidated
-------------------------------------------------------------------------
Revenues 141,003 230,693 22,775 - (908) 393,563
Direct cost of
sales, general
and admini-
strative
expenses 105,246 124,244 21,859 10,439 (1,348) 260,440
-------------------------------------------------------------------------
Segment profit 35,757 106,449 916 (10,439) 440 133,123
Depreciation 3,173 5,250 50 2,806 - 11,279
Interest expense 517 1,686 692 18,167 - 21,062
Other expense,
net (128) 3,672 1,037 (656) - 3,925
-------------------------------------------------------------------------
Income before
income taxes
and non-
controlling
interest 32,195 95,841 (863) (30,756) 440 96,857
-------------------------------------------------------------------------
-------------------------------------------------------------------------

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 admini-
strative
expenses 100,830 121,523 25,930 11,040 (2,633) 256,690
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Segment profit 33,597 101,286 3,136 (11,040) 258 127,237
Depreciation 2,823 5,673 55 1,951 - 10,502
Amortization - 355 - 600 - 955
Interest expense 472 39 266 17,130 - 17,907
Other expense,
net 751 5,378 1,687 (1,253) - 6,563
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Income before
income taxes
and non-
controlling
interest 29,551 89,841 1,128 (29,468) 258 91,310
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Source: News - Media

CONTACT: John Cassaday, President and Chief Executive Officer, Corus
Entertainment Inc., (416) 642-3770; Tom Peddie, Senior Vice President and
Chief Financial Officer, Corus Entertainment Inc., (416) 642-3780; Tracy
Ewing, Vice President, Communications, Corus Entertainment Inc., (416)
642-3792

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