International Entertainment News: Corus Entertainment announces third quarter results

Corus Entertainment announces third quarter results

- Earnings per share of $0.45 for the third quarter, up 29% from prior year - Combined Radio and Television revenues up 4% for the third quarter - Segment profit of $71.8 million, up 11% for the third quarter

TORONTO, July 9 /PRNewswire-FirstCall/ -- Corus Entertainment Inc. (TSX: CJR.B; NYSE: CJR) announced its third quarter financial results today, led by continued revenue growth from its broadcasting businesses.

"This was another strong quarter for Corus Entertainment meeting our expectations," said John Cassaday, President and CEO of Corus Entertainment Inc. "Once again, we delivered excellent results from our Television division; solid revenue performance from all of our divisions; and continued excellent overall cost control. We remain very optimistic about our outlook, particularly given the growth opportunities in the expanding women's segment of specialty television and continued strong economic performance in western Canada, supporting our radio and premium television businesses."

Third Quarter Results
---------------------

Consolidated revenues for the three months ended May 31, 2008 were $207.8 million, up 5% from $197.6 million last year. Consolidated segment profit was $71.8 million, up 11% from $64.8 million last year. Net income for the quarter was $37.7 million ($0.45 basic and diluted), compared to net income of $29.6 million ($0.35 basic and $0.34 diluted) last year. The current quarter benefited from $10.0 million in recoveries related to income tax changes, and was negatively impacted by an accrual of $9.7 million related to disputed regulatory fees.

Corus Television contributed quarterly revenues of $114.6 million, up 5% from $109.2 million last year, led by specialty advertising growth of 2% and subscriber revenue growth of 2%. Quarterly segment profit increased to $49.6 million, up 8% from $46.1 million last year.

Corus Radio revenues were $77.0 million, up 3% from $74.8 million last year. Segment profit was $24.7 million compared to $25.1 million last year.

Corus Content revenues were $16.3 million, up 12% from $14.6 million last year. Segment profit was $3.7 million, compared to $0.1 million last year.

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

Consolidated revenues for the nine months ended May 31, 2008 were $601.4 million, up 3% from $581.5 million last year. Consolidated segment profit was $204.9 million, up 5% from $194.5 million last year. Net income for the nine-month period was $112.4 million ($1.35 basic and $1.32 diluted), up 31% compared to net income of $85.8 million ($1.02 basic and $0.99 diluted) last year. The current period benefited from $23.2 million in recoveries related to income tax changes, and was negatively impacted by an accrual of $9.7 million related to disputed regulatory fees.

Corus Television contributed revenues of $345.3 million, up 4% from $332.1 million last year, led by specialty advertising growth of 3% and subscriber revenue growth of 2%. Segment profit increased to $156.1 million, up 5% from $148.4 million last year.

Corus Radio revenues were $218.0 million, up 4% from $209.2 million last year. Segment profit was $60.4 million, up 1% from $60.1 million last year.

Corus Content revenues were $39.1 million, down 10% from $43.7 million last year. Segment profit was $4.6 million, compared to $3.2 million last year.

In the first nine months of fiscal 2008, the Company purchased for cancellation 2,601,800 Class B Non-Voting Shares at an average price of $22.51 per share. In June 2008, a further 524,400 Class B Non-Voting Shares were purchased and cancelled at an average price of $19.59 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 quarter ended May 31, 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 July 9, 2008 at 8:30 a.m. ET/7:30 a.m. CT/6:30 a.m. MT/5:30 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 (866) 321-6651 (North America) or (416) 642-5212 (International). The confirmation code for this call is: 4627540. PowerPoint slides for the call will be posted at 8:15 a.m. ET on July 9, 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) May 31, August 31,
(in thousands of Canadian dollars) 2008 2007
-------------------------------------------------------------------------
ASSETS
Current
Cash and cash equivalents 28,518 33,347
Accounts receivable 172,098 151,380
Income taxes recoverable 780 -
Prepaid expenses and other 9,213 10,921
Program and film rights 125,027 125,068
Future tax asset 12,475 13,518
-------------------------------------------------------------------------
Total current assets 348,111 334,234
-------------------------------------------------------------------------

Tax credits receivable 28,597 16,875
Investments and other assets 19,920 17,492
Property, plant and equipment, net 71,912 78,342
Program and film rights 102,551 90,687
Film investments 70,463 66,593
Deferred charges - 4,100
Broadcast licenses 533,876 532,812
Goodwill 795,817 795,832
-------------------------------------------------------------------------
1,971,247 1,936,967
-------------------------------------------------------------------------
-------------------------------------------------------------------------

LIABILITIES AND SHAREHOLDERS' EQUITY
Current
Accounts payable and accrued liabilities 166,718 166,083
Income taxes payable - 1,474
-------------------------------------------------------------------------
Total current liabilities 166,718 167,557
-------------------------------------------------------------------------

Long-term debt 627,751 610,697
Other long-term liabilities 62,745 64,773
Future tax liability 91,889 102,851
-------------------------------------------------------------------------
Total liabilities 949,103 945,878
-------------------------------------------------------------------------

Non-controlling interest 19,112 15,196

SHAREHOLDERS' EQUITY
Share capital 865,686 882,244
Contributed surplus 15,741 10,250
Retained earnings 140,159 95,568
Accumulated other comprehensive loss (18,554) (12,169)
-------------------------------------------------------------------------
Total shareholders' equity 1,003,032 975,893
-------------------------------------------------------------------------
1,971,247 1,936,967
-------------------------------------------------------------------------
-------------------------------------------------------------------------

CORUS ENTERTAINMENT INC.
CONSOLIDATED STATEMENTS OF INCOME

(unaudited) Three months ended Nine months ended
(in thousands of May 31, May 31,
Canadian dollars except -----------------------------------------
per share amounts) 2008 2007 2008 2007
-------------------------------------------------------------------------
Revenues 207,819 197,612 601,382 581,539
Direct cost of sales, general
and administrative expenses 136,047 132,801 396,487 386,999
Depreciation 4,974 5,286 16,253 15,788
Amortization - 300 - 1,255
Interest expense 10,345 9,114 31,407 27,021
Disputed regulatory fees 9,734 1,311 9,734 3,803
Other expense, net 63 674 3,988 7,237
-------------------------------------------------------------------------
Income before income taxes and
non-controlling interest 46,656 48,126 143,513 139,436
Income tax expense 7,533 17,184 27,124 49,590
Non-controlling interest 1,449 1,355 3,960 4,047
-------------------------------------------------------------------------
Net income for the period 37,674 29,587 112,429 85,799
-------------------------------------------------------------------------
-------------------------------------------------------------------------

Earnings per share
Basic $0.45 $0.35 $1.35 $1.02
Diluted $0.45 $0.34 $1.32 $0.99
-------------------------------------------------------------------------
-------------------------------------------------------------------------

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

Three months ended Nine months ended
(unaudited) May 31, May 31,
(in thousands of -----------------------------------------
Canadian dollars) 2008 2007 2008 2007
-------------------------------------------------------------------------
Net income for the period 37,674 29,587 112,429 85,799
Other comprehensive loss,
net of tax
Unrealized foreign currency
translation adjustment 213 (1,437) (1,054) (428)
Unrealized change in fair
value of available-for-sale
investments (1,121) - (938) -
Unrealized change in fair
value of cash flow hedges 390 - (11,400) -
-------------------------------------------------------------------------
(518) (1,437) (13,392) (428)
-------------------------------------------------------------------------
Comprehensive income
for the period 37,156 28,150 99,037 85,371
-------------------------------------------------------------------------
-------------------------------------------------------------------------

CORUS ENTERTAINMENT INC.
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY

Contributed surplus
Balance, beginning of period 13,515 8,450 10,250 6,878
Stock-based compensation 2,237 1,026 6,156 3,106
Exercise of stock options (11) (206) (665) (714)
-------------------------------------------------------------------------
Balance, end of period 15,741 9,270 15,741 9,270
-------------------------------------------------------------------------
-------------------------------------------------------------------------

Retained earnings
Balance, beginning of period 123,252 88,329 95,568 51,585
Cumulative impact of
accounting changes - - (1,594) -
-------------------------------------------------------------------------
Adjusted opening balance 123,252 88,329 93,974 51,585
Net income for the period 37,674 29,587 112,429 85,799
Dividends (12,347) (14,084) (35,238) (32,276)
Share repurchase excess (8,420) (12,054) (31,006) (13,330)
-------------------------------------------------------------------------
Balance, end of period 140,159 91,778 140,159 91,778
-------------------------------------------------------------------------
-------------------------------------------------------------------------

Accumulated other
comprehensive loss
Balance, beginning of period (18,036) (10,519) (12,169) (11,528)
Cumulative impact of
accounting changes - - 7,007 -
-------------------------------------------------------------------------
Adjusted opening balance (18,036) (10,519) (5,162) (11,528)
Other comprehensive loss,
net of tax (518) (1,437) (13,392) (428)
-------------------------------------------------------------------------
Balance, end of period (18,554) (11,956) (18,554) (11,956)
-------------------------------------------------------------------------
-------------------------------------------------------------------------

CORUS ENTERTAINMENT INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS

Three months ended Nine months ended
(unaudited) May 31, May 31,
(in thousands of -----------------------------------------
Canadian dollars) 2008 2007 2008 2007
-------------------------------------------------------------------------
OPERATING ACTIVITIES
Net income for the period 37,674 29,587 112,429 85,799
Add (deduct) non-cash items:
Depreciation 4,974 5,286 16,253 15,788
Amortization of program
and film rights 35,875 35,398 107,862 101,562
Amortization of film
investments 8,885 7,389 21,496 26,357
Other amortization - 300 - 1,255
Future income taxes (1,966) 4,911 (7,029) 12,958
Non-controlling interest 1,449 1,355 3,960 4,047
Stock-based compensation 2,284 3,989 5,972 10,040
Other 2,134 614 6,408 1,184
Net change in non-cash
working capital balances
related to operations (5,029) (1,870) (29,940) (33,510)
Payment of program and
film rights (40,657) (36,171) (118,339) (115,075)
Net additions to film
investments (13,212) (16,192) (42,690) (45,694)
-------------------------------------------------------------------------
Cash provided by operating
activities 32,411 34,596 76,382 64,711
-------------------------------------------------------------------------

INVESTING ACTIVITIES
Additions to property,
plant and equipment (2,975) (4,886) (10,102) (14,439)
Business combinations - - (774) (46,645)
Net change in other
investments and assets (2,600) (498) (4,021) 897
Decrease in public benefits
associated with acquisitions (958) (1,699) (2,903) (4,302)
-------------------------------------------------------------------------
Cash used in investing
activities (6,533) (7,083) (17,800) (64,489)
-------------------------------------------------------------------------

FINANCING ACTIVITIES
Increase (decrease) in
bank loans 636 (5,093) 21,043 19,838
Issuance of shares under
Stock Option Plan 934 7,841 10,118 25,678
Shares repurchased (18,590) (21,783) (58,577) (24,380)
Dividends paid (12,436) (16,168) (34,027) (34,246)
Dividend paid to
non-controlling interest (139) - (1,742) (1,524)
Other (147) (695) (226) (872)
-------------------------------------------------------------------------
Cash used in financing
activities (29,742) (35,898) (63,411) (15,506)
-------------------------------------------------------------------------
Decrease in cash and cash
equivalents during the period (3,864) (8,385) (4,829) (15,284)
Cash and cash equivalents,
beginning of period 32,382 36,737 33,347 43,636
-------------------------------------------------------------------------
Cash and cash equivalents,
end of period 28,518 28,352 28,518 28,352
-------------------------------------------------------------------------
-------------------------------------------------------------------------

CORUS ENTERTAINMENT INC.
BUSINESS SEGMENT INFORMATION

Three months ended May 31, 2008

Tele- Elimi- Consol-
Radio vision Content Corporate nations idated
-------------------------------------------------------------------------
Revenues 76,964 114,644 16,338 - (127) 207,819
Direct cost of
sales, general and
administrative
expenses 52,276 65,033 12,640 6,320 (222) 136,047
-------------------------------------------------------------------------
Segment profit 24,688 49,611 3,698 (6,320) 95 71,772
Depreciation 1,615 2,239 70 1,050 - 4,974
Interest expense 262 1,141 6 8,936 - 10,345
Disputed regulatory
fees 5,421 4,313 - - - 9,734
Other expense, net (35) (28) 968 (842) - 63
-------------------------------------------------------------------------
Income before
income taxes and
non-controlling
interest 17,425 41,946 2,654 (15,464) 95 46,656
-------------------------------------------------------------------------
-------------------------------------------------------------------------

Three months ended May 31, 2007

Tele- Elimi- Consol-
Radio vision Content Corporate nations idated
-------------------------------------------------------------------------
Revenues 74,765 109,242 14,606 - (1,001) 197,612
Direct cost of
sales, general and
administrative
expenses 49,708 63,140 14,554 6,432 (1,033) 132,801
-------------------------------------------------------------------------
Segment profit 25,057 46,102 52 (6,432) 32 64,811
Depreciation 1,516 2,669 40 1,061 - 5,286
Amortization - - - 300 - 300
Interest expense 302 105 31 8,676 - 9,114
Disputed regulatory
fees 830 481 - - - 1,311
Other expense, net 570 151 564 (611) - 674
-------------------------------------------------------------------------
Income before
income taxes and
non-controlling
interest 21,839 42,696 (583) (15,858) 32 48,126
-------------------------------------------------------------------------
-------------------------------------------------------------------------

Nine months ended May 31, 2008

Tele- Elimi- Consol-
Radio vision Content Corporate nations idated
-------------------------------------------------------------------------
Revenues 217,967 345,337 39,113 - (1,035) 601,382
Direct cost of
sales, general and
administrative
expenses 157,522 189,277 34,499 16,759 (1,570) 396,487
-------------------------------------------------------------------------
Segment profit 60,445 156,060 4,614 (16,759) 535 204,895
Depreciation 4,788 7,489 120 3,856 - 16,253
Interest expense 779 2,827 698 27,103 - 31,407
Disputed regulatory
fees 5,421 4,313 - - - 9,734
Other expense, net (163) 3,644 2,005 (1,498) - 3,988
-------------------------------------------------------------------------
Income before
income taxes and
non-controlling
interest 49,620 137,787 1,791 (46,220) 535 143,513
-------------------------------------------------------------------------
-------------------------------------------------------------------------

Nine months ended May 31, 2007

Tele- Elimi- Consol-
Radio vision Content Corporate nations idated
-------------------------------------------------------------------------
Revenues 209,192 332,051 43,672 - (3,376) 581,539
Direct cost of
sales, general and
administrative
expenses 149,053 183,656 40,484 17,472 (3,666) 386,999
-------------------------------------------------------------------------
Segment profit 60,139 148,395 3,188 (17,472) 290 194,540
Depreciation 4,339 8,342 95 3,012 - 15,788
Amortization - 355 - 900 - 1,255
Interest expense 774 144 297 25,806 - 27,021
Disputed regulatory
fees 2,315 1,488 - - - 3,803
Other expense, net 1,321 5,529 2,251 (1,864) - 7,237
-------------------------------------------------------------------------
Income before
income taxes and
non-controlling
interest 51,390 132,537 545 (45,326) 290 139,436
-------------------------------------------------------------------------
-------------------------------------------------------------------------

Source: News - Media

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

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Wednesday, July 09, 2008

Corus Entertainment announces third quarter results

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