Corus Entertainment announces fiscal 2008 fourth quarter and year-end results

Corus Entertainment announces fiscal 2008 fourth quarter and year-end results

- Earnings per share of $1.57 for the year, an increase of 24% over the prior fiscal year - Segment profit for the year up 5% versus prior year - 20% increase in the declared dividend in fiscal 2008

TORONTO, Oct. 23 /PRNewswire-FirstCall/ -- Corus Entertainment Inc. (TSX: CJR.B; NYSE: CJR) announced its fourth quarter and year-end financial results today, led by continued growth from its broadcasting businesses.

"Corus had a strong 2008, growing our revenues and profits as our core businesses continued to perform well," said John Cassaday, President and Chief Executive Officer, Corus Entertainment Inc. "We have confidence in our continued growth, particularly within specialty and pay TV with the addition of Cosmopolitan TV, VIVA and HBO Canada to our portfolio."

"We are proud of our fiscal 2008 results," said Heather Shaw, Executive Chair, Corus Entertainment Inc. "Strong operating results, a 20% dividend increase, our share-buybacks and our upcoming Dividend Reinvestment Plan (DRIP) have provided solid value to our shareholders."

Fourth Quarter Results
----------------------

Consolidated revenues for the three months ended August 31, 2008 were $185.8 million, down 1% from $187.2 million last year. Consolidated segment profit was $47.2 million, up 2% from $46.4 million last year. Net income for the quarter was $17.4 million ($0.21 basic and diluted), compared to net income of $21.2 million ($0.25 basic and diluted) last year.

Corus Television contributed quarterly revenues of $104.8 million, up 1% from $104.2 million last year, led by specialty advertising growth of 5% and subscriber revenue growth of 2%. Quarterly segment profit increased to $35.7 million, up 5% from $34.1 million last year.

Corus Radio revenues were $68.5 million, up 3% from $66.5 million last year. Segment profit was $15.1 million down 13% from $17.4 million last year.

Corus Content revenues were $12.8 million, down 27% from $17.7 million last year. Segment profit was up 15% to $2.6 million, compared to $2.3 million last year.

Fiscal 2008 Results
-------------------

Consolidated revenues for the year ended August 31, 2008 were $787.2 million, up 2% from $768.7 million last year. Consolidated segment profit was $252.1 million, up 5% from $240.9 million last year. Net income for the year was $129.8 million ($1.57 basic and $1.54 diluted), compared to net income of $107.0 million ($1.27 basic and $1.23 diluted) last year. The current year benefited from $23.6 million in recoveries related to income tax changes, and was negatively impacted by an accrual of $10.9 million related to disputed regulatory fees.

Corus Television contributed revenues of $450.2 million, up 3% from $436.3 million last year, led by specialty advertising growth of 4% and subscriber revenue growth of 2%. Segment profit increased to $191.8 million, up 5% from $182.4 million last year.

Corus Radio revenues were $286.4 million, up 4% from $275.7 million last year. Segment profit was $75.5 million, down 3% from $77.5 million last year.

Corus Content revenues were $52.0 million, down 15% from $61.3 million last year. Segment profit was up 32% to $7.2 million, compared to $5.4 million last year.

In fiscal 2008, the Company purchased for cancellation 4,388,400 Class B Non-Voting Shares at an average price of $20.84 per share. In September 2008, a further 660,466 Class B Non-Voting Shares were purchased and cancelled at an average price of $19.34 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 August 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 October 23, 2008 at 2 p.m. ET / 1 p.m. CT/ Noon MT / 11 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 1-866-322-1159 (North America) or 416-640-3404. The confirmation code for this call is: 8145792. PowerPoint slides for the call will be posted at 1:45 p.m. ET on October 23, 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) August 31, August 31,
(in thousands of Canadian dollars) 2008 2007
-------------------------------------------------------------------------
ASSETS
Current
Cash and cash equivalents 19,642 33,347
Accounts receivable 157,440 151,380
Income taxes recoverable 1,615 -
Prepaid expenses and other 10,135 10,921
Program and film rights 131,301 125,068
Future tax asset 9,593 13,518
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Total current assets 329,726 334,234
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Tax credits receivable 21,952 16,875
Investments and other assets 93,086 17,492
Property, plant and equipment 73,562 78,342
Program and film rights 103,163 90,687
Film investments 80,819 66,593
Deferred charges - 4,100
Broadcast licenses 533,491 532,812
Goodwill 797,854 795,832
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2,033,653 1,936,967
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LIABILITIES AND SHAREHOLDERS' EQUITY
Current
Accounts payable and accrued liabilities 196,026 166,083
Income taxes payable - 1,474
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Total current liabilities 196,026 167,557
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Long-term debt 692,750 610,697
Other long-term liabilities 59,936 64,773
Future tax liability 87,699 102,851
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Total liabilities 1,036,411 945,878
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Non-controlling interest 20,237 15,196

SHAREHOLDERS' EQUITY
Share capital 848,257 882,244
Contributed surplus 17,304 10,250
Retained earnings 131,594 95,568
Accumulated other comprehensive loss (20,150) (12,169)
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Total shareholders' equity 977,005 975,893
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2,033,653 1,936,967
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CORUS ENTERTAINMENT INC.
CONSOLIDATED STATEMENTS OF INCOME

(unaudited) Three months ended Twelve months ended
(in thousands of Canadian August 31, August 31,
dollars except per share ------------------------------------------
amounts) 2008 2007 2008 2007
-------------------------------------------------------------------------
Revenues 185,774 187,204 787,156 768,743
Direct cost of sales, general
and administrative expenses 138,539 140,823 535,026 527,822
Depreciation 5,801 5,768 22,054 21,556
Amortization - 300 - 1,555
Interest expense 9,906 8,817 41,313 35,838
Disputed regulatory fees 1,202 (3,803) 10,936 -
Other expense, net 3,865 2,563 7,853 9,800
-------------------------------------------------------------------------
Income before income taxes
and non-controlling interest 26,461 32,736 169,974 172,172
Income tax expense 8,395 10,223 35,519 59,813
Non-controlling interest 660 1,294 4,620 5,341
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Net income for the period 17,406 21,219 129,835 107,018
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Earnings per share

Basic $0.21 $0.25 $1.57 $1.27
Diluted $0.21 $0.25 $1.54 $1.23
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CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

Three months ended Twelve months ended
(unaudited) August 31, August 31,
(in thousands of Canadian ------------------------------------------
dollars) 2008 2007 2008 2007
-------------------------------------------------------------------------
Net income for the period 17,406 21,219 129,835 107,018
Other comprehensive loss, net
of tax
Unrealized foreign currency
translation adjustment 1,031 (213) (23) (641)
Unrealized change in fair
value of available-
for-sale investments (176) - (1,114) -
Unrealized change in fair
value of cash flow hedges (2,451) - (13,851) -
-------------------------------------------------------------------------
(1,596) (213) (14,988) (641)
-------------------------------------------------------------------------
Comprehensive income for the
period 15,810 21,006 114,847 106,377
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-------------------------------------------------------------------------

CORUS ENTERTAINMENT INC.
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS EQUITY

Three months ended Twelve months ended
(unaudited) August 31, August 31,
(in thousands of Canadian ------------------------------------------
dollars) 2008 2007 2008 2007
-------------------------------------------------------------------------
Share capital
Balance, beginning of period 865,686 886,139 882,244 870,563
Issuance of shares under
stock option plan 1,555 1,284 12,338 27,676
Shares repurchased (18,984) (5,179) (46,555) (16,229)
Repayment of executive stock
purchase loans - - 230 234
-------------------------------------------------------------------------
Balance, end of period 848,257 882,244 848,257 882,244
-------------------------------------------------------------------------
-------------------------------------------------------------------------

Contributed surplus
Balance, beginning of period 15,741 9,270 10,250 6,878
Stock-based compensation 1,748 1,027 7,904 4,133
Exercise of stock options (185) (47) (850) (761)
-------------------------------------------------------------------------
Balance, end of period 17,304 10,250 17,304 10,250
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Retained earnings
Balance, beginning of period 140,159 91,778 95,568 51,585
Cumulative impact of
accounting changes - - (1,594) -
-------------------------------------------------------------------------
Adjusted opening balance 140,159 91,778 93,974 51,585
Net income for the period 17,406 21,219 129,835 107,018
Dividends (12,088) (10,566) (47,326) (42,842)
Share repurchase excess (13,883) (6,863) (44,889) (20,193)
-------------------------------------------------------------------------
Balance, end of period 131,594 95,568 131,594 95,568
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-------------------------------------------------------------------------

Accumulated other
comprehensive loss
Balance, beginning of period (18,554) (11,956) (12,169) (11,528)
Cumulative impact of
accounting changes - - 7,007 -
-------------------------------------------------------------------------
Adjusted opening balance (18,554) (11,956) (5,162) (11,528)
Other comprehensive loss, net
of tax (1,596) (213) (14,988) (641)
-------------------------------------------------------------------------
Balance, end of period (20,150) (12,169) (20,150) (12,169)
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CORUS ENTERTAINMENT INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS

Three months ended Twelve months ended
(unaudited) August 31, August 31,
(in thousands of Canadian ------------------------------------------
dollars) 2008 2007 2008 2007
-------------------------------------------------------------------------
OPERATING ACTIVITIES
Net income for the period 17,406 21,219 129,835 107,018
Add (deduct) non-cash
items:
Depreciation 5,801 5,768 22,054 21,556
Amortization of program and
film rights 37,799 37,149 145,661 138,711
Amortization of film
investments 6,897 12,424 28,393 38,781
Future income taxes (292) 3,337 (7,321) 16,295
Non-controlling interest 660 1,294 4,620 5,341
Stock-based compensation 1,999 3,026 7,971 13,066
Imputed interest and other 2,185 (35) 8,593 2,404
Net change in non-cash working
capital balances related to
operations 18,922 5,700 (11,018) (27,810)
Payment of program and film
rights (23,578) (41,145) (141,917) (156,220)
Net additions to film
investments (13,603) (10,375) (56,293) (56,069)
-------------------------------------------------------------------------
Cash provided by operating
activities 54,196 38,362 130,578 103,073
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INVESTING ACTIVITIES
Additions to property, plant
and equipment (7,450) (5,848) (17,552) (20,287)
Business combinations - (18,047) (774) (64,692)
Cash held in escrow (74,950) - (74,950) -
Net cash flows for
investments and other assets (230) 19,782 (4,251) 20,679
Decrease in public benefits
associated with acquisitions (1,090) (2,196) (3,993) (6,498)
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Cash used in investing
activities (83,720) (6,309) (101,520) (70,798)
-------------------------------------------------------------------------

FINANCING ACTIVITIES
Increase (decrease) in bank
loans 64,551 (5,450) 85,594 14,388
Issuance of shares under
stock option plan 1,370 1,237 11,488 26,915
Shares repurchased (32,867) (12,042) (91,444) (36,422)
Dividends paid (12,257) (10,599) (46,284) (44,845)
Dividend paid to
non-controlling interest - - (1,742) (1,524)
Other (149) (204) (375) (1,076)
-------------------------------------------------------------------------
Cash provided by (used in)
financing activities 20,648 (27,058) (42,763) (42,564)
-------------------------------------------------------------------------
Increase (decrease) in cash
and cash equivalents during
the period (8,876) 4,995 (13,705) (10,289)
Cash and cash equivalents,
beginning of period 28,518 28,352 33,347 43,636
-------------------------------------------------------------------------
Cash and cash equivalents,
end of period 19,642 33,347 19,642 33,347
-------------------------------------------------------------------------
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CORUS ENTERTAINMENT INC.
BUSINESS SEGMENT INFORMATION

Three months ended August 31, 2008

Tele- Elimi- Conso-
Radio vision Content Corporate nations lidated
-------------------------------------------------------------------------
Revenues 68,482 104,838 12,846 - (392) 185,774
Direct cost of
sales, general and
administrative
expenses 53,423 69,133 10,258 6,220 (495) 138,539
-------------------------------------------------------------------------
Segment profit 15,059 35,705 2,588 (6,220) 103 47,235
Depreciation 1,745 2,820 44 1,192 - 5,801
Interest expense 263 938 180 8,525 - 9,906
Disputed
regulatory fees 734 468 - - - 1,202
Other expense, net 3,757 718 488 (1,098) - 3,865
-------------------------------------------------------------------------
Income before
income taxes and
non-controlling
interest and
non-controlling
interest 8,560 30,761 1,876 (14,839) 103 26,461
-------------------------------------------------------------------------
-------------------------------------------------------------------------

Three months ended August 31, 2007

Tele- Elimi- Conso-
Radio vision Content Corporate nations lidated
-------------------------------------------------------------------------
Revenues 66,544 104,219 17,653 - (1,212) 187,204
Direct cost of
sales, general and
administrative
expenses 49,148 70,166 15,399 7,372 (1,262) 140,823
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Segment profit 17,396 34,053 2,254 (7,372) 50 46,381
Depreciation 1,856 2,566 161 1,185 - 5,768
Amortization - - - 300 - 300
Interest expense 241 101 199 8,276 - 8,817
Disputed regulatory
fees (2,315) (1,488) - - - (3,803)
Other expense, net 2,590 627 625 (1,279) - 2,563
-------------------------------------------------------------------------
Income before
income taxes and
non-controlling
interest 15,024 32,247 1,269 (15,854) 50 32,736
-------------------------------------------------------------------------
-------------------------------------------------------------------------

Twelve months ended August 31, 2008

Tele- Elimi- Conso-
Radio vision Content Corporate nations lidated
-------------------------------------------------------------------------
Revenues 286,449 450,175 51,959 - (1,427) 787,156
Direct cost of
sales, general and
administrative
expenses 210,945 258,410 44,757 22,979 (2,065) 535,026
-------------------------------------------------------------------------
Segment profit 75,504 191,765 7,202 (22,979) 638 252,130
Depreciation 6,533 10,309 164 5,048 - 22,054
Interest expense 1,042 3,765 878 35,628 - 41,313
Disputed regulatory
fees 6,155 4,781 - - - 10,936
Other expense, net 3,594 4,362 2,493 (2,596) - 7,853
-------------------------------------------------------------------------
Income before
income taxes and
non-controlling
interest 58,180 168,548 3,667 (61,059) 638 169,974
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-------------------------------------------------------------------------

Twelve months ended August 31, 2007

Tele- Elimi- Conso-
Radio vision Content Corporate nations lidated
-------------------------------------------------------------------------
Revenues 275,736 436,270 61,325 - (4,588) 768,743
Direct cost of
sales, general and
administrative
expenses 198,201 253,822 55,883 24,844 (4,928) 527,822
-------------------------------------------------------------------------
Segment profit 77,535 182,448 5,442 (24,844) 340 240,921
Depreciation 6,195 10,908 256 4,197 - 21,556
Amortization - 355 - 1,200 - 1,555
Interest expense 1,015 245 496 34,082 - 35,838
Other expense, net 3,911 6,156 2,876 (3,143) - 9,800
-------------------------------------------------------------------------
Income before
income taxes and
non-controlling
interest 66,414 164,784 1,814 (61,180) 340 172,172
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-------------------------------------------------------------------------

Source: Corus Entertainment Inc.

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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