Corus Entertainment announces fiscal 2011 third quarter results

Corus Entertainment announces fiscal 2011 third quarter results

-- Monthly dividend increase of 16%
-- Consolidated revenues up 7% and segment profit up 11%
-- Television specialty ad growth of 15%
-- Radio revenue growth of 4% in Ontario offset by a 7% decline in
the West
-- Basic earnings per share from continuing operations of $0.48
for the quarter compared to $0.35 last year

TORONTO, July 14, 2011 /PRNewswire/ - Corus Entertainment Inc. (TSX: CJR.B) announced its third quarter financial results today.

"We are very pleased to have achieved double digit segment profit growth
for the third consecutive quarter. The successful conversion of strong
top line growth and cost containment initiatives resulted in
outstanding operating leverage," said John Cassaday, President and CEO
of Corus Entertainment.  "Once again, this growth was powered by our
core television business and demonstrates strength across our Kids,
Pay, Women's and Merchandising brands."

Financial
Highlights

(unaudited) Three months ended Nine months ended

(in May 31, May 31,
thousands of
Canadian
dollars
except per
share
amounts)

2011 2010 2011 2010

Revenues

Radio 50,745 51,374 148,031 144,852

Television 161,043 147,013 476,989 435,242

211,788 198,387 625,020 580,094

Segment
profit

Radio 16,000 17,506 44,186 44,230

Television 68,535 59,452 205,652 179,724

Corporate (7,258) (7,511) (22,948) (19,502)

77,277 69,447 226,890 204,452

Net income 39,229 28,255 110,344 112,486
from
continuing
operations

Basic
earnings per
share

From $ 0.48 $ 0.35 $ 1.35 $ 1.40
continuing
operations

From $ $ 0.04 $ 0.08 $ 0.09
discontinued --
operations

$0.48 $ 0.39 $1.43 $ 1.49

Consolidated Results from Continuing Operations

Consolidated revenues for the three months ended May 31, 2011 were
$211.8 million, up 7% from $198.4 million last year.  Consolidated
segment profit was $77.3 million, up 11% from $69.4 million last year.
Net income for the quarter was $39.2 million ($0.48 basic and $0.47
diluted), compared to $28.3 million ($0.35 basic and diluted) last
year.

Consolidated revenues for the nine months ended May 31, 2011 were $625.0
million, up 8% from $580.1 million last year.  Consolidated segment
profit was $226.9 million, up 11% from $204.5 million last year.  Net
income for the nine month period was $110.3 million ($1.35 basic and
$1.34 diluted), compared to a net income of $112.5 million ($1.40 basic
and $1.39 diluted) last year.  Net income for the nine month period for
the prior year includes a debt refinancing cost of $14.3 million, a
$14.0 million reversal of a disputed regulatory fee accrual and a $14.2
million recovery due to income tax rate changes.  Removing the impact
of these items results in an adjusted nine month basic earnings per
share of $1.22 in the prior year.

Operational Results - Highlights

Television

-- Segment revenues increased 10% in both the third quarter and
year-to-date
-- Segment profit increased 15% in the third quarter and 14%
year-to-date
-- Specialty advertising revenues increased 15% both in the third
quarter and year-to-date
-- Subscriber revenues increased 5% in the third quarter and 7%
year-to-date
-- Movie Central finished the quarter with 1,024,000 subscribers,
up 6% from the third quarter of 2010

Radio

-- Segment revenues decreased 1% in the third quarter and
increased 2% year-to-date
-- Revenues for the quarter increased 4% in Ontario and declined
in the West by 7%
-- Segment profit decreased 9% in the third quarter and was flat
year-to-date

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, television broadcasting,
children's book publishing and children's animation.  The company's
multimedia entertainment brands include YTV, Treehouse, Nickelodeon
(Canada), W Network, OWN: Oprah Winfrey Network (Canada), CosmoTV,
Sundance Channel (Canada), Movie Central, HBO Canada, Nelvana, Kids Can
Press and radio stations including CKNW AM 980, 99.3 The FOX, Country
105, 630 CHED, Q107, and 102.1 the Edge.  Corus creates engaging
branded entertainment experiences for its audiences across multiple
platforms.  A publicly traded company, Corus is listed on the Toronto
Stock Exchange (CJR.B).  Experience Corus on the web at www.corusent.com.

The unaudited consolidated financial statements and accompanying notes
for the three months ended May 31, 2011 and Management's Discussion and
Analysis are available on the Company's website at www.corusent.com in the Investor Relations section.

A conference call with Corus senior management is scheduled for July 14,
2011 at 2 p.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 North America is 1.800.679.0308 and
for local/international callers is 416.981.9080.  PowerPoint slides for
the call will be posted at 1:45 p.m. ET on July 14, 2011 and can be
found on the Corus Entertainment website at www.corusent.com in the Investor Relations section.

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 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 arise after the date thereof or otherwise.

 

CORUS ENTERTAINMENT INC.

CONSOLIDATED BALANCE SHEETS

(unaudited) As atMay 31, As at August 31,

(in thousands of Canadian 2011 2010
dollars)

ASSETS

Current

Cash and cash equivalents 60,425 7,969

Accounts receivable 189,909 161,645

Income taxes recoverable -- 1,781

Prepaid expenses and other 9,797 17,040

Program and film rights 146,039 159,526

Future tax asset 5,482 6,129

Current assets of -- 14,951
discontinued operations

Total current assets 411,652 369,041

Tax credits receivable 47,992 39,597

Investments and other assets 44,595 22,595

Property, plant and equipment 168,541 147,905

Program and film rights 111,696 88,484

Film investments 103,975 100,454

Broadcast licenses 541,248 541,248

Goodwill 671,827 671,827

Long-term assets of -- 78,104
discontinued operations

2,101,526 2,059,255

LIABILITIES AND SHAREHOLDERS'
EQUITY

Current

Accounts payable and accrued 211,357 193,342
liabilities

Income taxes payable 14,667 336

Current liabilities of -- 9,744
discontinued operations

Total current liabilities 226,024 203,422

Long-term debt 620,114 691,891

Other long-term liabilities 98,256 88,003

Future tax liability 93,336 89,651

Long-term liabilities of -- 12,285
discontinued operations

Total liabilities 1,037,730 1,085,252

Non-controlling interest 18,947 18,055

SHAREHOLDERS' EQUITY

Share capital 879,058 856,655

Contributed surplus 9,142 11,780

Retained earnings 169,663 98,669

Accumulated other (13,014) (11,156)
comprehensive loss

Total shareholders' equity 1,044,849 955,948

2,101,526 2,059,255

 

CORUS ENTERTAINMENT INC.

CONSOLIDATED STATEMENTS OF INCOME

Three months ended Nine months ended

(unaudited) May 31, May 31,

(in thousands of
Canadian dollars
except per share
amounts) 2011 2010 2011 2010

Revenues 211,788 198,387 625,020 580,094

Direct cost of
sales, general and

administrative 134,511 128,940 398,130 375,642
expenses

Depreciation 6,203 4,716 18,364 13,365

Interest expense 14,693 15,002 45,883 34,549

Disputed -- -- -- (14,015)
regulatory fees

Debt refinancing -- -- -- 14,256

Restructuring 93 -- 2,342 --

Other expense (969) 6,421 (2,211) 7,788
(income), net

Income from
continuing
operations before
income taxes

and 57,257 43,308 162,512 148,509
non-controlling
interest

Income tax expense 14,900 13,093 45,212 31,555

Non-controlling 3,128 1,960 6,956 4,468
interest

Net income for the 39,229 28,255 110,344 112,486
period from
continuing
operations

Net income for the -- 3,156 6,743 7,436
period from
discontinued
operations

Net income for the 39,229 31,411 117,087 119,922
period

Basic earnings per
share

From continuing $ 0.48 $ 0.35 $ 1.35 $ 1.40
operations

From discontinued $ $ 0.04 $ 0.08 $ 0.09
operations --

$ 0.48 $ 0.39 $ 1.43 $ 1.49

Diluted earnings
per share

From continuing $ 0.47 $ 0.35 $ 1.34 $ 1.39
operations

From discontinued $ $ 0.04 $ 0.08 $ 0.09
operations --

$ 0.47 $ 0.39 $ 1.42 $ 1.48

CONSOLIDATED STATEMENTS OFCOMPREHENSIVE INCOME

Three months ended Nine months ended

(unaudited) May 31, May 31,

(in thousands of 2011 2010 2011 2010
Canadian dollars)

Net income for the 39,229 31,411 117,087 119,922
period

Other
comprehensive
income (loss), net
of tax

Unrealized 4 (16) (1,857) (540)
foreign currency
translation
adjustment

Unrealized
change in fair
value of
available-for-sale

investments, (77) 277 (1) 289
net of tax

Unrealized
change in fair
value of cash flow
hedges,

net of tax -- -- -- 3,431

Recognition of
change in fair
value of cash flow

hedge in net -- -- -- 9,244
income, net of tax

(73) 261 (1,858) 12,424

Comprehensive 39,156 31,672 115,229 132,346
income for the
period

 

CORUS ENTERTAINMENT INC.

CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS'EQUITY

Three months ended Nine months ended

(unaudited) May 31, May 31,

(in thousands
of Canadian
dollars) 2011 2010 2011 2010

Share capital

Balance,
beginning of
period 869,622 846,747 856,655 840,602

Issuance of
shares under
stock option
plan 5,043 5,779 12,954 10,510

Other 4,393 1,307 9,449 2,721

Balance, end
of period 879,058 853,833 879,058 853,833

Contributed
surplus

Balance,
beginning of
period 10,274 15,177 11,780 17,303

Stock-based
compensation 288 (1,181) 810 672

Settlement
and
modification
of long-term
incentive
plan -- (1,186) -- (4,659)

Exercise of
stock options (1,420) (909) (3,448) (1,415)

Balance, end
of period 9,142 11,901 9,142 11,901

Retained
earnings

Balance,
beginning of
period 145,915 84,785 98,669 20,380

Net income
for the
period 39,229 31,411 117,087 119,922

Dividends (15,481) (12,169) (46,093) (36,275)

Balance, end
of period 169,663 104,027 169,663 104,027

Accumulated
other
comprehensive
loss

Balance,
beginning of
period (12,941) (11,844) (11,156) (24,007)

Other
comprehensive
income
(loss), net
of tax (73) 261 (1,858) 12,424

Balance, end
of period (13,014) (11,583) (13,014) (11,583)

 

CORUS ENTERTAINMENT INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

Three months ended Nine months ended

(unaudited) May 31, May31,

(in thousands
of Canadian
dollars) 2011 2010 2011 2010

OPERATING
ACTIVITIES

Net income for
the period 39,229 31,411 117,087 119,922

Net income from
discontinued
operations -- (3,156) (6,743) (7,436)

Add (deduct)
non-cash items:

Depreciation 6,203 4,716 18,364 13,365

Amortization
of program
rights 44,301 40,901 129,528 123,974

Amortization
of film
investments 8,830 10,984 30,941 26,126

Future
income taxes 2,541 (777) 3,365 (14,629)

Non-controlling
interest 3,128 1,960 6,956 4,468

Stock option
expense 288 216 810 672

Imputed
interest 2,827 2,458 7,911 5,926

Debt
refinancing -- -- -- 14,256

Other (809) (60) (2,403) (448)

Net change in
non-cash
working capital

balances
related to
operations 7,353 14,489 (6,439) 18,688

Payment of
program and
film rights (41,686) (41,272) (114,814) (125,545)

Net additions
to film
investments (23,131) (13,846) (56,251) (46,843)

Cash provided
by operating
activities from

continuing
operations 49,074 48,024 128,312 132,496

Cash provided
by (used in)
operating
activities from

discontinued
operations -- 325 (2,542) 715

Cash provided
byoperating
activities 49,074 48,349 125,770 133,211

INVESTING
ACTIVITIES

Additions to
property, plant
and equipment (5,387) (21,846) (32,602) (51,352)

Business
combinations -- -- -- (36,000)

Net cash flows
for investments
and other
assets 210 (580) (4,057) 2,284

Decrease in
public benefits
associated with

acquisitions (350) (601) (932) (1,079)

Cash used in
investing
activities from

continuing
operations (5,527) (23,027) (37,591) (86,147)

Cash provided
by (used in)
investing
activities from

discontinued
operations -- (322) 74,996 (715)

Cash providedby
(used in)
investing
activities (5,527) (23,349) 37,405 (86,862)

FINANCING
ACTIVITIES

Decrease in
bank loans (28,458) (24,895) (73,222) (454,576)

Issuance of
senior
unsecured
guaranteed
notes -- -- -- 500,000

Financing and
swap
termination
fees (718) -- (718) (30,997)

Issuance of
shares under
stock option
plan 3,622 4,870 9,506 9,095

Dividends paid (11,023) (11,078) (34,572) (33,725)

Dividends paid
to
non-controlling
interest (741) -- (5,107) (9,260)

Other (2,282) 265 (6,606) (3,179)

Cash used in
financing
activities from
continuing
operations (39,600) (30,838) (110,719) (22,642)

Net change in
cash and cash
equivalents
during the
period

from
continuing
operations 3,947 (5,841) (19,998) 23,707

Net change in
cash and cash
equivalents
during the
period

from
discontinued
operations -- 3 72,454 --

Net change in
cash and cash
equivalents

during the
period 3,947 (5,838) 52,456 23,707

Cash and cash
equivalents,
beginning of
period 56,478 40,467 7,969 10,922

Cash and cash
equivalents,
endof period 60,425 34,629 60,425 34,629

 

CORUS ENTERTAINMENT INC.

BUSINESS SEGMENT INFORMATION

(unaudited)

(in thousands of Canadian dollars except per share amounts)

Three months
ended May 31,
2011

Radio Television Corporate Consolidated

Revenues 50,745 161,043 -- 211,788

Direct cost of
sales, general
and
administrative
expenses 34,745 92,508 7,258 134,511

Segment profit
(loss) 16,000 68,535 (7,258) 77,277

Depreciation 817 736 4,650 6,203

Interest
expense (74) 6,182 8,585 14,693

Restructuring 79 6 8 93

Other expense
(income), net (515) 396 (850) (969)

Income (loss)
before income
taxes and
non-controlling
interest 15,693 61,215 (19,651) 57,257

Three months
ended May 31,
2010

Radio Television Corporate Consolidated

Revenues 51,374 147,013 -- 198,387

Direct cost of
sales, general
and
administrative
expenses 33,868 87,561 7,511 128,940

Segment profit
(loss) 17,506 59,452 (7,511) 69,447

Depreciation 1,001 1,819 1,896 4,716

Interest
expense 670 1,296 13,036 15,002

Other expense
(income), net 411 1,256 4,754 6,421

Income (loss)
before income
taxes and
non-controlling
interest 15,424 55,081 (27,197) 43,308

Nine months
ended May 31,
2011

Radio Television Corporate Consolidated

Revenues 148,031 476,989 -- 625,020

Direct cost of
sales, general
and
administrative
expenses 103,845 271,337 22,948 398,130

Segment profit
(loss) 44,186 205,652 (22,948) 226,890

Depreciation 2,313 3,255 12,796 18,364

Interest
expense 2,398 18,459 25,026 45,883

Restructuring 750 9 1,583 2,342

Other expense
(income), net (1,009) (1,822) 620 (2,211)

Income (loss)
before income
taxes and
non-controlling
interest 39,734 185,751 (62,973) 162,512

Nine months
ended May 31,
2010

Radio Television Corporate Consolidated

Revenues 144,852 435,242 -- 580,094

Direct cost of
sales, general
and
administrative
expenses 100,622 255,518 19,502 375,642

Segment profit
(loss) 44,230 179,724 (19,502) 204,452

Depreciation 3,079 5,596 4,690 13,365

Interest
expense 2,816 3,651 28,082 34,549

Disputed
regulatory fees (6,722) (7,293) -- (14,015)

Debt --
refinancing -- 14,256 14,256

Other expense
(income), net 512 563 6,713 7,788

Income (loss)
before income
taxes and
non-controlling
interest 44,545 177,207 (73,243) 148,509

 

Revenues by segment

Three months ended Nine months ended

May 31, May31,

2011 2010 2011 2010

Radio

West 23,499 25,142 69,301 71,219

Ontario 27,246 26,232 78,730 73,633

50,745 51,374 148,031 144,852

Television

Kids 65,986 57,425 208,812 182,071

Specialty
and Pay 95,057 89,588 268,177 253,171

161,043 147,013 476,989 435,242

Segment
profit

Three months ended Nine months ended

May 31, May 31,

2011 2010 2011 2010

Radio

West 7,918 9,208 21,526 23,962

Ontario 8,082 8,298 22,660 20,268

16,000 17,506 44,186 44,230

Television

Kids 27,961 23,233 92,323 78,799

Specialty
and Pay 40,574 36,219 113,329 100,925

68,535 59,452 205,652 179,724

Revenuesby
type

Three months ended Nine months ended

May 31, May 31,

2011 2010 2011 2010

Advertising 104,374 99,739 306,873 288,222

Subscriber
fees 76,176 72,328 225,537 211,225

Other 31,238 26,320 92,610 80,647

211,788 198,387 625,020 580,094

  

 

SOURCE Corus Entertainment Inc.

Corus Entertainment Inc.

CONTACT: John Cassaday  
President and Chief Executive Officer
Corus Entertainment Inc. 
416.479.6018       Tom Peddie
Executive Vice President and Chief
Financial Officer   
Corus Entertainment Inc.  
416.479.6080       Sally Tindal
Director, Communications
Corus Entertainment Inc.
416.479.6107
 

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