Corus Entertainment announces fiscal 2011 fourth quarter and year-end results

Corus Entertainment announces fiscal 2011 fourth quarter and year-end results

-- Net income from continuing operations of $141.3 million ($1.73
per share basic) for the fiscal year, up 18% from $119.7
million ($1.48 per share basic) last year
-- Free cash flow from continuing operations of $133.3 million
-- Consolidated revenues up 7% in the fourth quarter and 8% for
the fiscal year
-- Segment profit up 14% for the quarter and 12% for the fiscal
year
-- Television segment profit up 14% for the fiscal year
-- Radio achieves segment profit margin of 30% for the fiscal year

TORONTO, Oct. 26, 2011 /PRNewswire/ - Corus Entertainment Inc. (TSX: CJR.B)
announced its fourth quarter and year-end financial results today.

"Corus had an excellent year highlighted by double digit segment profit
growth and a 45% dividend increase," said John Cassaday, President and
CEO of Corus Entertainment.  "Corus achieved its segment profit
guidance and exceeded free cash flow guidance as a result of tight cost
controls in Radio coupled with exceptional revenue and segment profit
growth in Television.  Our annual segment profit guidance included the
Quebec Radio business for a full year, so if not for the divestiture of
Quebec, we would have been at the high end of our guidance range or
exceeded it."

Financial Highlights

(unaudited) Three months ended Year ended

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

2011 2010 2011 2010

Revenues

Radio 47,626 47,581 195,657 192,433

Television 152,567 139,855 629,556 575,097

200,193 187,436 825,213 767,530

Segment profit

Radio 14,899 13,201 59,085 57,431

Television 52,880 46,955 258,532 226,679

Corporate (9,248) (8,639) (32,196) (28,141)

58,531 51,517 285,421 255,969

Net income from continuing 29,210 4,164 141,274 119,662
operations

Basic earnings per share

From continuing operations $ 0.35 $ 0.05 $ 1.73 $ 1.48

From discontinued operations $ -- $ 0.03 $ 0.06 $ 0.09

$ 0.35 $ 0.08 $1.79 $ 1.57

Consolidated Results from Continuing Operations

Consolidated revenues for three months ended August 31, 2011 were $200.2
million, up 7% from $187.4 million last year.  Consolidated segment
profit was $58.5 million, up 14% from $51.5 million last year.  Net
income for the quarter was $29.2 million ($0.35 basic and diluted),
compared to $4.2 million ($0.05 basic and diluted) last year.

Consolidated revenues for fiscal year ended August 31, 2011 were $825.2
million, up 8% from $767.5 million last year.  Consolidated segment
profit was $285.4 million, up 12% from $256.0 million last year.  Net
income for the fiscal year was $141.3 million ($1.73 basic and $1.72
diluted), compared to a net income of $119.7 million ($1.48 basic and
$1.47 diluted) last year.  Net income 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 $14.3 million recovery due to
income tax rate changes.  Removing the impact of these items results in
adjusted basic earnings per share of $1.31 in the prior year.  Free
cash flow from continuing operations for fiscal 2011 was $133.3
million, exceeding our guidance of $100.0 million.

Operational Results - highlights

Television

-- Segment revenues increased 9% both in the fourth quarter and
for the fiscal year
-- Segment profit increased 13% in the fourth quarter and 14% for
the fiscal year
-- Specialty advertising revenues decreased 6% in the fourth
quarter, but increased 11% for the fiscal year
-- Subscriber revenues increased 3% in the fourth quarter and 6%
for the fiscal year
-- Movie Central finished the fiscal year with 984,000
subscribers, up 2% from the prior year

Radio

-- Segment revenues for the fourth quarter remained consistent
with the prior year, but increased 2% for the fiscal year
-- Segment profit increased 13% in the fourth quarter and 3% for
the fiscal year
-- Achieved segment profit margin target of 30% for the fiscal
year

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 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 and year ended August 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 October
26, 2011 at 3:00 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 1.800.945.5981 and
for local/international callers is 416.981.9021.  PowerPoint slides for
the call will be posted at 2:45 p.m. ET on October 26, 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, distribution, 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, distribution, 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 at August 31, As at August 31,

(in thousands of Canadian dollars) 2011 2010

ASSETS

Current

Cash and cash equivalents 55,922 7,969

Accounts receivable 178,531 161,645

Income taxes recoverable 603 1,445

Prepaid expenses and other 13,497 17,040

Program and film rights 160,590 159,526

Future tax asset 7,615 6,129

Current assets of discontinued -- 15,287
operations

Total current assets 416,758 369,041

Tax credits receivable 43,108 39,597

Intangibles, investments and other 39,980 22,595
assets

Property, plant and equipment 169,600 147,905

Program and film rights 99,543 88,484

Film investments 102,540 100,454

Broadcast licenses 541,248 541,248

Goodwill 671,827 671,827

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

2,084,604 2,059,255

LIABILITIES AND SHAREHOLDERS' EQUITY

Current

Accounts payable and accrued 212,607 193,342
liabilities

Current liabilities of discontinued -- 10,080
operations

Total current liabilities 212,607 203,422

Long-term debt 600,796 691,891

Other long-term liabilities 97,314 88,003

Future tax liability 96,013 90,641

Long-term liabilities of discontinued -- 11,295
operations

Total liabilities 1,006,730 1,085,252

Non-controlling interest 19,200 18,055

SHAREHOLDERS' EQUITY

Share capital 882,679 856,655

Contributed surplus 9,361 11,780

Retained earnings 179,207 98,669

Accumulated other comprehensive loss (12,573) (11,156)

Total shareholders' equity 1,058,674 955,948

2,084,604 2,059,255

CORUS ENTERTAINMENT INC.

CONSOLIDATED STATEMENTS OF INCOME

Three months ended Year ended

(unaudited) August 31, August 31,

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

Revenues 200,193 187,436 825,213 767,530

Direct cost of sales,
general and

administrative expenses 141,662 135,919 539,792 511,561

Depreciation 6,558 6,757 24,922 20,122

Interest expense 13,793 13,987 57,276 44,222

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

Debt refinancing -- -- -- 14,256

Restructuring 1,352 12,924 3,694 12,924

Other expense (income), net (1,849) 11,689 (4,060) 19,477

Income from continuing
operations before income
taxes

and non-controlling 38,677 6,160 203,589 158,983
interest

Income tax expense 9,214 580 55,106 33,437

Non-controlling interest 253 1,416 7,209 5,884

Net income for the period 29,210 4,164 141,274 119,662
from continuing operations

Net income for the period -- 2,648 5,023 7,072
from discontinued operations

Net income for the period 29,210 6,812 146,297 126,734

Basic earnings per share

From continuing operations $ 0.35 $ 0.05 $ 1.73 $ 1.48

From discontinued operations $ -- $ 0.03 $ 0.06 $ 0.09

$ 0.35 $ 0.08 $ 1.79 $ 1.57

Diluted earnings per share

From continuing operations $ 0.35 $ 0.05 $ 1.72 $ 1.47

From discontinued operations $ -- $ 0.03 $ 0.06 $ 0.09

$ 0.35 $ 0.08 $ 1.78 $ 1.56

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

Three months ended Year ended

(unaudited) August 31, August 31,

(in thousands of Canadian 2011 2010 2011 2010
dollars)

Net income for the period 29,210 6,812 146,297 126,734

Other comprehensive income
(loss), net of tax

Unrealized foreign 306 516 (1,551) (24)
currency translation
adjustment

Unrealized change in fair
value of available-for-sale

investments, net of tax 135 (89) 134 200

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

441 427 (1,417) 12,851

Comprehensive income for the 29,651 7,239 144,880 139,585
period

CORUS ENTERTAINMENT INC.

CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY

Three months ended Year ended

(unaudited) August 31, August 31,

(in thousands of Canadian 2011 2010 2011 2010
dollars)

Share capital

Balance, beginning of period 879,058 853,833 856,655 840,602

Issuance of shares under stock 278 1,517 13,232 12,027
option plan

Shares repurchased (1,976) -- (1,976) --

Issuance of shares under 5,319 1,275 14,657 3,731
dividend reinvestment plan

Other -- 30 111 295

Balance, end of period 882,679 856,655 882,679 856,655

Contributed surplus

Balance, beginning of period 9,142 11,901 11,780 17,303

Stock-based compensation 292 235 1,102 907

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

Exercise of stock options (73) (356) (3,521) (1,771)

Balance, end of period 9,361 11,780 9,361 11,780

Retained earnings

Balance, beginning of period 169,663 104,027 98,669 20,380

Net income for the period 29,210 6,812 146,297 126,734

Dividends declared (17,937) (12,170) (64,030) (48,445)

Shares repurchased excess (1,729) -- (1,729) --

Balance, end of period 179,207 98,669 179,207 98,669

Accumulated other comprehensive
loss

Balance, beginning of period (13,014) (11,583) (11,156) (24,007)

Other comprehensive income 441 427 (1,417) 12,851
(loss), net of tax

Balance, end of period (12,573) (11,156) (12,573) (11,156)

CORUS ENTERTAINMENT INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

Three months ended Year ended

(unaudited) August 31, August 31,

(in thousands of Canadian 2011 2010 2011 2010
dollars)

OPERATING ACTIVITIES

Net income for the period 29,210 6,812 146,297 126,734

Earnings from discontinued -- (2,648) (5,023) (7,072)
operations

Add (deduct) non-cash items:

Depreciation 6,558 6,757 24,922 20,122

Amortization of program 44,277 41,976 173,805 165,950
rights

Amortization of film 11,679 12,330 42,620 38,456
investments

Future income taxes 521 (598) 3,886 (15,227)

Non-controlling interest 253 1,416 7,209 5,884

Stock option expense 292 235 1,102 907

Imputed interest 2,859 2,709 10,770 8,635

Debt refinancing -- -- -- 14,256

Gain on property disposal (3,422) -- (3,422) --

Other (457) 2,393 (2,860) 1,945

Net change in non-cash working
capital

balances related to 12,205 (7,044) 14,766 11,644
operations

Payment of program and film (62,511) (41,765) (177,325) (167,310)
rights

Net additions to film (5,419) (17,208) (61,670) (64,051)
investments

Cash provided by operating
activities from

continuing operations 36,045 5,365 175,077 140,873

Cash provided by (used in)
operating activities from

discontinued operations -- 5,490 (13,262) 3,193

Cash provided by operating 36,045 10,855 161,815 144,066
activities

INVESTING ACTIVITIES

Additions to property, plant (13,389) (30,487) (45,991) (81,839)
and equipment

Business combinations -- (4,000) -- (40,000)

Proceeds from property disposal 7,971 -- 7,971 --

Net cash flows for intangibles, 1,601 461 (2,456) 2,745
investments and other assets

Increase (decrease) in public (341) 259 (1,273) (820)
benefits associated with
acquisitions

Cash used in investing (4,158) (33,767) (41,749) (119,914)
activities from continuing
operations

Cash provided by (used in)
investing activities from

discontinued operations -- (495) 74,996 (1,210)

Cash provided by (used in) (4,158) (34,262) 33,247 (121,124)
investing activities

FINANCING ACTIVITIES

Increase (decrease) in bank (19,616) 9,638 (92,838) (444,938)
loans

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

Financing and swap termination (32) -- (750) (30,997)
fees

Issuance of shares under stock 205 1,161 9,711 10,256
option plan

Shares repurchased (3,705) -- (3,705) --

Dividend paid (10,956) (10,880) (45,528) (44,605)

Dividend paid to -- (960) (5,107) (10,220)
non-controlling interest

Capital lease payments and (2,286) (2,212) (8,892) (5,391)
other

Cash used in financing (36,390) (3,253) (147,109) (25,895)
activities from continuing
operations

Net change during the period in
cash and cash

equivalents from continuing (4,503) (31,655) (13,781) (4,936)
operations

Net change during the period in
cash and cash

equivalents from -- 4,995 61,734 1,983
discontinued operations

Net change in cash and cash (4,503) (26,660) 47,953 (2,953)
equivalents during the period

Cash and cash equivalents, 60,425 34,629 7,969 10,922
beginning of period

Cash and cash equivalents, end 55,922 7,969 55,922 7,969
of period

CORUS ENTERTAINMENT INC.

BUSINESS SEGMENT INFORMATION

(unaudited)

(in thousands of Canadian dollars)

Three months ended August 31, 2011

Radio Television Corporate Consolidated

Revenues 47,626 152,567 -- 200,193

Direct cost of sales,
general

and administrative 32,727 99,687 9,248 141,662
expenses

Segment profit (loss) 14,899 52,880 (9,248) 58,531

Depreciation 757 758 5,043 6,558

Interest expense 154 6,729 6,910 13,793

Restructuring 1,226 496 (370) 1,352

Other expense (income), net 243 (2,937) 845 (1,849)

Income (loss) before income
taxes and

non-controlling interest 12,519 47,834 (21,676) 38,677

Three months ended August 31, 2010

Radio Television Corporate Consolidated

Revenues 47,581 139,855 -- 187,436

Direct cost of sales,
general

and administrative 34,380 92,900 8,639 135,919
expenses

Segment profit (loss) 13,201 46,955 (8,639) 51,517

Depreciation 980 4,404 1,373 6,757

Interest expense (income) 739 (14) 13,262 13,987

Restructuring 5,506 5,055 2,363 12,924

Other expense (income), net 6,481 1,585 3,623 11,689

Income (loss) before income
taxes and

non-controlling interest (505) 35,925 (29,260) 6,160

Year ended August 31, 2011

Radio Television Corporate Consolidated

Revenues 195,657 629,556 -- 825,213

Direct cost of sales,
general

and administrative 136,572 371,024 32,196 539,792
expenses

Segment profit (loss) 59,085 258,532 (32,196) 285,421

Depreciation 3,070 4,013 17,839 24,922

Interest expense 2,552 22,788 31,936 57,276

Restructuring 1,976 505 1,213 3,694

Other expense (income), net (766) (4,759) 1,465 (4,060)

Income (loss) before income
taxes and

non-controlling interest 52,253 235,985 (84,649) 203,589

Year ended August 31, 2010

Radio Television Corporate Consolidated

Revenues 192,433 575,097 -- 767,530

Direct cost of sales,
general

and administrative 135,002 348,418 28,141 511,561
expenses

Segment profit (loss) 57,431 226,679 (28,141) 255,969

Depreciation 4,059 10,000 6,063 20,122

Interest expense (income) 3,555 (677) 41,344 44,222

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

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

Restructuring 5,506 5,055 2,363 12,924

Other expense (income), net 6,993 2,148 10,336 19,477

Income (loss) before income
taxes and

non-controlling interest 44,040 217,446 (102,503) 158,983

Revenues by segment

Three months ended Year ended

August 31, August 31,

2011 2010 2011 2010

Radio

West 22,324 22,251 91,625 93,470

Ontario 25,302 25,330 104,032 98,963

47,626 47,581 195,657 192,433

Television

Kids 70,146 58,497 278,958 240,568

Specialty and Pay 82,421 81,358 350,598 334,529

152,567 139,855 629,556 575,097

Segment profit

Three months ended Year ended

August 31, August 31,

2011 2010 2011 2010

Radio

West 7,217 6,333 28,743 30,295

Ontario 7,682 6,868 30,342 27,136

14,899 13,201 59,085 57,431

Television

Kids 23,032 18,327 115,355 97,126

Specialty and Pay 29,848 28,628 143,177 129,553

52,880 46,955 258,532 226,679

Revenues by type

Three months ended Year ended

August 31, August 31,

2011 2010 2011 2010

Advertising 83,052 85,385 389,925 373,607

Subscriber fees 74,351 71,946 299,888 283,171

Merchandise, distribution and 42,790 30,105 135,400 110,752
other

200,193 187,436 825,213 767,530

 

 

 

SOURCE Corus Entertainment Inc.

Corus Entertainment Inc.

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

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