Corus Entertainment Announces Fiscal 2012 Third Quarter Results

Corus Entertainment Announces Fiscal 2012 Third Quarter Results


-- Year-to-date free cash flow(1) up 17%
-- Net income attributable to shareholders up 7%
-- Basic earnings per share up 6% to $0.52 per share
-- Consolidated revenues and segment profit(1) down 4%
-- Strong segment profit(1) margins at Television (43%) and Radio
(33%)


TORONTO, July 12, 2012 /PRNewswire/ - Corus Entertainment Inc. (TSX: CJR.B) announced its third quarter financial results today.



"Despite tough year-over-year comparables, we delivered a solid
performance in the quarter, growing net income and earnings per share,
maintaining our exceptional margins through rigorous cost controls and
continuing to generate impressive free cash flow," said John Cassaday,
President and CEO of Corus Entertainment. "Our specialty advertising
revenues in the quarter were impacted by soft demand in the Kids
segment, which overshadowed the continued strong performance in our
Women's vertical and newer services, including ABC Spark. Looking
ahead, our exceptional brands, superior programming and disciplined
cost controls position us well for a recovery in the advertising
market."






Financial Highlights



(unaudited) Three months ended Nine months ended

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

2012 2011 2012 2011

Revenues

Television 154,749 161,043 503,075 476,989

Radio (2) 49,329 50,745 143,577 148,031

204,078 211,788 646,652 625,020

Segment profit(1)

Television 66,732 69,992 207,648 210,184

Radio (2) 16,151 16,000 42,432 44,186

Corporate (7,227) (7,223) (20,963) (24,963)

75,656 78,769 229,117 229,407



Net income attributable to
shareholders:

From continuing operations 43,221 40,352 125,340 113,841

From discontinued operations -- -- -- 5,023

43,221 40,352 125,340 118,864



Basic earnings per share
attributable to shareholders:

From continuing operations $ 0.52 $ 0.49 $ 1.51 $ 1.39

From discontinued operations -- -- -- 0.06

$ 0.52 $ 0.49 $ 1.51 $ 1.45







(1) See definitions and discussion under Key Performance Indicators in
MD&A

(2) Reflects the disposition of the Quebec Radio operations, which
occurred on February 1, 2011, as discontinued operations in all
periods presented





Consolidated Results from Continuing Operations


Consolidated revenues for the three months ended May 31, 2012 were
$204.1 million, down 4% from $211.8 million last year.  Consolidated
segment profit((1)) was $75.7 million, down 4% from $78.8 million last year.  Net income
attributable to shareholders for the quarter was $43.2 million ($0.52
basic and $0.51 diluted), up 7% compared to $40.4 million ($0.49 basic
and diluted) last year.



Consolidated revenues for the nine months ended May 31, 2012 were $646.7
million, up 3% from $625.0 million last year.  Consolidated segment
profit((1)) was $229.1 million, consistent with $229.4 million last year.  Net
income attributable to shareholders for the nine months was $125.3
million ($1.51 basic and $1.50 diluted), up 10% compared to $113.8
million ($1.39 basic and $1.38 diluted) last year.


Operational Results - Highlights

Television


-- Segment revenues decreased 4% in Q3 2012, but increased 5%
year-to-date
-- Segment profit(1) decreased 5% in Q3 2012 and 1% year-to-date
-- Specialty advertising revenues decreased 11% in the quarter and
1% year-to-date
-- Subscriber revenues decreased 2% in the quarter and 1%
year-to-date
-- Merchandise, distribution and other revenue increased 8% in the
quarter and 39% year-to-date
-- Movie Central finished the quarter with 975,000 subscribers

Radio((2))


-- Segment revenues decreased 3% in Q3 2012 and year-to-date
-- Segment profit(1) increased 1% in Q3 2012, but decreased 4%
year-to-date





(1) See definitions and discussion under Key Performance Indicators in
MD&A

(2) Radio results reflect the disposition of the Quebec Radio
operations, which occurred on February 1, 2011, as discontinued
operations in all periods presented






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), ABC Spark, 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 and nine months ended May 31, 2012 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 12,
2012 at 2:00 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 1.800.734.8583 and
for local/international callers is 416.641.6705.  PowerPoint slides for
the call will be posted 15 minutes prior the start of the call 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 STATEMENTS OF FINANCIAL POSITION



(unaudited) As at May 31, As at August As at September
31, 1,

(in thousands 2012 2011 2010
of Canadian
dollars)

ASSETS

Current

Cash and cash 56,636 55,922 7,969
equivalents

Accounts 182,520 178,531 175,134
receivable

Income taxes 3,036 603 1,781
recoverable

Prepaid 11,490 13,497 18,008
expenses and
other



Total current 253,682 248,553 202,892
assets



Tax credits 52,215 43,108 39,597
receivable

Intangibles, 44,544 39,980 22,699
investments and
other assets

Property, plant 166,537 169,600 161,585
and equipment

Program and 263,068 256,970 244,963
film rights

Film 76,119 83,133 80,611
investments

Broadcast 569,505 569,505 610,423
licenses

Goodwill 674,138 671,827 695,029

Deferred tax 27,240 30,915 32,130
asset

2,127,048 2,113,591 2,089,929



LIABILITIES AND
SHAREHOLDERS'
EQUITY

Current

Accounts 217,947 206,773 192,839
payable and
accrued
liabilities

Provisions 3,930 5,267 13,048

Total current 221,877 212,040 205,887
liabilities



Long-term debt 527,594 600,796 691,891

Other long-term 84,374 104,574 95,840
liabilities

Deferred tax 142,869 141,361 146,044
liability

Total 976,714 1,058,771 1,139,662
liabilities



SHAREHOLDERS'
EQUITY

Share capital 913,467 882,679 856,655

Contributed 7,566 10,299 12,706
surplus

Retained 209,156 143,717 62,509
earnings

Accumulated 642 (1,075) 342
other
comprehensive
income (loss)

Total equity 1,130,831 1,035,620 932,212
attributable to
shareholders

Equity 19,503 19,200 18,055
attributable to
non-controlling
interest

Total 1,150,334 1,054,820 950,267
shareholders'
equity

2,127,048 2,113,591 2,089,929











CORUS ENTERTAINMENT INC.

CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME



Three months ended Nine months ended

(unaudited) May 31, May 31,

(in thousands of Canadian 2012 2011 2012 2011
dollars except per share
amounts)

Revenues 204,078 211,788 646,652 625,020

Direct cost of sales, 128,422 133,019 417,535 395,613
general and administrative
expenses

Depreciation 6,339 6,203 19,231 18,364

Interest expense 13,190 14,693 40,027 43,483

Restructuring 2,325 92 2,325 2,342

Other income, net (3,532) (969) (4,702) (2,211)

Income before income taxes 57,334 58,750 172,236 167,429

Income tax expense 12,387 15,270 41,070 46,632

Net income for the period 44,947 43,480 131,166 120,797
from continuing operations

Net income for the period -- -- -- 5,023
from discontinued
operations

Net income for the period 44,947 43,480 131,166 125,820



Netincome attributable to:

Shareholders from 43,221 40,352 125,340 113,841
continuing operations

Shareholders from -- -- -- 5,023
discontinued
operations

Non-controlling 1,726 3,128 5,826 6,956
interest

44,947 43,480 131,166 125,820



Basic earnings pershare
attributable to
shareholders:

From continuing $ 0.52 $ 0.49 $ 1.51 $ 1.39
operations

From discontinued -- -- -- 0.06
operations

$0.52 $ 0.49 $1.51 $ 1.45



Diluted earningsper share
attributable to
shareholders:

From continuing $ 0.51 $ 0.49 $ 1.50 $ 1.38
operations

From discontinued -- -- -- 0.06
operations

$ 0.51 $ 0.49 $ 1.50 $ 1.44



Net income for the period 44,947 43,480 131,166 125,820

Other comprehensive income
(loss), net of tax

Unrealized foreign 1,434 4 1,971 (1,857)
currency translation
adjustment

Unrealized change in (163) (77) (254) (1)
fair value of
available-for-sale
investments

Actuarial gain on -- -- -- 433
employee future
benefits

1,271 (73) 1,717 (1,425)

Comprehensive income for 46,218 43,407 132,883 124,395
the period



Comprehensive income
attributable to:

Shareholders 44,492 40,279 127,057 117,439

Non-controlling 1,726 3,128 5,826 6,956
interest

46,218 43,407 132,883 124,395











CORUS ENTERTAINMENT INC.

CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY



(unaudited) Accumulated Total Non-
(in thousands Share Contributed Retained other attributable controlling Total
of Canadian capital surplus earnings comprehensive to interest equity
dollars) income (loss) shareholders



At August 31, 882,679 10,299 143,717 (1,075) 1,035,620 19,200 1,054,820
2011

Comprehensive -- -- 125,340 1,717 127,057 5,826 132,883
income

Dividends -- -- (58,123) -- (58,123) (5,523) (63,646)
declared

Issuance of 13,669 (3,623) -- -- 10,046 -- 10,046
shares under
stock option
plan

Issuance of 19,229 -- -- -- 19,229 -- 19,229
shares under
dividend
reinvestment
plan

Shares (2,110) -- (1,778) -- (3,888) -- (3,888)
repurchased

Share-based -- 890 -- -- 890 -- 890
compensation
expense



At May 31, 913,467 7,566 209,156 642 1,130,831 19,503 1,150,334
2012







(unaudited) Accumulated Total Non-
(in thousands Share Contributed Retained other attributable controlling Total
of Canadian capital surplus earnings comprehensive to interest equity
dollars) income (loss) shareholders



At 856,655 12,706 62,509 342 932,212 18,055 950,267
September1,
2010

Comprehensive -- -- 118,864 (1,425) 117,439 6,956 124,395
income (loss)

Actuarial -- -- 433 (433) -- -- --
gain transfer

Dividends -- -- (46,093) -- (46,093) (5,107) (51,200)
declared

Issuance of 12,954 (3,448) -- -- 9,506 -- 9,506
shares under
stock option
plan

Issuance of 9,449 -- -- -- 9,449 -- 9,449
shares under
dividend
reinvestment
plan

Share-based -- 822 -- -- 822 -- 822
compensation
expense

Other -- -- -- -- -- (957) (957)



At May 31, 879,058 10,080 135,713 (1,516) 1,023,335 18,947 1,042,282
2011













CORUS ENTERTAINMENT INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS



Three months ended Nine months ended

(unaudited) May 31, May31,

(in thousands of Canadian 2012 2011 2012 2011
dollars)

OPERATINGACTIVITIES

Net income for the period 44,947 43,480 131,166 125,820

Deduct earnings from -- -- -- (5,023)
discontinued operations

Add (deduct) non-cash
items:

Depreciation 6,339 6,203 19,231 18,364

Amortization of 46,317 44,174 139,805 129,563
program rights

Amortization of film 4,002 7,501 21,949 26,378
investments

Deferred income taxes (51) 2,541 4,735 3,365

Stock-based 298 274 890 822
compensation expense

Imputed interest 2,894 2,827 8,904 7,911

Gain on acquisition (2,383) -- (2,383) --

Other (2,000) (809) (2,790) (2,403)

Net change in non-cash 11,466 7,700 (9,260) 5,300
working capital balances
related to operations

Payment of program and (44,841) (41,686) (131,267) (114,814)
film rights

Net additions to film (6,391) (23,131) (40,364) (56,251)
investments

Cash provided by 60,597 49,074 140,616 139,032
operating activities from
continuing operations

Cash used in operating -- -- -- (13,262)
activities from
discontinued operations

Cash provided by 60,597 49,074 140,616 125,770
operating activities



INVESTING ACTIVITIES

Additions to property, (5,501) (5,387) (13,585) (32,602)
plant and equipment

Business combination (4,104) -- (4,104) --

Net cash flows for (4,868) 210 (3,859) (4,057)
intangibles, investments
and other assets

Other (242) (350) (560) (932)

Cash used in investing (14,715) (5,527) (22,108) (37,591)
activities from
continuing operations

Cash provided by -- -- -- 74,996
investing activities from
discontinued operations

Cash provided by (used (14,715) (5,527) (22,108) 37,405
in) investing activities



FINANCING ACTIVITIES

Decrease in bank loans (40,103) (28,458) (74,777) (73,222)

Issuance of shares under 1,709 3,622 10,046 9,506
stock option plan

Shares repurchased -- -- (3,888) --

Dividends paid (13,705) (11,023) (37,525) (34,572)

Dividends paid to -- (741) (4,423) (5,107)
non-controlling interest

Other (2,722) (3,000) (7,227) (7,324)

Cash used in (54,821) (39,600) (117,794) (110,719)
financingactivities from
continuing operations

Net change during the (8,939) 3,947 714 (9,278)
period in cash and cash
equivalents from
continuing operations

Net change during the -- -- -- 61,734
period in cash and cash
equivalents from
discontinued operations

Net change in cash and (8,939) 3,947 714 52,456
cash equivalents during
the period

Cash and cash 65,575 56,478 55,922 7,969
equivalents, beginning of
period

Cash and cash 56,636 60,425 56,636 60,425
equivalents, end of
period













CORUS ENTERTAINMENT INC.

BUSINESS SEGMENT INFORMATION



(unaudited)

(in thousands of Canadian dollars)



Three months
ended May 31,
2012

Radio Television Corporate Consolidated

Revenues 49,329 154,749 -- 204,078

Direct cost of
sales, general
and
administrative
expenses 33,178 88,017 7,227 128,422

Segment profit
(loss)(1) 16,151 66,732 (7,227) 75,656

Depreciation 870 816 4,653 6,339

Interest
expense (256) 6,118 7,328 13,190

Restructuring 1,053 1,151 121 2,325

Other expense
(income), net (55) (866) (2,611) (3,532)

Income (loss)
before income
taxes 14,539 59,513 (16,718) 57,334



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 91,051 7,223 133,019

Segment profit
(loss)(1) 16,000 69,992 (7,223) 78,769

Depreciation 817 736 4,650 6,203

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

Restructuring 79 6 7 92

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

Income (loss)
before income
taxes 15,693 62,672 (19,615) 58,750



Nine
monthsended
May 31, 2012

Radio Television Corporate Consolidated

Revenues 143,577 503,075 -- 646,652

Direct cost of
sales, general
and
administrative
expenses 101,145 295,427 20,963 417,535

Segment profit
(loss)(1) 42,432 207,648 (20,963) 229,117

Depreciation 2,427 2,168 14,636 19,231

Interest
expense (160) 19,350 20,837 40,027

Restructuring 1,053 1,151 121 2,325

Other expense
(income), net (42) (1,861) (2,799) (4,702)

Income (loss)
before income
taxes 39,154 186,840 (53,758) 172,236



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 103,845 266,805 24,963 395,613

Segment profit
(loss)(1) 44,186 210,184 (24,963) 229,407

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

Interest
expense 2,398 16,059 25,026 43,483

Restructuring 750 9 1,583 2,342

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

Income
(loss)before
income taxes 39,734 192,683 (64,988) 167,429



((1))See definitions and discussion under Key Performance Indicators in MD&A












Revenues by type

Three months ended Nine months ended

May 31, May 31,

2012 2011 2012 2011

Advertising 97,076 104,374 300,395 306,873

Subscriber fees 74,285 76,176 224,350 225,537

Merchandise, 32,717 31,238 121,907 92,610
distribution and other

204,078 211,788 646,652 625,020






 


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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