Corus Entertainment Announces Fiscal 2012 Fourth Quarter and Year-End Results

Corus Entertainment Announces Fiscal 2012 Fourth Quarter and Year-End Results


-- Specialty advertising revenues up 7% in the quarter
-- Consolidated segment profit margin up 290 basis points in the
quarter, with Television and Radio margins of 40% and 30%,
respectively, for the fiscal year
-- Free cash flow(1) up 15% in fiscal 2012 to $155.1 million
-- Adjusted net income attributable to shareholders(1)(3) up 9% in
the quarter and 10% for the fiscal year
-- Adjusted basic earnings per share(1)(3) up 6% in the quarter
and 8% for the fiscal year
-- Segment profit up 8% for the quarter and 1% for the fiscal year


TORONTO, Oct. 25, 2012 /PRNewswire/ - Corus Entertainment Inc. (TSX: CJR.B) announced its fourth quarter and year-end financial
results today.



"Corus finished the year with strong gains in specialty advertising
revenues and segment profit for the fourth quarter.  We are
particularly pleased with our excellent segment profit margins and
record free cash flow," said John Cassaday, President and CEO of Corus
Entertainment.  "Looking ahead, we are confident that disciplined cost
controls, coupled with our portfolio of assets, position us well for
continued growth in fiscal 2013."




Financial Highlights
(from continuing
operations)



(unaudited) Three months ended Year ended

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

2012 2011 2012 2011

Revenues

Television 147,874 152,567 650,949 629,556

Radio (2) 47,750 47,626 191,327 195,657

195,624 200,193 842,276 825,213

Segment profit (1)

Television 54,490 50,940 262,138 261,124

Radio (2) 14,995 14,899 57,427 59,085

Corporate (8,623) (9,360) (29,586) (34,323)

60,862 56,479 289,979 285,886



Net income
attributable to
shareholders 23,341 27,670 148,681 141,511

Adjusted net income
attributable to
shareholders(1) (3) 30,175 27,670 155,515 141,511



Basic earnings per
share $ 0.28 $ 0.34 $ 1.79 $ 1.73

Adjusted basic
earnings per share(1)
(3) $ 0.36 $ 0.34 $ 1.87 $ 1.73

Diluted earnings per
share $ 0.28 $ 0.33 $ 1.78 $ 1.72



Free Cash Flow(1) 24,962 31,887 155,147 134,861







(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.

(3) Excludes the impact of a $6.8 million ($0.08 per share) non-cash
tax expense related to an increase in the Ontario long-term tax
rate which was substantively enacted in the fourth quarter 2012.




 






Consolidated Results from Continuing Operations


Consolidated revenues for the three months ended August 31, 2012 were
$195.6 million, down 2% from $200.2 million last year.  Consolidated
segment profit for the quarter was $60.9 million, up 8% from $56.5
million last year.  Net income attributable to shareholders for the
quarter was $23.3 million ($0.28 per share basic and diluted), down 16%
compared with $27.7 million ($0.34 per share basic and $0.33 per share
diluted) last year.  On June 20, 2012, the Ontario government passed
legislation cancelling planned future corporate tax rate reductions. 
Accordingly, the Company remeasured certain deferred tax assets and
liabilities resulting in a non-cash tax expense of $6.8 million ($0.08
per share) in the fourth quarter 2012.  Excluding the impact of this
item, adjusted basic earnings per share was $0.36 in the fourth quarter
2012, up 6% from the prior year.



Consolidated revenues for the year ended August 31, 2012 were $842.3
million, up 2% from $825.2 million last year.  Consolidated segment
profit for the fiscal year was $290.0 million, up 1% from $285.9
million last year.  Net income attributable to shareholders for the
fiscal year was $148.7 million ($1.79 per share basic and $1.78 per
share diluted), up 5% compared to $141.5 million ($1.73 per share basic
and $1.72 per share diluted) last year.  Excluding the impact of the
income tax rate changes that occurred in the fourth quarter 2012,
adjusted basic earnings per share was $1.87 in the current year, up 8%
from the prior year.  Free cash flow((1)) from continuing operations for fiscal 2012 was $155.1 million, up 15%
from $134.9 million last year.


Operational Results - Highlights

Television


-- Segment revenues decreased 3% in Q4 2012, but increased 3% for
the fiscal year
-- Segment profit(1) increased 7% in Q4 2012 and was flat for the
fiscal year
-- Specialty advertising revenues increased 7% in Q4 2012 and were
flat for the fiscal year
-- Subscriber revenues decreased 1%, both in Q4 2012 and for the
fiscal year
-- Merchandising, distribution and other revenues decreased 16% in
Q4 2012, but increased 21% for the fiscal year
-- Movie Central finished the fiscal year with 976,000 subscribers

Radio((2))


-- Segment revenues were flat in Q4 2012 and decreased 2% for the
fiscal year
-- Segment profit(1) increased 1% in Q4 2012 and decreased 3% for
the fiscal year





(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, children's animation and animation
software.  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, Toon Boom 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, 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 October
25, 2012 at 1:00 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 1.800.926.5230 and
for local/international callers is 416.981.9039.  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.



Corus' annual investor day conference is scheduled for November 29, 2012
at 9:00 a.m. ET and will be webcast from 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 August As at August As at September
31, 31, 1,

(in thousands
of Canadian
dollars) 2012 2011 2010

ASSETS

Current

Cash and cash
equivalents 24,588 55,922 7,969

Accounts
receivable 173,421 178,531 175,134

Income taxes
recoverable 9,542 603 1,781

Prepaid
expenses and
other 12,664 13,497 18,008



Total current
assets 220,215 248,553 202,892



Tax credits
receivable 43,865 43,108 39,597

Intangibles,
investments and
other assets 42,390 39,980 22,699

Property, plant
and equipment 163,563 169,600 161,585

Program and
film rights 271,244 256,970 244,963

Film
investments 67,983 83,133 80,611

Broadcast
licenses 569,505 569,505 610,423

Goodwill 674,393 671,827 695,029

Deferred tax
assets 28,327 30,915 32,130

2,081,485 2,113,591 2,089,929



LIABILITIES AND
SHAREHOLDERS'
EQUITY

Current

Accounts
payable and
accrued
liabilities 185,991 206,773 192,839

Provisions 2,322 5,267 13,048

Total current
liabilities 188,313 212,040 205,887



Long-term debt 518,258 600,796 691,891

Other long-term
liabilities 87,853 104,574 95,840

Deferred tax
liabilities 150,971 141,361 146,044

Total
liabilities 945,395 1,058,771 1,139,662



SHAREHOLDERS'
EQUITY

Share capital 910,005 882,679 856,655

Contributed
surplus 7,835 10,299 12,706

Retained
earnings 198,445 143,717 62,509

Accumulated
other
comprehensive
income (loss) (812) (1,075) 342

Total equity
attributable to
shareholders 1,115,473 1,035,620 932,212

Equity
attributable to
non-controlling
interest 20,617 19,200 18,055

Total
shareholders'
equity 1,136,090 1,054,820 950,267

2,081,485 2,113,591 2,089,929











CORUS ENTERTAINMENT INC.

CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME



Three months ended Year ended

(unaudited) August 31, August 31,

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

Revenues 195,624 200,193 842,276 825,213

Direct cost of sales,
general and
administrative
expenses 134,762 143,714 552,297 539,327

Depreciation 6,408 6,558 25,639 24,922

Interest expense 12,242 13,793 52,269 57,276

Restructuring -- 1,352 2,325 3,694

Other expense
(income), net 1,056 (1,849) (3,646) (4,060)



Income before income
taxes 41,156 36,625 213,392 204,054

Income tax expense 16,171 8,702 57,241 55,334



Net income for the
period from continuing
operations 24,985 27,923 156,151 148,720

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

Net income for the
period 24,985 27,923 156,151 153,743



Net income
attributable to:

Shareholders from
continuing
operations 23,341 27,670 148,681 141,511

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

Non-controlling
interest 1,644 253 7,470 7,209

24,985 27,923 156,151 153,743



Basic earnings per
share:

From continuing
operations $ 0.28 $ 0.34 $ 1.79 $ 1.73

From discontinued
operations -- -- -- $ 0.06

$ 0.28 $ 0.34 $ 1.79 $ 1.79



Diluted earnings per
share:

From continuing
operations $ 0.28 $ 0.33 $ 1.78 $ 1.72

From discontinued
operations -- -- -- $ 0.06

$ 0.28 $ 0.33 $ 1.78 $ 1.78



Net income for the
period 24,985 27,923 156,151 153,743

Other comprehensive
income (loss), net of
tax

Unrealized foreign
currency translation
adjustment (1,485) 306 486 (1,551)

Unrealized change in
fair value of
available-for-sale
investments 31 135 (223) 134

Actuarial (loss)
gain on employee
future benefits (2,950) -- (2,950) 433

(4,404) 441 (2,687) (984)



Comprehensive income
for the period 20,581 28,364 153,464 152,759



Comprehensive income
attributable to:

Shareholders 18,937 28,111 145,994 145,550

Non-controlling
interest 1,644 253 7,470 7,209

20,581 28,364 153,464 152,759











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



Comprehensive
income -- -- 148,681 (2,687) 145,994 7,470 153,464

Actuarial
loss transfer -- -- (2,950) 2,950 -- -- --

Dividends
declared -- -- (78,143) -- (78,143) (6,053) (84,196)

Issuance of
shares under
stock option
plan 13,668 (3,622) -- -- 10,046 -- 10,046

Issuance of
shares under
dividend
reinvestment
plan 25,982 -- -- -- 25,982 -- 25,982

Shares
repurchased (12,435) -- (12,860) -- (25,295) -- (25,295)

Share-based
compensation
expense -- 1,158 -- -- 1,158 -- 1,158

Repayment of
executive
stock
purchase
loans 111 -- -- -- 111 -- 111

At August 31,
2012 910,005 7,835 198,445 (812) 1,115,473 20,617 1,136,090







Accumulated Total
Share Contributed Retained other attributable Non- Total
capital surplus earnings comprehensive to controlling equity
income shareholders interest
(loss)



At September
1, 2010 856,655 12,706 62,509 342 932,212 18,055 950,267

Comprehensive
income (loss) -- -- 146,534 (984) 145,550 7,209 152,759

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

Dividends
declared -- -- (64,030) -- (64,030) (5,107) (69,137)

Issuance of
shares under
stock option
plan 13,232 (3,521) -- -- 9,711 -- 9,711

Issuance of
shares under
dividend
reinvestment
plan 14,657 -- -- -- 14,657 -- 14,657

Shares
repurchased (1,976) -- (1,729) -- (3,705) -- (3,705)

Share-based
compensation
expense -- 1,114 -- -- 1,114 -- 1,114

Repayment of
executive
stock
purchase
loans 111 -- -- -- 111 -- 111

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

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











CORUS ENTERTAINMENT INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS



Three months ended Year ended

(unaudited) August 31, August 31,

(in thousands of
Canadian dollars) 2012 2011 2012 2011

OPERATING
ACTIVITIES

Net income for
the period 24,985 27,923 156,151 153,743

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

Add (deduct)
non-cash items:

Depreciation 6,408 6,558 25,639 24,922

Amortization of
program rights 46,543 43,958 186,348 173,521

Amortization of
film
investments 10,052 13,938 32,001 40,316

Deferred income
taxes 8,186 521 12,921 4,110

Share-based
compensation
expense 268 292 1,158 1,114

Imputed
interest 2,444 2,859 11,348 10,770

Gain from asset
disposition -- (3,422) -- (3,422)

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

Other 738 (457) (2,052) (2,860)

Net change in
non-cash working
capital balances
related to
operations (3,939) 11,805 (13,199) 16,881

Payment of
program and film
rights (65,422) (62,511) (196,689) (177,325)

Net additions to
film investments (569) (5,419) (40,933) (61,670)

Cash provided by
operating
activities from
continuing
operations 29,694 36,045 170,310 175,077

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

Cash provided by
operating
activities 29,694 36,045 170,310 161,815



INVESTING
ACTIVITIES

Additions to
property, plant
and equipment (5,658) (13,389) (19,243) (45,991)

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

Proceeds from
asset disposition -- 7,971 -- 7,971

Net cash flows
for intangibles,
investments and
other assets (7,431) 1,601 (11,290) (2,456)

Other (75) (341) (635) (1,273)

Cash used in
investing
activities from
continuing
operations (13,164) (4,158) (35,272) (41,749)

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

Cash provided by
(used in)
investing
activities (13,164) (4,158) (35,272) 33,247



FINANCING
ACTIVITIES

Decrease in bank
loans (9,973) (19,616) (84,750) (92,838)

Issuance of
shares under
stock option plan -- 205 10,046 9,711

Shares
repurchased (21,407) (3,705) (25,295) (3,705)

Dividends paid (13,258) (10,956) (50,783) (45,528)

Dividends paid to
non-controlling
interest (1,630) -- (6,053) (5,107)

Other (2,310) (2,318) (9,537) (9,642)

Cash used in
financing
activities from
continuing
operations (48,578) (36,390) (166,372) (147,109)

Net change during
the period in
cash and cash
equivalents from
continuing
operations (32,048) (4,503) (31,334) (13,781)

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

Net change in
cash and cash
equivalents
during the period (32,048) (4,503) (31,334) 47,953

Cash and cash
equivalents,
beginning of
period 56,636 60,425 55,922 7,969

Cash and cash
equivalents, end
of period 24,588 55,922 24,588 55,922











CORUS ENTERTAINMENT INC.

BUSINESS SEGMENT INFORMATION

(unaudited)

(in thousands
of Canadian
dollars)



Three months
ended August
31, 2012

Radio Television Corporate Consolidated

Revenues 47,750 147,874 -- 195,624

Direct cost of
sales, general
and
administrative
expenses 32,755 93,384 8,623 134,762

Segment profit
(loss)(1) 14,995 54,490 (8,623) 60,862

Depreciation 822 816 4,770 6,408

Interest
expense 160 5,786 6,296 12,242

Other expense
(income), net 199 459 398 1,056

Income (loss)
before income
taxes 13,814 47,429 (20,087) 41,156



Three months
ended August
31, 2011

Radio Television Corporate Consolidated

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

Direct cost of
sales, general
and
administrative
expenses 32,727 101,627 9,360 143,714

Segment profit
(loss)(1) 14,899 50,940 (9,360) 56,479

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 12,519 45,894 (21,788) 36,625



Year ended
August 31,
2012

Radio Television Corporate Consolidated

Revenues 191,327 650,949 -- 842,276

Direct cost of
sales, general
and
administrative
expenses 133,900 388,811 29,586 552,297

Segment profit
(loss)(1) 57,427 262,138 (29,586) 289,979

Depreciation 3,249 2,984 19,406 25,639

Interest
expense -- 25,136 27,133 52,269

Restructuring 1,053 1,151 121 2,325

Other expense
(income), net 157 (1,402) (2,401) (3,646)

Income (loss)
before income
taxes 52,968 234,269 (73,845) 213,392



Year ended
August 31,
2011

Radio Television Corporate Consolidated

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

Direct cost of
sales, general
and
administrative
expenses 136,572 368,432 34,323 539,327

Segment profit
(loss)(1) 59,085 261,124 (34,323) 285,886

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 52,253 238,577 (86,776) 204,054




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










Revenues by type

Three months ended Year ended

August 31, August 31,

2012 2011 2012 2011

Advertising 85,650 83,052 386,045 389,925

Subscriber fees 73,577 74,351 297,927 299,888

Merchandising,
distribution and other 36,397 42,790 158,304 135,400

195,624 200,193 842,276 825,213






 



 


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 


-------
Profile: intent