Corus Entertainment Announces Fiscal 2013 Second Quarter Results

Corus Entertainment Announces Fiscal 2013 Second Quarter Results


-- Adjusted net income attributable to shareholders of $24.4
million for the second quarter and $76.6 million year-to-date
-- Free cash flow up 12% year-to-date
-- Consolidated segment profit margins of 30% for the second
quarter and 36% year-to-date
-- Movie Central finished the quarter above 1 million subscribers


TORONTO, April 11, 2013 /PRNewswire/ - Corus Entertainment Inc. (TSX: CJR.B) announced its second quarter and six months year-to-date
financial results today.



"The second quarter business results were soft, as expected, but we were
able to end the first half of the year with significant increases in
year-to-date free cash flow and improved margins," said John Cassaday,
President and Chief Executive Officer of Corus Entertainment.  "The
highlight of the quarter was the successful refinancing of our Senior
Unsecured Guaranteed Notes, which resulted in a 300 basis point
reduction in our financing costs.  This activity was followed up by a
series of significant transactions subsequent to the quarter, certain
of which are subject to CRTC approval, which will enable us to expand
our presence in Radio, consolidate our position in TELETOON and ABC
Spark, enter the Quebec specialty television market and realize
substantial gains on the sale of our minority interest in the Food
Network (Canada) and on the revaluation of TELETOON."


Financial Highlights



Three months ended Six months ended

February February
28, 29, February 28, February 29,

(unaudited -
in thousands
of Canadian
dollars
except per
share
amounts) 2013 2012 2013 2012

Revenues

Television 143,423 163,299 317,246
348,326

Radio 40,277 42,384 92,601 94,248

183,700 205,683 409,847 442,574



Segment
profit (1)


Television 51,796 60,421 130,494
140,916

Radio 9,654 9,879 28,610 26,281

Corporate (6,802) (8,053) (11,763)
(13,736)

54,648 62,247 147,341 153,461



Net income
attributable
to
shareholders
5,944 31,571 58,103 82,119

Adjusted net
income
attributable
to
shareholders
(1) (2) 24,432 31,571 76,591 82,119





Basic
earnings per
share $ 0.07 $ 0.38 $ 0.70 $ 0.99

Adjusted
basic
earnings per
share (1) (2)
$ 0.29 $ 0.38 $ 0.92 $ 0.99

Diluted
earnings per
share $ 0.07 $ 0.38 $ 0.69 $ 0.99



Free cash
flow (1) 45,974 50,772 83,859 74,831

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

(2) Excludes the impact of debt refinancing costs of $25.0 million
($0.22 per share)







Consolidated Results from Continuing Operations


Consolidated revenues for the three months ended February 28, 2013 were
$183.7 million, down 11% from $205.7 million last year.  Consolidated
segment profit was $54.6 million, down 12% from $62.2 million last
year.  Net income attributable to shareholders for the quarter was $5.9
million ($0.07 basic and diluted per share), compared to $31.6 million
($0.38 basic and diluted per share) last year.  Net income for the
current quarter includes a pre-tax charge for debt refinancing of $25.0
million.  Removing the impact of this item results in adjusted net
income attributable to shareholders of $24.4 million ($0.29 per share)
in the current quarter.



Consolidated revenues for the six months ended February 28, 2013 were
$409.8 million, down 7% from $442.6 million last year.  Consolidated
segment profit was $147.3 million, down 4% from $153.5 million last
year.  Net income attributable to shareholders for the six months was
$58.1 million ($0.70 basic and $0.69 diluted per share), compared to
$82.1 million ($0.99 basic and diluted per share) last year.  Removing
the impact of the debt refinancing costs results in adjusted net income
attributable to shareholders of $76.6 million ($0.92 per share) in the
current year.


Operational Results - Highlights

Television


-- Movie Central finished the quarter with 1,013,000 subscribers,
up 37,000 year-to-date
-- Segment profit margin of 41% year-to-date
-- Segment revenues decreased 12% in Q2 2013 and 9% year-to-date
-- Segment profit(1) decreased 14% in Q2 2013 and 7% year-to-date


Radio


-- Segment profit margin of 31% year-to-date
-- Segment revenues decreased 5% in Q2 2013 and 2% year-to-date
-- Segment profit(1) decreased 2% in Q2 2013, but increased 9%
year-to-date


Other


-- Issued $550.0 million of 4.25% Senior Unsecured Guaranteed
Notes due in 2020
-- Agreements completed, subsequent to the quarter, to extend
Radio presence into Ottawa, consolidate ownership of TELETOON
and ABC Spark, acquire 100% of Historia and Séries+, and divest
Corus' minority interest in the Food Network (Canada)






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








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), Cosmopolitan TV, Sundance Channel (Canada),
Movie Central, HBO Canada, Nelvana, Kids Can Press, Toon Boom and 37
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 six months ended February 28, 2013 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 April
11, 2013 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 1.800.732.6870 and
for local/international callers is 416.981.9030.  PowerPoint slides for
the call will be posted 15 minutes prior to 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



As at February 28, As at August 31,

(unaudited - in thousands 2013 2012
of Canadian dollars)

ASSETS

Current

Cash and cash equivalents 573,781 24,588

Accounts receivable 181,842 173,421

Income taxes recoverable 961 9,542

Prepaid expenses and other 12,134 12,664

Asset held-for-sale 9,881 --

Total current assets 778,599 220,215



Tax credits receivable 45,799 43,865

Intangibles, investments 39,361 42,390
and other assets

Property, plant and 157,070 163,563
equipment

Program and film rights 274,749 271,244

Film investments 79,382 67,983

Broadcast licenses 569,505 569,505

Goodwill 674,393 674,393

Deferred tax assets 35,096 28,327

2,653,954 2,081,485



LIABILITIES AND
SHAREHOLDERS' EQUITY

Current

Accounts payable and 191,672 185,991
accrued liabilities

Provisions 1,198 2,322

Current portion of 518,125 --
long-term debt

Total current liabilities 710,995 188,313



Long-term debt 537,957 518,258

Other long-term liabilities 88,167 87,853

Deferred tax liabilities 151,071 150,971

Total liabilities 1,488,190 945,395





SHAREHOLDERS' EQUITY

Share capital 923,806 910,005

Contributed surplus 8,322 7,835

Retained earnings 214,347 198,445

Accumulated other 995 (812)
comprehensive income (loss)

Total equity attributable 1,147,470 1,115,473
to shareholders

Equity attributable to 18,294 20,617
non-controlling interest

Total shareholders' equity 1,165,764 1,136,090

2,653,954 2,081,485














CORUS ENTERTAINMENT INC.

CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME



Three months ended Six months ended

(unaudited - in February February February February 29,
thousands of Canadian 28, 29, 28, 2012
dollars except per 2013 2012 2013
share amounts)

Revenues 183,700 205,683 409,847 442,574

Direct cost of sales, 129,052 143,436 262,506 289,113
general and
administrative expenses

Depreciation and 7,517 6,653 13,946 12,892
amortization

Interest expense 13,271 13,410 25,403 26,837

Debt refinancing 25,033 -- 25,033 --

Other (income) expense, (426) (1,617) 80 (1,170)
net



Income before income 9,253 43,801 82,879 114,902
taxes

Income tax expense 2,373 10,262 21,983 28,683



Net income for the 6,880 33,539 60,896 86,219
period



Net income attributable
to:

Shareholders 5,944 31,571 58,103 82,119

Non-controlling 936 1,968 2,793 4,100
interest

6,880 33,539 60,896 86,219



Earnings per share
attributable to
shareholders:

Basic $ 0.07 $ 0.38 $ 0.70 $ 0.99

Diluted $ 0.07 $ 0.38 $ 0.69 $ 0.99



Net income for the 6,880 33,539 60,896 86,219
period

Other comprehensive
income (loss), net of
tax:

Items that may be
reclassified
subsequently to income:

Unrealized foreign 1,191 (587) 1,481 537
currency
translation
adjustment

Unrealized change 36 (17) 326 (91)
in fair value of
available-for-sale
investments

1,227 (604) 1,807 446

Comprehensive income 8,107 32,935 62,703 86,665
for the period



Comprehensive income
attributable to:

Shareholders 7,171 30,967 59,910 82,565

Non-controlling 936 1,968 2,793 4,100
interest

8,107 32,935 62,703 86,665














CORUS ENTERTAINMENT INC.

CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY







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



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

Comprehensive 1,807 59,910
income -- -- 58,103 2,793 62,703

Dividends -- (41,445)
declared -- -- (41,445) (5,116) (46,561)

Issuance of -- 749
shares under
stock option
plan 994 (245) -- -- 749

Issuance of -- 13,515
shares under
dividend
reinvestment
plan 13,515 -- -- -- 13,515

Shares -- (1,464)
repurchased (708) -- (756) -- (1,464)

Share-based -- 732
compensation
expense -- 732 -- -- 732



At February 995 1,147,470
28, 2013 923,806 8,322 214,347 18,294 1,165,764





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

Comprehensive 446 82,565
income -- -- 82,119 4,100 86,665

Dividends -- (37,968)
declared -- -- (37,968) (4,423) (42,391)

Issuance of -- 8,337
shares under
stock option
plan 11,448 (3,111) -- -- 8,337

Issuance of -- 12,839
shares under
dividend
reinvestment
plan 12,839 -- -- -- 12,839

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

Share-based -- 592
compensation
expense -- 592 -- -- 592



At February (629) 1,098,097
29, 2012 904,856 7,780 186,090 18,877 1,116,974














CORUS ENTERTAINMENT INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS



Three months ended Six months ended

(unaudited - in February February February 28, February 29,
thousands of 28, 29, 2013 2012
Canadian 2013 2012
dollars)

OPERATING
ACTIVITIES

Net income for 6,880 33,539 60,896 86,219
the period

Add (deduct)
non-cash items:

Depreciation 7,517 6,653 13,946 12,892
and
amortization

Amortization 46,908 46,433 92,601 93,488
of program
and film
rights

Amortization 3,501 7,960 9,708 17,947
of film
investments

Deferred (5,432) 3,424 (6,726) 4,786
income taxes

Share-based 392 299 732 592
compensation
expense

Imputed 2,628 2,976 5,153 6,010
interest

Debt 25,033 -- 25,033 --
refinancing

Other 590 (547) 286 (790)

Net change in
non-cash
working capital

balances 19,587 20,665 (9,546) (20,726)
related to
operations

Payment of (39,806) (50,997) (67,432) (86,426)
program and
film rights

Net additions (18,160) (16,837) (34,234) (33,973)
to film
investments

Cash provided 49,638 53,568 90,417 80,019
by operating
activities



INVESTING
ACTIVITIES

Additions to (3,930) (4,714) (7,472) (8,084)
property, plant
and equipment

Net cash flows (7,039) (122) (6,966) 1,009
for
intangibles,
investments and
other assets

Other (236) (165) (324) (318)

Cash used in (11,205) (5,001) (14,762) (7,393)
investing
activities



FINANCING
ACTIVITIES

Decrease in (39,910) (34,674) (29,925) (34,674)
bank loans

Issuance of 550,000 -- 550,000 --
notes

Financing fees (8,607) -- (8,607) --

Issuance of 749 8,251 749 8,337
shares under
stock option
plan

Shares -- -- (1,464) (3,888)
repurchased

Dividends paid (13,775) (12,145) (26,998) (23,820)

Dividends paid (803) (200) (5,116) (4,423)
to
non-controlling
interest

Other (2,789) (2,233) (5,101) (4,505)

Cash provided 484,865 (41,001) 473,538 (62,973)
by (used in)
financing
activities

Net change in 523,298 7,566 549,193 9,653
cash and cash
equivalents
during the
period

Cash and cash 50,483 58,009 24,588 55,922
equivalents,
beginning of
the period

Cash and cash 573,781 65,575 573,781 65,575
equivalents,
end of the
period














CORUS ENTERTAINMENT INC.

BUSINESS SEGMENT INFORMATION



(unaudited - in thousands of Canadian dollars)



Three months ended February 28, 2013

Radio Television Corporate Consolidated

Revenues 40,277 143,423 -- 183,700

Direct cost of sales,
general and
administrative
expenses 30,623 91,627 6,802 129,052

Segment profit (loss)
(1) 9,654 51,796 (6,802) 54,648

Depreciation and
amortization 7,517

Interest expense 13,271

Debt refinancing 25,033

Other expense
(income), net (426)

Income before income
taxes 9,253



Three months ended February 29, 2012

Radio Television Corporate Consolidated

Revenues 42,384 163,299 -- 205,683

Direct cost of sales,
general and
administrative
expenses 32,505 102,878 8,053 143,436

Segment profit (loss)
(1) 9,879 60,421 (8,053) 62,247

Depreciation and
amortization 6,653

Interest expense 13,410

Other expense
(income), net (1,617)

Income before income
taxes 43,801



Six months ended
February 28, 2013

Radio Television Corporate Consolidated

Revenues 92,601 317,246 -- 409,847

Direct cost of sales,
general and
administrative
expenses 63,991 186,752 11,763 262,506

Segment profit (loss)
(1) 28,610 130,494 (11,763) 147,341

Depreciation and
amortization 13,946

Interest expense 25,403

Debt refinancing 25,033

Other expense
(income), net 80

Income before income
taxes 82,879



Six months ended
February 29, 2012

Radio Television Corporate Consolidated

Revenues 94,248 348,326 -- 442,574

Direct cost of sales,
general and
administrative
expenses 67,967 207,410 13,736 289,113

Segment profit (loss)
(1) 26,281 140,916 (13,736) 153,461

Depreciation and
amortization 12,892

Interest expense 26,837

Other expense
(income), net (1,170)

Income before income
taxes 114,902

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










Revenues by
type

Three months ended Six months ended

February February February 28, February 29,
28, 29,

2013 2012 2013 2012

Advertising 80,506 83,870 198,400 203,319

Subscriber 73,798 75,924 148,779 150,065
fees

Merchandising, 29,396 45,889 62,668 89,190
distribution
and other

183,700 205,683 409,847 442,574








  


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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