Corus Entertainment Announces Fiscal 2013 Third Quarter Results

Consolidated revenues for the nine months ended May 31, 2013 were $609.9 million, down 6% from $646.7 million last year.  Consolidated segment profit was $215.6 million, down 6% from $229.1 million last year.  Net income attributable to shareholders for the nine months was $148.0 million ($1.77 per share basic and $1.76 per share diluted), up 18% compared to $125.3 million ($1.51 per share basic and $1.50 per share diluted) last year.  Year-to-date net income includes a pre-tax charge for debt refinancing of $25.0 million and a gain related to the sale of the Company's non-controlling interest in Food Network Canada of $55.4 million.  Removing the impact of these items results in an adjusted net income attributable to shareholders of $111.1 million ($1.33 earnings per share basic) in the current year.

Operational Results - Highlights

Television

  • Segment revenues decreased 1% in Q3 and 7% year-to-date
  • Specialty advertising revenues increased 9% in Q3 and 1% year-to-date
  • Subscriber revenues increased 2% for Q3 and were flat year-to-date
  • Merchandising, distribution and other revenues declined 26% in Q3 and 31% year-to-date
  • Segment profit(1) decreased 7% in Q3 and year-to-date
  • Segment profit margin of 41% year-to-date
  • Movie Central finished the quarter with 1,009,000 subscribers, up 33,000 year-to-date

Radio

  • Segment revenues decreased 5% in Q3 and 3% year-to-date
  • Segment profit(1) decreased 8% in Q3, but increased 2% year-to-date
  • Segment profit margin of 31% year-to-date

Other

  • Acquired the remaining 49% interest in ABC Spark and disposed of the Company's non-controlling interest in Food Network Canada in the quarter for a gain of $55.4 million.
  • Entered into agreements to establish Radio presence in Ottawa, consolidate ownership of TELETOON and acquire 100% of Historia and Séries+.  These transactions are subject to CRTC approval.

(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 nine months ended May 31, 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 July 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 416.620.9188.  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 May 31, As at August 31,
(unaudited - in thousands of Canadian dollars) 2013  2012 
ASSETS    
Current    
Cash and cash equivalents 78,281  24,588 
Accounts receivable 187,016  173,421 
Promissory note receivable 47,759  — 
Income taxes recoverable —  9,542 
Prepaid expenses and other 13,035  12,664 
     
Total current assets 326,091  220,215 
     
Tax credits receivable 51,796  43,865 
Intangibles, investments and other assets 44,181  42,390 
Property, plant and equipment 153,653  163,563 
Program and film rights 267,500  271,244 
Film investments 76,735  67,983 
Broadcast licenses 569,505  569,505 
Goodwill 674,393  674,393 
Deferred tax assets 39,013  28,327 
  2,202,867  2,081,485 
     
LIABILITIES AND SHAREHOLDERS' EQUITY    
Current    
Accounts payable and accrued liabilities 196,649  185,991 
Income taxes payable 3,554  — 
Provisions 943  2,322 
Total current liabilities 201,146  188,313 
     
Long-term debt 538,462  518,258 
Other long-term liabilities 89,712  87,853 
Deferred tax liabilities 152,144  150,971 
Total liabilities 981,464  945,395 
     
     
SHAREHOLDERS' EQUITY    
Share capital 930,802  910,005 
Contributed surplus 6,797  7,835 
Retained earnings 265,560  198,445 
Accumulated other comprehensive income (loss) 831  (812)
Total equity attributable to shareholders 1,203,990  1,115,473 
Equity attributable to non-controlling interest 17,413  20,617 
Total shareholders' equity 1,221,403  1,136,090 
  2,202,867  2,081,485 
     

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