Consolidated Results from Operations
Consolidated revenues for the three months ended August 31, 2013 were $193.6 million, down 1% from $195.6 million last year. Consolidated segment profit was $54.4 million, down 11% from $60.9 million last year as Corporate costs were up $5.1 million due primarily to achievement of performance incentives and higher share-based compensation. Net income attributable to shareholders for the quarter was $11.9 million ($0.14 per share basic and diluted), down 49% compared to $23.3 million ($0.28 per share basic and diluted) last year. Net income attributable to shareholders for the fourth quarter includes an impairment charge related to broadcast license impairments of $5.7 million, business acquisition, integration and restructuring costs of $5.2 million and investment impairment charges of $7.1 million. Removing the impact of these items results in adjusted basic earnings per share attributable to shareholders of $0.31 per share in the quarter. Net income attributable to shareholders for the fourth quarter of the prior year includes a charge due to an income tax rate change of $6.8 million and business acquisition, integration and restructuring costs of $1.8 million. Removing the impact of these items results in an adjusted basic earnings per share attributable to shareholders of $0.38 per share in the prior quarter.
Consolidated revenues for the year ended August 31, 2013 were $803.5 million, down 5% from $842.3 million last year. Consolidated segment profit was $270.0 million, down 7% from $290.0 million last year. Net income attributable to shareholders for the year was $159.9 million ($1.91 per share basic and $1.90 per share diluted), up 8% compared to $148.7 million ($1.79 per share basic and $1.78 per share diluted) last year. Net income attributable to shareholders for the current fiscal year includes a charge for debt refinancing of $25.0 million, the gain related to the sale of the Company's non-controlling interest in Food Network Canada of $55.4 million, broadcast license impairments of $5.7 million, business acquisition, integration and restructuring costs of $7.3 million and investment impairment charges of $7.1 million. Removing the impact of these items results in an adjusted net income attributable to shareholders of $138.6 million ($1.65 basic earnings per share attributable to shareholders) in the current year. Net income attributable to shareholders for the prior fiscal year includes a charge due to an income tax rate change of $6.8 million and business acquisition, integration and restructuring costs of $4.2 million. Removing the impact of these items results in an adjusted basic earnings per share attributable to shareholders of $1.90 per share in the prior year. Free cash flow for the year ended August 31, 2013 was $154.1 million compared to $155.1 million in the prior year.
Operational Results - Highlights
- Segment revenues increased 1% in Q4 and decreased 5% for the fiscal year
- Specialty advertising revenue increased 6% in Q4 and 2% for the fiscal year
- Subscriber revenues increased 1% for Q4 and were flat for the fiscal year
- Merchandising, distribution and other revenues declined 3% in Q4 and 24% for the fiscal year
- Segment profit(1) increased 4% in Q4 and decreased 5% for the fiscal year
- Segment profit margin of 40% for the fiscal year
- Movie Central finished the fiscal year with 996,000 subscribers, up 20,000 from the prior year
- Segment revenues decreased 8% in Q4 and 4% for the fiscal year
- Segment profit(1) decreased 22% in Q4 and 4% for the fiscal year
- Segment profit margin of 30% for the fiscal year
- Corporate expenses were up $5.1 million in Q4 and $4.3 million for the fiscal year due to higher share-based compensation and achievement of performance incentives.
(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 months and year ended August 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 October 24, 2013 at 12:30 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 Canada is 1.866.229.4144 and for international callers is 1.847.585.4422. Please note that the audience passcode for both dial-in numbers is 7565 565. 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.