Consolidated Revenues up 11% Earnings per share of $0.13 (includes a non-cash negative impact of $0.42 per share for the change in Ontario tax rates)
Segment profits, on a consolidated basis, up 19% Television revenues and segment profit growth of 11% and 16%
Radio segment profit margin up from 27% to 29%
(Toronto, Canada) Corus Entertainment Inc. (TSX: CJR.B; NYSE: CJR) announced its first quarter results today, building on the positive momentum of fiscal 2003. The Company posted double-digit growth in revenues and segment profit, on a consolidated basis, led by continued advertising growth in specialty television which contributed to an 11% increase in Television division revenues over prior year. The Content division also grew revenues by 36% and Radio revenues were up 2% over the same period a year ago.
“We continued the positive momentum of last year in our first quarter results”, said John Cassaday, President and CEO of Corus Entertainment. “Excellent ad growth from specialty television, solid expense control in radio and continued strong Beyblade results coupled with a disciplined business approach from our Content division were the major contributors to our strong results.”
Consolidated revenues for the quarter were $185.0 million, up 11% from $165.9 million last year. All divisions delivered higher segment profit, up 19% on a consolidated basis to $57.3 million from $48.0 million last year. Net income for the quarter was $5.7 million, down from $8.3 million last year due to a change in Ontario tax rates that caused an increase in the Company’s income tax expense and net future tax liability position of $17.8 million. Earnings per share for the quarter were $0.13 compared to $0.19 last year. The non-cash impact of the Ontario tax rate increase was to reduce earnings per share by $0.42.
Corus Television contributed quarterly revenues of $94.2 million, up from $85.1 million last year, led by advertising growth of 20% for the quarter. An exceptional performance by Corus’ adult specialty networks, which bettered prior year first quarter ad revenue by more than 40%, was coupled with advertising gains of 19% from the kids’ television group led by YTV. Revenue growth was also seen in the Premium Television Services which experienced a 9% increase in subscriber revenue during the quarter over the prior year. Television segment profit grew to $39.8 million, up 16% from $34.2 million last year and segment profit margin for the quarter was 42% compared to 40% last year.
Corus Radio revenues were $60.7 million in the quarter, up 2% from $59.3 million in the same period last year. Segment profit was $17.8 million compared to $16.1 million a year ago, an increase of 11%. More significantly, segment profit margin improved by two percentage points to 29% for the quarter compared to 27% last year, in line with the Company’s commitment to achieving a 30% segment profit margin in fiscal year 2004. Radio’s performance was highlighted by double-digit revenue growth in the major markets of Toronto and French Montreal. Corus’ balanced portfolio strategy delivered the positive results for the Radio division, despite weaker performances in Vancouver, Calgary and English Montreal where competitive challenges have had an impact on ad revenues.
Again this quarter, the Branded Consumer Products business led the Content division to positive results with a 150% increase in revenue for the quarter, from $6.5 million to $16.2 million, largely due to the continued strong merchandising sales of Beyblade. Overall, first quarter revenues for the division grew 36% over the same period last year. Production and Distribution revenues declined 10% to $14.5 million from $16.2 million in prior year, based on reduced production volume from 53 episodes last year to 17 episodes and a direct-to-video feature this year. The Content division delivered positive segment profit for the quarter, of $2.6 million from break-even in the prior year. Segment profit margin for the quarter was 9%.
“Our aggressive focus on growing revenues and earnings paid off for this quarter,” added Heather Shaw, Executive Chair of Corus Entertainment. On the heels of our recent dividend declaration, Corus shareholders can be assured that the Company is committed to delivering results, value and continued growth.”
Corus Entertainment is a Canadian-based media and entertainment company. Corus is a market leader in both specialty TV and Radio. Corus also owns Nelvana Limited, a leading international producer and distributor of children’s programming and products. The company’s other interests include publishing, television broadcasting and advertising services. A publicly traded company, Corus is listed on the Toronto (CJR.B) and New York (CJR) Exchanges. Corus’ Web site can be found at corusentertainment.com.
Certain statements in this press release may constitute forward-looking statements and is subject to important risks and uncertainties. The results or events predicted in these statements may differ materially from actual results or events. Factors which could cause results or events to differ from current 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; and, changes in accounting standards. Consequently, all of the forward-looking statements made in this report are qualified by these cautionary statements, and there can be no assurance that the actual results or developments anticipated by us will be realized or, even if substantially realized, that they will have the expected consequences to, or effects on, us. 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.
For further information, please contact:
John Cassaday President and Chief Executive Officer Corus Entertainment Inc. (416) 642-3770
Tom Peddie Senior Vice-President & Chief Financial Officer Corus Entertainment Inc. (416) 642-3780
Kerry Morgan Vice President, Communications Corus Entertainment Inc. (416) 642-3792
Segment profit (which corresponds to the line item Operating income before the following in the consolidated statements of income and retained earnings (deficit)) is calculated as revenues less operating, general and administrative expenses and is the measure used by management to evaluate the operating performance of its business segments.