• Monthly dividend increased 6.9%
  • Consolidated revenue up 8%
  • Consolidated segment profit up 9%
  • Adjusted basic earnings per share attributable to shareholders of $0.65 per share
  • Strong segment profit margins for Television (46%) and Radio (33%)
  • Fiscal 2014 results include 100% interest in TELETOON Canada Inc. and fiscal 2013 is adjusted to equity account for Corus’ 50% economic interest in TELETOON Canada Inc.

(January 14, 2014 – Toronto, Canada) Corus Entertainment Inc. (TSX: CJR.B) announced its first quarter financial results today.

“We have again benefited from our disciplined focus on cost controls, delivering excellent margins this quarter in the face of slow economic growth and tough year-over-year comparables in our merchandising business,” said John Cassaday, President and Chief Executive Officer of Corus Entertainment.  “This is a pivotal year for us.  With our recently closed acquisition of TELETOON, Séries+ and Historia, combined with continued strong ratings on our core TV brands and increases from several of our newer brands, we are confident that Corus will see a return to solid growth in fiscal 2014.”

Financial Highlights
Three months ended
November 30,
(unaudited – in thousands of Canadian dollars
except per share amounts)
2013  2012 (3)
Revenues   
  Television  177,949   157,622
  Radio  48,056   52,324
 226,005   209,946
Segment profit (1)     
  Television  82,524   70,522
  Radio  15,837   18,956
  Corporate  (6,085)  (4,961)
 92,276   84,517
    
Net income attributable to shareholders  150,891   52,159
Adjusted net income attributable to shareholders (1) (2)  55,177   52,159
      
Basic earnings per share $ 1.78 $ 0.63
Adjusted basic earnings per share (1) (2) $ 0.65 $ 0.63
Diluted earnings per share $ 1.78 $ 0.62
    
Free cash flow (1)  49,636   39,824
      
(1) See definitions and discussion under the Key Performance Indicators section of the 2014 Report to Shareholders.
(2) For the quarter ended November 30, 2013, excludes the impact of $127.9 million ($1.51 per share) gain on remeasurement to fair value of the Company’s 50% interest in TELETOON which was held prior to consolidation on September 1, 2013, business acquisition, integration and restructuring costs of $21.9 million ($0.25 per share), an increase in the purchase price obligation of $7.3 million ($0.09 per share), and investment impairment related charges of $3.3 million ($0.04 per share).
(3) Prior period figures have been restated to reflect the changes in accounting standards described in note 3 to the interim condensed consolidated financial statements contained in the 2014 Report to Shareholders.

 

Consolidated Results from Operations

For fiscal 2014, the operating results of TELETOON Canada Inc. (“TELETOON”), as well as its assets and liabilities, have been fully consolidated effective September 1, 2013 as a consequence of meeting the definition of control under IFRS 10 – Consolidated Financial Statements.  Accordingly, a business combination had occurred in accordance with IFRS 3 – Business Combinations and as a result, TELETOON must be accounted for by applying the acquisition method.  The Company held a 50% equity ownership interest in TELETOON as at November 30, 2013 and on December 20, 2013, received Canadian Radio-television and Telecommunication Commission (“CRTC”) approval to complete the acquisition of the remaining 50% interest in TELETOON that it did not already own.  The acquisition closed on January 1, 2014 (refer to 2014 Report to Shareholders note 15 for further details).

For fiscal 2013, as a result of retroactive application of IFRS 11 – Joint Arrangements, the Company is no longer permitted to proportionately consolidate the operations of TELETOON up to August 31, 2013 (i.e. prior to the business combination on September 1, 2013) and is required to account for this investment using the equity method of accounting. As a consequence, the Television segment’s revenue and segment profit for the first quarter of fiscal 2013 were reduced by $16.2 million and $8.2 million, respectively and instead, Corus’ share of TELETOON’s net income of $6.0 million was reported as Other expense (income) in the Consolidated Statements of Income and Comprehensive Income.  The restatement did not change reported net income for fiscal 2013.

Consolidated revenues for the three months ended November 30, 2013 were $226.0 million, up 8% from $209.9 million last year.  Consolidated segment profit was $92.3 million, up 9% from $84.5 million last year.  Net income attributable to shareholders for the quarter was $150.9 million ($1.78 both basic and diluted per share), compared to $52.2 million ($0.63 basic and $0.62 diluted per share) last year.  Net income attributable to shareholders for the first quarter includes a non-cash gain of $127.9 million resulting from the remeasurement to fair value of the Company’s 50% interest in TELETOON which was held prior to consolidation on September 1, 2013, business acquisition, integration and restructuring costs of $21.9 million, an increase in the purchase price obligation of $7.3 million and investment impairment related charges of $3.3 million.  Removing the impact of these items results in an adjusted basic earnings per share of $0.65 in the quarter.

Operational Results – Highlights

Television

  • Fiscal 2014 reflects consolidation of 100% interest in TELETOON; Fiscal 2013 retroactively restated to apply IFRS 11 – Joint Arrangements, resulting in equity accounting for Corus’ 50% economic interest in TELETOON
  • Segment revenues increased 13%
  • Specialty advertising revenues increased 35%
  • Subscriber revenues increased 14%
  • Merchandising, distribution and other revenues declined 33%
  • Segment profit(1) increased 17%
  • Segment profit margin of 46%
  • Movie Central finished the quarter with 974,000 subscribers

Radio

  • Segment revenues decreased 8%
  • Segment profit(1) decreased 16%
  • Segment profit margin of 33%

Other

  • Completed the acquisition of Historia, Séries+ and the remaining 50% interest in TELETOON Canada Inc. on January 1, 2014
  • Awaiting CRTC approval on the acquisition of two Ottawa-based radio stations, CKQB-FM and CJOT-FM

(1) See definitions and discussion under the Key Performance Indicators section of the 2014 Report to Shareholders.

Corus Entertainment Inc. reports in Canadian dollars.

About Corus Entertainment Inc.

Corus Entertainment Inc. is a Canadian-based media and entertainment company that creates, broadcasts and licenses content across a variety of platforms for audiences around the world.  The Company’s portfolio of multimedia offerings encompasses specialty television and radio with additional assets in pay television, television broadcasting, children’s book publishing, children’s animation and animation software.  Corus’ brands include YTV, TELETOON, ABC Spark, W Network, OWN: Oprah Winfrey Network (Canada), HBO Canada, Historia, Séries+, as well as Nelvana, Kids Can Press, Toon Boom and 37 radio stations including CKNW AM 980, 99.3 The FOX, Country 105, 630 CHED, Fresh FM London, Q107 and 102.1 the Edge.  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 ended November 30, 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 January 14, 2014 at 4:30 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 North America is 1.800.745.9476 and for local/international callers is 1.416.641.6705.  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.

For further information, please contact:


Files