• Consolidated segment profit up 1% for the quarter and year-to-date
  • Television revenues up 2% for the quarter and year-to-date
  • Television segment profit up 3% for the quarter and up 2% year-to-date
  • Net loss attributable to shareholders of $86.8 million for the quarter, which includes a non-cash Radio broadcast license and goodwill impairment charge of $130.0 million.
  • Adjusted basic earnings per share of $0.33 per share, up 3% for the quarter

(April 9, 2015 – Toronto, Canada) Corus Entertainment Inc. (TSX: CJR.B) announced its second quarter financial results today.

“In the second quarter, the company continued to see strong audience delivery, particularly from our Women’s, Family and French-language specialty networks, and improved radio ratings in certain key markets. However, as economic headwinds continue to impact advertising market confidence, we do not expect to achieve our segment profit guidance for fiscal 2015,” said Doug Murphy, President and Chief Executive Officer of Corus Entertainment. “Moving forward, we continue to make excellent progress on our four strategic priorities and we are conducting a comprehensive review of opportunities arising from this new flexible regulatory environment. Our recent landmark deal with Nickelodeon is the first example of our priorities in action as we position the company for future growth, embracing the exciting changes and opportunities emerging from the evolving regulatory and content marketplace.”

Financial Highlights   
Three months ended Six months ended
February 28, February 28,
(unaudited – in thousands of Canadian dollars
except per share amounts)
2015  2014 2015  2014
Revenues   
  Television  155,175   152,101  336,665   330,050
  Radio  36,309   39,312  81,930   87,368
 191,484   191,413  418,595   417,418
      
Segment profit (1)       
  Television  59,700   58,034  143,479   140,558
  Radio  6,227   8,470  19,047   24,307
  Corporate  (6,208)  (7,222)  (9,531)  (13,307)
 59,719   59,282  152,995   151,558
      
Net income (loss) attributable to shareholders  (86,786)  6,116  (34,880)  157,007
Adjusted net income attributable to shareholders (1) (2)  28,499   26,780  80,405   81,957
        
Basic earnings (losses) per share $ (1.01) $ 0.07 $ (0.41) $ 1.85
Adjusted basic earnings per share (1) (2) $ 0.33 $ 0.32 $ 0.93 $ 0.97
Diluted earnings (losses) per share $ (1.01) $ 0.07 $ (0.41) $ 1.85
      
Free cash flow (1)  59,242   73,405  92,624   123,041
      
(1) Adjusted net income (loss) attributable to shareholders, adjusted basic earnings per share, segment profit and free cash flow do not have standardized meanings prescribed by IFRS.  The Company reports on segment profit and free cash flow because they are key measures used to evaluate performance.  For definitions and explanations, see discussion under the Key Performance Indicators section of the 2015 Report to Shareholders.  
(2) For the three and six months ended February 28, 2015, excludes radio broadcast license and goodwill impairment charges of $130.0 million ($1.44 per share), business acquisition, integration and restructuring charges of $8.0 million ($0.07 per share), offset by a gain on disposition of investment of $17.0 million ($0.17 per share).  For the three months ended February 28, 2014, excludes radio broadcast license impairment charges of $8.0 million ($0.07 per share), business acquisition, integration and restructuring costs of $18.7 million ($0.20 per share) and a decrease in the purchase price obligation of $2.1 million ($0.02 per share).  For the six month period ended February 28, 2014, excludes the impact of a $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, radio broadcast license impairment charges of $8.0 million ($0.07 per share), business acquisition, integration and restructuring costs of $40.7 million ($0.46 per share), an increase in the purchase price obligation of $5.3 million ($0.06 per share) and investment impairment related charges of $3.3 million ($0.04 per share).


Consolidated Results from Operations

Consolidated revenues for the three months ended February 28, 2015 were $191.5 million, which is comparable to   $191.4 million last year.  Consolidated segment profit was $59.7 million, up 1% from $59.3 million last year.  Net loss attributable to shareholders for the quarter was $86.8 million ($1.01 loss per share basic and diluted), compared to net income attributable to shareholders of $6.1 million ($0.07 per share basic and diluted) last year. Net loss attributable to shareholders for the second quarter includes Radio broadcast license and goodwill impairment charges of $130.0 million ($1.44 per share), business acquisition, integration and restructuring costs of $8.0 million ($0.07 per share), offset by a gain on disposition of investment of $17.0 million ($0.17 per share).  Removing the impact of these items results in an adjusted net income attributable to shareholders of $28.5 million ($0.33 per share) in the quarter.  Net income attributable to shareholders for the prior year quarter includes radio broadcast license impairment charges of $8.0 million ($0.07 per share), business acquisition, integration and restructuring costs of $18.7 million ($0.20 per share) and a decrease in the purchase price obligation of $2.1 million ($0.02 per share) related to the acquisition of control of TELETOON.  Removing the impact of these items results in an adjusted net income attributable to shareholders of       $26.8 million ($0.32 per share) in the prior year quarter.

Consolidated revenues for the six months ended February 28, 2015 were $418.6 million, which is comparable to        $417.4 million last year. Consolidated segment profit was $153.0 million, up 1% from $151.6 million last year. Net loss attributable to shareholders for the six months ended February 28, 2015 was $34.9 million ($0.41 loss per share basic and diluted) compared to net income attributable to shareholders of $157.0 million ($1.85 per share basic and diluted) last year.  Net loss attributable to shareholders for the six months ended February 28, 2015 includes Radio broadcast license and goodwill impairment charges of $130.0 million ($1.44 per share), business acquisition, integration and restructuring costs of $8.0 million ($0.07 per share), offset by a gain on disposition of investment of $17.0 million ($0.17 per share).  Removing the impact of these items results in an adjusted net income attributable to shareholders of $80.4 million     ($0.93 per share) for the current year-to-date.  Removing the impact of the prior year non-cash gain of $127.9 million ($1.51 per share) 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, radio broadcast license impairment charges of $8.0 million ($0.07 per share), business acquisition, integration and restructuring costs of $40.7 million ($0.46 per share), an increase in the purchase price obligation of $5.3 million ($0.06 per share), and investment impairment related charges of $3.3 million ($0.04 per share) results in an adjusted net income attributable to shareholders of $82.0 million ($0.97 per share).

Operational Results – Highlights

Television

  • Specialty advertising revenues decreased 7% in Q2 2015 and 2% for the year-to-date
  • Subscriber revenues increased 2% in Q2 2015 and 5% for the year-to-date
  • Merchandising, distribution and other revenues increased 32% in Q2 2015 and 7% for the year-to-date
  • Segment profit(1) increased 3% in Q2 2015 and 2% for the year-to-date
  • Segment profit margin(1) of 38% in Q2 2015 and 43% for the year-to-date

Radio

  • Segment revenues decreased 8% in Q2 2015 and 6% for the year-to-date
  • Segment profit(1) decreased 26% in Q2 2015 and 22% for the year-to-date
  • Segment profit margin(1) of 17% in Q2 2015 and 23% for the year-to-date
  • Non-cash broadcast license and goodwill impairment charges of $130.0 million in Q2 2015 and for the year-to-date

Corporate

  • Financial guidance revised, refer to Outlook section of the Second Quarter 2015 Report to Shareholders
  • $18.5 million pre-tax cash proceeds from disposition of GoPro shares held by Steamboat Ventures

 (1) Segment profit and segment profit margin do not have standardized meanings prescribed by IFRS.  The Company reports on segment profit and segment profit margin because they are key measures used to evaluate performance.  For definitions and explanations, see discussion under the Key Performance Indicators section of the 2015 Report to Shareholders.

Corus Entertainment Inc. reports in Canadian dollars.

The unaudited consolidated financial statements and accompanying notes for the three and six months ended     February 28, 2015 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 9, 2015 at 2:30 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 local and international callers is 416.981.9039 and for North America is 1.800.734.8582.  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.

Use of Non-GAAP Financial Measures

This press release includes the non-GAAP financial measures of adjusted net income, adjusted basic earnings per share and free cash flow that are not in accordance with, nor an alternate to, generally accepted accounting principles (“GAAP”) and may be different from non-GAAP measures used by other companies. In addition, these non-GAAP measures are not based on any comprehensive set of accounting rules or principles.

Non-GAAP financial measures should not be considered as a substitute for, or superior to, measures of financial performance prepared in accordance with GAAP. They are limited in value because they exclude charges that have a material effect on the Company’s reported results and, therefore, should not be relied upon as the sole financial measures to evaluate the Company’s financial results. The non-GAAP financial measures are meant to supplement, and to be viewed in conjunction with, GAAP financial results.  A reconciliation of the Company’s non-GAAP measures is included in the Company’s most recent Report to Shareholders which is available on Corus’ website at www.corusent.com as well as on SEDAR.

Caution Concerning Forward-Looking Statements

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 relate 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.

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 and Séries+, as well as Nelvana, Kids Can Press, Toon Boom and 39 radio stations including CKNW AM 980, Rock 101, Country 105, 630 CHED, Fresh Radio, JUMP! 106.9, 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.

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For further information, please contact:

 

Doug Murphy                                                    Tom Peddie                                               Sally Tindal
President and Chief Executive Officer         Executive Vice President and Chief     Director, Communications
Corus Entertainment Inc.                                Financial Officer                                       Corus Entertainment Inc.
416.479.6649                                                      Corus Entertainment Inc.                        416.479.6107
                                                                            416.479.6080