• Net Income up 42%*
  • Nelvana Merchandising EBITDA** Almost Triples
  • Strong Ad Sales for Radio and Television, up 12%
  • Margins Continue to Improve

Corus Entertainment Inc. (TSX: CJR.B; NYSE: CJR) announced today results for its second quarter ending February 28, 2003 highlighted by double-digit earnings growth in its Television and Radio divisions and strong performance from Nelvana’s Branded Consumer Products.

Consolidated revenue for the second quarter was $147.5 million compared to $167.7 million. Last year’s results included Viewers’ Choice and Klutz which were disposed of in fiscal 2002.On a pro forma*** basis, revenues were up 1%. Net income for the quarter was $7.0 million or $0.16 per share, compared to $19.3 million or $0.45 per share last year. Last year’s second quarter net income included an after tax gain of $14.3 million on the disposition of the Company’s interest in The Comedy Network. Comparable earnings per share for the quarter were $0.16 compared to $0.12 last year. Cash flow derived from operations per share for the quarter is $1.19 compared with $1.34 last year. EBITDA for the quarter was $31.4 million compared to $31.6 million last year. However, on a pro forma basis, reflecting last year’s asset dispositions, EBITDA was up 12% from $28.0 million and consolidated operating margin improved from 19% to 21%.

We were very encouraged by double digit advertising growth for both our television and radio assets in the quarter,” said John Cassaday, President and CEO of Corus Entertainment. “The continued strong performance of television and radio has allowed us to reposition Nelvana without shrinking our consolidated operating earnings.”

Corus Radio revenues increased to $48.9 million, up 12% from $43.5 million last year on an actual and pro forma basis. EBITDA was $7.1 million, up 32% from $5.4 million last year. Radio margins were 15% for the quarter, up from 12% last year.

Nelvana’s results for the quarter were in line with plan and expectations. Branded Consumer Products revenue and EBITDA saw significant growth in the quarter with revenues up 82% on a pro forma basis over last year to $10.5 million from $5.8 million, largely due to the growth of the Beyblade property in particular. EBITDA nearly tripled, from $1.0 million pro forma last year to $2.6 million. Production and Distribution saw a decline in revenue for the quarter of 28% over last year, reflecting the loss of revenue from the German market due to the bankruptcy of RTV in Q3 last year. Overall, the Content division revenues in the quarter declined by 7% on a pro forma basis to $28.9 million with EBITDA of $2.6 million vs. $4.7 million pro forma a year ago.

Television contributed quarterly revenue of $71.6 million, roughly equal to pro forma Q2 revenue of the previous year, but a decline of 9% from actual revenue of $78.9 million last year as a result of the disposition of Viewers’ Choice and other assets. EBITDA grew to $22.8 million, up 2% from $22.3 million last year. On a pro forma basis, EBITDA increased by 18%. Television’s margins were 32% for the quarter, up from 28% last year. Advertising revenue for television continued to climb, up 10% for the quarter and 8% year-to-date on a pro forma basis. Consolidated year-to-date revenues were $313.5 million, down from $347.9 million last year, reflecting asset dispositions.

On a pro forma basis, revenue in the prior year was $316.1 million. Net income year-to-date is $15.3 million compared to $23.1 million last year. EBITDA for the six months is $79.4 million, compared to $80.2 million last year. However, on a pro forma basis, EBITDA is up 5% from $75.8 million last year. Cash flow derived from operations per share for the six month period is $2.17 compared with $2.66 last year. In the Radio division, YTD revenues are $108.2 million, up 9% from last year. EBITDA is $23.2 million, up 14% from $20.4 million last year. YTD margins are 21%.

In the Content Division, YTD revenues are $51.6 million compared to $95.6 million last year, reflecting the disposition of Klutz and the decision to produce fewer episodes. EBITDA is $2.6 million compared to $12.5 million last year and $10.0 million on a pro forma basis. Television YTD revenue is $156.7 million compared to $154.9 million last year and $153.9 million on a pro forma basis. EBITDA is $56.9 million compared to $49.8 million last year and $47.9 million on a pro forma basis. Television YTD margins are 36% compared to 32% a year ago.

“The Company has worked hard to improve our industry leading margins in both Television and Radio, reflecting our efforts on cost control and customer service,”added Heather Shaw, Executive Chair of Corus Entertainment. “We are also pleased with the progress of our strategy at Nelvana.”

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.

Supplemental earnings measures Non-GAAP earnings measures have been identified the first time mentioned and include the following:

* Net income for three months ended February 28, 2002 excludes after-tax gain of $14.3 million on the sale of investment in Comedy Network.

** EBITDA is provided to assist investors in determining the ability of the Company to generate cash from operations to cover financial charges before income and expense items from investing activities, income taxes and items not considered to be in the ordinary course of business. It is also widely used for valuation purposes. A reconciliation of EBITDA and net income is provided in the consolidated statements of income and retained earnings. EBITDA is calculated as net income before minority interest, equity earnings from investees, income tax expense, restructuring charges, other (income)/expense, loss/(gain) on sale of investments, interest on long-term debt, amortization and depreciation. A listing of these items is disclosed in the consolidated statements of income and retained earnings. These items are excluded in the determination of EBITDA as they are non-cash in nature, pre-tax, financing charges, income or expense from investing activities or are not considered to be in the ordinary course of business. EBITDA should not be considered in isolation of, or as a substitute for, (1) net income or loss, as an indicator of the Company’s operating performance, or (2) cash flows from operating, investing and financing activities, as a measure of the Company’s liquidity.

*** Pro forma information (including pro forma revenues; pro forma EBITDA and pro forma EBITDA margin) is provided to assist investors in comparing results between periods after giving effect to significant acquisitions and divestitures. In particular, results from the same period in fiscal 2002 have been adjusted to reflect operating results of all businesses reporting in the current period as if the businesses had been owned for the same number of days in the prior year. Pro forma information is provided on the basis of the CompanyÕs reportable business segments (Television, Radio and Content) for revenues and EBITDA ?the measure of profitability reviewed by the chief operating decision maker of these divisions, since there were acquisitions and/or dispositions in each of these divisions during fiscal 2002 or fiscal 2003.

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

Sally Tindal
Director, Publicity and Media Relations
Corus Entertainment Inc. 
(416) 642-3792 or (416) 530-5121

Full financial details are available on the Corus Entertainment Web site at www.corusentertainment.com under Financial Info.