Q2 Consolidated Revenues up 5%
Q2 Net Income up 18% to $8.3 million ($0.19 per share)
YTD Segment Profit Margin Improvement in All Divisions
Solid Cash Position in the Quarter
Q2 TV Segment Profit up 16% on Advertising and Subscriber Revenue Gains
(Toronto, Canada) Corus Entertainment Inc. (TSX: CJR.B; NYSE: CJR) announced today strong results for its second quarter ending February 29, 2004, highlighted by advertising revenue growth in specialty television and continued momentum from Nelvana’s Branded Consumer Products business. Consolidated revenue for the second quarter was $155.0 million, up 5% from $147.5 million in the prior year. Net income for the quarter was up 18% to $8.3 million or $0.19 per share, compared to $7.0 million or $0.16 per share last year. Consolidated segment profit grew by 8% to $34.1 million from $31.4 million. The consolidated results for the second quarter reflect Corus’ early adoption of the stock option expense accounting.
“Excellent cost control, continued strong television performance and growth in our branded consumer products business drove a strong quarter for Corus,” said John Cassaday, President and CEO of Corus Entertainment. “We are looking for stronger revenue performance from radio in the back half of the year as a result of several recent format changes.”
Corus Television continued its strong quarter-over-quarter growth with revenues of $75.2 million, up 5% from $71.6 million last year. Advertising revenue grew by 5%, while subscriber revenue gained 6%. Movie Central saw strong subscriber growth over the previous year, finishing the quarter with 699,000 subscribers, up 6% from August 31, 2003. Segmented profit for television was up 16% in the second quarter at $26.5 million compared to $22.8 million last year. Television also delivered a strong segment profit margin gain of three percentage points to 35% for the quarter. Corus Radio revenues in the quarter declined by 2% to $47.8 million from $48.9 million last year, due primarily to challenges in Western Canada. This was partially offset by a strong performance from the Ontario region. The balanced portfolio of stations and effective cost controls across the division helped to deliver segment profit of $7.7 million, up 9% from $7.1 million last year, and continued gains in segment profit margins which grew to 16% from 15% in the second quarter of last year. The Content division continued to show steady growth in the second quarter with total revenues of $34.3 million, an 18% increase from the prior year revenues of $28.9 million. Revenue growth can be attributed to the Branded Consumer Products business, which saw an 88% increase over the previous year, largely due to the continued strong performance of the Beyblade brand worldwide. Production and distribution revenues declined as anticipated from $18.5 million last year to $14.7 million this year, due to a reduced production slate and the timing of license term start dates. Second quarter segment profit for the Content division grew modestly to $2.8 million from $2.6 million but segment profit margin declined slightly from 9% to 8%.
Year-to-Date (YTD) Results
Consolidated year-to-date revenues for Corus grew to $340.0 million, up 8% from $313.5 million last year. Consolidated segment profit for the six months was $91.3 million, compared to $79.4 million last year, a gain of 15% in the period. Net income year-to-date was $14.0 million or $0.33 per share, compared to $15.2 million or $0.36 per share last year. Television revenues year-to-date were $169.4 million representing an 8% increase over last year led by 14% growth in advertising revenue for the period. Television’s segment profit for the first six months of the year was $66.3 million compared to $56.9 million last year, an increase of 16%. Television YTD segment profit margin was 39% compared to 36% a year ago. In the Radio division, YTD revenues were $108.6 million compared to $108.2 million last year. Segment profit grew 10% to $25.5 million from $23.2 million last year. YTD segment profit margin growth continued with a gain of three percentage points from 21% last year to 24%. In the Content division, YTD revenues were $65.0 million compared to $51.6 million last year, a gain of 26%. Segment profit for the six-month period more than doubled to $5.4 million from $2.6 million, driving segment profit margin improvement of three percentage points to 8%. The YTD gains were due largely to the strong revenue growth from Beyblade merchandise during the holiday season.
“We’re pleased with the solid earnings growth delivered by all three operating divisions in the first half of this fiscal year,” added Heather Shaw, Executive Chair of Corus Entertainment. “The Company has responded well to specific business challenges and has managed the balance of our asset portfolio to ensure continued growth in shareholder value. Today, Corus’ Board of Directors approved the Company’s second semi-annual dividend to be paid on June 30, 2004.”
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. Corus Entertainment reports in Canadian dollars. 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
Full financial details are available on the Corus Entertainment Web site at www.corusentertainment.com under Financial Info.