(Toronto, Canada) Corus Entertainment Inc. (TSE: CJR.B; NYSE: CJR) announced today that its productivity improvements, debt reductions and solid organic revenue growth leave it on track to achieve the objectives from its three-point plan and operating target for fiscal 2002. Corus reports in Canadian dollars.
Corus’ consolidated results for the second quarter ending February 28, 2002 include a 21% overall increase in revenues to $162.9 million from $134.7 million last year, fueled by acquisitions and organic growth. On a pro forma basis*, revenue rose 7% over last year. EBITDA* increased 15% in the second quarter, to $29.5 million from $25.6 million last year. Pro forma EBITDA continued to show steady growth increasing 7% over the previous year. Television division EBITDA increased 24% over prior year with a pro forma EBITDA gain of 3% (up 12% excluding the new digital networks). Radio division reported a 12% decrease in EBITDA over the year, however, on a pro forma basis, Radio EBITDA grew by 14%. Due to the cyclical nature of the production sector, EBITDA for the Content division was down 8% resulting from planned lower production for the quarter. This production decline will be offset by increased production levels during of the balance of the fiscal year, maintaining our target of delivering 250 episodes by the end of the fiscal year. EBITDA as a percentage of revenues was 18% for the quarter, while earnings per share were $0.46 compared to $0.31 last year. Cash flow per share for the quarter was $1.27 compared to $1.09 last year. The year to date consolidated results include a revenue increase of 34% from $252.2 million to $337.6 million. EBITDA was $75.2 million compared to $62.0 million last year. Earnings per share were $0.55 compared to $0.66.
“Despite soft advertising markets Corus performed well in the quarter. Our expense reductions were timely and we have achieved our debt reduction targets,” said John Cassaday, President and Chief Executive Officer of Corus Entertainment. “Going forward, a turnaround in our Quebec radio operations, significant planned back half production at Nelvana and positive economic news leave us confident that we will achieve our stated target for fiscal 2002.”
Corus Television again led the quarter with continued growth in subscriber revenue that helped the division post revenue and EBITDA gains of 39% and 24% respectively over the same period last year. On a pro-forma basis, Television grew revenues by 16%. Corus Radio continued to experience growth in local sales of 5% in major markets, despite a weak advertising climate and a traditionally slow second quarter sales cycle.
On a pro forma basis, Corus Radio revenues were flat compared to last year due to declines in national sales. Results of the Content division exceeded expectations and reflect a planned decrease in production levels during the quarter from 54 episodes to 32 episodes this year. Despite the decrease in episodes, pro forma revenues for the division were consistent with the same period for the prior year.
Corus has also evaluated its goodwill and intangible assets to ensure allocations as of September 1, 2001 were appropriate under new GAAP recommendations. In the second quarter, Corus tested the amounts allocated to goodwill and as a result, recorded a non-cash charge for goodwill impairment in the Content division of approximately $150 million, a portion of which is related to the recently-divested Klutz business. Such charge is non-operational in nature and is reflected as an adjustment to retained earnings as at September 1, 2001.
“Our second quarter results have reaffirmed the benefits of Corus’ three-point plan and the results are reflected in an increase in shareholder value over the past three months,” added Heather Shaw, Executive Chair of Corus Entertainment. “Our continued focus is on maximizing the synergies that are available to us through consolidation.”
Corus Entertainment is a Canadian-based media and entertainment company. Corus is Canada’s market leader in both specialty TV and Radio. Corus also owns Nelvana Limited, an internationally recognized producer and distributor of children’s programming and products. The company’s other interests include music, 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:
President and Chief Executive Officer, Corus Entertainment Inc.
Senior Vice-President & Chief Financial Officer, Corus Entertainment Inc.
Group Director, Communications, Corus Entertainment Inc.