CORUS ENTERTAINMENT INC.
-- Consolidated revenues up 1% for the quarter
-- Consolidated segment profit up 3% for the quarter
-- Net income attributable to shareholders of $41.3 million ($0.47 per
share basic) for the quarter
-- Adjusted basic earnings per share of $0.49 per share for the quarter
-- Consolidated segment profit margins of 42% for the quarter
TORONTO, Jan. 13, 2016 /CNW/ - Corus Entertainment Inc. (TSX: CJR.B) announced its first quarter financial results today.
"Our solid results for the first quarter underscores our commitment to deliver growth in fiscal 2016" said Doug Murphy, President and Chief Executive Officer, Corus Entertainment. "The launch of Disney Channel (Canada) and the optimization of our portfolio of Kids brands across platforms drove growth in subscriber, merchandising, production and distribution revenues during the quarter. Our transformational acquisition of Shaw Media, announced this morning, will create a powerful combination of media assets that will give us the scale, brands, content and team to succeed in a rapidly evolving media landscape."
Financial Highlights
--------------------
Three months ended
November 30,
(unaudited -in thousands of
Canadian dollars except per share
amounts) 2015 2014
---------------------------------- ---- ----
Revenues
Television 183,718 181,490
Radio 44,600 45,621
----- ------ ------
228,318 227,111
======= =======
Segment profit(1)
Television 88,035 83,779
Radio 12,803 12,820
Corporate (4,960) (3,323)
--------- ------ ------
95,878 93,276
====== ======
Net income attributable to
shareholders 41,320 51,906
Adjusted net income attributable to
shareholders(1) (2) 42,484 51,906
=================================== ====== ======
Basic earnings per share $0.47 $0.60
Adjusted basic earnings per
share(1) (2) $0.49 $0.60
Diluted earnings per share $0.47 $0.60
========================== ===== =====
Free cash flow(1) 34,537 33,382
================ ====== ======
(1) Adjusted net income
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 Fiscal 2016 Report
to Shareholders.
(2) For the three months ended
November 30, 2015, basic earnings
per share has been adjusted to
exclude business acquisition,
integration and restructuring
charges of $2.4 million ($0.03 per
share) and to include amortization
of Pay TV assets reclassified as
held for disposal of $1.4 million
($0.01 per share).
Consolidated Results from Operations
Consolidated revenues for the three months ended November 30, 2015 were $228.3 million, up 1% from $227.1 million last year. Consolidated segment profit was $95.9 million, up 3% from $93.3 million last year. Net income attributable to shareholders for the quarter was $41.3 million ($0.47 per share basic and diluted), as compared to $51.9 million ($0.60 per share basic and diluted) last year. Net income attributable to shareholders for the first quarter of fiscal 2016 includes business acquisition, integration and restructuring costs of $2.4 million ($0.03 per share), and excludes amortization of Pay Television assets reclassified as assets held for disposal of $1.4 million ($0.01 per share). Adjusting for the impact of these items results in an adjusted net income attributable to shareholders of $42.5 million ($0.49 per share basic) in the quarter.
For fiscal 2016, certain of Corus' Pay Television business' ("Pay TV") assets and liabilities have been reclassified as assets held for disposal effective November 19, 2015 as a consequence of meeting the definition of assets held for sale under International Financial Reporting Standard 5 - Non-current Assets Held for Sale and Discontinued Operations. The Company's business activities are conducted through two operating segments, Television and Radio. The disposal group, Pay TV, is not a separate operating segment, but it is included as part of the Television operating segment. Accordingly, the disposal group, Pay TV, does not qualify for discontinued operations presentation and, as a result, its operating results remain in continuing operations in the consolidated statements of income and comprehensive income. Further discussion is provided in note 18 of the Company's interim consolidated financial statements for the period ended November 30, 2015.
Operational Results - Highlights
Television
-- Segment revenues increased 1% in Q1 2016
-- Specialty advertising revenues decreased 6% in Q1 2016
-- Subscriber revenues increased 2% in Q1 2016
-- Merchandising, distribution and other revenues increased 33% in Q1 2016
-- Segment profit((1)) increased 5% in Q1 2016
-- Segment profit margin((1)) of 48% in Q1 2016
Radio
-- Segment revenues decreased 2% in Q1 2016
-- Segment profit((1)) in Q1 2016 was consistent with the prior year
-- Segment profit margin((1)) of 29% in Q1 2016
Corporate
-- Net debt to segment profit ratio reduced to 2.6 times
-- Continued strong free cash flow of $34.5 million in Q1 2016 compared to
$33.4 million in Q1 2015
(1) Segment profit, segment
profit margin and free cash flow
do not have standardized meanings
prescribed by IFRS. The Company
reports on segment profit, segment
profit margin 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 2016 Report to Shareholders.
Corus Entertainment Inc. reports in Canadian dollars.
The unaudited consolidated financial statements and accompanying notes for the three months ended
November 30, 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 January 13, 2016 at 9:00 a.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 1.416.641.6202 and for North America is 1.800.925.4693. More information 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 other should carefully consider the foregoing factors and other uncertainties and potential events. Unless otherwise required by applicable securities laws, Corus disclaims 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
Corus Entertainment Inc. is a Canadian-based integrated media and content company that creates, broadcasts, licenses and delivers 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, animation software, and technology and media services. Corus' television brands include ABC Spark, Cartoon Network (Canada), CMT (Canada), Disney Channel (Canada), Disney Junior, Disney XD, Nickelodeon (Canada), OWN: Oprah Winfrey Network (Canada), Telelatino, TELETOON, Treehouse, W Network, YTV, Historia, La chaîne Disney, Séries+ and TÉLÉTOON. Its 39 radio brands include CKNW AM 980, Rock 101, Country 105, 630 CHED, Fresh Radio, JUMP! 106.9, Q107 and 102.1 the Edge. The company also owns Nelvana, an internationally renowned animation production company, Kids Can Press, Toon Boom and Quay Media Services. A publicly traded company, Corus is listed on the Toronto Stock Exchange (CJR.B). Experience Corus on the web at www.corusent.com.
CORUS ENTERTAINMENT INC.
CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
As at November 30, As at August 31,
(unaudited
-in
thousands
of
Canadian
dollars) 2015 2015
---------- ---- ----
ASSETS
Current
Cash and
cash
equivalents 42,170 37,422
Accounts
receivable 212,747 164,600
Income
taxes
recoverable - 12,439
Prepaid
expenses
and
other 13,735 13,855
Assets
held
for
disposal 165,814 -
--------- ------- ---
Total
current
assets 434,466 228,316
-------- ------- -------
Tax
credits
receivable 25,459 25,958
Intangibles,
investments
and
other
assets 168,082 60,589
Property,
plant
and
equipment 136,344 139,140
Program
and
film
rights 450,588 315,899
Film
investments 41,558 36,549
Broadcast
licenses 906,590 956,984
Goodwill 775,688 827,859
Deferred
tax
assets 37,995 40,815
-------- ------ ------
2,976,770 2,632,109
========= =========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current
Accounts
payable
and
accrued
liabilities 240,768 210,971
Current
portion
of
long-
term
debt 150,000 150,000
Income
taxes
payable 834 -
Provisions 9,436 8,930
Liabilities
associated
with
assets
held
for
disposal 63,472 -
----------- ------ ---
Total
current
liabilities 464,510 369,901
------------ ------- -------
Long-
term
debt 631,518 651,002
Other
long-
term
liabilities 404,341 138,833
Deferred
tax
liabilities 238,507 252,462
------------ ------- -------
Total
liabilities 1,738,876 1,412,198
------------ --------- ---------
SHAREHOLDERS' EQUITY
Share
capital 998,144 994,571
Contributed
surplus 9,738 9,471
Retained
earnings 207,574 191,182
Accumulated
other
comprehensive
income 7,750 7,353
------------- ----- -----
Total
equity
attributable
to
shareholders 1,223,206 1,202,577
Equity
attributable
to non-
controlling
interest 14,688 17,334
------------- ------ ------
Total
shareholders'
equity 1,237,894 1,219,911
-------------- --------- ---------
2,976,770 2,632,109
========= =========
CORUS ENTERTAINMENT INC.
CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME
Three months ended
November 30,
(unaudited -in thousands of Canadian
dollars except per share amounts) 2015 2014
------------------------------------ ---- ----
Revenues 228,318 227,111
Direct cost of sales, general and
administrative expenses 132,440 133,835
Depreciation and amortization 11,002 5,774
Interest expense 18,890 12,681
Business acquisition, integration and
restructuring costs 2,361 -
Other expense (income), net 3,925 1,806
--------------------------- ----- -----
Income before income taxes 59,700 73,015
Income tax expense 16,877 19,833
Net income for the period 42,823 53,182
========================= ====== ======
Net income attributable to:
Shareholders 41,320 51,906
Non-controlling interest 1,503 1,276
------------------------ ----- -----
42,823 53,182
====== ======
Earnings per share attributable to shareholders:
Basic $0.47 $0.60
Diluted $0.47 $0.60
======= ===== =====
Net income for the period 42,823 53,182
Other comprehensive income (loss), net of tax:
Items that may be reclassified subsequently to income:
Unrealized foreign currency
translation adjustment 299 1,230
Unrealized change in fair value of
available-for-sale investments (116) (310)
Unrealized change in fair value of
cash flow hedges 214 (38)
---------------------------------- --- ---
397 882
--- ---
Comprehensive income for the period 43,220 54,064
=================================== ====== ======
Comprehensive income attributable to:
Shareholders 41,717 52,788
Non-controlling interest 1,503 1,276
------------------------ ----- -----
43,220 54,064
====== ======
CORUS ENTERTAINMENT INC.
CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY
(unaudited - in thousands of Canadian dollars) Share Contributed Retained Accumulated Total equity Non- Total equity
capital surplus earnings other attributable to controlling
comprehensive shareholders interest
income
--- ---
At August 31, 2015 994,571 9,471 191,182 7,353 1,202,577 17,334 1,219,911
Comprehensive income - - 41,320 397 41,717 1,503 43,220
Dividends declared - - (24,928) - (24,928) (4,149) (29,077)
Issuance of shares under dividend reinvestment plan 3,573 - - - 3,573 - 3,573
Share-based compensation expense - 267 - - 267 - 267
-------------------------------- --- --- --- --- --- --- ---
At November 30, 2015 998,144 9,738 207,574 7,750 1,223,206 14,688 1,237,894
==================== ======= ===== ======= ===== ========= ====== =========
At August 31, 2014 967,330 8,385 313,361 3,767 1,292,843 17,283 1,310,126
Comprehensive income - - 51,906 882 52,788 1,276 54,064
Dividends declared - - (23,464) - (23,464) (4,134) (27,598)
Issuance of shares under stock option plan 1,711 (292) - - 1,419 - 1,419
Issuance of shares under dividend reinvestment plan 5,485 - - - 5,485 - 5,485
Share-based compensation expense - 529 - - 529 - 529
-------------------------------- --- --- --- --- --- --- ---
At November 30, 2014 974,526 8,622 341,803 4,649 1,329,600 14,425 1,344,025
==================== ======= ===== ======= ===== ========= ====== =========
CORUS ENTERTAINMENT INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
Three months ended
November 30,
(unaudited -in thousands of Canadian
dollars) 2015 2014
------------------------------------ ---- ----
OPERATING ACTIVITIES
Net income for the period 42,823 53,182
Adjustments to reconcile net income to cash provided by operating
activities:
Depreciation and amortization 11,002 5,774
Amortization of program and film
rights 54,263 54,337
Amortization of film investments 3,331 6,921
Deferred income taxes 1,938 2,847
Share-based compensation expense 267 529
Imputed interest on long-term
liabilities 10,451 3,496
Venture fund distribution gain (533) -
Other 198 482
Net change in non-cash working
capital balances related to
operations (29,825) (26,449)
Payment of program and film rights (45,129) (50,417)
Net additions to film investments (9,827) (13,815)
--------------------------------- ------ -------
Cash provided by operating activities 38,959 36,887
------------------------------------- ------ ------
INVESTING ACTIVITIES
Additions to property, plant and equipment (2,703) (2,823)
Consideration for assets held for disposal 21,100 -
Business combination (2,476) -
Venture fund distribution 1,684 -
Net cash flows for intangibles, investments
and other assets (2,663) (15,161)
Other (2,328) (511)
----- ------ ----
Cash provided by (used) in investing
activities 12,614 (18,495)
------------------------------------ ------ -------
FINANCING ACTIVITIES
Increase (decrease) in bank loans (19,999) 19,791
Issuance of shares under stock option plan - 1,419
Dividends paid (21,298) (17,919)
Dividends paid to non-controlling interest (4,149) (4,134)
Other (1,379) (1,294)
----- ------ ------
Cash used in financing activities (46,825) (2,137)
--------------------------------- ------- ------
Net change in cash and cash equivalents
during the period 4,748 16,255
Cash and cash equivalents, beginning of the
period 37,422 11,585
------------------------------------------- ------ ------
Cash and cash equivalents, end of the
period 42,170 27,840
===================================== ====== ======
CORUS ENTERTAINMENT INC.
BUSINESS SEGMENT INFORMATION
(unaudited - in thousands of Canadian dollars)
Three months ended November 30, 2015
Television Radio Corporate Consolidated
---------- ----- --------- ------------
Revenues 183,718 44,600 - 228,318
Direct cost of
sales, general and
administrative
expenses 95,683 31,797 4,960 132,440
------------------- ------ ------ ----- -------
Segment profit
(loss)(1) 88,035 12,803 (4,960) 95,878
Depreciation and amortization 11,002
Interest expense 18,890
Business acquisition, integration and
restructuring costs 2,361
Other expense, net 3,925
------------------ -----
Income before income taxes 59,700
========================== ======
Three months ended November 30, 2014
Television Radio Corporate Consolidated
---------- ----- --------- ------------
Revenues 181,490 45,621 - 227,111
Direct cost of
sales, general and
administrative
expenses 97,711 32,801 3,323 133,835
------------------- ------ ------ ----- -------
Segment profit
(loss)(1) 83,779 12,820 (3,323) 93,276
Depreciation and amortization 5,774
Interest expense 12,681
Other expense, net 1,806
------------------ -----
Income before income taxes 73,015
========================== ======
(1) Segment profit does not have a
standardized meaning prescribed by
IFRS. For definitions and
explanations, see discussion under
the Key Performance Indicators
section of the 2016 Report to
Shareholders.
Revenues by type
Three months ended
November 30, November 30,
2015 2014
---- ----
Advertising 115,341 120,966
Subscriber fees 86,954 85,414
Merchandising,
distribution and
other 26,023 20,731
----------------- ------ ------
228,318 227,111
======= =======
SOURCE Corus Entertainment Inc.
