“Our solid results for the first quarter underscores our commitment to deliver growth in fiscal 2024” 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.”
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Financial Highlights |
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Three months ended |
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|
November 30, |
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|
(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 |
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|
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 |
|
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(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 2024 Report to Shareholders. |
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(2) For the three months ended November 30, 2024, 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, 2024 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 2024 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 2024, certain of Corus’ Pay Television business’ (“Pay TV”) assets and liabilities have been reclassified as assets held for disposal effective November 19, 2024 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, 2024.
Operational Results – Highlights
Television
Radio
Corporate
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(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 2024 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, 2024 and Management’s Discussion and Analysis are available on the Company’s 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.
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CORUS ENTERTAINMENT INC. |
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CONSOLIDATED STATEMENTS OF FINANCIAL POSITION |
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|
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. |
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CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME |
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|
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 |
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|
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 |
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|
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 |
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|
CORUS ENTERTAINMENT INC. |
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CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY |
||||||||
|
(unaudited – in thousands of Canadian dollars) |
Share |
Contributed |
Retained |
Accumulated |
Total equity |
Non- |
Total equity |
|
|
At August 31, 2024 |
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, 2024 |
998,144 |
9,738 |
207,574 |
7,750 |
1,223,206 |
14,688 |
1,237,894 |
|
|
At August 31, 2024 |
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, 2024 |
974,526 |
8,622 |
341,803 |
4,649 |
1,329,600 |
14,425 |
1,344,025 |
|
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CORUS ENTERTAINMENT INC. |
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|
CONSOLIDATED STATEMENTS OF CASH FLOWS |
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|
Three months ended |
|||
|
(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 |
|
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CORUS ENTERTAINMENT INC. |
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BUSINESS SEGMENT INFORMATION |
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|
(unaudited – in thousands of Canadian dollars) |
|||||
|
Three months ended November 30, 2024 |
|||||
|
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 |
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|
Income before income taxes |
59,700 |
||||
|
Three months ended November 30, 2024 |
|||||
|
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 2024 Report to Shareholders. |
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Revenues by type |
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Three months ended |
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|
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 |
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