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CORUS ENTERTAINMENT ANNOUNCES FISCAL 2023 SECOND QUARTER RESULTS
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CORUS ENTERTAINMENT ANNOUNCES FISCAL 2023 SECOND QUARTER RESULTS

  • Consolidated revenue decreased 5% for the quarter and 6% for the year-to-date
  • Consolidated segment profit(1) decreased 32% for the quarter and 28% for the year-to-date
  • Consolidated segment profit margin(1) of 17% for the quarter and 25% for the year-to-date
  • Net loss attributable to shareholders of $15.5 million ($0.08 loss per share basic) for the quarter and net income attributable to shareholders of $15.9 million ($0.08 per share basic) for the year-to-date
  • Net debt to segment profit(1) of 3.59 times at February 28, 2023, up from 3.02 times at August 31, 2022
  • Free cash flow(1) of $28.4 million for the quarter and $49.2 million for the year-to-date

TORONTO, April 13, 2023 /PRNewswire/ – Corus Entertainment Inc. (TSX: CJR.B) announced its second quarter financial results today.

“Our second quarter results reflect the impact of current global advertising market conditions on advertising revenue, partially offset by significant growth in our owned content business,” said Doug Murphy, President and Chief Executive Officer. “The ongoing actions we are taking to expand our premium digital video business, with the concurrent expansion of cross-platform monetization capabilities and prudent content investments, are advancing our strategic plan for future profitable growth. We are streamlining our operating model, balancing the near-term realities of current macroeconomic headwinds with long-term value creation as we optimize our asset base. The recent changes to our financial priorities reinforce our commitment to responsible capital allocation while positioning Corus to emerge in a position of strength when the advertising economy recovers.”

Financial Highlights


Three months ended

February 28,

%

Six months ended

February 28,

%

(in thousands of Canadian dollars except per share amounts)

2023

2022

Change

2023

2022

Change

Revenue







Television

321,548

339,661

(5 %)

723,077

774,408

(7 %)

Radio

22,323

22,000

1 %

51,985

51,126

2 %


343,871

361,661

(5 %)

775,062

825,534

(6 %)






Segment profit (loss) (1)







Television

63,019

92,723

(32 %)

194,778

271,609

(28 %)

Radio

350

125

180 %

6,372

5,871

9 %

Corporate

(4,234)

(6,292)

33 %

(10,323)

(13,754)

25 %


59,135

86,556

(32 %)

190,827

263,726

(28 %)






Segment profit margin (1)







Television

20 %

27 %


27 %

35 %


Radio

2 %

1 %


12 %

11 %


Consolidated

17 %

24 %


25 %

32 %







Net income (loss) attributable to shareholders

(15,450)

16,221

(195 %)

15,937

92,386

(83 %)

Basic earnings (loss) per share

($0.08)

$0.08


$0.08

$0.44


Diluted earnings (loss) per share

($0.08)

$0.08


$0.08

$0.44







Free cash flow (1)

28,397

88,417

(68 %)

49,207

168,404

(71 %)



(1)

In addition to disclosing results in accordance with International Financial Reporting Standards (“IFRS”) as issued by the International Accounting Standards Board (“IASB”), the Company also provides supplementary non-IFRS measures as a method of evaluating the Company’s performance and to provide a better understanding of how management views the Company’s performance. These non-IFRS or non-GAAP measures can include: segment profit (loss), segment profit margin, free cash flow, net debt to segment profit, optimized advertising revenue and new platform revenue. These are not measurements in accordance with IFRS and should not be considered as an alternative to any other measure of performance under IFRS. Please see additional discussion and reconciliations under the Key Performance Indicators and Non-GAAP Financial Measures section of the Company’s Second Quarter 2023 Report to Shareholders.

 

Segment Revenue


Three months ended

February 28,

%

Six months ended

February 28,

%

(in thousands of Canadian dollars)

2023

2022

Change

2023

2022

Change

Revenue

 

321,548



 

723,077



Television

339,661

(5 %)

774,408

(7 %)

Advertising

169,124

184,695

(8 %)

421,637

469,732

(10 %)

Subscriber

124,051

132,823

(7 %)

251,566

260,358

(3 %)

Distribution, production and other

28,373

22,143

28 %

49,874

44,318

13 %

Radio

22,323

22,000

1 %

51,985

51,126

2 %

Total Revenue

343,871

361,661

(5 %)

775,062

825,534

(6 %)






Optimized advertising revenue (1)

52 %

42 %

14 %

53 %

39 %

24 %

New platform revenue (1)

12 %

10 %

4 %

11 %

9 %

8 %

(1)

Optimized advertising revenue and new platform revenue do not have standardized meanings prescribed by IFRS. For definitions and explanations, see the discussion under the Key Performance Indicators and Non-GAAP Financial Measures section of the Second Quarter 2023 Report to Shareholders.


Operational Highlights 

Corus advanced its strategic priorities on multiple fronts. The Company expanded its premium digital video offerings for subscribers and advertisers, evolved its Kids channel portfolio and announced new greenlights for its lifestyle and factual reality content slate. An updated capital allocation policy was adopted and the Company advanced its capital allocation priorities through investments in the business to support future growth opportunities while continuing to navigate an uncertain macroeconomic environment.

  • Global TV App adds two premium networks, Freeplay section. Magnolia Network Canada and Lifetime are now available on the Global TV App, offering over 500 episodes and more than 300 hours of content to users with a subscription to these networks through their cable package. The Global TV App also introduced Freeplay – an all-new section available across Global TV App platforms where users can watch thousands of hours of free ad-supported content from over 100 shows and over 75 movies.
  • Kids channel portfolio evolves with launch of two rebranded kids’ networks. TELETOON was rebranded as Cartoon Network on linear platforms and STACKTV beginning March 27, 2023. In addition, Corus introduced a new kids’ television channel, relaunching the prior Cartoon Network as Boomerang. Alongside the recent launch of multi-platform kids’ streaming service TELETOON+, these rebrands modernize and expand Corus’ catalogue of kids’ entertainment across its portfolio.
  • Corus Studios Announces Recent Sales and New Series. Corus Studios sold over 200 hours of content during Q2 of fiscal 2023, including interconnected movies The Love Club (4×120) to Hallmark Channel U.S. and three series to Hulu in the U.S. Titles debuting for sale in the international market include Pamela Anderson’s new series Pamela’s Cooking With Love (working title) (8×60), Renovation Resort (7×60) starring Bryan Baeumler and Scott McGillivray, and Bryan Baeumler’s new series Bryan’s All In (10×60).

Financial Highlights

  • Effective March 31, 2023, Corus’ annual dividend rate was reduced to $0.12 per Class B Share and $0.115 per Class A Share. This redeployment of capital from dividends is expected to be directed to debt repayment. In addition, a revised dividend payment schedule was adopted with expected quarterly payment dates shifting to August, November, February and May (from June, September, December and March), with any such dividend declarations being subject to Board approval.
  • Free cash flow(1) of $28.4 million in Q2 and $49.2 million year-to-date compared to $88.4 million and $168.4 million year-to-date, respectively, in the same comparable prior year periods. The decrease in free cash flow(1) for the second quarter is attributable to a decrease in cash provided by operating activities of $61.6 million. The decrease in free cash flow(1) for the six months ended February 28, 2023 is mainly attributable to a decrease in cash provided by operating activities of $75.7 million and cash provided by investing activities in the prior year’s six months ended February 28, 2022, related to a $43.5 million non-recurring venture fund distribution.
  • Net debt to segment profit(1) was 3.59 times at February 28, 2023, up from 3.02 times at August 31, 2022. The main driver of the increase in this ratio is the decrease of segment profit(1) for the most recent four quarters.
  • As of February 28, 2023, the Company had $57.9 million of cash and cash equivalents and approximately $300.0 million available under its Revolving Facility, $241.6 million of which could be drawn.

(1)

Free cash flow, net debt to segment profit and segment profit do not have standardized meanings prescribed by IFRS. The Company reports on these because they are key measures used to evaluate performance. For definitions and explanations, see the discussion under the Key Performance Indicators and Non-GAAP Financial Measures section of the Second Quarter 2023 Report to Shareholders and/or Management’s Discussion and Analysis in the Company’s Annual Report for the year ended August 31, 2022 (“2022 MD&A”).


Corus Entertainment Inc. reports its financial results in Canadian dollars.

The unaudited interim condensed consolidated financial statements and accompanying notes for the three and six months ended February 28, 2023 and Management’s Discussion and Analysis are available on the Company’s website at www.corusent.com in the Investor Relations section and under the Company’s SEDAR profile at www.sedar.com.

A conference call with Corus senior management is scheduled for April 13, 2023 at 8:00 a.m. ET. While this call is directed at analysts and investors, members of the media are welcome to listen in. To instantly join the conference call by phone, please use the following URL to easily register and be connected to the conference call automatically: https://bit.ly/3zhNIds You can also dial direct to be entered into the call by an Operator. The dial in number for the conference call for local and international callers is 1.647.484.0475 and for North America is 1.888.256.1007. This call will be archived and available for replay in the Investor Relations section of the Corus website beginning April 13, 2023, at 11a.m. ET or accessible by telephone until

April 20, 2023, at 1.888.203.1112 (toll-free North America) or 647.436.0148 (local or international), using replay code 9635047#. More information can be found on the Corus Entertainment website at www.corusent.com in the Investor Relations section.

Risks and Uncertainties

Significant risks and uncertainties affecting the Company and its business are discussed under the heading “Risks and Uncertainties” and “Seasonal Fluctuations” in the 2022 MD&A, as filed at www.sedar.com on October 24, 2022.

As discussed further in the 2022 MD&A, the Company’s operating performance is affected by general Canadian and worldwide economic conditions. Changes or volatility in domestic or international economic conditions, economic uncertainty or geopolitical conflict and tensions, including current ongoing factors that can create or exacerbate recessionary conditions, may affect discretionary consumer and business spending, including on advertising and marketing, resulting in changes to demand for Corus’ product and services offerings. In addition, the continued elevated consumer price index inflation also affects the Company’s business, operations and financial performance through disruption to supply chains, increased costs of programming, services and labour or disruption to availability of labour, reduced advertising demand or spending, or lower demand for the Company’s products and services, all of which may lead to decreased revenue or profitability.

Other financial risks which may be related to or elevated by the foregoing include leverage risk related to the Company’s financial covenants and debt servicing payments, requirements and compliance under its credit facility, and impacts thereof; the volatility of the market price for the Company’s Class B Non-Voting Shares, which can be impacted by factors beyond the Company’s control and which can decline even if the Company’s operating results, underlying asset values or prospects have not changed; and risks related to the payment, amount or timing of dividends. Please see the 2022 MD&A for a full discussion of these and other risks and uncertainties.

Outlook

Currently, the Company expects its year over year Television advertising revenue in the third quarter will be relatively consistent with the year over year performance in the first quarter of fiscal 2023, given continuing macroeconomic and other risk factors described above and in the 2022 MD&A. While the Company continues to expect improvement in the macro-environment over the medium term, visibility continues to be limited at this time.

The Company recently updated its Capital Allocation Policy, in light of the foregoing as well as considering the continuing low visibility into the macroeconomic environment and, in addition to continuing to take rigorous cost reduction measures, the Company believes it is prudent to conserve cash out of an abundance of caution. Updates to the Capital Allocation Policy include the non renewal of the Company’s share buyback program when it expired on January 16, 2023 and a reduction in its annual dividend rates effective March 31, 2023. The Company expects this redeployment of capital to be directed to debt repayment.

Use of Non-GAAP Financial Measures

This press release includes the non-GAAP or non-IFRS financial measures of segment profit, segment profit margin, free cash flow, net debt to segment profit, as well as supplementary financial measures not presented in the financial statements such as optimized advertising revenue, and new platform revenue. Non-GAAP or non-IFRS measures that are not in accordance with, nor an alternate to, generally accepted accounting principles (“GAAP”) and may be different from non-GAAP or non-IFRS 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 IFRS. 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, IFRS financial results. A reconciliation of the Company’s non-GAAP measures is included in the Company’s most recent Report to Shareholders for the three and six months ended February 28, 2023, which is available on Corus’ website at www.corusent.com as well as on SEDAR at www.sedar.com.

Caution Concerning Forward-Looking Information

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 press release 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 information”). This forward-looking information relates to, among other things, the Company’s objectives, goals, strategies, targets, intentions, plans, estimates and outlook, including the adoption and anticipated impact of the Company’s strategic plan, advertising and expectations of advertising trends for fiscal 2023, subscriber revenue and anticipated subscription trends, distribution, production and other revenue, the Company’s dividend policy and the payment of future dividends; the Company’s leverage target; the Company’s ability to manage retention and reputation risks related to its on-air talent; expectations regarding financial performance, including capital allocation strategy and capital structure management, operating costs and tariffs, taxes and fees, and can generally be identified by the use of words such as “believe”, “anticipate”, “expect”, “intend”, “plan”, “will”, “may” or the negatives of these terms and other similar expressions. In addition, any statements that refer to expectations, projections or other characterizations of future events or circumstances may be considered forward-looking information.

Although Corus believes that the expectations reflected in such forward-looking information are reasonable, such information involves assumptions, risks and uncertainties and undue reliance should not be placed on such statements. Certain material factors or assumptions are applied with respect to the forward-looking information, including without limitation, factors and assumptions regarding the general market conditions and general outlook for the industry including: the impact of recessionary conditions and continuing supply chain constraints; the potential impact of new competition and industry mergers and acquisitions; changes to applicable tax, licensing and regulatory regimes; inflation and interest rates, stability of the advertising, subscription, production and distribution markets; changes to key suppliers or clients; operating and capital costs and tariffs, taxes and fees, the Company’s ability to source, produce or sell desirable content and the Company’s capital and operating results being consistent with its expectations. Actual results may differ materially from those expressed or implied in such information.

Important factors that could cause actual results to differ materially from these expectations include, among other things: the Company’s ability to attract, retain and manage fluctuations in advertising revenue; the Company’s ability to maintain relationships with key suppliers and clients and on anticipated financial terms and conditions; audience acceptance of the Company’s television programs and cable networks; the Company’s ability to manage retention and reputation risks related to its on-air talent; the Company’s ability to recoup production costs; the availability of tax credits; the availability of expected news, production and related credits, programs and funding; the existence of co-production treaties; the Company’s ability to compete in any of the industries in which it does business including with competitors which may not be regulated in the same way or to the same degree; the business and strategic opportunities (or lack thereof) that may be presented to and pursued by the Company; 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 including statements, decisions or positions by applicable regulators including, without limitation, the Canadian Radio-television and Telecommunications Commission (“CRTC”), Canadian Heritage and Innovation, Science and Economic Development Canada (“ISED”); changes to licensing status or conditions; unanticipated or un-mitigatable programming costs; the Company’s ability to integrate and realize anticipated benefits from its acquisitions and to effective y manage its growth; the Company’s ability to successfully defend itself against litigation matters and complaints; failure to meet covenants under the Company’s senior credit facility, senior unsecured notes or other instruments or facilities; epidemics, pandemics or other public health and safety crises in Canada and globally, including COVID-19; physical and operational changes to the Company’s key facilities and infrastructure; cybersecurity threats or incidents to the Company or its key suppliers and vendors; and changes in accounting standards.

Additional information about these factors and about the material assumptions underlying any forward looking information may be found under the heading “Risks and Uncertainties” in the Company’s Management’s Discussion and Analysis for the year ended August 31, 2022 and under the heading “Risk Factors” in the Company’s Annual Information Form for the year ended August 31, 2022. Corus cautions that the foregoing list of important assumptions and factors that may affect future results is not exhaustive. When relying on the Company’s forward-looking information to make decisions with respect to Corus, investors and others should carefully consider the foregoing factors and other uncertainties and potential events. Unless otherwise specified, all forward-looking information in this document speaks as of the date of this document and may be updated or amended from time to time. Except as otherwise required by applicable securities laws, Corus disclaims any intention or obligation to publicly update or revise any forward-looking information whether as a result of new information, events or circumstances that arise after the date thereof or otherwise.

About Corus Entertainment Inc.    

Corus Entertainment Inc. (TSX: CJR.B) is a leading media and content company that develops and delivers high quality brands and content across platforms for audiences around the world. Engaging audiences since 1999, the company’s portfolio of multimedia offerings encompass 33 specialty television services, 39 radio stations, 15 conventional television stations, digital and streaming services, animation software, technology and media services. Corus is an internationally-renowned content creator and distributor through Nelvana, a world class animation studio expert in all formats and Corus Studios, a globally recognized producer of hit scripted and unscripted content. The company also owns full-service social digital agency so.da, lifestyle entertainment company Kin Canada, leading 2D animation software supplier Toon Boom and children’s book publishing house, Kids Can Press. Corus’ roster of premium brands includes Global Television, W Network, HGTV Canada, Food Network Canada, Magnolia Network Canada, The HISTORY® Channel, Showcase, Adult Swim, National Geographic, Disney Channel Canada, YTV, Global News, Globalnews.ca, Q107, Country 105, and CFOX, along with streaming platforms STACKTV, TELETOON+, the Global TV App and Curiouscast. Corus is the domestic advertising representative and an original content partner for Pluto TV, a Paramount Company, which is the leading free ad-supported streaming television (FAST) service. For more information visit www.corusent.com.

CORUS ENTERTAINMENT INC.



INTERIM CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL POSITION



 

 

(unaudited – in thousands of Canadian dollars)

As at February 28,

As at August 31,

2023

2022

ASSETS



Current



Cash and cash equivalents

57,852

54,912

Accounts receivable

329,023

311,015

Income taxes recoverable

13,751

17,180

Prepaid expenses and other assets

27,482

21,423

Total current assets

428,108

404,530

Tax credits receivable

44,800

32,744

Investments and other assets

62,617

63,931

Property, plant and equipment

277,302

294,026

Program rights

777,597

660,722

Film investments

73,296

59,122

Intangibles

1,629,601

1,620,796

Goodwill

316,308

316,308

Deferred income tax assets

47,429

50,301


3,657,058

3,502,480

 

LIABILITIES AND EQUITY



Current



Accounts payable and accrued liabilities

637,569

526,899

Current portion of long-term debt

15,426

15,574

Provisions

5,665

8,540

Total current liabilities

658,660

551,013

Long-term debt

1,244,854

1,246,076

Other long-term liabilities

430,471

376,570

Provisions

7,265

9,830

Deferred income tax liabilities

407,725

415,010

Total liabilities

2,748,975

2,598,499

 

EQUITY



Share capital

281,052

781,918

Contributed surplus

2,012,464

1,511,481

Accumulated deficit

(1,569,976)

(1,574,358)

Accumulated other comprehensive income

34,915

33,000

Total equity attributable to shareholders

758,455

752,041

Equity attributable to non-controlling interests

149,628

151,940

Total equity

908,083

903,981


3,657,058

3,502,480

 

 

CORUS ENTERTAINMENT INC.

INTERIM CONDENSED CONSOLIDATED STATEMENTS OF INCOME (LOSS) AND COMPREHENSIVE INCOME (LOSS)







Three months ended

February 28,


Six months ended

                            February 28,

(unaudited – in thousands of Canadian dollars except per share amounts)

2023

2022

2023

2022

Revenue

343,871

361,661

775,062

825,534

Direct cost of sales, general and administrative expenses

284,736

275,105

584,235

561,808

Depreciation and amortization

40,282

39,747

80,416

77,128

Interest expense

34,751

25,759

69,123

51,281

Restructuring and other costs

2,137

1,011

4,966

2,054

Other expense (income), net

1,375

(5,938)

8,421

(2,801)

Income (loss) before income taxes

(19,410)

25,977

27,901

136,064

Income tax expense (recovery)

(4,491)

6,029

8,222

35,187

Net income (loss) for the period

(14,919)

19,948

19,679

100,877

 

Other comprehensive income, net of income taxes





Items that may be reclassified subsequently to income (loss):





Unrealized change in fair value of cash flow hedges

2,336

1,515

1,294

3,501

Unrealized foreign currency translation adjustment

423

(225)

1,309

32


2,759

1,290

2,603

3,533

Items that will not be reclassified to income (loss):





Unrealized change in fair value of financial assets

(365)

(2,912)

(688)

10,668

Actuarial gain on post-retirement benefit plans

1,489

3,128

547

2,460


1,124

216

(141)

13,128

Other comprehensive income, net of income taxes

3,883

1,506

2,462

16,661

Comprehensive income (loss) for the period

(11,036)

21,454

22,141

117,538






Net income (loss) attributable to:





Shareholders

(15,450)

16,221

15,937

92,386

Non-controlling interests

531

3,727

3,742

8,491


(14,919)

19,948

19,679

100,877






Comprehensive income (loss) attributable to:





Shareholders

(11,567)

17,727

18,399

109,047

Non-controlling interests

531

3,727

3,742

8,491


(11,036)

21,454

22,141

117,538






Earnings (loss) per share attributable to shareholders:





Basic

($0.08)

$0.08

$0.08

$0.44

Diluted

($0.08)

$0.08

$0.08

$0.44

 

CORUS ENTERTAINMENT INC.








INTERIM CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY

 

 

 

(unaudited – in thousands of Canadian dollars)

 

 

Share

capital

 

 

Contributed

surplus

 

 

Accumulated

deficit

Accumulated

other

comprehensive

income

 

Total equity

attributable to

shareholders

 

Non-

controlling

interests

 

 

 

Total equity

As at August 31, 2022

781,918

1,511,481

(1,574,358)

33,000

752,041

151,940

903,981

Comprehensive income

15,937

2,462

18,399

3,742

22,141

Dividends declared

(11,505)

(11,505)

(10,073)

(21,578)

Reduction of stated capital

(500,000)

500,000

Change in fair value of put option

liability

 

 

 

(597)

 

 

(597)

 

164

 

(433)

Shares repurchased under normal

course issuer bid (“NCIB”)

 

(3,089)

 

1,119

 

 

 

(1,970)

 

 

(1,970)

Reversal of automatic share

purchase commitment

 

2,223

 

(504)

 

 

 

1,719

 

 

1,719

Actuarial gain on post-retirement

benefit plans

 

 

 

547

 

(547)

 

 

 

Share-based compensation expense

368

368

368

Equity funding by a non-controlling

interest

 

 

 

 

 

 

3,855

 

3,855

As at February 28, 2023

281,052

2,012,464

(1,569,976)

34,915

758,455

149,628

908,083









 

 

 

(unaudited – in thousands of Canadian dollars)

 

 

 

Share

capital

 

 

 

Contributed

surplus

 

 

 

Accumulated

deficit

 

Accumulated

other

comprehensive

income

 

 

Total equity

attributable to

shareholders

 

 

Non-

controlling

interests

 

 

 

Total equity

As at August 31, 2021

816,189

1,512,431

(1,282,897)

21,811

1,067,534

152,829

1,220,363

Comprehensive income

92,386

16,661

109,047

8,491

117,538

Dividends declared

(24,996)

(24,996)

(6,625)

(31,621)

Business acquisition

436

436

Change in fair value of put option

liability arising from business

 acquisition

 

 

 

 

 

 

(1,421)

 

 

 

 

(1,421)

 

 

(257)

 

 

(1,678)

Share repurchase under NCIB

(4,919)

(1,439)

(6,358)

(6,358)

Share repurchase commitment

under NCIB

 

(1,338)

 

(386)

 

 

 

(1,724)

 

 

(1,724)

Actuarial gain on post-retirement

benefit plans

 

 

 

2,460

 

(2,460)

 

 

 

Share-based compensation expense

611

611

611

Equity funding by a non-controlling

interest

 

 

 

 

 

 

5,719

 

5,719

As at February 28, 2022

809,932

1,511,217

(1,214,468)

36,012

1,142,693

160,593

1,303,286

 

CORUS ENTERTAINMENT INC.






INTERIM CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS






Three months ended

Six months ended




February 28,


February 28,


(unaudited – in thousands of Canadian dollars)

2023

2022

2023

2022


OPERATING ACTIVITIES






Net income (loss) for the period

(14,919)

19,948

19,679

100,877


Adjustments to reconcile net income (loss) to cash flow from operations:






Amortization of program rights

143,551

133,928

295,940

276,120


Amortization of film investments

6,234

3,473

10,509

7,084


Depreciation and amortization

40,282

39,747

80,416

77,128


Deferred income tax recovery

(3,575)

(2,439)

(8,559)

(2,481)


Share-based compensation expense

102

317

368

611


Imputed interest

15,179

11,869

31,356

23,140


Payment of program rights

(173,932)

(136,037)

(333,047)

(230,208)


Net spend on film investments

(14,691)

(12,329)

(36,275)

(27,594)


Other

(491)

(4,652)

141

(4,654)


Cash flow from operations

(2,260)

53,825

60,528

220,023


Net change in non-cash working capital balances related to operations

33,192

38,674

(5,005)

(88,821)


Cash provided by operating activities

30,932

92,499

55,523

131,202


 

INVESTING ACTIVITIES






Additions to property, plant and equipment

(2,426)

(4,171)

(5,373)

(6,047)


Proceeds from sale of property

247

100

340

125


Business combination, net of cash acquired

2,606

2,606


Venture fund distribution

43,478


Net cash flows for intangibles, investments and other assets

(427)

(596)

(1,354)

(1,218)


Cash provided by (used in) investing activities

(2,606)

(2,061)

(6,387)

38,944


 

FINANCING ACTIVITIES






Decrease in bank loans

(33,127)

(271,225)

(2,070)

(319,758)


Financing fees

(998)

(4,400)

(998)

(4,400)


Issuance of senior unsecured notes

250,000

250,000


Share repurchase under NCIB

(5,850)

(2,045)

(5,850)


Equity funding by a non-controlling interest

3,855

3,742

3,855

3,742


Payment of lease liabilities

(4,438)

(4,153)

(8,813)

(8,168)


Dividends paid

(11,962)

(12,499)

(23,965)

(24,996)


Dividends paid to non-controlling interests

(3,710)

(3,700)

(10,073)

(6,625)


Other

(1,006)

(215)

(2,087)

(2,326)


Cash used in financing activities

(51,386)

(48,300)

(46,196)

(118,381)


Net change in cash and cash equivalents during the period

(23,060)

42,138

2,940

51,765


Cash and cash equivalents, beginning of the period

80,912

53,312

54,912

43,685


Cash and cash equivalents, end of the period

57,852

95,450

57,852

95,450












 

CORUS ENTERTAINMENT INC.





BUSINESS SEGMENT INFORMATION





(unaudited – in thousands of Canadian dollars)





Three months ended February 28, 2023






Television

Radio

Corporate

Consolidated

Revenue

321,548

22,323

343,871

Direct cost of sales, general and administrative expenses

258,529

21,973

4,234

284,736

Segment profit (loss)(1)

63,019

350

(4,234)

59,135

Depreciation and amortization




40,282

Interest expense




34,751

Restructuring and other costs




2,137

Other expense, net




1,375

Loss before income taxes




(19,410)

 

Three months ended February 28, 2022






Television

Radio

Corporate

Consolidated

Revenue

339,661

22,000

361,661

Direct cost of sales, general and administrative expenses

246,938

21,875

6,292

275,105

Segment profit (loss)(1)

92,723

125

(6,292)

86,556

Depreciation and amortization




39,747

Interest expense




25,759

Restructuring and other costs




1,011

Other income, net




(5,938)

Income before income taxes




25,977

 

Six months ended February 28, 2023






Television

Radio

Corporate

Consolidated

Revenue

723,077

51,985

775,062

Direct cost of sales, general and administrative expenses

528,299

45,613

10,323

584,235

Segment profit (loss)(1)

194,778

6,372

(10,323)

190,827

Depreciation and amortization




80,416

Interest expense




69,123

Restructuring and other costs




4,966

Other expense, net




8,421

Income before income taxes




27,901

Six months ended February 28, 2022






Television

Radio

Corporate

Consolidated

Revenue

774,408

51,126

825,534

Direct cost of sales, general and administrative expenses

502,799

45,255

13,754

561,808

Segment profit (loss)(1)

271,609

5,871

(13,754)

263,726

Depreciation and amortization




77,128

Interest expense




51,281

Restructuring and other costs




2,054

Other income, net




(2,801)

Income before income taxes




136,064

 

(1)

Segment profit (loss) does not have a standardized meaning prescribed by IFRS. For definitions and explanations,

see discussion under the Key Performance Indicators and Non-GAAP Financial Measures section of the

Second Quarter 2023 Report to Shareholders.

 

REVENUE BY TYPE






Three months ended

Six months ended



February 28,


February 28,

(unaudited – in thousands of Canadian dollars)

2023

2022

2023

2022

Advertising

190,294

205,539

471,061

518,313

Subscriber

124,051

132,823

251,566

260,358

Distribution, production and other

29,526

23,299

52,435

46,863


343,871

361,661

775,062

825,534

                                               

NON-GAAP FINANCIAL MEASURES







 (unaudited – in thousands of Canadian dollars, except percentages)    


Three months ended 

February 28, 

%


Six months ended

February 28, 

%








Optimized advertising revenue

2023

2022

Change

2023

2022

Change

Optimized advertising revenue (numerator)

87,669

77,237

14 %

225,345

182,203

24 %

Television advertising revenue (denominator)

169,124

184,695

(8 %)

421,637

469,732

(10 %)

Optimized advertising revenue percentage

52 %

42 %

53 %

39 %

 


Three months ended


Six months ended


(unaudited – in thousands of Canadian dollars, except percentages)

February 28,



%


February 28,

%

New platform revenue

2023

2022

Change

2023

2022

Change

New platform revenue (numerator)

34,172

33,016

4 %

73,860

68,231

8 %

 

Television advertising revenue

 

169,124

 

184,695

 

(8 %)

 

421,637

 

469,732

(10 %)

Television subscriber revenue

124,051

132,823

(7 %)

251,566

260,358

(3 %)

Total Television advertising and subscriber revenue (denominator)

293,175

317,518

(8 %)

673,203

730,090

(8 %)

New platform revenue percentage

12 %


10 %

11 %

9 %


                                                                                                    

(unaudited – in thousands of Canadian dollars)  


Three months ended

 February 28,


  Six months ended

February 28,

Free Cash Flow

2023

2022

2023

2022

Cash provided by (used in):





Operating activities

30,932

92,499

55,523

131,202

Investing activities

(2,606)

(2,061)

(6,387)

38,944

 

Add (deduct): cash used (provided by) in business acquisitions and 

strategic investments (1)

28,326

90,438

49,136

170,146

71

(2,021)

71

(1,742)

Free cash flow

28,397

88,417

49,207

168,404

(1)

Strategic investments are comprised of investments in venture funds and associated companies.

                                                                                                                                           

(unaudited – in thousands of Canadian dollars)    

As at February 28,

As at August 31,

Net Debt and Net Debt to Segment Profit

2023

2022

Total debt, net of unamortized financing fees and prepayment options

1,260,280

1,261,650

Lease liabilities

129,406

134,369

Cash and cash equivalents

(57,852)

(54,912)

Net debt (numerator)

1,331,834

1,341,107

Segment profit (denominator) (1)

370,744

443,643

Net debt to segment profit

3.59

3.02

(1)

Reflects aggregate amounts for the most recent four quarters, as detailed in the table in the Quarterly

 Consolidated Financial Information section of the Second Quarter 2023 Report to Shareholders.

 

Cision View original content:https://www.prnewswire.com/news-releases/corus-entertainment-announces-fiscal-2023-second-quarter-results-301796570.html

SOURCE Corus Entertainment Inc.

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