- Consolidated revenue decreased 8% for the quarter and 7% for
the year-to-date
- Consolidated segment profit(1) decreased 22% for the
quarter and 26% for the year-to-date
- Consolidated segment profit margin(1) of 24% for the
quarter and 25% for the year-to-date
- Net loss attributable to shareholders of $495.1 million ($2.48 loss per share basic) for the quarter and
$479.1 million ($2.40 loss per share basic) for the year-to-date,
which includes non-cash impairment charges of $590.0 million related to goodwill, broadcast
licences as well as trade mark and brand assets
- Net debt to segment profit(1) of 3.85 times at
May 31, 2023, up from 3.02 times at
August 31, 2022
- Free cash flow(1) of $26.0
million for the quarter and $75.2
million for the year-to-date
TORONTO, June 29,
2023 /PRNewswire/ -
Corus Entertainment Inc. (TSX: CJR.B)
announced its third quarter financial results today.
"The advertising recession which began last summer continues and
has negatively impacted our revenues and third quarter
results," said Doug Murphy,
President and Chief Executive Officer. "As we balance the near-term
challenges, we are successfully evolving our business into a
powerful multi-platform aggregator of premium video with leading
cross platform monetization capabilities. Our impressive
premium video content revealed at Corus' recent sales upfront will
be available for all audiences across Global, our specialty
networks and streaming portfolio. We are intensely pursuing
efficiencies and improved productivity with significant cost
reductions as we streamline our operating model to position Corus
for an inevitable improvement in the economy and
create shareholder value over the longer term."
Financial Highlights
|
Three months
ended
May 31,
|
%
|
Nine months
ended
May 31,
|
%
|
|
(in thousands of Canadian dollars
except per share amounts)
|
2023
|
2022
|
Change
|
2023
|
2022
|
Change
|
|
Revenue
|
|
|
|
|
|
|
|
Television
|
371,159
|
404,130
|
(8 %)
|
1,094,236
|
1,178,538
|
(7 %)
|
|
Radio
|
26,176
|
29,328
|
(11 %)
|
78,161
|
80,454
|
(3 %)
|
|
397,335
|
433,458
|
(8 %)
|
1,172,397
|
1,258,992
|
(7 %)
|
|
|
|
|
|
|
Segment profit (loss)
(1)
|
|
|
|
|
|
|
|
Television
|
96,028
|
127,518
|
(25 %)
|
290,806
|
399,127
|
(27 %)
|
|
Radio
|
4,112
|
5,667
|
(27 %)
|
10,484
|
11,538
|
(9 %)
|
|
Corporate
|
(3,235)
|
(9,457)
|
66 %
|
(13,558)
|
(23,211)
|
42 %
|
|
96,905
|
123,728
|
(22 %)
|
287,732
|
387,454
|
(26 %)
|
|
|
|
|
|
|
Segment profit margin
(1)
|
|
|
|
|
|
|
|
Television
|
26 %
|
32 %
|
|
27 %
|
34 %
|
|
|
Radio
|
16 %
|
19 %
|
|
13 %
|
14 %
|
|
|
Consolidated
|
24 %
|
29 %
|
|
25 %
|
31 %
|
|
|
|
|
|
|
|
Net income (loss)
attributable to shareholders
|
(495,073)
|
29,621
|
|
(479,136)
|
122,007
|
|
|
Adjusted net income
attributable to shareholders (1)
|
18,042
|
30,159
|
(40 %)
|
37,628
|
124,054
|
(70 %)
|
|
|
|
|
|
|
Basic earnings
(loss) per share
|
($2.48)
|
$0.14
|
|
($2.40)
|
$0.59
|
|
|
Adjusted basic
earnings per share (1)
|
$0.09
|
$0.15
|
|
$0.19
|
$0.60
|
|
|
Diluted earnings (loss)
per share
|
($2.48)
|
$0.14
|
|
($2.40)
|
$0.59
|
|
|
|
|
|
|
|
Free cash flow (1)
|
25,979
|
27,468
|
(5 %)
|
75,186
|
194,872
|
(61 %)
|
|
|
|
(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, adjusted net income attributable to
shareholders, adjusted basic earnings per share, 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 Third Quarter 2023
Report to Shareholders.
|
Segment Revenue
|
Three months ended
May 31,
|
%
|
Nine months
ended
May 31,
|
%
|
|
(in thousands of
Canadian dollars)
|
2023
|
2022
|
Change
|
2023
|
2022
|
Change
|
|
Revenue
|
371,159
|
|
|
1,094,236
|
|
|
|
Television
|
404,130
|
(8 %)
|
1,178,538
|
(7 %)
|
|
Advertising
|
209,008
|
237,993
|
(12 %)
|
630,645
|
707,725
|
(11 %)
|
|
Subscriber
|
124,225
|
130,410
|
(5 %)
|
375,791
|
390,768
|
(4 %)
|
|
Distribution, production and other
|
37,926
|
35,727
|
6 %
|
87,800
|
80,045
|
10 %
|
|
Radio
|
26,176
|
29,328
|
(11 %)
|
78,161
|
80,454
|
(3 %)
|
|
Total Revenue
|
397,335
|
433,458
|
(8 %)
|
1,172,397
|
1,258,992
|
(7 %)
|
|
|
|
|
|
|
Optimized advertising revenue
(1)
|
53 %
|
47 %
|
(1 %)
|
53 %
|
42 %
|
14 %
|
|
New platform revenue (1)
|
12 %
|
11 %
|
(6 %)
|
11 %
|
10 %
|
3 %
|
|
(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 Third 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, announced its Fall
schedule and 2023/24 series line-up for Global TV, its Specialty
networks and STACKTV, and highlighted its Canadian original
content lineup for 2023/24. 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 announced its
2023/24 primetime lineup of new
acquisitions and returns of
major hit series. Global TV's 2023/24 roster
will deliver 17 hours of simulcast programming in primetime for
2023/24. Early Fall features the return of Survivor for
Season 45 and I Can See Your Voice alongside new Global
Original drama Robyn Hood.
Global's 2023/24 season welcomes back popular franchises FBI
and NCIS, along with So Help Me Todd, Fire
Country, Abbott Elementary and Ghosts, and
introduces new dramas Matlock, Elsbeth, and Doc,
and new comedy Poppa's House.
- Specialty portfolio and streaming platforms announced
2023/24 series lineup. Corus' specialty drama networks and
STACKTV will feature new Peacock Originals Ted, Based on a True
Story and Apples Never Fall, and returning seasons of
Bel Air, Dr. Death, and more. Corus' unscripted and reality
networks, and STACKTV will see the return of The Real Housewives
of New York City, Fixer Upper: The
Hotel, and new series The Unbelievable with Dan Aykroyd (wt), Beyond Skinwalker Ranch,
and more.
- Nelvana and Corus Studios deliver a diverse lineup of
Canadian original content for 2023/24 across its brands. This
includes a total of 25 new and returning series, with 11 titles
from Corus Studios and eight from Nelvana. Corus Studios titles
include Bryan's All In (10x60), Pamela's Garden of Eden (8x60), Scott's Vacation
House Rules (7x60), Rock Solid Builds (8x60), The Big
Bake (14x60) and more. Nelvana's titles include The Hardy
Boys (8x60), Agent Binky: Pets of the Universe (10x30),
Millie Magnificent (52x11), and more.
Financial Highlights
- On June 29, 2023, Corus declared
a dividend of $0.03 per Class B share
and $0.02875 per Class A share,
payable on August 15, 2023 to
shareholders of record at July 31,
2023.
- Free cash flow(1) of $26.0
million in Q3 and $75.2
million year-to-date compared to $27.5 million and $194.9
million year-to-date, respectively, in the same comparable
prior year periods. The decrease in free cash flow(1)
for the third quarter is attributable to an increase in cash used
in investing activities of $1.5
million. The decrease in free cash flow(1) for
the nine months ended May 31, 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 nine months
ended May 31, 2022, related to a
$43.5 million non-recurring venture
fund distribution.
- Net debt to segment profit(1) was 3.85 times at
May 31, 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 May 31, 2023, the Company
had $56.2 million of cash and cash
equivalents and approximately $300.0
million available under its Revolving Facility, $197.5 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 Third
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 nine months
ended May 31, 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 June 29, 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://emportal.ink/3MHd8aP. 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
1.416.764.8650 and for North
America is 1.888.664.6383. This call will be archived and
available for replay in the Investor Relations section of the Corus
website beginning June
29, 2023, at 11a.m.ET or accessible
by telephone until July 6, 2023, at
1.888.390.0541 (toll free North
America) or 416.764.8677 (local or international), using
replay code 815361#. 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. 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, 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. In addition, labour actions
such as the Writer's Guild of America strike have shut-down the
majority of U.S. based scripted productions, which may impact the
timing of premium content premieres and types of programming on the
Company's services in the coming months, which may negatively
impact audience levels.
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 Television advertising revenue in the fourth quarter will decline moderately compared to the prior year, 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.
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,
adjusted net income attributable to shareholders, adjusted basic
earnings per share, 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 nine months ended May 31, 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 effectively 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 May
31,
|
As at August
31,
|
|
2023
|
2022
|
|
ASSETS
|
|
|
|
Current
|
|
|
|
Cash and cash
equivalents
|
56,173
|
54,912
|
|
Accounts
receivable
|
349,666
|
311,015
|
|
Income taxes
recoverable
|
10,975
|
17,180
|
|
Prepaid expenses and
other assets
|
25,292
|
21,423
|
|
Total
current assets
|
442,106
|
404,530
|
|
Tax credits receivable
|
53,162
|
32,744
|
|
Investments and
other assets
|
60,022
|
63,931
|
|
Property,
plant and equipment
|
273,145
|
294,026
|
|
Program
rights
|
731,247
|
660,722
|
|
Film
investments
|
66,971
|
59,122
|
|
Intangibles
|
1,304,831
|
1,620,796
|
|
Goodwill
|
21,099
|
316,308
|
|
Deferred income tax assets
|
48,021
|
50,301
|
|
3,000,604
|
3,502,480
|
|
LIABILITIES AND
EQUITY
|
|
|
|
Current
|
|
|
|
Accounts payable
and accrued liabilities
|
637,006
|
526,899
|
|
Current portion
of long-term debt
|
14,097
|
15,574
|
|
Provisions
|
10,234
|
8,540
|
|
Total current
liabilities
|
661,337
|
551,013
|
|
Long-term
debt
|
1,236,885
|
1,246,076
|
|
Other long-term liabilities
|
372,853
|
376,570
|
|
Provisions
|
8,272
|
9,830
|
|
Deferred income tax liabilities
|
316,888
|
415,010
|
|
Total liabilities
|
2,596,235
|
2,598,499
|
|
EQUITY
|
|
|
|
Share capital
|
281,052
|
781,918
|
|
Contributed
surplus
|
2,012,658
|
1,511,481
|
|
Accumulated
deficit
|
(2,068,543)
|
(1,574,358)
|
|
Accumulated
other comprehensive income
|
34,655
|
33,000
|
|
Total
equity attributable to shareholders
|
259,822
|
752,041
|
|
Equity attributable to non-controlling interests
|
144,547
|
151,940
|
|
Total equity
|
404,369
|
903,981
|
|
3,000,604
|
3,502,480
|
CORUS ENTERTAINMENT INC.
INTERIM CONDENSED CONSOLIDATED STATEMENTS OF INCOME (LOSS) AND COMPREHENSIVE INCOME (LOSS)
|
Three months
ended
May 31,
|
Nine months
ended
May 31,
|
|
(unaudited - in thousands of Canadian dollars except per share
amounts)
|
2023
|
2022
|
2023
|
2022
|
|
Revenue
|
397,335
|
433,458
|
1,172,397
|
1,258,992
|
|
Direct cost of sales,
general and administrative expenses
|
300,430
|
309,730
|
884,665
|
871,538
|
|
Depreciation and
amortization
|
40,178
|
39,952
|
120,594
|
117,080
|
|
Interest
expense
|
33,278
|
28,514
|
102,401
|
79,795
|
|
Goodwill, broadcast licence and other
asset impairment
|
590,000
|
—
|
590,000
|
—
|
|
Debt
refinancing
|
—
|
(3,830)
|
—
|
(3,428)
|
|
Restructuring and
other costs
|
10,580
|
4,169
|
15,546
|
6,223
|
|
Other expense (income), net
|
(1,997)
|
10,795
|
6,424
|
7,592
|
|
Income (loss) before
income taxes
|
(575,134)
|
44,128
|
(547,233)
|
180,192
|
|
Income tax expense (recovery)
|
(83,982)
|
11,136
|
(75,760)
|
46,323
|
|
Net income (loss)
for the period
|
(491,152)
|
32,992
|
(471,473)
|
133,869
|
|
Other comprehensive income
(loss), net of income taxes
|
|
|
|
|
|
Items that may be reclassified subsequently to income (loss):
|
|
|
|
|
|
Unrealized change in fair value
of cash flow hedges
|
461
|
1,506
|
1,755
|
5,007
|
|
Unrealized foreign currency translation adjustment
|
(143)
|
8
|
1,166
|
40
|
|
318
|
1,514
|
2,921
|
5,047
|
|
Items that will
not be reclassified to income (loss):
|
|
|
|
|
|
Unrealized change in fair value
of financial assets
|
(578)
|
(5,649)
|
(1,266)
|
5,019
|
|
Actuarial gain (loss)
on post-retirement benefit plans
|
(578)
|
4,467
|
(31)
|
6,927
|
|
(1,156)
|
(1,182)
|
(1,297)
|
11,946
|
|
Other comprehensive income
(loss), net of income taxes
|
(838)
|
332
|
1,624
|
16,993
|
|
Comprehensive income (loss)
for the period
|
(491,990)
|
33,324
|
(469,849)
|
150,862
|
|
|
|
|
|
|
Net income (loss)
attributable to:
|
|
|
|
|
|
Shareholders
|
(495,073)
|
29,621
|
(479,136)
|
122,007
|
|
Non-controlling
interests
|
3,921
|
3,371
|
7,663
|
11,862
|
|
(491,152)
|
32,992
|
(471,473)
|
133,869
|
|
|
|
|
|
|
Comprehensive income (loss)
attributable to:
|
|
|
|
|
|
Shareholders
|
(495,911)
|
29,953
|
(477,512)
|
139,000
|
|
Non-controlling
interests
|
3,921
|
3,371
|
7,663
|
11,862
|
|
(491,990)
|
33,324
|
(469,849)
|
150,862
|
|
|
|
|
|
|
Earnings (loss) per share attributable to shareholders:
|
|
|
|
|
|
Basic
|
($2.48)
|
$0.14
|
($2.40)
|
$0.59
|
|
Diluted
|
($2.48)
|
$0.14
|
($2.40)
|
$0.59
|
|
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 (loss)
|
—
|
—
|
(479,136)
|
1,624
|
(477,512)
|
7,663
|
(469,849)
|
|
Dividends
declared
|
—
|
—
|
(17,490)
|
—
|
(17,490)
|
(15,750)
|
(33,240)
|
|
Reduction of stated capital
|
(500,000)
|
500,000
|
—
|
—
|
—
|
—
|
—
|
|
Change in fair value
of put option
liability
|
—
|
—
|
(754)
|
—
|
(754)
|
65
|
(689)
|
|
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 loss on
post-retirement benefit
plans
|
—
|
—
|
(31)
|
31
|
—
|
—
|
—
|
|
Share-based compensation expense
|
—
|
562
|
—
|
—
|
562
|
—
|
562
|
|
Reallocation of equity interest
|
—
|
—
|
3,226
|
—
|
3,226
|
(3,226)
|
—
|
|
Equity funding by a non-controlling
interest
|
—
|
—
|
—
|
—
|
—
|
3,855
|
3,855
|
|
As at May 31, 2023
|
281,052
|
2,012,658
|
(2,068,543)
|
34,655
|
259,822
|
144,547
|
404,369
|
|
(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
|
—
|
—
|
122,007
|
16,993
|
139,000
|
11,862
|
150,862
|
|
Dividends
declared
|
—
|
—
|
(37,411)
|
—
|
(37,411)
|
(14,145)
|
(51,556)
|
|
Business
acquisition
|
—
|
—
|
—
|
—
|
—
|
864
|
864
|
|
Change in fair value
of put option
liability
|
—
|
—
|
(1,557)
|
—
|
(1,557)
|
(254)
|
(1,811)
|
|
Shares repurchased under normal
course issuer bid
|
(21,127)
|
(2,852)
|
—
|
—
|
(23,979)
|
—
|
(23,979)
|
|
Share
repurchase commitment
under NCIB
|
(4,231)
|
(316)
|
—
|
—
|
(4,547)
|
—
|
(4,547)
|
|
Actuarial gain on
post-retirement benefit
plans
|
—
|
—
|
6,927
|
(6,927)
|
—
|
—
|
—
|
|
Share-based compensation expense
|
—
|
935
|
—
|
—
|
935
|
—
|
935
|
|
Equity funding by a non-controlling
interest
|
—
|
—
|
—
|
—
|
—
|
5,719
|
5,719
|
|
As at May 31, 2022
|
790,831
|
1,510,198
|
(1,192,931)
|
31,877
|
1,139,975
|
156,875
|
1,296,850
|
|
CORUS ENTERTAINMENT INC.
|
|
INTERIM CONDENSED CONSOLIDATED STATEMENTS
OF CASH FLOWS
|
|
Three months
ended
|
Nine months
ended
|
|
|
May 31,
|
|
May 31,
|
|
(unaudited - in thousands of Canadian
dollars)
|
2023
|
2022
|
2023
|
2022
|
|
OPERATING ACTIVITIES
|
|
|
|
|
|
Net income
(loss) for the period
|
(491,152)
|
32,992
|
(471,473)
|
133,869
|
|
Adjustments to reconcile net income (loss)
to cash flow from operations:
|
|
|
|
|
|
Amortization of program rights
|
158,748
|
150,093
|
454,688
|
426,213
|
|
Amortization of film investments
|
12,195
|
12,051
|
22,704
|
19,135
|
|
Depreciation and amortization
|
40,178
|
39,952
|
120,594
|
117,080
|
|
Deferred income tax recovery
|
(91,630)
|
(4,861)
|
(100,189)
|
(7,342)
|
|
Goodwill, broadcast licence and other asset
impairment
|
590,000
|
—
|
590,000
|
—
|
|
Share-based compensation expense
|
194
|
324
|
562
|
935
|
|
Imputed interest
|
13,675
|
11,827
|
45,031
|
34,967
|
|
Debt
refinancing
|
—
|
(3,830)
|
—
|
(3,428)
|
|
Payment of program rights
|
(161,185)
|
(173,366)
|
(494,232)
|
(403,574)
|
|
Net spend on film
investments
|
(18,674)
|
(11,803)
|
(54,949)
|
(39,397)
|
|
Other
|
1,015
|
10,882
|
1,156
|
5,826
|
|
Cash flow from operations
|
53,364
|
64,261
|
113,892
|
284,284
|
|
Net change in non-cash working capital balances related to operations
|
(23,554)
|
(34,463)
|
(28,559)
|
(123,284)
|
|
Cash provided by operating activities
|
29,810
|
29,798
|
85,333
|
161,000
|
|
INVESTING ACTIVITIES
|
|
|
|
|
|
Additions to property, plant
and equipment
|
(3,548)
|
(2,819)
|
(8,921)
|
(8,866)
|
|
Proceeds from
sale of property
|
396
|
—
|
736
|
125
|
|
Business combination, net of cash
acquired
|
—
|
—
|
—
|
3,606
|
|
Venture fund
distribution
|
—
|
—
|
—
|
43,478
|
|
Net cash flows
for intangibles, investments and other assets
|
(679)
|
489
|
(2,033)
|
(1,729)
|
|
Cash provided by (used in) investing activities
|
(3,831)
|
(2,330)
|
(10,218)
|
36,614
|
|
FINANCING
ACTIVITIES
|
|
|
|
|
|
Decrease in bank loans
|
(10,203)
|
(27,872)
|
(12,273)
|
(347,630)
|
|
Financing
fees
|
—
|
(1,492)
|
(998)
|
(5,892)
|
|
Issuance of senior unsecured notes
|
—
|
—
|
—
|
250,000
|
|
Share repurchase under NCIB
|
—
|
(17,231)
|
(2,045)
|
(23,081)
|
|
Equity funding
by a non-controlling interest
|
—
|
—
|
3,855
|
3,742
|
|
Payment of lease liabilities
|
(4,570)
|
(4,441)
|
(13,383)
|
(12,609)
|
|
Dividends
paid
|
(5,979)
|
(12,415)
|
(29,944)
|
(37,411)
|
|
Dividends paid
to non-controlling interests
|
(5,677)
|
(7,520)
|
(15,750)
|
(14,145)
|
|
Other
|
(1,229)
|
(254)
|
(3,316)
|
(2,580)
|
|
Cash used in financing activities
|
(27,658)
|
(71,225)
|
(73,854)
|
(189,606)
|
|
Net change
in cash and cash equivalents during the
period
|
(1,679)
|
(43,757)
|
1,261
|
8,008
|
|
Cash and cash
equivalents, beginning of the period
|
57,852
|
95,450
|
54,912
|
43,685
|
|
Cash and cash
equivalents, end of the period
|
56,173
|
51,693
|
56,173
|
51,693
|
|
CORUS ENTERTAINMENT INC.
|
|
BUSINESS SEGMENT INFORMATION
|
|
(unaudited - in
thousands of Canadian dollars)
|
|
Three months ended
May 31, 2023
|
|
Television
|
Radio
|
Corporate
|
Consolidated
|
|
Revenue
|
371,159
|
26,176
|
—
|
397,335
|
|
Direct cost of sales, general
and administrative expenses
|
275,131
|
22,064
|
3,235
|
300,430
|
|
Segment profit (loss)(1)
|
96,028
|
4,112
|
(3,235)
|
96,905
|
|
Depreciation and
amortization
|
|
|
|
40,178
|
|
Interest
expense
|
|
|
|
33,278
|
|
Goodwill, broadcast licence and other
asset impairment
|
|
|
|
590,000
|
|
Restructuring and
other costs
|
|
|
|
10,580
|
|
Other income, net
|
|
|
|
(1,997)
|
|
Loss before income taxes
|
|
|
|
(575,134)
|
|
Three months
ended May 31, 2022
|
|
|
|
|
|
Television
|
Radio
|
Corporate
|
Consolidated
|
|
Revenue
|
404,130
|
29,328
|
—
|
433,458
|
|
Direct cost of sales, general
and administrative expenses
|
276,612
|
23,661
|
9,457
|
309,730
|
|
Segment profit (loss)(1)
|
127,518
|
5,667
|
(9,457)
|
123,728
|
|
Depreciation and
amortization
|
|
|
|
39,952
|
|
Interest
expense
|
|
|
|
28,514
|
|
Debt
refinancing
|
|
|
|
(3,830)
|
|
Restructuring and
other costs
|
|
|
|
4,169
|
|
Other expense, net
|
|
|
|
10,795
|
|
Income before income
taxes
|
|
|
|
44,128
|
|
Nine months ended May 31, 2023
|
|
|
|
|
|
Television
|
Radio
|
Corporate
|
Consolidated
|
|
Revenue
|
1,094,236
|
78,161
|
—
|
1,172,397
|
|
Direct cost of sales,
general and administrative expenses
|
803,430
|
67,677
|
13,558
|
884,665
|
|
Segment profit
(loss)(1)
|
290,806
|
10,484
|
(13,558)
|
287,732
|
|
Depreciation and
amortization
|
|
|
|
120,594
|
|
Interest
expense
|
|
|
|
102,401
|
|
Goodwill, broadcast
licence and other asset impairment
|
|
|
|
590,000
|
|
Restructuring and other
costs
|
|
|
|
15,546
|
|
Other expense,
net
|
|
|
|
6,424
|
|
Loss before income taxes
|
|
|
|
(547,233)
|
|
Nine months ended May
31, 2022
|
|
|
|
|
|
Television
|
Radio
|
Corporate
|
Consolidated
|
|
Revenue
|
1,178,538
|
80,454
|
—
|
1,258,992
|
|
Direct cost of sales,
general and administrative expenses
|
779,411
|
68,916
|
23,211
|
871,538
|
|
Segment profit
(loss)(1)
|
399,127
|
11,538
|
(23,211)
|
387,454
|
|
Depreciation and
amortization
|
|
|
|
117,080
|
|
Interest
expense
|
|
|
|
79,795
|
|
Debt
refinancing
|
|
|
|
(3,428)
|
|
Restructuring and other
costs
|
|
|
|
6,223
|
|
Other expense,
net
|
|
|
|
7,592
|
|
Income before income taxes
|
|
|
|
180,192
|
|
|
|
(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 Third Quarter 2023 Report to Shareholders.
|
REVENUE BY TYPE
|
Three months ended
May 31,
|
|
Nine months
ended
May 31,
|
|
(unaudited - in thousands of Canadian
dollars)
|
2023
|
2022
|
2023
|
2022
|
|
Advertising
|
233,840
|
265,915
|
704,901
|
784,228
|
|
Subscriber
|
124,225
|
130,410
|
375,791
|
390,768
|
|
Distribution, production and other
|
39,270
|
37,133
|
91,705
|
83,996
|
|
397,335
|
433,458
|
1,172,397
|
1,258,992
|
NON-GAAP FINANCIAL MEASURES
|
(unaudited - in
thousands of Canadian dollars, except percentages)
|
Three months
ended
May 31,
|
%
|
Nine months ended
May 31,
|
%
|
|
Optimized advertising revenue
|
2023
|
2022
|
Change
|
2023
|
2022
|
Change
|
|
Optimized advertising revenue (numerator)
|
111,121
|
112,677
|
(1 %)
|
336,466
|
294,880
|
14 %
|
|
Television
advertising revenue (denominator)
|
209,008
|
237,993
|
(12 %)
|
630,645
|
707,725
|
(11 %)
|
|
Optimized advertising revenue
percentage
|
53 %
|
47 %
|
|
53 %
|
42 %
|
|
|
Three months ended
|
|
Nine months
ended
|
|
|
|
(unaudited - in thousands of Canadian dollars, except percentages)
|
May 31,
|
%
|
May 31,
|
%
|
|
|
New platform revenue
|
2023
|
2022
|
Change
|
2023
|
2022
|
Change
|
|
New platform revenue (numerator)
|
38,637
|
40,992
|
(6 %)
|
112,497
|
109,223
|
3 %
|
|
Television
advertising revenue
|
209,008
|
237,993
|
(12 %)
|
630,645
|
707,725
|
(11 %)
|
|
Television
subscriber revenue
|
124,225
|
130,410
|
(5 %)
|
375,791
|
390,768
|
(4 %)
|
|
Total
Television advertising and subscriber revenue (denominator)
|
333,233
|
368,403
|
(10 %)
|
1,006,436
|
1,098,493
|
(8 %)
|
|
New platform revenue
percentage
|
12 %
|
11 %
|
|
11 %
|
10 %
|
|
|
(unaudited - in thousands of Canadian dollars,
except per share amounts)
|
Three months ended
May 31,
|
Nine months
ended
May 31,
|
|
Adjusted Net Income
Attributable to Shareholders
|
2023
|
2022
|
2023
|
2022
|
|
Net income
(loss) attributable to shareholders
|
(495,073)
|
29,621
|
(479,136)
|
122,007
|
|
Adjustments, net of income tax:
|
|
|
|
|
|
Goodwill, broadcast licence and
other asset impairment
|
504,953
|
—
|
504,953
|
—
|
|
Debt
refinancing
|
—
|
(2,526)
|
—
|
(2,526)
|
|
Restructuring and other costs
|
8,162
|
3,064
|
11,811
|
4,573
|
|
Adjusted net income
attributable to shareholders
|
18,042
|
30,159
|
37,628
|
124,054
|
|
Basic earnings
(loss) per share
|
($2.48)
|
$0.14
|
($2.40)
|
$0.59
|
|
Adjustments, net of income tax:
|
|
|
|
|
|
Goodwill, broadcast licence and
other asset impairment
|
$2.53
|
—
|
$2.53
|
—
|
|
Debt
refinancing
|
—
|
($0.01)
|
—
|
($0.01)
|
|
Restructuring and other costs
|
$0.04
|
$0.02
|
$0.06
|
$0.02
|
|
Adjusted basic earnings per share
|
$0.09
|
$0.15
|
$0.19
|
$0.60
|
|
(unaudited - in
thousands of Canadian dollars)
|
Three months ended
May 31,
|
Nine months
ended
May 31,
|
|
Free Cash Flow
|
2023
|
2022
|
2023
|
2022
|
|
Cash provided by (used in):
|
|
|
|
|
|
Operating activities
|
29,810
|
29,798
|
85,333
|
161,000
|
|
Investing
activities
|
(3,831)
|
(2,330)
|
(10,218)
|
36,614
|
|
Add
(deduct): cash used in
(provided by) business acquisitions and
strategic investments (1)
|
25,979
|
27,468
|
75,115
|
197,614
|
|
—
|
—
|
71
|
(2,742)
|
|
Free cash flow
|
25,979
|
27,468
|
75,186
|
194,872
|
|
(1)
|
Strategic investments are comprised of investments in venture funds and associated companies.
|
|
(unaudited - in thousands of Canadian
dollars)
|
As at
May 31,
|
As at August 31,
|
|
Net Debt and Net
Debt to Segment Profit
|
2023
|
2022
|
|
Total debt, net of unamortized financing fees and prepayment options
|
1,250,982
|
1,261,650
|
|
Lease liabilities
|
128,795
|
134,369
|
|
Cash and cash
equivalents
|
(56,173)
|
(54,912)
|
|
Net debt
(numerator)
|
1,323,604
|
1,341,107
|
|
Segment profit (denominator) (1)
|
343,921
|
443,643
|
|
Net debt to segment profit
|
3.85
|
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
Third Quarter 2023 Report to Shareholders.
|
View original
content:https://www.prnewswire.com/news-releases/corus-entertainment-announces-fiscal-2023-third-quarter-results-301866816.html
SOURCE Corus Entertainment Inc.