Corus Entertainment Announces Fiscal 2013 Second Quarter Results

       Corus Entertainment Announces Fiscal 2013 Second Quarter Results

PR Newswire

TORONTO, April 11, 2013

  *Adjusted net income attributable to shareholders of $24.4 million for the
    second quarter and $76.6 million year-to-date
  *Free cash flow up 12% year-to-date
  *Consolidated segment profit margins of 30% for the second quarter and 36%
    year-to-date
  *Movie Central finished the quarter above 1 million subscribers

TORONTO, April 11, 2013 /PRNewswire/ - Corus Entertainment Inc. (TSX: CJR.B)
announced its second quarter and six months year-to-date financial results
today.

"The second quarter business results were soft, as expected, but we were  able 
to end the first half of  the year with significant increases in  year-to-date 
free cash flow and improved margins," said John Cassaday, President and  Chief 
Executive Officer of Corus Entertainment.  "The highlight of the quarter  was 
the successful refinancing  of our  Senior Unsecured  Guaranteed Notes,  which 
resulted in a 300 basis point reduction in our financing costs. This activity
was followed up  by a  series of  significant transactions  subsequent to  the 
quarter, certain of which are subject  to CRTC approval, which will enable  us 
to expand our presence in Radio, consolidate our position in TELETOON and  ABC 
Spark, enter the  Quebec specialty television  market and realize  substantial 
gains on the sale of our minority interest in the Food Network (Canada) and on
the revaluation of TELETOON."

Financial Highlights

                          Three months ended       Six months ended
                          February    February     February    February
                              28,             29,             28,        29,
(unaudited - in thousands                          
of Canadian dollars
except per share amounts)
                                2013     2012           2013      2012
Revenues                                                         
       Television         143,423   163,299      317,246    348,326
       Radio               40,277    42,384       92,601     94,248
                          183,700   205,683      409,847    442,574
                                                                
Segment profit ^(1)                                              
       Television          51,796    60,421      130,494    140,916
       Radio                9,654     9,879       28,610     26,281
       Corporate           (6,802)   (8,053)     (11,763)   (13,736)
                           54,648    62,247      147,341    153,461
                                                               
Net income attributable                                       
to shareholders                5,944    31,571          58,103      82,119
Adjusted net income                                           
attributable to
shareholders ^(1) ^(2) 
                               24,432    31,571          76,591      82,119
                                                                
                                                                  
Basic earnings per share                                      
                               $ 0.07    $ 0.38          $ 0.70      $ 0.99
Adjusted basic earnings                                       
per share ^(1) (2)             $ 0.29    $ 0.38          $ 0.92      $ 0.99
Diluted earnings per                                          
share                          $ 0.07    $ 0.38          $ 0.69      $ 0.99
                                                         
Free cash flow ^(1)          45,974    50,772       83,859     74,831
^(1) See definitions and discussion under Key Performance Indicators in MD&A
^(2) Excludes the impact of debt refinancing costs of $25.0 million ($0.22 per
share)

Consolidated Results from Continuing Operations

Consolidated revenues for the three months ended February 28, 2013 were $183.7
million, down 11% from $205.7 million last year. Consolidated segment  profit 
was $54.6  million,  down  12%  from $62.2  million  last  year.  Net  income 
attributable to shareholders for the quarter was $5.9 million ($0.07 basic and
diluted per share),  compared to $31.6  million ($0.38 basic  and diluted  per 
share) last  year. Net  income for  the current  quarter includes  a  pre-tax 
charge for debt  refinancing of $25.0  million. Removing the  impact of  this 
item results  in adjusted  net income  attributable to  shareholders of  $24.4 
million ($0.29 per share) in the current quarter.

Consolidated revenues for the six months  ended February 28, 2013 were  $409.8 
million, down 7% from $442.6  million last year. Consolidated segment  profit 
was $147.3  million,  down 4%  from  $153.5  million last  year.  Net  income 
attributable to shareholders for the six months was $58.1 million ($0.70 basic
and $0.69  diluted per  share), compared  to $82.1  million ($0.99  basic  and 
diluted per share)  last year. Removing  the impact of  the debt  refinancing 
costs results in  adjusted net  income attributable to  shareholders of  $76.6 
million ($0.92 per share) in the current year.

Operational Results - Highlights

Television

  *Movie Central finished the quarter with 1,013,000 subscribers, up 37,000
    year-to-date
  *Segment profit margin of 41% year-to-date
  *Segment revenues decreased 12% in Q2 2013 and 9% year-to-date
  *Segment profit^(1) decreased 14% in Q2 2013 and 7% year-to-date

Radio

  *Segment profit margin of 31% year-to-date
  *Segment revenues decreased 5% in Q2 2013 and 2% year-to-date
  *Segment profit^(1) decreased 2% in Q2 2013, but increased 9% year-to-date

Other

  *Issued $550.0 million of 4.25% Senior Unsecured Guaranteed Notes due in
    2020
  *Agreements completed, subsequent to the quarter, to extend Radio presence
    into Ottawa, consolidate ownership of TELETOON and ABC Spark, acquire 100%
    of Historia and Séries+, and divest Corus' minority interest in the Food
    Network (Canada)

^(1) See definitions and discussion under Key Performance Indicators in MD&A.

Corus Entertainment Inc. reports in Canadian dollars.

About Corus Entertainment Inc.

Corus Entertainment Inc. is a Canadian-based media and entertainment company.
Corus is a  market leader in  specialty television and  radio with  additional 
assets in pay television, television broadcasting, children's book publishing,
children's  animation  and  animation  software.  The  Company's   multimedia 
entertainment brands include YTV, Treehouse, Nickelodeon (Canada), ABC  Spark, 
W Network,  OWN: Oprah  Winfrey Network  (Canada), Cosmopolitan  TV,  Sundance 
Channel (Canada), Movie  Central, HBO  Canada, Nelvana, Kids  Can Press,  Toon 
Boom and 37 radio stations including CKNW  AM 980, 99.3 The FOX, Country  105, 
630  CHED,  Q107,  and  102.1  the  Edge.  Corus  creates  engaging   branded 
entertainment experiences  for its  audiences  across multiple  platforms.  A 
publicly traded  company,  Corus  is  listed on  the  Toronto  Stock  Exchange 
(CJR.B). Experience Corus on the web at www.corusent.com.

The unaudited consolidated financial statements and accompanying notes for the
three and six months ended February  28, 2013 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 April 11, 2013
at 2:00  p.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    North   America   is    1.800.732.6870   and    for 
local/international callers is 416.981.9030.  PowerPoint slides for the  call 
will be posted 15 minutes prior to the  start of the call and can be found  on 
the Corus Entertainment website at www.corusent.com in the Investor  Relations 
section.

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 related 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  others should carefully  consider the foregoing  factors 
and other uncertainties  and potential  events. Unless  otherwise required  by 
applicable securities  laws,  we  disclaim  any  intention  or  obligation  to 
publicly update or revise any  forward-looking statements whether as a  result 
of new information, events or circumstances that arise after the date  thereof 
or otherwise.

                           CORUS ENTERTAINMENT INC.
                CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
                                                                       
                                   As at February 28,    As at August 31,
(unaudited - in thousands of                     2013               2012
Canadian dollars)
ASSETS                                                                  
Current                                                                 
Cash and cash equivalents                     573,781             24,588
Accounts receivable                           181,842            173,421
Income taxes recoverable                          961              9,542
Prepaid expenses and other                     12,134             12,664
Asset held-for-sale                             9,881                   —
Total current assets                          778,599            220,215
                                                                       
Tax credits receivable                         45,799             43,865
Intangibles, investments and other             39,361             42,390
assets
Property, plant and equipment                 157,070            163,563
Program and film rights                       274,749            271,244
Film investments                               79,382             67,983
Broadcast licenses                            569,505            569,505
Goodwill                                      674,393            674,393
Deferred tax assets                            35,096             28,327
                                           2,653,954          2,081,485
                                                                       
LIABILITIES AND SHAREHOLDERS'                                           
EQUITY
Current                                                                 
Accounts payable and accrued                  191,672            185,991
liabilities
Provisions                                      1,198              2,322
Current portion of long-term debt             518,125                  —
Total current liabilities                     710,995            188,313
                                                                       
Long-term debt                                537,957            518,258
Other long-term liabilities                    88,167             87,853
Deferred tax liabilities                      151,071            150,971
Total liabilities                           1,488,190            945,395
                                                                       
                                                                       
SHAREHOLDERS' EQUITY                                                    
Share capital                                 923,806            910,005
Contributed surplus                             8,322              7,835
Retained earnings                             214,347            198,445
Accumulated other comprehensive                   995               (812)
income (loss)
Total equity attributable to                1,147,470          1,115,473
shareholders
Equity attributable to                         18,294             20,617
non-controlling interest
Total shareholders' equity                  1,165,764          1,136,090
                                           2,653,954          2,081,485
                                                        

                           CORUS ENTERTAINMENT INC.
          CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME
                                                                     
                                Three months ended      Six months ended
(unaudited - in thousands of     February   February   February   February
Canadian dollars except per            28,         29,         28,         29,
share amounts)                        2013        2012        2013        2012
Revenues                         183,700   205,683   409,847   442,574
Direct cost of sales, general    129,052   143,436   262,506   289,113
and administrative expenses
Depreciation and amortization      7,517     6,653    13,946    12,892
Interest expense                  13,271    13,410    25,403    26,837
Debt refinancing                  25,033         —    25,033        —
Other (income) expense, net         (426)    (1,617)        80    (1,170)
                                                                     
Income before income taxes         9,253    43,801    82,879   114,902
Income tax expense                 2,373    10,262    21,983    28,683
                                                                     
Net income for the period          6,880    33,539    60,896    86,219
                                                                     
Net income attributable to:                                           
   Shareholders                5,944    31,571    58,103    82,119
   Non-controlling               936     1,968     2,793     4,100
       interest
                                  6,880    33,539    60,896    86,219
                                                                     
Earnings per share                                                    
attributable to shareholders:
   Basic                       $ 0.07     $ 0.38     $ 0.70     $ 0.99
   Diluted                     $ 0.07     $ 0.38     $ 0.69     $ 0.99
                                                                     
Net income for the period          6,880    33,539    60,896    86,219
Other comprehensive income                                            
(loss), net of tax:
Items that may be reclassified                                        
subsequently to income:
   Unrealized foreign          1,191      (587)     1,481       537
       currency translation
       adjustment
   Unrealized change in           36       (17)       326       (91)
       fair value of
       available-for-sale
       investments
                                  1,227      (604)     1,807       446
Comprehensive income for the       8,107    32,935    62,703    86,665
period
                                                                     
Comprehensive income                                                  
attributable to:
   Shareholders                7,171    30,967    59,910    82,565
   Non-controlling               936     1,968     2,793     4,100
       interest
                                  8,107    32,935    62,703    86,665
                                                            

                                  CORUS ENTERTAINMENT INC.
                        CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY
                                                                                     
                                                                                     
                                                                                     
(unaudited -                                  Accumulated Total equity
in thousands                                        other attributable        Non-
of Canadian      Share Contributed Retained comprehensive           to controlling      Total
dollars)       capital     surplus earnings income (loss) shareholders    interest     equity
                                                                                     
At August 31,                                       (812)   1,115,473
2012          910,005      7,835 198,445                                20,617 1,136,090
Comprehensive                                      1,807      59,910
income             —         —  58,103                                 2,793    62,703
Dividends                                               —     (41,445)
declared           —         — (41,445)                                (5,116)   (46,561)
Issuance of                                             —         749
shares under
stock option
plan              994       (245)      —                                     —       749
Issuance of                                             —      13,515
shares under
dividend
reinvestment
plan           13,515         —      —                                     —    13,515
Shares                                                  —      (1,464)
repurchased      (708)         —    (756)                                     —    (1,464)
Share-based                                             —         732
compensation
expense            —        732      —                                     —       732
                                                                                     
At February                                          995   1,147,470
28, 2013      923,806      8,322 214,347                                18,294 1,165,764
                                                                                     
                                                                                     
At August 31,                                     (1,075)   1,035,620
2011          882,679     10,299 143,717                                19,200 1,054,820
Comprehensive                                        446      82,565
income             —         —  82,119                                 4,100    86,665
Dividends                                             —     (37,968)
declared           —         — (37,968)                                (4,423)   (42,391)
Issuance of                                           —       8,337
shares under
stock option
plan           11,448     (3,111)      —                                    —     8,337
Issuance of                                           —      12,839
shares under
dividend
reinvestment
plan           12,839         —      —                                    —    12,839
Shares                                                —      (3,888)
repurchased    (2,110)         —  (1,778)                                    —    (3,888)
Share-based                                           —         592
compensation
expense            —        592      —                                    —       592
                                                                                     
At February                                         (629)   1,098,097
29, 2012      904,856      7,780 186,090                                18,877 1,116,974
                                                                            

                           CORUS ENTERTAINMENT INC.
                    CONSOLIDATED STATEMENTS OF CASH FLOWS
                                                                      
                                Three months ended       Six months ended
                                 February   February   February   February
(unaudited - in thousands of           28,         29,         28,         29,
Canadian dollars)                     2013        2012        2013        2012
OPERATING ACTIVITIES                                                  
Net income for the period          6,880    33,539    60,896    86,219
Add (deduct) non-cash items:                                          
    Depreciation and             7,517     6,653    13,946    12,892
      amortization
    Amortization of program     46,908    46,433    92,601    93,488
      and film rights
    Amortization of film         3,501     7,960     9,708    17,947
      investments
    Deferred income taxes       (5,432)     3,424    (6,726)     4,786
    Share-based compensation       392       299       732       592
      expense
    Imputed interest             2,628     2,976     5,153     6,010
    Debt refinancing            25,033        —    25,033        —
    Other                          590      (547)       286      (790)
Net change in non-cash working                                        
capital
    balances related to         19,587    20,665    (9,546)   (20,726)
      operations
Payment of program and film      (39,806)   (50,997)   (67,432)   (86,426)
rights
Net additions to film            (18,160)   (16,837)   (34,234)   (33,973)
investments
Cash provided by operating        49,638    53,568    90,417    80,019
activities
                                                                     
INVESTING ACTIVITIES                                                  
Additions to property, plant      (3,930)    (4,714)    (7,472)    (8,084)
and equipment
Net cash flows for                (7,039)      (122)    (6,966)     1,009
intangibles, investments and
other assets
Other                               (236)      (165)      (324)      (318)
Cash used in investing           (11,205)    (5,001)   (14,762)    (7,393)
activities
                                                                     
FINANCING ACTIVITIES                                                  
Decrease in bank loans           (39,910)   (34,674)   (29,925)   (34,674)
Issuance of notes                550,000        —   550,000        —
Financing fees                    (8,607)        —    (8,607)        —
Issuance of shares under stock       749     8,251       749     8,337
option plan
Shares repurchased                    —        —    (1,464)    (3,888)
Dividends paid                   (13,775)   (12,145)   (26,998)   (23,820)
Dividends paid to                   (803)      (200)    (5,116)    (4,423)
non-controlling interest
Other                             (2,789)    (2,233)    (5,101)    (4,505)
Cash provided by (used in)       484,865   (41,001)   473,538   (62,973)
financing activities
Net change in cash and cash      523,298     7,566   549,193     9,653
equivalents during the period
Cash and cash equivalents,        50,483    58,009    24,588    55,922
beginning of the period
Cash and cash equivalents, end   573,781    65,575   573,781    65,575
of the period
                                                            

                           CORUS ENTERTAINMENT INC.
                         BUSINESS SEGMENT INFORMATION
                                                                             
(unaudited - in thousands of Canadian dollars)
                                                                    
Three months ended February 28, 2013
                              Radio  Television  Corporate  Consolidated
Revenues                      40,277    143,423        —      183,700
Direct cost of sales,
general and administrative
expenses                      30,623     91,627     6,802      129,052
Segment profit (loss)^(1)      9,654     51,796    (6,802)       54,648
Depreciation and
amortization                                                     7,517
Interest expense                                                13,271
Debt refinancing                                                25,033
Other expense (income), net                                       (426)
Income before income taxes                                       9,253
                                                                    
Three months ended February 29, 2012
                              Radio  Television  Corporate  Consolidated
Revenues                      42,384    163,299        —      205,683
Direct cost of sales,
general and administrative
expenses                      32,505    102,878     8,053      143,436
Segment profit (loss)^(1)      9,879     60,421    (8,053)       62,247
Depreciation and
amortization                                                     6,653
Interest expense                                                13,410
Other expense (income), net                                     (1,617)
Income before income taxes                                      43,801
                                                                    
Six months ended February
28, 2013                                                              
                              Radio  Television  Corporate  Consolidated
Revenues                      92,601    317,246        —      409,847
Direct cost of sales,
general and administrative
expenses                      63,991    186,752    11,763      262,506
Segment profit (loss)^(1)     28,610    130,494   (11,763)      147,341
Depreciation and
amortization                                                    13,946
Interest expense                                                25,403
Debt refinancing                                                25,033
Other expense (income), net                                         80
Income before income taxes                                      82,879
                                                                    
Six months ended February
29, 2012                                                              
                              Radio  Television  Corporate  Consolidated
Revenues                      94,248    348,326        —      442,574
Direct cost of sales,
general and administrative
expenses                      67,967    207,410    13,736      289,113
Segment profit (loss)^(1)     26,281    140,916   (13,736)      153,461
Depreciation and
amortization                                                    12,892
Interest expense                                                26,837
Other expense (income), net                                     (1,170)
Income before income taxes                                     114,902
^(1) See definitions and discussion under Key Performance Indicators in MD&A.
                                                          

Revenues by type                                                     
                             Three months ended       Six months ended
                             February   February    February   February
                                     28,         29,           28,         29,
                                2013      2012       2013      2012
Advertising                     80,506    83,870    198,400   203,319
Subscriber fees                 73,798    75,924    148,779   150,065
Merchandising, distribution     29,396    45,889     62,668    89,190
and other
                             183,700   205,683    409,847   442,574



SOURCE Corus Entertainment Inc.

Contact:

John Cassaday
President and Chief Executive Officer
Corus Entertainment Inc.
416.479.6018

Tom Peddie
Executive Vice President and Chief 
Financial Officer 
Corus Entertainment Inc.
416.479.6080

Sally Tindal
Director, Communications
Corus Entertainment Inc.
416.479.6107
 
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