- Consolidated revenues increased 28% for the quarter and 65% for
the year-to-date [up 3% on a pro forma basis(1) for the
quarter and down 2% for the year-to-date(1)]
- Consolidated segment profit(2) growth of 35% for the
quarter and 54% for the year-to-date [up 14% on a pro forma
basis(1) for the quarter and up 5% for the
year-to-date(1)]
- Consolidated segment profit margin (2) of 38% for
the quarter and 36% for the year-to-date
- Net income attributable to shareholders of $66.7 million ($0.33 per share basic) for the quarter and
$162.7 million ($0.81 per share basic) for the year-to-date.
- Adjusted basic earnings per share(2)(3) of
$0.35 per share for the quarter
TORONTO, June 27, 2017 /PRNewswire/- Corus
Entertainment Inc. (TSX: CJR.B) announced its third quarter
financial results today.
"Our Q3 results clearly demonstrate progress on our goal of
returning Corus to growth", said Doug
Murphy, President and Chief Executive Officer. "We were
pleased to deliver solid revenue gains, double-digit segment profit
growth and impressive margin expansion in the quarter. In addition,
we reached a key leverage ratio milestone earlier than anticipated.
As we head into a new broadcast year, we expect our powerful brands
and content will position us for continued audience share gains,
supported by our exciting fall schedule. This coupled with our
improved cost structure and the unwavering commitment of our
talented team gives us confidence that we remain on the right track
to achieving our long-term goals".
Financial
Highlights
|
|
|
|
|
|
Three months
ended
|
Nine months
ended
|
|
|
May
31,
|
|
May
31,
|
(in thousands of
Canadian dollars except per share amounts)
|
2017
|
2016
|
2017
|
2016
|
Revenues
|
|
|
|
|
|
Television
|
422,324
|
321,176
|
1,183,784
|
668,326
|
|
Radio
|
39,304
|
39,648
|
114,012
|
118,521
|
|
461,628
|
360,824
|
1,297,796
|
786,847
|
Segment profit
(2)
|
|
|
|
|
|
Television
|
171,294
|
127,968
|
457,114
|
297,408
|
|
Radio
|
11,598
|
9,665
|
31,225
|
27,650
|
|
Corporate
|
(7,079)
|
(7,447)
|
(17,857)
|
(19,415)
|
|
175,813
|
130,186
|
470,482
|
305,643
|
Net income (loss)
attributable to shareholders
|
66,719
|
(15,766)
|
162,746
|
127,786
|
Adjusted net income
attributable to shareholders (2) (3)
|
70,141
|
52,950
|
176,544
|
116,378
|
Basic earnings (loss)
per share
|
$0.33
|
$(0.10)
|
$0.81
|
$1.16
|
Adjusted basic
earnings per share (2) (3)
|
$0.35
|
$0.34
|
$0.88
|
$1.05
|
Diluted earnings
(loss) per share
|
$0.33
|
$(0.10)
|
$0.81
|
$1.15
|
|
|
|
|
|
Free cash flow
(2)
|
82,527
|
67,947
|
212,458
|
126,768
|
(1)
|
Pro forma results
reflect the inclusion of Shaw Media and the exclusion of Pay TV in
the three and nine month period ended May 31,
2016.
|
(2)
|
Segment profit,
segment profit margin, adjusted net income attributable to
shareholders, adjusted basic earnings per share, and free cash flow
do not have standardized meanings prescribed by IFRS. The Company
believes these non-IFRS measures are frequently used as key
measures to evaluate performance. For definitions and explanations,
see discussion under the Key Performance Indicators section of the
Fiscal 2017 Report to Shareholders.
|
(3)
|
For the three months
ended May 31, 2017, adjusted net income attributable to
shareholders excludes business acquisition, integration and
restructuring charges of $4.6 million ($0.02 per share). For the
nine months ended May 31, 2017, adjusted net income attributable to
shareholders excludes business acquisition, integration and
restructuring charges of $18.7 million ($0.07 per share). For the
three months ended May 31, 2016, adjusted net income attributable
to shareholders excludes business acquisition, integration and
restructuring charges of $29.3 million ($0.15 per share) and debt
refinancing costs of $61.2 million ($0.29 per share). For the nine
months ended May 31, 2016, adjusted net income attributable to
shareholders represents net income attributable to shareholders
adjusted to include amortization of disposed Pay TV programming
assets of $15.6 million ($0.11 per share) and excludes business
acquisition, integration and restructuring charges of $37.6 million
($0.29 per share), a gain on the disposal of the Pay TV disposal
group of $86.2 million ($0.70 per share) and debt refinancing costs
of $61.2 million ($0.41 per share).
|
Consolidated Results from Operations
Consolidated revenues for the three months ended May 31, 2017 were $461.6
million, an increase of 28% from $360.8 million last year. Consolidated segment
profit was $175.8 million, up 35%
from $130.2 million last year. Net
income attributable to shareholders for the quarter ended
May 31, 2017 was $66.7 million ($0.33 per share basic and diluted), as compared
to a net loss of $15.8 million
($0.10 loss per share basic and
diluted) last year. Net income attributable to shareholders for the
third quarter of fiscal 2017 includes business acquisition,
integration and restructuring costs of $4.6
million ($0.02 per share).
Adjusting for the impact of this item results in an adjusted net
income attributable to shareholders of $70.1
million ($0.35 per share
basic) in the quarter. Net loss attributable to shareholders for
the prior year quarter includes business acquisition, integration
and restructuring costs of $29.3
million ($0.15 per share) and
debt refinancing costs of $61.2
million ($0.29 per share).
Adjusting for the impact of these items results in an adjusted net
income attributable to shareholders of $53.0
million ($0.34 per share
basic) for the prior year quarter.
Consolidated revenues for the nine months ended May 31, 2017 were $1,297.8
million, up 65% from $786.8
million last year and consolidated segment profit was
$470.5 million, up 54% from
$305.6 million last year. Net income
attributable to shareholders for the nine months ended May 31, 2017 was $162.7
million ($0.81 per share),
compared to $127.8 million
($1.16 per share) last year. Net
income attributable to shareholders for the nine months ended
May 31, 2017, includes business
acquisition, integration and restructuring costs of $18.7 million ($0.07 per share). Adjusting for the impact of
this item results in an adjusted net income attributable to
shareholders of $176.5 million
($0.88 per share basic) for the
current fiscal year-to-date. Net income attributable to
shareholders for the nine months ended May
31, 2016 includes business acquisition, integration and
restructuring costs of $37.6 million
($0.29 per share), debt refinancing
costs of $61.2 million ($0.41 per share), a gain relating to the
discontinuation of the Pay Television business and the disposal of
certain assets of $86.2 million
($0.70 per share), and excludes
amortization of disposed of Pay Television program and film rights
of $15.6 million ($0.11 per share). Adjusting for the impact of
these items results in an adjusted net income attributable to
shareholders of $116.4 million
($1.05 per share) for the prior
fiscal year-to-date.
Commencing April 1, 2016, 100% of
the operating results of Shaw Media Inc. ("Shaw Media"), as well as
its assets and liabilities, were fully consolidated as a business
combination in accordance with IFRS 3 - Business
Combinations and, as a result, Shaw Media was accounted for by
applying the acquisition method as of that date. Shaw Media was
reported as part of the Television segment as of April 1, 2016 (further discussion is provided in
note 27 of the Company's audited annual consolidated financial
statements for the year ended August 31,
2016).
In addition, for fiscal 2016, certain of Corus' Pay Television
business' ("Pay TV") assets and liabilities were reclassified as
held for disposal effective November 19,
2015 as a consequence of meeting the definition of assets
held for sale under IFRS 5 – Non-current Assets Held for Sale
and Discontinued Operations. The disposal group, Pay TV, did
not qualify for discontinued operations presentation and as a
result, its operating results remained in continuing operations in
the consolidated statement of income and comprehensive income for
the year ended August 31, 2016.
However, intangible assets classified as held for disposal ceased
being amortized effective November 19,
2015 and as a consequence, amortization of program and film
rights in the Television segment for the nine months ended
May 31, 2016 was lower by
$15.6 million, than it would have
been had amortization on these assets not ceased. On February 29, 2016, the Pay TV disposition was
completed and the related proceeds and a gain associated with this
disposal group was recognized (further discussion is provided in
note 27 of the Company's audited annual consolidated financial
statements for the year ended August 31,
2016).
These transactions contributed to the significant year-over-year
variances in the consolidated operating results for the three and
nine months ended May 31, 2017, as
the prior year includes the operating results of the Pay TV
business up to the end of the second quarter of fiscal 2016 and
only includes the operating results of Shaw Media for two months of
the third quarter of fiscal 2016. In the prior year's quarter, Shaw
Media generated revenues and segment profit of $275.4 million and $78.8
million, respectively. On a pro forma basis, including Shaw
Media for the full three months in the third quarter of last year,
for the three months ended May 31,
2017 total revenues increased 3%, while segment profit
increased 14% compared to the prior year. Segment profit margin of
38% in the third quarter of fiscal 2017 was up from 36% in the
prior year (as reported) and up from 34% on a pro forma basis. In
the nine months ended May 31, 2016,
Shaw Media generated revenues and segment profit of $797.4 million and $248.1
million, respectively, while Pay TV generated revenues and
segment profit of $67.8 million and
$49.3 million, respectively. On a pro
forma basis, including Shaw Media and excluding Pay TV for the same
period last year, for the nine months ended May 31, 2017 total revenues declined 2%, while
segment profit increased 5% from the prior year. Segment profit
margin of 36% for the nine months ended May
31, 2017 was down from 39% in the prior year (as reported)
and up from 34% on a pro forma basis.
Operational Results - Highlights
Television
- Segment revenues increased 31% in Q3 2017 and 77% for the
year-to-date [up 3% on a pro forma basis(1) for the
quarter and down 2% year-to-date(1)]
- Advertising revenues increased 33% in Q3 2017 and 130% for the
year-to-date [flat on a pro forma basis(1) for the
quarter and down 4% year-to-date(1)]
- Subscriber revenues increased 26% in Q3 2017 and 37% for the
year-to-date [up 4% on a pro forma basis(1) for both the
quarter and year-to-date]
- Merchandising, distribution and other revenues increased 47% in
Q3 2017 and decreased 13% for the year-to-date [up 44% on a pro
forma basis(1) and down 16%
year-to-date(1)]
- Segment profit(2) increased 34% in Q3 2017 and 54%
for the year-to-date [up 13% on a pro forma basis(1) and
up 4% year-to-date(1)]
- Segment profit margin(2) of 41% in Q3 2017 and 39%
for the year-to-date, compared to 40% and 45%, respectively, in the
prior year comparable periods [37% for the quarter and 36%
year-to-date on a pro forma basis(1)]
Radio
- Segment revenues were down 1% in Q3 2017 and decreased 4% for
the year-to-date
- Advertising revenues were flat in Q3 2017 and decreased 3% for
the year-to-date
- Segment profit(1) increased 20% in Q3 2017 and 13%
for the year-to-date
- Segment profit margin(1) of 30% in Q3 2017 and 27%
for the year-to-date, compared to 24% and 23%, respectively, in the
prior year comparable periods
Corporate
- Reduction of net debt to segment profit leverage to 3.5
times
- Consolidated segment profit margin expansion in Q3 to 38%, up
400 basis points from 34% in the prior year, on a proforma
basis
(1)
|
Pro forma results
reflect the inclusion of Shaw Media and the exclusion of Pay TV in
the three months and year-to-date ended May 31, 2016
|
(2)
|
Segment profit and
segment profit margin 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
discussion under the Key Performance Indicators section of the 2017
Report to Shareholders.
|
Corus Entertainment Inc. reports in Canadian dollars.
The unaudited consolidated financial statements and accompanying
notes for the three and nine months ended May 31, 2017 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
June 27, 2017 at 8:00 a.m. ET. While this call is directed at
analysts and investors, members of the media are welcome to listen
in. The dial-in number for the conference call for local and
international callers is 1.416.981.9013 and for North America is 1.800.786.0540. More
information can be found on the Corus Entertainment website at
www.corusent.com in the Investor Relations section.
Use of Non-IFRS Financial Measures
This press release includes the non-IFRS financial measures of
adjusted net income, adjusted basic earnings per share and free
cash flow that are not in accordance with, nor an alternate to,
generally accepted accounting principles ("IFRS") and may be
different from non-IFRS measures used by other companies. In
addition, these non-IFRS measures are not based on any
comprehensive set of accounting rules or principles.
Non-IFRS 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-IFRS financial measures are meant to supplement,
and to be viewed in conjunction with, IFRS financial results. A
reconciliation of the Company's non-IFRS measures is included in
the Company's most recent Report to Shareholders which is available
on Corus' website at www.corusent.com as well as on SEDAR.
Caution Concerning Forward-Looking Statements
This press release contains forward-looking information and
should be read subject to the following cautionary
language:
To the extent any statements made in this report
contain information that is not historical, these statements are
forward- looking statements and may be forward-looking information
within the meaning of applicable securities laws (collectively,
"forward-looking statements"). These forward-looking statements
relate to, among other things, our objectives, goals, strategies,
intentions, plans, estimates and outlook, including advertising,
distribution, merchandise and subscription revenues, operating
costs and tariffs, taxes and fees, and can generally be identified
by the use of the words such as "believe", "anticipate", "expect",
"intend", "plan", "will", "may" and other similar expressions. In
addition, any statements that refer to expectations, projections or
other characterizations of future events or circumstances are
forward-looking statements. Although Corus believes that the
expectations reflected in such forward-looking statements are
reasonable, such statements involve risks and uncertainties and
undue reliance should not be placed on such statements. Certain
material factors or assumptions are applied in making
forward-looking statements, including without limitation factors
and assumptions regarding advertising, distribution, merchandise
and subscription revenues, operating costs and tariffs, taxes and
fees and actual results may differ materially from those expressed
or implied in such statements. Important factors that could cause
actual results to differ materially from these expectations
include, among other things: our ability to attract and retain
advertising revenues; audience acceptance of our television
programs and cable networks; our ability to recoup production
costs, the availability of tax credits and the existence of
co-production treaties; our ability to compete in any of the
industries in which we do business; the opportunities (or lack
thereof) that may be presented to and pursued by us; conditions in
the entertainment, information and communications industries and
technological developments therein; changes in laws or regulations
or the interpretation or application of those laws and regulations;
our ability to integrate and realize anticipated benefits from our
acquisitions and to effectively manage our growth; our ability to
successfully defend ourselves against litigation matters arising
out of the ordinary course of business; and changes in accounting
standards. Additional information about these factors and about the
material assumptions underlying such forward-looking statements may
be found in our Annual Information Form. Corus cautions that the
foregoing list of important factors that may affect future results
is not exhaustive. When relying on our forward-looking statements
to make decisions with respect to Corus, investors and other should
carefully consider the foregoing factors and other uncertainties
and potential events. Unless otherwise required by applicable
securities laws, Corus disclaims any intention or obligation to
publicly update or revise any forward-looking statements whether as
a result of new information, events or circumstances that arise
after the date thereof or otherwise.
About Corus Entertainment Inc.
Corus Entertainment Inc. (TSX: CJR.B) is a leading media and
content company that creates and delivers high quality brands and
content across platforms for audiences around the world. The
company's portfolio of multimedia offerings encompasses 45
specialty television services, 39 radio stations, 15 conventional
television stations, a global content business, digital assets,
live events, children's book publishing, animation software,
technology and media services. The Corus roster of premium brands
include Global Television, W Network, OWN: Oprah Winfrey Network
Canada, HGTV Canada, Food Network Canada, HISTORY®, Showcase,
National Geographic, Q107, CKNW, Fresh Radio, Disney Channel
Canada, YTV and Nickelodeon Canada. Visit Corus at
www.corusent.com.
CORUS
ENTERTAINMENT INC.
|
CONSOLIDATED
STATEMENTS OF FINANCIAL POSITION
|
|
As at May
31,
|
As at August
31,
|
(unaudited - in
thousands of Canadian dollars)
|
2017
|
2016
|
ASSETS
|
|
|
Current
|
|
|
Cash and cash
equivalents
|
78,011
|
71,363
|
Accounts
receivable
|
485,820
|
379,861
|
Prepaid expenses and
other assets
|
22,921
|
18,835
|
Total current
assets
|
586,752
|
470,059
|
Tax credits
receivable
|
17,293
|
19,860
|
Investments and other
assets
|
51,966
|
46,759
|
Property, plant and
equipment
|
258,211
|
282,105
|
Program
rights
|
687,892
|
682,268
|
Film
investments
|
46,101
|
45,164
|
Intangibles
|
2,053,339
|
2,076,237
|
Goodwill
|
2,387,652
|
2,390,652
|
Deferred income tax
assets
|
80,334
|
80,281
|
|
6,169,540
|
6,093,385
|
|
|
|
LIABILITIES AND
SHAREHOLDERS' EQUITY
|
|
|
Current
|
|
|
Accounts payable and
accrued liabilities
|
482,513
|
393,367
|
Current portion of
long-term debt
|
158,125
|
115,000
|
Provisions
|
15,737
|
21,390
|
Income taxes
payable
|
22,641
|
1,982
|
Total current
liabilities
|
679,016
|
531,739
|
Long-term
debt
|
1,957,083
|
2,081,020
|
Other long-term
liabilities
|
449,372
|
530,767
|
Provisions
|
11,124
|
8,905
|
Deferred income tax
liabilities
|
487,739
|
464,607
|
Total
liabilities
|
3,584,334
|
3,617,038
|
SHAREHOLDERS'
EQUITY
|
|
|
Share
capital
|
2,260,779
|
2,168,543
|
Contributed
surplus
|
11,076
|
10,444
|
Retained
earnings
|
146,790
|
142,499
|
Accumulated other
comprehensive income (loss)
|
6,627
|
(3,569)
|
Total equity
attributable to shareholders
|
2,425,272
|
2,317,917
|
Equity attributable
to non-controlling interest
|
159,934
|
158,430
|
Total
shareholders' equity
|
2,585,206
|
2,476,347
|
|
6,169,540
|
6,093,385
|
CORUS
ENTERTAINMENT INC.
|
CONSOLIDATED
STATEMENTS OF INCOME AND COMPREHENSIVE INCOME
|
|
|
|
|
Three months
ended
|
Nine months
ended
|
|
|
May
31,
|
|
May
31,
|
(unaudited - in
thousands of Canadian dollars except per share amounts)
|
2017
|
2016
|
2017
|
2016
|
Revenues
|
461,628
|
360,824
|
1,297,796
|
786,847
|
Direct cost of sales,
general and administrative expenses
|
285,815
|
230,638
|
827,314
|
481,204
|
Depreciation and
amortization
|
23,390
|
18,776
|
68,943
|
40,384
|
Interest
expense
|
39,918
|
33,697
|
118,595
|
71,074
|
Debt
refinancing
|
—
|
61,248
|
—
|
61,248
|
Business acquisition,
integration and restructuring costs
|
4,638
|
29,264
|
18,718
|
37,639
|
Gain on
disposition
|
—
|
—
|
—
|
(86,151)
|
Other (income)
expense, net
|
4,626
|
(2,018)
|
7,521
|
7,036
|
Income (loss) before
income taxes
|
103,241
|
(10,781)
|
256,705
|
174,413
|
Income tax
expense
|
27,551
|
120
|
68,330
|
39,357
|
Net income (loss)
for the period
|
75,690
|
(10,901)
|
188,375
|
135,056
|
|
|
|
|
|
Net income (loss)
attributable to:
|
|
|
|
|
|
|
Shareholders
|
66,719
|
(15,766)
|
162,746
|
127,786
|
|
|
Non-controlling
interest
|
8,971
|
4,865
|
25,629
|
7,270
|
|
75,690
|
(10,901)
|
188,375
|
135,056
|
|
|
|
|
|
Earnings (loss)
per share attributable to shareholders:
|
|
|
|
|
|
|
Basic
|
$0.33
|
$(0.10)
|
$0.81
|
$1.16
|
|
|
Diluted
|
$0.33
|
$(0.10)
|
$0.81
|
$1.15
|
|
|
|
|
|
Net income (loss)
for the period
|
75,690
|
(10,901)
|
188,375
|
135,056
|
|
|
|
|
|
Other
comprehensive income (loss), net of income taxes:
|
|
|
|
|
|
Items that may be
reclassified subsequently to income:
|
|
|
|
|
|
|
Unrealized foreign
currency translation adjustment
|
191
|
(527)
|
404
|
(61)
|
|
|
Unrealized change in
fair value of available-for-sale investments
|
(271)
|
114
|
(271)
|
(10)
|
|
|
Unrealized change in
fair value of cash flow hedges
|
(3,253)
|
(5,527)
|
10,063
|
(5,208)
|
|
|
Actuarial gain (loss)
on employee post-employment benefits
|
(3,756)
|
1,970
|
9,309
|
1,970
|
|
(7,089)
|
(3,970)
|
19,505
|
(3,309)
|
Comprehensive
income (loss) for the period
|
68,601
|
(14,871)
|
207,880
|
131,747
|
|
|
|
|
|
Comprehensive
income (loss) attributable to:
|
|
|
|
|
|
|
Shareholders
|
59,630
|
(19,736)
|
182,251
|
124,477
|
|
|
Non-controlling
interest
|
8,971
|
4,865
|
25,629
|
7,270
|
|
68,601
|
(14,871)
|
207,880
|
131,747
|
CORUS
ENTERTAINMENT INC.
|
|
|
CONSOLIDATED
STATEMENTS OF CHANGES IN EQUITY
|
(unaudited - in
thousands of Canadian dollars)
|
Share
capital
|
Contributed
surplus
|
Retained
earnings
|
Accumulated
other
comprehensive
income (loss)
|
Total equity
attributable to shareholders
|
Non-
controlling interest
|
Total
equity
|
At August 31,
2016
|
2,168,543
|
10,444
|
142,499
|
(3,569)
|
2,317,917
|
158,430
|
2,476,347
|
Comprehensive
income
|
—
|
—
|
162,746
|
19,505
|
182,251
|
25,629
|
207,880
|
Dividends
declared
|
—
|
—
|
(172,264)
|
—
|
(172,264)
|
(27,125)
|
(199,389)
|
Issuance of shares
under dividend reinvestment plan
|
92,236
|
—
|
—
|
—
|
92,236
|
—
|
92,236
|
Actuarial gain on
post-
retirement benefit
plans
|
—
|
—
|
9,309
|
(9,309)
|
—
|
—
|
—
|
Share-based
compensation expense
|
—
|
632
|
—
|
—
|
632
|
—
|
632
|
Reallocation of
equity interest
|
—
|
—
|
4,500
|
—
|
4,500
|
3,000
|
7,500
|
At May 31,
2017
|
2,260,779
|
11,076
|
146,790
|
6,627
|
2,425,272
|
159,934
|
2,585,206
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
At August 31,
2015
|
994,571
|
9,471
|
191,182
|
7,353
|
1,202,577
|
17,334
|
1,219,911
|
Comprehensive
income
|
—
|
—
|
127,786
|
(3,309)
|
124,477
|
7,270
|
131,747
|
Dividends
declared
|
—
|
—
|
(115,152)
|
—
|
(115,152)
|
(13,002)
|
(128,154)
|
Issuance of shares
under public
equity
offering
|
279,762
|
—
|
—
|
—
|
279,762
|
—
|
279,762
|
Issuance of shares to
related party
|
833,541
|
—
|
—
|
—
|
833,541
|
—
|
833,541
|
Existing
non-controlling ownership interest from acquisition
|
—
|
—
|
—
|
—
|
—
|
147,656
|
147,656
|
Issuance of shares
under dividend reinvestment plan
|
30,292
|
—
|
—
|
—
|
30,292
|
—
|
30,292
|
Actuarial gain on
post-
retirement benefit
plans
|
—
|
—
|
1,970
|
(1,970)
|
—
|
—
|
—
|
Share-based
compensation expense
|
—
|
669
|
—
|
—
|
669
|
—
|
669
|
At May 31,
2016
|
2,138,166
|
10,140
|
205,786
|
2,074
|
2,356,166
|
159,258
|
2,515,424
|
CORUS
ENTERTAINMENT INC.
|
|
|
|
|
CONSOLIDATED
STATEMENTS OF CASH FLOWS
|
|
|
|
|
|
|
|
|
Three months
ended
|
Nine months
ended
|
|
|
May
31,
|
|
May
31,
|
(unaudited - in
thousands of Canadian dollars)
|
2017
|
2016
|
2017
|
2016
|
OPERATING
ACTIVITIES
|
|
|
|
|
Net income (loss) for
the period
|
75,690
|
(10,901)
|
188,375
|
135,056
|
Adjustments to
reconcile net income (loss) to cash flow from
operations:
|
|
|
|
|
|
Amortization of
program rights
|
136,598
|
100,533
|
391,009
|
198,786
|
|
Amortization of film
investments
|
7,815
|
6,346
|
16,777
|
13,890
|
|
Depreciation and
amortization
|
23,390
|
18,776
|
68,943
|
40,384
|
|
Deferred income
taxes
|
8,584
|
(10,450)
|
15,798
|
(22,357)
|
|
Share-based
compensation expense
|
178
|
213
|
632
|
669
|
|
Imputed
interest
|
13,442
|
11,675
|
39,195
|
32,906
|
|
Debt refinancing
costs
|
—
|
61,248
|
—
|
61,248
|
|
Gain on
disposition
|
—
|
—
|
—
|
(86,151)
|
|
Payment of program
rights
|
(132,557)
|
(103,274)
|
(375,919)
|
(215,788)
|
|
Net additions to film
investments
|
(11,106)
|
(13,021)
|
(17,534)
|
(31,702)
|
|
CRTC benefit
payments
|
(5,609)
|
(4,247)
|
(17,581)
|
(8,527)
|
|
Other
|
893
|
1,447
|
2,235
|
4,143
|
Cash flow from
operations
|
117,318
|
58,345
|
311,930
|
122,557
|
Net change in
non-cash working capital balances related to operations
|
(32,646)
|
5,420
|
(102,911)
|
4,657
|
Cash provided by
operating activities
|
84,672
|
63,765
|
209,019
|
127,214
|
|
|
|
|
|
INVESTING
ACTIVITIES
|
|
|
|
|
Additions to
property, plant and equipment
|
(2,160)
|
(4,100)
|
(13,567)
|
(10,956)
|
Net proceeds from
disposition
|
—
|
—
|
—
|
209,474
|
Business
combinations, net of acquired cash
|
3,000
|
(1,836,847)
|
3,000
|
(1,839,323)
|
Proceeds from
disposition of non-controlling interest
|
—
|
—
|
5,250
|
1,684
|
Net cash flows for
intangibles, investments and other assets
|
(383)
|
(4,080)
|
(4,741)
|
(11,231)
|
Cash provided by
(used in) investing activities
|
457
|
(1,845,027)
|
(10,058)
|
(1,650,352)
|
FINANCING
ACTIVITIES
|
|
|
|
|
Increase (decrease)
in bank loans
|
(28,144)
|
2,176,029
|
(85,616)
|
1,987,295
|
Redemption of
notes
|
—
|
(550,000)
|
—
|
(550,000)
|
Debt refinancing
costs
|
—
|
(55,671)
|
—
|
(55,671)
|
Financing
fees
|
—
|
(20,167)
|
—
|
(23,595)
|
Share subscription
net of issuance costs
|
—
|
276,529
|
—
|
276,529
|
Dividends
paid
|
(25,716)
|
(24,453)
|
(78,600)
|
(64,569)
|
Dividends paid to
non-controlling interest
|
(8,540)
|
(7,853)
|
(27,125)
|
(13,002)
|
Other
|
(495)
|
(964)
|
(972)
|
(3,634)
|
Cash provided by
(used in) financing activities
|
(62,895)
|
1,793,450
|
(192,313)
|
1,553,353
|
Net change in cash
and cash equivalents during the period
|
22,234
|
12,188
|
6,648
|
30,215
|
Cash and cash
equivalents, beginning of the period
|
55,777
|
55,449
|
71,363
|
37,422
|
Cash and cash
equivalents, end of the period
|
78,011
|
67,637
|
78,011
|
67,637
|
CORUS
ENTERTAINMENT INC.
|
|
|
|
|
BUSINESS SEGMENT
INFORMATION
|
|
|
|
|
|
|
|
|
|
(unaudited - in
thousands of Canadian dollars)
|
|
|
|
|
Three months ended
May 31, 2017
|
|
|
|
|
|
Television
|
Radio
|
Corporate
|
Consolidated
|
Revenues
|
422,324
|
39,304
|
—
|
461,628
|
Direct cost of sales,
general and administrative expenses
|
251,030
|
27,706
|
7,079
|
285,815
|
Segment profit
(loss)(1)
|
171,294
|
11,598
|
(7,079)
|
175,813
|
Depreciation and
amortization
|
|
|
|
23,390
|
Interest
expense
|
|
|
|
39,918
|
Business acquisition,
integration and restructuring costs
|
|
|
|
4,638
|
Other expense,
net
|
|
|
|
4,626
|
Income before
income taxes
|
|
|
|
103,241
|
Three months ended
May 31, 2016
|
|
|
|
|
|
Television
|
Radio
|
Corporate
|
Consolidated
|
Revenues
|
321,176
|
39,648
|
—
|
360,824
|
Direct cost of sales,
general and administrative expenses
|
193,208
|
29,983
|
7,447
|
230,638
|
Segment profit
(loss)(1)
|
127,968
|
9,665
|
(7,447)
|
130,186
|
Depreciation and
amortization
|
|
|
|
18,776
|
Interest
expense
|
|
|
|
33,697
|
Debt refinancing
costs
|
|
|
|
61,248
|
Business acquisition,
integration and restructuring costs
|
|
|
|
29,264
|
Other income,
net
|
|
|
|
(2,018)
|
Income before
income taxes
|
|
|
|
(10,781)
|
Nine months ended
May 31, 2017
|
|
|
|
|
|
Television
|
Radio
|
Corporate
|
Consolidated
|
Revenues
|
1,183,784
|
114,012
|
—
|
1,297,796
|
Direct cost of sales,
general and administrative expenses
|
726,670
|
82,787
|
17,857
|
827,314
|
Segment profit
(loss)(1)
|
457,114
|
31,225
|
(17,857)
|
470,482
|
Depreciation and
amortization
|
|
|
|
68,943
|
Interest
expense
|
|
|
|
118,595
|
Business acquisition,
integration and restructuring costs
|
|
|
|
18,718
|
Other expense,
net
|
|
|
|
7,521
|
Income before
income taxes
|
|
|
|
256,705
|
(1)
Segment profit does not have a standardized meaning prescribed by
IFRS. For definitions and explanations, see discussion under the
Key Performance Indicators section of the 2017 Report to
Shareholders.
|
|
Nine months ended May
31, 2016
|
|
|
|
|
(unaudited - in
thousands of Canadian dollars)
|
Television
|
Radio
|
Corporate
|
Consolidated
|
Revenues
|
668,326
|
118,521
|
—
|
786,847
|
Direct cost of sales,
general and administrative expenses
|
370,918
|
90,871
|
19,415
|
481,204
|
Segment profit
(loss)(1)
|
297,408
|
27,650
|
(19,415)
|
305,643
|
Depreciation and
amortization
|
|
|
|
40,384
|
Interest
expense
|
|
|
|
71,074
|
Gain on
disposition
|
|
|
|
(86,151)
|
Debt refinancing
costs
|
|
|
|
61,248
|
Business acquisition,
integration and restructuring costs
|
|
|
|
37,639
|
Other expense,
net
|
|
|
|
7,036
|
Income before
income taxes
|
|
|
|
174,413
|
(1)
Segment profit does not have a standardized meaning prescribed by
IFRS. For definitions and explanations, see discussion under the
Key Performance Indicators section of the 2017 Report to
Shareholders.
|
REVENUES BY
TYPE
|
|
|
|
Three months
ended
|
Nine months
ended
|
|
|
May
31,
|
|
May
31,
|
(unaudited - in
thousands of Canadian dollars)
|
2017
|
2016
|
2017
|
2016
|
Advertising
|
304,550
|
238,895
|
853,901
|
435,568
|
Subscriber
fees
|
127,539
|
100,949
|
379,556
|
277,549
|
Merchandising,
distribution and other
|
29,539
|
20,980
|
64,339
|
73,730
|
|
461,628
|
360,824
|
1,297,796
|
786,847
|
NON-IFRS FINANCIAL
MEASURES
|
Adjusted segment
profit
|
|
|
|
|
|
Reported segment
profit
|
175,813
|
130,186
|
470,482
|
305,643
|
|
Adjustments:
|
|
|
|
|
|
|
Amortization not
taken on Pay TV assets disposed of
|
—
|
—
|
—
|
(15,585)
|
|
Adjusted segment
profit
|
175,813
|
130,186
|
470,482
|
290,058
|
|
|
|
|
|
Adjusted Net
Income Attributable to Shareholders
|
|
|
|
|
|
Reported net
income (loss) attributable to shareholders
|
66,719
|
(15,766)
|
162,746
|
127,786
|
|
Adjustments, net
of income tax:
|
|
|
|
|
|
|
Gain on disposal of
Pay TV assets
|
—
|
—
|
—
|
(76,631)
|
|
|
Amortization of Pay
TV assets disposed of
|
—
|
—
|
—
|
(11,455)
|
|
|
|
Business acquisition,
integration and restructuring costs
|
3,422
|
23,699
|
13,798
|
31,661
|
|
|
Debt refinancing
costs
|
—
|
45,017
|
—
|
45,017
|
|
Adjusted net
income attributable to shareholders
|
70,141
|
52,950
|
176,544
|
116,378
|
|
Basic earnings
(loss) per share
|
$0.33
|
$(0.10)
|
$0.81
|
$1.16
|
|
Adjustments, net
of income tax:
|
|
|
|
|
|
|
Gain on disposal of
Pay TV assets
|
—
|
—
|
—
|
(0.70)
|
|
|
Amortization of Pay
TV assets disposed of
|
—
|
—
|
—
|
(0.11)
|
|
|
|
Business acquisition,
integration and restructuring costs
|
0.02
|
0.15
|
0.07
|
0.29
|
|
|
Debt refinancing
costs
|
—
|
0.29
|
—
|
0.41
|
|
Adjusted basic
earnings per share
|
$0.35
|
$0.34
|
$0.88
|
$1.03
|
|
Three months
ended
|
Nine months
ended
|
|
|
May
31,
|
|
May
31,
|
(unaudited - in
thousands of Canadian dollars)
|
2017
|
2016
|
2017
|
2016
|
Free cash
flow
|
|
|
|
|
|
Cash provided by
(used in):
|
|
|
|
|
|
Operating
activities
|
84,672
|
63,765
|
209,019
|
127,214
|
|
Investing
activities
|
457
|
(1,845,027)
|
(10,058)
|
(1,650,352)
|
|
85,129
|
(1,781,262)
|
198,961
|
(1,523,138)
|
|
Add back: cash
provided from (used for) business combinations and strategic
investments (1)(2)
|
(2,602)
|
1,849,209
|
13,497
|
1,859,380
|
|
Deduct: net proceeds
from disposition
|
—
|
—
|
—
|
(209,474)
|
|
Free cash
flow
|
82,527
|
67,947
|
212,458
|
126,768
|
(1)
Strategic investments are comprised of investments in venture funds
and associated companies.
|
(2)
Adjusted to remove the impact of disposing the Pay TV
business
|
SOURCE Corus Entertainment Inc.