- Consolidated revenue decreased 21% for the quarter and 16% for
the year
- Consolidated segment profit(1) decreased 9% for the
quarter and 15% for the year
- Consolidated segment profit margin(1) of 16% for the
quarter and 22% for the year
- Net loss attributable to shareholders of $25.7 million ($0.13 loss per share basic) for the quarter and
$772.6 million ($3.87 loss per share basic) for the year, which
includes non-cash impairment charges of $960.0 million for the year ($742.0 million after tax)
- Proforma net debt to segment profit(1) of 3.84 times
at August 31, 2024, which excludes
contributions to segment profit from a prior year business
divestiture, was up from the proforma net debt to segment profit as
at August 31, 2023 of 3.62 times
- Free cash flow(1) of $39.1
million for the quarter and $114.2
million for the year
TORONTO, Oct. 25,
2024 /CNW/ - Corus Entertainment Inc. (TSX:
CJR.B) announced its fourth quarter and annual financial results
today.
"We have made significant progress on our plan to create a more
sustainable future following challenging industry wide conditions
and increased competitive intensity this past year," said
Troy Reeb, Co Chief Executive
Officer. "Notably, we've generated considerable interest for the
upcoming launch of our two all-new lifestyle brands, Flavour
Network and Home Network, and the expansion of programming on Slice
has yielded impressive results. Coupled with the strength of our
fall schedule, these initiatives give us confidence we are on the
right path."
"Our commitment to right-sizing our business is evident in our
fourth quarter and year-end results," said John Gossling, Co Chief Executive Officer and
Chief Financial Officer. "We delivered increased free cash flow for
the year, benefitting from our meaningful cost reduction efforts
and deliberate focus on assets with the highest potential to
generate returns. We also announced today that we have entered into
an Amended and Restated Credit Facility, which is an important step
in our more comprehensive plan to address our balance sheet and
facilitates the execution of our business strategy."
Financial Highlights
|
|
Three months
ended
|
|
|
Year ended
|
|
|
|
August
31,
|
%
|
|
August
31,
|
%
|
(in thousands of
Canadian dollars except per share amounts)
|
2024
|
2023
|
Change
|
2024
|
2023
|
Change
|
Revenue
|
|
|
|
|
|
|
Television
|
248,048
|
314,232
|
(21 %)
|
1,176,738
|
1,408,468
|
(16 %)
|
Radio
|
21,305
|
24,611
|
(13 %)
|
93,860
|
102,772
|
(9 %)
|
|
269,353
|
338,843
|
(21 %)
|
1,270,598
|
1,511,240
|
(16 %)
|
|
|
|
|
|
Segment profit
(loss) (1)
|
|
|
|
|
|
|
Television
|
45,707
|
49,774
|
(8 %)
|
294,780
|
340,580
|
(13 %)
|
Radio
|
1,407
|
2,976
|
(53 %)
|
9,442
|
13,460
|
(30 %)
|
Corporate
|
(4,814)
|
(6,477)
|
26 %
|
(20,793)
|
(20,035)
|
(4 %)
|
|
42,300
|
46,273
|
(9 %)
|
283,429
|
334,005
|
(15 %)
|
|
|
|
|
|
Segment profit
margin (1)
|
|
|
|
|
|
|
Television
|
18 %
|
16 %
|
|
25 %
|
24 %
|
|
Radio
|
7 %
|
12 %
|
|
10 %
|
13 %
|
|
Consolidated
|
16 %
|
14 %
|
|
22 %
|
22 %
|
|
|
|
|
|
|
Net income (loss)
attributable to shareholders
|
(25,675)
|
50,412
|
(151 %)
|
(772,641)
|
(428,724)
|
(80 %)
|
Adjusted net income
(loss) attributable to shareholders(1)
|
(4,003)
|
(9,075)
|
56 %
|
11,427
|
28,553
|
(60 %)
|
|
|
|
|
|
Earnings (loss) per
share:
|
|
|
|
|
|
|
Basic
|
($0.13)
|
$0.25
|
|
($3.87)
|
($2.15)
|
|
Diluted
|
($0.13)
|
$0.25
|
|
($3.87)
|
($2.15)
|
|
Adjusted
basic(1)
|
($0.02)
|
($0.04)
|
|
$0.06
|
$0.14
|
|
|
|
|
|
|
Free cash
flow (1)
|
39,142
|
31,654
|
24 %
|
114,152
|
106,840
|
7 %
|
|
|
(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-Generally Accepted Accounting Principles ("GAAP") measures can
include: segment profit (loss), segment profit margin, free cash
flow, adjusted net income (loss) attributable to shareholders,
adjusted basic earnings (loss) per share, net debt to segment
profit, proforma net debt to segment profit 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 Fourth Quarter 2024
Report to Shareholders.
|
Segment Revenue
|
|
Three months
ended
|
|
|
Year ended
|
|
|
|
August
31,
|
%
|
|
August
31,
|
%
|
|
|
|
|
|
|
|
(in thousands of
Canadian dollars)
|
2024
|
2023
|
Change
|
2024
|
2023
|
Change
|
Revenue
|
248,048
|
|
|
1,176,738
|
|
|
Television
|
314,232
|
(21 %)
|
1,408,468
|
(16 %)
|
Advertising
|
115,865
|
137,391
|
(16 %)
|
652,322
|
768,036
|
(15 %)
|
Subscriber
|
117,883
|
126,466
|
(7 %)
|
470,332
|
502,257
|
(6 %)
|
Distribution,
production and other
|
14,300
|
50,375
|
(72 %)
|
54,084
|
138,175
|
(61 %)
|
Radio
|
21,305
|
24,611
|
(13 %)
|
93,860
|
102,772
|
(9 %)
|
Total
Revenue
|
269,353
|
338,843
|
(21 %)
|
1,270,598
|
1,511,240
|
(16 %)
|
|
|
|
|
|
New
platform revenue percentage (1)
|
13 %
|
13 %
|
(5 %)
|
12 %
|
11 %
|
(6 %)
|
|
|
(1)
|
New platform revenue
does not have a standardized meaning prescribed by IFRS. For
definition and explanation, see the discussion under the Key
Performance Indicators and Non-GAAP Financial Measures section of
the Fourth Quarter 2024 Report to Shareholders.
|
Operational Highlights
Corus has launched its Fall schedule for Global TV and Corus'
Specialty networks on traditional and streaming platforms. In
addition, Corus announced the upcoming launch of new lifestyle
channels, Flavour Network and Home Network, added new content for
specialty channel Slice, continued to implement cost savings
initiatives and made bank debt repayments. The Company continues to
navigate an uncertain macroeconomic and competitive
environment.
Corus Introduces: Flavour Network and Home
Network. On September 18, 2024,
Corus announced its two all-new, Canadian-owned lifestyle brands
will launch in Canada on
December 30, 2024. Launching with
more than 460 premiere hours in Winter/Spring 2025, the Corus-owned
networks will feature a mix of Canadian original programming, as
well as international acquisitions through new and expanded licence
deals. The broad slate of exclusive content delivers new voices and
formats, familiar faces from proven hits, and global representation
to deliver a hand-picked, content-first strategy and curated brand
experience.
Corus adds 173 hours of premium new content to
Slice's fall schedule. While continuing to be home to premium
reality content featuring real-life experiences and iconic talent,
Slice expands deals with trusted studio partners to feature new
unscripted genres including true crime and daily news.
Financial Highlights
- Free cash flow(1) of $39.1
million in Q4 and $114.2
million for the year compared to $31.7 million and $106.8
million, respectively, in the same comparable prior year
periods. The increase in free cash flow(1) for the
fourth quarter and the year is mainly attributable to higher cash
provided by operating activities, offset by higher cash used in
investing activities.
- Net debt to segment profit(1) was 3.84 times as at
August 31, 2024. Proforma net debt to
segment profit(2) was 3.84 times at August 31, 2024, up from 3.62 times at
August 31, 2023. This ratio increased
as a result of the decline in segment profit(1) for the
most recent four quarters exceeding the effect of the reduced net
debt.
- Corus paid down $2.7 million of
debt during the fourth quarter of fiscal 2024 and $38.8 million for the year.
- As of August 31, 2024, the
Company had $82.4 million of cash and
cash equivalents and $30.0 million
available to be drawn under its Revolving Facility.
(1)
|
Free cash flow, segment
profit (loss), net debt to segment profit and proforma net debt to
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 Fourth Quarter 2024 Report to
Shareholders and/or Management's Discussion and Analysis in the
Company's Annual Report for the year ended August 31, 2023 ("2023
MD&A").
|
(2)
|
Proforma net debt to
segment profit ratio excludes contributions to segment profit from
Toon Boom Animation Inc., which was sold in August 2023, for the
most recent four quarters.
|
Corus Entertainment Inc. reports its financial
results in Canadian dollars.
The unaudited interim condensed consolidated
financial statements and accompanying notes for the three months
and year ended August 31, 2024 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.sedarplus.ca.
A conference call with Corus senior management is
scheduled for October 25, 2024 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/3zGVLV8. 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
1.416.945.7677 and for North
America is 1.888.699.1199. This call will be archived and
available for replay in the Investor Relations section of the Corus
website beginning October 25, 2024,
at 11 a.m.ET or accessible by
telephone until November 1, 2024, at
1.888.660.6345 (toll-free North
America) or 1.289.819.1450 (local or international), using
replay code 23680#. 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 2023 MD&A, as
filed at www.sedarplus.ca on October 30,
2023.
As discussed further in the 2023 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.
As previously identified, additional key factors
that have and may continue to adversely impact the Company's
ability to compete successfully and its financial results include,
but are not limited to: industry-wide, continuing reduced
advertising demand or spending on linear television; macroeconomic
supply chain disruptions, which in turn impact advertising; ability
to secure programming rights; changes to acquired programming costs
and arrangements, which continue to increase; and continued
inaction or slower action by Corus' federal broadcast regulator to
revisit Canadian program spending requirements, which represent a
significant portion of the Company's cost base. A more extensive
discussion of risks and uncertainties that may affect the Company's
business, operations and financial performance can be found in the
2023 Annual MD&A.
Programming and trade mark output arrangements for HGTV, Food
Network, Cooking Channel, Magnolia Network and OWN will not be
renewed upon their expiry on December 31,
2024. The Company is currently undertaking a review of these
channels and while some lifestyle channels will be retired, HGTV
and Food Network will be rebranded as Home Network and Flavour
Network based on the strength of top-rated Canadian programs and
foreign content supply. This is expected to impact revenue on the
Company's services in calendar 2025, which may lead to decreased
profitability.
In addition, the Company has entered into the
Credit Facility and issued the Senior Unsecured Notes, all of which
contain certain financial covenants including with respect to the
maintenance of certain leverage ratios. Management has taken and
continues to take significant cost reduction actions and make
appropriate investments in areas or assets which support
sustainable profitability. Management also intends to actively
pursue options for such amendments or relief, concurrent with such
cost reduction actions and its regulatory advocacy. However, should
the financial performance, specifically the impacts to
profitability, continue to decline without successful mitigation
and should there be no further changes or amendments to the
foregoing financing arrangements, there is material risk that the
Company will not meet its covenants under (i) the terms of the
Credit Facility, which sets a maximum total debt to cash flow ratio
of 5.75 through to and including December
31, 2024, 7.25 from January 1,
2025 through and including March 31,
2025, and 4.25 thereafter, or; (ii) the Senior Unsecured
Notes.
The Company's ability to mitigate the concerns above is
dependent on its ability to continue to access financing or obtain
relief from or amendments to terms with lenders or noteholders with
respect to relevant financial covenants or repayment terms under
such facilities. While the Company has been successful in obtaining
requisite relief and amendments in the past, there can be no
assurance it will be able to do so in the future.
Other financial risks which may be related to or
elevated by the foregoing include 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. Please see the 2023 MD&A
for a full discussion of these and other risks and
uncertainties.
Outlook
We continue to expect over-supply of premium
digital video inventory from foreign competitors, and generally
lower demand for linear advertising. As such, the Company expects
year-over-year declines in Television advertising revenue in the
first quarter of fiscal 2025 to be similar to the fourth quarter of
fiscal 2024. Amortization of TV program rights in the first quarter
is expected to increase by a mid-single digit percentage
year-over-year. The Company will continue with its implementation
of additional cost reduction initiatives and expects general and
administrative expenses to decline in the range of 5% to 10% for
the first quarter compared to the prior year. While the Company
continues to expect improvement in the macroeconomic environment in
the medium term, visibility remains 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 (loss), segment
profit margin, free cash flow, adjusted net income (loss)
attributable to shareholders, adjusted basic earnings per share,
net debt to segment profit, proforma net debt to segment profit, as
well as supplementary financial measures not presented in the
financial statements such as new platform revenue. Non-GAAP or
non-IFRS measures 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 months and year ended August 31, 2024, which is available on Corus'
website at www.corusent.com as well as on SEDAR+ at
www.sedarplus.ca.
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 capital allocation strategy,
capital structure and liability management including liquidity,
leverage targets, ability to repay debt, and/or renegotiate
existing debt terms, dividend policy and the payment of future
dividends, strategic plan, advertising and expectations of
advertising trends for fiscal 2025 and 2026, subscriber revenue and
anticipated subscription trends, distribution, production and other
revenue, the Company's ability to manage retention and reputation
risks related to its on-air talent; expectations regarding
financial performance, 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 Company's ability to maintain
necessary access to loan and credit facilities, 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 maintain necessary access to loan
and credit facilities, 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 including new,
re-branded or re-programmed channels; 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 renegotiate, obtain relief from or 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; 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,
2023 and under the heading "Risk Factors" in the Company's
Annual Information Form for the year ended August 31, 2023. 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 32
specialty television services, 37 radio stations, 15 conventional
television stations, digital and streaming platforms, and social
digital agency and media services. Corus' roster of premium brands
includes Global Television, W Network, Flavour Network and Home
Network (launching soon), The HISTORY® Channel,
Showcase, Adult Swim, National Geographic and Global News, along
with streaming platforms STACKTV, TELETOON+, the Global TV App and
Curiouscast. Corus is also 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. Corus is an internationally-renowned content creator,
producer and distributor through Corus Studios and Nelvana. 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 August
31,
|
As at August
31,
|
2024
|
2023
|
ASSETS
|
|
|
Current
|
|
|
Cash and cash
equivalents
|
82,422
|
56,163
|
Accounts
receivable
|
232,040
|
295,175
|
Income taxes
recoverable
|
25,006
|
21,597
|
Prepaid expenses and
other assets
|
17,857
|
21,285
|
Total current
assets
|
357,325
|
394,220
|
Tax credits
receivable
|
19,756
|
44,270
|
Investments and other
assets
|
57,325
|
74,415
|
Property, plant and
equipment, net
|
250,810
|
268,214
|
Program
rights
|
494,022
|
668,976
|
Film
investments
|
55,312
|
53,085
|
Intangible assets,
net
|
252,358
|
1,198,229
|
Deferred income tax
assets
|
—
|
44,653
|
Total
assets
|
1,486,908
|
2,746,062
|
LIABILITIES AND
EQUITY (DEFICIT)
|
|
|
Current
|
|
|
Accounts payable and
accrued liabilities
|
488,098
|
565,052
|
Current portion of
long-term debt
|
9,903
|
13,434
|
Provisions
|
25,467
|
9,811
|
Total current
liabilities
|
523,468
|
588,297
|
Long-term
debt
|
1,042,931
|
1,078,950
|
Other long-term
liabilities
|
197,499
|
316,912
|
Provisions
|
10,697
|
9,041
|
Deferred income tax
liabilities
|
54,041
|
293,862
|
Total
liabilities
|
1,828,636
|
2,287,062
|
EQUITY
(DEFICIT)
|
|
|
Share
capital
|
281,052
|
281,052
|
Contributed
surplus
|
2,013,797
|
2,012,936
|
Accumulated
deficit
|
(2,784,729)
|
(2,014,077)
|
Accumulated other
comprehensive income
|
24,481
|
37,841
|
Total equity (deficit)
attributable to shareholders
|
(465,399)
|
317,752
|
Equity attributable to
non-controlling interests
|
123,671
|
141,248
|
Total
equity (deficit)
|
(341,728)
|
459,000
|
|
1,486,908
|
2,746,062
|
CORUS ENTERTAINMENT
INC. INTERIM CONDENSED CONSOLIDATED
STATEMENTS OF INCOME (LOSS) AND
COMPREHENSIVE INCOME (LOSS)
|
|
|
|
Three months
ended
|
|
Year ended
|
|
|
|
|
|
|
August
31,
|
|
August
31,
|
|
|
|
|
(unaudited - in
thousands of Canadian dollars except per share amounts)
|
2024
|
2023
|
2024
|
2023
|
|
|
|
|
Revenue
|
269,353
|
338,843
|
1,270,598
|
1,511,240
|
|
|
|
|
Direct cost of sales,
general and administrative expenses
|
227,053
|
292,570
|
987,169
|
1,177,235
|
|
|
|
|
Depreciation and
amortization
|
23,513
|
37,051
|
111,078
|
157,645
|
|
|
|
|
Interest
expense
|
24,662
|
33,009
|
107,827
|
135,410
|
|
|
|
|
Goodwill, broadcast
licence and other asset impairment
|
—
|
100,000
|
960,000
|
690,000
|
|
|
|
|
Debt
refinancing
|
—
|
—
|
753
|
—
|
|
|
|
|
Restructuring and other
costs
|
28,264
|
5,023
|
55,225
|
20,569
|
|
|
|
|
Loss (gain) on
disposition
|
584
|
(142,288)
|
584
|
(142,288)
|
|
|
|
|
Other income,
net
|
(1,793)
|
(10,094)
|
(1,658)
|
(3,670)
|
|
|
|
|
Income (loss) before
income taxes
|
(32,930)
|
23,572
|
(950,380)
|
(523,661)
|
|
|
|
|
Income tax
recovery
|
(9,966)
|
(25,046)
|
(183,636)
|
(100,806)
|
|
|
|
|
Net income (loss)
for the period
|
(22,964)
|
48,618
|
(766,744)
|
(422,855)
|
|
|
|
|
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
|
(3,754)
|
3,190
|
(6,533)
|
4,945
|
|
|
|
|
Unrealized foreign
currency translation adjustment
|
(259)
|
(99)
|
57
|
1,067
|
|
|
|
|
|
(4,013)
|
3,091
|
(6,476)
|
6,012
|
|
|
|
|
Items that will not
be reclassified to income (loss):
|
|
|
|
|
|
|
|
|
Unrealized change in
fair value of financial assets
|
(680)
|
95
|
(6,884)
|
(1,171)
|
|
|
|
|
Actuarial gain (loss)
on post-retirement benefit plans
|
2,887
|
9,632
|
(969)
|
9,601
|
|
|
|
|
|
2,207
|
9,727
|
(7,853)
|
8,430
|
|
|
|
|
Other comprehensive
income (loss), net of income taxes
|
(1,806)
|
12,818
|
(14,329)
|
14,442
|
|
|
|
|
Comprehensive income
(loss) for the period
|
(24,770)
|
61,436
|
(781,073)
|
(408,413)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss)
attributable to:
|
|
|
|
|
|
|
|
|
Shareholders
|
(25,675)
|
50,412
|
(772,641)
|
(428,724)
|
|
|
|
|
Non-controlling
interests
|
2,711
|
(1,794)
|
5,897
|
5,869
|
|
|
|
|
|
(22,964)
|
48,618
|
(766,744)
|
(422,855)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Comprehensive income
(loss) attributable to:
|
|
|
|
|
|
|
|
|
Shareholders
|
(27,481)
|
63,230
|
(786,970)
|
(414,282)
|
|
|
|
|
Non-controlling
interests
|
2,711
|
(1,794)
|
5,897
|
5,869
|
|
|
|
|
|
(24,770)
|
61,436
|
(781,073)
|
(408,413)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings (loss) per
share attributable to shareholders:
|
|
|
|
|
|
|
|
|
Basic
|
($0.13)
|
$0.25
|
($3.87)
|
($2.15)
|
|
|
|
|
Diluted
|
($0.13)
|
$0.25
|
($3.87)
|
($2.15)
|
|
|
|
|
CORUS
ENTERTAINMENT INC.
|
|
|
|
|
|
|
|
INTERIM
CONDENSED CONSOLIDATED STATEMENTS OF
CHANGES IN EQUITY (DEFICIT)
|
(unaudited - in
thousands of Canadian dollars)
|
Share
capital
|
Contributed
surplus
|
Accumulated
deficit
|
Accumulated
other
comprehensive
income
|
Total equity
(deficit) attributable
to shareholders
|
Non- controlling
interests
|
Total equity
(deficit)
|
As at August 31,
2023
|
281,052
|
2,012,936
|
(2,014,077)
|
37,841
|
317,752
|
141,248
|
459,000
|
Comprehensive income
(loss)
|
—
|
—
|
(772,641)
|
(14,329)
|
(786,970)
|
5,897
|
(781,073)
|
Dividends
declared
|
—
|
—
|
—
|
—
|
—
|
(12,373)
|
(12,373)
|
Disposition of Aircraft
Pictures
|
—
|
—
|
1,655
|
—
|
1,655
|
102
|
1,757
|
Actuarial loss on
post-retirement
benefit
plans
|
—
|
—
|
(969)
|
969
|
—
|
—
|
—
|
Share-based
compensation expense
|
—
|
861
|
—
|
—
|
861
|
—
|
861
|
Reallocation of equity
interest
|
—
|
—
|
1,303
|
—
|
1,303
|
(5,303)
|
(4,000)
|
Return of capital to
non-controlling interest
|
—
|
—
|
—
|
—
|
—
|
(5,900)
|
(5,900)
|
As at August 31,
2024
|
281,052
|
2,013,797
|
(2,784,729)
|
24,481
|
(465,399)
|
123,671
|
(341,728)
|
(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)
|
—
|
—
|
(428,724)
|
14,442
|
(414,282)
|
5,869
|
(408,413)
|
Dividends
declared
|
—
|
—
|
(23,475)
|
—
|
(23,475)
|
(17,366)
|
(40,841)
|
Reduction of stated
capital
|
(500,000)
|
500,000
|
—
|
—
|
—
|
—
|
—
|
Change in fair value of
put option liability
|
—
|
—
|
(347)
|
—
|
(347)
|
176
|
(171)
|
Shares repurchased
under normal course issuer bid ("NCIB")
|
(3,090)
|
1,119
|
—
|
—
|
(1,971)
|
—
|
(1,971)
|
Reversal of automatic
share purchase commitment
|
2,224
|
(504)
|
—
|
—
|
1,720
|
—
|
1,720
|
Actuarial gain on
post-retirement
benefit
plans
|
—
|
—
|
9,601
|
(9,601)
|
—
|
—
|
—
|
Share-based
compensation expense
|
—
|
840
|
—
|
—
|
840
|
—
|
840
|
Reallocation of equity
interest
|
—
|
—
|
3,226
|
—
|
3,226
|
(3,226)
|
—
|
Equity funding by a
non-controlling
interest
|
—
|
—
|
—
|
—
|
—
|
3,855
|
3,855
|
As at August 31,
2023
|
281,052
|
2,012,936
|
(2,014,077)
|
37,841
|
317,752
|
141,248
|
459,000
|
CORUS
ENTERTAINMENT INC.
|
|
|
|
|
INTERIM
CONDENSED CONSOLIDATED STATEMENTS OF CASH
FLOWS
|
|
|
|
|
|
Three months
ended
|
|
Year ended
|
|
|
August
31,
|
|
August
31,
|
(unaudited - in
thousands of Canadian dollars)
|
2024
|
2023
|
2024
|
2023
|
OPERATING
ACTIVITIES
|
|
|
|
|
Net income (loss) for
the period
|
(22,964)
|
48,618
|
(766,744)
|
(422,855)
|
Adjustments to
reconcile net income (loss) to cash flow from
operations:
|
|
|
|
|
Amortization of
program rights
|
104,775
|
140,491
|
479,170
|
595,179
|
Amortization of film
investments
|
1,513
|
14,056
|
15,724
|
36,760
|
Depreciation and
amortization
|
23,513
|
37,051
|
111,078
|
157,645
|
Deferred income tax
recovery
|
(1,937)
|
(24,327)
|
(191,362)
|
(124,516)
|
Goodwill, broadcast
licence and other asset impairment
|
—
|
100,000
|
960,000
|
690,000
|
Loss (gain) on
business divestiture
|
584
|
(142,288)
|
584
|
(142,288)
|
Share-based
compensation expense
|
288
|
278
|
861
|
840
|
Imputed
interest
|
8,544
|
12,516
|
41,819
|
57,547
|
Debt
refinancing
|
—
|
—
|
753
|
—
|
Payment of program
rights
|
(134,380)
|
(180,303)
|
(550,543)
|
(674,535)
|
Net spend on film
investments
|
10,955
|
(5,392)
|
(10,672)
|
(60,341)
|
Other
|
563
|
189
|
34
|
1,345
|
Cash flow from
operations
|
(8,546)
|
889
|
90,702
|
114,781
|
Net change in non-cash
working capital balances related to operations
|
54,387
|
36,445
|
39,955
|
7,886
|
Cash provided by
operating activities
|
45,841
|
37,334
|
130,657
|
122,667
|
|
|
|
|
|
INVESTING
ACTIVITIES
|
|
|
|
|
Additions to property,
plant and equipment
|
(5,854)
|
(4,381)
|
(17,785)
|
(13,302)
|
Proceeds from sale of
property
|
10
|
—
|
2,271
|
736
|
Acquisition of
non-controlling interest
|
(4,000)
|
—
|
(4,000)
|
—
|
Business divestiture,
net of divested cash
|
(2,801)
|
141,172
|
(2,801)
|
141,172
|
Net cash flows for
intangibles, investments and other assets
|
(856)
|
(1,299)
|
(1,338)
|
(3,332)
|
Cash provided by
(used in) investing activities
|
(13,501)
|
135,492
|
(23,653)
|
125,274
|
|
|
|
|
|
FINANCING
ACTIVITIES
|
|
|
|
|
Decrease in bank
loans
|
(2,736)
|
(159,469)
|
(38,805)
|
(171,742)
|
Financing
fees
|
(591)
|
—
|
(1,210)
|
(998)
|
Share repurchase under
NCIB
|
—
|
—
|
—
|
(2,045)
|
Equity funding (return
of capital) to non-controlling interest
|
(5,900)
|
—
|
(5,900)
|
3,855
|
Payment of lease
liabilities
|
(4,496)
|
(4,560)
|
(18,108)
|
(17,943)
|
Dividends
paid
|
—
|
(5,979)
|
—
|
(35,923)
|
Dividends paid to
non-controlling interests
|
(2,300)
|
(1,616)
|
(12,373)
|
(17,366)
|
Other
|
(1,103)
|
(1,212)
|
(4,349)
|
(4,528)
|
Cash used in
financing activities
|
(17,126)
|
(172,836)
|
(80,745)
|
(246,690)
|
Net change in cash and
cash equivalents during the period
|
15,214
|
(10)
|
26,259
|
1,251
|
Cash and cash
equivalents, beginning of the period
|
67,208
|
56,173
|
56,163
|
54,912
|
Cash and cash
equivalents, end of the period
|
82,422
|
56,163
|
82,422
|
56,163
|
CORUS
ENTERTAINMENT INC.
|
|
|
|
|
BUSINESS SEGMENT
INFORMATION
|
|
|
|
|
(unaudited - in
thousands of Canadian dollars)
|
|
|
|
|
Three months ended
August 31, 2024
|
|
|
|
|
|
Television
|
Radio
|
Corporate
|
Consolidated
|
Revenue
|
248,048
|
21,305
|
—
|
269,353
|
Direct cost of sales,
general and administrative expenses
|
202,341
|
19,898
|
4,814
|
227,053
|
Segment profit
(loss)(1)
|
45,707
|
1,407
|
(4,814)
|
42,300
|
Depreciation and
amortization
|
|
|
|
23,513
|
Interest
expense
|
|
|
|
24,662
|
Restructuring and other
costs
|
|
|
|
28,264
|
Loss on
disposition
|
|
|
|
584
|
Other income,
net
|
|
|
|
(1,793)
|
Loss before income
taxes
|
|
|
|
(32,930)
|
|
|
|
|
|
Three months ended
August 31, 2023
|
|
|
|
|
|
Television
|
Radio
|
Corporate
|
Consolidated
|
Revenue
|
314,232
|
24,611
|
—
|
338,843
|
Direct cost of sales,
general and administrative expenses
|
264,458
|
21,635
|
6,477
|
292,570
|
Segment profit
(loss)(1)
|
49,774
|
2,976
|
(6,477)
|
46,273
|
Depreciation and
amortization
|
|
|
|
37,051
|
Interest
expense
|
|
|
|
33,009
|
Goodwill, broadcast
licence and other asset impairment
|
|
|
|
100,000
|
Restructuring and other
costs
|
|
|
|
5,023
|
Gain on
disposition
|
|
|
|
(142,288)
|
Other income,
net
|
|
|
|
(10,094)
|
Income before income
taxes
|
|
|
|
23,572
|
Year ended August 31, 2024
|
|
|
|
|
|
Television
|
Radio
|
Corporate
|
Consolidated
|
Revenue
|
1,176,738
|
93,860
|
—
|
1,270,598
|
Direct cost of sales,
general and administrative expenses
|
881,958
|
84,418
|
20,793
|
987,169
|
Segment profit
(loss)(1)
|
294,780
|
9,442
|
(20,793)
|
283,429
|
Depreciation and
amortization
|
|
|
|
111,078
|
Interest
expense
|
|
|
|
107,827
|
Goodwill, broadcast
licence and other asset impairment
|
|
|
|
960,000
|
Debt
refinancing
|
|
|
|
753
|
Restructuring and
other costs
|
|
|
|
55,225
|
Loss on
disposition
|
|
|
|
584
|
Other income,
net
|
|
|
|
(1,658)
|
Loss before income taxes
|
|
|
|
(950,380)
|
|
|
|
|
|
Year ended August 31,
2023
|
|
|
|
|
|
Television
|
Radio
|
Corporate
|
Consolidated
|
Revenue
|
1,408,468
|
102,772
|
—
|
1,511,240
|
Direct cost of sales,
general and administrative expenses
|
1,067,888
|
89,312
|
20,035
|
1,177,235
|
Segment profit
(loss)(1)
|
340,580
|
13,460
|
(20,035)
|
334,005
|
Depreciation and
amortization
|
|
|
|
157,645
|
Interest
expense
|
|
|
|
135,410
|
Goodwill, broadcast
licence and other asset impairment
|
|
|
|
690,000
|
Restructuring and
other costs
|
|
|
|
20,569
|
Gain on
disposition
|
|
|
|
(142,288)
|
Other income,
net
|
|
|
|
(3,670)
|
Loss before income taxes
|
|
|
|
(523,661)
|
(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 Fourth Quarter 2024 Report to Shareholders.
|
REVENUE BY TYPE
|
|
Three months
ended
|
|
Year ended
|
|
|
August
31,
|
|
August
31,
|
(unaudited - in
thousands of Canadian dollars)
|
2024
|
2023
|
2024
|
2023
|
Advertising
|
135,970
|
160,732
|
740,446
|
865,633
|
Subscriber
|
117,883
|
126,466
|
470,332
|
502,257
|
Distribution,
production and other
|
15,500
|
51,645
|
59,820
|
143,350
|
|
269,353
|
338,843
|
1,270,598
|
1,511,240
|
NON-GAAP FINANCIAL MEASURES
|
|
Three months
ended
|
|
|
Year ended
|
|
(unaudited - in
thousands of Canadian dollars, except percentages)
|
|
August
31,
|
%
|
|
August
31,
|
%
|
New platform
revenue
|
2024
|
2023
|
Change
|
2024
|
2023
|
Change
|
New platform revenue
(numerator)
|
31,256
|
33,024
|
(5 %)
|
137,111
|
145,521
|
(6 %)
|
Television advertising
revenue
|
115,865
|
137,391
|
(16 %)
|
652,322
|
768,036
|
(15 %)
|
Television subscriber
revenue
|
117,883
|
126,466
|
(7 %)
|
470,332
|
502,257
|
(6 %)
|
Total Television
advertising and subscriber revenue (denominator)
|
233,748
|
263,857
|
(11 %)
|
1,122,654
|
1,270,293
|
(12 %)
|
New platform revenue
percentage
|
13 %
|
13 %
|
|
12 %
|
11 %
|
|
|
|
Three months
ended
|
|
Year ended
|
(unaudited - in
thousands of Canadian dollars, except per share amounts)
|
|
August
31,
|
|
August
31,
|
|
|
|
|
|
Adjusted Net Income
Attributable to Shareholders
|
2024
|
2023
|
2024
|
2023
|
Net income (loss)
attributable to shareholders
|
(25,675)
|
50,412
|
(772,641)
|
(428,724)
|
Adjustments, net of
income tax:
|
|
|
|
|
Goodwill, broadcast
licence and other asset impairment
|
—
|
73,500
|
742,016
|
578,453
|
Debt
refinancing
|
—
|
—
|
555
|
—
|
Loss (gain) on
disposition
|
584
|
(136,479)
|
584
|
(136,479)
|
Restructuring and
other costs
|
21,088
|
3,492
|
40,913
|
15,303
|
Adjusted net income
(loss) attributable to shareholders
|
(4,003)
|
(9,075)
|
11,427
|
28,553
|
Basic earnings
(loss) per share
|
($0.13)
|
$0.25
|
($3.87)
|
($2.15)
|
Adjustments, net of
income tax:
|
|
|
|
|
Goodwill,
broadcast licence and other asset impairment
|
—
|
$0.37
|
$3.72
|
$2.90
|
Debt
refinancing
|
—
|
—
|
—
|
—
|
Loss (gain) on
disposition
|
—
|
($0.68)
|
—
|
($0.68)
|
Restructuring and
other costs
|
$0.11
|
$0.02
|
$0.21
|
$0.07
|
Adjusted basic
earnings (loss) per share
|
($0.02)
|
($0.04)
|
$0.06
|
$0.14
|
|
|
Three months
ended
|
|
Year ended
|
(unaudited - in
thousands of Canadian dollars)
|
|
August
31,
|
|
August
31,
|
Free Cash
Flow
|
2024
|
2023
|
2024
|
2023
|
Cash provided by (used
in):
|
|
|
|
|
Operating
activities
|
45,841
|
37,334
|
130,657
|
122,667
|
Investing
activities
|
(13,501)
|
135,492
|
(23,653)
|
125,274
|
Add (deduct): cash used
in (provided by) business acquisitions, divestitures and strategic
investments (1)
|
32,340
|
172,826
|
107,004
|
247,941
|
6,802
|
(141,172)
|
7,148
|
(141,101)
|
Free cash
flow
|
39,142
|
31,654
|
114,152
|
106,840
|
(1)
|
Strategic investments
are comprised of investments in venture funds and associated
companies.
|
(unaudited - in
thousands of Canadian dollars)
|
As at August
31,
|
As at August
31,
|
Net Debt and Net
Debt to Segment Profit
|
2024
|
2023
|
Total debt, net of
unamortized financing fees and prepayment options
|
1,052,834
|
1,092,384
|
Lease
liabilities
|
116,834
|
126,084
|
Cash and cash
equivalents
|
(82,422)
|
(56,163)
|
Net debt
(numerator)
|
1,087,246
|
1,162,305
|
Segment profit
(denominator) (1)
|
283,429
|
334,005
|
Net debt to segment
profit
|
3.84
|
3.48
|
Proforma net debt to
segment profit (2)
|
3.84
|
3.62
|
(1)
|
Reflects aggregate
amounts for the most recent four quarters, as detailed in the table
in the Quarterly Consolidated Financial Information section of the
Fourth Quarter 2024 Report to Shareholders.
|
(2)
|
Proforma net debt to
segment profit ratio excludes contributions to segment profit from
Toon Boom Animation Inc., which was divested on August 23, 2023,
for the most recent four quarters.
|
SOURCE Corus Entertainment Inc (IR Group)