- Consolidated revenue was flat for the quarter and decreased 5%
for the year
- Consolidated segment profit(1) decreased 18% for the
quarter and 25% for the year
- Consolidated segment profit margin(1) of 14% for the
quarter and 22% for the year
- Net income attributable to shareholders of $50.4 million ($0.25 per share basic) for the quarter, which
includes gain on business divestiture of $142.3 million and impairment charges of
$100.0 million related to broadcast
license and brands and trade marks. Net loss attributable to
shareholders of $428.7 million
($2.15 loss per share basic) for the
year, which includes a gain on business divestiture of $142.3 million as well as non-cash impairment
charges of $690.0 million for the
year
- Proforma net debt to segment profit(1) of 3.62 times
at August 31, 2023, which excludes
contributions to segment profit from business divestiture, up from
3.02 times at August 31, 2022, and
down from 3.85 times at the end of the third quarter
- Free cash flow(1) of $31.7
million for the quarter and $106.8
million for the year
- Corus suspends dividend; intends to redirect capital to debt
repayment
TORONTO, Oct. 27,
2023 /PRNewswire/ -
Corus Entertainment Inc. (TSX: CJR.B)
announced its fourth quarter and year end financial results
today.
"Our fourth quarter results reflect ongoing weakness in the
advertising economy further impacted by more recent distortions
resulting from the WGA and SAG-AFTRA strikes that
persisted much longer than anticipated," said Doug Murphy, President and Chief Executive
Officer. "We are focused on what we can control as we navigate
through these challenges. We will prudently redirect capital from
dividends to debt repayment. Our intense pursuit of efficiencies
and improved productivity is resulting in significant expense
reductions as we streamline our operating model and evolve our
business into a multi-platform aggregator of premium video with
leading cross platform monetization capabilities. Corus will
benefit from a more normalized content supply in the quarters
ahead with an improved cost structure as we await a
concurrent improvement in the advertising economy."
Financial Highlights
|
Three months ended
August 31,
|
%
|
Year
ended
August
31,
|
%
|
|
(in thousands of Canadian dollars
except per share amounts)
|
2023
|
2022
|
Change
|
2023
|
2022
|
Change
|
|
Revenue
|
|
|
|
|
|
|
|
Television
|
314,232
|
314,170
|
0 %
|
1,408,468
|
1,492,708
|
(6 %)
|
|
Radio
|
24,611
|
25,424
|
(3 %)
|
102,772
|
105,878
|
(3 %)
|
|
338,843
|
339,594
|
(0 %)
|
1,511,240
|
1,598,586
|
(5 %)
|
|
|
|
|
|
|
Segment profit (loss)
(1)
|
|
|
|
|
|
|
|
Television
|
49,774
|
59,018
|
(16 %)
|
340,580
|
458,145
|
(26 %)
|
|
Radio
|
2,976
|
1,729
|
72 %
|
13,460
|
13,267
|
1 %
|
|
Corporate
|
(6,477)
|
(4,558)
|
(42 %)
|
(20,035)
|
(27,769)
|
28 %
|
|
46,273
|
56,189
|
(18 %)
|
334,005
|
443,643
|
(25 %)
|
|
|
|
|
|
|
Segment profit margin
(1)
|
|
|
|
|
|
|
|
Television
|
16 %
|
19 %
|
|
24 %
|
31 %
|
|
|
Radio
|
12 %
|
7 %
|
|
13 %
|
13 %
|
|
|
Consolidated
|
14 %
|
17 %
|
|
22 %
|
28 %
|
|
|
|
|
|
|
|
Net income (loss)
attributable to shareholders
|
50,412
|
(367,065)
|
|
(428,724)
|
(245,058)
|
|
|
Adjusted net
income (loss) attributable to shareholders (1)
|
(9,075)
|
(17,116)
|
47 %
|
28,553
|
106,938
|
(73 %)
|
|
|
|
|
|
|
Basic earnings
(loss) per share
|
$0.25
|
($1.82)
|
|
($2.15)
|
($1.19)
|
|
|
Adjusted basic earnings (loss) per share
(1)
|
($0.04)
|
($0.08)
|
|
$0.14
|
$0.52
|
|
|
Diluted earnings (loss)
per share
|
$0.25
|
($1.82)
|
|
($2.15)
|
($1.19)
|
|
|
|
|
|
|
|
Free cash flow (1)
|
31,654
|
44,713
|
(29 %)
|
106,840
|
239,585
|
(55 %)
|
|
(1)
|
In addition to
disclosing results in accordance with International Financial
Reporting Standards ("IFRS") as issued by the International
Accounting Standards Board ("IASB"), the Company also provides
supplementary non-IFRS measures as a method of evaluating the
Company's performance and to provide a better understanding of how
management views the Company's performance. These non-IFRS or
non-GAAP measures can include: segment profit (loss), segment
profit margin, free cash flow, adjusted net income (loss)
attributable to shareholders, adjusted basic earnings (loss) per
share, net debt to segment profit, proforma net debt to segment
profit, optimized advertising revenue and new platform revenue.
These are not measurements in accordance with IFRS and should not
be considered as an alternative to any other measure of performance
under IFRS. Please see additional discussion and reconciliations
under the Key Performance Indicators and Non-GAAP Financial
Measures section of the Company's Fourth Quarter 2023 Report to
Shareholders.
|
Segment Revenue
|
Three months ended
August 31,
|
%
|
Year ended
August 31,
|
%
|
|
(in thousands of
Canadian dollars)
|
2023
|
2022
|
Change
|
2023
|
2022
|
Change
|
|
Revenue
|
314,232
|
|
|
1,408,468
|
|
|
|
Television
|
314,170
|
0 %
|
1,492,708
|
(6 %)
|
|
Advertising
|
137,391
|
151,873
|
(10 %)
|
768,036
|
859,598
|
(11 %)
|
|
Subscriber
|
126,466
|
127,715
|
(1 %)
|
502,257
|
518,483
|
(3 %)
|
|
Distribution, production and other
|
50,375
|
34,582
|
46 %
|
138,175
|
114,627
|
21 %
|
|
Radio
|
24,611
|
25,424
|
(3 %)
|
102,772
|
105,878
|
(3 %)
|
|
Total Revenue
|
338,843
|
339,594
|
(0 %)
|
1,511,240
|
1,598,586
|
(5 %)
|
|
|
|
|
|
|
Optimized advertising revenue (1)
|
55 %
|
50 %
|
(2 %)
|
54 %
|
43 %
|
11 %
|
|
New platform revenue (1)
|
13 %
|
12 %
|
—
|
11 %
|
10 %
|
2 %
|
|
(1)
|
Optimized advertising
revenue and new platform revenue do not have standardized meanings
prescribed by IFRS. For definitions and explanations, see
the discussion under the Key Performance Indicators and
Non-GAAP Financial Measures section of the Fourth Quarter 2023
Report to Shareholders.
|
Operational Highlights
Corus advanced its strategic priorities on multiple fronts. The
Company launched its Fall 2023 schedule for Global TV, its
Specialty networks and STACKTV, implemented cost savings
initiatives, completed the sale of Toon Boom Animation Inc. and
used the net proceeds from the sale to pay down bank debt. The
Company continues to navigate an uncertain macroeconomic
environment as well as the impact of U.S. media industry labour
strikes on its programming supply.
- Global confirmed its Fall 2023 schedule of new and returning
programming. Global announced its Fall 2023 slate of premieres,
including top reality show Survivor, new original drama
Robyn Hood and the Canadian
broadcast premiere of hit U.S. series Yellowstone.
- Corus completed the sale of its animation software business;
net proceeds used to repay outstanding bank debt. Corus
completed the sale of Toon Boom Animation Inc. to Integrated Media
Company on August 23, 2023 for net
proceeds of $141.2 million.
- Entertainment Tonight Canada end of production
announced. The final new episode aired on October 6, 2023, with the decision to end
production of the daily entertainment newsmagazine show being due
to production costs and a challenging advertising environment.
- Corus Studios and Nikki Ray Media Agency announced four new
TV movies set to premiere in 2024. Represented internationally
by Corus Studios, the made-for-tv movie franchise The Love Club
Moms will premiere on W Network and STACKTV in 2024.
Financial Highlights
- Free cash flow(1) of $31.7
million in Q4 and $106.8
million for the year compared to $44.7 million and $239.6
million, respectively, in the same comparable prior year
periods. The decrease in free cash flow(1) for the
fourth quarter is mainly attributable to a decrease in cash
provided by operating activities of $18.5
million as the net proceeds from the sale of Toon Boom
Animation Inc. on August 23, 2023 of
$141.2 million that were used to pay
down bank debt are not included in free cash flow(1).
The decrease in free cash flow(1) for the year ended
August 31, 2023 is mainly
attributable to a decrease in cash provided by operating activities
of $94.2 million, that excludes the
net proceeds from the sale of Toon Boom Animation Inc. and cash
provided by investing activities in the prior year ended
August 31, 2022, related to a
$43.5 million non-recurring venture
fund distribution.
- Net debt to segment profit(1) was 3.48 times at
August 31, 2023. Proforma net debt to
segment profit(2) was 3.62 times at August 31, 2023, up from 3.02 times at
August 31, 2022, however lower than
at the end of the third quarter of 3.85 times. The main driver of
the increase in this ratio is the decrease of segment
profit(1) for the most recent four quarters.
- As of August 31, 2023, the
Company had $56.2 million of cash and
cash equivalents and $300.0 million
available under its Revolving Facility, $285.9 million of which could be drawn.
Dividends
- In fiscal 2024, the Company announced its Board of Directors
has prudently suspended the dividend to redirect the use of free
cash flow(1) from dividends to debt repayment given the
impact of continuing macroeconomic uncertainty, and the impact of
the extended Writer's Guild of America ("WGA") strike (resolved on
October 9, 2023) and the ongoing
labour action of Screen Actors Guild-American Federation of
Television and Radio Artists ("SAG-AFTRA") on audience levels,
advertising demand and revenue.
|
(1)
|
Free cash flow, segment
profit, 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 2023
Report to Shareholders and/or Management's Discussion and
Analysis in the Company's Annual Report for the year ended
August 31, 2022 ("2022 MD&A").
|
|
(2)
|
Proforma net debt to
segment profit ratio excludes contributions to segment profit from
Toon Boom Animation Inc. for the most recent four
quarters.
|
Corus Entertainment Inc. reports its financial results in
Canadian dollars.
The unaudited interim condensed consolidated financialstatements
and accompanying notes for the three months and year ended
August 31, 2023 and Management's
Discussion and Analysis are available on the Company's website
at www.corusent.com in the Investor Relations section and
under the Company's SEDAR profile at www.sedarplus.ca.
A conference call with Corus senior management is scheduled for
October 27, 2023 at 8:00 a.m. ET. While this call is directed at
analysts and investors, members of the media are welcome to listen
in. To instantly join the conference call by phone, please use the
following URL to easily register and be connected to the conference
call automatically: https://emportal.ink/48EOK3t . You can also
dial direct to be entered into the call by an Operator. The dial-in
number for the conference call for local and international callers
is 1.416.764.8650 and for North
America is 1.888.664.6383. This call will be archived and
available for replay in the Investor Relations section of
the Corus website beginning October 27,
2023, at 11a.m.ET or
accessible by telephone until November 3,
2023, at 1.888.390.0541 (toll-free North America) or 416.764.8677 (local or
international), using replay code 367305#. More information can be
found on the Corus Entertainment website at www.corusent.com
in the Investor Relations section.
Risks and Uncertainties
Significant risks and uncertainties affecting the Company and
its business are discussed under the heading "Risks and
Uncertainties" and "Seasonal Fluctuations" in the 2022 MD&A, as
filed at www.sedarplus.ca on October
24, 2022.
As discussed further in the 2022 MD&A, the Company's
operating performance is affected by general Canadian and worldwide
economic conditions. Changes or volatility in domestic or
international economic conditions, economic uncertainty or
geopolitical conflict and tensions, including current ongoing
factors that can create or exacerbate recessionary conditions, may
affect discretionary consumer and business spending, including on
advertising and marketing, resulting in changes to demand
for Corus' product and services offerings. The continued
elevated consumer price index inflation also affects the Company's
business, operations and financial performance through disruption
to supply chains, increased costs of programming, services and
labour, reduced advertising demand or spending, or lower demand for
the Company's products and services, all of which may lead to
decreased revenue or profitability. Although the WGA strike
was resolved on October 9, 2023, the
continued labour action of the SAG-AFTRA will continue to
impact the majority of scripted productions world-wide that
employ SAG-AFTRA talent. This will impact the timing of premium
content premieres and types of programming on the Company's
services in the coming months, which may negatively impact audience
levels and may result in decreased revenue or profitability.
Other financial risks which may be related to or elevated by the
foregoing include leverage risk related to the Company's financial
covenants and debt servicing payments, requirements and compliance
under its credit facility, and impacts thereof; the volatility of
the market price for the Company's Class B Non-Voting Shares, which
can be impacted by factors beyond the Company's control and which
can decline even if the Company's operating results, underlying
asset values or prospects have not changed; and risks related to
the payment, amount or timing of dividends. Please see the 2022
MD&A for a full discussion of these and other risks and
uncertainties.
Outlook
Given continuing macroeconomic uncertainty and its impact on
advertising demand, combined with the extended WGA strike (resolved
on October 9, 2023) and ongoing
labour action of SAG-AFTRA, which impedes the Company's ability to
deliver new episodes of scripted programming on television,
resulting in lower audience levels and advertising demand, the
Company expects its Television advertising revenue in the first
quarter of fiscal 2024 will decline in the range of 15-20% compared
to the prior year. Amortization of program rights is expected to
decline by a similar range along with the further implementation of
additional cost management initiatives. The Company has suspended
its dividend and intends to redirect the use of free cash flow from
dividends on Class A and Class B shares to debt repayment. While
the Company continues to expect improvement in the
macro-environment and the normalization of program supply over 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 (loss) 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 optimized advertising
revenue, and new platform revenue. Non-GAAP or non-IFRS
measures that are not in accordance with, nor an alternate to,
generally accepted accounting principles ("GAAP") and may be
different from non-GAAP or non-IFRS measures used by other
companies. In addition, these non-GAAP measures are not based on
any comprehensive set of accounting rules or principles.
Non-GAAP financial measures should not be considered as a
substitute for, or superior to, measures of financial performance
prepared in accordance with IFRS. They are limited in value
because they exclude charges that have a material effect on the
Company's reported results and, therefore, should not be relied
upon as the sole financial measures to evaluate the Company's
financial results. The non-GAAP financial measures are meant to
supplement, and to be viewed in conjunction with, IFRS
financial results. A reconciliation of the Company's non-GAAP
measures is included in the Company's most recent Report to
Shareholders for the three months and year ended August 31, 2023, 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
strategic plan, advertising and expectations of advertising trends
for fiscal 2024, subscriber revenue and anticipated subscription
trends, distribution, production and other revenue, the Company's
dividend policy and the payment of future dividends; the Company's
leverage target; the Company's ability to manage retention and
reputation risks related to its on-air talent; expectations
regarding financial performance, including capital allocation
strategy and capital structure management, operating costs and
tariffs, taxes and fees, and can generally be identified by the use
of words such as "believe", "anticipate", "expect", "intend",
"plan", "will", "may" or the negatives of these terms and other
similar expressions. In addition, any statements that refer to
expectations, projections or other characterizations of future
events or circumstances may be considered forward-looking
information.
Although Corus believes that the expectations reflected in such
forward-looking information are reasonable, such information
involves assumptions, risks and uncertainties and undue reliance
should not be placed on such statements. Certain material factors
or assumptions are applied with respect to the forward-looking
information, including without limitation, factors and assumptions
regarding the general market conditions and general outlook for the
industry including: the impact of recessionary conditions and
continuing supply chain constraints; the potential impact of new
competition and industry mergers and acquisitions; changes to
applicable tax, licensing and regulatory regimes; inflation and
interest rates, stability of the advertising, subscription,
production and distribution markets; changes to key suppliers or
clients; operating and capital costs and tariffs, taxes and fees,
the Company's ability to source, produce or sell desirable content
and the Company's capital and operating results being consistent
with its expectations. Actual results may differ materially from
those expressed or implied in such information.
Important factors that could cause actual results to differ
materially from these expectations include, among other things: the
Company's ability to attract, retain and manage fluctuations in
advertising revenue; the Company's ability to maintain
relationships with key suppliers and clients and on anticipated
financial terms and conditions; audience acceptance of the
Company's television programs and cable networks; the Company's
ability to manage retention and reputation risks related to its
on-air talent; the Company's ability to recoup production costs;
the availability of tax credits; the availability of expected news,
production and related credits, programs and funding; the existence
of co-production treaties; the Company's ability to compete in any
of the industries in which it does business including with
competitors which may not be regulated in the same way or to the
same degree; the business and strategic opportunities (or lack
thereof) that may be presented to and pursued by the Company;
conditions in the entertainment, information and communications
industries and technological developments therein; changes in laws
or regulations or the interpretation or application of those laws
and regulations including statements, decisions or positions by
applicable regulators including, without limitation, the Canadian
Radio-television and Telecommunications Commission ("CRTC"),
Canadian Heritage and Innovation, Science and Economic Development
Canada ("ISED"); changes to licensing status or conditions;
unanticipated or un mitigatable programming costs; the Company's
ability to integrate and realize anticipated benefits from its
acquisitions and to effectively manage its growth; the Company's
ability to successfully defend itself against litigation matters
and complaints; failure to meet covenants under the Company's
senior credit facility, senior unsecured notes or other instruments
or facilities; epidemics, pandemics or other public health and
safety crises in Canada and
globally; physical and operational changes to the Company's key
facilities and infrastructure; cybersecurity threats or incidents
to the Company or its key suppliers and vendors; and changes in
accounting standards.
Additional information about these factors and about the
material assumptions underlying any forward-looking information may
be found under the heading "Risks and Uncertainties" in the
Company's Management's Discussion and Analysis for the year ended
August 31, 2022 and under the heading
"Risk Factors" in the Company's Annual Information Form for the
year ended August 31, 2022. Corus
cautions that the foregoing list of important assumptions and
factors that may affect future results is not exhaustive. When
relying on the Company's forward-looking information to make
decisions with respect to Corus, investors and others should
carefully consider the foregoing factors and other uncertainties
and potential events. Unless otherwise specified, all
forward-looking information in this document speaks as of the date
of this document and may be updated or amended from time to time.
Except as otherwise required by applicable securities
laws, Corus disclaims any intention or obligation to publicly
update or revise any forward-looking information whether as a
result of new information, events or circumstances that arise after
the date thereof or otherwise.
About Corus Entertainment Inc.
Corus Entertainment Inc. (TSX: CJR.B) is a leading media and
content company that develops and delivers high quality brands and
content across platforms for audiences around the world. Engaging
audiences since 1999, the company's portfolio of multimedia
offerings encompass 33 specialty television services, 39 radio
stations, 15 conventional television stations, digital and
streaming platforms, and technology and media services. Corus is an
internationally-renowned content creator and distributor through
Nelvana, a world class animation studio expert in all formats and
Corus Studios, a globally recognized producer of hit scripted and
unscripted content. The company also owns full-service social
digital agency so.da, lifestyle entertainment company Kin Canada,
and children's book publishing house, Kids Can Press. Corus' roster
of premium brands includes Global Television, W Network, HGTV
Canada, Food Network Canada, Magnolia Network Canada, The
HISTORY® Channel, Showcase, Adult Swim, National
Geographic, Disney Channel Canada, YTV, Global News, Globalnews.ca,
Q107, Country 105, and CFOX, along with streaming platforms
STACKTV, TELETOON+, the Global TV App and Curiouscast. Corus is the
domestic advertising representative and an original content partner
for Pluto TV, a Paramount Company, which is the leading free
ad-supported streaming television (FAST) service. For more
information visit www.corusent.com.
|
CORUS ENTERTAINMENT INC.
|
|
|
|
INTERIM CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
|
|
(unaudited - in
thousands of Canadian dollars)
|
As at August 31,
|
As at August
31,
|
|
2023
|
2022
|
|
ASSETS
|
|
|
|
Current
|
|
|
|
Cash and cash
equivalents
|
56,163
|
54,912
|
|
Accounts
receivable
|
295,175
|
311,015
|
|
Income taxes recoverable
|
21,597
|
17,180
|
|
Prepaid expenses and
other assets
|
21,285
|
21,423
|
|
Total
current assets
|
394,220
|
404,530
|
|
Tax credits receivable
|
44,270
|
32,744
|
|
Investments and other assets
|
74,415
|
63,931
|
|
Property,
plant and equipment
|
268,214
|
294,026
|
|
Program
rights
|
668,976
|
660,722
|
|
Film
investments
|
53,085
|
59,122
|
|
Intangibles
|
1,198,229
|
1,937,104
|
|
Deferred income tax assets
|
44,653
|
50,301
|
|
2,746,062
|
3,502,480
|
|
LIABILITIES AND
EQUITY
|
|
|
|
Current
|
|
|
|
Accounts payable and accrued liabilities
|
565,052
|
526,899
|
|
Current portion of long-term debt
|
13,434
|
15,574
|
|
Provisions
|
9,811
|
8,540
|
|
Total current
liabilities
|
588,297
|
551,013
|
|
Long-term
debt
|
1,078,950
|
1,246,076
|
|
Other long-term liabilities
|
316,912
|
376,570
|
|
Provisions
|
9,041
|
9,830
|
|
Deferred income tax liabilities
|
293,862
|
415,010
|
|
Total liabilities
|
2,287,062
|
2,598,499
|
|
EQUITY
|
|
|
|
Share capital
|
281,052
|
781,918
|
|
Contributed
surplus
|
2,012,936
|
1,511,481
|
|
Accumulated
deficit
|
(2,014,077)
|
(1,574,358)
|
|
Accumulated
other comprehensive income
|
37,841
|
33,000
|
|
Total
equity attributable to shareholders
|
317,752
|
752,041
|
|
Equity attributable to non-controlling interests
|
141,248
|
151,940
|
|
Total equity
|
459,000
|
903,981
|
|
2,746,062
|
3,502,480
|
|
CORUS
ENTERTAINMENT INC.
|
|
|
|
|
|
INTERIM CONDENSED CONSOLIDATED STATEMENTS OF INCOME (LOSS) AND COMPREHENSIVE INCOME (LOSS)
|
|
Three months ended
August 31,
|
Year ended
August 31,
|
|
(unaudited - in thousands of Canadian dollars except per share
amounts)
|
2023
|
2022
|
2023
|
2022
|
|
Revenue
|
338,843
|
339,594
|
1,511,240
|
1,598,586
|
|
Direct cost of sales, general
and administrative expenses
|
292,570
|
283,405
|
1,177,235
|
1,154,943
|
|
Depreciation and amortization
|
37,051
|
39,857
|
157,645
|
156,937
|
|
Interest
expense
|
33,009
|
27,313
|
135,410
|
107,108
|
|
Goodwill, broadcast licence and other asset
impairment
|
100,000
|
350,000
|
690,000
|
350,000
|
|
Debt
refinancing
|
—
|
—
|
—
|
(3,428)
|
|
Restructuring and other costs
|
5,023
|
1,839
|
20,569
|
8,062
|
|
Gain on
disposition
|
(142,288)
|
—
|
(142,288)
|
—
|
|
Other expense (income), net
|
(10,094)
|
9,255
|
(3,670)
|
16,847
|
|
Income (loss) before
income taxes
|
23,572
|
(372,075)
|
(523,661)
|
(191,883)
|
|
Income tax expense (recovery)
|
(25,046)
|
(5,968)
|
(100,806)
|
40,355
|
|
Net income
(loss) for the period
|
48,618
|
(366,107)
|
(422,855)
|
(232,238)
|
|
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
|
3,190
|
(116)
|
4,945
|
4,891
|
|
Unrealized foreign
currency translation adjustment
|
(99)
|
1,256
|
1,067
|
1,296
|
|
3,091
|
1,140
|
6,012
|
6,187
|
|
Items that will
not be reclassified to income (loss):
|
|
|
|
|
|
Unrealized change in fair value
of financial assets
|
95
|
(17)
|
(1,171)
|
5,002
|
|
Actuarial gain
(loss) on post-retirement benefit plans
|
9,632
|
(2,461)
|
9,601
|
4,466
|
|
9,727
|
(2,478)
|
8,430
|
9,468
|
|
Other comprehensive income (loss), net of income
taxes
|
12,818
|
(1,338)
|
14,442
|
15,655
|
|
Comprehensive income (loss) for the
period
|
61,436
|
(367,445)
|
(408,413)
|
(216,583)
|
|
|
|
|
|
|
Net income (loss)
attributable to:
|
|
|
|
|
|
Shareholders
|
50,412
|
(367,065)
|
(428,724)
|
(245,058)
|
|
Non-controlling
interests
|
(1,794)
|
958
|
5,869
|
12,820
|
|
48,618
|
(366,107)
|
(422,855)
|
(232,238)
|
|
|
|
|
|
|
Comprehensive income (loss)
attributable to:
|
|
|
|
|
|
Shareholders
|
63,230
|
(368,403)
|
(414,282)
|
(229,403)
|
|
Non-controlling
interests
|
(1,794)
|
958
|
5,869
|
12,820
|
|
61,436
|
(367,445)
|
(408,413)
|
(216,583)
|
|
|
|
|
|
|
Earnings (loss) per share attributable to shareholders:
|
|
|
|
|
|
Basic
|
$0.25
|
($1.82)
|
($2.15)
|
($1.19)
|
|
Diluted
|
$0.25
|
($1.82)
|
($2.15)
|
($1.19)
|
|
CORUS ENTERTAINMENT INC.
|
|
|
|
|
|
|
|
|
INTERIM CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY
|
|
(unaudited - in
thousands of Canadian dollars)
|
Share
capital
|
Contributed
surplus
|
Accumulated
deficit
|
Accumulated
other
comprehensive
income
|
Total
equity
attributable to
shareholders
|
Non-
controlling
interests
|
Total
equity
|
|
As at August 31,
2022
|
781,918
|
1,511,481
|
(1,574,358)
|
33,000
|
752,041
|
151,940
|
903,981
|
|
Comprehensive
income (loss)
|
—
|
—
|
(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
|
|
(unaudited - in
thousands of Canadian dollars)
|
Share
capital
|
Contributed
surplus
|
Accumulated
deficit
|
Accumulated
other
comprehensive
income
|
Total
equity
attributable to
shareholders
|
Non-
controlling
interests
|
Total
equity
|
|
As at August 31,
2021
|
816,189
|
1,512,431
|
(1,282,897)
|
21,811
|
1,067,534
|
152,829
|
1,220,363
|
|
Comprehensive
income (loss)
|
—
|
—
|
(245,058)
|
15,655
|
(229,403)
|
12,820
|
(216,583)
|
|
Dividends
declared
|
—
|
—
|
(49,561)
|
—
|
(49,561)
|
(19,772)
|
(69,333)
|
|
Business
acquisition
|
—
|
—
|
—
|
—
|
—
|
864
|
864
|
|
Change in fair value of put option
liability
|
—
|
—
|
(1,308)
|
—
|
(1,308)
|
(520)
|
(1,828)
|
|
Shares repurchased under normal
course issuer bid
|
(32,047)
|
(2,719)
|
—
|
—
|
(34,766)
|
—
|
(34,766)
|
|
Share
repurchase commitment
under NCIB
|
(2,224)
|
504
|
—
|
—
|
(1,720)
|
—
|
(1,720)
|
|
Actuarial gain on
post-retirement benefit
plans
|
—
|
—
|
4,466
|
(4,466)
|
—
|
—
|
—
|
|
Share-based compensation expense
|
—
|
1,265
|
—
|
—
|
1,265
|
—
|
1,265
|
|
Equity funding by a non-controlling
interest
|
—
|
—
|
—
|
—
|
—
|
5,719
|
5,719
|
|
As at August 31,
2022
|
781,918
|
1,511,481
|
(1,574,358)
|
33,000
|
752,041
|
151,940
|
903,981
|
|
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)
|
2023
|
2022
|
2023
|
2022
|
|
OPERATING ACTIVITIES
|
|
|
|
|
|
Net income (loss)
for the period
|
48,618
|
(366,107)
|
(422,855)
|
(232,238)
|
|
Adjustments to reconcile net income (loss)
to cash flow from operations:
|
|
|
|
|
|
Amortization of program rights
|
140,491
|
133,597
|
595,179
|
559,810
|
|
Amortization of film investments
|
14,056
|
4,794
|
36,760
|
23,929
|
|
Depreciation and amortization
|
37,051
|
39,857
|
157,645
|
156,937
|
|
Deferred income tax recovery
|
(24,327)
|
(3,095)
|
(124,516)
|
(10,437)
|
|
Goodwill, broadcast licence and other asset
impairment
|
100,000
|
350,000
|
690,000
|
350,000
|
|
Gain on business
divestiture
|
(142,288)
|
—
|
(142,288)
|
—
|
|
Share-based compensation expense
|
278
|
330
|
840
|
1,265
|
|
Imputed interest
|
12,516
|
11,234
|
57,547
|
46,201
|
|
Debt
refinancing
|
—
|
—
|
—
|
(3,428)
|
|
Payment of program rights
|
(180,303)
|
(160,640)
|
(674,535)
|
(564,214)
|
|
Net spend on film
investments
|
(5,392)
|
(1,771)
|
(60,341)
|
(41,168)
|
|
Other
|
189
|
1,802
|
1,345
|
7,628
|
|
Cash flow from operations
|
889
|
10,001
|
114,781
|
294,285
|
|
Net change in non-cash working capital balances related to operations
|
36,445
|
45,834
|
7,886
|
(77,450)
|
|
Cash provided by operating activities
|
37,334
|
55,835
|
122,667
|
216,835
|
|
INVESTING ACTIVITIES
|
|
|
|
|
|
Additions to property, plant and equipment
|
(4,381)
|
(8,944)
|
(13,302)
|
(17,810)
|
|
Proceeds from sale
of property
|
—
|
174
|
736
|
299
|
|
Business divestiture, net of divested cash
|
141,172
|
—
|
141,172
|
—
|
|
Business combination, net
of cash acquired
|
—
|
—
|
—
|
3,606
|
|
Venture fund
distribution
|
—
|
—
|
—
|
43,478
|
|
Net cash flows
for intangibles, investments and other assets
|
(1,299)
|
(2,672)
|
(3,332)
|
(4,401)
|
|
Cash provided by (used in) investing activities
|
135,492
|
(11,442)
|
125,274
|
25,172
|
|
FINANCING
ACTIVITIES
|
|
|
|
|
|
Decrease in bank loans
|
(159,469)
|
(7,216)
|
(171,742)
|
(354,846)
|
|
Financing
fees
|
—
|
—
|
(998)
|
(5,892)
|
|
Issuance of senior
unsecured notes
|
—
|
—
|
—
|
250,000
|
|
Share repurchase under NCIB
|
—
|
(11,610)
|
(2,045)
|
(34,691)
|
|
Equity funding by a non-controlling interest
|
—
|
—
|
3,855
|
3,742
|
|
Payment of lease liabilities
|
(4,560)
|
(4,422)
|
(17,943)
|
(17,031)
|
|
Dividends
paid
|
(5,979)
|
(12,150)
|
(35,923)
|
(49,561)
|
|
Dividends paid to non-controlling interests
|
(1,616)
|
(5,627)
|
(17,366)
|
(19,772)
|
|
Other
|
(1,212)
|
(149)
|
(4,528)
|
(2,729)
|
|
Cash used in financing activities
|
(172,836)
|
(41,174)
|
(246,690)
|
(230,780)
|
|
Net change
in cash and cash equivalents during the
period
|
(10)
|
3,219
|
1,251
|
11,227
|
|
Cash and cash
equivalents, beginning of the period
|
56,173
|
51,693
|
54,912
|
43,685
|
|
Cash and cash
equivalents, end of the period
|
56,163
|
54,912
|
56,163
|
54,912
|
|
CORUS ENTERTAINMENT INC.
|
|
|
|
|
|
BUSINESS SEGMENT INFORMATION
|
|
|
|
|
|
(unaudited - in
thousands of Canadian dollars)
|
|
|
|
|
|
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
|
|
Three months ended
August 31, 2022
|
|
|
|
|
|
Television
|
Radio
|
Corporate
|
Consolidated
|
|
Revenue
|
314,170
|
25,424
|
—
|
339,594
|
|
Direct cost of sales, general
and administrative expenses
|
255,152
|
23,695
|
4,558
|
283,405
|
|
Segment profit (loss)(1)
|
59,018
|
1,729
|
(4,558)
|
56,189
|
|
Depreciation and amortization
|
|
|
|
39,857
|
|
Interest
expense
|
|
|
|
27,313
|
|
Goodwill, broadcast licence and other asset
impairment
|
|
|
|
350,000
|
|
Restructuring and other costs
|
|
|
|
1,839
|
|
Other expense, net
|
|
|
|
9,255
|
|
Loss before
income taxes
|
|
|
|
(372,075)
|
|
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)
|
|
|
|
|
|
|
Year ended August 31,
2022
|
|
|
|
|
|
Television
|
Radio
|
Corporate
|
Consolidated
|
|
Revenue
|
1,492,708
|
105,878
|
—
|
1,598,586
|
|
Direct cost of sales,
general and administrative expenses
|
1,034,563
|
92,611
|
27,769
|
1,154,943
|
|
Segment profit
(loss)(1)
|
458,145
|
13,267
|
(27,769)
|
443,643
|
|
Depreciation and
amortization
|
|
|
|
156,937
|
|
Interest
expense
|
|
|
|
107,108
|
|
Goodwill, broadcast
licence and other asset impairment
|
|
|
|
350,000
|
|
Debt
refinancing
|
|
|
|
(3,428)
|
|
Restructuring and
other costs
|
|
|
|
8,062
|
|
Other expense,
net
|
|
|
|
16,847
|
|
Loss before income taxes
|
|
|
|
(191,883)
|
|
(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 2023 Report to Shareholders.
|
|
REVENUE BY
TYPE
|
|
|
|
|
|
Three months ended
August 31,
|
Year ended
August 31,
|
|
(unaudited - in thousands of Canadian
dollars)
|
2023
|
2022
|
2023
|
2022
|
|
Advertising
|
160,732
|
175,964
|
865,633
|
960,192
|
|
Subscriber
|
126,466
|
127,715
|
502,257
|
518,483
|
|
Distribution, production and other
|
51,645
|
35,915
|
143,350
|
119,911
|
|
338,843
|
339,594
|
1,511,240
|
1,598,586
|
|
NON-GAAP FINANCIAL
MEASURES
|
|
|
|
|
|
|
|
Three months
ended
|
|
Year ended
|
|
|
(unaudited - in
thousands of Canadian dollars, except percentages)
|
August
31,
|
%
|
August
31,
|
%
|
|
Optimized advertising revenue
|
2023
|
2022
|
Change
|
2023
|
2022
|
Change
|
|
Optimized advertising revenue (numerator)
|
74,995
|
76,660
|
(2 %)
|
411,461
|
371,540
|
11 %
|
|
Television
advertising revenue (denominator)
|
137,391
|
151,873
|
(10 %)
|
768,036
|
859,598
|
(11 %)
|
|
Optimized advertising revenue percentage
|
55 %
|
50 %
|
|
54 %
|
43 %
|
|
|
Three months ended
|
|
Year ended
|
|
|
(unaudited - in thousands of Canadian dollars, except percentages)
|
August
31,
|
%
|
August
31,
|
%
|
|
New platform revenue
|
2023
|
2022
|
Change
|
2023
|
2022
|
Change
|
|
New platform revenue (numerator)
|
33,024
|
33,061
|
—
|
145,521
|
142,284
|
2 %
|
|
|
|
|
|
|
|
|
Television
advertising revenue
|
137,391
|
151,873
|
(10 %)
|
768,036
|
859,598
|
(11 %)
|
|
Television
subscriber revenue
|
126,466
|
127,715
|
(1 %)
|
502,257
|
518,483
|
(3 %)
|
|
Total
Television advertising and subscriber revenue (denominator)
|
263,857
|
279,588
|
(6 %)
|
1,270,293
|
1,378,081
|
(8 %)
|
|
New platform revenue percentage
|
13 %
|
12 %
|
|
11 %
|
10 %
|
|
|
Three months
ended
|
Year ended
|
|
(unaudited - in
thousands of Canadian dollars, except per share
amounts)
|
August
31,
|
August
31,
|
|
Adjusted Net Income (Loss)
Attributable to Shareholders
|
2023
|
2022
|
2023
|
2022
|
|
Net
income (loss) attributable to shareholders
|
50,412
|
(367,065)
|
(428,724)
|
(245,058)
|
|
Adjustments, net of income tax:
|
|
|
|
|
|
Goodwill, broadcast licence and other asset
impairment
|
73,500
|
348,597
|
578,453
|
348,597
|
|
Debt
refinancing
|
—
|
—
|
—
|
(2,526)
|
|
Gain on
disposition
|
(136,479)
|
—
|
(136,479)
|
—
|
|
Restructuring and
other costs
|
3,492
|
1,352
|
15,303
|
5,925
|
|
Adjusted net income (loss)
attributable to shareholders
|
(9,075)
|
(17,116)
|
28,553
|
106,938
|
|
Basic earnings
(loss) per share
|
$0.25
|
($1.82)
|
($2.15)
|
($1.19)
|
|
Adjustments, net of income tax:
|
|
|
|
|
|
Goodwill, broadcast licence and other asset
impairment
|
$0.37
|
$1.73
|
$2.90
|
$1.69
|
|
Debt
refinancing
|
—
|
—
|
—
|
($0.01)
|
|
Gain on
disposition
|
($0.68)
|
—
|
($0.68)
|
—
|
|
Restructuring and
other costs
|
$0.02
|
$0.01
|
$0.07
|
$0.03
|
|
Adjusted basic
earnings (loss) per share
|
($0.04)
|
($0.08)
|
$0.14
|
$0.52
|
|
Three months
ended
|
Year ended
|
|
(unaudited - in
thousands of Canadian dollars)
|
August
31,
|
August
31,
|
|
Free Cash
Flow
|
2023
|
2022
|
2023
|
2022
|
|
Cash provided by (used in):
|
|
|
|
|
|
Operating activities
|
37,334
|
55,835
|
122,667
|
216,835
|
|
Investing
activities
|
135,492
|
(11,442)
|
125,274
|
25,172
|
|
Add (deduct): cash used in (provided by) business acquisitions,
divestitures and strategic investments
(1)
|
172,826
|
44,393
|
247,941
|
242,007
|
|
(141,172)
|
320
|
(141,101)
|
(2,422)
|
|
Free cash
flow
|
31,654
|
44,713
|
106,840
|
239,585
|
|
(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
|
2023
|
2022
|
|
Total debt, net of unamortized financing fees and prepayment options
|
1,092,384
|
1,261,650
|
|
Lease liabilities
|
126,084
|
134,369
|
|
Cash and cash
equivalents
|
(56,163)
|
(54,912)
|
|
Net debt
(numerator)
|
1,162,305
|
1,341,107
|
|
Segment profit
(denominator) (1)
|
334,005
|
443,643
|
|
Net debt
to segment profit
|
3.48
|
3.02
|
|
Proforma net debt to segment
profit (2)
|
3.62
|
3.02
|
|
(1)
|
Reflects aggregate
amounts for the most recent four quarters, as detailed in the table
in the Quarterly Consolidated Financial Information section of the
Fourth Quarter 2023 Report to Shareholders.
|
|
(2)
|
Proforma net debt to
segment profit ratio excludes contributions to segment profit from
Toon Boom Animation Inc. for the most recent four
quarters.
|
View original
content:https://www.prnewswire.com/news-releases/corus-entertainment-announces-fiscal-2023-fourth-quarter-and-year-end-results-301969777.html
SOURCE Corus Entertainment Inc (IR Group)
