CORUS ENTERTAINMENT ANNOUNCES FISCAL 2023 FOURTH QUARTER AND YEAR END RESULTS

  • 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.

SOURCE Corus Entertainment Inc (IR Group)

Originally published at https://www.prnewswire.com/news-releases/corus-entertainment-announces-fiscal-2023-fourth-quarter-and-year-end-results-301969777.html
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