Corus Entertainment Announces Fiscal 2020 Second Quarter Results

  • Consolidated revenues declined 2% for the quarter and 1% year-to-date
  • Consolidated segment profit(1)(2) increased 2% for the quarter and decreased 2% year-to-date
  • Consolidated segment profit margin(1) of 31% for the quarter and 36% year-to-date
  • Net income attributable to shareholders of $18.5 million ($0.09 per share basic) for the quarter and $96.6 million ($0.46 per share basic) year-to-date
  • Net debt to segment profit(1)(3) of 3.00 times at February 29, 2020 improved from 3.08 times at November 30, 2019
  • Free cash flow(1)(2) of $65.1 million for the quarter and $118.1 million year-to-date


TORONTO, April 1, 2020 /CNW/ - Corus Entertainment Inc. (TSX:CJR-B.TO - News) announced its second quarter financial results today.

"Our determined focus on executing on our strategic priorities resulted in solid second quarter consolidated revenues and segment profit," said Doug Murphy, President and Chief Executive Officer. "At this unprecedented time across the world, we are focused on the health and well-being of our employees, who continue to diligently serve the needs of our audiences, clients and partners.  We deeply understand that one of our foremost responsibilities as an essential national and local broadcaster is to provide reliable and timely information, news and entertainment for the public, particularly in times like these.

"The entire Corus family has been working tirelessly on business continuity measures that not only enable us to continue delivering programming across our networks, but ensure we are positioned to return to normal operations, when the situation warrants it.  Strong operating and financial discipline are engrained in our culture, enabling our team to navigate adeptly through challenges.  We are benefitting from the work we have done to create sufficient liquidity and improve our financial flexibility, and our long-term strategy remains unchanged."

Financial Highlights


Three months ended

Six months ended


February 29,

February 28,

February 29,

February 28,

(in thousands of Canadian dollars except per share amounts)

2020

2019

2020

2019

Revenues





Television

347,843

353,466

777,794

779,656

Radio

28,152

30,649

66,079

71,930


375,995

384,115

843,873

851,586

Segment profit (1) (2)





Television

115,472

113,709

294,090

298,262

Radio

4,576

4,955

16,604

17,967

Corporate

(4,139)

(5,516)

(10,670)

(11,443)


115,909

113,148

300,024

304,786

Net income attributable to shareholders

18,524

6,344

96,640

66,759

Adjusted net income attributable to shareholders (1) (3)

25,900

15,733

105,880

85,844

Basic earnings per share

$0.09

$0.03

$0.46

$0.31

Adjusted basic earnings per share (1) (3)

$0.12

$0.07

$0.50

$0.40

Diluted earnings per share

$0.09

$0.03

$0.46

$0.31

Free cash flow (1)(2)

65,073

83,909

118,121

126,315

(1)

Segment profit, segment profit margin, adjusted net income attributable to shareholders, adjusted basic earnings per share, free cash flow and net debt to segment profit do not have standardized meanings prescribed by International Financial Reporting Standards ("IFRS"). The Company believes these non-IFRS measures are frequently used as key measures to evaluate performance. For definitions, explanations and reconciliations see discussion under the Key Performance Indicators section of the Second Quarter 2020 Report to Shareholders.

(2)

Segment profit for the three and six months ended February 29, 2020 was impacted by the adoption of the new accounting standard, IFRS 16 - Leases, effective September 1, 2019. This has resulted in an increase in segment profit for the quarter and year-to-date of approximately $3.4 million and $6.7 million, respectively, and an increase in free cash flow of approximately $4.2 million and $8.0 million, respectively. Further discussion of this can be found in the Impact of New Accounting Policies section of the Second Quarter 2020 Report to Shareholders.

(3)

Refer to page 10 of this press release for details of adjustments to arrive at adjusted net income attributable to shareholders, adjusted basic earnings per share, and the calculation of net debt to segment profit.


 

Consolidated Results from Operations

Consolidated revenues for the three months ended February 29, 2020 were $376.0 million, down 2% from $384.1 million last year, and consolidated segment profit was $115.9 million, an increase of 2% from $113.1 million last year. Net income attributable to shareholders for the quarter ended February 29, 2020 was $18.5 million ($0.09 per share basic), as compared to $6.3 million ($0.03 per share basic) last year. Net income attributable to shareholders for the second quarter of fiscal 2020 includes integration, restructuring and other costs of $10.0 million ($0.03 per share, net of income taxes). Adjusting for the impact of this item results in an adjusted net income attributable to shareholders of $25.9 million ($0.12 per share basic) for the quarter. Net income attributable to shareholders for the prior year quarter includes integration, restructuring and other costs of $4.0 million ($0.01 per share, net of income taxes) and an impairment of an investment in associates of $8.7 million ($0.03 per share, net of income taxes). Adjusting for the impact of these items results in an adjusted net income attributable to shareholders of $15.7 million ($0.07 per share basic) for the prior year quarter.

Consolidated revenues for the six months ended February 29, 2020 were $843.9 million, a decline of 1% from $851.6 million last year, and consolidated segment profit was $300.0 million, a decrease of 2% from $304.8 million last year. Net income attributable to shareholders for the six months ended February 29, 2020 was $96.6 million ($0.46 per share basic), as compared to a net income attributable to shareholders of $66.8 million ($0.31 per share basic) last year. Net income attributable to shareholders for the six months ended February 29, 2020 includes integration, restructuring and other costs of $12.6 million ($0.04 per share). Adjusting for the impact of this item results in an adjusted net income attributable to shareholders of $105.9 million ($0.50 per share basic) for the current fiscal year. Net income attributable to shareholders for the six months ended February 28, 2019 includes integration, restructuring and other costs of $17.2 million ($0.06 per share, net of income taxes) and an impairment of an investment in associates of $8.7 million ($0.03 per share, net of income taxes). Adjusting for the impact of these items results in an adjusted net income attributable to shareholders of $85.8 million ($0.40 per share basic) for the prior fiscal year.

Operational Results - Highlights for Q2 2020 

Television

  • Segment revenues decreased 2% in Q2 2020 and were flat year-to-date. On a proforma basis, when adjusted for the disposal of the Telelatino Network in March 2019, segment revenues were flat for the quarter and up 1% year-to-date
  • Advertising revenues decreased 6% in Q2 2020 and 2% year-to-date. On a proforma basis, advertising revenues were down 5% in Q2 2020 and 1% year-to-date
  • Subscriber revenues were down 2% in both Q2 2020 and year-to-date. On a proforma basis, subscriber revenues were up 1% in Q2 and flat year-to-date
  • Merchandising, distribution and other revenues increased $8.3 million (50%) in Q2 2020 and $10.9 million (32%) year-to-date
  • Segment profit(1) was up 2% in Q2 2020 and down 1% year-to-date
  • Segment profit margin(1) of 33% in Q2 2020 and 38% year-to-date, compared to 32% and 38%, respectively, in the prior year


Radio

  • Segment revenues decreased $2.5 million (8%) in Q2 2020 and $5.8 million (8%) year-to-date
  • Segment profit(1) decreased $0.4 million (8%) in Q2 2020 and $1.4 million (8%) year-to-date
  • Segment profit margin(1) of 16% in Q2 2020 and 25% year-to-date was comparable with the prior year


Corporate

  • Free cash flow(1) of $65.1 million in Q2 2020 and $118.1 million year-to-date, compared to $83.9 million and $126.3 million, respectively, in the prior year
  • Net debt to segment profit(1) was 3.00 times at February 29, 2020, up from 2.82 times at August 31, 2019, due to the implementation of IFRS 16 - Leases that added $153.6 million to the net debt calculation as at February 29, 2020, offset by bank loan repayments of $38.3 million in Q2 2020 and $87.0 million for the year-to-date, as well as segment profit growth
  • As at February 29, 2020 2.48 million shares have been repurchased under the Normal Course Issuer Bid since its implementation on November 13, 2019
  • Consolidated segment profit margin(1) of 31% in Q2 2020 and 36% year-to-date, compared to 29% and 36%, respectively, in the prior year


(1)

Segment profit, segment profit margin, free cash flow and 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 section of the Second Quarter 2020 Report to Shareholders.


 

COVID – 19 Update

The Company is closely monitoring the evolution of the novel coronavirus-19 ("COVID-19") situation. The priority has been keeping the Company's employees safe and healthy.  Active steps have been taken to implement physical distancing and other measures as recommended by public health agencies, decreasing the number of people in the Company's offices and broadcast centres. Where possible, the Company's employees are working from home.  Appropriate business continuity measures are being taken to ensure uninterrupted service of the Company's television, digital and radio operations, which are considered essential services across Canada. The Company has gone through extraordinary lengths to continue to serve its customers and audiences, ensuring that Canadians can connect with high-quality news and entertainment at a time when it is needed the most.

It is too soon to gauge the impacts of the current COVID-19 outbreak, given the many unknowns related to it. These include the duration and severity of the outbreak.  COVID-19 is altering business and consumer activity in affected areas and beyond which may materially impact the Company.  The Company's financial priorities remain unchanged.  Importantly the Company remains committed to increasing its financial flexibility over the longer term.  In this environment, however, the Company believes it is prudent to conserve cash out of an abundance of caution.  As such, the Company expects to refrain from buying back shares under its share buyback program in the immediate term.  Consistent with this approach, the Board of Directors has elected to defer its decision on the declaration of the June dividend at this time.  The outside date for a decision on the declaration of the June dividend is June 9, 2020, by which point the Company expects to have more clarity on the nature and length of the impact of the COVID-19 pandemic.  For greater clarity, the Company is not reducing, eliminating or temporarily suspending the dividend at this time.

Corus Entertainment Inc. reports its financial results in Canadian dollars.

The unaudited interim condensed consolidated financial statements and accompanying notes for the three and six months ended February 29, 2020 and Management's Discussion and Analysis are available on the Company's website at www.corusent.com in the Investor Relations section.

A conference call with Corus senior management is scheduled for April 1, 2020 at 8:00 a.m. ET. While this call is directed at analysts and investors, members of the media are welcome to listen in. The dial-in number for the conference call for local and international callers is 1.647.427.7450 and for North America is 1.888.231.8191. More information can be found on the Corus Entertainment website at www.corusent.com in the Investor Relations section.

Use of Non-IFRS Financial Measures

This press release includes the non-IFRS financial measures of adjusted net income attributable to shareholders, adjusted basic earnings per share, free cash flow and net debt to segment profit that are not in accordance with, nor an alternate to, generally accepted accounting principles ("IFRS") and may be different from non-IFRS measures used by other companies. In addition, these non-IFRS measures are not based on any comprehensive set of accounting rules or principles.

Non-IFRS financial measures should not be considered as a substitute for, or superior to, measures of financial performance prepared in accordance with IFRS. They are limited in value because they exclude charges that have a material effect on the Company's reported results and, therefore, should not be relied upon as the sole financial measures to evaluate the Company's financial results. The non-IFRS financial measures are meant to supplement, and to be viewed in conjunction with, IFRS financial results. A reconciliation of the Company's non-IFRS measures is included in the Company's most recent Report to Shareholders which is available on Corus' website at www.corusent.com as well as on SEDAR at www.sedar.com.

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 report contain information that is not historical, these statements are forward-looking statements and may be forward-looking information within the meaning of applicable securities laws (collectively, "forward-looking information"). These forwardlooking statements relate to, among other things, our objectives, goals, strategies, intentions, plans, estimates and outlook, including advertising, distribution, merchandise and subscription revenues, operating costs and tariffs, taxes and fees, and can generally be identified by the use of words such as "believe", "anticipate", "expect", "intend", "plan", "will", "may" and other similar expressions. In addition, any statements that refer to expectations, projections or other characterizations of future events or circumstances may be considered forward-looking information. Although Corus believes that the expectations reflected in such forward-looking information are reasonable, such information involves assumptions and 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, interest rates, stability of the advertising, distribution, merchandise and subscription markets, operating and capital costs and tariffs, taxes and fees, our ability to source desirable content and our capital and operating results being consistent with our 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: our ability to attract and retain advertising revenues; audience acceptance of our television programs and cable networks; our ability to recoup production costs, the availability of tax credits and the existence of co-production treaties; our ability to compete in any of the industries in which we do business; the opportunities (or lack thereof) that may be presented to and pursued by us; conditions in the entertainment, information and communications industries and technological developments therein; changes in laws or regulations or the interpretation or application of those laws and regulations; our ability to integrate and realize anticipated benefits from our acquisitions and to effectively manage our growth; our ability to successfully defend ourselves against litigation matters arising out of the ordinary course of business; failure to meet covenants under our senior credit facility; epidemics, pandemics or other public health crises, including the current outbreak of novel coronavirus ("COVID-19") 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 Management's Discussion and Analysis for the year ended August 31, 2019 and the second quarter ended February 29, 2020 and under the heading "Risk Factors" in our Annual Information Form. Corus cautions that the foregoing list of important assumptions and factors that may affect future results is not exhaustive. When relying on our 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. Unless 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.TO - News) 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 34 specialty television services, 39 radio stations, 15 conventional television stations, a suite of digital assets, animation software, technology and media services. Corus is an established creator of globally distributed content through Nelvana animation studio, Corus Studios, and children's book publishing house Kids Can Press. The company also owns innovative full-service social digital agency so.da, and lifestyle entertainment company Kin Canada. Corus' roster of premium brands includes Global Television, W Network, HGTV Canada, Food Network Canada, HISTORY®, Showcase, Adult Swim, National Geographic, Disney Channel Canada, YTV, Global News, Globalnews.ca, Q107, Country 105, and CFOX. Visit Corus at www.corusent.com.

CORUS ENTERTAINMENT INC.
CONSOLIDATED STATEMENTS OF FINANCIAL POSITION

 

(unaudited - in thousands of Canadian dollars)

As at February 29,

As at August 31,

2020

2019

ASSETS



Current



Cash and cash equivalents

58,458

82,568

Accounts receivable

390,159

372,828

Income taxes recoverable

12,276

13,772

Prepaid expenses and other assets

28,511

19,557

Total current assets

489,404

488,725

Tax credits receivable

36,139

25,035

Investments and other assets

57,727

51,707

Property, plant and equipment

348,062

225,927

Program rights

709,892

507,913

Film investments

53,231

53,336

Intangibles

1,909,896

1,876,235

Goodwill

1,383,958

1,383,958

Deferred income tax assets

58,290

59,463


5,046,599

4,672,299

 

LIABILITIES AND EQUITY



Current



Accounts payable and accrued liabilities

525,751

429,483

Current portion of bank debt

76,339

76,339

Provisions

8,970

10,331

Total current liabilities

611,060

516,153

Bank debt

1,570,477

1,655,406

Other long-term liabilities

598,434

278,117

Provisions

9,686

7,686

Deferred income tax liabilities

462,311

472,700

Total liabilities

3,251,968

2,930,062

 

EQUITY



Share capital

815,205

830,477

Contributed surplus

1,509,352

1,512,818

Accumulated deficit

(695,053)

(758,757)

Accumulated other comprehensive income

14,722

12,187

Total equity attributable to shareholders

1,644,226

1,596,725

Equity attributable to non-controlling interest

150,405

145,512

Total equity

1,794,631

1,742,237


5,046,599

4,672,299


 

CORUS ENTERTAINMENT INC.
CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME


Three months ended

Six months ended


February 29,

February 28,

February 29, 

February 28,

(unaudited - in thousands of Canadian dollars except per share amounts)

2020

2019

2020

2019

Revenues

375,995

384,115

843,873

851,586

Direct cost of sales, general and administrative expenses

260,086

270,967

543,849

546,800

Depreciation and amortization

40,299

54,801

80,266

109,129

Interest expense

29,783

31,846

58,606

63,185

Integration, restructuring and other costs

10,024

4,047

12,558

17,228

Other expense, net

5,448

6,521

3,385

7,758

Income before income taxes

30,355

15,933

145,209

107,486

Income tax expense

7,932

4,213

38,426

28,990

Net income for the period

22,423

11,720

106,783

78,496






Other comprehensive loss, net of income taxes:





Items that may be reclassified subsequently to income:





Unrealized change in fair value of cash flow hedges

(9,157)

(14,368)

(4,208)

(14,746)

Unrealized foreign currency translation adjustment

231

(170)

178

120


(8,926)

(14,538)

(4,030)

(14,626)

Items that will not be reclassified to income:





Unrealized change in fair value of financial assets

1,057

96

6,565

96

Actuarial loss on post-retirement benefit plans

(12,471)

(3,502)

(7,715)

(1,176)


(11,414)

(3,406)

(1,150)

(1,080)

Other comprehensive loss, net of income taxes

(20,340)

(17,944)

(5,180)

(15,706)

Comprehensive income (loss) for the period

2,083

(6,224)

101,603

62,790

Net income attributable to:





Shareholders

18,524

6,344

96,640

66,759

Non-controlling interest

3,899

5,376

10,143

11,737


22,423

11,720

106,783

78,496

Comprehensive income (loss) attributable to:





Shareholders

(1,816)

(11,600)

91,460

51,053

Non-controlling interest

3,899

5,376

10,143

11,737


2,083

(6,224)

101,603

62,790

Earnings per share attributable to shareholders:





Basic

$0.09

$0.03

$0.46

$0.31

Diluted

$0.09

$0.03

$0.46

$0.31

 

CORUS ENTERTAINMENT INC.
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
interest

Total equity

As at August 31, 2019

830,477

1,512,818

(758,757)

12,187

1,596,725

145,512

1,742,237

Comprehensive income (loss)

96,640

(5,180)

91,460

10,143

101,603

Dividends declared

(25,221)

(25,221)

(10,661)

(35,882)

Share repurchase under normal

 

(9,761)

 

(3,629)

 

 

 

(13,390)

 

 

(13,390)

course issuer bid ("NCIB")

Share repurchase commitment

(5,511)

 

(398)

 

 

 

(5,909)

 

 

(5,909)

under NCIB

Actuarial loss on post-retirement

 

 

 

(7,715)

 

7,715

 

 

 

benefit plans

Share-based compensation expense

 

 

561

 

 

 

561

 

 

561


Equity funding

5,411

5,411

As at February 29, 2020

815,205

1,509,352

(695,053)

14,722

1,644,226

150,405

1,794,631









(unaudited - in thousands of Canadian dollars)

Share
capital

Contributed
surplus

Accumulated
deficit

Accumulated
other comprehensive
income

Total equity 
attributable
to
shareholders

Non-
controlling
interest

Total equity

As at August 31, 2018, as previously presented

 

2,330,477

 

12,119

 

(856,668)

 

36,460

 

1,522,388

 

154,415

 

1,676,803

IFRS 9 transitional adjustment

9,396

9,396

9,396

IFRS 15 transitional adjustment

1,985

1,985

1,985

Adjusted balance as at

2,330,477

12,119

(854,683)

45,856

1,533,769

 

154,415

 

1,688,184

September 1, 2018

Comprehensive income (loss)

66,759

(15,706)

51,053

11,737

62,790

Dividends declared

(25,431)

(25,431)

(15,163)

(40,594)

Reduction of stated capital

(1,500,000)

1,500,000

Actuarial loss on post-retirement

 

 

 

(1,176)

 

1,176

 

 

 

benefit plans

Share-based compensation expense

 

 

247

 

 

 

247

 

 

247


As at February 28, 2019

830,477

1,512,366

(814,531)

31,326

1,559,638

150,989

1,710,627


 

CORUS ENTERTAINMENT INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS  


Three months ended 

Six months ended


February 29,

February 28,

February 29,

February 28,

(unaudited - in thousands of Canadian dollars)

2020

2019

2020

2019

OPERATING ACTIVITIES





Net income for the period

22,423

11,720

106,783

78,496

Adjustments to reconcile net income to cash flow from operations:





Amortization of program rights

122,962

127,558

255,563

257,128

Amortization of film investments

5,255

2,856

11,081

6,385

Depreciation and amortization

40,299

54,801

80,266

109,129

Deferred income tax recovery

(99)

(10,600)

(6,078)

(19,947)

Impairment of investment in associate

8,720

8,720

Share-based compensation expense

307

202

561

247

Imputed interest

13,682

11,071

26,238

21,665

Payment of program rights

(147,809)

(126,590)

(267,001)

(236,804)

Net spend on film investments

(17,958)

(17,722)

(33,480)

(28,385)

CRTC benefit payments

(11)

(50)

(733)

(911)

Other

(2,533)

(338)

(3,208)

(3,808)

Cash flow from operations

36,518

61,628

169,992

191,915

Net change in non-cash working capital balances related to operations

29,225

24,692

(46,777)

(60,224)

Cash provided by operating activities

65,743

86,320

123,215

131,691

INVESTING ACTIVITIES





Additions to property, plant and equipment

(2,016)

(3,591)

(6,290)

(6,160)

Proceeds from sale of property

30

6

39

9

Net cash flows for intangibles, investments and other assets

1,316

(2,124)

30

(2,523)

Cash used in investing activities

(670)

(5,709)

(6,221)

(8,674)

FINANCING ACTIVITIES





Decrease in bank loans

(38,295)

(60,539)

(86,969)

(117,548)

Shares repurchased under NCIB

(9,667)

(12,963)

Payments of lease liabilities

(4,163)

(8,047)

Equity funding by a non-controlling interest

3,277

5,411

Dividends paid

(12,648)

(12,717)

(25,366)

(12,717)

Dividends paid to non-controlling interest

(7,246)

(9,941)

(10,661)

(17,163)

Other

(2,122)

(431)

(2,509)

(2,740)

Cash used in financing activities

(70,864)

(83,628)

(141,104)

(150,168)

Net change in cash and cash equivalents during the period

(5,791)

(3,017)

(24,110)

(27,151)

Cash and cash equivalents, beginning of the period

64,249

70,667

82,568

94,801

Cash and cash equivalents, end of the period

58,458

67,650

58,458

67,650

 

CORUS ENTERTAINMENT INC.
BUSINESS SEGMENT INFORMATION

(unaudited - in thousands of Canadian dollars)





Three months ended February 29, 2020






Television

Radio

Corporate

Consolidated

Revenues

347,843

28,152

375,995

Direct cost of sales, general and administrative expenses

232,371

23,576

4,139

260,086

Segment profit (loss)(1)(2)

115,472

4,576

(4,139)

115,909

Depreciation and amortization




40,299

Interest expense




29,783

Integration, restructuring and other costs




10,024

Other expense, net




5,448

Income before income taxes




30,355

Three months ended February 28, 2019






Television

Radio

Corporate

Consolidated

Revenues

353,466

30,649

384,115

Direct cost of sales, general and administrative expenses

239,757

25,694

5,516

270,967

Segment profit (loss)(1)

113,709

4,955

(5,516)

113,148

Depreciation and amortization




54,801

Interest expense




31,846

Integration, restructuring and other costs




4,047

Other expense, net




6,521

Income before income taxes




15,933

Six months ended February 29, 2020






Television

Radio

Corporate

Consolidated

Revenues

777,794

66,079

843,873

Direct cost of sales, general and administrative expenses

483,704

49,475

10,670

543,849

Segment profit (loss)(1)(2)

294,090

16,604

(10,670)

300,024

Depreciation and amortization




80,266

Interest expense




58,606

Integration, restructuring and other costs




12,558

Other expense, net




3,385

Income before income taxes




145,209

(1)

Segment profit (loss) does not have a standardized meaning prescribed by IFRS. For definitions and explanations, see discussion under the Key Performance Indicators section of the Second Quarter 2020 Report to Shareholders.

(2)

Segment profit for the three and six months ended February 29, 2020 was impacted by the adoption of the new accounting standard, IFRS 16 - Leases, effective September 1, 2019.  This has resulted in an increase in segment profit for the quarter and year-to-date of approximately $3.4 million and $6.7 million, respectively. Further discussion of this can be found in the Impact of New Accounting Policies section of the Second Quarter 2020 Report to Shareholders.

 

(unaudited - in thousands of Canadian dollars)





Six months ended February 29, 2020






Television

Radio

Corporate

Consolidated

Revenues

779,656

71,930

851,586

Direct cost of sales, general and administrative expenses

481,394

53,963

11,443

546,800

Segment profit (loss)(1)

298,262

17,967

(11,443)

304,786

Depreciation and amortization




109,129

Interest expense




63,185

Integration, restructuring and other costs




17,228

Other expense, net




7,758

Income before income taxes




107,486

(1)

Segment profit (loss) does not have a standardized meaning prescribed by IFRS. For definitions and explanations, see discussion under the Key Performance Indicators section of the Second Quarter 2020 Report to Shareholders.

 

REVENUES BY TYPE


Three months ended

Six months ended


February 29,

February 28,

February 29,

February 28,

(unaudited - in thousands of Canadian dollars)

2020

2019

2020

2019

Advertising

225,860

240,284

548,269

561,619

Subscriber fees

123,750

125,639

247,419

252,323

Merchandising, distribution and other

26,385

18,192

48,185

37,644


375,995

384,115

843,873

851,586

 


NON-IFRS FINANCIAL MEASURES


Three months ended

Six months ended

(unaudited - in thousands of Canadian dollars, except per share amounts) 

February 29,

February 28,

February 29,

February 28,

Adjusted Net Income Attributable to Shareholders

2020

2019

2020

2019

Net income attributable to shareholders

18,524

6,344

96,640

66,759

Adjustments, net of income tax:





Impairment of investment in associates

6,409

6,409

Integration, restructuring and other costs

7,376

2,980

9,240

12,676

Adjusted net income attributable to shareholders

25,900

15,733

105,880

85,844

Basic earnings per share

$0.09

$0.03

$0.46

$0.31

Adjustments, net of income tax:





Impairment of investment in associates

$0.03

$0.03

Integration, restructuring and other costs

$0.03

$0.01

$0.04

$0.06

Adjusted basic earnings per share

$0.12

$0.07

$0.50

$0.40


 


Three months ended

Six months ended

(unaudited - in thousands of Canadian dollars)

February 29, 

February 28,

February 29, 

February 28,

Free Cash Flow

2020

2019

2020

2019

Cash provided by (used in):





Operating activities (1)

65,743

86,320

123,215

131,691

Investing activities

(670)

(5,709)

(6,221)

(8,674)


65,073

80,611

116,994

123,017

Add: cash used in business acquisitions, strategic investments and non-





controlling interest (2)

3,298

1,127

3,298

Free cash flow

65,073

83,909

118,121

126,315

(1)

Free cash flow for the three and six months ended February 29, 2020 was impacted by the adoption of IFRS 16, effective September 1, 2019. This has resulted in an increase in free cash flow of approximately $4.2 million for the quarter and $8.0 million for the year-to-date. Further discussion of this can be found in the Impact of New Accounting Policies section of the First Quarter 2020 Report to Shareholders.

(2)

Strategic investments are comprised of investments in venture funds and associated companies

 

(unaudited - in thousands of Canadian dollars)

Six months ended


February 29, 

August 31,

Net Debt and Net Debt to Segment Profit

2020

2019

Total bank loans, net of unamortized financing fees

1,646,816

1,731,745

Lease liabilities

153,607

Cash and cash equivalents

(58,458)

(82,568)

Net debt

1,741,965

1,649,177

Segment profit (denominator) (1)

580,323

585,085

Net debt to segment profit

3.00

2.82

(1)

Reflects aggregate amounts for the most recent four quarters, as detailed in the table in the "Quarterly Consolidated Financial Information" section of the Second Quarter 2020 Report to Shareholders. Effective September 1, 2019, the Company adopted IFRS 16. There has been no restatement of segment profit for those quarters prior to fiscal 2020. Refer to Impact of New Accounting Policies section of the Second Quarter 2020 Report to Shareholders for more information.

 

Cision

View original content:http://www.prnewswire.com/news-releases/corus-entertainment-announces-fiscal-2020-second-quarter-results-301033252.html

SOURCE Corus Entertainment Inc.


Cision

View original content: http://www.newswire.ca/en/releases/archive/April2020/01/c2657.html