• Consolidated revenues increased 4% for the quarter and 3% year-to-date, driven by an 11% increase in Television advertising revenues for the quarter and 7% year-to-date
• Consolidated segment profit⁽¹⁾ was flat for the quarter and up 5% for the year-to-date
• Consolidated segment profit margin⁽¹⁾ of 29% for the quarter and 36% for the year-to-date
• Net income attributable to shareholders of $6.3⁽²⁾ million ($0.03 per share basic) for the quarter and $66.8⁽²⁾ million ($0.31 per share basic) for the year-to-date
• Free cash flow⁽¹⁾ of $83.9 million for the quarter and $126.3 million for the year-to-date

TORONTO, April 5, 2019 /PRNewswire/ - Corus Entertainment Inc. (TSX: CJR.B) announced its second quarter financial results today.

"Corus delivered another strong quarter, with double-digit Television advertising revenue growth exceeding our expectations," said Doug Murphy, President and Chief Executive Officer. "The benefits of our ongoing progress in advanced advertising and data initiatives, our client centric approach and robust advertising demand are reflected in these positive results, partially offset by softness in our Radio segment and timing-related variability in our content business. Notably, the strength of our free cash flow in the quarter is accelerating our progress towards our leverage targets and supporting the advancement of our strategic priorities as we continue to build for the future."

Financial Highlights

Consolidated Results from Operations

Consolidated revenues for the three months ended February 28, 2019 were $384.1 million, up 4% from $369.5 million last year and consolidated segment profit was $113.1 million, relatively consistent with $112.8 million last year. Net income attributable to shareholders for the quarter ended February 28, 2019 was $6.3 million ($0.03 per share basic), compared to $40.0 million ($0.19 per share basic) last year. Net income attributable to shareholders for the second quarter of fiscal 2019 includes business acquisition, integration and restructuring 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 quarter. Net income attributable to shareholders for the prior year quarter includes business acquisition, integration and restructuring costs of $2.5 million ($0.01 per share, net of income taxes). Adjusting for the impact of this item results in an adjusted net income attributable to shareholders of $41.9 million ($0.20 per share basic) for the prior year quarter.

Consolidated revenues for the six months ended February 28, 2019 were $851.6 million, up 3% from $826.9 million last year.  Consolidated segment profit was $304.8 million, up 5% from $290.6 million last year.  Net income attributable to shareholders for the six months ended February 28, 2019 was $66.8 million ($0.31 per share basic), compared to net income attributable to shareholders of $117.7 million ($0.57 per share basic) last year. Net income attributable to shareholders for the six months ended February 28, 2019 includes business acquisition, integration and restructuring 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 current fiscal year. Net income attributable to shareholders for the six months ended February 28, 2018 includes business acquisition, integration and restructuring costs of $4.1 million ($0.01 per share, net of income taxes). Adjusting for the impact of these items results in an adjusted net income attributable to shareholders of $120.8 million ($0.58 per share basic) for the prior fiscal year.

Consolidated net income attributable to shareholders as well as basic and diluted earnings per share for the three and six months ended February 28, 2019 was impacted by a change in accounting estimate related to the useful life of the Company's television brands. Commencing September 1, 2018, the useful life of television brands was changed from indefinite life to lives ranging from three to 20 years. For the three and six months ended February 28, 2019, this has resulted in an additional $34.9 million and $69.8 million, respectively, in amortization expense in the depreciation and amortization line within the Consolidated Statement of Income and Comprehensive Income, and reduced net income attributable to shareholders, net of income taxes, by $25.7 million ($0.12 per share basic) and $51.3 million ($0.24 per share basic), respectively. Further discussion of this can be found in the Impact of New Accounting Policies and Changes in Estimates section of the Second Quarter 2019 Report to Shareholders.

Operational Results - Highlights for Q1 2019 

Television

• Segment revenues increased 5% in Q2 2019 and 4% for the year-to-date
• Advertising revenues increased 11% in Q2 2019 and 7% for the year-to-date
• Subscriber revenues were down 1% in Q2 2019 and flat for the year-to-date
• Merchandising, distribution and other revenues were down $2.5 million (13%) in Q2 2019 and $2.0 million (6%) for the year-to-date
• Segment profit⁽¹⁾ increased 10% in both Q2 2019 and the year-to-date
• Segment profit margin⁽¹⁾ of 32% in Q2 2019 and 38% for the year-to-date, compared to 31% and 36%, respectively, in the prior year

Radio

• Segment revenues decreased 8% in Q2 2019 and 4% for the year-to-date
• Segment profit⁽¹⁾ decreased $1.9 million (28%) in Q2 2019 and $2.4 million (12%) for the year-to-date
• Segment profit margin⁽¹⁾ of 16% in Q2 2019 and 25% for the year-to-date, compared to 21% and 27%, respectively, in the prior year

Corporate

• Free cash flow⁽¹⁾ of $83.9 million in Q2 2019 and $126.3 million for the year-to-date, compared to $82.1 million and $165.3 million, respectively, in the prior year
• Net debt to segment profit⁽¹⁾ leverage of 3.05 times at February 28, 2019, down from 3.28 times at August 31, 2018, in part due to debt repayments of $117.6 million for the year-to-date
• Consolidated segment profit margin⁽¹⁾ of 29% in Q2 2019 and 36% for the year-to-date, compared to 31% and 35%, respectively, in the prior year

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 28, 2019 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 5, 2019 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 and free cash flow that are not in accordance with, nor an alternate to, generally accepted accounting principles ("IFRS") and may be different from non-IFRS measures used by other companies. In addition, these non-IFRS measures are not based on any comprehensive set of accounting rules or principles.

Non-IFRS financial measures should not be considered as a substitute for, or superior to, measures of financial performance prepared in accordance with IFRS. They are limited in value because they exclude charges that have a material effect on the Company's reported results and, therefore, should not be relied upon as the sole financial measures to evaluate the Company's financial results. The non-IFRS financial measures are meant to supplement, and to be viewed in conjunction with, IFRS financial results. A reconciliation of the Company's non-IFRS measures is included in the Company's most recent Report to Shareholders which is available on Corus' website at www.corusent.com as well as on SEDAR 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 forward-looking statements relate to, among other things, our objectives, goals, strategies, intentions, plans, estimates and outlook, including advertising, distribution, merchandise and subscription revenues, operating costs and tariffs, taxes and fees, and can generally be identified by the use of 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; 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, 2018 and the second quarter ended February 28, 2019 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) is a leading media and content company that develops and delivers high quality brands and content across platforms for audiences around the world. The company's portfolio of multimedia offerings encompass 37 specialty television services, 39 radio stations, 15 conventional television stations, a suite of digital assets, animation software, technology and media services. Corus is also 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, National Geographic, Disney Channel Canada, YTV and Nickelodeon Canada, Global News, Globalnews.ca, Q107, Country 105, and CFOX. Visit Corus at www.corusent.com.

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SOURCE Corus Entertainment Inc.