"The third quarter was challenging on a number of fronts, most notably, advertising softness in Radio continued and our merchandising, production and distribution businesses faced tough year-over-year comparatives," said John Cassaday, President and Chief Executive Officer, Corus Entertainment. "We did deliver triple-digit growth in net income and earnings per share, and specialty advertising revenues increased by 9%, with growth in our key brands. Despite these impressive gains in our core television broadcast business, our expectations for a stronger back half have not materialized and we will miss the lower end of our segment profit guidance. Free cash flow guidance remains unchanged. Looking ahead, we are excited about the opportunity to expand our business through acquisitions that will enable us to enter the Ottawa radio and Quebec specialty television markets, subject to CRTC approval."
| Financial Highlights | |||||
| Three months ended | Nine months ended | ||||
| May 31, | May 31, | ||||
| (unaudited - in thousands of Canadian dollars except per share amounts) | 2013 | 2012 | 2013 | 2012 | |
| Revenues | |||||
| Television | 152,982 | 154,749 | 470,228 | 503,075 | |
| Radio | 47,078 | 49,329 | 139,679 | 143,577 | |
| 200,060 | 204,078 | 609,907 | 646,652 | ||
| Segment profit (1) | |||||
| Television | 61,816 | 66,732 | 192,310 | 207,648 | |
| Radio | 14,874 | 16,151 | 43,484 | 42,432 | |
| Corporate | (8,464) | (7,227) | (20,227) | (20,963) | |
| 68,226 | 75,656 | 215,567 | 229,117 | ||
| Net income attributable to shareholders | 89,913 | 43,221 | 148,016 | 125,340 | |
| Adjusted net income attributable to shareholders (1) (2) | 34,519 | 43,221 | 111,110 | 125,340 | |
| Basic earnings per share | $ 1.07 | $ 0.52 | $ 1.77 | $ 1.51 | |
| Adjusted basic earnings per share (1) (2) | $ 0.41 | $ 0.52 | $ 1.33 | $ 1.51 | |
| Diluted earnings per share | $ 1.07 | $ 0.51 | $ 1.76 | $ 1.50 | |
| Free cash flow (1) | 44,573 | 55,354 | 128,432 | 130,185 | |
| (1) See definitions and discussion under Key Performance Indicators in MD&A. | |||||
| (2) Excludes the impact of $25.0 million ($0.22 per share) pre-tax debt refinancing costs and a gain on disposition of the Company's non-controlling interest in Food Network Canada of $55.4 million ($0.66 per share). | |||||
Consolidated Results from Operations
Consolidated revenues for the three months ended May 31, 2013 were
$200.1 million, down 2% from $204.1 million last year. Consolidated
segment profit was $68.2 million, down 10% from $75.7 million last
year. Net income attributable to shareholders for the quarter was
$89.9 million ($1.07 per share basic and diluted), up 108% compared to
$43.2 million ($0.52 per share basic and $0.51 per share diluted) last
year. Net income for the quarter includes a gain related to the sale
of the Company's non-controlling interest in Food Network Canada of
$55.4 million . Removing the impact of this item results in an adjusted
net income attributable to shareholders of $34.5 million ( $0.41
earnings per share basic) in the quarter.
