Headline, Industry News

Corus fourth quarter and year end

TORONTO, Oct. 26 /PRNewswire-FirstCall/ – Corus Entertainment Inc. (TSX: CJR.B; NYSE: CJR) announced fourth quarter and year end financial results today. Corus completed a very successful fiscal year with strong operating results and cash flows.

Fiscal 2006 Year End Highlights – Combined Radio and Television revenues up 8% for quarter and 9% for full year – Combined Radio and Television segment profit up 7% for quarter and 11% for full year – $94 million in free cash flow(x), up 16% from last year – Positive cash flow and segment profit from Content

"It was a strong year for Corus and the fourth quarter was no exception. We had another excellent quarter for our Television division, driven by strong ratings and subscriber growth for our brands," said John Cassaday, President and Chief Executive Officer, Corus Entertainment Inc. "Our Content business continued to post positive results and Radio remained strong outside Quebec, where we are integrating newly acquired stations."

Fourth Quarter Results:

Consolidated revenues for the fourth quarter ended August 31, 2006 were $185.0 million, up 6% from $175.3 million last year. Consolidated segment profit was $44.5 million, up 5% from $42.6 million last year. Net income for the quarter was $46.6 million ($1.11 basic and $1.09 diluted), compared to income of $9.7 million ($0.23 basic and $0.22 diluted) last year. Net income for the quarter was positively impacted by approximately $37.0 million in income tax rate changes and other income tax items.

Corus Television contributed quarterly revenues of $94.7 million, up 13% from $83.4 million last year, led by continued specialty advertising growth of 20% and subscriber growth of 12%. Quarterly segment profit increased to $34.1 million, up 11% from $30.8 million last year.

Corus Radio revenues were $66.3 million, up 2% from $65.3 million last year. Segment profit was $15.8 million, essentially unchanged from the prior year. On a same station(x) basis, both revenues and segment profit were up by approximately 4%.

Corus Content revenues were $26.8 million, down 4% from $28.0 million last year. Segment profit was $2.6 million, compared to $1.8 million last year.

Full Year Results:

Consolidated revenues for the year ended August 31, 2006 were $726.3 million, up 6% from $683.1 million last year. Consolidated segment profit was $214.1 million, up 10% from $195.3 million last year. Net income for the year was $35.5 million ($0.84 basic and $0.82 diluted earnings per share), compared to $71.1 million ($1.66 basic and $1.65 diluted earnings per share) last year, as the Company recorded a $132.0 million pre-tax debt refinancing charge related to the purchase of the Senior Subordinated Notes and the termination of cross-currency agreements associated with those notes in the second quarter of fiscal 2006. In addition, net income was positively impacted by approximately $37.0 million in income tax rate changes and other income tax items.

Corus Television, led by specialty advertising growth of 14% and subscriber growth of 10%, contributed full year revenues of $393.3 million, up 11% from $354.2 million last year. Movie Central increased its subscriber base from 748,000 at August 31, 2005 to 822,000 at the end of the fiscal year. Full year segment profit increased to $164.2 million, up 17% from $140.8 million last year.

Corus Radio revenues were $268.4 million, up 6% from $252.7 million last year. Segment profit was $68.4 million, down 1% from $69.0 million last year. Revenue and segment profit were impacted by the sale of Corus’ Red Deer assets and the multi-station swap in the province of Quebec. On a same station(x) basis, revenues were up 6% and segment profit was up by approximately 7%.

Corus Content revenues were $72.1 million, down 12% from $82.3 million last year. Segment profit was $5.6 million, compared to $3.6 million last year. Revenues were down in fiscal 2006 as fewer episodes were delivered and Beyblade merchandising revenues declined towards the end of fiscal 2005. The division continues to generate positive cash flow.

Corus has continued to purchase shares under its Normal Course Issuer Bid announced in December 2005. At the end of August 2006, the Company had purchased for cancellation 1,034,700 Class B Non-Voting Shares at an average price of $35.56 per share.

"We are particularly pleased with the excellent progress that we are making in generating cash," said Heather Shaw, Executive Chair, Corus Entertainment Inc. "This supports our desire to enhance shareholder value through such means as increased dividends and share buybacks."

Corus Entertainment Inc. reports in Canadian dollars.