CJR.B Corus Entertainment Inc

• Consolidated revenue decreased 12% for the quarter
• Consolidated segment profit⁽¹⁾ decreased 30% for the quarter
• Consolidated segment profit margin⁽¹⁾ of 26% for the quarter
• Net income attributable to shareholders of $11.9 million ($0.06 income per share basic) for the quarter
• Free cash flow⁽¹⁾ of a negative $10.1 million for the quarter

TORONTO, Jan. 10, 2025 /CNW/ - Corus Entertainment Inc. (TSX: CJR.B) announced its first quarter financial results today.

"Our strong fall schedule across Global and our specialty portfolio delivered share gains in linear viewing and impressive digital audience growth in our first quarter," said Troy Reeb, Co-Chief Executive Officer. "In the near term, we expect new winter programming to support positive trends in both news and entertainment audiences, and we look forward to building on the successful launch of our new lifestyle brands, Flavour Network and Home Network, which have already proven popular with viewers and advertisers."

"Our results were in line with the first quarter outlook we provided, reflecting the return to a regular fall programming schedule and lower advertising demand," said John Gossling, Co-Chief Executive Officer and Chief Financial Officer. "We are encouraged by the emerging strength of our product and audiences but given industry and economic conditions, our commitment to pursue further cost reductions remains an integral part of our more comprehensive plan to right-size our business, increase our focus on high-margin assets with growth potential and take necessary steps to strengthen our balance sheet."

Financial Highlights

Segment Revenue

Operational Highlights

Following the launch of its successful Fall Schedule, Corus was the only Canadian broadcaster that saw an increase in its overall share of viewing⁽¹⁾. Total hours streamed across streaming platforms (STACKTV, the Global TV App and Pluto TV) this Fall grew 24%⁽²⁾. In addition, Corus successfully launched two new lifestyle channel brands on December 30, 2024, and continued to implement cost savings initiatives.

• Corus launches Flavour Network and Home Network. Corus debuted new lifestyle networks Flavour Network and Home Network on December 30, 2024.
• Global announces its winter 2025 lineup. Global announced its robust slate of winter 2025 premieres, featuring Global original and fan-favourite Family Law, new medical drama Doc, modern Sherlock Holmes medical mystery series Watson, new classic game show Hollywood Squares, and returning top hits Saturday Night Live, Survivor, Matlock, Ghosts and more.
• Global is home to TV's #1 fall hits. Global was the #1 network in core prime time this Fall⁽³⁾. Additionally, Global had 11 of the Top 20 most-watched programs in Canada this fall including #1 reality series Survivor, #1 late night program Saturday Night Live and #1 comedy Ghosts⁽⁴⁾. 

Financial Highlights

• Free cash flow⁽¹⁾ of negative $10.1 million in Q1 2025 compared to $23.7 million in the same comparable prior year period. The decrease in free cash flow⁽¹⁾ for the first quarter is mainly attributable to lower cash provided by operating activities.
• Net debt to segment profit⁽¹⁾ was 4.48 times as at November 30, 2024, up from 3.84 times at August 31, 2024, as a result of a decrease in segment profit and increase in debt.
• As of November 30, 2024, the Company had $87.6 million of cash and cash equivalents and $31.3 million available to be drawn under its Revolving Facility.

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

The unaudited interim condensed consolidated financial statements and accompanying notes for the three months ended November 30, 2024 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 January 10, 2025 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/3W5tQGr. 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 1.416.945.7677 and for North America is 1.888.699.1199. This call will be archived and available for replay in the Investor Relations section of the Corus website beginning January 10, 2025, at 11 a.m. ET or accessible by telephone until January 17, 2025, at 1.888.660.6345 (toll-free North America) or 646.517.4150 (local or international), using replay code 89130#. 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 2024 MD&A, as filed at www.sedarplus.ca on October 28, 2024. These discussions are important to understanding the assumptions and factors which may affect the Company's outlook and results.

As discussed further in the 2024 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 Company continuously monitors all major risks affecting it or the industry more broadly, including regulatory, legal and judicial developments and decisions, such as, for example, the appeal by certain foreign streaming services of the CRTC decision to require initial base contributions from them. A repeal, change or delay in implementation of a regulatory, legal or judicial decision can materially impact the Company's outlook, operations and business, and financial results. A comprehensive and more extensive discussion of risks and uncertainties that may affect the Company's business, operations and financial performance and by extension, the assumptions or actual results, related to any forward looking information or outlook, can be found in the 2024 Annual MD&A.

Other financial risks which may be related to or affected or elevated by the foregoing risks include 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. As noted above, please see the 2024 MD&A and all of the Company's public disclosure for a full discussion of these and other risks and uncertainties. 

Outlook

In the second quarter, we continue to expect the over-supply of premium digital video inventory from foreign competitors, and continued generally lower demand for linear advertising. As such, the Company expects year-over-year declines in Television advertising revenue in the second quarter of fiscal 2025 to be similar to the first quarter of fiscal 2025. Amortization of TV program rights is expected to increase in the quarter in the low double digit percentage range on a year-over-year basis. The Company will continue with its implementation of additional cost reduction initiatives and expects general and administrative expenses to decline in the range of 5 to 10% for the second quarter compared to the prior year.

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 attributable to shareholders, adjusted basic earnings per share, net debt to segment profit, as well as supplementary financial measures not presented in the financial statements such as 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 ended November 30, 2024, 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 document 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 capital allocation strategy, capital structure and liability management including liquidity, leverage targets, ability to repay debt, and or renegotiate existing debt terms, strategic plan, advertising and expectations of advertising trends for fiscal 2025, subscriber revenue and anticipated subscription trends, distribution, production and other revenue, 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 include, without limitation: factors and assumptions regarding the general market conditions and general outlook for the industry, such as: changes to or affecting the media industry including with respect to advertising supply and demand on linear and digital services; the potential impact of new or increased competition from both domestic and foreign players, who may not be regulated in the same way or to the same degree; inflation and interest rates; changes to or regarding the interpretation or application of accounting principles or standards; changes to operating and capital costs and tariffs, taxes and fees, including any caused by new or different taxation legislation or rulings; changes in any applicable 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") or other similar governmental, legislative, judicial or administrative body; changes in or to macroeconomic or geopolitical conditions in Canada and globally; general change in the competitive landscape and conditions; technological developments or changes affecting the industries, services, products or labour force of or relevant to the Company; and epidemics, pandemics or other public health and safety crises in Canada and globally.

Additional important factors or assumptions relating to or affecting the Company that could impact any forward looking statements, expectations or information or could cause actual results to differ materially from such expressed or implied information include, without limitation: the Company's ability to maintain necessary access to loan and credit facilities; ability to renegotiate, obtain relief from, or meet covenants under the Company's senior credit facility, senior unsecured notes or other instruments or facilities; the Company's capital and operating results being consistent with its expectations; the Company's ability to attract, retain and manage fluctuations in advertising demand, supply and revenue; the Company's ability to maintain relationships and related agreements with key suppliers, partners and clients, including for content, programming and distribution, and on anticipated financial terms and conditions; the Company's ability to source, produce or sell desirable content; audience acceptance of the Company's television programs and cable networks including any new, re-branded or re-programmed channels; 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 or 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; changes to licensing status or conditions; unanticipated or un-mitigatable programming costs; the Company's ability to successfully defend itself against litigation matters and complaints and to manage costs or business impacts if it is not successful; 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 or significant interruption of business or failure of delivery of services by or at a key supplier or vendor of the Company; and interruption of services.

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, 2024 (the "2024 MD&A"). 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. 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 30 specialty television services, 37 radio stations, 15 conventional television stations, digital and streaming platforms, and social digital agency and media services. Corus' roster of premium brands includes Global Television, W Network, Flavour Network, Home Network, The HISTORY® Channel, Showcase, Slice, Adult Swim, National Geographic and Global News, along with streaming platforms STACKTV, TELETOON+, the Global TV App and Curiouscast. Corus is also an internationally-renowned content creator, producer and distributor as well as the domestic advertising representative and an original content partner for Pluto TV, a Paramount Company. For more information visit www.corusent.com.

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NON-GAAP FINANCIAL MEASURES

SOURCE Corus Entertainment Inc (IR Group)