Mr. Doug Murphy reports
CORUS ENTERTAINMENT ANNOUNCES FISCAL 2023 FIRST QUARTER RESULTS
Corus Entertainment Inc. has released its first quarter 2023 financial results.
"While we navigate the recent macroeconomic headwinds, Corus remains steadfast in our pursuit of long-term growth for the business," said Doug Murphy, president and chief executive officer. "Our recent launch of Pluto TV with Paramount Global redefines the FAST [free ad-supported streaming television] channel business in Canada. We have bolstered the value proposition of StackTV with the addition of our suite of Disney channels. Our owned content business is gearing up for a significant increase in episodic deliveries in the year ahead. Importantly, we have implemented a rigorous cost review to address recent revenue weakness while remaining focused on advancing our strategic plan and priorities."
Corus advanced its strategic priorities on multiple fronts. The company expanded its premium digital video offerings for subscribers and advertisers, and launched its fall programming lineup for Global TV and Corus's portfolio of specialty networks. The company advanced its capital allocation priorities through investments in the business to support future growth opportunities while continuing to navigate an uncertain macroeconomic environment:
Corus and Paramount Global launched Pluto TV. Pluto TV, the world's leading FAST service, launched in Canada on Dec. 1, 2022. Corus's leading advertising sales capabilities have combined with Pluto TV's best-in-class platform and technology, serving compelling content to audiences and providing a differentiated model for advertisers. The service launched with more than 110 unique channels and over 20,000 hours of content, including access to a selection of Canadian series and shows from Corus's portfolio spanning a variety of genres. Pluto TV is available on all major platforms, including Web, mobile and connected televisions.
channels. Disney Channel, Disney Junior and Disney XD launched Dec. 14, 2022, on StackTV, Corus's premium multichannel streaming service, providing value for subscribers.
- Corus released its 2022 sustainability report, which outlines the company's focused approach to build a more-sustainable future through environment, social and governance (ESG) initiatives. Centred on Corus's three key pillars -- people, planet and responsibility -- the inaugural sustainability report outlines the progress made to date as well as a set of foundational goals that anchor Corus's ambition and approach to sustainability.
Free cash flow of $20.8-million in Q1, compared with $80-million in the prior year's quarter. The decrease in free cash flow in the first quarter is attributable to a decrease in cash provided by operating activities of $14.1-million and higher cash used in investing activities. In the prior year's quarter, cash provided from investing activities included a $43.5-million non-recurring venture fund distribution.
- Net debt to segment profit was 3.38 times at Nov. 30, 2022, up from 3.02 times at Aug. 31, 2022. The main driver of the increase in this ratio is the decrease of segment profit for the most-recent four quarters.
- In the first quarter, the company purchased 785,000 of its Class B non-voting participating shares under a normal course issuer bid at an average acquisition price of $2.51.
As of Nov. 30, 2022, the company had $80.9-million of cash and cash equivalents, and approximately $270-million available under its revolving facility, $214.1-million of which could be drawn.
The unaudited interim condensed consolidated financial statements and accompanying notes for the three months ended Nov. 30, 2022, and management's discussion and analysis are available on the company's website and under the company's SEDAR profile.
A conference call with Corus senior management is scheduled for Jan. 13, 2023, at 8 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 1-647-794-4605 and for North America is 1-888-394-8218. More information can be found on the Corus Entertainment website.
Given the continuing uncertain economic conditions, risks and uncertainties described above and in the 2022 MD&A, the company currently expects to continue to be impacted by industry trends in advertising spending in media. At the current time, the company also expects to see some sequential improvement in the calendar year in the rate of decline in television advertising revenue, given macroeconomic and industry factors appear to be stabilizing. However, the company expects that the softness in television advertising revenue discussed in the prior quarter will continue to persist to some degree in fiscal 2023.
While the company's financial priorities remain unchanged, in light of the foregoing as well as considering the continuing low visibility into the macroeconomic environment, in addition to continuing to take rigorous cost reduction measures, the company believes it is prudent to conserve cash out of an abundance of caution. As such, the company will not renew its share buyback program when it expires on Jan. 16, 2023. In addition, consistent with this approach, the company's board of directors has decided to defer its decision on the declaration of the March dividend at this time. The outside date for a decision on the declaration of a March dividend is March 15, 2023. The company will also use this opportunity to consider the alignment of dividend declaration and payment dates. The company understands the importance of the dividend to its shareholders and remains committed to its long-term dividend philosophy.
About Corus Entertainment Inc.
Corus Entertainment 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 encompasses 33 specialty television services, 39 radio stations, 15 conventional television stations, a suite of digital and streaming assets, animation software, technology and media services. Corus is an internationally renowned content creator and distributor through Nelvana, a world-class animation studio expert in all formats, and Corus Studios, a globally recognized producer of hit scripted and unscripted content. The company also owns innovative, full-service social digital agency so.da, lifestyle entertainment company Kin Canada, leading 2-D animation software supplier Toon Boom and children's book publishing house Kids Can Press. Corus's roster of premium brands includes Global Television, W Network, HGTV Canada, Food Network Canada, Magnolia Network Canada, History, Showcase, Adult Swim, National Geographic, Disney Channel Canada, YTV, Global News, Q107, Country 105 and CFOX, along with broadly distributed Canadian streaming platforms StackTV, Teletoon+, the Global TV App and Curiouscast.
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