Mr. Doug Murphy reports

CORUS ENTERTAINMENT ANNOUNCES FISCAL 2023 FOURTH QUARTER AND YEAR END RESULTS

Corus Entertainment Inc. has released its fourth quarter and year-end financial results.

"Our fourth quarter results reflect ongoing weakness in the advertising economy further impacted by more recent distortions resulting from the WGA [Writers Guild of America] and SAG-AFTRA [Screen Actors Guild - American Federation of Television and Radio Artists] strikes that persisted much longer than anticipated," said Doug Murphy, president and chief executive officer. "We are focused on what we can control as we navigate through these challenges. We will prudently redirect capital from dividends to debt repayment. Our intense pursuit of efficiencies and improved productivity is resulting in significant expense reductions as we streamline our operating model and evolve our business into a multiplatform aggregator of premium video with leading cross-platform monetization capabilities. Corus will benefit from a more normalized content supply in the quarters ahead with an improved cost structure as we await a concurrent improvement in the advertising economy."

Operational highlights:

• Corus advanced its strategic priorities on multiple fronts: The company launched its fall 2023 schedule for Global TV, its specialty networks and StackTV, implemented cost savings initiatives, completed the sale of Toon Boom Animation Inc., and used the net proceeds from the sale to pay down bank debt. The company continues to navigate an uncertain macroeconomic environment as well as the impact of U.S. media industry labour strikes on its programming supply.
• Global confirmed its fall 2023 schedule of new and returning programming: Global announced its fall 2023 slate of premieres, including top reality show Survivor, new original drama Robyn Hood and the Canadian broadcast premiere of hit U.S. series Yellowstone.
• Corus completed the sale of its animation software business; net proceeds used to repay outstanding bank debt: Corus completed the sale of Toon Boom Animation to Integrated Media Company on Aug. 23, 2023, for net proceeds of $141.2-million.
• Entertainment Tonight Canada end of production announced: The final new episode aired on Oct. 6, 2023, with the decision to end production of the daily entertainment news magazine show being due to production costs and a challenging advertising environment.
• Corus Studios and Nikki Ray Media Agency announced four new TV movies set to premiere in 2024: Represented internationally by Corus Studios, made-for-TV movie franchise The Love Club Moms will premiere on W Network and StackTV in 2024.

Financial highlights

• Free cash flow of $31.7-million in Q4 and $106.8-million for the year compared with $44.7-million and $239.6-million, respectively, in the same comparable prior-year periods. The decrease in free cash flow for the fourth quarter is mainly attributable to a decrease in cash provided by operating activities of $18.5-million as the net proceeds from the sale of Toon Boom Animation on Aug. 23, 2023, of $141.2-million that were used to pay down bank debt are not included in free cash flow. The decrease in free cash flow for the year ended Aug. 31, 2023, is mainly attributable to a decrease in cash provided by operating activities of $94.2-million; that excludes the net proceeds from the sale of Toon Boom Animation Inc. and cash provided by investing activities in the prior year ended Aug. 31, 2022, related to a $43.5-million non-recurring venture fund distribution.
• Net debt to segment profit was 3.48 times at Aug. 31, 2023. Pro forma net debt to segment profit was 3.62 times at Aug. 31, 2023, up from 3.02 times at Aug. 31, 2022, but, however, lower than at the end of the third quarter of 3.85 times. The main driver of the increase in this ratio is the decrease of segment profit for the most recent four quarters.
• As of Aug. 31, 2023, the company had $56.2-million of cash and cash equivalents and $300-million available under its revolving facility, $285.9-million of which could be drawn.

Dividends:

• In fiscal 2024, the company announced its board of directors has prudently suspended the dividend to redirect the use of free cash flow from dividends to debt repayment given the impact of continuing macroeconomic uncertainty and the impact of the extended WGA strike (resolved on Oct. 9, 2023) and the continuing labour action of SAG-AFTRA on audience levels, advertising demand and revenue.

The unaudited interim condensed consolidated financial statements and accompanying notes for the three months and year ended Aug. 31, 2023, and management discussion and analysis are available on the company's website in the investor relations section and under the company's SEDAR+ profile.

A conference call with Corus senior management is scheduled for Oct. 27, 2023, at 8 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 register on-line and be connected to the conference call automatically. 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 1-416-764-8650 and for North America is 1-888-664-6383. This call will be archived and available for replay in the investor relations section of the Corus website beginning Oct. 27, 2023, at 11 a.m.ET, or accessible by telephone until Nov. 3, 2023, at 1-888-390-0541 (toll-free North America) or 416-764-8677 (local or international), using replay code 367305 followed by the number sign. More information can be found on the Corus Entertainment website in the investor relations section.

Outlook

Given continuing macroeconomic uncertainty and its impact on advertising demand, combined with the extended WGA strike (resolved on Oct. 9, 2023) and the continuing labour action of SAG-AFTRA, which impedes the company's ability to deliver new episodes of scripted programming on television, resulting in lower audience levels and advertising demand, the company expects its television advertising revenue in the first quarter of fiscal 2024 will decline in the range of 15 per cent to 20 per cent compared with the prior year. Amortization of program rights is expected to decline by a similar range along with the further implementation of additional cost management initiatives. The company has suspended its dividend and intends to redirect the use of free cash flow from dividends on Class A and Class B shares to debt repayment. While the company continues to expect improvement in the macro environment and the normalization of program supply over the medium term, visibility remains limited at this time.

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 encompass 33 specialty television services, 39 radio stations, 15 conventional television stations, digital and streaming platforms, and 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 full-service social digital agency so.da, lifestyle entertainment company Kin Canada 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, The History Channel, Showcase, Adult Swim, National Geographic, Disney Channel Canada, YTV, Global News, Globalnews.ca, Q107, Country 105 and CFOX, along with streaming platforms StackTV, Teletoon+, the Global TV app and Curiouscast. Corus is the domestic advertising representative and an original content partner for Pluto TV, a Paramount company, which is the leading free ad-supported streaming television (FAST) service.

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