CORRECTION: CanWest Reports Increase In First Quarter Revenues, Operating Profits.Business Editors CORRECTION...by CanWest Global Communications CanWest Global Communications Corp. TSX: CGS TSX: CGS.A NYSE: CWG is one of Canada's largest international media companies. The company's head office is situated in Winnipeg, Manitoba, at the tallest building (CanWest Global Place) in the city and it is on the Corp. NOTE TO EDITORS: CanWest Global Communications Corp. corrects... Please note correction to release transmitted earlier. The 5th paragraph should read $0.33 per share in F2000 compared to $0.35 per share in the same period last year. The 3rd last paragraph should read $0.33 and $0.35 per share under net earnings. The full corrected release follows: WINNIPEG Winnipeg, city, Canada Winnipeg (wĭn`ĭpĕg), city (1991 pop. 616,790), provincial capital, SE Man., Canada, at the confluence of the Red and Assiniboine rivers. , Manitoba--(BUSINESS WIRE)--Jan. 11, 2000 (TSE See Tokyo Stock Exchange. TSE 1. See Tokyo Stock Exchange (TSE). 2. See Toronto Stock Exchange (TSE). :CGS CGS centimeter-gram-second system. CGS or cgs abbr. centimeter-gram-second system. CGS, c.g.s. .S.) (WINNIPEG STOCK EXCHANGE:CGS.S.) (TSE:CGS.A.) (WINNIPEG STOCK EXCHANGE:CGS.A.) (NYSE NYSE See: New York Stock Exchange :CWG CWG Conversations with God CWG Core Working Group CWG Certification Working Group (WiMAX Forum) CWG Collaboration Working Group CWG Commercial Working Group (TAT-14) ) CanWest Global Communications Corp., Canada's leading international diversified diversified (di·verˑ·s media company, today reported financial results for the first quarter ended November November: see month. 30, 1999. * Combined revenue from operations in Canada Canada (kăn`ədə), independent nation (2001 pop. 30,007,094), 3,851,787 sq mi (9,976,128 sq km), N North America. Canada occupies all of North America N of the United States (and E of Alaska) except for Greenland and the French islands of , Australia Australia (ôstrāl`yə), smallest continent, between the Indian and Pacific oceans. With the island state of Tasmania to the south, the continent makes up the Commonwealth of Australia, a federal parliamentary state (2005 est. pop. , New Zealand New Zealand (zē`lənd), island country (2005 est. pop. 4,035,000), 104,454 sq mi (270,534 sq km), in the S Pacific Ocean, over 1,000 mi (1,600 km) SE of Australia. The capital is Wellington; the largest city and leading port is Auckland. and Ireland Ireland, Irish Eire (âr`ə) [to it are related the poetic Erin and perhaps the Latin Hibernia], island, 32,598 sq mi (84,429 sq km), second largest of the British Isles. for the year increased $5.1 million, or 2% to $268.3 million from $263.2 million. * Combined broadcast operating profit Operating profit (or loss) Revenue from a firm's regular activities less costs and expenses and before income deductions. operating profit See operating income. before amortization of $101.0 million was up slightly from $99.9 million, or 1% over the same period last year. * Combined cash flow from operations Cash flow from operations A firm's net cash inflow resulting directly from its regular operations (disregarding extraordinary items such as the sale of fixed assets or transaction costs associated with issuing securities), calculated as the sum of net income plus noncash expenses was $60.6 million or $0.40 per share compared to $64.5 million or $0.43 per share last year. * Net earnings totaled $48.9 million or $0.33 per share in F2000, compared to $51.7 million or $0.35 per share during the same period last year. Increased financing expenses related to the Company's development activities account for the decrease from last year. Commenting on the results, Leonard Asper Leonard Asper (born May 31, 1964, in Winnipeg, Manitoba), is a Canadian businessperson and lawyer. He is a graduate of Brandeis University and the University of Toronto Law School. Leonard Asper is the son of the late Izzy Asper, founder of CanWest Global. , CanWest's President and Chief Executive Officer said: "We are satisfied with the results from the first quarter, especially with the improvement in New Zealand with a significant sports broadcasting agreement and some key management changes. The TV3 Television Network in Ireland is tracking well, reporting a doubling of revenues over last year and improvement in operating results despite increasing its programming output. Both Network TEN in Australia and Global Television in Canada
This article discusses the history, programming and business issues regarding television in Canada. Television technology issues are not covered in this article except to say that in Canada, like the United States, television reported solid results. As well, CanWest continues to book the interest cost of carrying over $700 million in investments, including investments in WIC WIC - WAN Interface Card and Ulster Ulster, northernmost of the historic provinces of Ireland. Modern Ulster consists of nine counties. Six (Antrim, Armagh, Down, Fermanagh, Derry, and Tyrone) now make up Northern Ireland (see Ireland, Northern), which is often referred to as Ulster; the remaining TV whose operating results are not included in the combined results of CanWest. Inclusion of these results would have contributed to a significant increase in revenues and operating profits." Asper As´per a. 1. Rough; rugged; harsh; bitter; stern; fierce. n. 1. (Greek Gram.) The rough breathing; a mark (h before it; thus hōs r>, In the context of mergers, cost synergy is the savings in operating costs expected after two companies, who compliment each other's strengths, join. Notes: The savings in operating costs usually come in the form of laying off employees. " said Asper, "which will have a positive impact on our earnings." Asper added that the Company will continue its transformation into an integrated media group with corporate development activity focussed on complementary media businesses and online ventures. "We have come a long way in the last two years in laying the ground work to develop a substantial diversified international media group," said Asper. "Over the course of fiscal 2000, we intend to continue that transformation and growth by deploying our significant investment capacity to add complementary media properties, including specialty television, outdoor, radio and internet based media in our existing and new markets. During the first quarter and into the second quarter, CanWest completed the following initiatives, all of which are expected to positively impact the Company's future results: * CanWest reached agreement on all commercial terms with Shaw Communications Shaw Communications Inc. (TSX: SJR.NV.B NYSE: SJR) is a Canadian telecomunications company headquartered in Calgary, Alberta. The company was founded by J.R. Shaw in 1966 as Capital Cable Television Co Ltd.. Inc. on the division of WIC's assets. Following the end of the quarter, CanWest formally applied to the CRTC CRTC Canadian Radio-Television & Telecommunications Commission CRTC Combat Readiness Training Center CRTC Cathode Ray Tube Controller CRTC China Railway Telecommunications Center CRTC Cold Region Test Center CRTC Continuously Regenerated Trap Column for transfer of ownership of the WIC television stations and other broadcasting assets and a public hearing has been scheduled for April, 2000. * TV3 New Zealand, recorded an 8% increase in revenue over the same quarter last year. This growth, in part, is due to the agreement with Sky Television to broadcast New Zealand's major sporting events. * CanWest Radio New Zealand Radio New Zealand Limited (Māori: Te Reo Irirangi o Aotearoa) is New Zealand's public service radio broadcaster. It is presently a Crown Entity established by the Radio New Zealand Act 1995, incorporated under the Companies Act 1993, and a continued to outperform Outperform An analyst recommendation meaning a stock is expected to do slightly better than the market return. Notes: Exact definitions vary by brokerage, but in general this rating is better than neutral and worse than buy or strong buy. the market and reported a 12% increase in revenues for the quarter. * TV3 Ireland marked its first anniversary on September September: see month. 20, 1999, with the launch of Ireland's first breakfast television program, ireland am Ireland AM is Ireland's only breakfast programme. It airs on TV3. The current presenters are Mark Cagney, Sinead Desmond, Alan Hughes and Aidan Cooney. It debuted in September 1999. The show goes out from 07:00 - 10:00. , and Agenda, a provocative new public affairs Those public information, command information, and community relations activities directed toward both the external and internal publics with interest in the Department of Defense. Also called PA. See also command information; community relations; public information. program. Audience numbers and advertiser ad·ver·tise v. ad·ver·tised, ad·ver·tis·ing, ad·ver·tis·es v.tr. 1. To make public announcement of, especially to proclaim the qualities or advantages of (a product or business) so as to increase support continue to increase into the second full year of operation. Revenues are up 101% over the same period last year. * Prime TV in Canada reached operating profitability well ahead of expectations with revenues doubling over last year. * CanWest Interactive maintained its 20% equity interest in Internet Broadcasting Internet Broadcasting (formerly Internet Broadcasting Systems), or IBS, is a provider of television station web sites. IBS hosts over 70 local stations' sites, and co-produced NBCOlympics. Systems Inc. (IBS IBS Irritable bowel syndrome, see there ) as IBS added two significant media partners and additional investors. Hearst/Argyle Television and Post-Newsweek Television both took equity interests in IBS and added their stations to the emerging internet local news network. IBS now has more than 40 station sites operating or in development. IBS's enterprise value has increased approximately 80% since CanWest's investment in July July: see month. 1999. * LifeServ Corporation announced a significant increase in the number of registered online users up to more than 600,000, double the number reported in the last quarter. The number of registered online users is increasing at the rate of 4,000 per day. Two new online sites are scheduled to be launched in January with a total of 10 to be ready by June. LifeServ recently signed major sponsorship deals with AT&T and Johnson & Johnson, which will bring significant new revenues to the Company. * Network TEN Australia continues to perform well and has announced it is in a position to make significant acquisitions in complementary television or interactive media ventures. * CanWest Entertainment's major programs have become hits in the US, exceeding sales expectations and prospects for renewal. Lower profits in the first quarter are timing in nature and we still expect to see revenues and operating profits double over last year. "The major challenge for 2000 in Canada is to complete the regulatory process for the WIC transaction and complete the integration of the WIC operations into the Global Network," said I.H. Asper, O.C., Q.C., Executive Chairman. "In addition, we intend to increase our reach with complementary media, through a renewed acquisition strategy that will build on our strengths and take advantage of our management expertise and experience." CanWest Global Communications Corp. (NYSE: CWG; TSE, WSE WSE Web Services Enhancements (Microsoft) WSE Warsaw Stock Exchange (Warsaw, Poland) WSE Symposium on Web Site Evolution (IEEE International Symposum) : CGS.S and CGS.A; www.canwestglobal.com) is an international media company. CanWest owns, operates and/or holds substantial interests in conventional television and specialty cable channels in Canada, New Zealand, Australia, Ireland and the United Kingdom. The Company's program production and distribution division and interactive media division operate in several countries throughout the world.
CANWEST GLOBAL COMMUNICATIONS CORP.
COMBINED BUSINESS SEGMENT INFORMATION
(in thousands of Canadian dollars)
For the three months ended
November 30
--------------------------
Increase
1999 1998 (Decrease)
$ $ %
REVENUE
Television
Canada - Global Television 129,410 127,665 1
- Global Prime 3,346 1,797 86
Australia - Network TEN 88,474 84,738 4
New Zealand - TV3 21,293 20,541 4
------- ------- -----
242,523 234,741 3
Radio
New Zealand - More FM 5,696 5,325 7
Entertainment
Canada - Fireworks 11,028 16,420 (33)
------- ------- -----
259,247 256,486 1
------- ------- -----
Operations in development
New Zealand - TV4 1,287 2,223 (42)
Ireland - TV3 7,789 4,480 74
------- ------- -----
9,076 6,703 35
------- ------- -----
TOTAL REVENUE 268,323 263,189 2
------- ------- -----
------- ------- -----
BROADCAST OPERATING PROFIT
Television
Canada - Global Television 58,839 60,122 (2)
- Global Prime 892 (225) (496)
Australia - Network TEN 36,583 33,882 8
New Zealand - TV3 5,501 6,256 (12)
------- ------- -----
101,815 100,035 2
Radio
New Zealand - More FM 1,462 1,566 (7)
Entertainment
Canada - Fireworks 622 1,003 (38)
------- ------- -----
103,899 102,604 1
------- ------- -----
Operations in development
New Zealand - TV4 (728) (224) 225
Ireland - TV3 (2,187) (2,523) (13)
------- ------- -----
(2,915) (2,747) 6
------- ------- -----
TOTAL BROADCAST
OPERATING PROFIT 100,984 99,857 1
Corporate and development
expenses 3,456 3,008 15
------- ------- -----
OPERATING PROFIT (EBITDA) 97,528 96,849 1
------- ------- -----
------- ------- -----
NOTE: Combined results include the company's 57.5% economic
interest in Network TEN.
CANWEST GLOBAL COMMUNICATIONS CORP.
COMBINED STATEMENT OF EARNINGS
(in thousands of Canadian dollars)
For the three months ended
November 30
--------------------------
Increase
1999 1998 (Decrease)
$ $ %
Revenue 268,323 263,189 5,134
Operating expenses 167,339 163,332 (4,007)
------- ------- ------
Broadcast operating profit before
amortization 100,984 99,857 1,127
Corporate and development
expenses 3,456 3,008 (448)
------- ------- ------
Operating profit before amortization
(EBITDA) 97,528 96,849 679
Broadcast license and goodwill
amortization 3,311 3,304 (7)
Other amortization 6,095 5,191 (904)
------- ------- ------
Earnings before net financing
expenses (EBIT) 88,122 88,354 (232)
Financing expenses 11,768 8,240 (3,528)
Investment and other income (1,165) (2,804) (1,639)
------- ------- ------
Earnings before income taxes
(EBT) 77,519 82,918 (5,399)
Provision for income taxes 27,884 30,370 2,486
------- ------- ------
Earnings before the following 49,635 52,548 (2,913)
Minority interests 650 663 (13)
------- ------- ------
Earnings before realized currency
translation adjustments 50,285 53,211 (2,926)
Realized currency translation
adjustments (1,300) (1,500) 200
------- ------- ------
Net earnings 48,985 51,711 (2,726)
------- ------- ------
------- ------- ------
Cash flow from operations 60,588 64,518 (3,932)
------- ------- ------
------- ------- ------
Earnings per share before realized
currency translation adjustments
Basic $0.34 $0.36 (0.02)
Fully diluted $0.33 $0.35 (0.02)
Net earnings per share
Basic $0.33 $0.35 (0.02)
Fully diluted $0.32 $0.34 (0.02)
Cash flow from operations per share
Basic $0.40 $0.43 (0.03)
Fully diluted $0.40 $0.43 (0.03)
NOTE: Combined results include the company's 57.5% economic
interest in Network TEN.
FINANCIAL RESULTS INTRODUCTION CanWest's long term success strategy has been based upon acquiring under-performing assets and starting up new operations, and developing them into solid earnings and cash flow contributors. We also acquire fully priced assets which in our hands can be made more profitable in combination with CanWest operations. While this strategy has been extremely successful, it requires periods of development time to have assets mature into solid contributors. We remind our shareholders that CanWest is both an operating and development company. In the last two years, the Years, The the seven decades of Eleanor Pargiter’s life. [Br. Lit.: Benét, 1109] See : Time Company has undertaken several strategic initiatives to position itself for further growth in the new millennium. These include the start-ups of new national television networks TV3 Ireland and TV4 New Zealand; the start-up Start-up The earliest stage of a new business venture. of CanWest Entertainment and its acquisition of Canadian producer and distributor, Fireworks fireworks: see pyrotechnics. fireworks Explosives or combustibles used for display. Of ancient Chinese origin, fireworks evidently developed out of military rockets and explosive missiles and accompanied the spread of military explosives westward to Entertainment; the establishment of a presence in radio broadcasting The examples and perspective in this article or section may not represent a worldwide view of the subject. Please [ improve this article] or discuss the issue on the talk page. with the purchase of New Zealand's More FM and the entry into specialty television with the start up of the Global Prime network. Further, in recent months the Company has established CanWest Interactive and made investments in two Internet-based companies. These initiatives represent the foundations for the development of additional core business units for CanWest and are demonstrative of Adj. 1. demonstrative of - serving to prove or demonstrate; "the oath of office is...demonstrative of the legislative opinion on this subject"- John Marshall our strategy to leverage the cash flow from our major television businesses into new but complementary high growth media opportunities. We are building the foundation for future growth while shepherding our resources carefully to ensure they are profitably deployed. BASIS OF PRESENTATION Financial results are reported in Canadian dollars Noun 1. Canadian dollar - the basic unit of money in Canada; "the Canadian dollar has the image of loon on one side of the coin" loonie dollar - the basic monetary unit in many countries; equal to 100 cents and prepared on a combined basis, which proportionately pro·por·tion·ate adj. Being in due proportion; proportional. tr.v. pro·por·tion·at·ed, pro·por·tion·at·ing, pro·por·tion·ates To make proportionate. consolidates the financial results of Network TEN. Net earnings and earnings per share on a combined basis are the same as net earnings and earnings per share reported on a Canadian GAAP GAAP See: Generally Accepted Accounting Principles GAAP See generally accepted accounting principles (GAAP). basis. RESULTS OF OPERATIONS The results reported today reflect internal growth in revenue from television operations in Canada, Australia and New Zealand, and radio operations in New Zealand. As well, the results absorb the anticipated and normal start up losses incurred by our new television operation - the TV3 Network in Ireland. The results for the year include the costs associated with the financing of our 44% ownership of WIC Western International Communications Ltd. of approximately $5.3 million, but does not include the Company's share of WIC's operating results. The Company accounts for this investment at cost, recording dividend income as declared. In addition, the results include financing costs associated with our investment in Ulster TV and other publicly held companies. FIRST QUARTER FINANCIAL HIGHLIGHTS REVENUE Combined revenue was $268.3 million for the quarter ended November 30, 1999 compared to revenue of $263.2 million, representing an increase of 2% over the same period last year reflecting the following: * Global Television's revenue was up 1%, to $129.4 million for the first quarter of fiscal 2000 from $127.7 million last year. Global's program schedule continued to perform well in an increasingly fragmented frag·ment n. 1. A small part broken off or detached. 2. An incomplete or isolated portion; a bit: overheard fragments of their conversation; extant fragments of an old manuscript. 3. advertising market. * Global Prime contributed revenue of $3.3 million for the quarter, compared to $1.8 million for the same period last year. * Network TEN's revenue was up 2%, to A$162.1 million from A$158.2 million in the first quarter of fiscal 1999. Network TEN has been successful in maintaining revenue growth in line with that of the overall Australian Australian pertaining to or originating in Australia. Australian bat lyssavirus disease see Australian bat lyssavirus disease. Australian cattle dog a medium-sized, compact working dog used for control of cattle. market. The Company's reported contributions from Network TEN are affected by changes in the relative value of the Australian currency. For the first quarter of fiscal 2000, Network TEN's results were converted at an average rate of $0.9491 compared to $0.9314 for the same period last year. After conversion to Canadian dollars, Network TEN's 57.5% contribution to the Company's revenue for the first quarter of 2000 improved by 4% to $88.5 million from $84.7 million for the same period last year. * TV3 New Zealand's revenue was up 8%, to NZ$28.1 million for the first quarter this year from NZ$26.0 million for the first quarter of fiscal 1999. This reflected an improved New Zealand television advertising market and improvement in audience share. New Zealand results have been converted into Canadian dollars at an average rate of $0.7585 compared to $0.7908 last year, representing a decline of 4%. After conversion to Canadian dollars, TV3's contribution to the Company's revenue for 1999 increased by only 4% to $21.3 million from $20.5 million last year. * More FM's revenue increased by 12% in the first quarter of fiscal 2000, to NZ$7.5 million from NZ$6.7 million for the first quarter last year. * CanWest Entertainment's revenue was $11.0 million for the quarter ending November 30, 1999, compared to $16.4 million for the same period last year. CanWest Entertainment's wholly-owned subsidiary, Fireworks Entertainment, continued production and delivery of Pacific Blue, Real Kids, Real Adventures, and introduced new series Relic Hunter Relic Hunter is an American/Canadian/French television series, starring Tia Carrere and Christien Anholt. Actress Lindy Booth also starred for the first two seasons, and Tanja Reichert replaced her for the third. It ran for three seasons in the U.S. between 1999 and 2002. and Just a Kid during the quarter. Fireworks recognizes revenue upon delivery of its programs, and the decline in revenue is attributable to differing delivery schedules in the current year. * Revenue contributions from operations in development totalled $9.1 million for the first quarter this year versus $6.7 million for the same period last year. These include the TV4 Network in New Zealand, contributing NZ$1.7 million (or $1.3 million); and the TV3 Network in Ireland, contributing 4.0 million Irish Pounds (or $7.8 million). BROADCAST OPERATING PROFIT (EBITDA (Earnings Before Interest, Taxes, Depreciation and Amortization) A metric used to show a company's profitability, but not its cash flow. EBITDA became popular in the 1980s to show the potential profitability of leveraged buyouts, but has become ) Combined broadcast operating profit (before corporate and development costs) for the quarter ended November 30, 1999 was $101.0 million compared to $99.9 million for the same period last year. This result reflected the following: * Global Television's broadcast operating profit was down 2% to $58.8 million this year from $60.1 million in the same period last year. * Global Prime contributed $892,000 in broadcast operating profit for the three months, compared to a loss of $225,000 in the same period last year. * Network TEN's broadcast operating profit was improved to A$67.0 million in the first quarter of 2000 compared to A$63.3 million for the same period last year. Network TEN's 57.5% contribution to CanWest's broadcast operating profit was $36.6 million for the quarter ended November 30, 1999 compared with $33.9 million for the quarter compared to the same period last year. * TV3 New Zealand broadcast operating profit was to NZ$7.3 million compared to NZ$7.9 million in the first quarter last year. This was attributable to a decline in the New Zealand currency which increased foreign program costs. Excluding the foreign exchange items, TV3's operating profit improved by NZ$1.5 million to NZ$7.2 million. TV3's contribution to CanWest's operating profit in Canadian currency was $5.5 million for the quarter ended November 30, 1999 compared to $6.3 million for the same period a year ago. * More FM's broadcast operating profit was flat at NZ$1.9 million reflecting the start-up of two new stations, More FM Waikato and Channel Z Christchurch in the fourth quarter of 1999. These start ups bring the total number of radio stations in New Zealand This is a list of radio networks and radio stations operating in New Zealand. Network Stations Radio New Zealand Stations
to nine. * CanWest Entertainment's operating profit was $622,000 for the quarter compared to $1.0 million last year. Timing variances in delivery of completed product account for the decrease in the current period. * Start-up losses generated from operations in development totalled $2.9 million, arising primarily from TV3 Ireland. This compares to start up losses of $2.7 million for the same period last year. Combined operating profit before amortization but after corporate and development expenses (EBITDA) was $97.5 million for the first quarter of fiscal 2000, compared to $96.8 million last year. Investment income, including dividends from Ulster Television, totaled $1.2 million to date, compared with $2.8 million for the same period last year, which included dividends from Ulster Television and WIC. WIC suspended sus·pend v. sus·pend·ed, sus·pend·ing, sus·pends v.tr. 1. To bar for a period from a privilege, office, or position, usually as a punishment: suspend a student from school. payment of dividends after the second quarter in 1999. Financing expenses of $11.8 million for the first quarter of fiscal 2000 compare to $8.2 million for the same period last year. Financing expenses include the Company's cost of financing our investment in WIC as discussed above, as well as additional strategic investments. Had the operating results of these investments been included in the combined results, revenues and operating profits would have increased significantly. NET EARNINGS Net earnings totaled $48.9 million and $0.33 per share compared to $51.7 million or $0.35 per share last year. CASH FLOW Cash flow from operations totalled $60.6 million or $0.40 per share for the first quarter of fiscal 2000 compared to cash flow from operations of $64.5 million or $0.43 per share for the same period in 1999. RESULTS DETERMINED IN ACCORDANCE Accordance is Bible Study Software for Macintosh developed by OakTree Software, Inc.[] As well as a standalone program, it is the base software packaged by Zondervan in their Bible Study suites for Macintosh. WITH U.S. GAAP Net earnings determined in accordance with U.S. GAAP were $51.5 million for the three months ended November 30, 1999 compared to $50.0 million for the same period last year. Basic and fully diluted earnings per share diluted earnings per share An earnings measure calculated by dividing net income less preferred stock dividends for a period by the average number of shares of common stock that would be outstanding if all convertible securities were converted into shares of were $0.34 in the first quarter in both years. |
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