Corus Entertainment Inc. (CJRB) Earnings Call Transcript & Summary

Good afternoon. I would like to welcome everyone to the Corus Entertainment 2025 Annual General Meeting of Shareholders. I will now turn the meeting over to Heather Shaw, Executive Chair of Corus Entertainment.

Thank you, operator, and welcome, everyone. I'm Heather Shaw, Executive Chair of Corus Entertainment. And with me today are John Gossling, Co-Chief Executive Officer and Chief Financial Officer; Troy Reeb, Co-Chief Executive Officer; and Jennifer Lee, Chief Administrative Officer and Chief Legal Officer and Corporate Secretary. There are a few administrative matters. As with any virtual technology, unexpected glitches can occur. Our hosting provider, Lumi, has technology personnel on standby to help. Refer to the links from the navigation menu for assistance. If you are a shareholder that has logged in with the control number, instructions will appear on your screen about how to ask questions and for Class A voting shareholders, the voting procedure will also appear. Holders of Class B nonvoting shares will not see this voting screen. Shareholders or proxy holders who entered the meeting with a control number may submit questions in writing at any time during the meeting by following the instructions in your web portal. We will respond to questions received if it pertains to the matter of business of the meeting. When the polls for resolutions are opened, Class A voting shareholders will receive a message on the virtual interface requesting you to register your votes. You will only have a certain amount of time to do so when the polls are open. If you have properly cast your vote prior to the start of the meeting, your vote has been received by the scrutineer and there is no need to vote those shares during the meeting unless you wish to revoke or change your vote. We have been advised by TSX Trust company that based on the proxies already deposited with them, enough votes have been cast to carry each of the motions. Before I call the meeting to order, I invite our co-CEOs, Troy Reeb and John Gossling to make a few remarks.

Thank you, Heather. It's Troy here. Good afternoon, everyone. Please note our cautionary statement on forward-looking information on Slide 4 in this presentation and as posted on our website. We have navigated through a series of significant challenges for our industry and business in fiscal 2024. These included the programming delivery impacts of Hollywood strikes, which resulted in changes in audience and advertiser behavior, a shift in programming and trademark rights in our lifestyle television portfolio and increased competitive intensity, resulting in a significant deterioration in our financial results. In response, we honed our long-term plan with a focus on emerging as a smaller but more profitable business. The following are a few examples of our progress to date. Our Board and executive leadership team have been reduced in size, and we have implemented workforce reductions across the company. We have executed on extensive cost reduction initiatives, resulting in significant decreases in direct costs of sales, employee costs and in other general and administrative expenses. We made tough decisions to focus our investments on elements of our core business that will contribute attractive margins into the future while discontinuing less sustainable parts of our business. And we have made smart investments in programming and marketing to support the launch of our 2 all new lifestyle networks: Flavour Network and Home Network. And the performance of our strong fall schedule are highlights of the work we are doing to build on our 25-year legacy of serving Canadian audiences and advertisers. I'll now turn it over to John.

Thanks very much, Troy. Our results for fiscal 2024, as shown on Slide 6, are as follows. Consolidated revenues were just under $1.3 billion for the year. Total consolidated segment profit was $283 million for the year and free cash flow was $114 million. Our year-end pro forma leverage was 3.84x net debt to segment profit at August 31, 2024. Our resilient team is committed to advancing our comprehensive plan to streamline our operations, lower our costs and reduce debt while making necessary investments in growth opportunities. Corus will continue with our advocacy efforts to protect the core of what we do, which is to provide Canadians with access to high-quality news, entertainment and content that drives audiences and results. We would like to thank you, our shareholders, for your ongoing support and our entire team, of course, for their hard work, dedication and commitment. I would also like to extend our thanks to Heather Shaw, our Executive Chair; and our Board of Directors for their continued support and guidance. I'll now pass the meeting back over to Heather Shaw.

Thank you, John and Troy. We will now proceed to the official business of the meeting. I call to order this Annual General Meeting of Shareholders. In accordance with the bylaws of the company, I will ask Jennifer Lee to act as Secretary of the meeting, and I will chair the meeting. TSX Trust Company will act as scrutineer. The company has adopted the notice and access method of delivering materials to both registered and nonregistered shareholders. As such, Corus mailed a notice to all shareholders of record as of November 27, 2024, and to each director and the auditors. The company's notice and management information circular and 2024 annual report have been posted by the company on the meeting documents website for this meeting on the company's website and on SEDAR+. Copies of the management information circular, together with the 2024 annual report, have also been posted on the Lumi platform. We have received a statutory declaration from the company's transfer agent attesting to the proper mailing of the notice of this meeting and accompanying materials. A copy of these documents will be kept as part of the records of the meeting. The scrutineer's report will now be read.

The scrutineer, TSX Trust Company, report that there are 25 shareholders holding 3,274,356 Class A voting shares represented in person or by proxy at this meeting. The total represents 97.29% of the 3,365,394 issued and outstanding Class A voting shares.

A quorum is present, and I now declare the meeting duly called and properly constituted. The minutes of last year's Annual General Meeting of shareholders of the company have been posted to the Lumi platform and are available for review. Class A voting shareholders and any other shareholder that has entered the meeting with a control number may address the meeting when there is a call to discuss the motion in front of the meeting. Should you wish to address the chair on any motion, please type in your question or comment in the message section. If there is any discussion or question pertaining to the motion, the Secretary will read the question aloud. We will now move to the formal business of the meeting. Certain of these items will be subject of a vote by the Class A voting shareholders. All matters before this meeting must be approved by no less than a majority of the votes cast by Class A voting shareholders present in person at this meeting or voting by proxy. In accordance with the statutes and bylaws governing Corus, we will conduct the votes on the matters before us by a poll. On a poll, each holder of Class A voting shares is entitled to 1 vote for each such share held. The electronic poll will be open for all resolutions at the same time. This will allow you to choose to vote on each resolution immediately or to wait until the conclusion of discussion on each resolution to cast your vote. As previously noted, if you have already voted on a particular resolution by proxy, any vote that you cast through the Lumi platform on that particular resolution will revoke your proxy. I now present to the meeting the audited consolidated financial statements of Corus Entertainment Inc. for the year ended August 31, 2024, and the report of the auditors on them. Copies of these documents are included in the 2024 annual report made available to the shareholders on the Lumi platform and on the meeting documents website for this meeting. They are also posted on the company's website and on SEDAR+ and no further approval is necessary. We will now open the electronic polls for all resolutions and proceed with the first item of business, the election of directors of the company. The company did not receive notice of any director nominations in connection with this meeting within the time prescribed by the advanced notice requirements in the company's bylaws. Accordingly, at this meeting, the only persons eligible to be nominated for election to the Board are the persons nominated by management as set out in the management information circular. Class A voting shareholders are being asked to elect the directors of the company to serve until the next Annual Meeting of Shareholders or until their successors are elected or appointed or until they otherwise cease to hold office. I now call for someone to propose the nominees named in the company's management information circular to be elected as directors of the company.

Madam Chair, I'm Cathy Roozen, and I nominate as directors of the company for the ensuing year those persons described in the management information circular that was sent with the notice of this meeting, namely Fernand Belisle, Charmaine Crooks, Mark Hollinger, Barry James, Margaret O'Brien, Heather Shaw, Julie Shaw.

Are there any comments on this nomination?

Madam Chair, I'm John Gossling, and I second the motion.

I declare the nominations closed, and we will now move to the individual election of our directors by poll. I have been advised by the scrutineer that nearly all of the proxies received by management prior to the meeting have been voted for the election of each of the persons nominated to serve as directors. As a reminder, Class A voting shareholders who have not already voted by proxy will now have the opportunity to enter their votes in the Lumi platform. If you have already provided voting instructions or submitted a proxy, you need not vote on this matter. Please proceed with entering your votes. [Voting]

The next segment of business is the appointment of auditors and authorization for the directors to fix the remuneration. May I please have a motion?

Madam Chair, I'm John Gossling, and I move that Ernst and Young LLP be appointed auditors of the company to hold office into the next Annual Meeting of Shareholders or until a successor is appointed and [Audio Gap].

Madam Chair, I'm Cathy Roozen, and I second the motion.

Thank you. You have heard the resolution. Are there any comments on the motion? Class A voting shareholders who have not already voted by proxy will now have the opportunity to enter their votes in the Lumi platform. If you have already provided voting instructions or submitted a proxy, you do not need to vote on this matter. Please proceed with entering your votes. [Voting]

The final item of business is to consider, and if deemed advisable, to approve a resolution confirming the adoption of the company's Board of Directors of amendments to Section 6.5 of the company's amended and restated bylaw #1. A summary of the key changes to the bylaws along with the full text of the new Section 6.5 as adopted by the Board is set out in the management information circular. May I have a motion to approve the confirmation of the amendment to the bylaw.

Madam Chair, I'm Cathy Roozen, and I move that the resolution approving the confirmation of the amendments to Section 6.5 of the company's amended and restated bylaw #1 be approved.

You have heard the resolution. Are there any comments on the motion? Class A voting shareholders who have not already voted by proxy will now have the opportunity to enter their votes in the Lumi platform. If you have already provided voting instructions or submitted a proxy, you do not need to vote on this matter. Please proceed with entering your votes. We will be closing the polls on all motions shortly. [Voting]

Okay. Thank you. The polls are now closed with respect to voting on all of the motions. Our scrutineer has confirmed that all votes have been counted. The preliminary results of voting are as follows. Our scrutineer has confirmed that all 7 persons named in the management information circular and nominated at this meeting have been individually elected as directors of the company. They will each hold office for a term to expire immediately following the next Annual Meeting of Shareholders or until their successors are elected or appointed, or they otherwise cease to hold office. Our scrutineer has confirmed that the motion to appoint Ernst & Young LLP as the auditors of the company to hold office until the next Annual Meeting of Shareholders or until the successor is appointed and that the directors be authorized to fix their remuneration has been carried. Our scrutineer has confirm that the motion to approve a resolution confirming the adoption by the company's Board of Directors of amendments to Section 6.5 of the company's amended and restated bylaw #1 has been carried. The final report on voting results provided after the meeting by the scrutineer will be incorporated into the minutes of the meeting. We will also post the final voting results on the Investor Relations page of the company's website, and we'll file the results on SEDAR+.

Before we conclude the formal business of the meeting, we would like to take this opportunity to thank the Board of Directors for their support and guidance to this period of rapid change in the media industry. Thank you. I will now declare the formal part of the meeting terminated. I thank all the attendees for your time and attention, and it's back to the operator.

The Annual General Meeting of Shareholders of Corus Entertainment is now closed. Thank you, and please disconnect your lines.

Thank you.