Corus Entertainment Inc.

Good morning. My name is Joelle, and I will be your conference operator today. At this time, I would like to welcome everyone to the Chorus Entertainment Q1 2026 Analyst and Investor Conference Call. All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question and answer session. If you would like to ask a question during this time, simply press star, then the number one on your telephone keypad. If you would like to withdraw your question, please press star two. Thank you. As a reminder, this call is being recorded. I will now turn the call over to Mr. John Gosling, CEO of Coors Entertainment. Mr. Gosling, you may begin your conference.

Thanks very much, Joelle, and good morning, and happy new year, everyone. Welcome to our fiscal 2026 first quarter earnings call. I'd like to remind everyone that we have slides to accompany today's call, and you can find them on our website at www.coorsent.com. under the Investor Relations dash Events and Presentations section. I'll start off by drawing your attention to our standard cautionary statement, which comes down on slide two. We note that forward-looking statements may be made during this call, and actual results may differ materially from forecast projections or conclusions in these statements. We'd also like to remind those on our call today, in addition to disclosing results in accordance with IFRS, The course also provides supplementary non-IFRS or non-GAAP measures as a method of evaluating the company's performance and to provide a better understanding of how management views the company's performance. Today, we will be referring to certain non-GAAP measures in our remarks. Additional information on these non-GAAP measures, the company's report results, and factors and assumptions related to forward-looking information can be found in our first quarter 2026 report shareholders and the 2025 annual report, which can be found on CDAR+, or in the investor relations dash financial report section of our website. Joining me on today's call are Jennifer Lee, who is our chief administrative and legal officer, as well as senior finance team members Doug Spence and Ann Duggan, all of whom are outlined on slide three. All right, let's move on to slide four, and I'll start with a brief update on the proposed recapitalization transaction, which was first announced this past November. On December 17th, we received an interim court order which authorizes us to proceed with concurrent special meetings of note holders and shareholders to seek approval of the plan of arrangement for the transaction. This plan represents the culmination of a thorough strategic review that our board launched in early 2024 with the help of leading financial and legal advisors. Following this very comprehensive process where we looked at a number of options and factors, the board unanimously determined that this recapitalization transaction represents the best value option sorry, the best viable option for Forrest and our stakeholders at this time. The proposed transaction is expected to deliver substantial benefits by reducing total debt by more than $500 million, generating annual cash interest savings of up to $40 million, providing continued increased access to our secured lending facility and extending debt maturities by five years. This transaction is already strongly supported by several key stakeholders, with over 74% of senior note holders and more than 86% of Class A voting shareholders backing it. Importantly, this proposal also seeks to preserve as much value as possible for all stakeholders, particularly in light of the significant debt burden, the upcoming maturities of our credit facility, and the $750 million of senior notes and the ongoing industry headwinds. Last week, we filed and mailed meeting materials to all security holders as of the record date, which was December 24th, in respect of the meetings, which will be held later this month on January 30th. The meeting materials provide comprehensive details on the proposed transaction, along with clear instructions on how to vote. We urge all stakeholders to vote early, ahead of the January 28th proxy deadline, and to vote for this transaction. The dedicated proposed transaction page on our website also has more information on how to access materials how to vote, and information on who to call for assistance or more information about the process. All right, now over to slide five for a review of some key factors that contributed to viewing and advertising trends this fall and to provide highlights on the performance of our strong fall schedule. As mentioned on our last call, sports, particularly the Blue Jays playoff run in September and October, contributed to a temporary but significant shift in audience behavior. This impacted our specialty audiences in particular, as well as advertising buying patterns, all of which is similar to what we see during the Olympics. We saw audience momentum pick up notably once the World Series wrapped up, which set the stage for a return to more typical patterns across our networks. We are proud that Global emerged once again as the number one network in core primetime post the baseball season, with 11 of the top 20 most watched programs, including number one reality series Survivor and proven franchises 911, NCIS, and FBI, all ranking in the top 10. Plus, new franchise extension Sheriff Country secured a top 20 ranking in its freshman run. Core specialty channels also increased their presence in the rankings, reflecting the strength and broad reach of our portfolio. And in particular, W Network maintained its position as the number one specialty entertainment destination this fall, with Hallmark Channel's Countdown to Christmas again driving the success. History remains the number one factual network with eight of the top 20 specialty entertainment programs, and Home Network and Flavor Network continue to be in the number one and number two lifestyle brand positions. In addition... Our thoughtful rationalization of our kids' specialty portfolio to better reflect viewer case and demand has resulted in some audience consolidation into our remaining kids' brands. We saw Y2B in for the first time ever a boomerang position within the top 20 networks this fall. These achievements underscore the effectiveness of our strategic programming decisions and the continued appeal of our brands to Canadian audiences. On the streaming side of the business, overall viewing continues to gain strength, hitting an all-time high in Q1 for hours streamed. and monthly hours per monthly active user on Stack TV and global TV app combined. Stack TV tuning has grown by 5% during the fall 25 season, primarily driven by video on demand, which was up 23% over last year. Our streaming offerings are full of potential, and the revenue team is working diligently to pursue attractive opportunities in this area. All right, turning to slide six, let's take a look ahead to our exciting and packed winter schedule. Global Anonymous, a robust slate of premieres anchored by the landmark 50th season of Canada's number one reality series, Survivor. The mid-season lineup features exciting new additions, including drama series CIA, an expansion of the FBI universe, reality competition debut America's Culinary Cup, and true crime series Harlan Coleman's Final Twist. Rounding up the schedule, several of the most watched series return, with new seasons of the top 20 ranked series, Matlock, Elspeth, NCIS Origins, and Sheriff Country. In addition, the fall's number one new comedy, DMV, and Emmy Award-winning comedy, Abbott Elementary, also returns. Over to specialty. Showcase unveiled new titles in this lineup, including Peacock Originals, The Copenhagen Test, and Ponies. W's Network features new Peacock Originals series, The Birbs, and the comedy Zed Suite, probably Z-Suite, actually, alongside returning favorites, The Chicken Sisters, When Calls the Heart, and Outlander. Flavor Network continues to deliver fresh culinary content with new seasons and series, including Worst Cooks in America, Gordon Ramsay's Secret Service, the Great British Baking Show, Professionals, and Stanley Tucci's Searching for Italy. Over on Home Network, we welcome Property Pros, Kirstie Alsop and Phil Spencer with Season 10 of Love at Our List at UK, and the History Channel introduces gripping new series, History's Deadliest with Bing Raines. Overall, This diverse and dynamic lineup underscores course commitment to delivering compelling, fresh content together with the hits that engage audiences across all of our platforms. All right, moving on to slide seven. I'll briefly note that with the ongoing limited visibility on multiple fronts, including ongoing volatility in the macroeconomic, regulatory, and competitive environments, we do not believe it's appropriate to provide specific quarterly outlooks at this time. We are very focused on our strategic plans, including completing the recapitalization transaction and remain focused on discipline cost management and execution of value enhancing actions and opportunities. With that, I'll turn it over to Doug to review the financial results.

Thanks, John. Consistent with the outlook for TV advertising we provided on the Q4 call, our first quarter results reflect the continuation of trends in the broader advertising market related to linear TV demand, oversupply of digital inventory, and macroeconomic conditions. In addition, Lower subscriber revenue reflects the discontinuation of seven specialty channels since Q1 of last year, declines in the linear business, and ongoing disputes with certain distributors. TV advertising revenue was in line with our prior outlook with a decline similar to Q4 of fiscal 2025. This, combined with the lower subscription revenue, contributed to consolidated revenue of $268 million for the quarter, an 18% increase from the prior year. Consolidated segment profit was $57 million for the quarter, reflecting the revenue decline partially offset by the benefits of our cost reduction initiatives. For the first quarter, these resulted in a 16% reduction in general and administrative expenses. This was at the top end of our Q1 outlook of 10% to 15%, and includes a decrease of 10% in employee costs. In addition, lower amortization of program rights and film investments resulted in an 11% decrease in direct cost of sales. Combined, these helped to drive total expenses lower by $32 million, or 13% for the quarter, reflecting meaningful progress on our cost reduction commitments and efforts to right-size our business. The consolidated segment profit margin was 21% for the quarter, down from 26% last year. Free cash flow was negative $54 million in Q1. This reflects the lower segment profit, higher net investment in program rights and film investments, and proceeds from a sale of property in the prior year. Program rights in particular were impacted by the timing of certain buildings and program premieres in the current year, and this was partially offset by discontinuation of certain program rights related to TV portfolio changes in the prior year. At the end of our first quarter, we were in compliance with all covenants and had approximately $45 million of cash and cash equivalents and $35 million available to be drawn under our revolving credit facility. Net debt to segment profit increased to 7.39 times at the end of the first quarter, compared to 6.01 times at the end of last year, driven by the lower segment profit and higher debt balances. As John mentioned, we continue to focus on opportunities to further offset lower revenue while delivering on our longer-term strategic objectives. This includes progressing our proposed recapitalization transaction to strengthen Coors's financial position and support a sustainable business strategy. Moving to slide eight, TV segment revenue was $245 million for the first quarter, down 19% from the prior year. This was mainly driven by lower TV advertising revenue, which declined 23% to $135 million, and subscriber revenue, which declined 15% to $99 million. When we normalized for the sunset of two specialty channels in December 2024 and five additional channels at the start of the first quarter, combined with ongoing disputes with certain distributors, subscriber revenue for the quarter was down 3% compared to last year. Distribution, production, and other revenue was 2% lower for the quarter, driven by a pause in production in our animation studio as part of our cost containment efforts. TV segment expenses were $189 million in the quarter, down 13% from the prior year, driven by an 11% reduction in direct cost of sales and a 16% decline in general and administrative costs. Direct cost of sales benefited from the channel portfolio changes mentioned earlier, as well as reduced costs associated with certain digital sales initiatives. The savings in general and administrative costs reflected management's ongoing focus on cost contained. Overall TV segment profit declined 35% in the first quarter, mainly reflecting lower revenue, partially offset by the benefit of expense savings from significant ongoing cost reduction initiatives as we work to mitigate the impact of lower revenues. TV segment profit margins were 23% in Q1 compared to 28% last year. Moving to slide nine, radio segment revenue of $22 million for the quarter decreased 4% from the prior year period due to lower advertising demand. From a category perspective, Q1 saw declines in government or political spending and professional services, but saw increased pharmaceutical advertising, as well as benefiting from resilient revenues in the retail, entertainment, and automotive categories, which have historically been significant advertisers on radio. Radio segment profit increased to $5 million, up 38% in the quarter, with cost containment measures more than offsetting the lower advertising demand. Radio segment profit margin improved significantly 24% in Q1 compared to 16% last year benefiting from our cost reduction initiatives. I'll now turn it over to Jen for comments on the regulatory environment and recent developments.