Revs up 52%, earnings 78%
MONTREAL — Cinar Corp., which is at the center of a major scandal in Canada after allegations of tax fraud, reported record financial results Tuesday for its third quarter and first nine months of the year.
For the quarter, revenue was up 52% and net earnings rose 78%.
Cinar’s shares have taken a beating since it was alleged by an opposition Bloc Quebecois member of Parliament in the House of Commons that the Montreal-based producer of children’s TV programming engaged in fraudulent activities to obtain federal tax credits.
The company’s shares on the Toronto Stock Exchange dipped C$15.15 ($10.34) on Monday to close at a 52-week low of $17.98. Tuesday afternoon, Cinar shares had rebounded slightly on the Toronto board and were trading at $20.10.
For the third quarter ended Aug. 31, Cinar had revenues of $31.7 million, up from $20.8 million in the third quarter of last year. Cinar Education, which includes childhood-products distributor HighReach Learning, accounted for 50% of the revenue in the quarter, compared with 41.6% last year. Net earnings were $4.6 million, compared with $2.6 million last year.
For the nine-month period, revenues grew 41% to $91.4 million, up from $65 million in the first nine months of last year. Cinar Education accounted for 39% of the revenues, compared with 31% last year. Net earnings increased 51% to $13 million, from $8.6 million last year.
In a statement, Cinar president Ronald Weinberg said: “We are very pleased with our financial performance this quarter. During this period we delivered 38 new half-hours of animation and live-action programs, bringing the library to a total of 1,570 half-hours. Management will continue to pursue the company’s plans for its growth and development.”