Score Media Inc. Reports Q3 Financial Results

- Digital Media segment posts 46% growth in web and mobile revenues

- Broadcast segment maintains strong EBITDA performance

TORONTO, July 12, 2012 /CNW/ - Score Media Inc. (TSX: SCR) today announced its financial results for the third quarter ended May 31, 2012 in accordance with International Financial Reporting Standards ("IFRS").

  • Revenues for the three months ended May 31, 2012 were $12.7 million compared to $13.1 million in the three months ended May 31, 2011.
    • Digital media revenues for the three months ended May 31, 2012 were $1.1 million compared to $0.8 million in the three months ended May 31, 2011.
      • Digital media revenue growth reflects our success in monetizing our growing user base across our digital platforms in Canada and the United States.
    • Broadcast revenues for the three months ended May 31, 2012 were $11.5 million compared to $12.3 million in the three months ended May 31, 2011.
      • Broadcast revenues were impacted by anticipated revenue reductions from the closure of theScore Satellite Radio and lower contra revenues, as well as recent softness in the overall television advertising market.
  • EBITDA (see "Definitions") for the three months ended May 31, 2012 was $0.5 million compared to $2.1 million in the previous year, primarily as a result of a planned increase in expenditures on personnel and technology to support the significant growth in the audience of the Company's digital media platforms
    • Broadcast EBITDA for the three months ended May 31, 2012 was $3.8 million compared to $4.5 million in the three months ended May 31, 2011, primarily related to revenue reductions noted above and increased rights fees related to the Company's expanded content partnership with WWE (World Wrestling Entertainment).
    • Digital media EBITDA loss for the three months ended May 31, 2012 was $1.7 million compared to a $0.7 million EBITDA loss in the three months ended May 31, 2011. This was primarily related to planned increases to our product development and US direct sales teams, and traffic dependent technology costs.
    • Corporate costs for the three months ended May 31, 2012 were $1.6 million compared to $1.7 million in the three months ended May 31, 2011.

"Through investment in our digital platforms, we have again enjoyed significant audience growth year-over-year," said John Levy, Chairman and CEO, Score Media Inc. "This has enabled us to increase revenues generated through our industry leading mobile apps ScoreMobile and ScoreMobile FC, theScore.com website as well as the exclusive content showcased on our dedicated YouTube channel and on iTunes.

"Despite the recent softness in the television advertising market, our broadcast business remains solid and profitable and we remain strongly committed to developing and incorporating new and unique programming for theScore Television Network, such as our flagship afternoon show Live @theScore. This strategy leaves us well placed as the market begins to shows signs of recovery."

  • The Company's digital media assets registered significant audience growth in Q3/12:
    • ScoreMobile applications averaged 3.5 million unique users per month in Q3/12, growing by more than 1.1 million unique users per month, or more than 46%, from Q3/11.
    • theScore.com averaged 1.4 million unique users per month in Q3/12, an increase of 38% or 0.4 million unique users per month over Q3/11.
  • In Q3/12, Score Media Inc. announced a partnership with William Hill, allowing UK-based users of its ScoreMobile FC app to bet on live football matches at the touch of a button. The partnership with the UK's leading sports betting and gaming provider enabled users of ScoreMobile FC to place bets with their iPhone, BlackBerry or Windows smartphones via their williamhill.com account.
  • Score Media and Gillette Canada announced a partnership to produce Season 4 of Gillette DRAFTED.  For the first time in the show's history, viewers of theScore would decide who would be crowned winner, earning a one-year contract as Score Media's newest sportscaster - contributing to theScore Television Network, theScore.com and ScoreMobile - plus a one-year spokesperson contract with Gillette.
  • A version of Score Media's popular free sports mobile application ScoreMobile was released for the Kindle Fire tablet. Already available for the iPad and BlackBerry PlayBook as well as for iPhone, BlackBerry, Android and Windows Phone smartphones, ScoreMobile has become a must-have app for sports fans, reaching more than 3.5 million unique users each month.
  • Score Media's dedicated soccer mobile application ScoreMobile FC was updated in time for the Euro 2012 tournament in Poland and Ukraine, including free customizable push alerts (including goals and key incidents); daily video "vodcasts" featuring special guests; synchronized tournament fixtures to user calendars; up-to-the-second live scores; live blogs or text commentary for every game; comprehensive list of match times, tables and statistics and the latest Euro 2012 news, previews and post-match analysis in video format.

THIRD QUARTER RESULTS

The following tables reconcile net and comprehensive income (loss) to EBITDA:

               
               
      Three months ended
        May 31, 2012     May 31, 2011
               
Net and comprehensive income (loss) for the period    $ (1,595)    $ 608
               
Adjustments:            
  Share of loss of equity accounted investee     14     21
  Depreciation and amortization     1,373     1,174
  Finance costs     238     156
  Income tax expense     423     189
               
EBITDA    $ 453    $ 2,148
               
               
      Nine months ended
        May 31, 2012     May 31, 2011
               
Net and comprehensive income (loss) for the period    $ (2,684)    $ 1,248
               
Adjustments:            
  Share of loss (profit) of equity accounted investee     37     (4)
  Depreciation and amortization     3,293     3,242
  Finance costs     677     425
  Income tax expense     1,072     970
               
EBITDA    $ 2,395    $ 5,881

 

Score Media Inc.         
Condensed Consolidated Statements of Financial Position    
(in thousands of Canadian dollars)        
(unaudited)        
           
      May 31, 2012   August 31, 2011
           
Assets        
           
Current assets:        
  Cash  $ 103  $ 398
  Accounts and other receivable   13,280   12,227
  Prepaid expenses and other assets   1,390   1,976
      14,773   14,601
           
Non-current assets:        
  Fixed assets   12,911   13,654
  Intangible assets   7,045   6,087
  Investment in equity accounted investee   925   936
  Deferred tax assets   5,610   6,682
      26,491   27,359
           
 Total assets   $ 41,264  $ 41,960
           
Liabilities and Shareholders' Equity        
           
Current liabilities:        
  Accounts payable and accrued liabilities   8,189   6,442
           
Non-current liabilities:        
  Provisions   184   -
  Revolving credit facility   13,092   12,979
      13,276   12,979
           
Shareholders' equity   19,799   22,539
           
 Total liabilities and shareholders' equity   $ 41,264  $ 41,960
           
           
See accompanying notes to unaudited interim financial statements

 

Score Media Inc.                        
Condensed Consolidated Statements of Comprehensive Income (Loss)                      
(in thousands of Canadian dollars, except share and per share amounts)                      
(unaudited)                        
                           
      Three months ended   Nine months ended
        May 31, 2012     May 31, 2011     May 31, 2012     May 31, 2011
                           
Revenues    $ 12,690    $ 13,092    $ 36,553    $ 35,867
                           
Operating costs     12,237     10,944     34,158     29,986
                           
EBITDA     453     2,148     2,395     5,881
                           
Finance costs     238     156     677     425
Depreciation and amortization     1,373     1,174     3,293     3,242
Share of loss (profit) of equity accounted investee     14     21     37     (4)
                           
Income (loss) before income taxes     (1,172)     797     (1,612)     2,218
                           
Deferred income tax expense     423     189     1,072     970
                           
Net and comprehensive income (loss) for the period    $ (1,595)    $ 608    $ (2,684)    $ 1,248
                           
Earnings (loss) per share - basic and diluted     $ (0.02)    $ 0.01    $ (0.03)    $ 0.02
                           
See accompanying notes to unaudited interim financial statements

Score Media Inc.           
Condensed Consolidated Statements of Cash Flows          
(in thousands of Canadian dollars)          
(unaudited)          
               
      Nine months ended  
        May 31, 2012   May 31, 2011  
               
Cash flows from operating activities          
  Net and comprehensive income (loss)  $ (2,684)  $ 1,248  
  Adjustments for:          
    Depreciation and amortization   3,293   3,242  
    Share-based compensation expense   38   148  
    Share of loss (profit) of equity accounted for investee   11   (48)  
    Income tax expense   1,072   970  
    Provisions   184   -  
    Finance costs   677   425  
        2,591   5,985  
  Change in non-cash operating working capital:          
    Accounts and other receivable   (1,053)   (3,159)  
    Prepaid expenses and other assets   475   (483)  
    Accounts payable and accrued liabilities   1,747   1,160  
        1,169   (2,482)  
Net cash from operating activities   3,760   3,503  
               
Cash flows used in investing activities          
  Additions to fixed assets   (1,304)   (1,588)  
  Acquisition of intangible assets   (2,285)   (3,343)  
  Acquisition of interest in equity investee   -   (893)  
Net cash used in investing activities   (3,589)   (5,824)  
               
Cash flows used in financing activities          
  Draws from credit facility   44,963   28,131  
  Repayments of credit facility   (44,850)   (25,354)  
  Interest paid, net   (596)   (326)  
  Issuance of Class A subordinate voting shares   17   135  
Net cash used in financing activities   (466)   2,586  
               
Net increase (decrease) in cash   (295)   265  
               
Cash, beginning of period   398   184  
               
Cash, end of period  $ 103  $ 449  
               
See accompanying notes to unaudited interim financial statements

 

Segmented Information:                     
                     
      Three months ended May 31, 2012 Nine months ended May 31, 2012
          Corporate Consolidated totals     Corporate Consolidated totals
      Broadcast Digital Media Broadcast Digital Media
                     
                     
Revenues    $ 11,545  $ 1,145  $ -  $ 12,690  $ 33,692  $ 2,861  $ -  $ 36,553
                     
Operating costs   7,725 2,875 1,637 12,237 22,742 6,545 4,871 34,158
                     
EBITDA   3,820 (1,730) (1,637) 453 10,950 (3,684) (4,871) 2,395
                     
Finance costs         238       677
Depreciation and amortization         1,373       3,293
Share of loss of equity accounted investee         14       37
                     
Loss before income taxes          $ (1,172)        $ (1,612)
                     
Additions to fixed assets    $ 249 26 1  $ 276  $ 1,173 119 12  $ 1,304
Additions to intangible assets    $ 20 1,126 -  $ 1,146  $ 162 2,118 5  $ 2,285
                     
      Three months ended May 31, 2011 Nine months ended May 31, 2011
          Corporate Consolidated totals     Corporate Consolidated totals
      Broadcast Digital Media Broadcast Digital Media
                     
                     
Revenues    $ 12,310  $ 782  $ -  $ 13,092  $ 33,392  $ 2,475  $ -  $ 35,867
                     
Operating costs   7,767 1,479 1,698 10,944 21,228 4,099 4,659 29,986
                     
EBITDA   4,543 (697) (1,698) 2,148 12,164 (1,624) (4,659) 5,881
                     
Finance costs         156       425
Depreciation and amortization         1,174       3,242
Share of loss of equity accounted investee         21       (4)
                     
Income before income taxes          $ 797        $ 2,218
                     
Additions to fixed assets    $ 175 24 9  $ 208  $ 1,502 75 11  $ 1,588
Additions to intangible assets    $ 9 1,589 -  $ 1,598  $ 116 3,204 23  $ 3,343

 

The following selected quarterly financial data of the Corporation relates to the eight quarters ended May 31, 2012.

Quarterly Results Accounting
Basis
Revenues EBITDA Net and
comprehensive
income (loss)
Earnings (loss)
per share - basic
and diluted
    ($000's) ($000's) ($000's) ($)
May 31, 2012 IFRS 12,690 453 (1,595) (0.02)
February 29, 2012 IFRS 10,446 40 (1,303) (0.02)
November 30, 2011 IFRS 13,417 1,902 212 0.00
August 31, 2011 IFRS 11,530 1,901 160 0.00
May 31, 2011 IFRS 13,092 2,148 608 0.01
February 28, 2011 IFRS 10,982 1,079 (215) 0.00
November 30, 2010 IFRS 11,793 2,654 856 0.01
August 31, 2010 GAAP 10,523 1,442 1,100 0.01

The Company's revenues have historically reflected a seasonality trend, with the third quarter (ending May 31st) being the strongest, followed by the first quarter (ending November 30th), the fourth quarter (ending August 31st), and finally the second quarter (ending February 28th). This seasonality reflects general trends for sports media advertising, which in turn reflects the schedules (particularly the playoffs) of the major sports leagues.

Want to connect with Score Media? 

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mediarelations@thescore.com

http://www.scoremedia.com/

About Score Media Inc.
Score Media is a media company committed to delivering interactive and authentic sports entertainment.  Score Media's primary asset, theScore Television Network ("theScore"), is a national specialty television service providing sports news, information, highlights and live event programming across Canada.  The Company's digital media assets include theScore.com and the industry leading mobile sports applications ScoreMobile, ScoreMobile FC and SportsTap which reach over three million unique users per month.  Growing from a team of 60 in 1997 to over 290 employees in fiscal 2012, Score Media is a revolutionizing interactive media company.

Forward-looking (safe harbour) statement
Statements made in this news release that relate to future plans, events or performances are forward-looking statements.  Any statement containing words such as "believes", "plans", "expects" or "intends" and other statements which are not historical facts contained in this release are forward-looking, and these statements involve risks and uncertainties and are based on current expectations.  Consequently, actual results could differ materially from the expectations expressed in these forward-looking statements.

 

SOURCE Score Media Inc.

For further information:

Tom Hearne
Chief Financial Officer
Score Media Inc.
416-977-6787 x2206
thearne@scoremedia.com

James Bigg
Community PR Supervisor
Score Media Inc.
416-977-6787 x2366
jbigg@scoremedia.com

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Score Media Inc.

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