Score Media continues strong results in Q2 2007



    
    -  Revenue for the three months ended February 28, 2007 increased $0.9
       million to $7.7 million, compared to $6.8 million in the prior year.
       For the six months ended February 28, 2007, revenue increased $2.9
       million to $17.0 million, compared to $14.1 million in the prior year.

    -  EBITDA for the three months ended February 28, 2007 increased $0.4
       million to $1.2 million, compared to $0.8 million in the same period
       last year. EBITDA for the six months ended February 28, 2007 increased
       $0.9 million to $3.2 million, compared to $2.3 million in the same
       period last year.

    -  Net income for the Company for the three months ended February 28,
       2007 was $0.3 million, compared to $0.4 million in the prior year. Net
       income during the second quarter of 2007 was net of income tax expense
       of $0.4 million compared to no income tax expense in the same period
       last year. For the six months ended February 28, 2007, net income was
       $1.1 million, compared to $1.5 million in the prior year. Net income
       during the six months ended February 28, 2007 was net of income tax
       expense of $1.2 million compared to no income tax expense in the same
       period last year.

    -  In February 2007 the Company's wholly-owned subsidiary, Score Media
       Ventures Inc., announced the launch of Score Mobile Video, a mobile
       video clips service, available across Canada on every major wireless
       carrier. Score Mobile Video provides viewers access to signature Score
       programming on-the-go, including exclusive mobile coverage of NCAA
       March Madness.

    -  In March 2007 the Company launched its cross-platform coverage of NCAA
       March Madness, featuring extensive coverage of the tournament on
       television, online, on mobile devices and on video-on-demand. The
       Company will be the exclusive Canadian broadcast partner of NCAA March
       Madness through 2010.
    

    TORONTO, April 11 /CNW/ - Score Media Inc. (TSX: SCR) today announced its
second quarter financial results. The Company continued its strong growth in
the 3 and 6 months ended February 28, 2007, following its record revenue and
profitability in fiscal 2006. The positive results can be attributed to its
continued growth in subscriber and advertising revenue from its television
operations, as well as the success of Score Media's interactive properties and
Hardcore Sports Radio.
    "Score Media achieved double-digit year-over-year quarterly revenue
growth for the 11th consecutive quarter, which is a terrific attestation of
our core strengths - providing the best sports news, information and
entertainment to our fans, partners and advertisers," says John Levy, Chairman
and Chief Executive Officer, Score Media Inc. "Our developing interactive
properties and Hardcore Sports Radio will accentuate the solid platform of
success that has been achieved through our core TV business."

    Operating Highlights
    --------------------

    The following selected quarterly financial data of the Corporation
relates to the eight quarters ended February 28, 2007.

    
    -------------------------------------------------------------------------
                                                           Income per
                        Income from  Income from           share from  Income
    Quarterly            continuing  discontinued    Net   continuing    per
    Results    Revenue   operations   operations   income  operations   share
    -------------------------------------------------------------------------
               ($000's)   ($000's)     ($000's)   ($000's)     ($)       ($)
    -------------------------------------------------------------------------
    February
     28, 2007    7,731        262            -        262     0.00      0.00
    -------------------------------------------------------------------------
    November
     30, 2006    9,221        871            -        871     0.01      0.01
    -------------------------------------------------------------------------
    August 31,
     2006        6,935      9,805            -      9,805     0.11      0.11
    -------------------------------------------------------------------------
    May 31,
     2006        8,010      1,618           91      1,709     0.02      0.02
    -------------------------------------------------------------------------
    February 28,
     2006        6,750        413            -        413     0.00      0.00
    -------------------------------------------------------------------------
    November 30,
     2005        7,380      1,109            -      1,109     0.01      0.01
    -------------------------------------------------------------------------
    August 31,
     2005        6,104        211            -        211     0.00      0.00
    -------------------------------------------------------------------------
    May 31,
     2005        7,326      1,728          148      1,876     0.02      0.02
    -------------------------------------------------------------------------
    

    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.
Therefore, one quarter's operating results are not indicative of the
performance for the balance of the year.

    Three Months Ended February 28, 2007

    Revenue for the three months ended February 28, 2007 increased by $0.9
million to $7.7 million compared to $6.8 million in the prior year. This
increase was due to a combination of greater television subscriber revenue,
increased television advertising revenue, and revenues from Hardcore Sports
Radio and Score Media's interactive properties that were launched in the past
18 months.
    Television subscriber revenue increased approximately $0.1 million in the
second quarter reflecting continued growth in the subscriber base with several
broadcast distribution undertakings, compared to the second quarter of fiscal
2006. Television advertising revenue increased by approximately $0.5 million
during the second quarter, reflecting successes in marketing several new live
event sports programs, as well as continued advertising growth associated with
the Company's news programs. This advertising growth was supplemented with
increased revenue of approximately $0.3 million from the new business units.
    Operating expenses excluding rights fees were $5.3 million during the
quarter, compared to $5.2 million in the prior year, representing an increase
of $0.1 million.
    Program rights expenses were $1.3 million during the quarter, an increase
of $0.6 million compared to $0.7 million in the prior year. The increase in
program rights at The Score reflects higher program rights fees for Toronto
Raptors and other professional basketball, NCAA basketball, and Canadian
college football.
    EBITDA was $1.2 million compared to $0.8 million in the same period last
year, an increase of $0.4 million.
    Interest expense (net) for the second quarter was approximately nil
compared to $0.1 million in the same period last year due to lower average
bank loan balances during the second quarter compared to the prior year. The
Company completed the sale of 11.8 million Class A Subordinate voting shares
to the public at a price of $0.85 per share during the second quarter of
fiscal 2006 for net proceeds of $10.4 million which resulted in interest
income on cash and cash equivalents of $0.1 million in the three months ended
February 28, 2007.
    Depreciation and amortization expense increased $0.1 million in the
second quarter to $0.4 million compared to $0.3 million in the prior year,
reflecting the depreciation of new fixed assets in The Score as well as
Hardcore Sports Radio and Score Media's interactive properties that were
launched in the past 18 months. For the second quarter, fixed asset additions
were approximately $1.1 million compared to $0.4 million in the prior year;
fixed asset additions were largely associated with expanding television
broadcasting with a "high definition" channel and for new software and
computer equipment to support the new interactive properties.
    Net income for the three months ended February 28, 2007 was $0.3 million
or $0.00 per share based on a weighted average 98.6 million Class A
Subordinate Voting Shares and Special Voting Shares outstanding, compared to
$0.4 million or $0.00 per share based on a weighted average 86.7 million
Class A Subordinate Voting Shares and Special Voting Shares outstanding in the
prior year.
    During the three months ended February 28, 2007, net income was net of
income tax expense of $0.4 million compared to nil in the same period last
year. In August 2006, the Company recorded a future tax asset of $9.1 million
pertaining to the release of a portion of a valuation allowance in respect of
future tax assets. During the second quarter ended February 28, 2007, the
income tax expense of $0.4 million drew down the future tax asset. The
Company's effective tax rate was approximately 63% compared to its statutory
tax rate of 36% due to a valuation allowance being recorded against the losses
of certain entities in the consolidated group.

    Six Months Ended February 28, 2006

    Revenue for the six months ended February 28, 2007 increased by $2.9
million to $17.0 million compared to $14.1 million in the prior year. This
increase was due to approximately $0.2 million increased television subscriber
revenue, approximately $2.2 million increased television advertising revenue,
and approximately $0.5 million of revenues from Hardcore Sports Radio and
Score Media's interactive properties that were launched in the past 18 months.
    Operating expenses excluding rights fees were $11.8 million for the six
months ended February 28, 2007 compared to $10.6 million in the prior year,
representing an increase of $1.2 million. This increase resulted from higher
programming expenses associated with more live event programming, higher
compensation costs from general staffing increases, marketing expenses
associated with the launch of new initiatives, and greater occupancy costs at
the Company's facilities.
    Program rights were $2.0 million during the six month period ended
February 28, 2007, compared to $1.2 million in the prior year, an increase of
$0.8 million. Program rights for the six month period ended February 28, 2007
increased for live events such as NBA and NCAA basketball, as well as Canadian
college football.
    EBITDA for the six months ended February 28, 2007 was $3.2 million,
compared to $2.3 million for the same period last year, resulting in an
increase of $0.9 million.
    Interest expense (net) for the six month period ended February 28, 2007
was $0.1 million compared to the $0.3 million in the prior year. The decrease
of approximately $0.2 million reflects lower average bank loan balances
compared to the prior year. The Company completed an issue of equity shares
discussed above which resulted in interest income on cash and cash equivalents
of $0.2 million in the six months ended February 28, 2007 (2006 - nil).
    Depreciation and amortization expense for the six month period ended
February 28, 2007 increased $0.3 million in the second quarter to $0.8 million
compared to $0.5 million in the prior year, reflecting the depreciation of new
fixed assets in The Score as well as Hardcore Sports Radio and Score Media's
interactive properties that were launched in the past 18 months. Fixed asset
additions were approximately $2.8 million compared to $0.9 million in the
prior year; fixed asset additions were largely associated with expanding
television broadcasting with a "high definition" channel and for new software
and computer equipment to support the new interactive properties.
    Net income for the six months ended February 28, 2007 was $1.1 million or
$0.01 per share based on a weighted average 98.1 million Class A Subordinate
Voting Shares and Special Voting Shares outstanding, compared to $1.5 million
or $0.02 per share based on a weighted average 84.9 million Class A
Subordinate Voting Shares and Special Voting Shares outstanding in the prior
year.
    During the six months ended February 28, 2007, net income was net of
income tax expense of $1.2 million compared to nil in the same period last
year. In August 2006, the Company recorded a future tax asset of $9.1 million
pertaining to the release of a portion of a valuation allowance in respect of
future tax assets. During the six months ended February 28, 2007, the income
tax expense of $1.2 million drew down the future tax asset. The Company's
effective tax rate was approximately 51% compared to its statutory tax rate of
36% due to a valuation allowance being recorded against the losses of certain
entities in the consolidated group.

    Liquidity and Capital Resources

    Cash flows provided by operations for the three months ended February 28,
2007 were $0.1 million compared to cash flows provided by operations of $0.8
million in the prior year. The decrease of $0.7 million reflects movements in
non-cash working capital and a decrease in net income, which was partially
offset by increases in non-cash expenses.
    For the six months ended February 28, 2007, cash flows provided by
operations were $1.9 million compared to cash flows provided by operations of
$1.6 million in the prior year. The increase of $0.3 million reflects
increases in non-cash expenses - primarily income taxes in the amount of $1.2
million - which was partially offset by movements in non-cash working capital
and a decrease in net income.
    For the balance of fiscal 2007, the Company anticipates that cash flows
provided by operations will increase compared to fiscal 2006 based on
anticipated increases in both advertising and subscriber revenues with more
moderate increases in operating expenses. The Company has sufficient cash,
cash equivalents and marketable securities as well as working capital lines of
credit to support its operations.
    Cash flows provided by financing activities for the three months ended
February 28, 2007 was $0.2 million compared to $9.7 million in the prior year
as a result of the proceeds of an issue of equity securities in 2006. Cash
flows provided by financing activities for the six months ended February 28,
2007 was nil compared to $9.7 million in the 6 months ended February 28, 2006
largely due to this equity issue.
    On February 8, 2006 the Company completed the sale of 11.8 million
Class A Subordinate voting shares to the public at a price of $0.85 per share.
On February 15, 2006, the underwriter exercised an option to acquire 1.8
million Class A Subordinate Voting shares at $0.85 per share, being the price
of the offering to cover over-allotments, representing an amount of 15% of the
total number of Class A Subordinate voting shares offered. The net proceeds of
the offering amounted to $10.4 million.
    As part of the offering of the Class A Subordinate Voting shares, the
Company granted the underwriter 949,900 warrants to acquire 949,900 Class A
Subordinate Voting shares at an exercise price of $0.85 per warrant as partial
compensation for services rendered. These warrants expire in August 2007.
During the three months ended February 28, 2007, the underwriter exercised
472,700 of the warrants for net proceeds of $0.4 million to the Company.
    The proceeds of the offering are being used to (i) finance upgrades to
existing studio facilities and the implementation of "High Definition TV"
broadcasting capabilities; (ii) to provide funds for marketing, application
development, programming and working capital to Score Poker, Score Mobile, and
Hardcore Sports Radio; and (iii) for general corporate purposes.
    On May 26, 2005 the Company entered into a $15.0 million credit facility
with a Canadian chartered bank. The credit facility is comprised of a $10.0
million, 5-year term loan maturing on August 31, 2010, and a $5.0 million
revolving credit facility. This bank credit facility is available for general
corporate purposes.
    The provisions of the Company's bank credit facility impose restrictions,
the most significant of which are restrictions on investments, sales of
assets, distributions to shareholders, restrictions on new or renewed
programming rights agreements, and the maintenance of certain financial
covenants. Financial covenants include total funded debt to earnings before
interest, taxes, depreciation and amortization (EBITDA) and maximum capital
expenditure amounts.
    At February 28, 2007, the current portion of bank loan was $1.0 million,
which reflects the amount of the term loan due within 12 months; the long-term
portion of the term loan was $8.5 million.
    Cash flows used in investment activities for the three months ended
February 28, 2007 was $1.1 million compared to cash flows used in investment
activities of $0.4 million in the prior year. Fixed asset additions were
largely associated with expanding television broadcasting with a "high
definition" channel and for new software and computer equipment to support the
new interactive properties.
    Cash flows used in investment activities for the six months ended
February 28, 2007 was $2.9 million compared to cash flows used in investment
activities of $0.9 million in the prior year. These amounts also relate to
capital expenditures to expand and improve programming and production
facilities at The Score.
    For the entire fiscal 2007 year, the Company anticipates that
expenditures on new and replacement fixed assets will be approximately $9.0
million, which can be financed by cash flow from operations and cash and cash
equivalents on hand.
    Other than the credit facilities described above, the Company has no
other financial instruments and thus believes that there are no price, credit
or liquidity risks that it could be subject to from such instruments.

    Contractual Obligations

    The Company has no debt guarantees, capital leases or long-term
obligations other than loans which are disclosed on the Consolidated Balance
Sheets as at February 28, 2007, and August 31, 2006 and the notes thereto.
    Contractual operating obligations as at February 28, 2007 for the fiscal
years noted below are as follows:

    
    -------------------------------------------------------------------------
    Contractual
     Obligations        2007    2008    2009    2010    2011   There-  Total
     (in thousands                                             after
     of dollars)
    -------------------------------------------------------------------------

    -------------------------------------------------------------------------
    Operating lease
     obligations         932   1,472   1,074   1,121     685   1,750   7,034
    -------------------------------------------------------------------------
    Programming rights
     obligations         526   2,719   1,610   1,639       -       -   6,494
    -------------------------------------------------------------------------
    Long-term debt
     obligations         500   1,000   1,500   6,500       -       -   9,500
    -------------------------------------------------------------------------
    Total              1,958   5,191   4,184   9,260     685   1,750  23,028
    -------------------------------------------------------------------------
    

    About Score Media Inc.
    ----------------------

    Score Media Inc. (TSX: SCR) is a media company committed to creating
consumer value through creative solutions, technology, and innovation in
response to sports fans' growing desire for increased participation in their
consumption of sports content. Score Media's main asset is The Score
Television Network, a national specialty television service providing sports,
news, information, highlights and live event programming, available across
Canada in more than 6.1 million homes.

    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 "believe", "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, investors should not place undue reliance on
forward-looking statements as a prediction of actual results as actual results
could differ materially from the expectations expressed in these
forward-looking statements. Score Media Inc. disclaims any intention or
obligation to update or revise any forward-looking statements, whether as a
result of new information, future events or otherwise.

    %SEDAR: 00003035E




For further information:

For further information: Patrick Michaud, Executive Vice President and
CFO, (905) 522-0471

Organization Profile

Score Media Inc.

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