theScore Reports F2016 Q4 and Year End Results

- F2016 revenue for mobile sports company up 94% year over year; app audience and engagement continues to grow

TORONTO, Oct. 20, 2016 /CNW/ - theScore, Inc. (TSX Venture: SCR) ("theScore") today announced the financial results for the three and 12 months ended August 31, 2016 in accordance with International Financial Reporting Standards ("IFRS").

The Company posted quarterly revenue of $5.0 million compared to $2.9 million in the same period the previous year, an increase of 70%. Revenue for the 12 months ended August 31, 2016 was $23.9 million compared to $12.4 million for the same period the previous year, an increase of 94%.

Advertising revenue for the quarter grew 70%, while advertising revenue for the 12 months ended August 31, 2016 was up 105%. Revenue growth was powered by theScore's US programmatic and Canadian direct sales businesses, driven in turn by growth in users and engagement within theScore's mobile apps.

Users of theScore's mobile applications* reached 4.0 million average monthly active users for the quarter, an increase of 9% over the same period in F2015. Average monthly user sessions of theScore's mobile applications reached 278 million for the quarter, up by 32% compared to the same period in F2015.

"In just three years we have more than quadrupled our annual revenue, doubled in-app engagement, and firmly established theScore as a leader in mobile sports in North America," said John Levy, Founder and CEO of theScore. "We've built-out a best-in-class team that's committed to achieving audience, engagement and revenue growth across our mobile apps, while also expanding our brand presence across established – and emerging - digital platforms to ensure theScore is reaching sports fans wherever they are.

"We remain on track to deliver on our long-term vision of making theScore a profitable and self-sustaining business and we are excited by what the future holds."

Adjusted EBITDA loss for the three and 12 months ended August 31, 2016 was $3.8 million and $12.4 million compared to $4.0 million and $10.7 million in the same period the previous year. Net and comprehensive loss for the three and 12 months ended August 31, 2016 was $5.2 million and $16.9 million compared to $4.6 million and $13.5 million in the same period the previous year.

The increase in the Adjusted EBITDA loss is a result of increased revenues offset by increased personnel and marketing costs associated with theScore's continued investment in its esports and fantasy sports' businesses.

theScore announced the grant of an aggregate of 4,112,500 options on October 19, 2016, including 1,580,000 options to directors and officers of the Company. Options were granted to the following directors and officers: Norwest Video Inc. (600,000 options); Benjamin Levy (300,000 options); Tom Hearne (200,000 options); Ralph Lean (60,000 options); John Albright (60,000 options); Mark Scholes (60,000 options); Lorry Schneider (60,000 options); William Thomson (60,000 options), Mark Zega (60,000 options) and Kirstine Stewart (120,000 options). Each option is exercisable for one Class A Subordinate Voting Share of theScore at an exercise price of $0.21, vests over three years and has a term of ten years. Each option is exercisable in accordance with the terms and conditions of the Company's stock option plan.

theScore will be hosting a conference call at 8:30am EST on Thursday, October 20. Management will review the Company's Q4 F2016 results, followed by a question and answer session.

Conference Call Dial-In Numbers
Toronto: (+1) 416 764 8688
Toll Free North America: (+1) 888 390 0546

Instant Replay
Toronto: (+1) 416 764 8677
Toll Free: North America (+1) 888 390 0541
Playback Passcode: 573518 #

The conference call will also be webcast live here.

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Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.

About theScore Inc.
theScore, Inc. is an independent creator of mobile-first sports experiences, connecting fans to the sports content they love through an addictive combination of comprehensive and personalized real-time news, scores, stats, alerts and videos via emerging and established digital media platforms, including its mobile sports applications theScore and theScore esports, its web platforms theScore.com and thescoreesports.com and its chatbot services for Facebook Messenger and Kik Messenger.

Non-IFRS Financial Measures
In addition to disclosing results in accordance with IFRS as issued by the International Accounting Standards Board ("IASB"), theScore also provides supplementary non-IFRS financial measures as a method of evaluating the Company's performance. theScore utilizes earnings before interest, taxes, depreciation, amortization and acquisition costs ("Adjusted EBITDA") to measure operating performance.  theScore's definition of Adjusted EBITDA excludes depreciation and amortization, finance income, income taxes, and acquisition costs which in theScore's view do not adequately reflect its core operating results.  Adjusted EBITDA is used in the determination of short-term incentive compensation for all senior management personnel. The Company revised the non-GAAP measure in 2015 from EBITDA to adjusted EBITDA, as a result of the acquisition costs incurred related to Swoopt. Adjusted EBITDA is not a measure of performance under IFRS and should not be considered in isolation or as a substitute for net and comprehensive income or loss prepared in accordance with IFRS or as a measure of operating performance or profitability. Adjusted EBITDA does not have a standardized meaning prescribed by IFRS and is not necessarily comparable to similar measures presented by other companies.

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 "may", "would", "could", "will",  "believes", "plans", "anticipates", "estimates", "expects" or "intends" and other similar 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. Such statements reflect theScore's current views with respect to future events and are subject to certain risks, uncertainties and assumptions. Many factors could cause the Company's actual results, performance or achievements to be materially different from any future results, performance or achievements that may be expressed or implied by such forward looking statements, including among other things, those which are discussed under the heading "Risk Factors" in the Company's Annual Information Form as filed with the TSX Venture Exchange and available on SEDAR at www.sedar.com and elsewhere in documents that theScore files from time to time with securities regulatory authorities. Should one or more of these risks or uncertainties materialize, or should assumptions underlying the forward-looking statements prove incorrect, actual results could differ materially from the expectations expressed in these forward-looking statements. The Company does not intend, and does not assume any obligation, to update these forward-looking statements except as required by applicable law or regulatory requirements.

[*] User and user engagement metrics in the current and comparative periods excludes the following platforms no longer supported by theScore: (i) theScore app on BlackBerry 7, BlackBerry Playbook, Kindle Fire and Windows Phone 7; and (ii) theScore's legacy soccer application, ScoreMobile FC.

theScore, Inc.




Consolidated Statements of Financial Position




(in thousands of Canadian dollars)











2016


2015

ASSETS




Current assets:





Cash and cash equivalents 

$

15,554


$

31,841


Accounts receivable

5,326


3,376


Tax credits recoverable 

5,192


4,777


Prepaid expenses and deposits

1,008


842



27,080


40,836

Non-current assets:





Property and equipment

2,141


2,123


Intangible assets 

5,807


7,361


Investment

760


760


Tax credits recoverable 

1,616


1,399



10,324


11,643






 Total assets 

$

37,404


$

52,479






LIABILITIES AND SHAREHOLDERS' EQUITY




Current liabilities:





Accounts payable and accrued liabilities

$

5,180


$

4,583

Non-current liabilities:





Deferred lease obligation

495


510






Shareholders' equity

31,729


47,386






Commitments 









 Total liabilities and shareholders' equity 

$

37,404


$

52,479

















theScore, Inc.




Consolidated Statements of Cash Flows




(in thousands of Canadian dollars)













2016


2015







Cash flows from operating activities





Loss for the year

$

(16,863)


$

(13,469)


Adjustments for:






Depreciation and amortization

4,440


2,733



Share-based compensation

1,119


838



Acquisition costs

-


397




(11,304)


(9,501)


Change in non-cash operating assets and liabilities:






Accounts receivable

(1,950)


(1,861)



Tax credits recoverable

(296)


464



Prepaid expenses and deposits

(166)


(283)



Accounts payable and accrued liabilities

597


1,179



Deferred lease obligation

(15)


(3)




(1,830)


(504)

Net cash used in operating activities

(13,134)


(10,005)







Cash flows from financing activities





Exercise of stock options

87


64


Issuance of shares and warrants, net of transaction costs

-


24,866

Net cash from financing activities

87


24,930







Cash flows from investing activities





Additions of property and equipment 

(664)


(503)


Additions of intangible assets

(2,576)


(2,888)


Acquisition costs 

-


(397)


Business combination 

-


(659)

Net cash used in investing activities

(3,240)


(4,447)







Increase (decrease) in cash and cash equivalents

(16,287)


10,478







Cash and cash equivalents, beginning of year

31,841


21,363







Cash and cash equivalents, end of year

$

15,554


$

31,841

 

 

theScore, Inc.

Consolidated Statements of Comprehensive Loss

(in thousands of Canadian dollars, except per share amounts)





Three months ended August 31,

    Year ended August 31,


2016


2015

2016


2015








Revenue

$

4,986


$

2,933

$

23,916


$

12,359








Operating expenses:








Personnel

4,714


3,505

18,285


11,237


Content

669


417

2,559


1,401


Technology

534


589

2,124


2,058


Facilities, administrative and other

1,312


1,319

6,431


4,706


Marketing

1,355


960

5,792


2,787


Depreciation of property and equipment

173


143

646


553


Amortization of intangible assets

1,145


524

3,794


2,180


Stock based compensation

224


163

1,119


838


Acquisition expenses

-


-

-


397


10,125


7,620

40,750


26,157








Operating loss

(5,139)


(4,688)

(16,834)


(13,798)








Finance income

(26)


66

(29)


329








Net and comprehensive loss

$

(5,165)


$

(4,622)

$

(16,863)


$

(13,469)








Loss per share - basic and diluted 

$

(0.02)


$

(0.02)

$

(0.06)


$

(0.05)














Three months ended August 31,

Year ended August 31,


2016


2015

2016


2015








Net and comprehensive loss for the period

$

(5,165)


$

(4,622)

$

(16,863)


$

(13,469)








Adjustments:








Depreciation and amortization

1,318


667

4,440


2,733


Finance expense (income)

26


(66)

29


(329)


Acquisition expenses

-


-

-


397








Adjusted EBITDA loss

$

(3,821)


$

(4,022)

$

(12,394)


$

(10,668)

 

SOURCE theScore, Inc.

Image with caption: "Yearly revenue for theScore was up by 94%. (CNW Group/theScore, Inc.)". Image available at: http://photos.newswire.ca/images/download/20161020_C4620_PHOTO_EN_799504.jpg

For further information: James Bigg, Sr. Manager, Communications, theScore, Inc., Tel: 416.479.8812 ext. 2366, Email: james.bigg@thescore.com; Tom Hearne, Chief Financial Officer, theScore, Inc., Tel: 416.479.8812 ext. 2206, Email: tom.hearne@thescore.com

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