Score Media Inc. Releases Q2 Results

- TV advertising revenues continue to grow
- Digital media assets generate record audience growth
- Score Media secures first direct U.S. digital media sales

TORONTO, April 12, 2012 /CNW/ - Score Media Inc. (TSX: SCR) today announced its financial results for the second quarter ended February 29, 2012 in accordance with International Financial Reporting Standards ("IFRS").

• Revenue for the three months ended February 29, 2012 was $10.4 million compared to $11.0 million in the three months ended February 28, 2011.
• Broadcast revenues for the three months ended February 29, 2012 was $9.7 million compared to $10.2 million in the three months ended February 28, 2011.
• An increase of 2% in theScore's advertising revenue from $5.8 million to $5.9 million was offset by revenue reductions from the closure of theScore Satellite Radio and lower contra revenues.
• Digital media revenues for the three months ended February 29, 2012 was $0.7 million compared to $0.8 million in the three months ended February 28, 2011.
• Following the end of the quarter, Score Media closed its first two major U.S. digital media sales agreements, which will positively impact digital media revenues in Q3 and Q4.
• EBITDA (see "Definitions") for the three months ended February 29, 2012 was $40,000 compared to $1.1 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 February 29, 2012 was $2.2 million compared to $3.2 million in the three months ended February 28, 2011, primarily related to revenue reductions noted above and increased rights fees related to the Company's expanded content partnership with the WWE.
  
  
• Digital media EBITDA loss for the three months ended February 29, 2012 was $0.8 million compared to a $0.6 million EBITDA loss in the three months ended February 28, 2011, primarily related to planned increases in product development expenditures and sales costs to develop the US direct sales market.
  
  
• Corporate costs for the three months ended February 29, 2012 were $1.4 million compared to $1.5 million in the three months ended February 28, 2011.

"Last year's Q2 TV advertising revenue was exceptional for us, so it's encouraging to see continued growth off that base for the same quarter in 2012," said John Levy, Chairman and CEO, Score Media Inc. "We are also very excited about the continued growth of the digital side of our business, with these assets seeing record audience figures for Q2, as well as increased sales traction in U.S. which has led to us closing our first two major digital sales deals in this market."

• The Company's digital media assets registered record audience growth in Q2/12:
• ScoreMobile applications averaged 3.4 million unique users per month in Q2/12, growing by more than 1.3 million unique users per month, or over 65%, from Q2/11.
• theScore.com averaged 1.4 million unique users per month in Q2/12, an increase of 50% or 0.5 million unique users per month over Q2/11.
• Highlights during the Q2 period included Score Media Inc. announcing an extension to its programming partnership with Bellator Fighting Championships through its sixth season. The deal means theScore will broadcast Bellator's Summer Season as well as its seventh season later in the year and provided mixed martial arts fans with another year of access to fights across theScore's multiplatform assets, including theScore Television Network, theScore.com and its industry-leading application, ScoreMobile.
  
  
• In January, Score Media Inc. announced it had entered into a long-term programming agreement with FOX International Sports Channels, including at least 250 hours a year of live collegiate content and other FOX Sports and FUEL TV programming. This deal provided viewers of theScore with access to games featuring powerhouse schools like Oklahoma State, Texas, Oklahoma, Oregon, USC, and Stanford.
  
  
• In December, the company secured exclusive television rights to the FIFA Club World Cup in Japan. As a result, theScore provided live coverage of the tournament, live streaming both semi-finals and the final on theScore.com. In addition, its leading soccer app ScoreMobile FC was also made available for Windows Phone, with full coverage in English and Spanish.
  
  
• In the same month, theScore welcomed the return of the NBA to the network. theScore's top coverage included the launch of Court Surfing, with new hosts The Basketball Jones taking viewers through the most exciting NBA games of the night.
  
  
• The Company recognized a $1.9 million receivable relating to the eligible costs under the Ontario Interactive Digital Media Tax Credit incurred during fiscal 2010 and 2011.  $1.0 million of this amount related to employee salaries and benefits previously expensed under the digital media segment, $0.7 million of this amount related to costs previously capitalized in intangible assets, and $0.2 million of this amount related to amortization relating to previously capitalized digital media intangible assets.

SECOND QUARTER RESULTS

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

			Three months ended		Three months ended
			February 29, 2012		February 28, 2011
			(000's)		(000's)
Net and comprehensive income (loss) for the period		$	(1,303)	$	225
Adjustments:
	Share of loss (profit) of equity accounted investee, net of tax		35		(25)
	Depreciation and amortization		1,080		1,093
	Finance costs		232		146
	Income tax recovery		(4)		(360)
EBITDA		$	40	$	1,079
			Six months ended		Six months ended
			February 29, 2012		February 28, 2011
			(000's)		(000's)
Net and comprehensive income (loss) for the period		$	(1,091)	$	1,081
Adjustments:
	Share of loss (profit) of equity accounted investee, net of tax		23		(25)
	Depreciation and amortization		1,921		2,068
	Finance costs		440		269
	Income tax expense		649		340
EBITDA		$	1,942	$	3,733

Score Media Inc.
Condensed Consolidated Statements of Financial Position
(in thousands of Canadian dollars)
(unaudited)
			February 29, 2012		August 31, 2011
Assets
Current assets:
	Cash	$	121	$	398
	Accounts and other receivable		12,835		12,227
	Prepaid expenses and other assets		2,282		1,976
			15,238		14,601
Non-current assets:
	Fixed assets		13,339		13,654
	Intangible assets		6,593		6,087
	Investment in equity accounted investee		941		936
	Deferred tax assets		6,033		6,682
			26,906		27,359
Total assets		$	42,144	$	41,960
Liabilities and Shareholders' Equity
Current liabilities:
	Accounts payable and accrued liabilities		8,284		6,442
Non-current liabilities:
	Provisions		180		-
	Revolving credit facility		12,272		12,979
			12,452		12,979
Shareholders' equity			21,408		22,539
Total liabilities and shareholders' equity		$	42,144	$	41,960
See accompanying notes to unaudited condensed consolidated 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				Six months ended
					February 29, 2012		February 28, 2011		February 29, 2012		February 28, 2011
Revenues				$	10,446	$	10,982	$	23,863	$	22,775
Operating costs					10,406		9,903		21,921		19,042
EBITDA					40		1,079		1,942		3,733
Finance costs					232		146		440		269
Depreciation and amortization					1,080		1,093		1,921		2,068
Share of loss (profit) of equity accounted investee, net of tax					35		(25)		23		(25)
Income (loss) before income taxes					(1,307)		(135)		(442)		1,421
Income tax expense (recovery):
		Current			-		-		-		-
		Deferred			(4)		(360)		649		340
					(4)		(360)		649		340
Net and comprehensive income (loss) for the period				$	(1,303)	$	225	$	(1,091)	$	1,081
Earnings (loss) per share - basic and diluted				$	(0.02)	$	0.00	$	(0.01)	$	0.01
See accompanying notes to unaudited condensed consolidated interim financial statements

 

Score Media Inc.
Condensed Consolidated Statements of Cash Flows
(in thousands of Canadian dollars)
(unaudited)
			Six months ended
				February 29, 2012		February 28, 2011
Cash flows from operating activities
	Net and comprehensive income (loss)		$	(1,091)	$	1,081
	Adjustments for:
		Depreciation and amortization		1,921		2,068
		Share-based compensation expense		32		108
		Share of profit of equity accounted for investee, net of tax		(5)		(56)
		Income tax expense		649		340
		Provisions		180		-
		Finance costs		440		269
				2,126		3,810
	Change in non-cash operating working capital:
		Accounts and other receivable		(608)		(495)
		Prepaid expenses and other assets		(389)		(352)
		Accounts payable and accrued liabilities		1,842		2,510
				845		1,663
Net cash from operating activities				2,971		5,473
Cash flows used in investing activities
	Additions to fixed assets			(1,028)		(1,380)
	Acquisition of intangible assets			(1,137)		(1,745)
	Acquisition of equity interest in NuLayer Inc.			-		(893)
Net cash used in investing activities				(2,165)		(4,018)
Cash flows used in financing activities
	Draws from credit facility			30,941		24,021
	Repayments of credit facility			(31,648)		(25,354)
	Interest paid, net			(387)		(221)
	Issuance of Class A subordinate voting shares			11		126
Net cash used in financing activities				(1,083)		(1,428)
Net increase (decrease) in cash				(277)		27
Cash, beginning of period				398		184
Cash, end of period			$	121	$	211
See accompanying notes to unaudited condensed consolidated interim financial statements

 

Segmented Information:

				Three months ended February 29, 2012
		Broadcast		Digital Media		Corporate		Consolidated totals
Revenues	$	9,745	$	701	$	-	$	10,446
Operating costs		7,534		1,511		1,361		10,406
EBITDA		2,211		(810)		( 1,361)		40
Finance costs								232
Depreciation and amortization								1,080
Share of loss of equity accounted investee, net of tax								35
Loss before income taxes							$	(1,307)
Additions to fixed assets	$	339		3		9	$	351
Additions to intangible assets	$	97		324		-	$	421

 

			Six months ended February 29, 2012
			Broadcast		Digital Media		Corporate		Consolidated totals
Revenues		$	22,147	$	1,716	$	-	$	23,863
Operating costs			15,016		3,671		3,234		21,921
EBITDA			7,131		(1,955)		(3,234)		1,942
Finance costs									440
Depreciation and amortization									1,921
Share of loss of equity accounted investee, net of tax									23
Loss before income taxes								$	(442)
Additions to fixed assets		$	924		93		11	$	1,028
Additions to intangible assets		$	140		992		5	$	1,137

 

			Three months ended February 28, 2011
		Broadcast		Digital Media		Corporate		Consolidated totals
Revenues	$	10,162	$	820	$	-	$	10,982
Operating costs		7,009		1,412		1,482		9,903
EBITDA		3,153		(592)		( 1,482)		1 ,079
Finance costs								146
Depreciation and amortization								1,093
Share of profit of equity accounted investee, net of tax								(25)
Income (loss) before income taxes							$	(135)
Additions to fixed assets	$	600		6		2	$	608
Additions to intangible assets	$	81		760		-	$	841

 

		Six months ended February 28, 2011
			Broadcast		Digital Media		Corporate		Consolidated totals
Revenues		$	21,080	$	1,695	$	-	$	22,775
Operating costs			13,459		2,621		2,962		19,042
EBITDA			7,621		(926)		(2,962)		3,733
Finance costs									269
Depreciation and amortization									2,068
Share of profit of equity accounted investee, net of tax									(25)
Income (loss) before income taxes								$	1,421
Additions to fixed assets		$	1,327		51		2	$	1,380
Additions to intangible assets		$	107		1,615		23	$	1,745

The following selected quarterly financial data of the Corporation relates to the eight quarters ended February 29, 2012.

Quarterly Results	Accounting Basis	Revenue	EBITDA	Net and comprehensive income (loss)	Earnings (loss) per share - basic and diluted
		($000's)	($000's)	($000's)	($)
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	(341)	0.00
May 31, 2011	IFRS	13,092	2,148	668	0.01
February 28, 2011	IFRS	10,982	1,079	225	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
May 31, 2010	GAAP	11,986	1,916	568	0.01

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

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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. 

 

Tom Hearne
Chief Financial Officer
Score Media Inc.
416-977-6787 x2206
[email protected]

James Bigg
Community PR Supervisor
Score Media Inc.
416-977-6787 x2366
[email protected]