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 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]