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Press release from CNW Group

Score Media Inc. Reports Q3 Financial Results

Thursday, July 12, 2012

Score Media Inc. Reports Q3 Financial Results07:00 EDT Thursday, July 12, 2012- Digital Media segment posts 46% growth in web and mobile revenues- Broadcast segment maintains strong EBITDA performanceTORONTO, 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 platformsBroadcast 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 RESULTSThe 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 statementsScore 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, 2012Nine months ended May 31, 2012     CorporateConsolidated totals  CorporateConsolidated totals   BroadcastDigital MediaBroadcastDigital 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, 2011Nine months ended May 31, 2011     CorporateConsolidated totals  CorporateConsolidated totals   BroadcastDigital MediaBroadcastDigital 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 ResultsAccounting BasisRevenuesEBITDANet and comprehensive income (loss)Earnings (loss) per share - basic and diluted  ($000's)($000's)($000's)($)May 31, 2012IFRS12,690453(1,595)(0.02)February 29, 2012IFRS10,44640(1,303)(0.02)November 30, 2011IFRS13,4171,9022120.00August 31, 2011IFRS11,5301,9011600.00May 31, 2011IFRS13,0922,1486080.01February 28, 2011IFRS10,9821,079(215)0.00November 30, 2010IFRS11,7932,6548560.01August 31, 2010GAAP10,5231,4421,1000.01The 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?  http://twitter.com/#!/scoremediahttp://www.facebook.com/thescoremediarelations@thescore.comhttp://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) statementStatements 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. 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