- 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 /PRNewswire/ - 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 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.
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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.
SOURCE Score Media Inc.
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