Score Media Reports Record Revenue and Earnings Growth in 2010

Oct 20, 2010, 20:26 ET from Score Media Inc.

EBITDA increases by 100% to $7.6 million on strong revenue growth across all platforms

TORONTO, Oct. 20 /PRNewswire-FirstCall/ - Score Media Inc. (TSX: SCR) today announced its financial results for the fourth quarter and year ended August 31, 2010:

  • Revenue for the year ended August 31st, 2010 increased by $4.9 million, or 12.6%, to $43.8 million compared to $38.9 million in the year ended August 31, 2009.  Revenue increased across the Company's TV and digital media platforms.

  • EBITDA for the year ended August 31, 2010 was $7.6 million compared to $3.8 million in the previous year, due mostly to the increases in TV and digital media revenues. 

  • Net income for the year ended August 31, 2010 was $2.5 million, compared to a net loss of $1.4 million in the previous year, due primarily to the above noted increases in revenues. 

  • Fourth quarter revenue increased by $1.6 million, or 18%, to $10.5 million compared to $8.9 million in the prior year.  Fourth quarter EBITDA was $1.4 million compared to $0.7 million in the prior year.

"Fiscal 2010 was a breakthrough year for Score Media," says John Levy, Chairman and CEO, Score Media Inc.  "We achieved tremendous growth with TV and mobile experiencing exceptional revenue increases.  We look forward to continuing to make our mark during the next year and beyond."

  • In Fiscal 2010, ScoreMobile and ScoreMobile FC attracted over 1.4 million monthly unique visitors who viewed over 50 million pages of content in peak months

  • ScoreMobile continued to impress sports fans worldwide while ScoreMobile FC - launched on June 10, 2010, just in time for the 2010 FIFA World Cup™ - quickly attracted numerous soccer fans around the globe including ones from the United Kingdom, the United States and Indonesia.  The soccer app is a free, comprehensive source of information for world football fans that provides live scores, stats and standings of over 50 international soccer leagues from over 15 countries worldwide.

  • ScoreMobile also received a great deal of media attention in Fiscal 2010.  The app was crowned a "Top 10 Sports App" in Beckett Media's Guide to Phone Apps and a "Top 20 free BlackBerry App" by PC Magazine.  ScoreMobile also continues to be the #1 free sports app on BlackBerry anywhere in the world.

  • Audiences on theScore were up more than 50% in fiscal 2010 compared to the prior year.  Additionally, in the strategic 18-34 male demographic, audiences were up over 75% in the comparative periods.  Viewers are increasingly tuning in for the Company's continued creation, production, and acquisition of authentic and engaging sports content.  In addition, theScore's ratings benefited from the launch of BBM Canada's Portable People Meter (PPM) which more effectively captures out of home and group viewing and generally increased viewer ratings for sports television networks. 

  • Score Media and World Wrestling Entertainment, Inc. continued their partnership and announced a 3-year agreement on September 24, 2009 that brings WWE fans a full slate of exciting WWE programming.

  • On December 9, 2009, Score Media Inc. and presenting sponsor Gillette crowned Paul Brothers the winner of Gillette DRAFTED: The Search for Canada's Next Sportscaster. In a fierce competition that attracted over 3,000 entrants, Paul Brothers prevailed as the winner of both a one-year sportscaster contract with Score Media contributing to theScore Television Network, theScore.com and ScoreMobile, as well as a one-year spokesperson contract with Gillette. On May 5, 2010 Score Media revealed the return of the program with the announcement of Gillette DRAFTED Season 2. 

  • Score Media was, once again, the exclusive home of the NCAA Division I Men's Basketball tournament. All of the excitement from the 65 team championship was made available on theScore Television Network, with NCAA March Madness highlights and coverage appearing on theScore.com, ScoreMobile and theScore Satellite Radio.

  • On April 14, 2010, Score Media announced that it secured the exclusive Canadian media rights to Serie A, Italy's world-renowned professional soccer league. The two-year deal, which includes full digital rights, represents the first time a major Canadian sports network secured the rights to deliver exciting high-definition Serie A action to sports fans across Canada.

  • In April, 2010, Score Media and the Canadian Broadcasting Corporation (CBC) inked a partnership to deliver exclusive 2010 FIFA World Cup South Africa content to viewers on theScore Television Network. The deal gave theScore access to extended highlights of each FIFA World Cup™ match as well as the ability to create additional exclusive FIFA World Cup™ content, including in-depth news content and behind-the-scenes coverage of every team.

  • The launch of theScore iPad Edition was an important milestone for the company.  On July 27, 2010, the app - offering sports fans the latest stats, news, scores and standings from every major sports league, while integrating the best content from theScore's multiplatform properties - became one of the first free sports apps on the market. 

About Score Media Inc.
Score Media is a media company committed to delivering interactive and authentic sports entertainment. Created in 1997 in response to the growing desire for increased participation in the consumption of sports, the Company has now established itself as the home for hardcore sports fans. Score Media's primary asset, theScore Television Network ("theScore"), is a national specialty television service providing sports news, information, highlights and live event programming in more than 6.8 million homes across Canada. The Company's digital media assets include theScore.com, theScore iPad Edition and the mobile sports applications ScoreMobile and ScoreMobile FC which are available on BlackBerry, iPhone and Android devices. Score Media also operates theScore Satellite Radio which is available across North America on SIRIUS Satellite Radio Channel 98. Growing from a team of 60 in 1997 to over 240 employees in 2010, 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.

FOURTH QUARTER RESULTS

The following tables reconcile net income to EBITDA:

 
  Three   Three
  months ended   months ended
                                                                                               August 31, 2010        August 31, 2009
Net income (loss) for the period  $    1,100  $    (676)
Less:
  Future income tax recovery  1,020  -
 
Add back:
  Depreciation and amortization  1,188          1,165
  Interest expense, net     174   162
  Loss on disposal of fixed assets       -   10
  Future income tax expense   -   16
EBITDA             $            1,442  $     677

 
  Year ended  Year ended
  August 31,  August 31,
  2010  2009
Net income (loss) for the period  $  2,494  $ (1,433)
Less:
  Gain on sale of investments   18  -
 
Add back:
  Loss on disposal of fixed assets  -  49
  Depreciation and amortization  4,352  4,550
  Interest expense, net   622   423
  Future income tax expense   169   165
EBITDA              $  7,619  $  3,754

       
       
Score Media Inc.       
Consolidated Balance Sheets       
(in thousands of dollars)      
(unaudited)      
         
      August 31, 2010 August 31, 2009
        (restated)
         
Assets      
         
Current assets:      
  Cash and cash equivalents    $                        184  $                        276
  Accounts receivable                           9,828                         6,875
  Prepaid expenses and other assets                          1,254                            616
  Future tax assets                              847                            663
                           12,113                         8,430
         
Fixed assets                         15,193                       17,174
         
Intangible assets                           2,818                         1,735
         
Future tax assets                          6,658                         7,011
         
       $                 36,782  $                 34,350
         
Liabilities and Shareholders' Equity      
         
Current liabilities:      
  Accounts payable and accrued liabilities                           6,285                         5,132
         
Revolving credit facility                            9,511                      11,449
         
Shareholders' equity                         20,986                       17,769
         
       $                  36,782  $                   34,350
         
         
     

                 
                 
Score Media Inc.                
Consolidated Statements of Operations                
(in thousands of dollars, except share and per share amounts)            
(unaudited)                
                   
      Three months ended   Twelve months ended
      August 31, 2010   August 31, 2009   August 31, 2010   August 31, 2009
          (restated)       (restated)
                   
                   
Revenue    $                        10,523    $                     8,909    $                         43,838    $                         38,884
                   
Production and other direct expenses                                 5,279                             4,029                               17,950                              17,020
Selling, general and administration expenses                                  3,412                             3,244                               12,747                               12,766
Program rights                                     390                                959                                 5,522                                 5,344
                                    9,081                             8,232                               36,219                               35,130
                   
Income before undernoted                                 1,442                                677                                 7,619                                 3,754
                   
                   
Interest expense, net                                     174                                162                                    622                                    423
Gain on sale of investments                                        -                                     -                                     (18)                                       -  
Loss on disposal of fixed assets                                        -                                    10                                       -                                        49
Depreciation and amortization                                  1,188                             1,165                                 4,352                                 4,550
                   
Income (loss) before income taxes                                       80                             (660)                                2,663                              (1,268)
                   
Future income tax expense (recovery)                              (1,020)                                  16                                   169                                    165
                   
Net income (loss)    $                     1,100    $                 (676)    $                    2,494    $                  (1,433)
                   
Income (loss) per share - basic and diluted    $                       0.01    $                (0.01)    $                      0.03    $                    (0.02)
                   
Weighted average number of Class A Subordinate Voting             
  and Special Voting Shares outstanding Basic                    81,357,794                  81,146,781                       81,232,182                       91,504,735
    Diluted                    82,669,667                  81,146,781                       81,524,086                       91,504,735
                   

           
Score Media Inc.           
Consolidated Statements of Cash Flows          
(in thousands of dollars)          
(unaudited)          
               
      Three months ended   Twelve months ended
      August 31, 2010 August 31, 2009   August 31, 2010 August 31, 2009
        (restated)     (restated)
               
Cash provided by (used in):          
               
Operations:          
  Net income (loss)  $                        1,100  $                         (677)    $                        2,494  $                      (1,433)
  Items not involving cash:          
    Depreciation and amortization                               1,188                               1,166                                  4,352                                4,550
    Loss on disposal of fixed assets                                       -                                       10                                        -                                       49
    Stock-based compensation expense                                    87                                   231                                     547                                   429
    Gain on sale of investments                                  (18)                                      -                                      (18)                                      -  
    Future income tax expense (recovery)                             (1,020)                                  16                                     169                                   165
    Change in fair value of derivative instruments                                    26                                      -                                         26                                      -  
  Change in non-cash operating working capital:          
    Accounts receivable                                  393                               1,232                               (2,953)                                   776
    Prepaid expenses and other assets                                (990)                                  113                                  (638)                                  (47)
    Accounts payable and accrued liabilities                               1,387                                (343)                                 1,591                                   940
                                    2,153                                1,748                                  5,570                                5,429
               
Financing:          
  Draws from credit facility                              12,121                          11,905                               41,623                              52,349
  Repayments to credit facility                           (13,315)                          (12,954)                             (43,561)                           (44,703)
  Repurchase of Class A Subordinate Voting shares                                     -                                        -                                          -                               (7,271)
  Issuance of Class A Subordinate Voting shares                                    72                                      -                                      148                                     13
                                 (1,122)                             (1,049)                              (1,790)                                  388
               
Investments:          
  Proceeds from sale of investments                                    18                                      -                                         18                                      -  
  Additions to fixed assets                                 (233)                                (798)                               (1,412)                             (2,605)
  Change in non-cash working capital related to fixed assets                                 (319)                                  165                                   (438)                             (2,166)
  Acquisition and development of intangible assets                                 (858)                                   (3)                                (2,040)                             (1,062)
                                  (1,392)                                 (636)                               (3,872)                             (5,833)
               
Decrease in cash and cash equivalents                                (361)                                    63                                     (92)                                  (16)
               
Cash and cash equivalents, beginning of period                                   545                                   213                                    276                                  292
               
Cash and cash equivalents, end of period  $                            184  $                           276    $                            184  $                           276
               
               
Supplemental cash flow information          
  Interest paid  $                             84  $                           106    $                          418  $                           431
           

The following selected quarterly financial data of the Corporation relates to the eight quarters ended August 31, 2010.

Quarterly Results Revenue EBITDA Net income
(loss)
Income (loss) per share - basic and diluted
  ($000's) ($000's) ($000's) ($)
August 31, 2010 10,523 1,442 1,100 0.01
May 31, 2010 11,986 1,916 568 0.01
February 28, 2010 9,958 980 (239) 0.00
November 30, 2009 11,371 3,281 1,065 0.01
August 31, 2009 8,909 677 (676) (0.01)
May 31, 2009 10,816 1,654 12 0.00
February 28, 2009 8,662 204 (1,017) (0.01)
November 30, 2008 10,498 1,220 248 0.00

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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SOURCE Score Media Inc.