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theScore Reports F2019 Q1 Results

theScore, Inc. (TSX Venture: SCR) (“theScore”) today announced the financial results for the three months ended November 30, 2018 in accordance with International Financial Reporting Standards (“IFRS”). All financial information in this press release is reported in Canadian dollars, unless otherwise indicated.

Q1 F2019 Highlights

  • The Company achieved record quarterly EBITDA in Q1 F2019 of $1.0 million.
  • The Company achieved record quarterly revenue in Q1 F2019 of $9.5 million.
  • The Company grew average monthly user sessions to a new quarterly record of 469 million during Q1 F2019, with users opening theScore app an average of 111 times a month each.
  • In December the Company became the first media company in North America to announce plans for a mobile sportsbook in the United States, which the company anticipates will launch in New Jersey in mid-2019 subject to receipt of required regulatory approvals and licenses.
  • The Company’s esports’ video content achieved a new record of 40.3 million total views in Q1 F2019.

“Sports betting is a core focus this fiscal year and a huge opportunity for theScore,” said John Levy, Founder and CEO of theScore. “We’re excited to launch what we believe will be a unique and best-in-class mobile sportsbook in New Jersey in mid-2019.

“We’re uniquely positioned as a media company to succeed in sports betting. The record engagement achieved this quarter on our mobile app demonstrates the power of our audience, which spans every single U.S. state and indexes highly with sports betting enthusiasts.

“This is a big advantage, as is the rapid growth of mobile and in-game sports wagering, which aligns perfectly with the product expertise that has made theScore one of the most popular sports apps in North America.

“On top of this, we continue to create value across our Company, achieving record quarterly revenue and EBITDA while significantly growing our esports and social audiences. We look forward to further strengthening our reputation as a leader in digital sports media in 2019 and beyond.”

Financial Results
The Company achieved record EBITDA for Q1 F2019 of $1.0 million versus EBITDA of $0.5 million in Q1 F2018. The Company also achieved record revenue for Q1 F2019, which grew 13% to $9.5 million versus $8.4 million in Q1 F2018, and included record quarterly revenue for the Company’s Canadian direct sales business and strong year-over-year growth of U.S. programmatic revenue.

Audience Metrics
Total average monthly user sessions of theScore mobile app on iOS and Android reached a new quarterly record of 469 million in Q1 F2019, or 111 sessions-per-user per-month on a base of 4.2 million average monthly app users.

Total video views of theScore’s esports’ content were 40.3 million for Q1 F2019, representing year-over-year growth of 123%. Total watch minutes for theScore esports’ YouTube channel reached 296 million in Q1 F2019, growth of 867% year-over-year, with channel subscribers breaking past 500,000 during the period.

theScore’s content on its social channels reached approximately 67 million users per month in Q1 F2019, growth of 119% year-over-year, serving to further amplify theScore brand globally. This included a new monthly reach record of approximately 77 million in November.

Credit Facility
In December 2018 the Company entered into a $5 million demand credit facility with a Canadian chartered bank. The credit facility is available for working capital purposes and the amount available is based on a percentage of the Company’s accounts receivable and those of certain of its subsidiaries. The facility is secured by substantially all of the assets of the Company and certain of its subsidiaries.

Stock Option Plan
theScore announced that the board of directors has granted 5,537,500 options to acquire Class A subordinate voting shares to employees of, and consultants to, the Company, including 1,700,000 options to directors and officers of the Company. Assuming the requisite shareholder approval is obtained, options will be granted to the following directors and officers: Norwest Video Inc. (600,000 options); Benjamin Levy (500,000 options); Ralph Lean (100,000 options); John Albright (100,000 options); Mark Scholes (100,000 options); Lorry Schneider (100,000 options); Thomson Associates Inc. (100,000 options), and Mark Zega (100,000 options). Each option will be exercisable for one Class A Subordinate Voting Share of theScore at an exercise price of $0.30 in accordance with the terms and conditions of the Company’s employee stock option plan.

Conference Call

theScore will host a conference call at 4:30pm ET on Wednesday, January 23 where management will review the Company’s Q1 F2019 results, followed by a Q&A session:

Conference Call Dial-In

Local: (+1) 647 689-5637

Toll Free North America: (+1) 877 396-4208

The conference call will also be webcast live. Register now here.

Instant Replay

Local: (+1) 416 621-4642

Toll Free North America: (+1) 800 585-8367

Playback Passcode: 7389200 #

Annual General Meeting
theScore will be hosting its Annual General Meeting at 11:00am EST on Thursday, January 24, 2019 at the Company’s Toronto office at: 500 King Street West, Fourth Floor, Toronto, Ontario, M5V 1L9.

About theScore Inc.
theScore’s mission is to create highly-engaging digital products and content that empower the sports fan’s experience. Its flagship mobile app ‘theScore’ is one of the most popular multi-sport news and data apps in North America, serving millions of fans a month. The Company also creates innovative digital sports experiences through its web, social and esports platforms.

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 "may", "would", "could", "will", "believes", "plans", "anticipates", "estimates", "expects" or "intends" and other similar 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. Such statements reflect theScore's current views with respect to future events and are subject to certain risks, uncertainties and assumptions. Many factors could cause the Company's actual results, performance or achievements to be materially different from any future results, performance or achievements that may be expressed or implied by such forward looking statements, including among other things, those which are discussed under the heading "Risk Factors" in the Company's Annual Information Form and Short-form Prospectus as filed with the TSX Venture Exchange and available on SEDAR at www.sedar.com and elsewhere in documents that theScore files from time to time with securities regulatory authorities. Should one or more of these risks or uncertainties materialize, or should assumptions underlying the forward-looking statements prove incorrect, actual results could differ materially from the expectations expressed in these forward-looking statements. The Company does not intend, and does not assume any obligation, to update these forward-looking statements except as required by applicable law or regulatory requirements.

theScore, Inc.  
Condensed Consolidated Interim Statements of Financial Position
(in thousands of Canadian dollars)
(unaudited)
         
  As at
November 30, August 31,
      2018 2018
 
ASSETS
Current assets:
Cash and cash equivalents $ 11,736 $ 6,347
Accounts receivable 9,340 5,839
Prepaid expenses and deposits   1,382     1,078
22,458 13,264
Non-current assets:
Property and equipment 1,401 1,453
Intangible assets 6,146 6,074
Tax credits recoverable   1,616     1,616
9,163 9,143
     
Total assets $ 31,621   $ 22,407
 
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable and accrued liabilities $ 4,111 $ 3,710
 
Non-current liabilities:
Deferred lease obligation 395 415
 
Shareholders' equity 27,115 18,282
 
Commitments
     
Total liabilities and shareholders' equity $ 31,621   $ 22,407
theScore, Inc.  
Condensed Consolidated Interim Statements of Comprehensive Income (Loss)
Three months ended November 30, 2018 and 2017
(in thousands of Canadian dollars, except per share amounts)
(unaudited)
         
  Three months ended November 30,
    2018   2017  
 
Revenue from contracts with customers 9,475 8,351
 
Operating expenses:
Personnel 4,674 4,418
Content 500 462
Technology 712 668
Facilities, administrative and other 1,971 1,353
Marketing 535 806
Depreciation of property and equipment 93 103
Amortization of intangible assets 735 864
Stock based compensation 119   113  
9,339 8,787
 
Operating Income (loss) 136 (436 )
 
Finance income, net 27 176
     
Net and comprehensive income (loss) 163   (260 )
 
Income (Loss) per share - basic and diluted 0.00   (0.00 )
theScore, Inc.  
Condensed Consolidated Interim Statements of Cash Flows
(in thousands of Canadian dollars)
(unaudited)
           
    Three months ended November 30,
      2018     2017  
 
Cash flows used in operating activities
Net and comprehensive income/(loss) 163 (260 )
Adjustments for:
Depreciation and amortization 828 967
Stock based compensation 119     113  
1,110     820  
Change in non-cash operating assets and liabilities:
Accounts receivable (3,501 ) (2,992 )
Prepaid expenses and deposits (304 ) (16 )
Accounts payable and accrued liabilities 401 213
Deferred lease obligation (20 )   (14 )
(3,424 )   (2,809 )
Net cash used in operating activities (2,314 )   (1,989 )
 
Cash flows from financing activities
Exercise of stock options 51 17
Issuance of shares, net of transaction costs 8,500     -  
Net cash from financing activities 8,551     17  
 
Cash flows used in investing activities
Additions to property and equipment (41 ) (7 )
Additions to intangible assets (807 ) (721 )
Tax credits recoverable -     -  
Net cash used in investing activities (848 )   (728 )
 
Increase (decrease) in cash and cash equivalents 5,389 (2,699 )
 
Cash and cash equivalents, beginning of period 6,347 10,114
     
Cash and cash equivalents, end of period 11,736     7,414  
 
 

 

     
Three months ended
November 30, 2018 November 30, 2017
 
Net and comprehensive income (loss) for the period $ 163 $ (260 )
 
Adjustments:
Depreciation and amortization 828 967
Finance expense, net (27 ) (176 )
     
EBITDA $ 964     $ 531  

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