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theScore Reports F2019 Q2 Financial Results

theScore, Inc. (TSX Venture: SCR) (“theScore”) today announced the financial results for the three and six months ended February 28, 2019 in accordance with International Financial Reporting Standards (“IFRS”). All financial information in this press release is reported in Canadian dollars, unless otherwise indicated.

Q2 F2019 Highlights

  • Significant focus on product development and launch planning for theScore’s sportsbook, which is on-track for mid-2019 launch in New Jersey, subject to receiving all required approvals and licenses from the State of New Jersey Division of Gaming Enforcement (DGE) and the New Jersey Racing Commission (NJRC).
  • theScore set a new Q2 record for average monthly user sessions on theScore app. Average monthly sessions reached 395 million during Q2 F2019, with users opening it an average of 97 times a month each.
  • theScore’s social content achieved a new quarterly record with an average monthly reach of approximately 95 million users in Q2 F2019, including a new single-month record of approximately 118 million users in January.

“We made huge strides in Q2 and are on schedule to launch what we believe will be a best-in-class mobile sports betting experience in mid-2019,” said John Levy, Founder and CEO of theScore. “Our combination of sports media and sports betting will be a truly differentiated offering for the North American market, and we can’t wait to unveil it. While sports betting initiatives were naturally a big priority for us in Q2, we were also excited to set new records for engagement on our app, as well as a new quarterly record for our social reach, showcasing the power of our audience once again.

“Year-to-date revenue is also up, despite a slower Q2 from direct sales following a very strong Q1, and some industry-wide softness in the programmatic advertising space. That said, we’re seeing very good early momentum in Q3, with strong sales in the quarter to date.”

Financial Results
Revenue for the three months ended February 28, 2019 was $6.8 million compared to $7.1 million for the same period last year. Revenue for the six months ended February 28, 2019 was $16.3 million versus $15.5 million for the same period last year.

EBITDA loss for the three months ended February 28, 2019 was $2.2 million, versus a loss of $0.5 million in the same period the previous year. Increase in EBITDA loss for the quarter was primarily a result of increased expenses relating to ongoing development of theScore’s sports betting business, as well as softer revenue for the period. EBITDA loss for the six months ended February 28, 2019 was $1.3 million versus EBITDA of $14,000 in the same period the previous year.

Audience Metrics
Total average monthly active user sessions of theScore mobile app on iOS and Android reached 395 million in Q2 F2019, or 97 sessions-per-user-per-month on a base of 4.0 million average monthly app users.

Total video views of theScore esports’ content reached 39.3 million for Q2 F2019, representing year-over-year growth of 93%. Total watch minutes for theScore esports’ YouTube channel were 260 million, growth of 190% year-over-year. YouTube channel subscribers surpassed 700,000 earlier this month.

theScore’s content on its social channels achieved an average monthly reach of approximately 95 million in Q2 F2019, serving to further amplify theScore brand globally. This included a new monthly reach record of approximately 118 million in January.

Conference Call & Webcast
theScore will host a conference call and webcast at 4:30pm EST on Wednesday, April 17 where management will review the Company’s Q2 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: 8674184

Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.

About theScore
theScore’s mission is to create highly-engaging digital products and content that empowers 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, and in December 2018 announced plans to launch a mobile sportsbook in the United States.

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
February 28, August 31,
    2019 2018
 
ASSETS
Current assets:
Cash and cash equivalents $ 8,297 $ 6,347
Accounts receivable 7,663 5,839
Prepaid expenses and deposits 1,243   1,078
17,203 13,264
Non-current assets:
Property and equipment 1,354 1,453
Intangible and other assets 8,236 6,074
Tax credits recoverable 1,616   1,616
11,206

 

9,143
     
Total assets $ 28,409   $ 22,407
 
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable and accrued liabilities $ 3,757 $ 3,710
 
Non-current liabilities:
Deferred lease obligation 367 415
 
Shareholders' equity 24,285 18,282
 
Commitments
     
Total liabilities and shareholders' equity $ 28,409   $ 22,407
theScore, Inc.      
Condensed Consolidated Interim Statements of Comprehensive Loss
Three and six months ended February 28, 2019 and 2018
(in thousands of Canadian dollars, except per share amounts)
(unaudited)
                 
  Three months ended, Six months ended,
    February 28, 2019   February 28, 2018   February 28, 2019   February 28, 2018
 
Revenue from contracts with customers $ 6,776 $ 7,099 $ 16,251 $ 15,450
 
Operating expenses:
Personnel 4,600 4,187 9,273 8,605
Content 509 463 1,009 925
Technology 759 775 1,469 1,442
Facilities, administrative and other 2,423 1,498 4,394 2,850
Marketing 548 561 1,083 1,367
Depreciation of property and equipment 97 103 190 206
Amortization of intangible assets 692 922 1,427 1,788
Stock based compensation 126   134   245   247
9,754 8,643 19,090 17,430
 
Operating loss (2,978) (1,544) (2,839) (1,980)
 
Finance income (expense), net (26) (79) 1

 

96
             
Net and comprehensive loss $ (3,004)   $ (1,623)   $ (2,838)   $ (1,884)
 
Loss per share - basic and diluted $ (0.01)   $ (0.01)   $ (0.01)

 

$ (0.01)
theScore, Inc.  
Condensed Consolidated Interim Statements of Cash Flows
(in thousands of Canadian dollars)
(unaudited)
           
    Six months ended February 28,
      2019   2018
 
Cash flows used in operating activities
Net and comprehensive loss $ (2,838) $ (1,884)
Adjustments for:
Depreciation and amortization 1,617 1,994
Stock based compensation 245   247
(976)   357
Change in non-cash operating assets and liabilities:
Accounts receivable (1,824) (1,900)
Prepaid expenses and deposits (165) 53
Accounts payable and accrued liabilities 47 754
Deferred lease obligation (48)   (32)
(1,990)   (1,125)
Net cash used in operating activities (2,966)   (768)
 
Cash flows from financing activities
Exercise of stock options 96 16
Issuance of shares, net of transaction costs 8,500    
Net cash from financing activities 8,596   16
 
Cash flows used in investing activities
Additions to property and equipment (91) (22)
Additions to intangible and other assets (3,589)   (1,481)
Net cash used in investing activities (3,680)   (1,503)
 
Increase (decrease) in cash and cash equivalents 1,950 (2,255)
 
Cash and cash equivalents, beginning of period 6,347 10,114
     
Cash and cash equivalents, end of period $ 8,297   $ 7,859
                   
Three Months Ended   Six Months Ended
February 28, 2019   February 28, 2018   February 28, 2019   February 28, 2018
   
Net and comprehensive loss for the period $ (3,004) $ (1,623) $ (2,838) $ (1,884)
 
Adjustments:
Depreciation and amortization 789 1,025 1,617 1,994
Finance (income) expense, net 26 79 (1) (96)
                 
EBITDA $ (2,189)

 

  $ (519)   $ (1,222)     $ 14

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