Score Media and Gaming Inc. (TSX Venture: SCR) (“theScore”),
today announced the financial results for the three months ended
November 30, 2019 in accordance with International Financial
Reporting Standards (“IFRS”). All financial information in this
press release is reported in Canadian dollars, unless otherwise
indicated.
Highlights
- theScore made history by becoming the first sports media
company in North America to create and launch a mobile sportsbook.
theScore Bet went live in New Jersey ahead of the NFL Football
season and generated $8.8 million in handle1 in Q1 F2020, its first
three months of operation. Natively built for iOS and Android
devices, theScore Bet has been integrated with the company’s
flagship sports app to create a unique media and gaming
ecosystem.
- The company continued to execute on product and corporate
development initiatives to support the growth and multi-state
rollout of its gaming operations:
- The company launched FUSE by theScore, a unique product
development initiative introducing a new suite of innovative
integrations linking its media and sports betting platforms. FUSE
allows users to create a betslip from within theScore’s sports app
via native integrations embedded directly into box score pages.
Additional integrations within its chat pages were also added, with
ongoing innovations to further enhance navigation between
theScore’s media and gaming platforms due to be rolled-out
throughout F2020 and beyond.
- Subject to receiving all required licenses and approvals, the
Company anticipates launching theScore Bet in Indiana under its
multi-state market access framework agreement with Penn National
Gaming later this year, with other states to follow. theScore also
continued to pursue additional market access opportunities for
theScore Bet across the United States.
- theScore further strengthened its leadership team to support
the multi-state rollout of theScore Bet, appointing experienced
gaming executives Alvin Lobo as Chief Financial Officer and Josh
Sidsworth as General Counsel and Chief Compliance Officer.
- theScore closed a private placement with a fund managed and
controlled by Fengate Asset Management, securing $40,000,000 to
fund the growth and development of the Company’s media and gaming
operations.
- theScore achieved a new quarterly record for engagement on its
sports app. Average monthly sessions reached 523 million during Q1
F2020, year-over-year growth of 11%, with users opening it an
average of 123 times a month each. Average monthly active users
also grew to 4.3 million.
- Total video views of theScore esports’ video content reached 74
million in Q1 F2020, year-over-year growth of 84%. theScore
esports’ YouTube channel also passed 1 million subscribers,
reinforcing its position as the leading independent provider of
esports video content.
- theScore’s social sports content across Twitter, Facebook, and
Instagram reached approximately 97 million users in Q1 F2020,
year-over-year growth of 44%.
“It was a huge achievement by our product development team to
create and launch a best-in-class, natively-built mobile sportsbook
at the very beginning of F2020,” said John Levy, Founder and CEO of
theScore. “Our unique integrated approach to media and sports
betting sets us apart from any other operator and enabled us to hit
the ground running in our launch state of New Jersey.
“But New Jersey is only the start for us. As we grow our
footprint there, we are also moving to quickly expand our presence
across the United States. Under our existing multi-state market
access framework agreement with Penn National, we anticipate
launching theScore Bet in Indiana later this year, pending receipt
of all relevant licenses and approvals, with more states to follow.
At the same time, we continue to actively explore other market
access opportunities.
“Further, our hypothesis that sports app users would engage with
our gaming product was reinforced in our first quarter of
operation. Approximately three quarters of fans who placed a wager
on theScore Bet in Q1 came directly from theScore sports app,
supporting our powerful integration of media and gaming. Sports app
users are also proving more valuable in terms of handle, gross
gaming revenue, and retention than non-sports app users. This is
especially exciting given the record user engagement we saw on our
sports app in Q1, as well as the robust product roadmap we have in
place to further strengthen the connection between our media and
gaming platforms, including new product features and
cross-promotional capabilities.”
Financial Results
Total revenue for the three months ended November 30, 2019 was
$9.2 million compared to $9.5 million for the same period last
year. During the quarter, growth in direct advertising revenue was
offset by a decline in programmatic revenue, resulting from the
impact of lower demand from a programmatic partner who, prior to
January 2019, was a significant buyer of the Company’s programmatic
inventory, as well as more limited programmatic inventory in New
Jersey and surrounding states related to the launch of theScore
Bet.
In the first quarter of theScore Bet being live in market, the
Company generated $8.8 million in handle and gross gaming revenue2
of $242,000. When taking into account promotional costs and fair
value adjustments on unsettled bets, this resulted in negative net
gaming revenue3 of $26,000 for the period.
EBITDA loss for the three months ended November 30, 2019 was
$4.8 million versus EBITDA of $1.0 million for the same period last
year. The increase in EBITDA loss was primarily the result of
additional expenses incurred in connection with the launch and
expansion of our gaming operations.
Audience Metrics
User sessions of theScore sports app on iOS and Android reached
523 million in Q1 F2020, year-over-year growth of 11% and a new
all-time quarterly record. This represents 123 app
sessions-per-user-per-month on a base of 4.3 million average
monthly app users.
Total video views of theScore esports’ content hit 74 million
for Q1 F2020, year-over-year growth of 84%. Total watch hours for
theScore esports’ YouTube channel reached 5.6 million,
year-over-year growth of 28%. An additional 125,000 YouTube
subscribers were added during the period, with channel subscribers
surpassing one million in November.
theScore’s social sports content across Twitter, Facebook, and
Instagram achieved an average monthly reach of approximately 97
million in Q1 F2019, year-over-year growth of 44%. After launching
on the popular video-sharing social networking service TikTok
towards the end of Q4 F2019, theScore’s TikTok account now exceeds
500,000 followers and has quickly become one of the most popular
sports media accounts on the platform.
Stock Option Plan
theScore announced that the board of directors has granted
8,420,000 options to acquire Class A subordinate voting shares to
employees of the Company, including 3,700,000 options to directors
and officers of the Company as follows: Norwest Video Inc. (600,000
options); Benjamin Levy (500,000 options); Alvin Lobo (1,000,000
options), Josh Sidsworth (1,000,000 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 $0.85 in accordance with the
terms and conditions of the Company’s employee stock option
plan.
Conference Call & Webcast
theScore will host a conference call and webcast at 4:30pm EST
on Wednesday, January 22 where management will review the Company’s
F2020 Q1 results, followed by a Q&A session:
Conference Call Dial-In Local: +1 (647)
689-5637 Toll Free North America: +1 (877) 396-4208 Conference ID:
4388306
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 Conference ID:
4388306
Annual General Meeting
theScore will be hosting its Annual General Meeting at 11:00am
EST on Thursday, January 23, 2020 at the Company’s Toronto office
at: 500 King Street West, Fourth Floor, Toronto, Ontario, M5V
1L9.
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 Score Media and Gaming
Inc.
Score Media and Gaming Inc. empowers millions of sports fans
through its digital media and sports betting products. Its media
app ‘theScore’ is one of the most popular in North America,
delivering fans highly-personalized live scores, news, stats, and
betting information from their favorite teams, leagues, and
players. The Company’s sports betting app ‘theScore Bet’ delivers
an immersive and holistic mobile sports betting experience.
Natively built for iOS and Android devices, theScore Bet is deeply
integrated with theScore’s media app and is currently available to
place wagers in New Jersey. Publicly traded on the TSX Venture
Exchange (SCR), theScore also creates and distributes innovative
digital content 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.
Score Media and Gaming Inc. Condensed Consolidated Interim
Statements of Financial Position (in thousands of Canadian dollars)
(unaudited) As at November 30, August 31,
2019
2019
ASSETS Current assets: Cash and cash equivalents (note 8)
$ 32,087
$ 4,035
Restricted cash related to customer deposits (note 8)
847
11
Accounts receivable
9,801
7,956
Prepaid expenses, deposits, and other assets
1,980
1,261
44,715
13,263
Non-current assets: Restricted cash related to customer deposits
(note 8)
664
668
Property and equipment (note 3)
3,532
1,373
Intangible and other assets (note 4)
21,465
21,760
Tax credits recoverable (note 6)
1,616
1,616
27,277
25,417
Total assets
$ 71,992
$ 38,680
LIABILITIES AND SHAREHOLDERS' EQUITY Current liabilities:
Accounts payable and accrued liabilities
$ 7,217
$ 7,147
Current portion of deferred lease obligation
-
184
Current portion of lease liability
872
-
Current portion of convertible debenture (note 13)
1,167
-
Other current financial liabilities (note 15)
27
-
9,283
7,331
Non-current liabilities: Deferred lease obligation
-
112
Lease liability
1,727
-
Convertible debenture (note 13)
24,971
-
26,698
112
Shareholders' equity
36,011
31,237
Commitments (note 9) Total liabilities and
shareholders' equity
$ 71,992
$ 38,680
Score Media and Gaming Inc. Condensed Consolidated Interim
Statements of Comprehensive Income (Loss) (in thousands of Canadian
dollars, except per share amounts) (unaudited) Three months
ended November 30,
2019
2018
Revenue (note 11)
$ 9,219
$ 9,475
Operating expenses (note 14): Product development and
content
2,582
2,273
Sales and marketing
5,491
2,453
Technology and operations
3,158
1,261
General and administration
2,820
2,524
Depreciation and amortization
1,213
828
15,264
9,339
Operating income (loss)
(6,045)
136
Finance income (expense), net (note 16)
(1,172)
27
Income (loss) before income tax expense (recovery)
(7,217)
163
Deferred income tax expense (recovery) (note 17)
(3,107)
-
Net income (loss)
$ (4,110)
$ 163
Other comprehensive income (loss) Foreign currency
translation differences from foreign operations
16
-
Total comprehensive income (loss) for the period
$ (4,094)
163
Income (loss) per share - basic and diluted (note 12)
$ (0.01)
$0.00
Score Media and Gaming Inc. Condensed Consolidated Interim
Statements of Cash Flows (in thousands of Canadian dollars)
(unaudited) Three months ended November 30,
2019
2018
Cash flows from (used) in operating activities Net income
(loss) for the period
$ (4,110)
$ 163
Adjustments for: Depreciation and amortization
1,213
828
Stock based compensation (note 10)
153
119
Interest accretion on lease liabilities
37
-
Interest accretion on convertible debenture (note 13)
1,167
-
Revaluation of foreign currency balances (note 16)
84
-
Income tax recovery (note 17)
(3,107)
-
(4,563)
1,110
Change in non-cash operating assets and liabilities: Accounts
receivable
(1,845)
(3,501)
Restricted cash related to customer deposits
(832)
-
Prepaid expenses, deposits, and other assets
(719)
(304)
Accounts payable and accrued liabilities
70
401
Deferred lease obligation (note 2)
-
(20)
Other financial liabilities (note 15)
27
-
(3,299)
(3,404)
Net cash used in operating activities
(7,862)
(2,294)
Cash flows from financing activities Exercise of stock
options
49
51
Payment of lease liabilities (note 2)
(249)
-
Issuance of convertible debenture, net of transaction costs (note
13)
37,274
-
Issuance of shares, net of transaction costs
-
8,500
Net cash from financing activities
37,074
8,551
Cash flows used in investing activities Additions to
property and equipment (note 3)
(166)
(41)
Additions to intangible and other assets, net (note 4)
(1,010)
(807)
Net cash used in investing activities
(1,176)
(848)
Increase in cash and cash equivalents
28,036
5,389
Net effect of exchange rate fluctuations on cash
16
-
Cash and cash equivalents, beginning of period
4,035
6,347
Cash and cash equivalents, end of period
$ 32,087
$ 11,736
EBITDA Three Months Ended November 30, 2019 November 30, 2018
Net and comprehensive income (loss) for the period
$ (4,110)
$ 163
Adjustments: Depreciation and amortization
1,213
828
Finance (income) expense, net
1,172
(27)
Deferred income tax (recovery)
(3,107)
-
EBITDA
$ (4,832)
$ 964
1 Handle is calculated as the total amount of money bet by
customers in respect of bets that have settled in the applicable
period. Handle does not include free bets or other promotional
incentives, nor money bet by customers in respect of bets that are
open at period end.
2 Gross gaming revenue is calculated as dollar amounts bet by
customers less the dollar amounts paid out to customers in respect
of such bets which have settled in the applicable period.
3 Net gaming revenue is calculated as gross gaming revenue, less
free bets, promotional costs, bonuses and fair value adjustments on
open bets.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20200122005793/en/
James Bigg Sr. Manager, Communications Score Media and Gaming
Inc. Tel: 647-638-9281 Email: james.bigg@thescore.com
Alvin Lobo Chief Financial Officer Score Media and Gaming Inc.
Tel: 416-479-8812 Email: alvin.lobo@thescore.com
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