RNS Number:8774B
JumpTV Inc.
10 August 2007
JumpTV Increases Revenue 17%, Reduces Loss in Q2 2007 vs Q1 2007
TORONTO--(Marketwire - August 10, 2007) - JumpTV Inc. ("JumpTV" or the
"Company") (AIM: JTV) (TSX: JTV) a leader in broadcasting international
television and sports over the Internet, today announced quarterly results and
selected financial metrics for the quarter ended June 30, 2007.
For the quarter ended June 30, 2007 revenue was US$1,175,924, an increase of
175% from US$426,998 in the same period a year ago. Sequentially, revenue
increased 17% from US$1,003,146 in the first quarter 2007. Of the US$1.175
million in revenue approximately US$120,000 was advertising/syndication-related
revenue.
The net loss for the three months ended June 30, 2007 was US$6,514,301 or
US$0.13 per basic and diluted share, a 1% increase compared to US$6,449,005 or
US$0.31 per basic and diluted share for the same period a year ago. Quarter over
quarter net loss decreased by 8% from US$7,085,166 or US$0.18 per basic and
diluted share in the quarter ended March 31, 2007.
The net loss during the quarter included approximately US$1.26 million of M&A
and severance related expenses.
As of June 30, 2007 JumpTV had 302 channel partnerships compared to 204 channels
as of June 30, 2006 and 280 channels as of March 31, 2007.
Subscriptions were 34,148 as at June 30, 2007 down 1% from 34,496 as at March
31, 2007 and subscribers were 29,968 as at June 30, 2007 down less than 1% from
30,062 as at March 31, 2007. The Company had expected a significantly higher
reduction in subscriptions and subscribers during the period due to the
free-to-consumer launch of approximately 100 of its heretofore
subscription-based channels in the United States. However, the addition of new
content and the growth in the Company's non-U.S. subscriber base compensated for
the loss of U.S. subscribers.
Churn for the three months ended June 30, 2007 was 13.3%, up 6% from 12.5% for
the three months ended March 31, 2007.
For the second quarter of 2007, JumpTV's subscriber acquisition costs (SAC) were
US$33.69, a decrease of 34.9% compared to US$51.72 in the first quarter of 2007.
The Company continues to test various marketing initiatives. An increased focus
on search engine optimization (SEO) contributed to the decrease.
Average monthly revenue per user (ARPU) was US$11.42 in the quarter ending June
30, 2007, a less than 1% decrease from US$11.52 in the first quarter of 2007.
JumpTV chairman and chief executive officer G. Scott Paterson commented, "JumpTV
is focused on our path to profitability. We believe we have put in place the
strategic pieces and are focused now on execution and operations."
He added, "Our free-to-consumer launch has resulted in viewership of free
channels reaching approximately 40 million minutes per month within two months
of launch. We are confident that this has positioned JumpTV to obtain
advertising revenues over the next several quarters."
The Company reports the following recent developments for JumpTV:
1. In late May 2007 we launched selected channels on a free-to-consumer, ad
supported basis in the United States. As at June 30, 2007 we offered 108
channels free-to-consumers. During Q3 and Q4 2007 we intend to continue to add
to the free offerings in the U.S. and assess the merits of offering selected
content on a free-to-consumer basis in Canada and the United Kingdom (the
Company's second and third largest markets).
2. Partially as a result of the free-to-consumer launch in the U.S., the Company
has experienced, on average, 2.5 million viewing minutes per day, 2 million ad
impressions per day while average duration of user session has remained at
approximately 40 minutes.
3. We secured rights to additional cross-cultural content including channels in
the Middle East, Sub-Saharan Africa and Europe, sporting properties such as the
FIFA World Cup Matches in Canada and global production studios such as Arab
Telemedia Services.
4. We signed and implemented distribution partnerships with AOL Video, which
currently offers 108 JumpTV channels on a free-to-consumer basis in the U.S.,
and extended our relationship with Terra Networks to include Terra U.S., a
leading Hispanic portal in the U.S., currently offering 50 JumpTV channels.
5. We launched and implemented our 'Jumper' API media player, introduced social
networking features on JumpTV.com such as live chat alongside our channel feeds,
built out our ad-serving infrastructure allowing us to serve video and banner
ads from direct sales and third-party ad networks across the JumpTV website and
deployed Jumpers on the Internet at large.
6. We further invested in and improved our global content delivery network
(CDN), lighting up teleports/distribution points in Hong Kong, Singapore and Los
Angeles while upgrading London and Miami hubs.
7. We filled executive roles in network operations, marketing and ad sales
operations.
8. We went through a comprehensive operational review, resulting in process
improvement, reduction in headcount and an approximate 30% cut in structural
operating costs.
Kaleil Isaza Tuzman, president & COO of JumpTV, stated, "JumpTV has gone through
a number of changes over the last quarter, launching nearly a third of our
ethnic TV channels for free in the United States, introducing the
first-generation 'Jumper' on distribution partners' sites and reducing our
structural operating costs by approximately 30% -- which should be clearer in Q3
and Q4 results given the cost reduction process was completed at the end of Q2."
Isaza Tuzman continued, "We reduced our go-forward overhead expenses while
improving network quality and making product development advances during the
quarter. We are pleased that through this period of transition revenues have
expanded modestly."
Subsequent to the June 30 quarter close, JumpTV announced that it had entered
into a definitive agreement to acquire the Broadband Network business unit of
XOS Technologies Inc., based in Sanford, Florida, through an asset purchase
agreement for US$60.25 million in cash.
The Broadband Network business unit of XOS is one of the largest online global
sports networks streaming thousands of NCAA games including football, men's and
women's basketball, volleyball, baseball and track & field events. The Broadband
Network business unit currently has more than 150 official and exclusive
broadband relationships with U.S. colleges, universities, conferences and
professional sports teams including programs within the SEC, Big 12 and Big 10,
amongst other NCAA Division I conferences. In addition to live streaming, the
XOS Broadband Network specializes in custom-brand site design and Web hosting
for its partner teams and athletic departments with a technology platform that
includes Internet publishing tools, streaming video and audio on demand,
e-commerce solutions, online ticketing, mobile capabilities, and social
networking technologies.
The Company announced yesterday that an agreement has been reached to acquire
Cycling TV (Cycling.tv), an online video network offering dedicated cycling
content to the global cycling audience.
Paterson commented on the recent acquisitions, "We have consistently stated that
selected strategic acquisitions were part of our operating plan in order to
augment relevant content, product capabilities and audience reach. The XOS
Broadband Network and Cycling TV acquisitions underline our focus as a Company
on hard-to-find live content, like sports and news, for out-of-market
audiences."
Isaza Tuzman continued, "Now whether you are a Peruvian living in Madrid, an
Ohio State grad living in Oregon, or a professional cycling fan in Singapore,
JumpTV is always on for you, delivering the content you love, on any IP-enabled
device."
In future quarterly financial releases, JumpTV anticipates augmenting its key
performance indicators (KPIs) to better reflect its hybrid, subscription and
ad-based business model. This will likely involves disclosure of quarter over
quarter stream views and minutes watched, and may result in the elimination of
one or more subscription-only operating metrics.
The Company will hold a conference call to discuss Q2 results, as well as the
details of its acquisition of Cycling TV today, August 10, 2007, at 9:00am EDT
and 2:00pm GMT. To participate in the call, interested parties can use the
following dial-in numbers: U.S. and Canada -- 800.657.1263 or International --
+1 973.633.8200; conference code -- 9123576. Callers are suggested to dial-in at
least 5 minutes prior to the call.
About JumpTV
Live Television From Around the World -- online, anytime, anywhere.
JumpTV (AIM: JTV) (TSX: JTV) is a leading distributor of live Internet
television. With over 300 TV channels from 75+ countries, JumpTV delivers
full-screen sports, news and entertainment content on a real-time basis from all
corners of the globe to computers, Internet-enabled TV sets, IP set-top-boxes
and cell phones with browser access.
Forward Looking Statements
This news release contains forward-looking statements that involve significant
risk, uncertainties and assumptions. Many factors could cause actual results,
performance or achievements to differ materially from the results discussed or
implied in the forward-looking statements. These factors should be considered
carefully and readers should not place undue reliance on the forward looking
statements. These forward looking statements are made as of the date of this
news release, and the Company assumes no obligation to update or revise them to
reflect new events or circumstances. Many factors could cause the actual
results, performance or achievements of the Company to be materially different
from any future results, performance and achievements that may be expressed or
implied by such forward looking statements, including: general economic and
market segment conditions, competitor activity, product capability and
acceptance, international risk and currency exchange rates and technology
changes. More detailed assessment of the risks that could cause actual results
to materially differ from current expectations is contained in the "Risk
Assessment" section included in the Company's MD&A in respect of the year ended
December 31, 2006 posted on www.sedar.com.
Key Performance Indicators and Other Measures
JumpTV is not aware of any uniform standards for calculating subscriptions,
subscribers, ARPU, SAC, Churn and channels signed and we believe that JumpTV's
presentation of these measures may not be calculated consistently with other
companies in the same or similar business. Moreover, these measures are of
operational performance and not measures of financial performance under
generally accepted accounting principles. All other financial measures
referenced herein have been prepared in accordance with Canadian generally
accepted accounting principles.
JumpTV Inc.
CONSOLIDATED BALANCE SHEETS
(unaudited)
(Expressed in U.S. dollars)
As at June 30, December 31,
2007 2006
$ $
----------- ----------
ASSETS
Current
Cash 127,638,918 21,936,878
Short-term investments 117,325 28,115,378
Accounts receivable 126,300 --
Other receivables 1,003,273 723,621
Prepaid expenses and deposits 1,213,844 1,178,119
Funds held in trust 14,884 --
Due from related party 6,863 --
----------- ----------
Total current assets 130,121,407 51,953,996
----------- ----------
Property, plant and equipment, net 3,486,958 1,269,488
Intangible assets 1,594,270 312,140
Goodwill 116,621 102,069
Other assets 729,401 161,246
Deferred direct broadcast operating
costs, net 44,007 61,605
----------- ----------
136,092,664 53,860,544
=========== ==========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current
Accounts payable and accrued liabilities 2,490,003 3,950,284
Bank loan -- 1,287,150
Due to related party -- 14,676
Accrued license fees 192,498 106,916
Accrued professional fees 1,176,751 371,782
Accrued stock appreciation rights 449,653 1,087,760
Deferred revenue 280,604 205,314
Income taxes payable 86,750 61,800
----------- ----------
Total current liabilities 4,676,259 7,085,682
----------- ----------
Deferred rent 277,092 18,502
----------- ----------
Total liabilities 4,953,351 7,104,184
----------- ----------
Shareholders' equity
Share capital 171,689,822 75,227,648
Contributed surplus 4,465,580 2,937,219
Accumulated other comprehensive loss (40,355) (32,240)
Accumulated deficit (44,975,734) (31,376,267)
----------- ----------
Total shareholders' equity 131,139,313 46,756,360
----------- ----------
136,092,664 53,860,544
=========== ==========
JumpTV Inc.
CONSOLIDATED STATEMENTS OF OPERATIONS
(unaudited)
(Expressed in U.S. dollars)
Three months Six months
ended ended
June 30, June 30,
2007 2006 2007 2006
$ $ $ $
---------- ---------- ---------- ----------
Revenue 1,175,924 426,988 2,179,070 777,496
Direct broadcast
operating costs (1,551,330) (480,681) (2,911,589) (731,011)
---------- ---------- ---------- ----------
(375,406) (53,693) (732,519) 46,485
---------- ---------- ---------- ----------
Other costs and expenses
Selling, general
and administrative 6,739,486 5,864,555 13,268,378 9,220,197
Stock-based compensation 793,737 561,199 1,949,839 1,327,380
Amortization of property,
plant and equipment 136,707 25,918 215,883 47,851
Amortization of
intangible assets 9,908 -- 19,816 --
---------- ---------- ---------- ----------
7,679,838 6,451,672 15,453,916 10,595,428
---------- ---------- ---------- ----------
Loss before the
following: (8,055,244) (6,505,365) (16,186,435) (10,548,943)
Loss on foreign exchange (132,117) (16,625) (86,303) (8,301)
Investment income, net 1,682,560 84,985 2,698,221 156,102
---------- ---------- ---------- ----------
Loss before income taxes (6,504,801) (6,437,005) (13,574,517) (10,401,142)
Provision for income taxes 9,500 12,000 24,950 25,000
---------- ---------- ---------- ----------
Net loss for the period (6,514,301) (6,449,005) (13,599,467) (10,426,142)
========== ========== ========== ==========
Loss per weighted average
number of shares
outstanding - basic and
diluted (0.13) (0.31) (0.31) (0.52)
========== ========== ========== ==========
Weighted average number
of shares outstanding -
basic and diluted 48,531,087 21,054,579 44,326,196 19,871,859
========== ========== ========== ==========
JumpTV Inc.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(unaudited)
(Expressed in U.S. dollars)
Three months Six months
ended ended
June 30, June 30,
2007 2006 2007 2006
$ $ $ $
----------- ---------- ----------- ----------
OPERATING ACTIVITIES
Net loss for the period (6,514,301) (6,449,005) (13,599,467) (10,426,142)
Adjustments to reconcile
net loss to net cash
provided by (used in)
operating activities
Amortization 260,978 58,213 437,008 98,745
Unrealized gain on
short-term
investments (9,062) -- (10,062) --
Stock based
compensation,
excluding change
in accrued stock
appreciation rights
as noted below 1,484,267 561,199 2,588,752 1,327,380
Amortization of
deferred direct
broadcast operating
costs 31,396 8,800 62,790 17,599
----------- ---------- ----------- ----------
(4,746,722) (5,820,793) (10,520,979) (8,982,418)
Changes in operating
assets and liabilities
Accounts receivables (126,300) -- (126,300) --
Other receivables (266,041) (196,721) (306,093) (211,145)
Prepaid expenses,
deposits and other
assets 43,957 (325,844) 329,021 (478,943)
Funds held in trust 216,191 -- (14,884) --
Accounts payable and
other accrued
liabilities (1,253,887) 1,697,951 (1,613,228) 2,208,303
Due to related
parties 558 (102,535) (21,539) (109,898)
Accrued license fees 41,920 (3,513) 85,582 (37,795)
Accrued stock
appreciation rights (699,459) -- (638,107) --
Accrued professional
fees (359,896) (68,264) 804,969 (65,675)
Deferred revenue 3,709 13,889 75,290 24,585
Income taxes payable 9,500 12,000 24,950 25,000
Deferred rent 141,056 -- 258,590 --
----------- ---------- ----------- ----------
Cash used in operating
activities (6,995,414) (4,793,830) (11,662,728) (7,627,986)
----------- ---------- ----------- ----------
INVESTING ACTIVITIES
Redemption of
short-term
investments, net -- -- 28,000,000 --
Purchase of equipment (359,904) (445,306) (2,439,840) (703,721)
Acquisition, net of
cash acquired of
$3,308 4,202 (360,760) (147,638) (360,760)
----------- ---------- ----------- ----------
Cash provided by
(used in) investing
activities (355,702) (806,066) 25,412,522 (1,064,481)
----------- ---------- ----------- ----------
FINANCING ACTIVITIES
Proceeds from share
issuances, net (7,973) -- 93,096,698 7,998,646
Repayment of bank loan -- -- (1,287,150) --
Deferred share issue
costs -- (270,875) -- (270,875)
Redemption of Class C
common share -- -- -- (1)
Proceeds from exercise
of stock options 51,634 12,500 127,898 600,046
Proceeds from exercise
of warrants 14,800 -- 14,800 --
Other -- (5,317) -- --
----------- ---------- ----------- ----------
Cash provided by
(used in) financing
activities 58,461 (263,692) 91,952,246 8,327,816
----------- ---------- ----------- ----------
Net increase (decrease)
in cash during the
period (7,292,655) (5,863,588) 105,702,040 (364,651)
Cash, beginning of
period 134,931,573 10,973,989 21,936,878 5,475,052
----------- ---------- ----------- ----------
Cash, end of period 127,638,918 5,110,401 127,638,918 5,110,401
=========== ========== =========== ==========
PR / IR CONTACT INFORMATION:
Lewis Goldberg
KCSA Worldwide
+1-212-896-1216
lgoldberg@kcsa.com
NOMAD:
Chris Bowman
Canaccord Adams
Chris.Bowman@CanaccordAdams.com
This information is provided by RNS
The company news service from the London Stock Exchange
END
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