DAILY NEWS Nov 29, 2012 8:01 AM - 0 comments

theScore Reports Q4 and Year End Results

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2012-11-29

theScore, Inc. today announced the financial results for Score Digital (see definition below) for the fourth quarter and year ended August 31, 2012 in accordance with International Financial Reporting Standards ("IFRS").

FISCAL 2012 OPERATIONAL HIGHLIGHTS

Announced a plan of arrangement pursuant to which Rogers Media Inc. would acquire the television business of Score Media Inc., and the digital media business of Score Media would be spun-out to its shareholders; the plan of arrangement closed on October 19, 2012

Mobile sports applications achieved record growth in Fiscal 2012, registering 3.5 million monthly active users and 120 million user sessions in its peak month, March 2012, up 154% and 164% respectively, over March 2011

theScore.com also achieved record growth in Fiscal 2012, with 1.9 million monthly active users in March 2012, up 208% from March 2011

theScore re-launched its flagship ScoreMobile application for iPhone in November 2011; this app was named the best iPhone Sports App in both the United States and Canada by Apple in its iTunes Rewind 2011 and was inducted into the Apple iTunes "Hall of Fame" for Canada in 2012

"With the plan of arrangement now complete, we are excited to be moving forward with theScore as a stand-alone business," said John Levy, Chairman and CEO, theScore, Inc. "Our goal is to create the ultimate digital service for sports fans across web and mobile platforms, and we are hitting the ground running. Our mobile apps and website both achieved substantial growth in monthly active users over the past year, and we will build on this success with a robust product roadmap planned for fiscal 2013."

Q4 2012 and FISCAL 2012 FINANCIAL RESULTS FOR SCORE DIGITAL

Revenues for the year ended August 31, 2012 were $4.2 million compared to $4.1 million in the year ended August 31, 2011. Revenues for the fourth quarter ended August 31, 2012 were $1.3 million compared to $1.0 million in the fourth quarter ended August 31, 2011. Revenues for the year and fourth quarter ended August 31, 2011 included $0.9 million and $0.2 million, respectively, of revenues related to theScore Satellite Radio which ceased operations in August 2011.

EBITDA loss for the year ended August 31, 2012 was $6.5 million compared to $4.3 million in the previous year, primarily as a result of a planned increase in expenditures on personnel and technology to support the significant growth in the audience of the Company's digital media platforms. EBITDA loss for the fourth quarter ended August 31, 2012 was $1.8 million compared to $1.3 million in the previous year.

STOCK OPTION GRANT

theScore today announced the grant of an aggregate of 4,580,000 options, including 2,790,000 options to directors and officers of the Company. Options were granted to the following directors and officers: Norwest Video Inc. (1,600,000 options); Tom Hearne (400,000 options); Benjamin Levy (400,000 options); Brian Merker (150,000 options); Ralph Lean (40,000 options); Ken Read (40,000 options); Mark Scholes (40,000 options); Lorry Schneider (40,000 options); William Thomson (40,000 options); and Mark Zega (40,000 options). Each option is exercisable for one Class A Subordinate Voting Share of theScore at an exercise price of $0.13, vests over three years and has a term of ten years. Each option is exercisable in accordance with the terms and conditions of the Company's stock option plan.

CLOSING OF PLAN OF ARRANGEMENT

On October 19, 2012, Score Media Inc. (the "Parent") closed the Arrangement Agreement with Rogers pursuant to which, by way of the Arrangement: (a) Rogers acquired the television business of the Parent via an acquisition of all of the outstanding shares of the Parent for $1.62 per share; and (b) the digital media business of the Parent was spun out to the Parent's shareholders as a new corporation, theScore, Inc., incorporated on August 30, 2012 and formed to acquire Score Digital and certain assets of the Parent and its subsidiaries.

Under the terms of the Arrangement Agreement, Rogers acquired all of the outstanding shares of the Parent and an interest in theScore, Inc.

Pursuant to the business separation agreement, the Parent capitalized theScore, Inc. for $11.6 million and inclusive of $1.8 million held in escrow until the first anniversary of the closing of the transaction.

Prior to the closing of the Arrangement the balances due to and due from the Parent and Remaining Group were either settled or acquired by theScore, Inc. In both instances as at October 19, 2012, these amounts are no longer balances due to or due from the Parent and Remaining Group.

DEFINITION OF SCORE DIGITAL

Score Digital consists of the following entities, which as of August 31, 2012, were wholly owned subsidiaries of Score Media Inc. and were consolidated by and under the control of Score Media Inc.: Score Media Ventures Inc. (together with its wholly-owned consolidated subsidiaries ScoreMobile Inc. and 2283546 Ontario Inc.), Hardcore Sports Radio Inc., St. Clair Group Investments Inc., Score Productions Inc., and SMI International Holdings Inc. (together with its wholly-owned consolidated subsidiary SMI International Ltd.). Score Digital represents a portion of Score Media's businesses and does not constitute a separate legal entity.

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

About theScore, Inc.

theScore, Inc. creates, aggregates and distributes sports content via established and emergent digital media assets, including mobile sports applications and its website, theScore.com. theScore's mission is to create the ultimate digital service for sports fans across web and mobile platforms.

 Score Digital

Combined Consolidated Carve-out Statements of Financial Position

(in thousands of Canadian dollars)

August 31, 2012 August 31, 2011

Assets

Current assets:

Accounts receivable $ 1,124 $ 1,238

Other receivable 1,863 -

Due from Remaining Group 80 30

Prepaid expenses 142 37

3,209 1,305

Non-current assets:

Equipment 246 212

Intangible assets 7,206 5,765

Investment in equity accounted investee 916 936

8,368 6,913

Total assets $ 11,577 $ 8,218

Liabilities and Shareholders' Equity

Current liabilities:

Accounts payable and accrued liabilities $ 1,799 $ 1,291

Dur to Parent 23,574 17,146

Due to Remaining Group 8,840 4,408

34,213 22,845

Funded deficiency (22,636) (14,627)

Commitments and contingencies

Subsequent events

Total liabilities and shareholders' equity $ 11,577 $ 8,218

See accompanying notes to the Combined Consolidated Carve-out financial statements

Score Digital

Combined Consolidated Carve-out Statements of Comprehensive Loss

(in thousands of Canadian dollars)

Year ended

August 31, 2012 August 31, 2011

Revenue:

Digital media $ 4,195 $ 3,245

Radio, productions and other 854

4,195 4,099

Operating costs

Personnel 3,592 3,193

Content 2,010 2,266

Technology 2,725 1,101

Facilities, administrative, and other 1,621 860

Management fees 713 909

Depreciation of equipment 92 103

Amortization of intangible assets 1,801 1,223

Write-off of equipment 108

12,554 9,763

Operating loss (8,359) (5,664)

Finance costs 706 283

Share of loss of equity accounted investee 41 14

Loss and comprehensive loss (9,106) (5,961)

See accompanying notes to the Combined Consolidated Carve-out financial statements

Score Digital

Combined Consolidated Carve-out Statements of Comprehensive Loss

(in thousands of Canadian dollars)

Fourth quarter ended

August 31, 2012 August 31, 2011

Revenue:

Digital media $ 1,334 $ 769

Radio, productions and other 200

1,334 969

Operating costs

Personnel 1,356 946

Content 281 536

Technology 963 377

Facilities, administrative, and other 367 165

Management fees 216 242

Depreciation of equipment 25 24

Amortization of intangible assets 672 369

Write-off of equipment 108

3,880 2,767

Operating loss (2,546) (1,798)

Finance costs 287 114

Share of loss of equity accounted investee 4 18

Loss and comprehensive loss (2,837) (1,930)

See accompanying notes to the Combined Consolidated Carve-out financial statements

Score Digital

Reconciliation of Net and Comprehensive Income to EBITDA

Year ended

August 31, 2012 August 31, 2011

Net and comprehensive loss for the period $ (9,106) $ (5,961)

Adjustments:

Share of loss of equity accounted investee 41 14

Depreciation and amortization 1,893 1,326

Finance costs 706 283

Write-off of equipment - 108

EBITDA $ (6,466) $ (4,230)

Three months ended

August 31, 2012 August 31, 2011

Net and comprehensive loss for the period $ (2,837) $ (1,930)

Adjustments:

Share of loss of equity accounted investee 4 18

Depreciation and amortization 697 393

Finance costs 287 114

Write-off of equipment - 108

EBITDA $ (1,849) $ (1,297)

SOURCE: theScore, Inc.


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