- Media and Betting Business Continue Strong
F2021 Performance -
- Preparing to Address Large Canadian Market
Opportunity Following Recent Legalization of Single Event Sports
Betting -
- Completed our U.S. IPO and Nasdaq Listing
Raising Gross Proceeds of US$186.3 million -
- Company on Track to Vertically Integrate
Sportsbook Operations with Full Deployment of Proprietary Player
Account Management (PAM) System and Promotion Engine Next Month
-
- Online Betting Industry Leader Patrick Jay to
join theScore to Oversee Sportsbook Operations and Rollout In-House
Risk and Trading -
Score Media and Gaming Inc. (TSX: SCR; NASDAQ: SCR) (“theScore”
or the “Company”), today announced financial results for the three
and nine months ended May 31, 2021.
“theScore demonstrated continued momentum across our business in
the fiscal 2021 third quarter as solid gaming handle was
complemented by record third quarter media revenue,” said John
Levy, Chairman and CEO of theScore. “Third quarter media revenue of
$8.9 million was up 270% year-over-year and grew 5% compared to the
same period in 2019. In addition, our unique, integrated sports
media and betting approach powered gaming handle of $73.0 million
on theScore Bet, including $30.8 million wagered in March,
representing our single biggest handle month to date. We continue
to work through the licensing process ahead of launches of theScore
Bet in additional U.S. states, with an expectation that we will at
least double the number of markets in which we are live in the next
twelve months.
“Canada realized a significant milestone last month with the
passage of and subsequent Royal Assent for Bill C-218, which
legalized single event sports wagering, paving the way for each
Canadian province to implement a regulated sports betting
framework. With a large and passionate Canadian user base, strong
brand identity and best in class integrated media and betting
platforms, we are uniquely positioned for initial and long-term
success in the market. Notably, there is an enormous potential
market opportunity in our home province of Ontario, which is
expected to be the largest regulated sports betting market in North
America by population upon its expected opening later this year. We
are actively working to ensure theScore Bet will be ready to launch
sports betting and iGaming as soon as the Ontario market opens,
subject to receipt of regulatory approval. We have also already
begun amplifying our brand through activations in the Province and
will accelerate those efforts in the lead up to the market
opening.
“In addition, our team continues to build out a modern,
world-class gaming technology platform for the North American
market. From the start, owning and controlling our entire
technology stack has been a strategic priority. Over the past two
years, we’ve made great progress toward accomplishing that
objective, developing and deploying key elements of our proprietary
tech stack, while at the same time working with our partners at
Bet.Works whose technology and platform services have helped us
successfully rollout theScore Bet in several markets across the
U.S.
“Next month will mark a major milestone, as we plan to fully
deploy our proprietary, internally-developed PAM and promotion
engine, which have been approved by Gaming Laboratories
International (GLI) and applicable state gaming labs. These custom
built, cutting-edge systems will unlock additional user
personalization, cross-platform integration capabilities and
platform automation, which we believe will serve to further
differentiate theScore Bet’s best-in-class offering and drive both
near and long-term growth.
“Following that transition, we plan to complete the vertical
integration of our sportsbook operations by migrating to an
in-house managed risk and trading service, which we anticipate will
take place within the next twelve months. Key to these efforts is
the addition of Patrick Jay, a highly regarded online betting
industry leader with an impressive track record leading risk and
trading at high profile properties across the global gaming sector,
including five years at the Hong Kong Jockey Club and six years at
Ladbrokes. Patrick will play a major role working
cross-functionally on all aspects of our sportsbook operations and
theScore Bet, including the roll out of our in-house risk and
trading. We are looking very forward to Patrick joining the team in
September 2021*.
“Following our successful third quarter U.S. initial public
offering and public listing, our entire team remains focused on
further establishing theScore as a leading, integrated provider of
digital sports media and sports betting throughout the U.S. and
Canada. We believe our unique collection of interactive media and
leading-edge technology along with our massively engaged user base
positions theScore for long-term growth and shareholder value
creation. Subject to receipt of regulatory approval, we are eager
to begin operating our integrated betting platform in Ontario later
this year and believe our favorable competitive position will
result in strong initial market share as we build our foundation
for continued, sustainable growth.”
Recent Highlights
- In March, theScore completed a U.S. initial public offering and
listed on the Nasdaq Global Select Market, which raised gross
proceeds of US$186.3 million.
- Total Q3 F2021 gaming handle(1) on theScore Bet was $73.0
million.
- Generated highest-ever betting handle for a single month, $30.8
million in March 2021.
- Media revenue increased 5% vs. 2019** to $8.9 million, a
third-quarter record.
- In June 2021, Bill C-218 was passed by the Senate of Canada,
allowing for the legalization of single event sports betting across
Canada. The passage of this landmark legislation paves the way for
provinces to establish regulated sports betting frameworks, which
we believe presents a significant opportunity for theScore and its
integrated media and betting business.
Audience Metrics
- theScore achieved record engagement on its sports media app in
Q3.
- Recorded 470.2 million user sessions, a Q3 record. User
sessions rose 19% vs. 2019**.
- Users opened the app an average of 126.1 times each month, an
all-time high for average monthly sessions per user, across our
base of 3.7 million average monthly active users, demonstrating a
strong return to pre-COVID user levels.
- theScore’s sports content across Twitter, Facebook, Instagram
and TikTok achieved an average monthly reach of approximately 172
million users, a quarterly record.
- theScore’s esports platforms registered 241 million total video
views in Q3.
Financial Results
Total revenue for Q3 F2021 was $6.4 million, with record Q3
media revenue of $8.9 million partially offset by negative net
gaming revenue(3) of $2.5 million. Media revenue in the quarter
grew 270% year-over-year from $2.4 million for the same period last
year and was up 5.0% from the same period in 2019.
Gaming handle(1) was $73.0 million and gross gaming revenue(2)
was negative $40,000 in Q3 F2021. Inclusive of promotional costs
and fair value adjustments on unsettled bets, the Company generated
negative net gaming revenue(3) of $2.5 million.
EBITDA loss in Q3 F2021 was $21.1 million compared to an EBITDA
loss of $8.7 million for the same period last year. The wider
EBITDA loss was driven primarily by additional expenses incurred in
connection with the ongoing expansion of the Company’s gaming
operations as well as costs and professional service fees related
to the recently completed U.S. initial public offering.
Financial Statements and Management’s Discussion and
Analysis
The Company reports its financial results in Canadian dollars,
unless otherwise indicated. Our unaudited condensed consolidated
interim financial statements, accompanying notes, and Management’s
Discussion & Analysis for the three and nine months ended May
31, 2021 are prepared in accordance with International Financial
Reporting Standards (“IFRS”) and are available on the Company’s
Investor Relations page.
Conference Call & Webcast
theScore will host a conference call and webcast at 5:30 p.m. ET
today, July 13, 2021. During the call, management will review a
presentation summarizing recent developments that can be accessed
here.
Conference Call Dial-In Toll Free North
America: +1 (844) 925-3583 International: +1 (236) 714-3374
Conference ID: 1579499
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: 1579499
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 and is
currently available to place wagers in New Jersey, Colorado,
Indiana and Iowa. Publicly traded on the Toronto Stock Exchange
(TSX: SCR) and the Nasdaq Global Select Market (NASDAQ: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 our 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, the enactment of enabling legislation and
regulations in the provinces and territories of Canada to
facilitate online gaming (including the timing of such legislation
and regulations being passed and proclaimed in force (if at all)
and the terms and conditions imposed in such legislation and
regulations on participants in the online gaming industry), the
proclamation into force of federal legislation to permit
single-event sports wagering, the receipt by the Company of all
relevant licenses and approvals, and the rate of adoption and
market potential of online gaming, and those factors which are
discussed under the heading “Risk Factors” in our Annual
Information Form as filed with applicable securities regulatory
authorities and available on SEDAR under our profile at
www.sedar.com and as filed with the U.S. Securities and Exchange
Commission and available at www.sec.gov, and elsewhere in documents
that theScore files from time to time with such securities
regulatory authorities in Canada and with the U.S. Securities and
Exchange Commission, including its Management’s Discussion &
Analysis and Management Information Circular. 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.
NON-IFRS FINANCIAL MEASURES AND KEY METRICS
This news release makes reference to certain non-IFRS measures,
including handle, gross gaming revenue and EBITDA (which we define
as net loss before depreciation and amortization, finance expense,
net, and deferred income tax recovery and for which a
reconciliation to net loss is provided at the end of this news
release). These measures are not recognized measures under IFRS and
do not have a standardized meaning prescribed by IFRS and are,
therefore, not necessarily comparable to similar measures presented
by other companies. Rather, these measures are provided as
additional information to complement those IFRS measures by
providing further understanding of our results of operations from
management’s perspective. Accordingly, these measures should not be
considered in isolation nor as a substitute for analysis of our
financial information reported under IFRS. These non-IFRS measures
and metrics are used to provide investors with supplemental
measures of our operating performance and liquidity and thus
highlight trends in our business that may not otherwise be apparent
when relying solely on IFRS measures. We also believe that
securities analysts, investors and other interested parties
frequently use non-IFRS measures, including industry metrics, in
the evaluation of companies in our industry. Management also uses
non-IFRS measures and industry metrics in order to facilitate
operating performance comparisons from period to period, the
preparation of annual operating budgets and forecasts and to
determine components of executive compensation.
(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 the 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.
*Services to be provided by Patrick Jay pursuant to a management
services agreement with theScore. Subject to receipt of all
applicable regulatory approvals.
**Comparison to 2019 due to COVID’s impact on operations in
2020.
Score Media and Gaming Inc. Condensed Consolidated Interim
Statements of Financial Position (unaudited) (Expressed in
thousands of Canadian dollars) As at May 31, 2021 and August 31,
2020
May 31, 2021
August 31, 2020
Assets Current assets: Cash and cash equivalents
$
229,086
$
40,116
Restricted cash related to customer deposits
6,265
1,859
Accounts receivable
8,387
5,455
Tax credits recoverable
-
1,616
Prepaid expenses, deposits, and other assets
10,736
2,048
Total current assets
254,474
51,094
Property and equipment
3,305
4,136
Intangible and other assets
26,463
23,477
Total assets
$
284,242
$
78,707
Liabilities and shareholders' equity Current
liabilities: Accounts payable and accrued liabilities
$
17,787
$
10,353
Current portion of loans and other borrowings
412
6,645
Current portion of lease liability
946
908
Current portion of convertible debenture
1,978
-
Other current financial liabilities
286
231
Total current liabilities
21,409
18,137
Loans and other borrowings
429
740
Lease liability
327
1,042
Convertible debenture
16,817
29,584
Total liabilities
38,982
49,503
Shareholders' equity: Special voting shares
15
15
Class A subordinate voting shares
398,748
115,547
Contributed surplus
9,295
7,240
Accumulated other comprehensive income
3,570
512
Equity component of convertible debenture
4,000
8,891
Accumulated deficit
(170,368
)
(103,001
)
Total shareholders' equity
245,260
29,204
Total liabilities and shareholders' equity
$
284,242
$
78,707
Score Media and Gaming Inc. Condensed Consolidated Interim
Statements of Comprehensive Loss (unaudited) (Expressed in
thousands of Canadian dollars, except per share amounts) Three and
nine months ended May 31, 2021 and 2020 Three months ended, Nine
months ended May 31, 2021 May 31, 2020 May 31, 2021 May 31, 2020
Revenue Media revenue
$
8,890
$
2,404
$
27,464
$
18,497
Net gaming revenue
(2,458
)
(23
)
(6,900
)
(244
)
6,432
2,381
20,564
18,253
Operating expenses: Product development and content
3,166
1,633
9,136
6,889
Sales and marketing
5,140
1,778
15,187
11,426
Technology and operations
5,115
4,040
15,208
11,447
General and administration
14,134
3,666
24,357
10,683
Depreciation and amortization
1,486
1,503
4,318
4,028
29,041
12,620
68,206
44,473
Operating loss
(22,609
)
(10,239
)
(47,642
)
(26,220
)
Finance expense, net
(14,520
)
(438
)
(19,724
)
(2,126
)
Loss before income tax recovery
(37,129
)
(10,677
)
(67,366
)
(28,346
)
Deferred income tax recovery
-
-
-
(3,107
)
Net loss
$
(37,129
)
$
(10,677
)
$
(67,366
)
$
(25,239
)
Other comprehensive income Foreign currency translation
differences from foreign operations
2,204
(287
)
3,057
(411
)
Total comprehensive loss for the period
$
(34,925
)
$
(10,964
)
$
(64,309
)
$
(25,650
)
Loss per share - basic and diluted
$
(0.78
)
$
(0.30
)
$
(1.80
)
$
(0.77
)
Score Media and Gaming Inc. Condensed Consolidated Interim
Statements of Cash Flows (unaudited) (Expressed in thousands of
Canadian dollars) Nine months ended May 31, 2021 and 2020 Nine
months ended May 31, 2021 May 31, 2020 Cash flows from
(used) in operating activities Net loss for the period
$
(67,366
)
$
(25,239
)
Items not involving cash: Depreciation and amortization
4,318
4,025
Stock based compensation
2,423
2,394
Interest accretion on lease liabilities
67
103
Interest accretion on loans and other borrowings
42
-
Interest accretion on convertible debenture
4,639
3,295
Unrealized foreign exchange (gain) loss
15,146
(964
)
Income tax recovery
-
(3,107
)
Net cash used before working capital changes
(40,731
)
(19,493
)
Change in non-cash operating assets and liabilities: Accounts
receivable
(2,931
)
3,143
Tax credits recoverable
1,616
-
Restricted cash related to customer deposits
(4,814
)
(19
)
Prepaid expenses, deposits, and other assets
(8,785
)
(1,339
)
Accounts payable and accrued liabilities
8,090
(6
)
Other financial liabilities
65
95
Net cash used in operating activities
(47,490
)
(17,619
)
Cash flows from (used in) financing activities Exercise of
stock options
501
232
Payment of lease liabilities
(744
)
(665
)
Repayment of loans and other borrowings
(6,587
)
-
Redemption of convertible debenture
(1,817
)
-
Issuance of convertible debenture, net of transaction costs
-
37,272
Issuance of Class A subordinate voting shares, net of transaction
costs
263,829
-
Net cash from in financing activities
255,182
36,839
Cash flows used in investing activities Additions to
property and equipment
(464
)
(530
)
Additions to intangible and other assets, net
(7,307
)
(5,180
)
Net cash used in investing activities
(7,771
)
(5,710
)
Increase in cash and cash equivalents
199,921
13,510
Net effect of exchange rate fluctuations on cash
(10,951
)
52
Cash and cash equivalents, beginning of period
40,116
4,035
Cash and cash equivalents, end of period
$
229,086
$
17,597
EBITDA Three Months Ended Nine Months Ended May 31, 2021 May
31, 2020 May 31, 2021 May 31, 2020 Net loss for the period
$
(37,129
)
$
(10,677
)
$
(67,366
)
$
(25,239
)
Adjustments: Depreciation and amortization
1,486
1,503
4,318
4,028
Finance expense, net
14,520
438
19,724
2,126
Deferred income tax recovery
-
-
-
(3,107
)
EBITDA
$
(21,123
)
$
(8,736
)
$
(43,324
)
$
(22,192
)
View source
version on businesswire.com: https://www.businesswire.com/news/home/20210713006133/en/
Investor Relations
Alvin Lobo Chief Financial Officer Score Media and Gaming Inc.
Tel: 416-479-8812 Email: ir@thescore.com
Richard Land, James Leahy JCIR Tel: 212-835-8500 Email:
scr@jcir.com
Media Relations
Daniel Sabreen Director, Communications Score Media and Gaming
Inc. Tel: 917-722-3888 ext. 706 Email: dan.sabreen@thescore.com
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