Tuesday, April 13, 2021

theScore Reports Record F2021 Q2 Financial Results

 theScore Reports Record F2021 Q2 Financial Results


- Total gaming handle on theScore Bet rises 491% year-over-year -

- Completed U.S. IPO and Nasdaq listing, raising US$186.3 million to fund
growth of North American sports betting operations -


TORONTO, April 13, 2021 – Score Media and Gaming Inc. (TSX: SCR; NASDAQ: SCR) (“theScore” or the “Company”), today announced financial results for the three and six months ended February 28, 2021.
 
“We achieved record gaming handle and another quarter of solid media revenue growth in our fiscal 2021 second quarter. The strong second quarter results highlight theScore’s ongoing momentum and our users’ active, growing engagement with our mobile offerings,” said John Levy, Chairman and CEO of theScore. “Second quarter handle of $81.6 million on theScore Bet grew 491% year-over-year and 46% over the first quarter. We also recorded our highest-ever second quarter media revenue, with 17% year-over-year growth driven by our compelling content as well as our outstanding North American reach and audience engagement.
 
“Following the launch of theScore Bet in Iowa in mid-February, our mobile sports betting platform is now live in four states as our market rollout continues on schedule. We’re successfully building our user base and leveraging our media audience, while simultaneously welcoming new users to our platform as demonstrated by the year-over-year and quarterly sequential increases in gaming handle this quarter, including a nearly 200% increase in our New Jersey handle compared to the year-ago period. Through our recent agreement with Caesars Entertainment we now have sports betting market access in Illinois, the sixth most populous U.S. state. 
 
“During the second quarter, we raised US$186.3 million of gross proceeds through our U.S. initial public offering which we intend to deploy towards the ongoing build out of our industry-unique integrated sports betting and media technology platform. The new capital provides additional resources to further execute on our strategies to integrate sports betting and content to drive deep user engagement and expand our market access. We will continue to enhance our media and betting ecosystem through investments in technology to further develop user personalization, unique betting offerings, and in-game prop bets, which are expected to be a significant driver of U.S. sports betting growth. At the same time, we are working to expand our access into new U.S. states while continuing our preparations for the anticipated legalization of single-game sports wagering in Canada.
 
“We are very encouraged by the recent momentum in support of Bill C-218, which would legalize single-game sports betting in Canada. Our popular brand and dominant Canadian market position will enable theScore to participate as a market leader in what is expected to be a very large addressable market, including in our home province of Ontario.
 
“Our unique combination of media and betting is a powerful differentiator in a growing marketplace. We intend to leverage our position as the only digital sports media company in North America that operates a sports betting platform to further grow our U.S. business and capture meaningful market share in Canada when the market opens. With our fully integrated sports media and betting experience and technology focus, we are perfectly positioned to efficiently acquire and engage new customers while driving strong customer loyalty and attractive margins which will help drive the long-term enhancement of shareholder value.”

Recent Highlights

  • Total Q2 F2021 gaming handle [1] on theScore Bet grew 491% year-over-year, reaching a record $81.6 million in the quarter.
    • Handle was up 46% compared to Q1 F2021.
    • Q2 New Jersey gaming handle grew 195% year-over-year.
  • Media revenue increased 17% year-over-year to $8 million, a second-quarter record. 
  • In March, theScore completed a U.S. initial public offering and listed on the Nasdaq Global Select Market.
    • 6.9 million Class A Shares were sold by the Company at US$27.00 per share, resulting in gross proceeds of US$186.3 million.
    • Prior to the U.S. public listing, the Company consolidated its outstanding Class A Shares on the basis of one new Class A Share for every ten outstanding Class A Shares; it also consolidated its special voting shares at the same ratio.
  • theScore Bet launched in Iowa in February, bringing the Company’s base of live U.S. sports betting states to four.
  • In March, the Company entered into an Illinois market access agreement with Caesars Entertainment for mobile sports betting.
  • In March, theScore Bet became an official betting operator of the PGA TOUR. The content and marketing relationship also makes theScore Bet the TOUR’s first official betting operator in Canada, pending the enactment of enabling legislation and regulation and receipt of all necessary regulatory approvals.  
  • In December, the Company’s esports platforms served as the exclusive English language broadcast partner for the League of Legends’ Demacia Championship in China.

Audience Metrics
  • theScore achieved a Q2 record for engagement on its sports media app. User sessions rose 8% year-over-year in Q2 F2021 to 488 million with users opening the app an average of 125 times a month each. The Company had 3.9 million average monthly active users on theScore app.
  • theScore’s esports platforms registered 186.5 million total video views in Q2 F2021. An additional 99,600 YouTube subscribers were added during the period with total channel subscribers now exceeding 1.67 million.
  • ​During Q2, theScore’s sports content across Twitter, Facebook, Instagram and TikTok achieved an average monthly reach of approximately 88 million. theScore’s TikTok account added approximately 456,000 new followers in Q2 F2021, with followers now exceeding 3.1 million.


Financial Results 
Total revenue for Q2 F2021 was $5.6 million, with record Q2 media revenue partially offset by negative net gaming revenue [3] of $2.4 million. Media revenue in the quarter was $8 million, compared to $6.8 million for the same period last year, representing a 17% year-over-year increase.

Gaming handle [1] was $81.6 million and gross gaming revenue [2] was $0.4 million in Q2 F2021. When taking into account promotional costs and fair value adjustments on unsettled bets, this resulted in negative net gaming revenue [3] of $2.4 million.

EBITDA loss in Q2 F2021 was $12.9 million compared to an EBITDA loss of $8.6 million for the same period last year. This was primarily the result of additional expenses incurred in connection with the ongoing expansion of the Company’s gaming operations and 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 six months ended February 28, 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 5:30pm ET today, Tuesday, April 13. 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: 5097437

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: 5097437

Aphria's management defence during a conference call this morning.

 Aphria's management sprang to the defence during a conference call this morning. "While we factored in some impact to our business from the pandemic in Q3, the duration and the magnitude was greater than we initially anticipated," said Mr. Simon. Chief financial officer Carl Merton added that Ontario was in lockdown nearly every day of the quarter and Western Canada saw shutdowns too. As well, provincial cannabis boards -- which were previously predicting a boost in sales -- ended up reducing inventories, which led to Aphria receiving $5-million in product returns. Mr. Merton said Aphria was able to "mitigate a portion of the product return by finding alternate distribution channels." Yet nothing could stem the red ink. Aphria posted a loss of $360.9-million for the third quarter, sharply worse than its loss of $120.5-million in the second quarter.

Understandably keen to redirect investors' attention, Aphria repeatedly brought up what it saw as one of the highlights of the quarter, namely its all-share merger proposal with Tilray Inc. (U.TLRY) (which was dragged into Aphria's financial muck today and saw its stock drop $2.57 (U.S.) to $17.19 (U.S.)). Mr. Simon will be in charge of the combined company, which he hyped today as "one of the strongest global cannabis and consumer packaged goods companies in the world." Both Aphria and Tilray will hold shareholder votes on the merger this Wednesday. They are aiming to close the deal by (of course) April 20.

The S&P/TSX Cannabis Index lost 19.18 to 211.42, while the CSE Composite Index lost 13.77 to 852.51. Helping to drag the sector into the red was Aphria Inc. (APHA), which lost $2.89 to $17.47 on 10.9 million shares, after releasing its financial results for the fiscal third quarter ended Feb. 18. Chief executive officer Irwin Simon set the tone of the press release right away. Before even a single number was announced, Mr. Simon bemoaned COVID-19-related challenges that were "greater than we initially anticipated." In other words, brace yourselves.

For the fiscal third quarter, Aphria's net revenue came to $153.6-million and its adjusted EBITDA was $12.6-million. Both figures were below analysts' predictions of $163-million and $14.9-million. They were also below the comparative figures of $160.5-million and $12.9-million for the fiscal second quarter. COVID-19 lockdowns in Ontario and other core markets for Aphria meant that investors and analysts were not expecting much of a quarter-over-quarter increase, but the outright decrease was worrisome. Notably, gross revenue for recreational sales took a 17-per-cent plunge to $59.6-million in the third quarter from $72.1-million in the second quarter, breaking what had been a seven-quarter-long streak of increases.

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