SOURCE: JumpTV Inc.

November 13, 2007 03:21 ET

JumpTV Q3 2007 Revenue Tops $2 Million

TORONTO--(Marketwire - November 13, 2007) - JumpTV Inc. ("JumpTV" or the "Company") (TSX: JTV) (AIM: JTV), a leader in broadcasting international television and sports over the Internet, today announced quarterly results and selected financial metrics for the quarter ended September 30, 2007.

For the quarter ended September 30, 2007 revenue was US$2,004,056 up from US$1,175,924 in the second quarter 2007 and from US$534,671 in the same period a year ago. This increase was primarily due to the acquisitions of the Broadband Network Division of XOS Technologies Inc. and Cycling TV Limited and the increase in subscribers to JumpTV's international channels. Of the US$2 million in revenue approximately US$287,000 was advertising-related revenue. XOS results were consolidated as of September 1, 2007 and CyclingTV as of August 1, 2007.

The net loss for the three months ended September 30, 2007 was US$6,466,061 or US$0.13 per basic and diluted share compared to US$6,514,301 or US$0.13 per basic and diluted share in the quarter ended June 30, 2007 and compared to US$6,494,411 or US$0.23 per basic and diluted share for the same period a year ago. The net loss was $4,745,314 excluding non cash items during the quarter of approximately US$686,113 in stock-based compensation and other compensation payments and $1,034,634 that primarily relates to the amortization of tangible and intangible assets. In addition, the Company used approximately $870,000 of cash in the period to acquire its own stock.

As of September 30, 2007 JumpTV International had approximately 305 channel partnerships comprising its international offerings compared to 225 channels as of September 30, 2006 and 302 channels as of June 30, 2007. The Company signed additional channels in Q3 2007 and continued its strategy of selectively culling channels in the third quarter in order to focus its efforts on better performing channels. The Company intends to continue to cull certain channels from its platform over time to reduce costs, optimize revenues and better allocate its resources.

As of September 30, 2007 JumpTV Sports had approximately 175 official and exclusive broadcast relationships with U.S. colleges, universities, conferences and professional sports teams including programs within the SEC, Big 12 and Big 10 NCAA Division I Conferences.

The approximate number of subscribers as of September 30, 2007 was 86,000 up from 29,968 as at June 30, 2007. As at November 12, 2007 the Company had approximately 94,000 subscribers.

The following metrics for churn, SAC and ARPU are based solely on JumpTV International's content offerings as the Company does not have sufficient history to accurately disclose these metrics for the recently acquired business:

--  Churn for the three months ended September 30, 2007 was 13.2%, down
    0.8% from 13.3% for the three months ended June 30, 2007.
    
--  Subscriber acquisition costs (SAC) were US$14.49, a decrease of 57%
    compared to US$33.69 in the second quarter of 2007.  An increased focus on
    search engine optimization (SEO), targeted event-driven marketing campaigns
    and a reduction in marketing expenses contributed to the decrease.
    
--  Average monthly revenue per user (ARPU) was US$11.54 in the quarter
    ending September 30, 2007, a 1% increase from US$11.42 in the second
    quarter of 2007.
    

In addition, the Company notes that the average duration of a user session on JumpTV International channels was approximately 50 minutes during the quarter.

JumpTV Executive Chairman G. Scott Paterson commented, "JumpTV's third quarter was the most important in our history as we completed the strategic acquisition of XOS (now JumpTV Sports) and we furthered the momentum of our free-to-consumer ad supported model in the U.S. Importantly, our traffic metrics all showed strong growth and our premium content showed encouraging subscriber growth as well."

The Company reported the following traffic related average monthly metrics in connection with overall user activity on JumpTV.com, our Jumper affiliates and on JumpTV Sports-managed sites but not including third party distributors of JumpTV content such as AOL.com and Terra.com:

--  Stream views -- 4.6 million average per month in Q3 up from 2.6
    million average per month in Q2
    
--  Minutes viewed -- 85.4 million average per month in Q3 up from 62.9
    million average per month in Q2
    
--  Page Views -- 66.0 million average per month in Q3 up from 46.2
    million average per month in Q2
    
--  Unique visitors -- 6.8 million average per month in Q3 up from 4.6
    million average per month in Q2
    
--  Ad impressions -- 116.9 million average per month in Q3 up from 22.2
    million average per month in Q2
    

The Company reports the following recent developments for JumpTV:

1. We secured rights to additional cross-cultural content including channels in Asia, the Middle East, Sub-Saharan Africa and Europe, sporting properties such as the South American World Cup qualifying matches and the BIG EAST conference.

2. We signed and implemented distribution partnerships with Tiscali UK, which currently offers approximately 170 JumpTV channels, MySpace and Veoh Networks. Additionally, in many of our distribution partnerships we are starting to add emphasis, in addition to our live streams, on short-form entertaining video clips and highlights of major sporting events.

3. We have now deployed approximately 140 'Jumpers', our API media player, on multiple sites around the world including half of these on our channel partners own sites and we have a queue of interest from several hundred other websites.

4. We brought on a Head of Global Ad Sales who is building out his team and aggressively engaging the ad community.

5. We further invested in and improved our global content delivery network (CDN).

6. We made significant progress in integrating operations, marketing and finance with the recently acquired Broadband Network Division of XOS Technologies Inc. ["JumpTV Sports"].

Kaleil Isaza Tuzman, JumpTV President and COO and a member of the Board of Directors said, "From an operational perspective we are better positioned today than ever before to realize the true potential of JumpTV."

Jordan Banks, Chief Executive Officer, stated, "I am truly excited to have joined JumpTV. There is an exciting confluence of trends that are uniquely positioning JumpTV in the IPTV marketplace. The increasing penetration of broadband, an accelerated acceptance of the internet as a video delivery platform and the increasing thirst for compelling sports, entertainment and political content from around the world is rapidly building a passionate and loyal audience."

About JumpTV

JumpTV is a leading distributor of live international television and sports over the Internet. With more than 300 television channels from 75+ countries and more than 175 partnerships with sports teams and leagues, JumpTV delivers full-screen sports, news and entertainment content on a real-time basis from all corners of the globe to computers, Internet-enabled television sets, IP set-top-boxes and cell phones with browser access. For more information, visit www.jumptv.com.

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.

JumpTV Inc.

                        CONSOLIDATED BALANCE SHEETS
                                [unaudited]
                         [Expressed in U.S. dollars]

As at                                         September 30, December 31,
                                                  2007          2006
                                                    $             $
                                                -----------  -----------
ASSETS
Current
Cash                                             60,202,143   21,936,878
Short-term investments                              130,173   28,115,378
Accounts receivable                               1,757,364            -
Other receivables                                   606,646      723,621

Prepaid expenses and deposits                     1,669,757    1,178,119
                                                -----------  -----------
Total current assets                             64,366,083   51,953,996
                                                -----------  -----------
Property, plant and equipment, net                6,762,559    1,269,488
Intangible assets                                20,263,025      312,140
Goodwill                                         45,731,660      102,069
Other assets                                        686,765      161,246
Deferred direct broadcast operating costs, net       35,208       61,605
                                                -----------  -----------
Total assets                                    137,845,300   53,860,544
                                                ===========  ===========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current
Accounts payable and accrued liabilities          6,097,170    3,950,284
Bank indebtedness                                         -    1,287,150
Due to related party                                 11,196       14,676
Accrued license fees                                353,076      106,916
Accrued professional fees                           394,081      371,782
Current portion of notes payable                     37,139            -
Obligations under capital lease                     111,504            -
Accrued stock appreciation rights                         -    1,087,760
Deferred revenue                                  2,408,560      205,314
Income taxes payable                                 95,050       61,800
                                                -----------  -----------
Total current liabilities                         9,507,776    7,085,682
                                                -----------  -----------
Deferred rent                                       585,949       18,502
Notes payable                                        45,467            -
Obligations under capital lease                     122,205            -
                                                -----------  -----------
Total liabilities                                10,261,397    7,104,184
                                                -----------  -----------

Shareholders' equity
Share capital                                   173,717,912   75,227,648
Contributed surplus                               5,348,142    2,937,219
Accumulated other comprehensive loss                (40,355)     (32,240)
Accumulated deficit                             (51,441,796) (31,376,267)
                                                -----------  -----------
Total shareholders' equity                      127,583,903   46,756,360
                                                -----------  -----------
Total liabilities and shareholders' equity      137,845,300   53,860,544
                                                ===========  ===========


JumpTV Inc.


                  CONSOLIDATED STATEMENTS OF OPERATIONS
                              [unaudited]
                      [Expressed in U.S. dollars]


                              Three months              Nine months
                                  ended                    ended
                               September 30,            September 30,
                           ----------------------- -----------------------
                              2007        2006        2007        2006
                                $           $           $           $
                           ----------- ----------- ----------- -----------
Revenue                     2,004,056      534,671   4,183,126   1,312,167
Direct broadcast operating
 costs                      (2,874,920)  (706,102)  (5,786,509) (1,437,113)
                           ----------- ----------- ----------- -----------
                              (870,864)   (171,431) (1,603,383)   (124,946)
                           ----------- ----------- ----------- -----------

Other costs and expenses
Selling, general and
 administrative              5,971,444   5,318,685  19,239,821  14,538,882
Stock-based compensation
 and other compensation
 payments                      686,113   1,417,321   2,635,953   2,744,701
Amortization of property,
 plant and equipment           157,591      34,225     373,474      82,076
Amortization of intangible
 assets                         76,204           -      96,021           -
                           ----------- ----------- ----------- -----------
                             6,891,352   6,770,231  22,345,269  17,365,659
                           ----------- ----------- ----------- -----------
Loss before the following:  (7,762,216) (6,941,662)(23,948,652)(17,490,605)
Gain (loss) on foreign
 exchange                       47,341     107,548     (38,962)     99,247
Investment income, net       1,234,190     350,703   3,932,411     506,805
                           ----------- ----------- ----------- -----------
Loss before income taxes    (6,480,685) (6,483,411)(20,055,203)(16,884,553)
Provision for income taxes       8,300      11,000      33,250      36,000
Future income tax recovery     (22,924)          -     (22,924)          -
                           ----------- ----------- ----------- -----------
Net loss for the period     (6,466,061) (6,494,411)(20,065,529)(16,920,553)
                           =========== =========== =========== ===========

Loss per weighted average
 number of shares
 outstanding - basic and
 diluted                         (0.13)      (0.23)      (0.44)      (0.74)
                           =========== =========== =========== ===========

Weighted average number of
 shares outstanding  -
 basic and diluted          48,803,530  28,848,119  45,737,733  22,913,150
                           =========== =========== =========== ===========


JumpTV Inc.

                 CONSOLIDATED STATEMENTS OF CASH FLOWS
                             [unaudited]
                     [Expressed in U.S. dollars]
                                Three months             Nine months
                                   ended                    ended
                               September 30,            September 30,
                          ------------------------ -----------------------
                             2007         2006        2007        2006
                               $            $           $           $
                          -----------  ----------- ----------- -----------

OPERATING ACTIVITIES
Net loss for the period    (6,466,061) (6,494,411) (20,065,529)(16,920,553)
Adjustments to reconcile
 net loss to net cash
 provided by (used in)
 operating activities
  Amortization              1,003,239      76,069    1,440,248     174,310
  Unrealized gain on
   short-term investments           -           -      (22,910)          -
  Stock based compensation,
   excluding change in
   accrued stock
   appreciation rights as
   noted below              1,130,567     793,462    3,719,318   2,120,842
  Amortization of deferred
   direct broadcast
   operating costs             31,395       8,799       94,186      26,399
                          -----------  ----------- ----------- -----------

                           (4,300,860)  (5,616,081)(14,834,687)(14,599,002)
Changes in operating
 assets and liabilities
  Accounts receivables       (351,380)           -    (477,680)          -
  Other receivables           478,710     (197,586)    172,617    (408,731)
  Prepaid expenses,
   deposits and other
   assets                     (24,656)    (312,815)    304,364    (791,758)
  Funds held in trust          14,884     (581,861)          -    (581,861)
  Deferred direct
   broadcast operating
   costs                            -    (191,690)          -    (191,690)
  Accounts payable and
   other accrued
   liabilities                959,482   (1,020,553)   (491,447)  1,221,951
  Due to related party         18,059      (22,342)     (3,480)   (132,240)
  Accrued license fees        160,578       23,899     246,160     (13,896)
  Accrued stock
   appreciation rights       (449,653)     623,859  (1,087,760)    623,859
  Accrued professional
   fees                      (782,670)  (2,750,880)     22,299     362,242
  Obligation under
   capital lease              (20,659)           -     (20,659)          -
  Deferred revenue            481,114       22,253     556,404      46,838
  Income taxes payable          8,300       11,000      33,250      36,000
  Future tax liability        (22,924)           -     (22,924)          -
  Deferred rent               308,857            -     567,447           -
                          -----------  ----------- ----------- -----------
Cash used in operating
 activities                (3,522,818) (10,012,797)(15,036,096)(14,428,288)
                          -----------  ----------- ----------- -----------
INVESTING ACTIVITIES
  Redemption of
   short-term
   investments, net           (12,848)           -  28,000,000           -
  Purchase of equipment      (284,675)    (118,835) (2,886,812)   (771,709)
  Acquisition of
   SportsYA, net of cash
   acquired of $3,308           1,200          333    (146,439)   (444,973)
  Acquisition of Cycling
   TV Limited, net of
   cash acquired of
   $77,237                 (2,357,360)           -  (2,357,360)          -
  Acquisition of
   Broadband Network
   Division of XOS
   Technologies Inc.
   [JumpTV Sports]        (60,584,537)           - (60,584,537)          -
                          -----------  ----------- ----------- -----------
Cash used in investing
 activities               (63,238,220)    (118,502)(37,975,148) (1,216,682)
                          -----------  ----------- ----------- -----------

FINANCING ACTIVITIES
  Proceeds from share
   issuances, net               7,433   55,566,287  93,104,131  63,564,934
  Repayment of bank loan            -            -  (1,287,150)          -

  Deferred share issue
   costs                            -    3,449,672           -           -
  Redemption of Class C
   common share                     -            -           -          (1)
  Proceeds from exercise
   of stock options           186,963       25,438     314,861     625,484
  Proceeds from exercise
   of warrants                      -            -      14,800           -
  Normal course issuer bid   (870,133)           -    (870,133)          -
                          -----------  ----------- ----------- -----------
Cash provided by (used in)
 financing activities        (675,737)  59,041,397  91,276,509  64,190,417
                          -----------  ----------- ----------- -----------

Net (decrease) increase
 in cash during the
 period                   (67,436,775)  48,910,098  38,265,265  48,545,447
Cash, beginning of
 period                   127,638,918    5,110,401  21,936,878   5,475,052
                          -----------  ----------- ----------- -----------
Cash, end of period        60,202,143   54,020,499  60,202,143  54,020,499
                          ===========  =========== =========== ===========

Contact Information

  • JUMPTV PR / IR Contacts
    North America:
    Lewis Goldberg
    KCSA Worldwide
    +1-212-896-1216
    Email Contact

    UK:
    Chris Bowman/Andrew Chubb
    Canaccord Adams Limited
    +44 207 050 6500