JumpTV Inc.
AIM : JTV
TSX : JTV

JumpTV Inc.

March 23, 2007 08:39 ET

JumpTV Announces 4th Quarter Results Consistent With Previous Disclosure

TORONTO--(CCNMatthews - March 23, 2007) - JumpTV Inc. (TSX: JTV) (AIM: JTV), the world's leading broadcaster of ethnic television over the Internet, today announced quarterly results and key performance indicators for the quarter ended December 31, 2006, consistent with the results previously disclosed in the Company's short-form prospectus filed February 19, 2007.

For the quarter ended December 31, 2006 revenue increased 93.5% to US$748,864 from US$387,093 in the same period a year ago. Sequentially, revenue increased 40.1% from US$534,671 in the third quarter of 2006, as the Company added to its subscriber base.

Net loss for the fourth quarter of 2006 was US$8,676,543 or US$0.25 net loss per basic and diluted share compared to US$2,556,145 or US$0.16 net loss per basic and diluted share in the same period a year ago and US$6,494,411 or US$0.23 net loss per basic and diluted share in the quarter ended September 30, 2006. The increase in net loss was primarily the result of increased staffing levels to support the Company's global operations and ongoing investments in network, software and corporate systems.

At December 31, 2006 JumpTV had 254 channel partnerships, compared to 102 at the same period a year ago. This compares to 225 channel partnerships as of September 30, 2006.

For the fourth quarter of 2006, total subscriptions increased 127.6% to 28,138 from 12,361 in the same period a year ago. Sequentially, subscriptions increased 17.8% from 23,885 in the third quarter 2006 and 31.8% from 18,119 in the second quarter 2006. As disclosed in the short-form prospectus, subscriptions were 31,891 as of February 9, 2007.

For the fourth quarter of 2006, total subscribers increased 112.2% to 24,554 from 11,572 in the same period a year ago. Sequentially, subscribers increased 11.5% from 22,019 in the third quarter of 2006 and 34.9% from 16,319 in the second quarter of 2006. As disclosed in the short-form prospectus, subscribers were 27,963 as of February 9, 2007.

Average Monthly Churn was 26.9% for the fourth quarter of 2006 compared to 22.8% for the third quarter of 2006. The Company believes increased churn was, in part, driven by the Company's experimentation with seven-day marketing promotions throughout the fourth quarter, as well as subscribers upgrading from individual channels to channel bundles. As disclosed in the short-form prospectus, churn was 16.6% for the month of January 2007.

For the fourth quarter of 2006, JumpTV's Subscriber Acquisition Cost (SAC) increased 79.9% to US$39.21 compared to US$21.80 in the third quarter of 2006, as the Company experimented with different online and offline marketing initiatives.

For the quarter ended December 31, 2006, Average monthly Revenue Per User (ARPU) increased 17.1% to US$11.04, compared to US$9.43 in the third quarter of 2006, the result of certain subscribers moving from individual channel subscriptions to higher-priced channel bundles.

On February 23, 2007, JumpTV completed a public offering of common stock generating approximately US$100,000,000. The net proceeds from the offering will be used primarily to fund the continued roll-out of the JumpTV delivery infrastructure, to fund further investment in product development and technology, to fund JumpTV's subscriber acquisition strategy as well as to fund general corporate expenditures and working capital requirements of JumpTV's business including possible acquisitions. In keeping with its overall strategy, the Company is currently evaluating various potential acquisition opportunities. If agreement on one or more acquisition transactions is reached, all or a portion of the net proceeds of the offering may be re-allocated to effect such acquisitions.

G. Scott Paterson, chairman & chief executive officer of JumpTV, said, "As we have said since our initial public offering, JumpTV is focused on executing against our three phased strategy. To that end we have averaged signing up at least two new channel partnerships a week. We have built out our technology and user experience and are close to launching our social networking capabilities; and most importantly, we have actively partnered with leading potential sources of new viewers."

The Company reports key recent highlights for JumpTV include:

1- We launched JumpTV 3.0. This major redesign resulted in an improved viewer experience and dramatically increases our ability to offer premium television offerings such as pay-per-view and video on demand content;

2- We successfully added high-value, cross-cultural sports content to JumpTV. By acquiring Hispanic sports portal SportsYa (www.sportsya.com), and securing the rights to more than 200 matches from this year's Euro2008 qualifying tournament along with coverage of both the Egyptian and Israeli football leagues, we have effectively positioned JumpTV as one of the leading online destinations to view football live on the Internet;

3- We have added a key relationship with Orascom Telecom, owner of LINKdotNET and Arpu+. Our agreements with Orascom are vital steps in broadening our offering across the Middle East and North Africa. Orascom will be marketing our content to the Arabic community via its 10 web portals and we expect these activities to greatly enhance our brand in this key market.

Kaleil Isaza Tuzman, president and chief operating officer, added, "The fourth quarter of 2006 continued JumpTV's strong trajectory in content acquisition and product development, while providing important learning on the merchandising and customer acquisition fronts. We were pleased to see ongoing viral growth in JumpTV's subscriber base, and regular upgrades from individual channel subscriptions to channel bundles when premium packages have been made available -- resulting in higher ARPU."

Mr. Isaza Tuzman continued, "We were particularly pleased with our momentum in signing some very important, quality channel partners in the past quarter, including MBC1 and Al Arabiya (top Pan Arab channels), BEC3 (#1 channel in Thailand), Frecuencia Latina (leading channel in Peru) and the Sahara Group of channels (leading channels in India). We were also encouraged by the strong sequential increase in average monthly revenue per user, which was the result of successfully introducing bundled channels."

Mr. Paterson added, "As we near the end of the first quarter of 2007, we remain confident in our ability to expand our content, improve the quality of delivery and increase our viewer base. We also believe that through a number of recently signed agreements, we are positioned to expand our revenue model to include an advertising component. Finally, as a result of our recently completed secondary offering, we are appropriately capitalized to act on acquisition opportunities as they become available."

Mr. Paterson concluded, "We view 2007 as being a year of significant growth and evolution for JumpTV as we move towards a multi revenue stream model, providing certain content in select territories on an ad-supported basis, and continue to implement a series of distribution partnerships with broadband ISPs, Internet portals and device manufacturers. Following the agreements we signed last year with Telefonica, Comcast, Que Pasa and Maktoob, this year we have already announced major deals with Simply Media, Joost, blinkx and LINKdotNET -- and anticipate entering into further distribution partnerships."

JumpTV will hold a conference call to discuss its fourth quarter results at 6:00 a.m. PDT, 9:00 a.m. EDT and 1:00 p.m. GMT on Friday, March 23, 2007. A replay of the call will be available for 7 days using the following dial-in numbers: US -- 1-877-519-4471 or International -- 973-341-3080; conference code 8571323. The call will also be available via live audio cast on the JumpTV website, located at www.jumptv.com. The audio cast will be archived on the Company's website for a period of 30 days.

About JumpTV

JumpTV (AIM: JTV) (TSX: JTV) is the world's leading broadcaster of ethnic television over the Internet. With over 280 channels from 70+ countries, JumpTV delivers its subscribers full-screen news, sports and entertainment content on a real-time basis from all corners of the globe. JumpTV has subscribers in over 100 countries who view channels on the JumpTV online network via high-speed Internet connections on their home computers, laptops, Internet-enabled televisions and mobile phones.

Forward Looking Statement

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 final prospectus and MD&A
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.

KEY PERFORMANCE INDICATORS

Three months ended Growth
31-Dec-06 30-Sep-06 %
--------- --------- -------
Total Subscriptions 28,138 23,885 17.80%
Total Subscribers 24,554 22,019 11.50%
Channels Signed to date 254 225 12.90%
Average Monthly Revenue per User (ARPU) $ 11.04 $ 9.43 17.10%
Subscriber Acquisition Costs (SAC) $ 39.21 $ 21.80 79.90%
Subscriber Monthly Churn 26.90% 22.80% 18.00%
--------- --------- -------



JumpTV Inc.

CONSOLIDATED BALANCE SHEETS
(Expressed in U.S. dollars, unless otherwise noted)
(unaudited)

As at December 31

2006 2005
$ $
---------- ----------
ASSETS
Current
Cash and cash equivalents 21,936,878 5,475,052
Short-term investments 28,115,378 --
Other receivables 723,621 78,309
Prepaid expenses and deposits 1,178,119 14,812
---------- ----------
Total current assets 51,953,996 5,568,173
---------- ----------
Property, plant and equipment, net 1,269,488 379,694
Intangible assets 312,140 --
Goodwill 102,069 --
Other assets 161,246 105,216
Deferred direct broadcast operating costs, net 61,605 96,803
---------- ----------
Total assets 53,860,544 6,149,886
========== ==========

LIABILITIES AND SHAREHOLDERS' EQUITY
Current
Accounts payable and other accrued liabilities 3,950,284 1,008,845
Bank loan 1,287,150 --
Due to related parties 14,676 138,323
Current portion of accrued license fees 106,916 79,592
Accrued professional fees 371,782 195,592
Accrued stock appreciation rights 1,087,760 --
Deferred revenue 205,314 56,268
Income taxes payable 61,800 16,800
---------- ----------
Total current liabilities 7,085,682 1,495,420
---------- ----------
Accrued license fees -- 120,000
Deferred rent 18,502 --
---------- ----------
Total liabilities 7,104,184 1,615,420
---------- ----------

Shareholders' equity
Share capital 75,227,648 9,744,084
Contributed surplus 2,937,219 609,908
Accumulated other comprehensive loss (32,240) (40,355)
Accumulated deficit (31,376,267) (5,779,171)
---------- ----------
Total shareholders' equity 46,756,360 4,534,466
---------- ----------
Total liabilities and shareholders' equity 53,860,544 6,149,886
========== ==========



JumpTV Inc.

CONSOLIDATED STATEMENTS OF OPERATIONS
(Expressed in U.S. dollars, unless otherwise noted)
(unaudited)

Nine months
Year ended ended
December 31, December 31,
2006 2005
$ $
----------- -----------
Revenue 2,061,031 1,081,268
Direct broadcast operating costs (2,569,648) (1,518,978)
----------- -----------
(508,617) (437,710)
----------- -----------

Other costs and expenses
Selling, general and administrative 21,690,938 3,990,732
Stock-based compensation 4,097,351 203,934
Amortization of property, plant and equipment 128,549 27,939
Amortization of intangible assets 22,401 --
----------- -----------
25,939,239 4,222,605
----------- -----------
Loss before the following: (26,447,856) (4,660,315)
Loss (gain) on foreign exchange 186,990 (4,391)
Interest income (1,083,050) (41,654)
----------- -----------
Loss before income taxes (25,551,796) (4,614,270)
Provision for income taxes 45,300 16,800
----------- -----------
Net loss for the period (25,597,096) (4,631,070)
=========== ===========

Net loss per share - basic and diluted (0.99) (0.35)
=========== ===========

Weighted average number of shares
outstanding - basic and diluted 25,848,396 13,162,916
=========== ===========



JumpTV Inc.

CONSOLIDATED STATEMENTS OF CASH FLOWS
(Expressed in U.S. dollars, unless otherwise noted)
(unaudited)

Nine months
Year ended ended
December 31, December 31,
2006 2005
$ $
----------- -----------
OPERATING ACTIVITIES
Net loss for the period (25,597,096) (4,631,070)
Adjustments to reconcile net loss to net cash
used in operating activities
Amortization of property, plant and equipment 256,183 40,165
Amortization of intangible assets 58,360 --
Stock based compensation 4,123,974 203,934
Amortization of deferred direct broadcast
operating costs 87,920 5,867
----------- -----------
(21,070,659) (4,381,104)
Changes in operating assets and liabilities
Other receivables (645,312) (70,248)
Prepaid expenses, deposits and other assets (1,219,337) (113,408)
Accounts payable and other accrued liabilities 2,941,439 829,236
Due to related parties (123,647) 123,486
Accrued license fees (92,676) 58,337
Accrued professional fees 176,190 195,592
Deferred revenue 149,046 (14,367)
Income taxes payable 45,000 16,800
Deferred rent 18,502 --
----------- -----------
Cash used in operating activities (19,821,454) (3,355,676)
----------- -----------

INVESTING ACTIVITIES
(Purchase) redemption of short-term
investments (28,107,263) 74,462
Purchase of property, plant and equipment (1,145,977) (343,987)
Purchase of intangibles (12,500) --
Acquisition, net of cash acquired (440,847) --
----------- -----------
Cash used in investing activities (29,706,587) (269,525)
----------- -----------

FINANCING ACTIVITIES
Proceeds from share issuances, net 63,809,337 7,844,982
Proceeds from bank loan 1,287,150 --
Proceeds from (redemption of) Class C common
share (1) 1
Proceeds from exercise of stock options 713,381 125,000
Proceeds from exercise of warrants 180,000 --
----------- -----------
Cash provided by financing activities 65,989,867 7,969,983
----------- -----------

Net increase in cash and cash equivalents
during the period 16,461,826 4,344,782
Cash and cash equivalents, beginning of period 5,475,052 1,130,270
----------- -----------
Cash and cash equivalents, end of period 21,936,878 5,475,052
=========== ===========



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