SOURCE: JumpTV Inc.

August 11, 2008 06:00 ET

JumpTV Reports Q2 2008 Results

TORONTO--(Marketwire - August 11, 2008) - JumpTV (TSX: JTV) (AIM: JTV), a leading broadcaster of live and on-demand sports and international television over the Internet, today announced results for the second quarter ended June 30, 2008.

Revenue was $3.6 million (all amounts in U.S. dollars) for the second quarter of 2008 compared to $3.6 million for the first quarter of 2008 and $1.2 million in the same period in 2007 -- marking a year-over-year increase of 206%. This increase can be attributed to the acquisition of CyclingTV and XOS Broadband Networks (now JumpTV Sports) and the revenue generated by the South American World Cup Qualifiers in the second quarter of 2008.

The net loss for the three months ended June 30, 2008 was $11.5 million or $0.23 per share, basic and diluted as compared to $58.7 million or $1.19 per share, basic and diluted for the three months ended March 31, 2008 and $6.5 million or $0.13 per share, basic and diluted in the same period a year ago. The decrease in net loss from the first quarter 2008 was primarily due to the impairment of goodwill and intangibles recorded in the first quarter. Non-cash expenses were $2.0 million in the second quarter, consisting of amortization and stock-based compensation, compared to $50.2 million in the first quarter of 2008, consisting of impairment of goodwill and intangibles as well as amortization and stock-based compensation. As of June 30, 2008 the Company had $29.8 million in cash and cash equivalents.

"In our sports business, we broadened our client base by adding new teams and leagues as partners and, at the same time, we increased the depth of many of our existing relationships by adding incremental functionality and other technology solutions to their online offerings," commented G. Scott Paterson, Executive Chairman of JumpTV.

"In our international business, we took steps with respect to people and other resources to position our strongest areas of content aggregation -- Arabic, South Asian, Hispanic and Caribbean -- to be re-energized in the context of our new business plan which will unfold as a result of our planned merger with NeuLion. In particular, at this time, we have focused on our Arabic content which will soon be launched and available under its own newly designed and built proprietary portal which will compliment this content's availability on JumpTV.com," added Paterson.

The Company reports that its previously announced planned merger with NeuLion Inc., a Plainview, New York-based end-to-end IPTV service provider of live and on-demand sports, international and religious programming over the Internet and through set top boxes to the television, is on track to close on October 1st subject to shareholder and regulatory approvals.

"We are very excited about our pending merger and believe that the JumpTV/NeuLion combination will be able to offer our sports and international content partners best-in-class technology and services," Paterson commented.

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

    KPI (monthly averages in millions)       Q2 2008     Q2 2007
Stream Viewed                                    4.1         2.6
Minutes Viewed                                  95.9        63.0
Monthly Unique Visitors                          7.2         4.6
Monthly Pages Viewed                            62.6        46.2
Ad Impressions                                 178.3        22.2

The approximate number of subscribers as of June 30, 2008 was 68,500. Year-over-year subscribers increased 128% from 30,000 in Q2 2007, primarily as a result of the acquisitions of XOS Broadband Networks (now JumpTV Sports) and Cycling TV. The Company reports that it is typical for its subscriber trends to experience significant seasonality with Q2 being the weakest and Q4 being the strongest quarters as a result of the college/university school years and, correspondingly, football and basketball seasons.

About JumpTV

JumpTV Inc. (www.jumptv.com), (TSX: JTV) (AIM: JTV), is a world leading broadcaster of live and on-demand sports and international television over the Internet. In the last twelve months, JumpTV streamed more than 15,000 live and exclusive sporting events -- comprised of top college (NCAA), professional and Hispanic sports coverage -- to millions of fans globally. JumpTV also delivers a broad offering of internet services to its partners including web hosting, live event video streaming, ticket management and e-commerce.

Through JumpTV's consumer websites: JumpTV.com, Cycling.TV and SportsYa.com, as well as its collegiate and international sports partner websites, JumpTV streams tens of thousands of hours of live and on-demand events and international programming over the Internet each year, providing content from over 160 international channels from 40 countries to subscribers in over 90 countries.

Forward-Looking Statement

Certain statements herein relating to JumpTV's plans to merge with Nuelion, Inc. are forward-looking statements and represent JumpTV's current intentions in respect of future activities. These statements, in addressing future events and conditions, involve inherent risks and uncertainties. Forward-looking statements can by identified by the use of the words "will," "expect," "seek," "anticipate," "believe," "plan," "estimate," "expect," and "intend" and statements that an event or result "may," "will," "can," "should," "could," or "might" occur or be achieved and other similar expressions. Forward-looking statements 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. Although the forward-looking statements contained in this release are based upon what Management believes to be reasonable assumptions, the Company cannot assure readers that actual results will be consistent with these forward-looking statements. These forward-looking statements are made as of the date of this release and the Company assumes no obligation to update or revise them to reflect new events or circumstances, except as required by law. Many factors could cause the actual results, performance or achievements of the Company to be materially different from any future results, performance or 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 specific risks include that the merged entity will not be able to realize some or all of the expected synergies due to incompatibilities in the merging businesses, the inability of management to bring about such synergies or a changing business environment rendering such synergies inadvisable or uneconomical. After integrating the businesses the suite of service offerings may not perform as expected if shifting demand moves in a direction away from the expected business model of the merged entity, if competitors are able to take market share away from the merged entity or if changing technology adversely impacts the merged businesses. In addition, while the Company expects its content partners and those of NeuLion to continue and expand their relationship with the merged entity, there can be no assurance that such relationships will continue as expected, or at all. More detailed assessment of the risks that could cause actual results to materially differ than current expectations is contained in the "Risk Assessment" section of the Company's 2007 annual MD&A filed on www.sedar.com.

                             JumpTV Inc.
                   CONSOLIDATED BALANCE SHEETS
                            [unaudited]
       [Expressed in U.S. dollars, unless otherwise noted]
As at
                                                 June 30,      December 31,
                                                   2008            2007
                                                     $               $
                                                -----------    -----------

ASSETS
Current
Cash and cash equivalents                        29,800,084     51,202,984
Short-term investments                              127,001        130,640
Accounts receivable, net of allowance for
 doubtful accounts of $396,859 [2007 - $395,175]  1,454,571      1,782,280
Interest receivable                                  66,190        726,995
Sales taxes receivable                              840,680        659,000
Other receivables                                   132,829         79,385
Prepaid expenses and deposits                     1,298,810      1,044,921
                                                -----------    -----------
Total current assets                             33,720,165     55,626,205
                                                -----------    -----------
Property, plant and equipment, net                6,766,812      6,760,565
Intangible assets, net                           16,915,233     18,305,881
Goodwill                                                  -     47,970,833
Other assets                                      1,601,875      1,234,038
Deferred direct broadcast operating costs         1,926,590         76,409
Deferred acquisition costs                          495,732              -
                                                -----------    -----------
Total assets                                     61,426,407    129,973,931
                                                ===========    ===========

LIABILITIES AND SHAREHOLDERS' EQUITY
Current
Accounts payable                                  1,780,624      3,296,858
Other accrued liabilities                         6,486,346      5,247,328
Due to related party                                 17,490         37,229
Current portion of note payable                      13,586         13,586
Current portion of obligations under capital
 lease                                              108,635        120,465
Accrued stock appreciation rights                    41,325              -
Deferred revenue                                  2,210,756      1,752,042
Income taxes payable                                121,750        115,050
                                                -----------    -----------
Total current liabilities                        10,780,512     10,582,558
                                                -----------    -----------
Deferred rent                                       562,246        599,440
Deferred revenue                                    212,672        228,127
Note payable                                         31,881         31,881
Obligations under capital lease                      25,806         80,299
                                                -----------    -----------
Total liabilities                                11,613,117     11,522,305
                                                -----------    -----------

Shareholders' equity
Share capital                                   173,006,956    172,697,828
Contributed surplus                               8,991,547      7,740,531
Accumulated other comprehensive loss                (40,355)       (40,355)
Accumulated deficit                            (132,144,858)   (61,946,378)
                                                -----------    -----------
Total shareholders' equity                       49,813,290    118,451,626
                                                -----------    -----------
Total liabilities and shareholders' equity       61,426,407    129,973,931
                                                ===========    ===========




                                   JumpTV Inc.
          CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS
                                   [unaudited]
               [Expressed in U.S. dollars, unless otherwise noted]


                                 Three months              Six months
                                    ended                    ended
                                   June 30,                 June 30,
                            ----------------------  ----------------------
                                2008        2007       2008        2007
                                  $           $          $           $
                            ----------  ----------  ----------  ----------

Revenue                      3,601,950   1,175,924   7,208,509   2,179,070
Direct broadcast operating
 costs                      (4,837,043) (1,551,330) (9,507,612) (2,911,589)
                            ----------  ----------  ----------  ----------
                            (1,235,093)   (375,406) (2,299,103)   (732,519)
                            ----------  ----------  ----------  ----------

Other costs and expenses
Selling, general and
 administrative              9,471,741   6,739,486  18,327,462  13,268,378
Stock-based compensation
 and other compensation
 payments                      747,283     793,737   1,540,219   1,949,839
Amortization of property,
 plant and equipment           197,610     136,707     420,776     215,883
Amortization of intangible
 assets                         34,691       9,908      98,706      19,816
                            ----------  ----------  ----------  ----------
                            10,451,325   7,679,838  20,387,163  15,453,916
                            ----------  ----------  ----------  ----------
Loss before the following: (11,686,418) (8,055,244)(22,686,266)(16,186,435)
Impairment of goodwill               -           - (47,882,317)          -
Impairment of long-lived
 assets                              -           -    (173,786)          -
Loss on foreign exchange        (2,503)   (132,117)    (48,568)    (86,303)
Investment income, net         222,457   1,682,560     602,533   2,698,221
                            ----------  ----------  ----------  ----------
Loss before income taxes   (11,466,464) (6,504,801)(70,188,404)(13,574,517)
Provision for income taxes       3,200       9,500      10,076      24,950
                            ----------  ----------  ----------  ----------
Net loss for the period    (11,469,664) (6,514,301)(70,198,480)(13,599,467)
                            ==========  ==========  ==========  ==========

Unrealized gain on
 short-term investments              -           -           -     287,511
Reclassification of
 unrealized gain on
 short-term investments              -           -           -    (295,626)
                            ----------  ----------  ----------  ----------
Comprehensive loss for
 the period                (11,469,664) (6,514,301)(70,198,480)(13,607,582)
                            ==========  ==========  ==========  ==========


Loss per weighted average
 number of shares
 outstanding - basic and
 diluted                    $    (0.23) $    (0.13) $    (1.42) $    (0.31)
                            ==========  ==========  ==========  ==========

Weighted average number of
 shares outstanding -
 basic and diluted          49,310,124  48,531,087  49,287,228  44,326,196
                            ==========  ==========  ==========  ==========




                                     JumpTV Inc.
                       CONSOLIDATED STATEMENTS OF CASH FLOWS
                                    [unaudited]
              [Expressed in U.S. dollars, unless otherwise noted]

                            Three months ended        Six months ended
                                 June 30,                 June 30,
                         -----------------------  ------------------------
                             2008       2007         2008        2007
                               $          $            $           $
                         ----------- -----------  ----------- ------------

OPERATING ACTIVITIES
Net loss for the period  (11,469,664) (6,514,301) (70,198,480) (13,599,467)
Adjustments to reconcile
 net loss to net cash
 used in operating
 activities
  Amortization             1,309,468     260,978    2,583,600      437,008
  Impairment of goodwill           -           -   47,882,317            -
  Impairment of long-lived
   assets                          -           -      173,786            -
  Unrealized gain (loss)
   on short-term investments    (842)     (9,062)       3,639      (10,062)
  Stock based compensation,
   excluding change in
   accrued stock
   appreciation rights
   as noted below            705,960   1,484,267    1,498,894    2,588,752
  Amortization of deferred
   direct broadcast
   operating costs            31,395      31,396       62,790       62,790
                         ----------- -----------  ----------- ------------
                          (9,423,683) (4,746,722) (17,993,454) (10,520,979)
Changes in operating
 assets and liabilities
  Funds held in trust              -     216,191            -      (14,884)
  Accounts receivable        278,934    (116,300)     327,709     (126,300)
  Interest receivable         16,852      82,527      660,805     (283,689)
  Sales taxes receivable     (98,470)   (321,919)    (181,680)      93,855
  Other receivables          (41,620)    (36,649)     (53,444)     (98,896)
  Prepaid expenses,
   deposits and other
   assets                    313,084      43,957     (622,917)      329,021
  Deferred direct
   broadcast operating
   costs                    (814,889)          -   (1,867,779)           -
  Deferred acquisition
   costs                    (495,732)          -     (495,732)           -
  Accounts payable          (237,699)   (310,936)  (1,516,234)  (1,231,474)
  Other accrued
   liabilities             1,091,911  (1,098,629)   1,239,018      653,732
  Due to related party        (2,667)        558      (19,739)     (21,539)
  Obligations under
   capital lease             (33,593)          -      (66,323)           -
  Accrued stock
   appreciation rights        41,325    (699,459)      41,325     (638,107)
  Deferred revenue           103,244       3,709      443,259       75,290
  Income taxes payable         3,200       9,500        6,700       24,950
  Deferred rent                  474     141,056      (37,194)     258,590
                         ----------- -----------  ----------- ------------
Cash used in operating
 activities               (9,299,329) (6,833,116) (20,135,680) (11,500,430)
                         ----------- -----------  ----------- ------------
INVESTING ACTIVITIES
  Redemption of short-term
   investments, net                -           -            -   28,000,000
  Purchase of equipment     (669,641)   (522,202)  (1,256,185)  (2,602,138)
  Acquisition of SportsYA          -       4,202            -     (147,638)
  Acquisition of Broadband
   Network Division of
   XOS Technologies Inc.           -           -      (23,413)           -
  Acquisition of Cycling
   TV, Limited                     -           -       (4,871)           -
                         ----------- -----------  ----------- ------------
Cash provided by (used in)
 investing activities       (669,641)   (518,000)  (1,284,469)  25,250,224
                         ----------- -----------  ----------- ------------
FINANCING ACTIVITIES
  Proceeds from share
   issuances, net                  -      (7,973)           -   93,096,698
  Repayment of bank loan           -           -            -   (1,287,150)
  Proceeds from exercise
   of stock options                -      51,634       17,249      127,898
  Proceeds from exercise
   of warrants                     -      14,800            -       14,800
                         ----------- -----------  ----------- ------------
Cash provided by
 financing activities              -      58,461       17,249   91,952,246
                         ----------- -----------  ----------- ------------
Net increase (decrease)
 in cash and cash
 equivalents during the
 period                   (9,968,970) (7,292,655) (21,402,900) 105,702,040
                         ----------- -----------  ----------- ------------
Cash and cash equivalents,
 beginning of period      39,769,054 134,931,573   51,202,984   21,936,878
                         ----------- -----------  ----------- ------------
Cash and cash equivalents,
 end of period            29,800,084 127,638,918   29,800,084  127,638,918
                         =========== ===========  =========== ============

Contact Information

  • Press/IR Contacts:

    JUMPTV

    G. Scott Paterson
    Executive Chairman
    JumpTV
    416-368-6464

    Marc Georges
    Ricochet PR
    Phone: 212-679-3300 x125
    Email: Email Contact

    AIM NOMAD CONTACTS:
    UK
    Neil Johnson / Andrew Chubb
    Canaccord Adams Limited
    +44 207 050 6500