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Big Stick Media Corporation: Big Stick Media Corporation Announces Financial Results for Year-Ended November 30, 2008

^{Published on 2009-03-19 09:26:53, Last Modified on 2009-03-19 09:28:48 - Market Wire}
 

VANCOUVER, BRITISH COLUMBIA--(Marketwire - March 19, 2009) - Big Stick Media Corporation ("BSM" or the "Company") (TSX VENTURE:BSM) announces today its financial results for the year ended November 30, 2008.

For the year ended November 30, 2008, the Company incurred a net loss of $3.94 million versus a net loss of $3.17 million for the year ended November 30, 2007. The net loss figure includes various non-cash accounting items including amortization expense, stock option compensation expense, accredited interest expense, income tax recoveries, losses on asset dispositions, write-downs on asset impairments and net foreign exchange losses emanating from the movement of U.S. dollar. As well, included in the loss for fiscal 2008 is a one-time contract cancellation expense of $1,250,000 related to the termination of a marketing services contract with a third party consultant in support of the Company's Linetracker product which provided real-time sports information on a feed service basis. With the acquisition of the Don Best Sports product line in April of 2008, Linetracker and the related marketing services contract became redundant and were wound down. Excluding the effects of the non-cash charges, the one-time expense and cash interest expense, the normalized EBITDA for fiscal 2008 was $2.26 million versus a loss of $1.33 million in fiscal 2007.

In reviewing the financial results for the year ended November 30, 2008, readers should be aware that the year ended November 30, 2008 reflects only seven months of operations of the Don Best Sports platform which was acquired on April 28, 2008.

The financial results for the year-ended November 30, 2008 reflect the following pertinent information:

- The fourth quarter of the fiscal year (ending November 30) is the quarter in which the highest volume of cash receipts are realized in the Company's Las Vegas call center operation and in the Don Best Sports feed service subscription division. This is due to the fact that the fourth quarter encompasses the core part of the football season which is by far the most important of the various sports that BSM covers. Cash flows within the Don Best division were particularly strong as many customers chose to prepay their subscription service for the entire football season ending February 1, 2009. For this reason, the deferred revenue reflected on the Company's balance sheet as at November 30, 2008 was relatively high at $4.3 million.

- As part of the Don Best Sports acquisition, BSM became obligated to effect two separate deferred purchase price instalments each in the amount of US$2,045,000 due and payable on each of October 28, 2008 and April 28, 2009. The payment due in October of 2008 was effected in full with the application of positive cash generated from operations.

- The company undertook a significant right-sizing of its Las Vegas call center operation. The number of administrative personnel was markedly reduced as was the marketing budget. The Company reduced the scale of its Proline television show both in terms of the number of weeks of production and broadcasting and in terms of the number of airings per week. While it was expected that the reduction in marketing spend would have an adverse effect on sales revenue, the belief was that overall profitability would be enhanced. This belief was justified as while handicapping advisory sales during the 2008 football season fell by around 25%, the operations produced positive cash flow as opposed to a significant negative cash flow during the similar period in 2007.

- On October 22, 2008, the Company sold all of its fantasy sports assets related to the website [ www.rotoplay.com ] (the "Rotoplay Assets") to Pressure Packed Sports Inc. ("PPS"), a resident of Pennsylvania. The consideration received was a combination of assumption of liabilities, a deferred payment of US$10,000 and additional contingent consideration based on the prospective performance of the Rotoplay Assets. The Company recorded a loss on disposition of approximately $100,000. With this divestiture, the Company has effectively exited the fantasy sports business.

- On September 12, 2008, the Company filed a notice of intention with the TSX Venture Exchange (the "Exchange") relating to the repurchase by the Company of certain of its issued and outstanding common shares pursuant to a normal course issuer bid undertaken in accordance with the rules and policies of the Exchange. The Company proposes to purchase up to 6,084,255 common shares, representing 5% of the total common shares issued and outstanding as at the date of application, during the twelve month period commencing upon receipt of the Exchange approval for such program. During the year ended November 30, 2008, an aggregate 402,000 shares were purchased by the Company for cancellation in conjunction with the issuer bid. The allocated cost for the cancelled common shares was $79,769.

"BSM has clearly turned a significant corner in its development from a dormant entity to one producing reasonable positive cash flow from operations. As we continue to explore new means to distribute our existing products and to broaden the scope of our overall offering, we are confident that the positive cash generated by our operations will be enhanced.", stated Christopher Kape, President and CEO. "We look forward to increasing our reach and penetration within the sports information market in 2009 and beyond."

Inclusive of funds held within reserves required by the Company's payment processors, the balance sheet as at November 30, 2008 reflects aggregate cash of $2.64 million. The Company expects to continue to generate free cash during the ensuing fiscal quarters but much of this cash will be dedicated to meeting the final deferred purchase price obligation owing pursuant to the Don Best Sports acquisition described above.

BSM is based in Vancouver, British Columbia and trades on the TSX Venture Exchange under the trading symbol "BSM". Additional information about BSM including the Company's annual consolidated financial statements and management discussion and analysis for the year-ended November 30, 2008 are available under the Company's profile at [ www.sedar.com ].

As at the date hereof BSM has 120,574,101 issued and outstanding common shares.

About Big Stick Media Corporation

BSM owns and operates a portfolio of assets that provide fact-based and opinion oriented information relevant to the sports industry. These assets include websites, client-server software, publications and call centers. BSM generates revenues in a number of ways, including various direct to consumer services and direct to business sales through a portfolio of websites, the most significant of which are [ www.JimFeist.com ], [ www.donbest.com ], and [ www.g-picks.com ]. BSM also operates the Don Best Sports real-time sports information systems for serious sports enthusiasts, handicappers and bettors.

This press release may contain certain forward-looking statements with respect to the Company. These forward-looking statements, by their nature, involve risks and uncertainties that could cause actual results to differ materially from those contemplated. We consider the assumptions on which these forward-looking statements are based to be reasonable, but caution the reader that these assumptions regarding future events, many of which are beyond our control, may ultimately prove to be incorrect. There can be no assurance that such statements will prove to be accurate and actual results and future events could differ materially from those anticipated in such statements. Important factors that could cause actual results to differ materially from Big Stick Media Corporation's expectations are various risks detailed from time to time in the filings made by Big Stick Media Corporation with securities regulations.

The TSX Venture Exchange has not reviewed, and does not accept responsibility for the adequacy and accuracy of this release.