Written by :
Published on :
Big Stick Media Corporation ("BSM" or the "Company") (TSX VENTURE:BSM) announces today that it has ceased the operations of its wholly-owned subsidiary, National Sports Services (IGC), Inc. ("NSS"). NSS had been operating a call center for the sale of handicapping advisory services.
In the three completed fiscal quarters of 2009, NSS accounted for approximately 39% of BSM's consolidated revenue. While NSS had generated net income of approximately $675,000 for the first three quarters of fiscal 2009, this was due largely to the deferred recognition of revenue in relation to cash receipts received during the fourth quarter of 2008. As well, the company had realized a material foreign exchange translation gain related to the depreciation of the U.S. dollar versus the Canadian dollar. However, NSS had not been able to achieve cash flow positive results for any fiscal year since BSM had acquired the assets that constituted the NSS business in November of 2006.
"In the three years that we have owned and operated the NSS business, we have expended tremendous efforts to right-size the business amidst a challenging economic environment that pressured revenues", stated Christopher Kape, President and CEO. While we succeeded in bringing the business close to cash flow breakeven, we do not perceive that the necessary conditions exist to enable the company to become a profit center within our consolidated group. Accordingly, the decision has been made to systematically wind down the call center business and to focus our handicapping efforts within the online space via our website properties. We can now dedicate enhanced efforts on our product development initiatives within our Don Best information service division and improve the Company's bottom line results in the process".
The Company will continue to explore opportunities to monetize the remaining NSS assets over the coming weeks and to realize on any remaining value. To the extent that we are successful in consummating any such deal, we will disclose the relevant details in a subsequent press release. Furthermore, if no such transaction is available, we will consider retaining the assets to redeploy them in a call center environment if and when improved business conditions present themselves.
