PLAINVIEW, N.Y., Aug. 02, 2017 (GLOBE NEWSWIRE) -- NeuLion, Inc. (TSX:NLN), a leading technology product and service provider that specializes in the digital video broadcasting, distribution and monetization of live and on-demand content to Internet-enabled devices, today reported its financial results for the quarter ended June 30, 2017.
Q2 2017 Financial Highlights
- Total revenue of $23.9 million
- NeuLion® Digital Platform revenue of $16.5 million
- Net loss of $2.3 million
- Adjusted EBITDA(1) of $1.2 million
- Cash totaled $25.1 million at June 30, 2017
(1) “Adjusted EBITDA” is a non-GAAP measure and is not recognized, defined or a standardized measure under U.S. GAAP. This measure is defined in the “Use of Non-GAAP Financial Information” section of this news release.
“Expansion of our digital platform revenue base, which, excluding NHL-related revenues, increased 16% in the second quarter compared to last year, is fueling improving growth,” said Roy Reichbach, President and CEO of NeuLion. “During the quarter, we renewed our current agreement with the UFC and launched a number of new OTT customers. The flexibility of the NeuLion Digital Platform enables us to work with our customers to ensure that their digital content is available to viewers faster, with less operational complexity, and at lower costs than our competition. Our global reach provides a strong foundation for sustained business growth, customer success and long-term shareholder value.”
Q2 2017 Operational Highlights
- National Geographic Partners picked NeuLion as its partner to support an all-new mobile app launched in Australia. National Geographic licensed the NeuLion Digital Platform to support the launch of: nearly 5,000 long- and short-form videos, including over 1,400 TV show episodes; two live TV channels, National Geographic and Nat Geo Wild; and over 28,000 photos and galleries by some of National Geographic's leading photographers.
- Ultimate Fighting Championship (UFC) renewed and extended its agreement with NeuLion. The NeuLion Digital Platform will continue to be the OTT solution for delivering high quality fighting action to any connected device, including an all-new UFC digital linear channel offered as part of UFC Fight Pass.
- NeuLion opened its new European headquarters in London. Located in Shoreditch, the new office includes a state-of-the-art technical operations center and will allow NeuLion to expand its research and development, operations and sales capacities to support its growing EMEA business.
- Poker Central, the ultimate destination for fans of poker tournaments, cash games, and lifestyle away from the tables, partnered with NeuLion to launch PokerGO, a digital video subscription service that gives poker fans worldwide access to exclusive live tournaments and on-demand original programming. A highlight of PokerGO’s launch was its extensive coverage of the World Series of Poker Main Event, live from Las Vegas.
- Fédération Equestre Internationale (FEI), a leading global provider of digital live and on-demand equestrian sports content, partnered with NeuLion to bring a fully redesigned user experience online at www.fei.tv and on mobile devices through a new FEI TV app.
- NeuLion and Nokia announced a real time, end-to-end, live VR streaming partnership that will enable professional 360 VR production, delivery and monetization of VR content. NeuLion and Nokia jointly integrated the Nokia OZO Platform and the NeuLion Digital Platform.
- NeuLion launched its newly developed technology service, NeuLion ACE Analytics, which is now available to customers who have licensed the NeuLion Digital Platform. NeuLion ACE Analytics leverages OTT real-time consumer watch data, user data and support data, all generated by the NeuLion Digital Platform, as content is delivered to internet-connected devices. NeuLion ACE Analytics will help NeuLion customers power every aspect of viewers’ access to their OTT services by providing data insights that connect marketing, sales and multi-device user behavior.
- NeuLion’s 4K live streaming technology won in the “Best Digital TV Product or Broadcast Innovation” category during the 2017 Sports Technology Awards ceremony in London.
- NeuLion enabled Insight TV with an all-new connected TV app for Ultra HD Samsung sets. Insight TV produces content that pushes the boundaries of immersive stories, featuring incredible people doing amazing things in extreme sports and endurance, all delivered OTT by the NeuLion Digital Platform in true 4K resolutions.
Q2 2017 Financial Review
Total revenue was $23.9 million for the second quarter of 2017 (“Q2 2017”), a decrease of 1% over the prior year period. NeuLion Digital Platform revenues increased 4% to $16.5 million in Q2 2017, from $15.9 million for the prior year period. NeuLion’s consumer electronics licensing and MainConcept revenue streams were $7.4 million in Q2 2017 compared to $8.2 million in the prior year period.
Cost of revenue was $4.0 million, or 17% of revenue, in Q2 2017 compared to $4.1 million, or 17% of revenue, in the prior year period. Selling, general and administrative expenses, including stock-based compensation, were $14.8 million in Q2 2017, increasing 15% from $12.9 million in the prior year period. Research and development expenses decreased 6% to $5.0 million in Q2 2017, from $5.3 million for the prior comparable period.
Operating loss was $2.4 million in Q2 2017, compared to operating loss of $0.3 million in the prior year period. Net loss was $2.3 million, or a net loss of $0.01 per basic and diluted share in Q2 2017, compared to a net loss of $0.8 million, or a net loss of $0.00 per basic and diluted share, in the prior year period.
Adjusted EBITDA decreased to $1.2 million in Q2 2017 from $3.3 million for the prior year period due to a $0.2 million decrease in revenue and increased operating expenses related to investments in headcount and program spending. Please refer to the below table for the reconciliation of Net (Loss) Income to Adjusted EBITDA.
Use of Non-GAAP Financial Information
In addition to NeuLion’s U.S. GAAP results, this press release also includes disclosure of certain non-GAAP financial measures, as such term is used by the Securities and Exchange Commission. NeuLion defines “Adjusted EBITDA” as net income (loss) before interest, income taxes, depreciation and amortization, purchase accounting adjustments, stock-based compensation, acquisition-related expenses and foreign exchange (gain) loss. Adjusted EBITDA is a key measure used by management to evaluate NeuLion’s results and make strategic decisions about the company, including potential acquisitions. Management believes this measure is useful to investors because it is an indicator of operational performance. Because not all companies use identical calculations, NeuLion’s presentation of Adjusted EBITDA may not be comparable to similarly titled measures of other companies. These measures do not have any standardized meanings prescribed by U.S. GAAP and therefore are unlikely to be comparable to the calculation of similar measures used by other companies, and should not be viewed as alternatives to measures of financial performance or changes in cash flows calculated in accordance with U.S. GAAP.
Pursuant to the requirements of Regulation G, NeuLion has provided a reconciliation of Net (Loss) Income to Adjusted EBITDA in the below table.
| Reconciliation of Net (Loss) Income to Adjusted EBITDA (in thousands): | |||||||||||||
| Three months ended June 30, | Six months ended June 30, | ||||||||||||
| 2017 | 2016 | 2017 | 2016 | ||||||||||
| Net (Loss) Income | $ | (2,348 | ) | $ | (776 | ) | $ | (4,233 | ) | $ | 1,306 | ||
| Revenue excluded due to purchase accounting | 14 | 82 | 31 | 948 | |||||||||
| Depreciation and amortization | 2,458 | 2,125 | 4,869 | 4,099 | |||||||||
| Stock-based compensation | 1,121 | 1,372 | 1,996 | 2,126 | |||||||||
| Acquisition-related expenses | - | 102 | - | 102 | |||||||||
| Income tax expense (benefit) | 108 | 227 | (335 | ) | 1,878 | ||||||||
| Other (income) expense | (136 | ) | 201 | (190 | ) | (126 | ) | ||||||
| Adjusted EBITDA | $ | 1,217 | $ | 3,333 | $ | 2,138 | $ | 10,333 | |||||
Quarterly Webcast
NeuLion will host a live webcast tomorrow, August 3, 2017 at 8:00 a.m. ET that can be accessed at http://edge.media-server.com/m/p/27rwh2fv. In addition, a replay of the webcast will be available for a limited time at http://neulion.com/investor.
Financial Statements and MD&A
| SEC Filing: | click here |
| SEDAR Filing: | click here |
A PDF accompanying this announcement is available at http://www.globenewswire.com/NewsRoom/AttachmentNg/f6d1a081-2106-4b18-a8a0-bc6c846e837f
About NeuLion
NeuLion, Inc. (TSX:NLN) offers solutions that power the highest quality digital experiences for live and on-demand content in up to 4K on any device. Through its end-to-end technology platform, NeuLion enables digital video management, distribution and monetization for content owners worldwide including the NFL, NBA, World Surf League, Univision Deportes, Euroleague Basketball and others. NeuLion powers the entire video ecosystem for content owners and rights holders, consumer electronic companies, and third party video integrators through its MainConcept business. NeuLion’s robust consumer electronics licensing business enables its customers like Sony, LG, Samsung and others to stream secure, high-quality video seamlessly across their consumer devices. NeuLion is headquartered in Plainview, NY. For more information about NeuLion, visit www.NeuLion.com.
Forward-Looking Statements
Certain statements herein are forward-looking statements and represent NeuLion’s current intentions in respect of future activities. Forward-looking statements can be identified by the use of the words “will,” “expect,” “seek,” “anticipate,” “believe,” “plan,” “estimate,” “expect,” and “intend,” statements that an event or result “may,” “will,” “can,” “should,” “could,” or “might” occur or be achieved, and other similar expressions. These statements, in addressing future events and conditions, involve inherent risks and uncertainties. Although the forward-looking statements contained in this release are based upon what management believes to be reasonable assumptions, NeuLion 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 NeuLion assumes no obligation to update or revise them to reflect new events or circumstances, except as required by law. Many factors could cause NeuLion’s actual results, performance or achievements to be materially different from any future results, performance or achievements that may be expressed or implied by such forward-looking statements, including: our ability to derive anticipated benefits from the acquisition of Saffron Digital Limited; our ability to realize some or all of the anticipated benefits of our partnerships; our ability to increase revenue; general economic and market segment conditions; our customers’ subscriber levels and financial health; our ability to pursue and consummate acquisitions in a timely manner; our continued relationships with our customers; our ability to negotiate favorable terms for contract renewals; competitor activity; product capability and acceptance rates; technology changes; regulatory changes; foreign exchange risk; interest rate risk; and credit risk. These factors should be considered carefully and readers should not place undue reliance on the forward-looking statements. A more detailed assessment of the risks that could cause actual results to materially differ from current expectations is contained in the “Risk Factors” section of NeuLion’s Annual Report on Form 10-K for the fiscal year ended December 31, 2016, which is available on www.sec.gov and filed on www.sedar.com.
