PLAINVIEW, N.Y., Nov. 01, 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 September 30, 2017.
Q3 2017 Financial Highlights
- Total revenue of $22.0 million
- NeuLion® Digital Platform revenue of $14.5 million
- Net loss of $5.1 million
- Adjusted EBITDA(1) loss of $1.1 million
- Cash totaled $53.9 million at September 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.
“Our pipeline of new opportunities continues to grow and our focus remains on closing these new deals while continuing to deliver the highest quality customer service to our existing customers and executing our global growth strategy,” said Roy Reichbach, President and CEO of NeuLion. “While our third quarter results were impacted by a few historical factors and an increase in our sales and marketing efforts, we believe we are well positioned to take advantage of our burgeoning pipeline as we move forward to 2018.”
Mr. Reichbach added: “In the quarter we renewed our agreement with the NFL, closed new business with NOVA Broadcasting Group, renewed our Box Office streaming service with Sky Sports and extended our partnership with the National Collegiate Hockey Conference, to name a few. Through the NeuLion Digital Platform, we enable our customers to leverage innovative approaches to monetize their content, delivering significant value initially while we work to scale these relationships over time with additional features.”
Q3 2017 Operational Highlights
- The NFL renewed their agreement with NeuLion for an all new NFL Game Pass service. The service offers archived games in the United States and live games around the world (with exception of select geographies including Canada and Europe). The all new NFL Game Pass subscription service leverages NeuLion’s entire end-to-end platform, including encoding, editing, subscription services, content management, real-time OTT monitoring, and application development.
- Launched new content protection services with Rogers SportsNet NOW. NeuLion provides Rogers SportsNet with a digital rights management service and cloud-based infrastructure, for the purpose of protecting live and on-demand video streams supporting FairPlay Streaming by Apple, Microsoft PlayReady and Google Widevine.
- Renewed agreement with China Network Television (CNTV), the digital media agency of CCTV. NeuLion powers CNTV 5+ VIP, a subscription service in China offering fans premium HD live streaming of exclusive content on internet connected devices.
- NOVA Broadcasting Group, a Bulgarian broadcaster, partnered with NeuLion to launch a new over-the-top (OTT) service for premium content delivery. The all-new service, DIEMA XTRA PLAY, will deliver live linear channels and live events to viewers on multiple devices, including responsive web, iOS and Android mobile and tablet, as well as Chromecast.
- Sky Sports renewed their agreement with NeuLion to power live pay-per-view events for its Sky Sports Box Office OTT service. The service provides boxing fans in the UK and Ireland with live premium boxing events that can be viewed via the Now TV box, PC, mobile and tablet devices.
- The National Collegiate Hockey Conference extended its partnership with NeuLion to power its fully integrated digital network featuring both live and on-demand content through the 2021-2022 season. The extension agreement includes several new features and supported devices on NCHC.tv, a direct-to-consumer digital video solution, for the coming 2017-18 season.
- NeuLion expanded its presence in the Middle East and Africa by opening an office in Dubai. The new focus on the MENA region will offer the company expanded market opportunities with content rights holders based in that region.
Q3 2017 Financial Review
Total revenue was $22.0 million for the third quarter of 2017 (“Q3 2017”), a decline of 8% over the prior year period. NeuLion Digital Platform revenues were $14.5 million in Q3 2017, from $16.3 million for the prior year period. The decline compared to the prior year period resulted primarily from the loss of National Hockey League-related revenues in the amount of $1.3 million. NeuLion’s consumer electronics licensing and MainConcept revenue streams were $7.5 million in Q3 2017 compared to $7.6 million in the prior year period.
Cost of revenue was $4.4 million, or 20% of revenue, in Q3 2017 compared to $4.3 million, or 18% of revenue, in the prior year period. Selling, general and administrative expenses, including stock-based compensation, were $15.4 million in Q3 2017, an increase of 15% from $13.4 million in the prior year period. Research and development expenses decreased 13% to $4.6 million in Q3 2017, from $5.2 million for the prior comparable period.
Operating loss was $5.3 million in Q3 2017, compared to $1.5 million in the prior year period. Net loss was $5.1 million, or a net loss of $0.02 per basic and diluted share in Q3 2017, compared to a net loss of $2.7 million, or a net loss of $0.01 per basic and diluted share, in the prior year period.
Adjusted EBITDA loss was $1.1 million in Q3 2017 compared to Adjusted EBITDA of $2.3 million for the prior year period. The decline in Adjusted EBITDA resulted from a decrease of $1.9 million in revenue as well as increased operating expenses related to additional investments in program spending and headcount. 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 to Adjusted EBITDA in the below table.
| Reconciliation of Net Loss to Adjusted EBITDA (in thousands): | |||||||||||||
| Three months ended September 30, | Nine months ended September 30, | ||||||||||||
| 2017 | 2016 | 2017 | 2016 | ||||||||||
| Net Loss | $ | (5,053 | ) | $ | (2,715 | ) | $ | (9,285 | ) | $ | (1,409 | ) | |
| Revenue excluded due to purchase accounting | - | 68 | 31 | 1,015 | |||||||||
| Depreciation and amortization | 2,614 | 2,401 | 7,483 | 6,499 | |||||||||
| Stock-based compensation | 1,162 | 1,361 | 3,158 | 3,489 | |||||||||
| Loss on assets held for sale | 395 | - | 395 | - | |||||||||
| Acquisition-related expenses | - | - | - | 102 | |||||||||
| Income tax expense (benefit) | 173 | 1,155 | (163 | ) | 3,033 | ||||||||
| Other (income) expense | (370 | ) | 53 | (560 | ) | (73 | ) | ||||||
| Adjusted EBITDA | $ | (1,079 | ) | $ | 2,323 | $ | 1,059 | $ | 12,656 | ||||
Quarterly Webcast
NeuLion will host a live webcast tomorrow, November 2, 2017, at 8:30 a.m. ET that can be accessed at https://edge.media-server.com/m6/p/vq7najn3. 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 |
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/HDR 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, EFL, World Surf League, Univision, Sky Sports, Eleven Sports Network 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 acquisitions; 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.