NeuLion Reports First Quarter 2017 Revenue of $23.9 Million

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| Source: NeuLion, Inc.
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NeuLion Digital Platform Overview


An overview of the NeuLion Digital Platform, a complete end-to-end video solution, delivering live and on-demand content in up to 4K to any connected device.

NeuLion, Inc.

PLAINVIEW, N.Y., May 09, 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 March 31, 2017.

Q1 2017 Financial Highlights

  • Revenue of $23.9 million
  • NeuLion® Digital Platform revenue of $15.6 million
  • Net loss of $1.9 million
  • Cash totaled $32.7 million at March 31, 2017
  • Share Repurchase Program resulted in an additional 2.3 million shares purchased and cancelled

“Armed with an expanded global footprint and leading edge technology, we made solid progress in the first quarter growing and diversifying our customer base,” said Roy Reichbach, President and CEO of NeuLion. “Excluding revenue related to the NHL, with an expanded global sales team and footprint in place we grew our NeuLion Digital Platform revenue, year-over-year, by 13%.  We expect year-over-year revenue comparisons going forward to more directly reflect our growing current book of business, and new prospective customer opportunities.” 

Reichbach added, “Our advanced all-in-one video platform provides our customers with the technology they need to quickly monetize and deliver their content with a high-quality and engaging experience for their consumers. We are in a great position to be able to support our core North American and EMEA markets while also targeting high-potential new deal opportunities in the Latin American and Asian markets.”

Q1 2017 Operational Highlights

  • NeuLion partnered with the 23rd Annual Tampa Pro event – the longest-running contest in skateboarding – to launch the 2017 SLS Nike SB World Tour live via ETN, a brand-new platform powered by NeuLion that hosts live and original digital content.
  • NeuLion signed an agreement with FEI TV to redesign their website and mobile user experiences through the new FEI TV app, allowing fans to watch equestrian competition action both live and on replay.
  • NeuLion grew its presence in the NCAA market by building the first official athletic website in Seminole State College of Florida’s history, partnering with the University of New Orleans on a new digital ticketing platform and extending its agreement with the Southern Conference to continue to power their digital network.
  • The NeuLion Digital Platform, which supports all 60 CHL clubs in the Western Hockey League (WHL), the Ontario Hockey League (OHL), and the Quebec Major Junior Hockey League (QMJHL), was selected to power live and on-demand streaming of the Canadian Hockey League playoffs for fans throughout the world.
  • NeuLion delivered a new NBA game download option that allows subscribers to NBA International League Pass, the league’s live games subscription service powered by NeuLion for basketball fans outside of the United States, to download replays of full-length games or condensed games for convenient on-the-go viewing on both iOS and Android.
  • NeuLion enhanced its technology licensed to Sony, Samsung and LG by making available the NeuLion CE SDK Version 9.0, which offers advance playback, mobile-to-TV interactivity, total security and live streaming up to 4K resolutions for Smart TV manufacturers.
  • NeuLion delivered a new digital advertising solution for Univision Communications Inc. (UCI).  UCI’s Television Stations group, which includes 60 owned and operated stations in 19 designated market areas, now uses NeuLion-provided server-side ad insertion for its national and local digital advertising delivery to avoid the threat of ad blockers and provide a better viewer experience with targeted ads during live and on-demand streaming.
  • NeuLion’s MainConcept business licensed its HEVC Decoder to Soliton Systems for its Smart-telecaster Zao Series.  The Smart-telecaster is a small, hand-sized device that can be plugged in to any professional cameras that supports HEVC/H.265 video formats.

Q1 2017 Financial Review

Total revenue was $23.9 million for the first quarter of 2017 (“Q1 2017”), a decrease of 9% over the prior year period. NeuLion Digital Platform revenues declined 14% to $15.6 million in Q1 2017, from $18.2 million for the prior year period.  NeuLion’s consumer electronics licensing and MainConcept revenue streams were $8.3 million in Q1 2017 compared to $8.9 million in the prior year period.

Cost of revenue was $5.0 million, or 21% of revenue, in Q1 2017 compared to $4.7 million, or 18% of revenue, in the prior year period. Selling, general and administrative expenses, including stock-based compensation, were $14.7 million in Q1 2017, increasing 24% from $11.9 million in the prior year period.  Research and development expenses decreased 5% to $4.2 million in Q1 2017, from $4.4 million for the prior comparable period.  Operating loss was $2.4 million in Q1 2017, compared to operating income of $3.4 million in the prior year period.  Net loss was $1.9 million, or a net loss of $0.01 per basic and diluted share in Q1 2017, compared to a net income of $2.1 million, or a net income of $0.01 per basic and diluted share, in the prior year period. 

Adjusted EBITDA decreased to $0.9 million in Q1 2017 from $7.0 million for the prior year period due to a decrease of $2.4 million in revenue, an exclusion of $0.9 million in revenue due to purchase price accounting adjustments made as a result of the DivX acquisition, and an increase in operating expenses related to investments in headcount and the expansion of NeuLion’s UK headquarters.  Please refer to the below table for the reconciliation of Consolidated Net (Loss) Income to Adjusted EBITDA.

Share Repurchase Program

On March 8, 2016, NeuLion announced that its Board of Directors had authorized the repurchase of up to $10 million of its common stock over the next 12 months through a normal course issuer bid (“NCIB”) for up to 14,109,057 shares of common stock.  On March 24, 2016, NeuLion announced that it had received the TSX’s approval to commence the NCIB, and that the NCIB would commence on April 1, 2016.  Under the program, NeuLion has purchased 9,295,104 million shares of common stock at a total cost of $7,690,161 million through March 31, 2017. Of that total, 875,000 shares were purchased at a cost of $588,147 on NeuLion’s behalf in March 2017 and subsequently settled and cancelled in April 2017.  The NCIB terminated by its terms on March 31, 2017.

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 consolidated net income (loss) before interest, income taxes, depreciation and amortization, purchase accounting adjustments, stock-based compensation, acquisition-related expenses, gain on revaluation of convertible note derivative 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 U.S. GAAP Consolidated Net (Loss) Income to Adjusted EBITDA in the below tables. 

   
Reconciliation of GAAP Net (Loss) Income to Adjusted EBITDA (in thousands): 
   
  Three months ended March 31, 
  2017  2016 
   
GAAP Net (Loss) Income$  (1,886)$  2,082 
   
Revenue excluded due to purchase accounting 17  866 
Depreciation and amortization    2,410    1,974 
Stock-based compensation    875    754 
Income tax (benefit) expense   (443)   1,651 
Other income   (52)   (327)
   
Adjusted EBITDA $  921 $  7,000 
   

Quarterly Webcast

NeuLion will host a live webcast tomorrow, May 10, 2017 at 8:00 a.m. ET that can be accessed at http://edge.media-server.com/m/p/x2dbwogu. 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 video accompanying this announcement is available at http://www.globenewswire.com/NewsRoom/AttachmentNg/cbe09b73-a92d-4e07-91f6-c4b71250d811

A PDF accompanying this announcement is available at http://www.globenewswire.com/NewsRoom/AttachmentNg/c94cd908-cb7e-4303-b6a8-5066856dcb79

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 other 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 DivX Corporation and Saffron Digital Media; our ability to realize some or all of the anticipated benefits of our partnerships; 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

CONTACT INFORMATION
Press Contact: Chris Wagner |  | +1 516 622 8357
Investor Relations Contact: Rob Kelly|  | +1 416 992 4539