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NeuLion Reports 32% Increase in Revenue for Third Quarter 2011

(November 10, 2011)

PLAINVIEW, NY -- (Marketwire) -- 11/10/11 -- NeuLion, Inc. (TSX: NLN), the true end-to-end technology service provider for delivering live and on-demand content to any Internet-enabled device, today announced financial results for the third quarter of 2011. Revenue increased 32% to $9.1 million for the three months ended September 30, 2011 as compared to the same period a year ago, primarily due to strong organic growth in our services revenue.

Third Quarter Financial Highlights (all amounts are in U.S. dollars):

  • Services Revenue, which is our recurring revenue stream, increased by $1.5 million, or 22%, as compared to the same period a year ago.
  • Cost of Services Revenue, exclusive of depreciation and amortization, remained constant as a percentage of Services Revenue, at 40%, as compared to the same period a year ago.
  • Non-GAAP Adjusted EBITDA Loss (as defined below) improved by $1.1 million, or 32%, as compared to the same period a year ago, and Consolidated Net Loss improved by $0.8 million, or 16%, as compared to the same period a year ago.

"Management is pleased with the company's substantial 32% increase in revenue and new platform deployments that we have accomplished during the third quarter," stated Nancy Li, Chief Executive Officer of NeuLion, Inc. "The strong organic growth of $1.9 million, of which 79% is from our recurring services revenue stream, positively impacted our results. In addition, the dramatic increase in consumer demand for our premium live, interactive HD video service continues to be a key driver of our growth. We remain focused on increasing sales, expanding margins and improving overall profitability."

Third Quarter Operational Highlights:


TV Everywhere
Multi-device content delivery

  • Launched Big Ten Conference's TV Everywhere service, BTN2Go. BTN2Go features a live feed of all BTN television programming, including live game telecasts and extra football game channels, as well as part-time channels available on football Saturdays when BTN airs more than one game simultaneously. BTN2Go is available to authenticated subscribers of participating cable, satellite and video providers.
  • Delivered Major League Soccer's "TV Everywhere" strategy bringing live and on-demand content in HD to Roku and Panasonic Viera Connect TVs and enabling subscribers to watch over 200 games live, as well as view on demand video such as previously broadcasted MLS games and highlights.
  • Announced a partnership with The Whistle to create the first multi-platform sports media destination for kids

Professional Sports
Interactive video experience delivering live and on-demand video

  • Launched NFL Game Pass for iPad, iPhone and Android featuring live game broadcasts, live access to the NFL RedZone and NFL Network.
  • Delivered 6 UFC pay-per-view main events on UFC.TV and over 20 preliminary fights on Facebook and expanded their digital reach to include live events on Roku.
  • Launched the WNBA live streaming iPad app.

College Sports
Athletic portal and online destination for fans

  • Was selected by the Big 12 Conference to provide live and on-demand conference game video for iPhone and Android platforms
  • Signed multi-year contract with Texas A&M University and launched new, interactive digital experience for viewing college sports on the official athletics website and 12thManTV.
  • Relaunched Columbia University official athletic website www.gocolumbialions.com, with a new online experience for Lions fans.
  • Announced Facebook video platform for colleges and universities to seamlessly post broadcast-quality live and on-demand video.

Financial Results for the three months ended September 30, 2011:

Revenue was $9.1 million, as compared to $6.9 million for the three months ended September 30, 2010, marking a period-over-period increase of $2.2 million, or 32%.

Cost of revenue, exclusive of depreciation and amortization, was $3.9 million (43% of revenue), as compared to $2.9 million (42% of revenue) for the three months ended September 30, 2010.

Consolidated net loss was $4.2 million, which includes $1.9 million of non-cash and/or non-operating charges, netting a non-GAAP Adjusted EBITDA loss of $2.3 million, as compared to a consolidated net loss of $5.0 million, which includes $1.6 million of non-cash and/or non-operating charges, netting a non-GAAP Adjusted EBITDA loss of $3.4 million for the three months ended September 30, 2010, marking a period-over-period improvement in non-GAAP Adjusted EBITDA loss of $1.1 million, or 32%.

Financial Results for the nine months ended September 30, 2011:

Revenue was $29.0 million, as compared to $22.1 million for the nine months ended September 30, 2010, marking a period-over-period increase of $6.9 million, or 31%.

Cost of revenue, exclusive of depreciation and amortization, was $11.9 million (41% of revenue), as compared to $9.8 million (44% of revenue) for the nine months ended September 30, 2010, marking a period-over-period improvement of 3%.

Consolidated net loss was $11.4 million, which includes $5.4 million of non-cash and/or non-operating charges, netting a non-GAAP Adjusted EBITDA loss of $6.0 million, as compared to a consolidated net loss of $14.2 million, which includes $4.3 million of non-cash and/or non-operating charges, netting a non-GAAP Adjusted EBITDA loss of $9.9 million for the nine months ended September 30, 2010, marking a period-over-period improvement in non-GAAP Adjusted EBITDA loss of $3.9 million, or 39%.

Non-cash and/or non-operating charges consist of depreciation and amortization, stock-based compensation, unrealized gain on derivative, loss on dissolution of majority-owned subsidiary, investment income and foreign exchange gain/loss.

As of September 30, 2011 we had $12.3 million in cash and cash equivalents.

Use of Non-GAAP Measures

We report non-GAAP Adjusted EBITDA loss because it is a key measure used by management to evaluate our results and make strategic decisions about our company, including potential acquisitions. Non-GAAP Adjusted EBITDA loss represents consolidated net loss before interest, income taxes, depreciation and amortization, stock-based compensation, unrealized gain/loss on derivatives, investment income, non-controlling interests, loss on dissolution of majority-owned subsidiary and foreign exchange gain/loss. This measure does not have any standardized meaning prescribed by U.S. generally accepted accounting principles (U.S. GAAP) and therefore is unlikely to be comparable to the calculation of similar measures used by other companies, and should not be viewed as an alternative to measures of financial performance or changes in cash flows calculated in accordance with U.S. GAAP.

The below table reconciles our non-GAAP Adjusted EBITDA loss to its most directly comparable U.S. GAAP measure, consolidated net loss:

Consolidated Statement of Operations Reconciliation: Three months ended, Nine months ended, September 30, September 30, 2011 2010 2011 2010 $ $ $ $ ---------- ---------- ----------- ----------- Net loss (4,212,587) (4,967,248) (11,438,837) (14,210,151) Depreciation and amortization 1,348,590 1,221,814 4,172,602 3,784,104 Stock-based compensation 445,729 326,221 1,175,125 1,878,837 Unrealized gain on derivative 0 (70,400) 0 (1,389,300) Loss on dissolution of majority-owned subsidiary 97,205 0 97,205 0 Investment income and foreign exchange gain/loss (23,115) 37,029 (2,042) 34,970 ---------- ---------- ----------- ----------- Non-GAAP Adjusted EBITDA loss (2,344,178) (3,452,584) (5,995,947) (9,901,540) ========== ========== =========== ===========

About NeuLion
Founded in 2000, NeuLion, Inc. (TSX: NLN) offers the true end-to-end solution for delivering live and on-demand content to any Internet-enabled device. NeuLion enables content owners and distributors, cable operators and telecommunications companies to capitalize on the massive consumer demand for viewing video content on PCs, smartphones, iPads and other similar devices. NeuLion's customers include major entertainment, sports, global content and news companies. NeuLion is based in Plainview, NY. For more information about NeuLion, visit www.neulion.com.

Forward-Looking Statements
Forward-looking statements involve significant risk, uncertainties and assumptions. Although the forward-looking statements contained in this release are based upon what management believes to be reasonable assumptions, we 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 we assume no obligation to update or revise them to reflect new events or circumstances, except as required by law. Many factors could cause our 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 develop and execute on our business plan, including further diversifying our customer base; continuing to invest in and expand our sports-related business: our ability to increase revenue; general economic and market segment conditions; our customers' subscriber levels; the financial health of our customers; 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 Item 1A, "Risk Factors," in our Annual Report on Form 10-K for the fiscal year ended December 31, 2010, which is available on www.sec.gov and filed on www.sedar.com.

NEULION, INC. CONSOLIDATED BALANCE SHEETS (Expressed in U.S. dollars, unless otherwise noted) September 30, December 31, 2011 2010 (unaudited) $ $ ASSETS Current Cash and cash equivalents 12,292,632 12,929,325 Accounts receivable, net of allowance for doubtful accounts of $86,964 and $60,555, respectively 3,775,260 2,356,843 Other receivables 294,343 296,154 Inventory 811,244 946,780 Prepaid expenses and deposits 1,428,481 1,014,703 Due from related parties 490,348 1,261,776 ------------- ------------- Total current assets 19,092,308 18,805,581 ------------- ------------- Property, plant and equipment, net 4,481,018 5,119,422 Intangible assets, net 7,260,833 9,283,151 Goodwill 11,240,432 11,240,432 Other assets 323,657 259,497 ------------- ------------- Total assets 42,398,248 44,708,083 ============= ============= LIABILITIES AND EQUITY Current Accounts payable 9,937,989 5,504,489 Accrued liabilities 5,699,928 5,431,217 Due to related parties 15,939 26 Deferred revenue 5,126,797 6,432,445 ------------- ------------- Total current liabilities 20,780,653 17,368,177 ------------- ------------- Long-term deferred revenue 665,046 548,309 Other long-term liabilities 449,908 495,275 ------------- ------------- Total liabilities 21,895,607 18,411,761 ------------- ------------- Redeemable preferred stock, net Class 3 Preference Shares (par value: $0.01; authorized: 17,176,818; issued and outstanding: 17,176,818) 10,000,000 10,128,667 Class 4 Preference Shares (par value: $0.01; authorized; 10,912,265; issued and outstanding: 10,912,265) 4,849,546 -- ------------- ------------- Total redeemable preferred stock 14,849,546 10,128,667 ------------- ------------- NeuLion, Inc. stockholders' equity Common stock (par value: $0.01; authorized: 300,000,000; issued and outstanding: 139,868,063 and 139,180,279, respectively) 1,398,680 1,391,802 Additional paid-in capital 76,844,110 75,480,756 Promissory notes receivable (209,250) (209,250) Accumulated deficit (72,380,445) (60,963,093) ------------- ------------- Total NeuLion, Inc. stockholders' equity 5,653,095 15,700,215 ------------- ------------- Non-controlling interest -- 467,440 ------------- ------------- Total equity 5,653,095 16,167,655 ------------- ------------- Total liabilities and equity 42,398,248 44,708,083 ============= ============= NEULION, INC. CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS (unaudited) (Expressed in U.S. dollars, unless otherwise noted) Three months Nine months ended ended September 30, September 30, ------------------------- ------------------------- 2011 2010 2011 2010 $ $ $ $ Revenue Services revenue 8,225,017 6,718,427 26,602,541 20,874,118 Equipment revenue 877,169 230,236 2,403,767 1,177,775 ----------- ------------ ----------- ------------ 9,102,186 6,948,663 29,006,308 22,051,893 ----------- ------------ ----------- ------------ Costs and expenses Cost of services revenue, exclusive of depreciation and amortization shown separately below 3,257,089 2,698,350 10,076,277 8,713,024 Cost of equipment revenue 681,427 229,377 1,819,315 1,124,258 Selling, general and administrative, including stock- based compensation 7,953,577 7,799,741 24,281,788 23,994,988 Depreciation and amortization 1,348,590 1,221,814 4,172,602 3,784,104 ----------- ------------ ----------- ------------ 13,240,683 11,949,282 40,349,982 37,616,374 ----------- ------------ ----------- ------------ Operating loss (4,138,497) (5,000,619) (11,343,674) (15,564,481) Other income (expense) Unrealized gain on derivative -- 70,400 -- 1,389,300 Gain (loss) on foreign exchange 15,919 (40,297) (25,973) (69,250) Investment income 7,196 3,268 28,015 34,280 Loss on dissolution of majority-owned subsidiary (97,205) -- (97,205) -- ----------- ------------ ----------- ------------ (74,090) 33,371 (95,163) 1,354,330 ----------- ------------ ----------- ------------ Net and comprehensive loss (4,212,587) (4,967,248) (11,438,837) (14,210,151) Net loss attributable to non-controlling interest -- -- 21,485 -- ----------- ------------ ----------- ------------ Net and comprehensive loss attributable to controlling interest (4,212,587) (4,967,248) (11,417,352) (14,210,151) Adjustment to the carrying amount of redeemable preferred stock -- -- 153,233 -- ----------- ------------ ----------- ------------ Net and comprehensive loss attributable to NeuLion, Inc. common stockholders (4,212,587) (4,967,248) (11,264,119) (14,210,151) =========== ============ =========== ============ Net loss per weighted average number of shares outstanding - basic and diluted $(0.03) $(0.04) $(0.08) $(0.12) =========== ============ =========== ============ Weighted average number of shares outstanding - basic and diluted 139,868,063 116,980,017 139,487,253 116,837,174 =========== ============ =========== ============ NEULION, INC. CONSOLIDATED STATEMENTS OF CASH FLOWS (unaudited) (Expressed in U.S. dollars, unless otherwise noted) Three months Nine months ended ended September 30, September 30, ------------------------- ------------------------- 2011 2010 2011 2010 $ $ $ $ OPERATING ACTIVITIES Net loss (4,212,587) (4,967,248) (11,438,837) (14,210,151) Adjustments to reconcile net loss to net cash used in operating activities Depreciation and amortization 1,348,590 1,221,814 4,172,602 3,784,104 Stock-based compensation 445,729 326,221 1,175,125 1,878,839 Unrealized gain on derivative -- (70,400) -- (1,389,300) Loss on dissolution of majority-owned subsidiary 97,205 -- 97,205 -- Changes in operating assets and liabilities Accounts receivable (208,988) 36,824 (1,418,417) (207,814) Inventory 242,358 27,207 129,276 515,370 Prepaid expenses, deposits and other assets (363,378) (263,295) (479,407) (78,981) Other receivables (110,223) 483,932 1,811 638,674 Due from related parties (194,729) (360,561) 771,428 (212,313) Accounts payable 5,710,217 2,876,290 3,897,537 727,106 Accrued liabilities 512,490 (315,462) 339,179 (307,947) Deferred revenue 722,858 1,268,787 (1,188,911) 755,233 Long-term liabilities (23,647) (57,734) (45,007) (206,460) Due to related parties 15,939 88,066 15,913 13,582 ----------- ------------ ----------- ------------ Cash provided by (used in) operating activities 3,981,834 294,441 (3,970,503) (8,300,058) ----------- ------------ ----------- ------------ INVESTING ACTIVITIES Purchase of property, plant and equipment (1,027,984) (695,242) (1,515,736) (1,519,374) ----------- ------------ ----------- ------------ Cash used in investing activities (1,027,984) (695,242) (1,515,736) (1,519,374) ----------- ------------ ----------- ------------ FINANCING ACTIVITIES Private placement, net -- 10,000,000 4,849,546 10,000,000 Proceeds from exercise of stock options -- -- -- 32,155 ----------- ------------ ----------- ------------ Cash provided by financing activities -- 10,000,000 4,849,546 10,032,155 ----------- ------------ ----------- ------------ Net increase (decrease) in cash and cash equivalents during the period 2,953,850 9,599,199 (636,693) 212,723 Cash and cash equivalents, beginning of period 9,338,782 3,571,203 12,929,325 12,957,679 ----------- ------------ ----------- ------------ Cash and cash equivalents, end of period 12,292,632 13,170,402 12,292,632 13,170,402 =========== ============ =========== ============

Press Contact:
Chelsea Nunn
Corporate Communications
516-622-8381
Email Contact

Investor Relations Contact:
Marc Sokol
Executive Vice President
516-622-8386
Email Contact


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