2012-11-08 13:11:18 -
PLAINVIEW, NY -- (Marketwire) -- 11/08/12 -- NeuLion, Inc. (TSX: NLN), the leading enabler and provider of live and on-demand content to Internet-connected devices, today announced financial results for the three months and nine months ended September 30, 2012. Revenue was $9.4 million for the three months ended September 30, 2012. (All amounts are in U.S. dollars.)
For the three months ended September 30, 2012:
- Revenue increased by $0.3 million, or 3%, as compared to the same period a year ago.
- Cost of revenue, exclusive of depreciation and amortization, improved by $1.0 million, or 26%, as compared to the same period a year ago.
- Non-GAAP Adjusted EBITDA Loss (as defined below) was $0.6 million, an improvement of $1.7 million, or 74%, as compared to the same period a year ago, and consolidated net loss improved by $2.0 million, or 48%, as compared to the same period a year ago.
For the nine months ended September 30, 2012:
- Revenue decreased by $0.6 million, or 2%, as compared to the same period a year ago.
- Cost of revenue, exclusive of depreciation and amortization, improved by $1.4 million, or 12%, as compared to the same period a year ago.
- Non-GAAP Adjusted EBITDA Loss (as defined below) improved by $1.9 million, or 32%, as compared to the same period a year ago, and consolidated net loss improved by $2.2 million, or 19%, as compared to the same period a year ago.
"Management is pleased with the Company's substantial improvement in our operating results in the third quarter. The Company's 74% improvement in quarter-over-quarter Non-GAAP Adjusted EBITDA Loss was a result of our continued emphasis on closely monitoring costs and de-emphasizing non-core business initiatives," said Nancy Li, Chief Executive Officer of the Company.
Third Quarter Operational Highlights:
Strengthened Company Balance Sheet
Raised CDN$5 million in the form of a private placement
- The net proceeds of over CDN$4,750,000 from the private placement will be used by the Company for general working capital purposes.
NeuLion Sports
Interactive video experience delivering live and on-demand video
- Delivered over 5,600 hours of live Olympic coverage to Chinese consumers on their PCs and mobile devices through the first-ever premium subscription HD-streaming service in China.
- Launched NFL Game Rewind for the 2012-2013 football season. This service provides US and worldwide fans with the ability to access the "All 22" Coaches Film with interactive telestrator.
- Expanded UFC.TV's digital reach to all Apple products, including Apple TV®, the iPad®, iPhone® and the iPod touch®.
NeuLion TV Everywhere
Multi-device content delivery
- KyLinTV goes TV Everywhere with the 2.0 release of the world's first and largest Chinese IPTV service that now offers its customers KyLinTV's content through multiple devices, such as PCs, iPads®, Google TV boxes and smart TVs from Panasonic.
- Leveraging the NeuLion TV Everywhere platform, Sky Angel, America's premier faith and family television provider, expanded its service so viewers could access programming on PCs and iPads®, along with other new interactive features.
- Launched MSG Varsity's "Live Access," the first-ever live HD digital network targeting over 3 million homes in the New York metropolitan area.
NeuLion Athletics
Scholastic athletic portal and online destination for fans
- Launched new college digital apps for PCs, smartphones and tablets with more HD video, in-game experiences and personalization and enhanced video recommendations.
- Expanded partnership with Duke University with a new agreement offering fans easy online access on multiple devices and department personnel an extremely efficient way to handle their donor, ticketing and marketing needs.
- Launched the University of North Carolina's new online sports video service, "GoHeels TV."
Financial Results for the Three Months Ended September 30, 2012:
Revenue was $9.4 million, as compared to $9.1 million for the three months ended September 30, 2011, marking a period-over-period increase of $0.3 million, or 3%.
Cost of revenue, exclusive of depreciation and amortization, was $2.9 million (31% of revenue), as compared to $3.9 million (43% of revenue) for the three months ended September 30, 2011, marking a period-over-period improvement of $1.0 million (12% of revenue).
Consolidated net loss was $2.2 million, which includes $1.6 million of non-cash and/or non-operating charges, netting a Non-GAAP Adjusted EBITDA Loss of $0.6 million, as compared to a consolidated net loss of $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 for the three months ended September 30, 2011, marking a period-over-period improvement in Non-GAAP Adjusted EBITDA Loss of $1.7 million, or 74%.
Financial Results for the Nine Months Ended September 30, 2012:
Revenue was $28.4 million, as compared to $29.0 million for the nine months ended September 30, 2011, marking a period-over-period decrease of $0.6 million, or 2%.
Cost of revenue, exclusive of depreciation and amortization, was $10.5 million (37% of revenue), as compared to $11.9 million (41% of revenue) for the nine months ended September 30, 2011, marking a period-over-period improvement of $1.4 million (4% of revenue).
Consolidated net loss was $9.2 million, which includes $5.1 million of non-cash and/or non-operating charges, netting a Non-GAAP Adjusted EBITDA Loss of $4.1 million, as compared to a consolidated net loss of $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 for the nine months ended September 30, 2011, marking a period-over-period improvement in Non-GAAP Adjusted EBITDA Loss of $1.9 million, or 32%.
As of September 30, 2012, we had $17.3 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, investment income, 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,
2012 2011 2012 2011
$ $ $ $
---------- ---------- ---------- -----------
Consolidated net loss on a
GAAP basis (2,186,704) (4,212,587) (9,216,723) (11,438,837)
Depreciation and
amortization 1,144,043 1,348,590 3,564,861 4,172,602
Stock-based compensation 350,865 445,729 1,265,734 1,175,125
Loss on dissolution of
majority-owned subsidiary 0 97,205 0 97,205
Income taxes 62,000 0 279,000 0
Interest income and foreign
exchange gain/loss 11,563 (23,115) 37,924 (2,042)
---------- ---------- ---------- -----------
Non-GAAP Adjusted EBITDA
Loss (618,233) (2,344,178) (4,069,204) (5,995,947)
========== ========== ========== ===========
About NeuLion
Founded in 2000, NeuLion, Inc. (TSX: NLN) offers the true end-to-end solution for delivering live and on-demand content to Internet-connected devices. NeuLion enables content owners and distributors, cable operators and telecommunications companies to capitalize on consumer demand for viewing video content on PCs, smartphones, tablets 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 :
ctt.marketwire.com/?release=951188&id=2252800&type=1& .. .
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, 2011, which is available on www.sec.gov :
ctt.marketwire.com/?release=951188&id=2252803&type=1& .. and filed on www.sedar.com :
ctt.marketwire.com/?release=951188&id=2252806&type=1& .. .
NEULION, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(Expressed in U.S. dollars, unless otherwise noted)
September 30, December 31,
2012 2011
(unaudited)
$ $
------------- -------------
ASSETS
Current
Cash and cash equivalents 17,254,790 12,346,882
Accounts receivable, net of
allowance for doubtful accounts
of $64,803 and $64,132,
respectively 2,854,553 3,494,077
Other receivables 438,559 309,764
Inventory 644,894 797,436
Prepaid expenses and deposits 1,230,017 1,189,311
Due from related parties 1,139,644 734,452
------------- -------------
Total current assets 23,562,457 18,871,922
Property, plant and equipment, net 3,422,626 4,294,476
Intangible assets, net 4,664,407 6,609,465
Goodwill 11,327,626 11,327,626
Other assets 163,630 226,266
------------- -------------
Total assets 43,140,746 41,329,755
============= =============
LIABILITIES AND EQUITY
Current
Accounts payable 14,659,632 9,597,359
Accrued liabilities 5,101,564 5,314,308
Due to related parties 15,050 13,298
Deferred revenue 6,377,640 6,624,693
Convertible note, net of discount 233,938 -
------------- -------------
Total current liabilities 26,387,824 21,549,658
Long-term deferred revenue 1,222,794 1,050,495
Other long-term liabilities 376,805 432,159
Deferred tax liability 578,094 299,094
------------- -------------
Total liabilities 28,565,517 23,331,406
------------- -------------
Redeemable preferred stock, net
(par value: $0.01; authorized:
50,000,000; issued
and outstanding: 28,089,083)
Class 3 Preference Shares (par
value: $0.01; authorized:
17,176,818; issued and
outstanding: 17,176,818) 10,000,000 10,000,000
Class 4 Preference Shares (par
value: $0.01; authorized:
10,912,265; issued and
outstanding: 10,912,265) 4,887,160 4,864,591
------------- -------------
Total redeemable preferred stock 14,887,160 14,864,591
------------- -------------
Stockholders' equity
Common stock (par value: $0.01;
authorized: 300,000,000; issued
and outstanding: 163,967,804 and
140,012,310, respectively) 1,639,679 1,400,122
Additional paid-in capital 82,789,001 77,257,524
Promissory notes receivable (209,250) (209,250)
Accumulated deficit (84,531,361) (75,314,638)
------------- -------------
Total (deficit) equity (311,931) 3,133,758
------------- -------------
Total liabilities and equity 43,140,746 41,329,755
============= =============
NEULION, INC.
CONDENSED 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,
-------------------------- --------------------------
2012 2011 2012 2011
$ $ $ $
------------ ------------ ------------ ------------
Revenue
Services revenue 8,806,275 8,225,017 26,839,762 26,602,541
Equipment revenue 552,444 877,169 1,604,399 2,403,767
------------ ------------ ------------ ------------
9,358,719 9,102,186 28,444,161 29,006,308
------------ ------------ ------------ ------------
Costs and expenses
Cost of services
revenue,
exclusive of
depreciation and
amortization
shown separately
below 2,439,307 3,257,089 9,163,829 10,076,277
Cost of equipment
revenue 452,475 681,427 1,309,394 1,819,315
Selling, general
and
administrative,
including stock-
based
compensation 5,826,413 6,380,210 18,335,942 19,636,552
Research and
development 1,609,622 1,573,367 4,969,934 4,645,236
Depreciation and
amortization 1,144,043 1,348,590 3,564,861 4,172,602
------------ ------------ ------------ ------------
11,471,860 13,240,683 37,343,960 40,349,982
------------ ------------ ------------ ------------
Operating loss (2,113,141) (4,138,497) (8,899,799) (11,343,674)
Other income
(expense)
Gain (loss) on
foreign exchange (13,312) 15,919 (43,750) (25,973)
Investment income 1,749 7,196 5,826 28,015
Loss on
dissolution of
majority-owned
subsidiary - (97,205) - (97,205)
------------ ------------ ------------ ------------
(11,563) (74,090) (37,924) (95,163)
------------ ------------ ------------ ------------
Net and
comprehensive loss
before income taxes (2,124,704) (4,212,587) (8,937,723) (11,438,837)
Income taxes (62,000) - (279,000) -
------------ ------------ ------------ ------------
Net and
comprehensive loss (2,186,704) (4,212,587) (9,216,723) (11,438,837)
Net loss
attributable to
non-controlling
interest - - - 21,485
------------ ------------ ------------ ------------
Net and
comprehensive loss
attributable to
controlling
interest (2,186,704) (4,212,587) (9,216,723) (11,417,352)
Adjustment to the
carrying amount
of redeemable
preferred stock - - - 153,233
------------ ------------ ------------ ------------
Net and
comprehensive loss
attributable to
NeuLion, Inc.
common stockholders (2,186,704) (4,212,587) (9,216,723) (11,264,119)
============ ============ ============ ============
Net loss per
weighted average
number of shares
outstanding - basic
and diluted $ (0.02) $ (0.03) $ (0.07) $ (0.08)
============ ============ ============ ============
Weighted average
number of shares
outstanding - basic
and diluted 142,423,319 139,868,063 141,159,175 139,487,253
============ ============ ============ ============
NEULION, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(unaudited)
(Expressed in U.S. dollars, unless otherwise noted)
Three months Nine months
ended ended
September 30, September 30,
------------------------ ------------------------
2012 2011 2012 2011
$ $ $ $
----------- ----------- ----------- -----------
OPERATING ACTIVITIES
Net loss (2,186,704) (4,212,587) (9,216,723) (11,438,837)
Adjustments to reconcile
net loss to net cash
used inoperating
activities
Depreciation and
amortization 1,144,043 1,348,590 3,564,861 4,172,602
Stock-based
compensation 350,865 445,729 1,265,734 1,175,125
Loss on dissolution of
majority-owned
subsidiary - 97,205 - 97,205
Deferred income taxes 62,000 - 279,000 -
Changes in operating
assets and liabilities
Accounts receivable (684,258) (208,988) 639,524 (1,418,417)
Inventory 109,330 242,358 152,542 129,276
Prepaid expenses,
deposits and other
assets (129,452) (363,378) 21,930 (479,407)
Other receivables (123,102) (110,223) (128,795) 1,811
Due from related
parties 255,230 (194,729) (405,192) 771,428
Accounts payable 6,778,547 5,710,217 5,062,273 3,897,537
Accrued liabilities 351,431 512,490 (296,497) 339,179
Deferred revenue 1,838,064 722,858 8,011 (1,188,911)
Long-term liabilities (12,948) (23,647) (55,354) (45,007)
Due to related parties 4,829 15,939 1,752 15,913
----------- ----------- ----------- -----------
Cash provided by (used)
in operating activities 7,757,875 3,981,834 893,066 (3,970,503)
----------- ----------- ----------- -----------
INVESTING ACTIVITIES
Purchase of property,
plant and equipment (422,483) (1,027,984) (830,718) (1,515,736)
----------- ----------- ----------- -----------
Cash used in investing
activities (422,483) (1,027,984) (830,718) (1,515,736)
----------- ----------- ----------- -----------
FINANCING ACTIVITIES
Convertible note 545,628 - 545,628 -
Private placement, net 4,299,932 - 4,299,932 4,849,546
----------- ----------- ----------- -----------
Cash provided by
financing activities 4,845,560 - 4,845,560 4,849,546
----------- ----------- ----------- -----------
Net increase (decrease)
in cash and cash
equivalents during the
period 12,180,952 2,953,850 4,907,908 (636,693)
Cash and cash
equivalents, beginning
of period 5,073,838 9,338,782 12,346,882 12,929,325
----------- ----------- ----------- -----------
Cash and cash
equivalents, end of
period 17,254,790 12,292,632 17,254,790 12,292,632
=========== =========== =========== ===========
