PLAINVIEW, NY -- (Marketwire) -- 03/08/13 -- NeuLion, Inc. (TSX: NLN), a leading enabler and provider of live and on-demand content to Internet-connected devices, today announced financial results for the three months and year ended December 31, 2012 (all amounts are in U.S. dollars).
For the three months ended December 31, 2012:
- Non-GAAP Adjusted EBITDA (as defined below) was $0.8 million, an improvement of $1.7 million, as compared to the same period a year ago, and Consolidated Net Loss improved by $2.0 million, or 69%, as compared to the same period a year ago.
- Cost of revenue, exclusive of depreciation and amortization, as a percentage of total revenue, improved to 31% in the fourth quarter of 2012, as compared to 42% in the fourth quarter of 2011.
- Revenue was $10.5 million in the fourth quarter of 2012, as compared to $10.7 million in the fourth quarter of 2011, a decrease of $0.2 million, or 2%.
For the year ended December 31, 2012:
- Non-GAAP Adjusted EBITDA (as defined below) was $(3.3) million, an improvement of $3.6 million, or 52%, as compared to the same period a year ago, and Consolidated Net Loss improved by $4.3 million, or 30%, as compared to the same period a year ago.
- Cost of revenue, exclusive of depreciation and amortization, as a percentage of total revenue, improved to 35% in fiscal 2012, as compared to 41% in fiscal 2011.
- Revenue was $39.0 million in fiscal 2012, as compared to $39.7 million in fiscal 2011, a decrease of $0.7 million, or 2%.
"Management is extremely pleased with the positive results in the fourth quarter. The Company's substantial improvement in quarter-over-quarter Non-GAAP Adjusted EBITDA 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. "We continue to build on our unique strengths in the new and evolving IPTV marketplace. Our customers' recognition of NeuLion's technological leadership in this rapidly expanding field has put NeuLion at the forefront of online video delivery. We fully expect our customers' requirements, and NeuLion's role, to continue to grow as the adoption of TV over the Internet accelerates."
Fourth Quarter Operational Highlights:
Professional Sports
Interactive video experience delivering live and on-demand video
- Delivered live and on-demand streaming of select games throughout the 2013 International Ice Hockey Federation World Junior Championship Tournament from Russia.
- Partnered with the Barclays Center to live stream the Brooklyn Hoops Holiday Invitational; the first ever live video of a sporting event at Barclays.
- Launched the Portland Trailblazers live streaming experience for fans to watch all game broadcasts.
- Extended partnership with the Professional Bowlers Association for additional multi-year terms to power PBA Xtra Frames.
- The American Hockey League implemented NeuLion's Video Replay System into their officiating process for the start of the 2012-2013 season to allow referees to review goals during live games.
College Sports
Athletic portal and online destination for fans
- Launched newly designed Official Athletics website for the Oregon Ducks, goducks.com, bringing video to the forefront.
- Designed brand new CAA Gameday, a one stop digital destination for schedules, scores, videos, live stats and more across every school in the Colonial Athletic Association.
- Partnered with Horizon Media to deliver Capital One's 2013 Mascot Challenge Campaign across NeuLion NCAA sites.
- Addressed the Sports Business Journal Intercollegiate Athletics Forum audience on the topic of maximizing revenue through intellectual property.
TV Everywhere
Multi-device content delivery
- Partnered with the WWE to deliver the Rolling Stones 50th Anniversary Concert on multiple devices worldwide.
- Launched UVideos with Univision Communications, a bilingual digital network for Hispanic America offering one of the most fully integrated, comprehensive social experiences available in any language in the U.S.
- Partnered with Shaw Communications to deliver Shaw Go NFL Sunday Ticket on iPad.
- Powered an enhanced V.2 release of BTN2Go with more HD video, live stats, dynamic ad insertion and social media integration on multiple devices.
Financial Results for the Three Months Ended December 31, 2012:
Revenue was $10.5 million, as compared to $10.7 million for the three months ended December 31, 2011, a decrease of $0.2 million, or 2%.
Cost of revenue, exclusive of depreciation and amortization, was $3.2 million (31% of revenue), as compared to $4.5 million (42% of revenue) for the three months ended December 31, 2011, marking a period-over-period improvement of 11%.
Consolidated net loss was $0.9 million, which includes $1.7 million of non-cash and/or non-operating charges, netting a Non-GAAP Adjusted EBITDA of $0.8 million, as compared to a consolidated net loss of $2.9 million, which includes $2.0 million of non-cash and/or non-operating charges, netting a Non-GAAP Adjusted EBITDA of $(0.9) million for the three months ended December 31, 2011, marking a period-over-period improvement in Non-GAAP Adjusted EBITDA of $1.7 million.
Financial Results for the Year Ended December 31, 2012:
Revenue was $39.0 million, as compared to $39.7 million for the year ended December 31, 2011, a decrease of $0.7 million, or 2%.
Cost of revenue, exclusive of depreciation and amortization, was $13.7 million (35% of revenue), as compared to $16.4 million (41% of revenue) for the year ended December 31, 2011, marking a year-over-year improvement of 6%.
Consolidated net loss was $10.1 million, which includes $6.8 million of non-cash and/or non-operating charges, netting a Non-GAAP Adjusted EBITDA of $(3.3) million, as compared to a consolidated net loss of $14.4 million, which includes $7.5 million of non-cash and/or non-operating charges, netting a Non-GAAP Adjusted EBITDA of $(6.9) million for the year ended December 31, 2011, marking a year-over-year improvement in Non-GAAP Adjusted EBITDA of $3.6 million, or 52%.
As of December 31, 2012, we had $11.1 million in cash and cash equivalents.
Use of Non-GAAP Measures
We report Non-GAAP Adjusted EBITDA 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 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 to its most directly comparable U.S. GAAP measure, consolidated net loss:
Consolidated Statement of Operations
Reconciliation:
Years ended Three months ended
December 31, December 31,
2012 2011 2012 2011
$ $ $ $
----------- ----------- -------- ----------
Consolidated net loss on
a GAAP basis (10,078,764) (14,373,030) (862,040) (2,934,194)
Depreciation and
amortization 4,407,474 5,367,289 842,614 1,194,688
Stock-based compensation 1,627,231 1,647,422 361,497 472,296
Discount on convertible
note 77,922 0 77,922 0
Loss on dissolution of
majority-owned
subsidiary 0 227,402 0 130,197
Deferred income taxes 612,884 299,094 333,884 299,094
Investment income and
foreign exchange gain
(loss) 54,918 (44,883) 16,992 (42,841)
----------- ----------- -------- ----------
Non-GAAP Adjusted EBITDA (3,298,335) (6,876,706) 770,869 (880,760)
----------- ----------- -------- ----------
About NeuLion
NeuLion, Inc. (TSX: NLN) offers the true end-to-end solution for delivering live and on-demand content to Internet-enabled devices. 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
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" and 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. These factors should be considered carefully and readers should not place undue reliance on the forward-looking statements. 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 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. 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, 2012, 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)
As of December 31,
---------------------------
2012 2011
$ $
------------ ------------
ASSETS
Current
Cash and cash equivalents 11,108,107 12,346,882
Accounts receivable, net 4,193,949 3,494,077
Other receivables 348,891 309,764
Inventory 416,541 797,436
Prepaid expenses and deposits 1,185,051 1,189,311
Due from related parties 899,967 734,452
------------ ------------
Total current assets 18,152,506 18,871,922
Property, plant and equipment, net 3,446,648 4,294,476
Intangible assets, net 4,015,301 6,609,465
Goodwill 11,327,626 11,327,626
Other assets 161,913 226,266
------------ ------------
Total assets 37,103,994 41,329,755
------------ ------------
LIABILITIES AND EQUITY
Current
Accounts payable 9,813,237 9,597,359
Accrued liabilities 4,766,668 5,314,308
Due to related parties 12,282 13,298
Deferred revenue 5,715,102 6,624,693
Convertible note, net of discount 320,560 --
------------ ------------
Total current liabilities 20,627,849 21,549,658
Long-term deferred revenue 1,134,075 1,050,495
Other long-term liabilities 357,852 432,159
Deferred tax liability 911,978 299,094
------------ ------------
Total liabilities 23,031,754 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) 4,894,683 4,864,591
------------ ------------
Total redeemable preferred stock 14,894,683 14,864,591
------------ ------------
Stockholders' equity (deficit)
Common stock (par value: $0.01; authorized:
300,000,000; issued and outstanding:
164,207,147 and 140,012,310, respectively) 1,642,072 1,400,122
Additional paid-in capital 83,138,137 77,257,524
Promissory notes receivable (209,250) (209,250)
Accumulated deficit (85,393,402) (75,314,638)
------------ ------------
Total shareholders' (deficit) equity (822,443) 3,133,758
------------ ------------
Total liabilities and shareholders' equity
(deficit) 37,103,994 41,329,755
------------ ------------
NEULION, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS AND
COMPREHENSIVE LOSS
(Expressed in U.S. dollars, unless otherwise noted)
Years ended December 31,
-----------------------------
2012 2011
$ $
------------- -------------
Revenue
Services revenue 37,178,431 36,612,650
Equipment revenue 1,804,495 3,053,732
------------- -------------
38,982,926 39,666,382
------------- -------------
Costs and Expenses
Cost of services revenue, exclusive of
depreciation and amortization shown
separately below 12,280,658 13,985,258
Cost of equipment revenue 1,413,760 2,391,212
Selling, general and administrative,
including stock-based compensation 23,541,296 25,612,668
Research and development 6,672,778 6,201,372
Depreciation and amortization 4,407,474 5,367,289
------------- -------------
48,315,966 53,557,799
------------- -------------
Operating loss (9,333,040) (13,891,417)
------------- -------------
Other income (expense)
Gain (loss) on foreign exchange (56,244) 12,985
Investment income, net 1,326 31,898
Discount on convertible note (77,922) --
Loss on dissolution of majority-owned
subsidiary -- (227,402)
------------- -------------
(132,840) (182,519)
------------- -------------
Consolidated net and comprehensive loss
before income taxes (9,465,880) (14,073,936)
Deferred income taxes (612,884) (299,094)
------------- -------------
Consolidated net and comprehensive loss (10,078,764) (14,373,030)
Net loss attributable to non-controlling
interest -- 21,485
------------- -------------
Net and comprehensive loss attributable to
controlling interest (10,078,764) (14,351,545)
Adjustment to the carrying amount of
redeemable preferred stock -- 153,233
------------- -------------
Net and comprehensive loss attributable to
NeuLion, Inc. common stockholders (10,078,764) (14,198,312)
------------- -------------
Net loss per weighted average number of
shares of common stock outstanding - basic
and diluted $ (0.07) $ (0.10)
------------- -------------
Weighted average number of shares of common
stock outstanding - basic and diluted 146,899,685 139,610,112
------------- -------------
NEULION, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Expressed in U.S. dollars, unless otherwise noted)
Years ended December 31,
---------------------------
2012 2011
$ $
------------ ------------
OPERATING ACTIVITIES
Consolidated net loss (10,078,764) (14,373,030)
Adjustments to reconcile net loss to cash used
in operating activities
Depreciation and amortization 4,407,474 5,367,289
Discount on convertible note 77,922 --
Stock-based compensation 1,627,231 1,647,422
Loss on dissolution of majority-owned
subsidiary -- 227,402
Deferred income taxes 612,884 299,094
Changes in operating assets and liabilities
Accounts receivable (699,872) (1,199,419)
Inventory 380,895 105,578
Prepaid expenses, deposits and other assets 68,613 (145,778)
Other receivables (39,127) (13,610)
Due from related parties (165,515) 527,324
Accounts payable 215,878 3,449,839
Accrued liabilities (524,327) (92,865)
Deferred revenue (684,793) 694,434
Long-term liabilities (74,307) (63,116)
Due to related parties (1,016) 13,272
------------ ------------
Cash used in operating activities (4,876,824) (3,556,164)
------------ ------------
INVESTING ACTIVITIES
Purchase of property, plant and equipment, net (1,106,700) (1,875,825)
------------ ------------
Cash used in investing activities (1,106,700) (1,875,825)
------------ ------------
FINANCING ACTIVITIES
Convertible note 545,628 --
Private placement, net 4,199,121 4,849,546
------------ ------------
Cash provided by financing activities 4,744,749 4,849,546
------------ ------------
Net decrease in cash and cash equivalents
during the year (1,238,775) (582,443)
Cash and cash equivalents, beginning of year 12,346,882 12,929,325
------------ ------------
Cash and cash equivalents, end of year 11,108,107 12,346,882
------------ ------------
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