01:10:55 EDT Fri 29 Mar 2024
Enter Symbol
or Name
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NeuLion Inc
Symbol NLN
Shares Issued 214,184,801
Close 2015-03-03 C$ 1.17
Market Cap C$ 250,596,217
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NeuLion earns $3.56-million (U.S.) in 2014

2015-03-04 07:35 ET - News Release

Dr. Kanaan Jemili reports

NEULION REPORTS FOURTH QUARTER NET INCOME OF $1.6 MILLION ON REVENUE OF $16.5 MILLION

NeuLion Inc. today released financial results for the fourth quarter and fiscal year ended Dec. 31, 2014.

Fourth-quarter year-over-year highlights:

  • Revenue increased 17 per cent to $16.5-million against $14.1-million.
  • Cost of revenue as a per cent of revenue improved 300 basis points to 25 per cent against 28 per cent.
  • Non-GAAP (generally accepted accounting principles) adjusted EBITDA (earnings before interest, taxes, depreciation and amortization) increased 59 per cent to $3.5-million against $2.2-million.
  • Consolidated net income increased 45 per cent to $1.6-million against $1.1-million.
  • This is the ninth consecutive quarter of positive non-GAAP adjusted EBITDA.
  • This is the fifth consecutive quarter of net income.

Fiscal-year 2014 year-over-year highlights:

  • Revenue increased 18 per cent to $55.5-million against $47.1-million.
  • Non-GAAP adjusted EBITDA increased 140 per cent to $8.4-million against $3.5-million.

Management commentary

"NeuLion posted a 560-basis-point improvement in our non-GAAP adjusted EBITDA margin for the fourth quarter to 21.2 per cent, a quarterly record, from 15.6 per cent for the fourth quarter of 2013, reflecting continued gains in volume and usage from new and existing customers and demonstrating the earnings power of our business model," said Kanaan Jemili, chief executive officer.

"With the acquisition of DivX, we have entered 2015 excited about our expanded set of opportunities globally to continue scaling the business and to seize leadership from both a technology platform and consumer experience perspective in the fast-growing on-line video market," added Dr. Jemili. "We are intently focused on enlarging our customer base of both sports and entertainment content owners and consumer electronics manufacturers while continuing to expand relationships with our established customers. As adoption of ultrahigh-definition/4K video and over-the-top services accelerates, our end-to-end solution offerings, which enable digital content management, distribution and monetization, perfectly position NeuLion to deliver high-quality on-demand and live interactive digital content anywhere, on any device," concluded Dr. Jemili.

Fourth-quarter operational highlights

TV Everywhere:

  • Expanded partnership with Univision to include TV Everywhere offerings for its three top channels: Univision, UniMas and Deportes;
  • Launched new TV Everywhere offering with MSG Network called MSG Go to deliver live games, pregame and postgame coverage, and other MSG Network Emmy Award-winning original programming;
  • Partnered with Millicom, an international telecommunications and media company, to create and deliver an exclusive new digital mobile sports experience. This service will be available in Latin America.

Professional sports:

  • Expanded service and partnership with Coliseum Sports Media to include Barclays Premier League, PGA Tour, European Tour and LPGA Tour live events for the country of New Zealand;
  • Recognized by Microsoft as a premier plus development partner through work on Xbox apps for the NBA, NFL, NHL, UFC and others;
  • Licensed the NeuLion sports platform to the United Soccer League, a partner of Major League Soccer.

College sports:

  • Launched nine new college websites for schools that include the University of Oregon, the University of Nebraska and Princeton University, for desktop, tablet and mobile devices.
  • Partnered with Drum Corps International, a non-profit governing body for over 500 junior drum and bugle corps in the United States and Canada, to create an on-line destination for live and on-demand coverage of the annual DCI Tour and more than 35 world championships in 17 North American cities.
  • Continued enhancements to NeuLion college mobile and tablet services have resulted in an increase in traffic equalling 47 per cent of all traffic across the NeuLion college network in 2014, and for the last two quarters of 2014, mobile traffic was over 50 per cent of overall NeuLion college network traffic.

Fourth-quarter 2014 financial review:

  • Total revenue was $16.5-million compared with $14.1-million for the fourth quarter of 2013, an increase of $2.4-million, or 17 per cent, reflecting revenue growth from the company's pro sports and TV Everywhere customers.
    • Pro sports revenue increased 18 per cent to $7.9-million from $6.7-million for the fourth quarter of 2013, primarily due to growth in variable subscription fees.
    • College sports revenue decreased 8 per cent to $3.6-million from $3.9-million for the fourth quarter of 2013. The decrease was primarily a result of a drop in variable subscription fees as the company lost its ability to sell subscriptions for certain colleges, as colleges move to consolidate into conferences and sports networks.
    • TV Everywhere revenue increased 43 per cent to $5.0-million from $3.5-million for the fourth quarter of 2013, primarily due to increases in monthly fixed fees and variable usage fees.
  • Cost of revenue was $4.0-million, or 25 per cent of total revenue, compared with $4.0-million, or 28 per cent of total revenue, for the fourth quarter of 2013, a 300-basis-point improvement, reflecting improved operating costs on streaming.
  • Selling, general and administrative expenses, including stock-based compensation, were $8.0-million, an increase of 27 per cent, compared with $6.3-million for the fourth quarter of 2013. Included in selling, general and administrative costs were approximately $800,000 of acquisition-related expenses and $200,000 in costs associated with compliance with Section 404 of the Sarbanes-Oxley Act.
  • Research and development expenses were $2.1-million, an increase of 5 per cent, compared with $2.0-million for the fourth quarter of 2013. Research and development expenses primarily consist of wages and benefits.
  • Operating income was $1.8-million, an increase of 64 per cent, compared with $1.1-million for the fourth quarter of 2013.
  • Consolidated net income was $1.6-million, or one cent per basic and diluted share, an increase of 45 per cent compared with consolidated net income of $1.1-million, or nil per basic and diluted share, for the fourth quarter of 2013.

Non-GAAP results

non-GAAP adjusted EBITDA increased 59 per cent to $3.5-million from $2.2-million for the same period last year due to higher revenue, offset by increases in selling, general and administrative expenses, excluding stock-based compensation, and research and development expenses.

            
                                                             
                  CONSOLIDATED STATEMENTS OF OPERATIONS AND                                   
                         COMPREHENSIVE INCOME (LOSS)                                                 
                         (expressed in U.S. dollars)                                                 
                                                                            
                              Year ended Dec. 31, Three months ended Dec. 31,
                               2014          2013          2014          2013    

Revenue                $ 55,519,739  $ 47,107,178  $ 16,464,003  $ 14,144,133
Costs and expenses
Cost of revenue,
exclusive of
depreciation and
amortization
shown separately
below                    13,896,629    13,279,063     4,036,450     3,995,834
Selling, general
and
administrative,
including stock-
based
compensation             27,073,344    24,289,845     7,965,584     6,300,462
Research and
development               8,380,944     7,422,802     2,116,515     1,962,676
Depreciation and
amortization              2,621,366     3,755,054       546,038       767,782
                         51,972,283    48,746,764    14,664,587    13,026,754
Operating income
(loss)                    3,547,456    (1,639,586)    1,799,416     1,117,379
Other income
(expense)
(Loss) on foreign
exchange                   (138,295)     (125,657)      (73,729)      (35,708)
Investment income
(expense), net              428,617        (2,487)        2,018         1,864
Amortization of
discount on
convertible note                  0      (233,769)            0             0
                            290,322      (361,913)      (71,711)      (33,844)
Net and
comprehensive
income (loss)
before income taxes       3,837,778    (2,001,499)    1,727,705     1,083,535
Income (taxes)             (270,548)     (276,846)     (106,318)      (11,556)
Net and
comprehensive
income (loss)             3,567,230    (2,278,345)    1,621,387     1,071,979
Net income (loss)
per weighted
average number of
shares of common
stock outstanding --
basic                          0.01         (0.01)         0.01          0.00
Net income (loss)
per weighted
average number of
shares of common
stock outstanding --
diluted                        0.01         (0.01)         0.01          0.00

We seek Safe Harbor.

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