NeuLion Inc reports 627% Net Income growth while 5.1 pp EBITDA Margin decline from 11.1% to 6.0%
03.03.2016 • About NeuLion Inc (
$NLN) • By InTwits
NeuLion Inc reported 2015 financial results today. Overall the company's long term financial model is characterised by the following facts:
- NeuLion Inc doesn't have a profitable business model yet: 2015 ROIC is -3.7%
- NeuLion Inc has low CAPEX intensity: 5 year average CAPEX/Revenue was 3.0%. At the same time it's a lot of higher than industry average of 10.6%.
- CAPEX is quite volatile: 7.2 in 2015, 0.57 in 2014, 1.1 in 2013, 10.9 in 2012, 0.52 in 2011
- The company has unprofitable business model: ROIC is at -3.7%
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
NeuLion Inc ($NLN) key annual financial indicators
| mln. $ | 2011 | 2012 | 2013 | 2014 | 2015 | 2015/2014 |
|---|
P&L
|
|---|
| Revenue | 39.666 | 38.983 | 47.107 | 55.520 | 94.043 | 69.4% |
| Gross Profit | 17.923 | 20.881 | 30.073 | 39.002 | 76.268 | 95.6% |
| SG&A | | | 24.290 | 27.073 | 45.672 | 68.7% |
| EBITDA | -8.524 | -4.926 | 2.115 | 6.169 | 5.684 | -7.9% |
| Net Income | -14.352 | -10.079 | -2.278 | 3.567 | 25.916 | 626.5% |
Balance Sheet
|
|---|
| Cash | 12.347 | 11.108 | 19.644 | 25.898 | 53.413 | 106.2% |
| Short Term Debt | 0.000 | 0.000 | 0.000 | 0.000 | 0.000 | |
| Long Term Debt | 0.000 | 0.000 | 0.000 | 0.000 | 0.000 | |
Cash flow
|
|---|
| Capex | 1.876 | 1.107 | 1.301 | 1.850 | 1.428 | -22.8% |
Ratios
|
|---|
| Revenue growth | 19.6% | -1.7% | 20.8% | 17.9% | 69.4% | |
| EBITDA growth | -36.4% | -42.2% | -142.9% | 191.6% | -7.9% | |
| Gross Margin | 45.2% | 53.6% | 63.8% | 70.2% | 81.1% | 10.9% |
| EBITDA Margin | -21.5% | -12.6% | 4.5% | 11.1% | 6.0% | -5.1% |
| Net Income Margin | -36.2% | -25.9% | -4.8% | 6.4% | 27.6% | 21.1% |
| SG&A, % of revenue | | | 51.6% | 48.8% | 48.6% | -0.2% |
| CAPEX, % of revenue | 4.7% | 2.8% | 2.8% | 3.3% | 1.5% | -1.8% |
| ROIC | -62.1% | -55.8% | -10.3% | 18.5% | -3.7% | -22.2% |
| ROE | -150.8% | | | | 45.8% | 45.8% |
| Net Debt/EBITDA | | | -9.3x | -4.2x | -9.4x | -5.2x |
Revenue and profitability
NeuLion Inc's Revenue jumped on 69.4% in 2015. Revenue decline was accompanies by EBITDA margin decline. EBITDA Margin dropped on 14.4 pp from 7.4% to -7.0% in 2015.
Gross Margin jumped on 10.9 pp from 70.2% to 81.1% in 2015. SG&A as a % of Revenue showed almost no change in 2015.
Net Income marign surged on 21.1 pp from 6.4% to 27.6% in 2015.
Capital expenditures (CAPEX) and working capital investments
In 2015 the company had CAPEX/Revenue of 1.5%. NeuLion Inc's CAPEX/Revenue decreased slightly on 1.3 pp from 2.8% in 2012 to 1.5% in 2015. It's average level of CAPEX/Revenue for the last three years was 2.5%.
Return on investment
The company operates at negative ROIC (-3.67%) and low but positive ROE (45.81%). ROIC dropped on 22.2 pp from 18.5% to -3.7% in 2015.
Leverage (Debt)
The company has no debt. Cash jumped on 106% in 2015.
Appendix 1: Peers in Communications
Below we provide NeuLion Inc benchmarking against other companies in Communications industry for the last 5 years. We show data for the top-5 companies by key financial metric together with the median value for all the companies in the industry.
Top companies by Revenue growth, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Telehop Communications Inc ($HOP) | -11.7% | -13.1% | -7.8% | 105.7% | |
| Wi2Wi Corp ($YTY) | | | 11.5% | 100.3% | |
| BSM Technologies Inc ($GPS) | | | 39.1% | 55.5% | 2.7% |
| Plaintree Systems Inc ($NPT) | | 14.5% | 9.1% | 50.8% | -7.1% |
| Aimia Inc ($AIM) | | 6.3% | -25.6% | 47.5% | -0.3% |
| |
|---|
| Median (49 companies) | 10.4% | 5.0% | 1.8% | 1.9% | 2.7% |
|---|
| NeuLion Inc ($NLN) | | -1.7% | 20.8% | 17.9% | 69.4% |
Top companies by Gross margin, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Wanted Technologies Corp ($WAN) | 86.6% | 90.5% | 93.2% | 94.3% | 95.6% |
| CounterPath Corp ($CCV) | 74.1% | 80.0% | 85.1% | 80.9% | 81.5% |
| Mediagrif Interactive Technologies Inc ($MDF) | 78.2% | 79.8% | 79.8% | 78.8% | 80.1% |
| Sangoma Technologies Corp ($STC) | 74.5% | 68.8% | | 66.9% | 67.2% |
| Advantex Marketing International Inc ($ADX) | | 69.4% | 67.2% | 61.7% | 61.1% |
| |
|---|
| Median (40 companies) | 43.2% | 42.8% | 42.5% | 41.8% | 46.4% |
|---|
| NeuLion Inc ($NLN) | 45.2% | 53.6% | 63.8% | 70.2% | 81.1% |
Top companies by EBITDA margin, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Manitoba Telecom Services Inc ($MBT) | 33.7% | 34.3% | 33.7% | 47.4% | 42.3% |
| Cogeco Cable Inc ($CCA) | 45.8% | 46.0% | 44.9% | 43.8% | 46.2% |
| Cogeco Inc ($CGO) | 28.1% | 43.2% | 43.5% | 43.3% | 44.3% |
| Shaw Communications Inc ($SJR.B) | 43.3% | 42.7% | 43.3% | 42.1% | 44.6% |
| BCE Inc ($BCE) | 37.0% | 38.8% | 37.7% | 38.4% | 37.7% |
| |
|---|
| Median (49 companies) | 16.4% | 15.6% | 14.8% | 13.4% | 14.5% |
|---|
| NeuLion Inc ($NLN) | -21.5% | -12.6% | 4.5% | 11.1% | 6.0% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Newfoundland Capital Corp Ltd ($NCC.B) | | 8.7% | 5.5% | 76.8% | 5.9% |
| Axia NetMedia Corp ($AXX) | 10.7% | 30.8% | 27.2% | 27.0% | |
| UrtheCast Corp ($UR) | | | | 26.5% | |
| TeraGo Inc ($TGO) | 21.6% | 20.9% | 21.5% | 23.1% | |
| Manitoba Telecom Services Inc ($MBT) | 16.3% | 19.8% | 18.1% | 22.4% | 22.9% |
| |
|---|
| Median (52 companies) | 4.3% | 2.2% | 3.3% | 2.1% | 2.5% |
|---|
| NeuLion Inc ($NLN) | 4.7% | 2.8% | 2.8% | 3.3% | 1.5% |
Top companies by ROIC, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Wi2Wi Corp ($YTY) | -28.5% | -166.9% | | 136.7% | |
| Tucows Inc ($TC) | 12.8% | 17.7% | 22.5% | 35.4% | 51.4% |
| Asian Television Network International Ltd ($SAT) | 102.7% | 34.6% | 23.6% | 23.4% | |
| Points International Ltd ($PTS) | 20.7% | 14.9% | 15.0% | 21.2% | 18.8% |
| Yellow Pages Ltd/Canada ($Y) | 8.9% | 18.0% | 28.4% | 17.9% | 11.1% |
| |
|---|
| Median (53 companies) | 7.2% | 9.2% | 8.3% | 8.0% | 5.1% |
|---|
| NeuLion Inc ($NLN) | -62.1% | -55.8% | -10.3% | 18.5% | -3.7% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Plaintree Systems Inc ($NPT) | 0.7x | | | 124.2x | 3.9x |
| Advantex Marketing International Inc ($ADX) | | 4.8x | 2.2x | 5.0x | |
| MDC Partners Inc ($MDZ.A) | 7.3x | 12.4x | 112.6x | 4.6x | 5.5x |
| Quebecor Inc ($QBR.B) | 2.0x | 3.7x | 3.9x | 4.2x | |
| Postmedia Network Canada Corp ($PNC.B) | 2.9x | 3.3x | 3.4x | 4.2x | |
| |
|---|
| Median (41 companies) | 1.0x | 1.4x | 1.3x | 1.5x | 1.9x |
|---|
| NeuLion Inc ($NLN) | | | -9.3x | -4.2x | -9.4x |
