NeuLion Inc reports 614% CAPEX growth and 6.1% Revenue growth
01.03.2017 • About NeuLion Inc (
$NLN) • By InTwits
NeuLion Inc reported 2016 financial results today. Overall the company's long term financial model is characterised by the following facts:
- NeuLion Inc doesn't have a profitable business model yet: 2016 ROIC is -0.3%
- EBITDA Margin is quite volatile: 8.7% in 2016, 6.0% in 2015, 11.1% in 2014, 4.5% in 2013, -12.6% in 2012
- NeuLion Inc has low CAPEX intensity: 5 year average CAPEX/Revenue was 4.1%. At the same time it's a lot of higher than industry average of 8.1%.
- CAPEX is quite volatile: 10.2 in 2016, 1.4 in 2015, 1.8 in 2014, 1.3 in 2013, 1.1 in 2012
- The company has unprofitable business model: ROIC is at -0.3%
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
NeuLion Inc ($NLN) key annual financial indicators
| mln. $ | 2012 | 2013 | 2014 | 2015 | 2016 | 2016/2015 |
|---|
P&L
|
|---|
| Revenue | 38.983 | 47.107 | 55.520 | 94.043 | 99.788 | 6.1% |
| Gross Profit | 20.881 | 30.073 | 39.002 | 76.268 | 81.476 | 6.8% |
| SG&A | | 24.290 | 27.073 | 45.672 | 52.922 | 15.9% |
| EBITDA | -4.926 | 2.115 | 6.169 | 5.684 | 8.651 | 52.2% |
| Net Income | -10.079 | -2.278 | 3.567 | 25.916 | -1.753 | -106.8% |
Balance Sheet
|
|---|
| Cash | 11.108 | 19.644 | 25.898 | 53.413 | 41.905 | -21.5% |
| 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 | 1.107 | 1.301 | 1.850 | 1.428 | 10.195 | 613.9% |
Ratios
|
|---|
| Revenue growth | -1.7% | 20.8% | 17.9% | 69.4% | 6.1% | |
| EBITDA growth | -42.2% | -142.9% | 191.6% | -7.9% | 52.2% | |
| Gross Margin | 53.6% | 63.8% | 70.2% | 81.1% | 81.6% | 0.6% |
| EBITDA Margin | -12.6% | 4.5% | 11.1% | 6.0% | 8.7% | 2.6% |
| Net Income Margin | -25.9% | -4.8% | 6.4% | 27.6% | -1.8% | -29.3% |
| SG&A, % of revenue | | 51.6% | 48.8% | 48.6% | 53.0% | 4.5% |
| CAPEX, % of revenue | 2.8% | 2.8% | 3.3% | 1.5% | 10.2% | 8.7% |
| ROIC | -55.8% | -10.3% | 18.5% | -3.7% | -0.3% | 3.4% |
| ROE | | | | 45.8% | -1.6% | -47.4% |
| Net Debt/EBITDA | | -9.3x | -4.2x | -9.4x | -4.8x | 4.6x |
NeuLion Inc ($NLN) key quoterly financial indicators
| mln. $ | 16Q1 | 16Q2 | 16Q3 | 16Q4 | YoY change |
|---|
P&L
|
|---|
| Revenue | 26 | 24 | 24 | 26 | 21.3% | 6.3% | 8.9% | -8.1% |
| EBITDA | 5 | 2 | 1 | 1 | 153.9% | | 197.7% | -83.6% |
| Net Income | 2 | -1 | -3 | -0 | | | | -101.0% |
Balance Sheet
|
|---|
| Cash | 62 | 46 | 70 | 42 | 74.6% | 35.4% | 17.8% | -21.5% |
| Short Term Debt | 0 | 0 | 0 | 0 | | | | |
| Long Term Debt | 0 | 0 | 0 | 0 | -100.0% | | | |
Ratios
|
|---|
| Gross Margin | 82.3% | 82.9% | 81.9% | 79.6% | 2.3% | 1.4% | -0.5% | -1.1% |
| EBITDA Margin | 20.5% | 7.4% | 3.7% | 2.4% | 10.7% | 9.1% | 2.4% | -10.8% |
| Net Income Margin | 7.9% | -3.2% | -11.4% | -1.3% | 10.3% | 11.0% | 2.9% | -119.3% |
Revenue and profitability
The company's Revenue increased on 6.1%. Revenue growth showed slow down in 16Q4 - it was -8.1% YoY. Revenue decline was accompanies by EBITDA margin decline. EBITDA Margin decreased on 4.1 pp from 58.4% to 54.3% in FY2016.
Gross Margin increased slightly on 0.55 pp from 81.1% to 81.6% in 2016. SG&A as a % of Revenue increased on 4.5 pp from 48.6% to 53.0% in 2016.
Net Income marign dropped on 29.3 pp from 27.6% to -1.8% in 2016.
Capital expenditures (CAPEX) and working capital investments
In 2016 NeuLion Inc had CAPEX/Revenue of 10.2%. The company showed CAPEX/Revenue growth of 7.5 pp from 2.8% in 2013 to 10.2% in 2016. It's average level of CAPEX/Revenue for the last three years was 5.0%.NeuLion Inc maintained rich investment policy and has spent a lot to CAPEX (118% of EBITDA).
Return on investment
The company operates at negative ROIC (-0.32%) and ROE (-1.64%). ROIC increased on 3.4 pp from -3.7% to -0.32% in 2016. ROE dropped on 47.4 pp from 45.8% to -1.6% in 2016.
Leverage (Debt)
The company has no debt. Cash dropped on 21.5%.
Management team
The company's CEO is Roy E Reichbach. Roy E Reichbach is a founder and has 2 years tenure at the company. NeuLion Inc's CFO Tim Alavathil has spent 1 year at the company.
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 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| AcuityAds Holding Inc ($AT) | | | | 51.6% | 91.4% |
| Shopify Inc ($SH) | | 111.9% | 109.0% | 95.4% | 89.7% |
| Gaming Nation Inc ($FAN) | | | | | 46.6% |
| Tucows Inc ($TC) | | 13.3% | 13.6% | 17.1% | 9.8% |
| Points International Ltd ($PTS) | | 45.1% | 26.0% | 16.2% | 8.6% |
| |
|---|
| Median (25 companies) | 13.1% | 2.6% | 1.1% | 3.2% | 2.1% |
|---|
| NeuLion Inc ($NLN) | | 20.8% | 17.9% | 69.4% | 6.1% |
Top companies by Gross margin, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Wanted Technologies Corp ($WAN) | 90.5% | 93.2% | 94.3% | 95.6% | |
| TeraGo Inc ($TGO) | 62.9% | 61.8% | 59.8% | 77.2% | 77.2% |
| ICTV Brands Inc ($ITV) | 67.4% | 71.9% | 69.6% | 68.1% | |
| Platinum Communications Corp ($PCS) | 67.4% | 67.1% | 60.2% | 60.5% | |
| Redline Communications Group Inc ($RDL) | 56.4% | 61.1% | 56.1% | 56.0% | 55.3% |
| |
|---|
| Median (22 companies) | 43.5% | 41.2% | 43.6% | 43.5% | 40.1% |
|---|
| NeuLion Inc ($NLN) | 53.6% | 63.8% | 70.2% | 81.1% | 81.6% |
Top companies by EBITDA margin, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| BCE Inc ($BCE) | 38.8% | 37.7% | 38.4% | 37.7% | 39.8% |
| Rogers Communications Inc ($RCI.A) | 37.3% | 38.4% | 37.9% | 36.9% | 32.5% |
| Quebecor Inc ($QBR.B) | 27.5% | 36.3% | 35.5% | 34.2% | 35.5% |
| TELUS Corp ($T) | 35.3% | 35.2% | 35.1% | 34.1% | 33.0% |
| ZoomerMedia Ltd ($ZUM) | 32.6% | 33.8% | 29.3% | 29.1% | 27.1% |
| |
|---|
| Median (29 companies) | 19.1% | 13.7% | 8.8% | 10.4% | 7.3% |
|---|
| NeuLion Inc ($NLN) | -12.6% | 4.5% | 11.1% | 6.0% | 8.7% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| TELUS Corp ($T) | 17.9% | 17.8% | 19.8% | 20.2% | 21.5% |
| Rogers Communications Inc ($RCI.A) | 17.2% | 17.6% | 18.4% | 18.2% | 17.2% |
| Quebecor Inc ($QBR.B) | 16.7% | 15.4% | 17.9% | 17.5% | 17.6% |
| BCE Inc ($BCE) | 17.6% | 17.5% | 17.7% | 16.9% | 17.4% |
| TeraGo Inc ($TGO) | 20.9% | 21.5% | 23.1% | 14.8% | 13.0% |
| |
|---|
| Median (28 companies) | 2.6% | 3.2% | 2.2% | 3.1% | 2.9% |
|---|
| NeuLion Inc ($NLN) | 2.8% | 2.8% | 3.3% | 1.5% | 10.2% |
Top companies by ROIC, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Tucows Inc ($TC) | 17.7% | 22.5% | 35.4% | 51.4% | 58.4% |
| BCE Inc ($BCE) | 14.1% | 12.6% | 12.6% | 12.3% | 12.6% |
| Quebecor Inc ($QBR.B) | 7.9% | 9.6% | 8.4% | 8.4% | 10.1% |
| MDC Partners Inc ($MDZ.A) | -3.1% | -6.3% | 14.2% | 13.7% | 10.1% |
| TELUS Corp ($T) | 12.4% | 13.0% | 13.0% | 11.5% | 9.6% |
| |
|---|
| Median (28 companies) | 9.9% | 8.2% | 7.1% | 3.1% | 2.2% |
|---|
| NeuLion Inc ($NLN) | -55.8% | -10.3% | 18.5% | -3.7% | -0.3% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Intertain Group Ltd/The ($IT) | | | | 9.4x | |
| MDC Partners Inc ($MDZ.A) | 12.4x | 112.6x | 4.6x | 5.5x | 9.6x |
| Quebecor Inc ($QBR.B) | 3.7x | 3.9x | 4.2x | 4.8x | 4.3x |
| Rogers Communications Inc ($RCI.A) | 2.3x | 2.4x | 3.2x | 3.6x | 3.8x |
| Newfoundland Capital Corp Ltd ($NCC.B) | 1.4x | 1.3x | 3.3x | 3.2x | |
| |
|---|
| Median (20 companies) | 1.4x | 1.3x | 1.5x | 1.8x | 1.9x |
|---|
| NeuLion Inc ($NLN) | | -9.3x | -4.2x | -9.4x | -4.8x |
