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NEULION, INC. T.NLN

"NeuLion Inc is a technology product and service provider that offers digital video broadcasting, distribution and monetization of live and on-demand content to Internet-enabled devices."


TSX:NLN - Post by User

Post by ocean112on Nov 01, 2015 5:17pm
400 Views
Post# 24248734

$1.70/share possible in 2016 IF.....

$1.70/share possible in 2016 IF.....Management delivers on it's DivX forecast of positive GAAP net income for 2016. (see below - (a)). As we all know - R&D and SG&A for DivX are dragging down Neulion's core business - digital platform. Based on my forecast - without DivX - they would have generated $11.6M in net income for 2015, with 16M in EBITA. Forecast losses for DivX in 2015 are about $18M - so a net loss of about $6.3M. IF.... Management is predicting Net income to be accretive in 2016 from DivX - assuming no cuts - that would have to mean total DivX licensing revenue would have to almost double from $26M in 2015 to $52M in 2016 for DivX to contribute about $1M in net income. That's not out of the question since total DivX revenue in 2013 was about $75M and EPS (for DivX alone) was $0.25-$0.30 per share when it was owned by Rovi. (reference below - (b)) If DivX is accretive for 2016 - my numbers are quite positive: Consolidated Revenue - $124M (post NHL Loss) Net Income - $16M EBITDA - $32.6M at 12.4x EBITA = $1.66 Per share target. Will be keeping a close eye on DivX numbers or guidance in next release. _____________ (a) NeuLion management expects the transaction to be accretive on a GAAP operating income basis for 2016 and immediately accretive on a non-GAAP adjusted EBITDA basis. For the six-month period ended September 30, 2014, the period DivX has been a stand-alone private company, DivX had estimated GAAP unaudited revenues of $10.8 million and estimated non-GAAP revenues of $26.6 million, and an estimated GAAP unaudited consolidated net loss of $7.4 million and non-GAAP Adjusted EBITDA of $3.5 million. A reconciliation of the GAAP to non-GAAP figures can be found in a table at the end of this release. (https://www.neulion.com/ViewArticle.dbml?DB_OEM_ID=30000&ATCLID=209834243) (b) - After deciding to sell its Entertainment Store and consumer website businesses last July, ROVI has now decided to unload its DivX video codec licensing business. The company suggests the business, which has been pressured by the growing popularity of various alternative codecs, was good for 2013 revenue of $70M-$75M, and EPS of $0.25-$0.30. (8-K)
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