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NeuLion Reports 26% Increase in Revenue and Third Consecutive Positive Quarter

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PLAINVIEW, NY -- (Marketwired) -- 08/09/13 -- 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 and six months ended June 30, 2013 (all amounts are in U.S. dollars).

For the Three Months Ended June 30, 2013:

•Revenue was $11.0 million for the three months ended June 30, 2013, as compared to $8.7 million for the three months ended June 30, 2012, an increase of $2.3 million, or 26%.

•Cost of revenue, as a percentage of revenue, exclusive of depreciation and amortization, improved to 29% for the three months ended June 30, 2013, as compared to 35% for the three months ended June 30, 2012.

•Operating loss was $(1.0) million for the three months ended June 30, 2013, as compared to $(3.4) million for the three months ended June 30, 2012, an improvement of $2.4 million.

•Non-GAAP Adjusted EBITDA (as defined below) was $0.2 million for the three months ended June 30, 2013, an improvement of $1.7 million, as compared to $(1.5) million in the same period a year ago, and Consolidated Net Loss improved by $2.2 million as compared to the same period a year ago.



For the Six Months Ended June 30, 2013:

•Revenue was $22.9 million for the six months ended June 30, 2013, as compared to $19.1 million for the six months ended June 30, 2012, an increase of $3.8 million, or 20%.

•Cost of revenue, as a percentage of revenue, exclusive of depreciation and amortization, improved to 29% for the six months ended June 30, 2013, as compared to 40% for the six months ended June 30, 2012.

•Operating loss was $(1.2) million for the six months ended June 30, 2013, as compared to $(6.8) million for the six months ended June 30, 2012, an improvement of $5.6 million.

•Non-GAAP Adjusted EBITDA (as defined below) was $1.1 million for the six months ended June 30, 2013, an improvement of $4.6 million, as compared to $(3.5) million in the same period a year ago, and Consolidated Net Loss improved by $5.4 million as compared to the same period a year ago.



"We are very pleased with NeuLion's financial results for the second quarter of 2013, in particular the improvements in revenue, cost of revenue and non-GAAP Adjusted EBITDA, as compared to the same period a year ago," said Nancy Li, Chief Executive Officer of the Company. "The growth in consumer consumption of content on Internet-connected devices such as the iPad, iPhone, Android tablets and phones, gaming devices and connected TVs has paved the way for NeuLion to increase its presence in the marketplace, and we expect our role to continue to expand going forward as we deliver continued innovation."

Second Quarter Operational Highlights:

Professional Sports
Interactive video experience delivering live and on-demand video

•Partnered with the Barclays Center to create the Digital Ticket, a service that allows fans to watch select games, concerts and other events outside the venue on PC, mobile and tablet devices.

•Signed agreement with Coliseum Sports Media Ltd to deliver in New Zealand all 380 games of the Barclays Premier League via a dedicated pay-per-view digital service on PC, iPhone, iPad, Android phone and tablets and on the TV through Apple AirPlay.

•Integrated NHL GameCenter with Twitter using NeuLion's social media technology to provide fans with Twitter Cards allowing them to seamlessly embed videos directly in Tweets for easy sharing and viewing.

•Won the 2013 Cynopsis Sports Media Award in the "App - Affiliated" category for UFC.TV.

•Was a finalist in the 2013 Sports Business Awards in the "Best in Sports Technology" category.



College Sports
Athletic portal and online destination for fans

•Created an all-new Ivy League Conference subscription-based digital network that provides each member school with its own individual channel in addition to a conference-wide channel covering all the conference's schools, sports and events.

•Signed several new collegiate digital and ticketing partnerships with schools including Oklahoma University, the University of Nebraska Omaha, Old Dominion University and Fairfield University.

•Broadcasted Digital Dudes live from Sports Video Group's College Sports Summit in Atlanta, Georgia. With 12 sessions over the two-day conference, Digital Dudes covered a variety of topics and hosted speakers from the Big 10 Network, the Ivy League Conference, the Pac-12 Conference, Learfield Sports, the University of Miami, Duke University and others.



TV Everywhere
Multi-device content delivery

•Partnered with SENSIO Technologies to deliver 3DGO!, a streaming 3D VOD channel that offers consumers access to an exceptional 3D experience at home in terms of quality, premium 3D content and user-friendliness. The NeuLion TVE Platform is responsible for the storefront interface and back-end delivery for instant access to SENSIO's movie library of high-quality 3D entertainment.

•Signed multi-year agreement with Bright House Networks to provide live streaming of high school sports to fans on multiple Internet-connected devices.

•Selected by Participant Media to design and deliver the new cable network's downloadable interactive app called Pivot. As a brand-new general entertainment network that targets 18-30 year olds (millennials), all live and on-demand content will be streamed to multiple digital devices and available to either authenticated Pay TV subscribers or to broadband-only subscribers, giving viewers an incredible digital destination to access anytime, anywhere.



Financial Results for the Three Months Ended June 30, 2013:

Revenue was $11.0 million, as compared to $8.7 million for the three months ended June 30, 2012, an increase of $2.3 million, or 26%.

Cost of revenue, exclusive of depreciation and amortization, was $3.2 million (29% of revenue), as compared to $3.1 million (35% of revenue) for the three months ended June 30, 2012, marking a period-over-period change of $0.1 million, or 3% (6% of revenue).

Operating loss was $(1.0) million, as compared to $(3.4) million for the three months ended June 30, 2012, an improvement of $2.4 million.

Consolidated net loss was $1.3 million, which includes $1.5 million of non-cash and/or non-operating charges, resulting in Non-GAAP Adjusted EBITDA of $0.2 million, as compared to a consolidated net loss of $3.5 million, which includes $2.0 million of non-cash and/or non-operating charges, resulting in Non-GAAP Adjusted EBITDA of $(1.5) million for the three months ended June 30, 2012, marking a period-over-period improvement in Non-GAAP Adjusted EBITDA of $1.7 million.

Financial Results for the Six Months Ended June 30, 2013:

Revenue was $22.9 million, as compared to $19.1 million for the six months ended June 30, 2012, an increase of $3.8 million, or 20%.

Cost of revenue, exclusive of depreciation and amortization, was $6.6 million (29% of revenue), as compared to $7.6 million (40% of revenue) for the six months ended June 30, 2012, marking a period-over-period improvement of $1.0 million, or 13% (11% of revenue).

Operating loss was $(1.2) million, as compared to $(6.8) million for the six months ended June 30, 2012, an improvement of $5.6 million.

Consolidated net loss was $1.6 million, which includes $2.7 million of non-cash and/or non-operating charges, resulting in Non-GAAP Adjusted EBITDA of $1.1 million, as compared to a consolidated net loss of $7.0 million, which includes $3.5 million of non-cash and/or non-operating charges, resulting in Non-GAAP Adjusted EBITDA of $(3.5) million for the six months ended June 30, 2012, marking a period-over-period improvement in Non-GAAP Adjusted EBITDA of $4.6 million.

As of June 30, 2013, we had $9.4 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, discounts on convertible note 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: Three months ended Six months ended June 30, June 30, 2013 2012 2013 2012 $ $ $ $ ---------- ---------- ---------- ----------Consolidated net loss on a GAAP basis (1,317,594) (3,485,657) (1,600,461) (7,030,020)Depreciation and amortization 972,047 1,182,217 1,997,189 2,420,818Stock-based compensation 233,210 681,445 354,836 914,869Discount on convertible note 155,847 0 233,769 0Income taxes 87,845 90,000 105,290 217,000Interest and foreign exchange 35,536 14,728 53,651 26,362 ---------- ---------- ---------- ----------Non-GAAP Adjusted EBITDA 166,891 (1,517,267) 1,144,274 (3,450,971) ========== ========== ========== ==========




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. 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. These factors should be considered carefully and readers should not place undue reliance on the forward-looking statements. 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. CONDENSED CONSOLIDATED BALANCE SHEETS (Expressed in U.S. dollars, unless otherwise noted) June 30, December 31, 2013 2012 (unaudited) $ $ ------------ ------------ASSETSCurrentCash and cash equivalents 9,407,672 11,108,107Accounts receivable, net of allowance for doubtful accounts of $136,432 and $85,882 2,801,662 4,193,949Other receivables 350,404 348,891Inventory 307,615 416,541Prepaid expenses and deposits 1,001,605 1,185,051Due from related parties 745,442 899,967 ------------ ------------Total current assets 14,614,400 18,152,506Property, plant and equipment, net 3,146,602 3,446,648Intangible assets, net 2,717,089 4,015,301Goodwill 11,327,626 11,327,626Other assets 85,171 161,913 ------------ ------------Total assets 31,890,888 37,103,994 ============ ============LIABILITIES AND EQUITYCurrentAccounts payable 6,527,181 9,813,237Accrued liabilities 5,104,123 4,766,668Due to related parties 13,467 12,282Deferred revenue 4,379,193 5,715,102Convertible note, net of discount - 320,560 ------------ ------------Total current liabilities 16,023,964 20,627,849Long-term deferred revenue 1,118,517 1,134,075Other long-term liabilities 313,892 357,852Deferred tax liability 1,009,422 911,978 ------------ ------------Total liabilities 18,465,795 23,031,754 ------------ ------------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, issued and outstanding: 17,176,818) 10,000,000 10,000,000 Class 4 Preference Shares (par value: $0.01; authorized, issued and outstanding: 10,912,265) 4,909,729 4,894,683 ------------ ------------Total redeemable preferred stock 14,909,729 14,894,683 ------------ ------------Stockholders' deficitCommon stock (par value: $0.01; authorized: 300,000,000; issued and outstanding: 167,317,051 and 164,207,147, respectively) 1,673,171 1,642,072Additional paid-in capital 84,045,306 83,138,137Promissory notes receivable (209,250) (209,250)Accumulated deficit (86,993,863) (85,393,402) ------------ ------------Total stockholders' deficit (1,484,636) (822,443) ------------ ------------Total liabilities and stockholders' deficit 31,890,888 37,103,994 ============ ============ NEULION, INC. CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS (unaudited) (Expressed in U.S. dollars, unless otherwise noted) Three months Six months ended ended June 30, June 30, -------------------------- -------------------------- 2013 2012 2013 2012 $ $ $ $ ------------ ------------ ------------ ------------Revenue Services revenue 10,756,801 8,202,133 22,431,158 18,033,487 Equipment revenue 279,429 514,793 505,021 1,051,955 ------------ ------------ ------------ ------------ 11,036,230 8,716,926 22,936,179 19,085,442 ------------ ------------ ------------ ------------Costs and expenses Cost of services revenue, exclusive of depreciation and amortization shown separately below 3,038,290 2,676,978 6,288,583 6,724,521 Cost of equipment revenue 181,725 390,227 347,219 856,919 Selling, general and administrative, including stock- based compensation 6,009,154 6,082,672 11,938,192 12,509,531 Research and development 1,873,380 1,765,761 3,572,747 3,360,311 Depreciation and amortization 972,047 1,182,217 1,997,189 2,420,818 ------------ ------------ ------------ ------------ 12,074,596 12,097,855 24,143,930 25,872,100 ------------ ------------ ------------ ------------Operating loss (1,038,366) (3,380,929) (1,207,751) (6,786,658)Other income (expense) Loss on foreign exchange (33,395) (16,558) (47,206) (30,439) Interest (2,141) 1,830 (6,445) 4,077 Discount on convertible note (155,847) - (233,769) - ------------ ------------ ------------ ------------ (191,383) (14,728) (287,420) (26,362) ------------ ------------ ------------ ------------Net and comprehensive loss before income taxes (1,229,749) (3,395,657) (1,495,171) (6,813,020) Income taxes (87,845) (90,000) (105,290) (217,000) ------------ ------------ ------------ ------------Net and comprehensive loss (1,317,594) (3,485,657) (1,600,461) (7,030,020) ============ ============ ============ ============Net loss per weighted average number of shares outstanding - basic and diluted $ (0.01) $ (0.02) $ (0.01) $ (0.05) ============ ============ ============ ============Weighted average number of shares outstanding - basic and diluted 165,005,548 140,866,631 164,608,553 140,520,157 ============ ============ ============ ============ NEULION, INC. CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (unaudited) (Expressed in U.S. dollars, unless otherwise noted) Three months Six months ended ended June 30, June 30, ---------------------- ---------------------- 2013 2012 2013 2012 $ $ $ $ ---------- ---------- ---------- ----------OPERATING ACTIVITIESNet loss (1,317,594) (3,485,657) (1,600,461) (7,030,020)Adjustments to reconcile net loss to net cash used in operating activities Depreciation and amortization 972,047 1,182,217 1,997,189 2,420,818 Discount on convertible note 155,847 - 233,769 - Stock-based compensation 233,210 681,445 354,836 914,869 Income taxes 80,000 90,000 97,444 217,000Changes in operating assets and liabilities Accounts receivable 1,640,985 691,310 1,392,287 1,323,782 Inventory 242,725 137,704 108,926 43,212 Prepaid expenses, deposits and other assets (61,372) (24,653) 260,188 151,382 Other receivables (3,841) (40,002) (1,513) (5,693) Due from related parties 28,230 (456,913) 154,525 (660,422) Accounts payable (6,528,600) (1,641,215) (3,286,056) (1,716,274) Accrued liabilities 283,902 (1,157,255) 380,764 (647,927) Deferred revenue (1,434,406) (121,742) (1,351,467) (1,830,053) Long-term liabilities (21,919) (22,372) (43,960) (42,406) Due to related parties 638 (6,035) 1,185 (3,077) ---------- ---------- ---------- ----------Cash used in operating activities (5,730,148) (4,173,168) (1,302,344) (6,864,809) ---------- ---------- ---------- ----------INVESTING ACTIVITIESPurchase of property, plant and equipment (72,679) (86,187) (398,931) (408,235) ---------- ---------- ---------- ----------Cash used in investing activities (72,679) (86,187) (398,931) (408,235) ---------- ---------- ---------- ----------FINANCING ACTIVITIESExercise of broker warrants 840 - 840 - ---------- ---------- ---------- ----------Cash provided by financing activities 840 - 840 - ---------- ---------- ---------- ----------Net decrease in cash and cash equivalents during the period (5,801,987) (4,259,355) (1,700,435) (7,273,044)Cash and cash equivalents, beginning of period 15,209,659 9,333,193 11,108,107 12,346,882 ---------- ---------- ---------- ----------Cash and cash equivalents, end of period 9,407,672 5,073,838 9,407,672 5,073,838 ========== ========== ========== ==========



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