CARLSBAD, Calif., Aug. 3, 2016 /PRNewswire/ -- NTN Buzztime,
Inc. (NYSE MKT: NTN), reported financial results for the second
quarter ended June 30, 2016.
"We are making progress on a number of fronts, most importantly,
our primary focus of menu and payment at Buffalo Wild Wings," said
Ram Krishnan, NTN Buzztime CEO. "Deployment has been smooth, and we
are very encouraged by our market testing at 15 stores. We believe
we are achieving the desired guest entertainment and satisfaction
as well as providing the operational insights through our data
platform. In addition, we continue to advance strategic
partnerships with the Washington Redskins, Fanduel and others that
we expect to cultivate and then emulate in other advertising
opportunities."
"As projected, the first half of this year has been a building
period. During the second quarter, new site growth was outweighed
by attrition from our classic playmaker sites and related to Gen II
hardware. However, sequentially revenue was relatively flat,
average revenue per unit increased and gross margins improved. Our
rigor on investment choices and cost management programs improved
net loss, yielded positive EBITDA and generated over $500,000 in quarterly cash from operations.
Furthermore, to drive future sales to independents and small
chains, we formed a distribution partnership with Digital Dining
that sells primarily to smaller venues and through a dealer network
reaching 50,000 hospitality customers. We are excited about
all of these opportunities that we expect to grow long-term
shareholder value."
Financial Results for the Second-Quarter Ended June 30, 2016
Total revenues were
$5.4 million for the second quarter
of 2016, compared to $5.5 million for
the first quarter of 2016 and $6.2
million for the second quarter of 2015 primarily reflecting
lower sales-type lease arrangements. Second quarter 2016
direct costs were $1.8 million, down
from $3.4 million for the same period
in 2015 due to the lower sales-type lease revenue levels as well as
improved production costs and lower scrap and repair costs. As a
result, gross margin increased to 66%, up from 45% in the prior
year quarter. Selling, general and administrative expenses
decreased to $4.2 million from
$4.9 million for the same period in
2015 reflecting a leaner company structure. Net loss was
$850,000, or $0.46 per share, which improved from $2.6 million, or $1.43 per share, for the second quarter of
2015. EBITDA was $38,000, which
improved from an EBITDA loss of $1.7
million in the same period last year.
EBITDA is defined as earnings before interest, taxes,
depreciation and amortization and is not intended to represent a
measure of performance in accordance with accounting principles
generally accepted in the United
States (GAAP). Although EBITDA is positive for the
second quarter of 2016, EBITDA may not be positive for the third
quarter of 2016 or future quarters. A detailed description and
reconciliation of EBITDA and management's reasons for using this
measure is set forth at the end of this press release.
Metric Review for the Quarter Ended June 30, 2016
The site count was 2,859
venues and, as expected, decreased compared to 2,903 as of
March 31, 2016. Management
anticipates the net count will continue to fluctuate. As of
June 30, 2016, BEOND platform
installations increased to 1,922 locations, or 67% of the installed
base, compared to 1,879, or 65% of the installed base, as of
March 31, 2016.
Liquidity
Cash and cash equivalents were $3.6 million at June 30,
2016, compared to $3.2 million
as of December 31, 2015. This
includes positive cash flow from operating activities of
$13,000 during that six-month period,
and over $500,000 in the second
quarter of 2016.
Conference Call
Management will review the results on
a conference call with a live question and answer session today,
August 3, 2016, at 4:30 p.m. ET. To access the call, please use
passcode 53413626 and dial:
- (877) 307-1373 for the live call and (855) 859-2056 for the
replay, if calling from the United
States or Canada; or
- (678) 224-7873 for the live call and (404) 537-3406 for the
replay, if calling internationally.
The call will also be accompanied live by webcast over the
Internet and accessible at the company's website at
http://www.buzztime.com. The replay of the call will be
available until August 10, 2016.
Forward-looking Statements
This release
contains forward-looking statements which reflect management's
current views of future events and operations, including but not
limited to statements about our growth plans, product
performance, delivery of menu and payment technology, operational
efficiencies, guest experience, and additional revenue
streams. These statements are based on current expectations
and assumptions that are subject to risks and uncertainties that
could cause actual results to differ materially. These risks and
uncertainties include the risks of unsuccessful execution or launch
of products, platforms or brands, risks associated with customer
retention and growth plans, the impact of alternative entertainment
options and technologies and competitive products, brands,
technologies and pricing, adverse economic conditions, the
regulatory environment and changes in the law, failure of customer
and/or player acceptance or demand for new or existing products,
lower market acceptance or appeal of both existing and new products
and services by particular demographic groups or audiences as a
whole, termination of partnership and contractual relationships and
technical problems or outages. Please see NTN Buzztime, Inc.'s
recent filings with the Securities and Exchange Commission for
information about these and other risks that may affect the
Company. All forward-looking statements included in this release
are based on information available to us on the date hereof. These
statements speak only as of the date hereof and NTN Buzztime, Inc.
does not undertake to publicly update or revise any of its
forward-looking statements, even if experience or future changes
show that the indicated results or events will not be
realized.
About Buzztime:
Buzztime (NYSE MKT: NTN) delivers
interactive entertainment and innovative dining technology to bars
and restaurants in North America.
Venues license Buzztime's customizable solution to differentiate
themselves via competitive fun by offering guests trivia, card,
sports and arcade games, nationwide competitions, personalized
menus and self-service dining features. Buzztime's platform
improves operating efficiencies, creates connections among the
players and venues, and amplifies guests' positive experiences.
Founded in 1984, Buzztime has accumulated over 9 million player
registrations and over 115 million games were played in 2015 alone.
For more information, please visit http://www.buzztime.com or
follow us on Facebook or Twitter @buzztime.
IR AGENCY CONTACT:
Kirsten
Chapman/Becky Herrick, LHA
Investor Relations
buzztime@lhai.com
415-433-3777
NTN BUZZTIME, INC.
AND SUBSIDIARIES
|
CONDENSED
Consolidated Balance Sheets
|
(Unaudited)
|
(In thousands,
except par value amount)
|
|
|
|
|
ASSETS
|
June
30,
2016
|
|
December
31,
2015
|
Current
Assets:
|
|
|
|
Cash and cash
equivalents
|
$
3,571
|
|
$
3,223
|
Accounts receivable,
net
|
641
|
|
919
|
Site equipment to be
installed
|
2,985
|
|
3,990
|
Prepaid expenses and
other current assets
|
1,027
|
|
978
|
Total current
assets
|
8,224
|
|
9,110
|
|
|
|
|
Fixed assets,
net
|
3,511
|
|
3,915
|
Software development
costs, net
|
904
|
|
943
|
Deferred
costs
|
1,188
|
|
1,328
|
Goodwill
|
973
|
|
909
|
Intangible assets,
net
|
54
|
|
79
|
Other
assets
|
102
|
|
124
|
Total
assets
|
$
14,956
|
|
$
16,408
|
|
|
|
|
LIABILITIES AND
SHAREHOLDERS' EQUITY
|
|
|
|
Current
Liabilities:
|
|
|
|
Accounts
payable
|
$
379
|
|
$
211
|
Accrued
compensation
|
821
|
|
1,024
|
Accrued
expenses
|
529
|
|
670
|
Sales taxes
payable
|
114
|
|
192
|
Income taxes
payable
|
13
|
|
22
|
Current portion of
long-term debt
|
3,014
|
|
1,072
|
Current portion of
obligations under capital leases
|
75
|
|
78
|
Current portion of
deferred revenue
|
1,353
|
|
1,214
|
Other current
liabilities
|
284
|
|
639
|
Total current
liabilities
|
6,582
|
|
5,122
|
|
|
|
|
Long-term
debt
|
5,227
|
|
6,366
|
Obligations under
capital leases
|
120
|
|
138
|
Deferred
revenue
|
279
|
|
393
|
Deferred
rent
|
460
|
|
541
|
Other
liabilities
|
4
|
|
--
|
Total
liabilities
|
12,672
|
|
12,560
|
|
|
|
|
Commitments and
contingencies
|
|
|
|
|
|
|
|
Shareholders'
equity:
|
|
|
|
Series A 10%
cumulative convertible preferred stock, $0.005 par value, $156
liquidation preference, 5,000 shares authorized; 156 shares issued
and outstanding at June 30, 2016 and December 31, 2015
|
1
|
|
1
|
Common stock, $0.005
par value, 168,000 shares authorized at June 30, 2016 and December
31, 2015; 1,849 shares issued and outstanding at June 30, 2016 and
December 31, 2015
|
9
|
|
9
|
Treasury stock, at
cost, 10 shares at June 30, 2016 and December 31, 2015
|
(456)
|
|
(456)
|
Additional paid-in
capital
|
129,429
|
|
129,209
|
Accumulated
deficit
|
(126,986)
|
|
(125,087)
|
Accumulated other
comprehensive income
|
287
|
|
172
|
Total shareholders'
equity
|
2,284
|
|
3,848
|
Total liabilities and
shareholders' equity
|
$
14,956
|
|
$
16,408
|
|
|
|
|
NTN BUZZTIME, INC.
AND SUBSIDIARIES
|
CONDENSED
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE
LOSS
|
(Unaudited)
|
(In
thousands, except per share data)
|
|
|
|
|
|
Three months
ended
June
30,
|
|
Six months
ended
June
30,
|
|
2016
|
|
2015
|
|
2016
|
|
2015
|
Revenues
|
|
|
|
|
|
|
|
Subscription
revenue
|
$
4,355
|
|
$
4,202
|
|
$
8,729
|
|
$
8,402
|
Sales-type lease
revenue
|
301
|
|
1,251
|
|
697
|
|
2,091
|
Other
revenue
|
751
|
|
740
|
|
1,463
|
|
1,426
|
Total
revenues
|
5,407
|
|
6,193
|
|
10,889
|
|
11,919
|
|
|
|
|
|
|
|
|
Operating
expenses:
|
|
|
|
|
|
|
|
Direct operating costs
(includes depreciation and amortization)
|
1,840
|
|
3,379
|
|
3,876
|
|
6,028
|
Selling, general and
administrative
|
4,153
|
|
4,868
|
|
8,353
|
|
10,030
|
Impairment of
capitalized software
|
--
|
|
295
|
|
--
|
|
295
|
Depreciation and
amortization (excluding depreciation and amortization included in
direct costs
|
110
|
|
123
|
|
224
|
|
244
|
Total operating
expenses
|
6,103
|
|
8,665
|
|
12,453
|
|
16,597
|
Operating
loss
|
(696)
|
|
(2,472)
|
|
(1,564)
|
|
(4,678)
|
Other expense,
net
|
(149)
|
|
(139)
|
|
(303)
|
|
(182)
|
Loss before income
taxes
|
(845)
|
|
(2,611)
|
|
(1,867)
|
|
(4,860)
|
Provision for income
taxes
|
(5)
|
|
(14)
|
|
(24)
|
|
(28)
|
Net loss
|
$
(850)
|
|
$
(2,625)
|
|
$
(1,891)
|
|
$ (4,888)
|
|
|
|
|
|
|
|
|
Net loss per common
share – basic and diluted
|
$
(0.46)
|
|
$
(1.43)
|
|
$
(1.03)
|
|
$
(2.66)
|
|
|
|
|
|
|
|
|
Weighted average
shares outstanding – basic and diluted
|
1,839
|
|
1,838
|
|
1,839
|
|
1,838
|
|
|
|
|
|
|
|
|
Comprehensive
loss:
|
|
|
|
|
|
|
|
Net loss
|
$
(850)
|
|
$
(2,625)
|
|
$
(1,891)
|
|
$
(4,888)
|
Foreign currency
translations adjustment
|
2
|
|
42
|
|
115
|
|
(111)
|
Total comprehensive
loss
|
$
(848)
|
|
$
(2,583)
|
|
$
(1,776)
|
|
$
(4,999)
|
|
|
|
|
|
|
|
|
NTN BUZZTIME, INC.
AND SUBSIDIARIES
|
CONDENSED
CONSOLIDATED STATEMENTS OF CASH FLOWS
|
(Unaudited)
|
(In
thousands)
|
|
|
Six months
ended
June
30,
|
|
2016
|
|
2015
|
Cash flows provided
by (used in) operating activities:
|
|
|
|
Net loss
|
$ (1,891)
|
|
$ (4,888)
|
Adjustments to
reconcile net loss to net cash used in operating
activities:
|
|
|
|
Depreciation and
amortization
|
1,487
|
|
1,421
|
Provision for doubtful
accounts
|
24
|
|
12
|
Excess and obsolete
site equipment to be installed expense
|
27
|
|
607
|
Stock-based
compensation
|
223
|
|
218
|
Amortization of debt
issuance costs
|
18
|
|
4
|
Issuance of common
stock to consultant in lieu of cash payment
|
--
|
|
1
|
Impairment of
capitalized software
|
--
|
|
295
|
Loss from disposition
of equipment
|
6
|
|
5
|
Changes in assets and
liabilities:
|
|
|
|
Accounts
receivable
|
254
|
|
1,626
|
Site equipment to be
installed
|
265
|
|
388
|
Prepaid expenses and
other liabilities
|
131
|
|
67
|
Accounts payable and
accrued expenses
|
(254)
|
|
(251)
|
Income taxes
payable
|
(10)
|
|
(27)
|
Deferred
costs
|
141
|
|
(207)
|
Deferred
revenue
|
27
|
|
--
|
Deferred
rent
|
(81)
|
|
(72)
|
Other
liabilities
|
(354)
|
|
(334)
|
Net cash provided by
(used in) operating activities
|
13
|
|
(1,135)
|
|
|
|
|
Cash flows used in
investing activities:
|
|
|
|
Capital
expenditures
|
(291)
|
|
(445)
|
Software development
expenditures
|
(175)
|
|
(379)
|
Proceeds from the sale
of equipment
|
--
|
|
9
|
Net cash used in
investing activities
|
(466)
|
|
(815)
|
|
|
|
|
Cash flows provided
by financing activities:
|
|
|
|
Proceeds from
long-term debt
|
2,114
|
|
4,574
|
Payment on long-term
debt
|
(1,311)
|
|
(4,267)
|
Debit issuance costs
of long-term deb
|
(2)
|
|
(81)
|
Principal payments on
capital lease
|
(42)
|
|
(23)
|
Payment to cashed-out
stockholders in connection with
reverse/forward stock split
|
(3)
|
|
--
|
Payment of preferred
stockholder dividends
|
(8)
|
|
--
|
Proceeds from exercise
of stock options
|
--
|
|
1
|
Net cash provided by
investing activities
|
748
|
|
204
|
Net increase
(decrease) in cash and cash equivalents
|
295
|
|
(1,746)
|
Effect of exchange
rate on cash
|
53
|
|
(48)
|
Cash and cash
equivalents at beginning of period
|
3,223
|
|
7,185
|
Cash and cash
equivalents at end of period
|
3,571
|
|
5,391
|
|
|
|
|
Non-GAAP Information
A schedule reconciling the Company's consolidated net loss
calculated in accordance with GAAP to EBITDA is included in the
supplemental table below. The Company defines EBITDA as earnings
before interest, taxes, depreciation and amortization. EBITDA is
not intended to represent a measure of performance in accordance
with GAAP, nor should EBITDA be considered as an alternative to
statements of cash flows as a measure of liquidity. EBITDA is
included herein because the Company believes it is a measure of
operating performance that financial analysts, lenders, investors
and other interested parties find to be a useful tool for analyzing
companies like Buzztime that carry significant levels of non-cash
depreciation and amortization charges in comparison to their net
income or loss calculation in accordance with GAAP.
The following table reconciles our net loss per GAAP (in
thousands) to EBITDA:
|
Three months
ended
June
30,
|
|
Six months
ended
June
30,
|
|
2016
|
|
2015
|
|
2016
|
|
2015
|
Net loss per
GAAP
|
$
(850)
|
|
$ (2,625)
|
|
$ (1,891)
|
|
$ (4,888)
|
Interest expense,
net
|
153
|
|
182
|
|
280
|
|
284
|
Income tax
provision
|
5
|
|
14
|
|
24
|
|
28
|
Depreciation and
amortization
|
730
|
|
720
|
|
1,487
|
|
1,421
|
Total
EBITDA
|
$
38
|
|
$ (1,709)
|
|
$
(100)
|
|
$ (3,155)
|
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SOURCE NTN Buzztime, Inc.