CARLSBAD, Calif., Nov. 8, 2016 /PRNewswire/ -- NTN Buzztime,
Inc. (NYSE MKT: NTN), reported financial results for the third
quarter ended November 30, 2016.
"During the third quarter, our business fundamentals gained
momentum," said Ram Krishnan, NTN Buzztime CEO. "Our overall
average revenue per unit (ARPU) continued to climb; our advertising
revenue grew; our gross margins continued to be healthy; and our
Gen III tablets continued to deploy well into the field. As a
result, Buzztime delivered another quarter of bottom line
improvement. Further, in November, management along with new and
existing investors demonstrated confidence in our plan by infusing
$2.7 million in capital into the
company for general operations and growth investments. We are very
excited about our prospects."
Financial Results for the Third-Quarter Ended September 30, 2016
Total revenues were
$5.4 million for the third quarter of
2016, stable compared to $5.4 million
for the second quarter of 2016 and down compared to $6.1 million for the third quarter of 2015
primarily reflecting expected lower sales-type lease arrangements
that offset increases in subscription revenues. Direct costs were
$1.7 million, down from $3.2 million for the same period in 2015 due to
the lower sales-type lease revenue levels as well as reduced
production costs and lower scrap and repair costs. As a result,
gross margin increased to 68%, up from 47% in the prior year
quarter. Selling, general and administrative expenses were
$4.0 million for the third quarter of
2016 compared to $4.1 million for the
third quarter of 2015. Net loss was $573,000, or $0.31
per share, which improved from $1.3
million, or $0.73 per share,
for the third quarter of 2015. EBITDA was $288,000, which improved from an EBITDA loss of
$526,000 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 third quarter of 2016, EBITDA may not be positive in
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 September 30,
2016
The site count was 2,848 venues and, as expected,
decreased compared to 2,859 as of June 30,
2016. Management anticipates the net count will continue to
fluctuate. As of September 30, 2016,
BEOND platform installations increased to 1,968 locations, or 69%
of the installed base, compared to 1,922, or 67% of the installed
base, as of June 30, 2016.
Liquidity
Cash and cash equivalents were $3.0 million at September
30, 2016, compared to $3.2
million as of December 31,
2015. On November
4th, the company raised $2.7 million in net proceeds in a registered
direct offering to including new and existing shareholders as well
as management. The company sold 412,071 shares of its common
stock to the investors at a per share purchase price of $6.64,
which was the closing price of the common stock on October 31,
2016.
Conference Call
Management will review the results on
a conference call with a live question and answer session today,
November 8, 2016, at 4:30 p.m. ET. To access the call, please use
passcode 9183970 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 November 15,
2016.
Forward-looking Statements
This release
contains forward-looking statements which reflect management's
current views of future events and operations. 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
|
September
30,
2016
|
|
December
31,
2015
|
|
Current
Assets:
|
|
|
|
|
Cash and cash
equivalents
|
$
3,016
|
|
$
3,223
|
|
Accounts receivable,
net
|
898
|
|
919
|
|
Site equipment to be
installed
|
2,912
|
|
3,990
|
|
Prepaid expenses and
other current assets
|
935
|
|
978
|
|
Total current
assets
|
7,761
|
|
9,110
|
|
|
|
|
|
Fixed assets,
net
|
3,467
|
|
3,915
|
|
Software development
costs, net
|
1,021
|
|
943
|
|
Deferred
costs
|
1,048
|
|
1,328
|
|
Goodwill
|
959
|
|
909
|
|
Intangible assets,
net
|
42
|
|
79
|
|
Other
assets
|
100
|
|
124
|
|
|
|
|
|
Total
assets
|
$
14,398
|
|
$
16,408
|
|
|
|
|
|
LIABILITIES AND
SHAREHOLDERS' EQUITY
|
|
|
|
|
Current
Liabilities:
|
|
|
|
|
Accounts
payable
|
$
430
|
|
$
211
|
|
Accrued
compensation
|
788
|
|
1,024
|
|
Accrued
expenses
|
529
|
|
670
|
|
Sales taxes
payable
|
155
|
|
192
|
|
Income taxes
payable
|
11
|
|
22
|
|
Current portion of
long-term debt
|
2,917
|
|
1,072
|
|
Current portion of
obligations under capital leases
|
136
|
|
78
|
|
Current portion of
deferred revenue
|
1,379
|
|
1,214
|
|
Other current
liabilities
|
215
|
|
639
|
|
Total current
liabilities
|
6,560
|
|
5,122
|
|
|
|
|
|
Long-term
debt
|
5,068
|
|
6,366
|
|
Obligations under
capital leases
|
295
|
|
138
|
|
Deferred
revenue
|
262
|
|
393
|
|
Deferred
rent
|
415
|
|
541
|
|
Other
liabilities
|
4
|
|
--
|
|
Total
liabilities
|
12,604
|
|
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 September 30, 2016 and December 31,
2015
|
1
|
|
1
|
|
Common stock, $0.005
par value, 168,000 shares authorized at September 30, 2016 and
December 31, 2015; 1,849 shares issued and outstanding at September
30, 2016 and December 31, 2015
|
9
|
|
9
|
|
Treasury stock, at
cost, 10 shares at September 30, 2016 and December 31,
2015
|
(456 )
|
|
(456 )
|
|
Additional paid-in
capital
|
129,537
|
|
129,209
|
|
Accumulated
deficit
|
(127,559 )
|
|
(125,087 )
|
|
Accumulated other
comprehensive income
|
262
|
|
172
|
|
Total shareholders'
equity
|
1,794
|
|
3,848
|
|
|
|
|
|
Total liabilities and
shareholders' equity
|
$
14,398
|
|
$
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
September
30,
|
|
Nine months
ended
September
30,
|
|
2016
|
|
2015
|
|
2016
|
|
2015
|
|
Revenues
|
|
|
|
|
|
|
|
|
Subscription
revenue
|
$
4,378
|
|
$
4,268
|
|
$
13,107
|
|
$ 12,670
|
|
Sales-type lease
revenue
|
142
|
|
984
|
|
839
|
|
3,075
|
|
Other
revenue
|
923
|
|
827
|
|
2,386
|
|
2,253
|
|
Total
revenues
|
5,443
|
|
6,079
|
|
16,332
|
|
17,998
|
|
|
|
|
|
|
|
|
|
Operating
expenses:
|
|
|
|
|
|
|
|
|
Direct operating costs
(includes depreciation and amortization)
|
1,747
|
|
3,196
|
|
5,623
|
|
9,224
|
|
Selling, general and
administrative
|
4,007
|
|
4,076
|
|
12,360
|
|
14,106
|
|
Impairment of
capitalized software
|
--
|
|
--
|
|
--
|
|
295
|
|
Depreciation and
amortization (excluding depreciation and amortization included in
direct costs
|
103
|
|
121
|
|
327
|
|
365
|
|
Total operating
expenses
|
5,857
|
|
7,393
|
|
18,310
|
|
23,990
|
|
Operating
loss
|
(414 )
|
|
(1,314 )
|
|
(1,978 )
|
|
(5,992 )
|
|
Other expense,
net
|
(152 )
|
|
(49 )
|
|
(455 )
|
|
(231 )
|
|
Loss before income
taxes
|
(566 )
|
|
(1,363 )
|
|
(2,433 )
|
|
(6,223 )
|
|
(Provision) benefit
for income taxes
|
(7 )
|
|
15
|
|
(31 )
|
|
(13 )
|
|
Net loss
|
$
(573 )
|
|
$ (1,348
)
|
|
$ (2,464
)
|
|
$ (6,236
)
|
|
|
|
|
|
|
|
|
|
Net loss per common
share – basic and diluted
|
$ (0.31
)
|
|
$ (0.73
)
|
|
$ (1.34
)
|
|
$ (3.39
)
|
|
|
|
|
|
|
|
|
|
Weighted average
shares outstanding – basic and diluted
|
1,839
|
|
1,838
|
|
1,839
|
|
1,838
|
|
|
|
|
|
|
|
|
|
Comprehensive
loss:
|
|
|
|
|
|
|
|
|
Net loss
|
$
(573 )
|
|
$ (1,348
)
|
|
$ (2,464
)
|
|
$ (6,236
)
|
|
Foreign currency
translations adjustment
|
(25 )
|
|
(140 )
|
|
90
|
|
(251 )
|
|
Total comprehensive
loss
|
$
(598 )
|
|
$ (1,488
)
|
|
$ (2,374
)
|
|
$ (6,487
)
|
|
|
|
|
|
|
|
|
|
NTN BUZZTIME, INC.
AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF
CASH FLOWS
(Unaudited)
(In
thousands)
|
|
Nine months
ended
September
30,
|
|
2016
|
|
2015
|
|
Cash flows provided
by (used in) operating activities:
|
|
|
|
|
Net loss
|
$ (2,464 )
|
|
$ (6,236 )
|
|
Adjustments to
reconcile net loss to net cash used in operating
activities:
|
|
|
|
|
Depreciation and
amortization
|
2,191
|
|
2,172
|
|
Provision for doubtful
accounts
|
67
|
|
(2 )
|
|
Excess and obsolete
site equipment to be installed expense
|
38
|
|
680
|
|
Stock-based
compensation
|
331
|
|
341
|
|
Amortization of debt
issuance costs
|
27
|
|
11
|
|
Issuance of common
stock to consultant in lieu of cash payment
|
--
|
|
1
|
|
Impairment of
capitalized software
|
--
|
|
295
|
|
Loss from disposition
of equipment
|
16
|
|
28
|
|
Changes in assets and
liabilities:
|
|
|
|
|
Accounts
receivable
|
(46 )
|
|
1,610
|
|
Site equipment to be
installed
|
26
|
|
(403 )
|
|
Prepaid expenses and
other liabilities
|
224
|
|
(263 )
|
|
Accounts payable and
accrued expenses
|
(194 )
|
|
(51 )
|
|
Income taxes
payable
|
(12 )
|
|
(57 )
|
|
Deferred
costs
|
281
|
|
(252 )
|
|
Deferred
revenue
|
36
|
|
183
|
|
Deferred
rent
|
(125 )
|
|
(112 )
|
|
Other
liabilities
|
(424 )
|
|
(168)
|
|
Net cash provided by
(used in) operating activities
|
(28 )
|
|
(2,223 )
|
|
|
|
|
|
Cash flows used in
investing activities:
|
|
|
|
|
Capital
expenditures
|
(306 )
|
|
(781 )
|
|
Software development
expenditures
|
(378 )
|
|
(520 )
|
|
Proceeds from the sale
of equipment
|
--
|
|
9
|
|
Net cash used in
investing activities
|
(684 )
|
|
(1,292 )
|
|
|
|
|
|
Cash flows provided
by financing activities:
|
|
|
|
|
Proceeds from
long-term debt
|
2,114
|
|
5,638
|
|
Payment on long-term
debt
|
(1,568 )
|
|
(4,396 )
|
|
Debit issuance costs
of long-term deb
|
(8 )
|
|
(81 )
|
|
Principal payments on
capital lease
|
(63 )
|
|
(39 )
|
|
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
|
464
|
|
1,123
|
|
|
|
|
|
Net increase
(decrease) in cash and cash equivalents
|
(248 )
|
|
(2,392 )
|
|
Effect of exchange
rate on cash
|
41
|
|
(115 )
|
|
Cash and cash
equivalents at beginning of period
|
3,223
|
|
7,185
|
|
Cash and cash
equivalents at end of period
|
3,016
|
|
4,678
|
|
|
|
|
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
September
30,
|
|
Nine months
ended
September
30,
|
|
2016
|
|
2015
|
|
2016
|
|
2015
|
|
Net loss per
GAAP
|
$
(573 )
|
|
$ (1,348
)
|
|
$ (2,464
)
|
|
$ (6,236 )
|
|
Interest expense,
net
|
150
|
|
86
|
|
430
|
|
370
|
|
Income tax
provision
|
7
|
|
(15 )
|
|
31
|
|
13
|
|
Depreciation and
amortization
|
704
|
|
751
|
|
2,191
|
|
2,172
|
|
Total
EBITDA
|
$
288
|
|
$
(526 )
|
|
$
188
|
|
$ (3,681 )
|
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SOURCE NTN Buzztime, Inc.