CARLSBAD, Calif., Aug. 9, 2019 /PRNewswire/ -- NTN Buzztime, Inc.
(NYSE American: NTN), reported financial results for the
second quarter ended June 30,
2019.
"During the second quarter, Buzztime Entertainment improved net
loss compared to the prior year period and delivered its
13th consecutive quarter of positive EBITDA and gained
traction on three important growth initiatives," said Ram Krishnan,
NTN Buzztime CEO. "Upon test-marketing our new capital-light
product, called Buzztime Basic, we signed over 80 locations in the
first 75 days after it was released. After releasing a new mobile
app, we achieved over 37,000 downloads. We launched our new ad
platform in limited beta and began seeing transactions on the open
exchange, both on a local and national basis. In addition, we
completed a Nielsen study designed to measure the value of our
audience, revealing we have one of the largest place-based
advertising networks in the country and confirming we have a great
market opportunity."
"The investments we made in the tablet platform continue to pay
off in new markets. We've secured a second order from our jail
partner that provides for $3.0
million of revenue through 2020 and continue to see momentum
in our hardware and platform segment. In the third quarter, we will
reduce our SG&A run rate to help ensure our prudent use of
capital and keep our investments focused. Our new products present
an exciting trajectory for growth, and we believe we will be better
positioned to capture these market opportunities down the road,"
concluded Mr. Krishnan.
Financial Results for the Second Quarter Ended June 30, 2019
Total revenues were $5.2 million,
compared to $4.8 million in the first
quarter of 2019 and $5.7 million in
the second quarter of 2018. The year over year decrease reflects
lower subscription and professional development revenue, partially
offset by increases in advertising revenue. Direct costs were
$1.7 million, compared to
$1.9 million for the same period in
2018. Gross margin was 67%, compared to 66% for the same period in
2018, reflecting decreased equipment sales in the current period
that typically carry lower gross margins. Selling, general and
administrative expense decreased to $3.4
million, compared to $3.7
million in the prior year quarter, reflecting cost
management measures. Net loss attributable to common shareholders
was $98,000, or $0.03 per share, improved from a net loss
attributable to common shareholders of $132,000, or $0.05
per share, in the prior year quarter. Net loss was
$90,000, improved from a net loss of
$124,000 in the prior year
quarter. EBITDA was $686,000,
compared to $691,000 in the prior
year quarter.
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 this
quarter, it 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 June 30 , 2019
The site count was 2,609 at June 30,
2019, compared to 2,632 at March 31,
2019. Management anticipates that site count will continue
to fluctuate.
Liquidity
Cash, cash equivalents and restricted cash was $3.0 million at June 30,
2019, compared to $2.8 million
at December 31, 2018. For the first
six months in 2019, cash flow from operations was $1.3 million, increasing from $239,000 in the same period last year.
Conference Call
Management will review the results on a conference call with a live
question and answer session today, August 9,
2019, at 4:30 p.m. ET. To
access the call, please use passcode 8597009 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 that will be
accessible at the company's website at
http://www.buzztime.com/investors. The replay of the call
will be available until August 16,
2019.
Forward-looking Statements
This release contains forward-looking statements that reflect
management's current views of future events and operations,
including statements regarding the ability of the company's new
products to increase the company's growth, the impact of the
company's planned reduction in selling, general and administrative
expense, and management's view regarding the company's ability to
capture market opportunities. 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 American: NTN) delivers interactive entertainment
and innovative technology that helps its customers acquire, engage
and retain its patrons. Most frequently used in bars and
restaurants in North America, the
Buzztime tablets, mobile app and technology offer engaging
solutions to establishments that have guests who experience dwell
time, such as casinos, senior living, and more. Casual dining
venues license Buzztime's customizable solution to differentiate
themselves via competitive fun by offering guests trivia, card,
sports and arcade games. Buzztime's platform creates connections
among the players and venues and amplifies guests' positive
experiences. Buzztime's in-venue TV network creates one of the
largest digital out of home ad audiences in the US and Canada. Buzztime hardware solutions leverages
the company's experience manufacturing durable tablets and charging
systems, enabling a diverse group of businesses including
corrections, point-of-sale and loyalty with product
implementation. Buzztime games have also been recently
licensed by other businesses serving other markets. For more
information, please visit http://www.buzztime.com or
follow us on Facebook or Twitter@buzztime.
IR AGENCY CONTACT:
Kirsten Chapman, LHA Investor
Relations, buzztime@lhai.com 415-433-3777
NTN BUZZTIME, INC.
AND SUBSIDIARIES
|
Consolidated
Balance Sheets
|
(In thousands,
except par value amount)
|
|
ASSETS
|
June
30,
2019
|
|
December
31,
2018
|
Current
Assets:
|
(unaudited)
|
|
|
Cash and cash
equivalents
|
$
2,727
|
|
$
2,536
|
Restricted
cash
|
51
|
|
50
|
Accounts receivable,
net
|
732
|
|
1,143
|
Income taxes
receivable
|
8
|
|
--
|
Site equipment to be
installed
|
1,689
|
|
2,539
|
Prepaid expenses and
other current assets
|
506
|
|
517
|
Total current
assets
|
5,713
|
|
6,785
|
|
|
|
|
Restricted cash,
long-term
|
200
|
|
200
|
Operating lease
right-of-use assets
|
2,245
|
|
--
|
Fixed assets,
net
|
3,845
|
|
4,667
|
Software development
costs, net
|
2,464
|
|
2,018
|
Deferred
costs
|
377
|
|
424
|
Goodwill
|
695
|
|
667
|
Other
assets
|
100
|
|
103
|
|
|
|
|
Total
assets
|
$
15,639
|
|
$
14,864
|
|
|
|
|
LIABILITIES AND
SHAREHOLDERS' EQUITY
|
|
|
|
Current
Liabilities:
|
|
|
|
Accounts
payable
|
$
283
|
|
$
271
|
Accrued
compensation
|
632
|
|
572
|
Accrued
expenses
|
372
|
|
444
|
Sales taxes
payable
|
67
|
|
87
|
Income taxes
payable
|
--
|
|
1
|
Current portion of
long-term debt
|
1,083
|
|
1,000
|
Current portion of
obligations under operating leases
|
363
|
|
--
|
Current portion of
obligations under financing leases
|
25
|
|
45
|
Current portion of
deferred revenue
|
518
|
|
1,267
|
Other current
liabilities
|
231
|
|
337
|
Total current
liabilities
|
3,574
|
|
4,024
|
|
|
|
|
Long-term
debt
|
2,235
|
|
2,729
|
Obligations under
operating leases
|
3,090
|
|
--
|
Obligations under
financing leases
|
31
|
|
41
|
Deferred
revenue
|
17
|
|
30
|
Deferred
rent
|
--
|
|
1,123
|
Other
liabilities
|
25
|
|
--
|
Total
liabilities
|
8,972
|
|
7,947
|
|
|
|
|
Commitments and
contingencies
|
|
|
|
|
|
|
|
Shareholders'
equity:
|
|
|
|
Series A 10%
cumulative convertible preferred stock, $0.005 par value, $156
liquidation preference, 156 shares authorized; 156 shares issued
and outstanding at June 30, 2019 and December 31, 2018
|
1
|
|
1
|
Common stock, $0.005
par value, 15,000 shares authorized at June 30, 2019 and December
31, 2018; 2,882 and 2,875 shares issued at June 30, 2019 and
December 31, 2018, respectively
|
14
|
|
14
|
Treasury stock, at
cost, 10 shares at June 30, 2019 and December 31, 2018
|
(456 )
|
|
(456 )
|
Additional paid-in
capital
|
136,648
|
|
136,552
|
Accumulated
deficit
|
(129,805 )
|
|
(129,394 )
|
Accumulated other
comprehensive income
|
265
|
|
200
|
Total shareholders'
equity
|
6,667
|
|
6,917
|
|
|
|
|
Total liabilities and
shareholders' equity
|
$
15,639
|
|
$
14,864
|
NTN BUZZTIME, INC.
AND SUBSIDIARIES
|
CONSOLIDATED
STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS
|
(unaudited)
|
(In thousands,
except per share data)
|
|
|
Three months
ended
June
30,
|
|
Six months
ended
June
30,
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
Revenues
|
|
|
|
|
|
|
|
Subscription
revenue
|
$
3,800
|
|
$
4,041
|
|
$
7,633
|
|
$
8,106
|
Hardware
revenue
|
595
|
|
590
|
|
800
|
|
1,269
|
Other
revenue
|
831
|
|
1,020
|
|
1,625
|
|
2,037
|
Total
revenues
|
5,226
|
|
5,651
|
|
10,058
|
|
11,412
|
|
|
|
|
|
|
|
|
Operating
expenses:
|
|
|
|
|
|
|
|
Direct operating costs
(includes depreciation and amortization)
|
1,717
|
|
1,937
|
|
3,201
|
|
3,904
|
Selling, general and
administrative
|
3,422
|
|
3,658
|
|
6,891
|
|
7,679
|
Depreciation and
amortization (excluding depreciation and amortization included in
direct costs
|
89
|
|
83
|
|
185
|
|
169
|
Total operating
expenses
|
5,228
|
|
5,678
|
|
10,277
|
|
11,752
|
Operating
loss
|
(2 )
|
|
(27 )
|
|
(219 )
|
|
(340 )
|
Other expense,
net
|
(88 )
|
|
(73 )
|
|
(173 )
|
|
(167 )
|
Loss before income
taxes
|
(90 )
|
|
(100 )
|
|
(392 )
|
|
(507 )
|
Income tax
provision
|
--
|
|
(24 )
|
|
(11 )
|
|
(26 )
|
Net loss
|
(90 )
|
|
(124 )
|
|
(403 )
|
|
(533 )
|
Series A preferred
stock dividend
|
(8 )
|
|
(8 )
|
|
(8 )
|
|
(8 )
|
Net loss attributable
to common shareholders
|
$
(98 )
|
|
$
(132 )
|
|
$
(411 )
|
|
$ (541
)
|
|
|
|
|
|
|
|
|
Net loss per common
share – basic and diluted
|
$ (0.03
)
|
|
$ (0.05
)
|
|
$ (0.14
)
|
|
$ (0.22
)
|
|
|
|
|
|
|
|
|
Weighted average
shares outstanding – basic and diluted
|
2,870
|
|
2,514
|
|
2,868
|
|
2,512
|
|
|
|
|
|
|
|
|
Comprehensive
loss:
|
|
|
|
|
|
|
|
Net loss
|
$
(98 )
|
|
$
(124 )
|
|
$
(403 )
|
|
$ (533
)
|
Foreign currency
translations adjustment
|
32
|
|
(43 )
|
|
65
|
|
(91 )
|
Total comprehensive
loss
|
$
(58 )
|
|
$
(167 )
|
|
$
(338 )
|
|
$ (624
)
|
NTN BUZZTIME, INC.
AND SUBSIDIARIES
|
CONDENSED
CONSOLIDATED STATEMENTS OF CASH FLOWS
|
(unaudited)
|
(In
thousands)
|
|
|
Six months
ended
June
30,
|
|
2019
|
|
2018
|
Cash flows provided
by operating activities:
|
|
|
|
Net loss
|
$ (403
)
|
|
$
(533)
|
Adjustments to
reconcile net loss to net cash provided by operating
activities:
|
|
|
|
Depreciation and
amortization
|
1,454
|
|
1,336
|
Provision for doubtful
accounts
|
27
|
|
36
|
Amortization of
operating lease right-of-use assets
|
144
|
|
--
|
Scrap
expense
|
4
|
|
28
|
Transfer of fixed
assets to sales-type lease
|
6
|
|
10
|
Stock-based
compensation
|
109
|
|
251
|
Amortization of debt
issuance costs
|
5
|
|
17
|
Loss from disposition
of equipment and capitalized software
|
16
|
|
23
|
Changes in assets and
liabilities:
|
|
|
|
Accounts
receivable
|
384
|
|
(108 )
|
Site equipment to be
installed
|
465
|
|
(111 )
|
Operating lease
liabilities
|
(58 )
|
|
--
|
Prepaid expenses and
other liabilities
|
12
|
|
(176 )
|
Accounts payable and
accrued expenses
|
(20 )
|
|
145
|
Income
taxes
|
(10 )
|
|
14
|
Deferred
costs
|
47
|
|
234
|
Deferred
revenue
|
(866 )
|
|
(848 )
|
Deferred
rent
|
--
|
|
(99 )
|
Other
liabilities
|
23
|
|
20
|
Net cash provided by
operating activities
|
1,339
|
|
239
|
|
|
|
|
Cash flows used in
investing activities:
|
|
|
|
Capital
expenditures
|
(79 )
|
|
(280 )
|
Capitalized software
development expenditures
|
(639 )
|
|
(424 )
|
Net cash used in
investing activities
|
(718 )
|
|
(704 )
|
|
|
|
|
Cash flows (used in)
provided by financing activities:
|
|
|
|
Net proceeds from
issuance of common stock related to registered direct offering
|
--
|
|
1,381
|
Payment on long-term
debt
|
(417 )
|
|
(364 )
|
Principal payments on
financing leases
|
(30 )
|
|
(88 )
|
Payment of preferred
stockholder dividends
|
(8 )
|
|
(8 )
|
Tax withholding
related to net share settlement of vested restricted stock units
|
(13 )
|
|
--
|
Net cash (used in)
provided by financing activities
|
(468 )
|
|
921
|
|
|
|
|
Effect of exchange
rate on cash
|
39
|
|
(49 )
|
Net increase in cash
and cash equivalents
|
192
|
|
407
|
Cash, cash
equivalents and restricted cash at beginning of period
|
2,786
|
|
3,378
|
Cash, cash
equivalents and restricted cash at end of period
|
2,978
|
|
3,785
|
NTN BUZZTIME, INC. AND SUBSIDIARIES
RECONCILIATION of GAAP TO NON-GAAP
(unaudited)
(In thousands)
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,
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
Net loss per
GAAP
|
$
(90 )
|
|
$
(124 )
|
|
$
(403 )
|
|
$
(533 )
|
Interest expense,
net
|
69
|
|
94
|
|
136
|
|
187
|
Income tax
provision
|
--
|
|
24
|
|
11
|
|
26
|
Depreciation and
amortization
|
707
|
|
697
|
|
1,454
|
|
1,336
|
Total
EBITDA
|
$
686
|
|
$
691
|
|
$
1,198
|
|
$
1,016
|
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SOURCE NTN Buzztime, Inc.