CARLSBAD, Calif., Aug. 7, 2020 /PRNewswire/ -- NTN Buzztime, Inc.
(NYSE American: NTN) reported financial results for the second
quarter ended June 30,
2020.
"The negative impact of the COVID-19 pandemic on our customers
was abrupt and substantial, and it had a ripple-effect on our
business. As a result, we took action to significantly reduce our
operating costs," said Allen Wolff, CEO. "We have been focused
on cash management and exploring and evaluating strategic
alternatives."
Financial Results
For the second quarter 2020, total
revenues were $754,000, compared to
$5.2 million for the second quarter
of 2019. The decrease reflects reduced site count and the impact of
the COVID-19 pandemic on the company's business as a substantial
number of the bars and restaurants that subscribe to the company's
network suspended their subscriptions for at least a portion of the
current year period. Through corporate restructuring and cost
reductions, second quarter 2020 operating expense decreased to
$2.4 million, from $5.2 million for the second quarter of 2019.
Second quarter 2020 net loss attributable to common shareholders
was $2.0 million, including
$100,000 in capitalized software
impairments, or $0.69 per share,
compared to $98,000, or $0.03 per share, for the prior year quarter.
Liquidity
Cash, cash equivalents and unrestricted
cash was $2.2 million at June 30, 2020, compared to $2.2 million at March 31,
2020 and $3.2 million at
December 31, 2019. In
April 2020, the company received
$1.6 million under the Paycheck
Protection Program of the CARES Act. At June
30, 2020, the principal balance of the company's term loan
with its primary lender was $1.6
million, and working capital was $894,000. For additional information regarding
the company's liquidity and capital resources, please see the
company's quarterly report on Form 10-Q expected to be filed with
the SEC today.
The company will not be hosting an earnings call for the
recently completed quarter. The company's limited resources are
being directed toward managing operations and liquidity in light of
the substantial impact of the COVID-19 pandemic on its business and
on exploring and evaluating strategic alternatives. No assurance
are, or can be given, that a definitive agreement for a strategic
transaction will result from the company's strategic process, or
that even if such agreement is entered into, that the potential
transaction will be consummated.
Forward-looking Statements
This release may contain
forward-looking statements that reflect management's current views
of future events and operations, including challenges that we and
our customers will face related to the COVID-19 pandemic and the
potential meaningfulness of our product platform to our customers
as they or if they re-open their businesses. Among the
factors that could cause or contribute to material differences
between our actual results and the expectations indicated by the
forward-looking statements are risks and uncertainties that
include, but are not limited to: (1) our ability to raise
substantial capital in the very near-term to allow us to maintain
operations and sustain the negative impact of the COVID-19 pandemic
on our business and financial condition, and if we are able to
sustain such impact, our ability to recover from the impact; (2)
our ability to successfully manage our liquidity and our working
capital deficit by managing the timing of payments to our third
parties; (3) our ability to comply with our financial covenants in
our loan and security agreement with Avidbank and its right to
declare a default if we do not, which could lead to all payment
obligations becoming immediately due and payable and which could
lead to a foreclosure on our assets; (4) when, and the extent to
which, the negative impact of the pandemic will improve, including
when restaurants will be permitted to offer on-site dining or when
bars will be permitted to re-open and to what degree, when our
customers will re-open, or if they will subscribe to our service if
and when they do; (5) the negative impact that measures we
implemented and may implement to reduce our operating expenses and
planned capital expenses (including investments in our business)
may have on our ability to effectively manage and operate our
business; (6) our ability to maintain or grow our revenue; (7) with
respect to our strategic process, the risk that we may not enter
into a definitive agreement for a potential transaction or, if we
do, that the potential transaction will not be completed; (8) our
ability to compete effectively within the highly competitive
interactive games, entertainment and marketing services industries,
including our ability to successfully commercially launch
attractive product offerings, and the impact of new products and
technological change, especially in the mobile and wireless
markets, on our operations and competitiveness; (9) our ability to
adequately protect our proprietary rights and intellectual property
; and (10) the other risks and uncertainties described in Part I,
Item 1A "Risk Factors" of our Annual Report on Form 10-K for the
fiscal year ended December 31, 2019,
and described in other documents we filed or file from time to time
with the Securities and Exchange Commission thereafter, including
in our Current Reports on Form 8-K filed with the SEC on
March 30, 2020 and April 21, 2020, and our Quarterly Reports on Form
10-Q for each of the quarters ended March
31, 2020 and June 30,
2020. Please see our filings with the SEC for information
about these and other risks that may affect us. 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.
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, 2020
|
|
December
31, 2019
|
Current
Assets:
|
(unaudited)
|
|
|
Cash and cash
equivalents
|
$
2,234
|
|
$
3,209
|
Restricted
cash
|
201
|
|
50
|
Accounts receivable,
net
|
186
|
|
1,195
|
Site equipment to be
installed
|
1,132
|
|
1,090
|
Prepaid expenses and
other current assets
|
336
|
|
526
|
Total current
assets
|
4,089
|
|
6,070
|
|
|
|
|
Restricted cash,
long-term
|
--
|
|
150
|
Operating lease
right-of-use assets
|
44
|
|
2,101
|
Fixed assets,
net
|
928
|
|
2,822
|
Software development
costs, net
|
1,515
|
|
1,915
|
Deferred
costs
|
152
|
|
274
|
Goodwill
|
--
|
|
696
|
Other
assets
|
62
|
|
97
|
|
|
|
|
Total
assets
|
$
6,790
|
|
$
14,125
|
|
|
|
|
LIABILITIES AND
SHAREHOLDERS' EQUITY
|
|
|
|
Current
Liabilities:
|
|
|
|
Accounts
payable
|
$
397
|
|
$
835
|
Accrued
compensation
|
116
|
|
588
|
Accrued
expenses
|
385
|
|
490
|
Sales taxes
payable
|
--
|
|
131
|
Income taxes
payable
|
15
|
|
3
|
Current portion of
long-term debt
|
1,620
|
|
2,739
|
Current portion of
obligations under operating leases
|
28
|
|
409
|
Current portion of
obligations under financing leases
|
24
|
|
21
|
Current portion of
deferred revenue
|
377
|
|
460
|
Other current
liabilities
|
233
|
|
419
|
Total current
liabilities
|
3,195
|
|
6,095
|
|
|
|
|
Long-term
debt
|
1,625
|
|
--
|
Obligations under
operating leases
|
18
|
|
2,891
|
Obligations under
financing leases
|
9
|
|
20
|
Deferred
revenue
|
1
|
|
2
|
Other
liabilities
|
11
|
|
26
|
Total
liabilities
|
4,859
|
|
9,034
|
|
|
|
|
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, 2020 and December 31, 2019
|
1
|
|
1
|
Common stock, $0.005
par value, 15,000 shares authorized at June 30, 2020 and December
31, 2019; 2,938 and 2,901 shares issued at June, 2020 and December
31, 2019, respectively
|
15
|
|
14
|
Treasury stock, at
cost, 10 shares at June 30, 2020 and December 31, 2019
|
(456)
|
|
(456)
|
Additional paid-in
capital
|
136,837
|
|
136,721
|
Accumulated
deficit
|
(134,706)
|
|
(131,457)
|
Accumulated other
comprehensive income
|
240
|
|
268
|
Total shareholders'
equity
|
1,931
|
|
5,091
|
|
|
|
|
Total liabilities and
shareholders' equity
|
$
6,790
|
|
$
14,125
|
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,
|
|
2020
|
|
2019
|
|
2020
|
|
2019
|
Revenues
|
|
|
|
|
|
|
|
Subscription
revenue
|
$
727
|
|
$
3,800
|
|
$
2,726
|
|
$
7,633
|
Hardware
revenue
|
26
|
|
595
|
|
42
|
|
800
|
Other
revenue
|
1
|
|
831
|
|
380
|
|
1,625
|
Total
revenues
|
754
|
|
5,226
|
|
3,148
|
|
10,058
|
|
|
|
|
|
|
|
|
Operating
expenses:
|
|
|
|
|
|
|
|
Direct operating costs
(includes depreciation and amortization)
|
613
|
|
1,717
|
|
1,563
|
|
3,201
|
Selling, general and
administrative
|
1,595
|
|
3,422
|
|
4,675
|
|
6,891
|
Impairment of
capitalized software
|
100
|
|
--
|
|
238
|
|
1
|
Impairment of
goodwill
|
--
|
|
--
|
|
662
|
|
--
|
Depreciation and
amortization (excluding depreciation and amortization included in
direct costs
|
78
|
|
89
|
|
163
|
|
185
|
Total operating
expenses
|
2,386
|
|
5,228
|
|
7,301
|
|
10,277
|
Operating
loss
|
(1,632)
|
|
(2)
|
|
(4,153)
|
|
(219)
|
Other (expense) income,
net
|
(376)
|
|
(88)
|
|
908
|
|
(173)
|
Loss before income
taxes
|
(2,008)
|
|
(90)
|
|
(3,245)
|
|
(392)
|
Income tax (provision)
benefit
|
(15)
|
|
--
|
|
4
|
|
(11)
|
Net loss
|
(2,023)
|
|
(90)
|
|
(3,241)
|
|
(403)
|
Series A preferred
stock dividend
|
(8)
|
|
(8)
|
|
(8)
|
|
(8)
|
Net loss attributable
to common shareholders
|
$
(2,031)
|
|
$
(98)
|
|
$
(3,249)
|
|
$
(411)
|
|
|
|
|
|
|
|
|
Net loss per common
share – basic and diluted
|
$
(0.69)
|
|
$
(0.03)
|
|
$
(1.12)
|
|
$
(0.14)
|
|
|
|
|
|
|
|
|
Weighted average shares
outstanding – basic and diluted
|
2,925
|
|
2,870
|
|
2,913
|
|
2,868
|
|
|
|
|
|
|
|
|
Comprehensive
loss:
|
|
|
|
|
|
|
|
Net loss
|
$
(2,023)
|
|
$
(98)
|
|
$
(3,241)
|
|
$
(403)
|
Foreign currency
translations adjustment
|
76
|
|
32
|
|
(28)
|
|
65
|
Total comprehensive
loss
|
$
(1,947)
|
|
$
(58)
|
|
$
(3,269)
|
|
$
(338)
|
|
|
|
|
|
|
|
|
NTN BUZZTIME, INC.
AND SUBSIDIARIES
|
CONDENSED
CONSOLIDATED STATEMENTS OF CASH FLOWS
|
(unaudited)
|
(In
thousands)
|
|
|
Six months
ended June
30,
|
|
2020
|
|
2019
|
Cash flows (used in)
provided by operating activities:
|
|
|
|
Net loss
|
$
(3,241)
|
|
$
(403)
|
Adjustments to
reconcile net loss to net cash provided by operating
activities:
|
|
|
|
Depreciation and
amortization
|
1,058
|
|
1,454
|
Provision for doubtful
accounts
|
133
|
|
27
|
Amortization of
operating lease right-of-use assets
|
146
|
|
144
|
Common stock issued
for compensation in lieu of cash payment
|
61
|
|
--
|
Transfer of fixed
assets to sales-type lease
|
--
|
|
6
|
Stock-based
compensation
|
82
|
|
109
|
Gain from the asset
sale of Stump! Trivia and OpinioNation
|
(1,265)
|
|
--
|
Gain from the
termination of operating lease
|
$
(8)
|
|
--
|
Loss from the
disposition or sale of assets
|
502
|
|
19
|
Loss from impairment
of capitalized software
|
238
|
|
1
|
Loss from impairment
of goodwill
|
662
|
|
--
|
Amortization of debt
issuance costs
|
9
|
|
5
|
Changes in assets and
liabilities:
|
|
|
|
Accounts
receivable
|
975
|
|
384
|
Site equipment to be
installed
|
(286)
|
|
465
|
Operating lease
liabilities
|
(120)
|
|
(58)
|
Prepaid expenses and
other liabilities
|
190
|
|
12
|
Accounts payable and
accrued expenses
|
(1,436)
|
|
(20)
|
Income
taxes
|
13
|
|
(10)
|
Deferred
costs
|
122
|
|
47
|
Deferred
revenue
|
(84)
|
|
(866)
|
Other
liabilities
|
(201)
|
|
23
|
Net cash (used in)
provided by operating activities
|
(2,450)
|
|
1,339
|
|
|
|
|
Cash flows used in
investing activities:
|
|
|
|
Capital
expenditures
|
(20)
|
|
(79)
|
Capitalized software
development expenditures
|
(130)
|
|
(639)
|
Net cash used in
investing activities
|
(150)
|
|
(718)
|
|
|
|
|
Cash flows provided
by (used in) financing activities:
|
|
|
|
Net proceeds from the
sale of Stump! Trivia and OpinoNation
|
1,166
|
|
--
|
Proceeds on long-term
debt
|
1,625
|
|
--
|
Payment on long-term
debt
|
(1,125)
|
|
(417)
|
Debt issuance costs on
long-term debt
|
(3)
|
|
--
|
Principal payments on
financing leases
|
(8)
|
|
(30)
|
Payment of preferred
stockholder dividends
|
(8)
|
|
(8)
|
Payroll taxes remitted
on net share settlement of equity awards
|
(27)
|
|
(13)
|
Net cash provided by
(used in) financing activities
|
1,620
|
|
(468)
|
|
|
|
|
Effect of exchange
rate on cash
|
6
|
|
39
|
Net (decrease)
increase in cash and cash equivalents
|
(974)
|
|
192
|
Cash, cash
equivalents and restricted cash at beginning of period
|
3,409
|
|
2,786
|
Cash, cash
equivalents and restricted cash at end of period
|
2,435
|
|
2,978
|
|
|
|
|
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SOURCE NTN Buzztime, Inc.