CARLSBAD, Calif., March 20, 2019 /PRNewswire/ -- NTN Buzztime,
Inc. (NYSE American: NTN), reported financial results for the
fourth quarter and year ended December
31, 2018.
"Our business momentum delivered another strong quarter,
including positive net income, and closed 2018 with the company's
best bottom line annual performance in 24 years," said Ram
Krishnan, NTN Buzztime CEO. "In 2018, we grew revenue 10%, driven
by increased equipment sales while increasing cash from operations
by approximately 150%. These improvements reflect the impact
of our revenue diversification strategy and continued progress in
all facets of the business.
"More importantly, we continue to invest for future growth by
advancing our entertainment platform and bringing new offerings to
the market. During 2018, we introduced our hardware platform
appealing to new markets and attracting new customers. We have made
progress with our SiteHub – the dramatically smaller form factor
management system that improves functionality, eliminates wires and
lowers costs – and are planning live beta sites in 2019. Our
'Trivia for Cash' promotions increased player engagement and
boosted business at our partner locations. So, we are rolling out
additional campaigns to continue with this progress. In the first
quarter of 2019, we joined a new ad exchange, which broadens
advertising buyer access to our inventory in multiple marketplaces.
Additionally, we are in the process of launching our mobile app,
which increases convenience for players and engagement for venues
on- and off-premise.
"With these efforts to expand our product offering and revenue
channels, we are confident in our ability to bring new sustainable
growth to the company. While we continue to explore and evaluate
strategic alternatives focused on maximizing shareholder value, our
priority is building scalable distribution along with innovative
products," concluded Krishnan.
Financial Results for the Fourth Quarter Ended December 31, 2018
Total revenues were
$5.9 million, up 11.8% from
$5.3 million in the fourth quarter of
2017, due to increases in hardware revenue offset by lower
subscription revenue. Direct costs were $2.1
million and gross margin was 65%, compared to $1.7 million and 67% for the same period in 2017,
reflecting the product mix shift. Selling, general and
administrative expense decreased to $3.4
million, or 57% of revenue, down from $4.0 million, or 75% of revenue, in the prior
year quarter, reflecting cost management measures. During the
fourth quarter of 2018, the company incurred a goodwill impairment
loss of $261,000 related to its
Canadian business and did not in the comparable period. Net income
attributable to common shareholders was $44,000, or $0.02
per diluted share, improved from a net loss attributable to common
shareholders of $647,000, or
$0.31 per share, in the prior year
quarter. EBITDA was $732,000
for the fourth quarter of 2018, compared to $117,000 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 December 31, 2018
The site count was
2,639 at December 31, 2018, compared
to 2,666 at September 30, 2018.
Management anticipates that net site count will continue to
fluctuate. The tablet platform installations remained flat at 84%
of the installed base, when compared to the install base as of
September 30, 2018.
Liquidity
Cash and cash equivalents were $2.5 million at December
31, 2018, compared to $3.4
million at December 31, 2017.
2018 cash flow from operations reached $1.4
million, increasing $800,000
from $549,000 in 2017. Total deferred
revenue was $1.4 million, down from
$3.6 million at December 31, 2017. Working capital was
$2.8 million at December 31, 2018, improving $3.9 million from negative $1.1 million at December
31, 2017.
Financial Results for the Full Year Ended December 31, 2018
Total revenues were
$23.3 million, up 9.7% from
$21.3 million in 2017, reflecting
increases in professional development, advertising and hardware
revenue. Net loss attributable to common shareholders for 2018 was
$275,000, or $0.10 per share, improved from a net loss
attributable to common shareholders of $1.1
million, or $0.45 per share
for 2017. EBITDA was $2.8 million for
2018, compared to $1.8 million for
2017.
Conference Call
Management will review the results on
a conference call with a live question and answer session today,
March 20, 2019, at 4:30 p.m. ET. To access the call, please use
passcode 9359779 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. The replay of the call will be
available until March 27, 2019.
Forward-looking Statements
This release
contains forward-looking statements that reflect management's
current views of future events and operations, including statements
regarding management's expectations regarding future sustainable
growth, new offerings, market expansion, strategic opportunities,
the ability of the company's new lighter offerings to enhance the
value and attractiveness of the company's offerings, and the
company's ability to scale and to create shareholder value.
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 of both existing and
new offerings 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,
except as required by law.
About Buzztime:
Buzztime (NYSE American: NTN) delivers
interactive entertainment and innovative technology, including
performance analytics and secure payment with Europay, MasterCard®
and Visa® (EMV) chip card readers or with near-field communication
(NFC) technology to accept Apple, Android and Samsung Pay. Most
frequently used in bars and restaurants in North America, the Buzztime tablets 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, customized
menus and self-service dining features. Buzztime's platform
improves operating efficiencies, creates connections among the
players and venues, and amplifies guests' positive
experiences. The Buzztime platform has also been recently
resold and the content licensed for 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
|
December
31,
2018
|
|
December
31,
2017
|
Current
Assets:
|
|
|
|
Cash and cash
equivalents
|
$
2,536
|
|
$
3,378
|
Restricted
cash
|
50
|
|
--
|
Accounts receivable,
net
|
1,143
|
|
714
|
Site equipment to be
installed
|
2,539
|
|
4,866
|
Prepaid expenses and
other current assets
|
517
|
|
680
|
Total current
assets
|
6,785
|
|
9,638
|
|
|
|
|
Restricted cash,
long-term
|
200
|
|
--
|
Fixed assets,
net
|
4,667
|
|
3,678
|
Software development
costs, net
|
2,018
|
|
1,459
|
Deferred
costs
|
424
|
|
775
|
Goodwill
|
667
|
|
1,004
|
Other
assets
|
103
|
|
16
|
|
|
|
|
Total
assets
|
$
14,864
|
|
$
16,570
|
|
|
|
|
LIABILITIES AND
SHAREHOLDERS' EQUITY
|
|
|
|
Current
Liabilities:
|
|
|
|
Accounts
payable
|
$
271
|
|
$
390
|
Accrued
compensation
|
572
|
|
646
|
Accrued
expenses
|
444
|
|
418
|
Sales taxes
payable
|
87
|
|
107
|
Income taxes
payable
|
1
|
|
13
|
Current portion of
long-term debt
|
1,000
|
|
5,059
|
Current portion of
obligations under capital leases
|
45
|
|
176
|
Current portion of
deferred revenue
|
1,371
|
|
3,564
|
Deferred
rent
|
--
|
|
182
|
Other current
liabilities
|
233
|
|
192
|
Total current
liabilities
|
4,024
|
|
10,747
|
|
|
|
|
Long-term
debt
|
2,729
|
|
8
|
Obligations under
capital leases
|
41
|
|
164
|
Deferred
revenue
|
30
|
|
63
|
Deferred
rent
|
1,123
|
|
--
|
Other
liabilities
|
--
|
|
52
|
Total
liabilities
|
7,947
|
|
11,034
|
|
|
|
|
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 December 31, 2018 and 2017
|
1
|
|
1
|
Common stock, $0.005
par value, 15,000 shares authorized at December 31, 2018 and 2017;
2,875 and 2,521 shares issued and outstanding at December 31, 2018
and 2017, respectively
|
14
|
|
13
|
Treasury stock, at
cost, 10 shares at December 31, 2018 and 2017
|
(456 )
|
|
(456 )
|
Additional paid-in
capital
|
136,552
|
|
134,752
|
Accumulated
deficit
|
(129,394 )
|
|
(129,119 )
|
Accumulated other
comprehensive income
|
200
|
|
345
|
Total shareholders'
equity
|
6,917
|
|
5,536
|
|
|
|
|
Total liabilities and
shareholders' equity
|
$
14,864
|
|
$
16,570
|
NTN BUZZTIME, INC.
AND SUBSIDIARIES
CONSOLIDATED
STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS
(In thousands,
except per share data)
|
|
|
Three months
ended
December
31,
|
|
Years
ended
December
31,
|
|
2018
|
|
2017
|
|
2018
|
|
2017
|
Revenues
|
|
|
|
|
|
|
|
Subscription
revenue
|
$
3,920
|
|
$
4,212
|
|
$
16,031
|
|
$ 16,949
|
Hardware
revenue
|
1,162
|
|
246
|
|
3,589
|
|
770
|
Other
revenue
|
837
|
|
838
|
|
3,715
|
|
3,555
|
Total
revenues
|
5,919
|
|
5,296
|
|
23,335
|
|
21,274
|
|
|
|
|
|
|
|
|
Operating
expenses:
|
|
|
|
|
|
|
|
Direct operating costs
(includes depreciation and amortization)
|
2,051
|
|
1,742
|
|
8,070
|
|
6,755
|
Selling, general and
administrative
|
3,363
|
|
3,959
|
|
14,486
|
|
15,587
|
Impairment of
goodwill
|
261
|
|
--
|
|
261
|
|
--
|
Depreciation and
amortization (excluding depreciation and amortization included in
direct costs
|
71
|
|
84
|
|
315
|
|
334
|
Total operating
expenses
|
5,746
|
|
5,785
|
|
23,132
|
|
22,676
|
Operating income
(loss)
|
173
|
|
(489 )
|
|
203
|
|
(1,402 )
|
Other (expense)
income:
|
|
|
|
|
|
|
|
Interest expense,
net
|
(84 )
|
|
(110 )
|
|
(389 )
|
|
(498 )
|
Other (expense)
income
|
(137 )
|
|
5
|
|
(137 )
|
|
889
|
Total other (expense)
income, net
|
(221 )
|
|
(105 )
|
|
(526 )
|
|
391
|
Loss before income
taxes
|
(48 )
|
|
(594 )
|
|
(323 )
|
|
(1,011 )
|
Income tax benefit
(provision)
|
100
|
|
(45 )
|
|
64
|
|
(66 )
|
Net income
(loss)
|
$
52
|
|
(639 )
|
|
(259 )
|
|
(1,077 )
|
Series A preferred
stock dividend
|
(8 )
|
|
(8 )
|
|
(16 )
|
|
(16 )
|
Net income (loss)
attributable to common shareholders
|
$
44
|
|
$
(647 )
|
|
$
(275 )
|
|
$ (1,093
)
|
|
|
|
|
|
|
|
|
Net income (loss) per
common share – basic and diluted
|
$
0.02
|
|
$ (0.31
)
|
|
$ (0.10
)
|
|
$ (0.45
)
|
|
|
|
|
|
|
|
|
Weighted average
shares outstanding – basic and diluted
|
2,864
|
|
2,094
|
|
2,688
|
|
2,442
|
|
|
|
|
|
|
|
|
Comprehensive
loss:
|
|
|
|
|
|
|
|
Net income
(loss)
|
$
52
|
|
$
(639 )
|
|
$
(259 )
|
|
$ (1,077
)
|
Foreign currency
translations adjustment
|
(93 )
|
|
(14 )
|
|
(145 )
|
|
122
|
Total comprehensive
loss
|
$
(41 )
|
|
$
(653 )
|
|
$
(404 )
|
|
$ (955
)
|
|
|
|
|
|
|
|
|
NTN BUZZTIME, INC.
AND SUBSIDIARIES
CONDENSED
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In
thousands)
|
|
|
Years
ended
December
31,
|
|
2018
|
|
2017
|
Cash flows provided
by operating activities:
|
|
|
|
Net loss
|
$ (259
)
|
|
$ (1,077
)
|
Adjustments to
reconcile net loss to net cash provided by operating
activities:
|
|
|
|
Depreciation and
amortization
|
2,764
|
|
2,317
|
Provision for doubtful
accounts
|
78
|
|
72
|
Scrap
expense
|
30
|
|
226
|
Transfer of fixed
assets to sales-type lease
|
23
|
|
--
|
Stock-based
compensation
|
443
|
|
457
|
Amortization of debt
issuance costs
|
59
|
|
60
|
Common stock issued
for compensation in lieu of cash payment
|
--
|
|
209
|
Loss on sale or
disposition of assets
|
212
|
|
13
|
Impairment of
goodwill
|
261
|
|
--
|
Loss from disposition
of capitalized software
|
23
|
|
5
|
Changes in assets and
liabilities:
|
|
|
|
Accounts
receivable
|
(507 )
|
|
142
|
Site equipment to be
installed
|
431
|
|
(3,932 )
|
Prepaid expenses and
other liabilities
|
29
|
|
443
|
Accounts payable and
accrued expenses
|
(186 )
|
|
(586 )
|
Income taxes
payable
|
(10 )
|
|
9
|
Deferred
costs
|
350
|
|
130
|
Deferred
revenue
|
(2,227 )
|
|
2,349
|
Deferred
rent
|
(190 )
|
|
(189 )
|
Other
liabilities
|
41
|
|
(99 )
|
Net cash provided by
operating activities
|
1,365
|
|
549
|
|
|
|
|
Cash flows used in
investing activities:
|
|
|
|
Capital
expenditures
|
(648 )
|
|
(728 )
|
Capitalized software
development expenditures
|
(964 )
|
|
(724 )
|
Proceeds from sale of
assets
|
33
|
|
--
|
Net cash used in
investing activities
|
(1,579 )
|
|
(1,452 )
|
|
|
|
|
Cash flows used in
financing activities:
|
|
|
|
Net proceeds from
issuance of common stock related to registered direct offering
|
1,375
|
|
1,773
|
Proceeds from
long-term debt
|
4,000
|
|
50
|
Payment on long-term
debt
|
(5,373 )
|
|
(3,038 )
|
Debit issuance costs
of long-term deb
|
(23 )
|
|
(82 )
|
Principal payments on
capital lease
|
(249 )
|
|
(155 )
|
Tax withholding
related to net share settlement of vested restricted stock units
|
(17 )
|
|
--
|
Payment of preferred
stockholder dividends
|
(16 )
|
|
(16 )
|
Net cash used in
financing activities
|
(303 )
|
|
(1,468 )
|
|
|
|
|
Net decrease in cash,
cash equivalents and restricted cash
|
(517 )
|
|
(2,371 )
|
Effect of exchange
rate on cash
|
(75 )
|
|
63
|
Cash, cash
equivalents and restricted cash at beginning of period
|
3,378
|
|
5,686
|
Cash, cash
equivalents and restricted cash at end of period
|
2,786
|
|
3,378
|
|
|
|
|
Non-GAAP Information
A reconciliation of the Company's consolidated net income (loss)
calculated in accordance with GAAP to EBITDA is in the 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.
|
Three months
ended
December
31,
|
|
Years
ended
December
31,
|
|
2018
|
|
2017
|
|
2018
|
|
2017
|
Net income (loss) per
GAAP
|
$
52
|
|
$
(639 )
|
|
$
(259 )
|
|
$ (1,077
)
|
Interest
expense
|
84
|
|
110
|
|
389
|
|
498
|
Income tax (benefit)
provision
|
(100 )
|
|
45
|
|
(64 )
|
|
66
|
Depreciation and
amortization
|
696
|
|
601
|
|
2,764
|
|
2,317
|
Total
EBITDA
|
$
732
|
|
$
117
|
|
$
2,830
|
|
$
1,804
|
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SOURCE NTN Buzztime, Inc.