CARLSBAD, Calif., Nov. 7, 2018 /PRNewswire/ -- NTN Buzztime,
Inc. (NYSE American: NTN), reported financial results for the third
quarter ended September 30, 2018.
"Third quarter 2018 delivered 15.5% revenue growth over third
quarter 2017; reported positive net income for the first time since
2012; and reached $1.1 million in
EBITDA, more than double third quarter 2017," said Ram Krishnan,
NTN Buzztime CEO. "The results reflect our diversification
strategy, which includes focusing on hardware sales, licensing
content, and entering new markets. To drive future growth, we
continue to invest in advancing our technology platform and
extending our solution suite. Leveraging our foundation interactive
entertainment, we are developing new options in functionality, form
factor, and mobility culminating in an entry-level price point
option that we expect to broaden market appeal."
Recent Highlights
- Delivered initial round of tablets to partner in the jail
service industry.
- Launched a Quick Service and Fast casual mode that combines the
order and payment, which generated interest at October's FSTEC
conference.
- Increased player engagement with sweepstake promotions that
drive the network effect and venue traffic for customers.
- Positioned to release an entry-level or capital-light offering
in the first quarter of 2019, new elements include
-
- A sitehub the size of a deck of cards that improves
functionality, eliminates wires and lowers costs;
- A new TV display form factor that increases flexibility to add
more content and advertising; and
- Mobile Trivia and Mobile Live that leverage successful games
with new features designed to expand audience.
"We believe our lighter offering will enhance our value
equation, increase our market potential, give players way more
places to play, expand our audience through mobile downloads, and
improve our ability to scale. All of which, we believe will create
shareholder value," concluded Krishnan.
Financial Results for the Third Quarter Ended September 30, 2018
Total revenues were
$6.0 million, up 15.5% from
$5.2 million in the third quarter of
2017, as hardware revenue increases offset lower subscription
revenue. Direct costs were $2.1
million and gross margin was 65%, compared to $1.5 million and 70% for the same period in 2017,
reflecting higher equipment lease revenue, which carries a higher
cost and lower margin. Selling, general and administrative expense
was $3.4 million, or 57% of revenue,
down from $3.6 million, or 70% of
revenue, in the prior year quarter. Net income was $222,000, or $0.08
per share, improved from a net loss of $184,000, or $0.07
per share, in the prior year quarter. EBITDA was $1.1 million, compared to $517,000 in the third quarter of 2017.
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 September 30, 2018
The site count was
2,666 at September 30, 2018, compared
to 2,703 at June 30th.
Management anticipates the net site count will continue to
fluctuate. The tablet platform installations increased 84% of the
installed base, compared to 83% as of June
30, 2018.
Liquidity
Cash and cash equivalents were $3.1 million at September
30, 2018, compared to $3.4
million at December 31, 2017.
Total deferred revenue was $2.5
million, down from $3.6
million at December 31, 2017.
Working capital was $3.0 million at
September 30, 2018, improving
$4.1 million from negative
$1.1 million at December 31, 2017.
Conference Call
Management will review the results on
a conference call with a live question and answer session today,
November 7, 2018, at 4:30 p.m. ET. To access the call, please use
passcode 7619929 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 November 14,
2018.
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 growth, market
expansion, and the ability of the company's new lighter offerings
to enhance the value of the company's offerings, to increase the
company's market potential 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 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, 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/Becky Herrick, LHA
Investor Relations
buzztime@lhai.com
415-433-3777
NTN BUZZTIME, INC.
AND SUBSIDIARIES
|
Consolidated
Balance Sheets
|
(In thousands,
except par value amount)
|
|
|
|
|
ASSETS
|
September
30, 2018
|
|
December
31, 2017
|
Current
Assets:
|
(unaudited)
|
|
|
Cash and cash
equivalents
|
$
3,078
|
|
$
3,378
|
Accounts receivable,
net
|
1,279
|
|
714
|
Site equipment to be
installed
|
3,600
|
|
4,866
|
Prepaid expenses and
other current assets
|
572
|
|
680
|
Total current
assets
|
8,529
|
|
9,638
|
|
|
|
|
Fixed assets,
net
|
3,645
|
|
3,678
|
Software development
costs, net
|
1,840
|
|
1,459
|
Deferred
costs
|
470
|
|
775
|
Goodwill
|
976
|
|
1,004
|
Other
assets
|
84
|
|
16
|
|
|
|
|
Total
assets
|
$
15,544
|
|
$
16,570
|
|
|
|
|
LIABILITIES AND
SHAREHOLDERS' EQUITY
|
|
|
|
Current
Liabilities:
|
|
|
|
Accounts
payable
|
$
341
|
|
$
390
|
Accrued
compensation
|
360
|
|
646
|
Accrued
expenses
|
792
|
|
418
|
Sales taxes
payable
|
137
|
|
107
|
Income taxes
payable
|
36
|
|
13
|
Current portion of
long-term debt
|
1,104
|
|
5,059
|
Current portion of
obligations under capital leases
|
156
|
|
176
|
Current portion of
deferred revenue
|
2,487
|
|
3,564
|
Deferred
rent
|
33
|
|
182
|
Other current
liabilities
|
96
|
|
192
|
Total current
liabilities
|
5,542
|
|
10,747
|
|
|
|
|
Long-term
debt
|
2,977
|
|
8
|
Obligations under
capital leases
|
48
|
|
164
|
Deferred
revenue
|
31
|
|
63
|
Other
liabilities
|
50
|
|
52
|
Total
liabilities
|
8,648
|
|
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 September 30, 2018 and December 31,
2017
|
1
|
|
1
|
Common stock, $0.005
par value, 15,000 shares authorized at September 30, 2018 and
December 31, 2017; 2,872 and 2,521 shares issued and outstanding at
September 30, 2018 and December 31, 2017, respectively
|
14
|
|
13
|
Treasury stock, at
cost, 10 shares at September 30, 2018 and December 31,
2017
|
(456 )
|
|
(456 )
|
Additional paid-in
capital
|
136,482
|
|
134,752
|
Accumulated
deficit
|
(129,438 )
|
|
(129,119 )
|
Accumulated other
comprehensive income
|
293
|
|
345
|
Total shareholders'
equity
|
6,896
|
|
5,536
|
|
|
|
|
Total liabilities and
shareholders' equity
|
$
15,544
|
|
$
16,570
|
NTN BUZZTIME, INC.
AND SUBSIDIARIES
|
CONDENSED
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME
(LOSS)
|
(Unaudited)
|
(In thousands,
except per share data)
|
|
|
|
|
|
Three months
ended September
30,
|
|
Nine months
ended September
30,
|
|
2018
|
|
2017
|
|
2018
|
|
2017
|
Revenues
|
|
|
|
|
|
|
|
Subscription
revenue
|
$
4,005
|
|
$
4,279
|
|
$
12,111
|
|
$
12,737
|
Hardware
revenue
|
1,158
|
|
116
|
|
2,427
|
|
524
|
Other
revenue
|
841
|
|
803
|
|
2,878
|
|
2,717
|
Total
revenues
|
6,004
|
|
5,198
|
|
17,416
|
|
15,978
|
|
|
|
|
|
|
|
|
Operating
expenses:
|
|
|
|
|
|
|
|
Direct operating costs
(includes depreciation and amortization)
|
2,115
|
|
1,539
|
|
6,019
|
|
5,013
|
Selling, general and
administrative
|
3,444
|
|
3,636
|
|
11,123
|
|
11,628
|
Depreciation and
amortization (excluding depreciation and amortization included in
direct costs
|
75
|
|
76
|
|
244
|
|
250
|
Total operating
expenses
|
5,634
|
|
5,251
|
|
17,386
|
|
16,891
|
Operating income
(loss)
|
370
|
|
(53 )
|
|
30
|
|
(913 )
|
Other (expense)
income, net
|
(138 )
|
|
(122 )
|
|
(305 )
|
|
496
|
Income (loss) before
income taxes
|
232
|
|
(175 )
|
|
(275 )
|
|
(417 )
|
Provision for income
taxes
|
(10 )
|
|
(9 )
|
|
(36 )
|
|
(21 )
|
Net income
(loss)
|
$
222
|
|
$
(184 )
|
|
$
(311 )
|
|
$
(438 )
|
|
|
|
|
|
|
|
|
Net income (loss) per
common share – basic and diluted
|
$
0.08
|
|
$
(0.07 )
|
|
$
(0.12 )
|
|
$
(0.18 )
|
|
|
|
|
|
|
|
|
Weighted average
shares outstanding – basic and diluted
|
2,857
|
|
2,505
|
|
2,628
|
|
2,419
|
|
|
|
|
|
|
|
|
Comprehensive income
(loss):
|
|
|
|
|
|
|
|
Net income
(loss)
|
$
222
|
|
$
(184 )
|
|
$
(311 )
|
|
$
(438 )
|
Foreign currency
translations adjustment
|
39
|
|
80
|
|
(52 )
|
|
136
|
Total comprehensive
income (loss)
|
$
261
|
|
$
(104 )
|
|
$
(363 )
|
|
$
(302 )
|
|
|
|
|
|
|
|
|
NTN BUZZTIME, INC.
AND SUBSIDIARIES
|
CONDENSED
CONSOLIDATED STATEMENTS OF CASH FLOWS
|
(unaudited)
|
(In
thousands)
|
|
|
Nine months
ended September
30,
|
|
2018
|
|
2017
|
Cash flows provided
by operating activities:
|
|
|
|
Net loss
|
$ (311
)
|
|
$ (438
)
|
Adjustments to
reconcile net loss to net cash provided by operating
activities:
|
|
|
|
Depreciation and
amortization
|
2,068
|
|
1,716
|
Provision for doubtful
accounts
|
53
|
|
47
|
Scrap
expense
|
30
|
|
30
|
Transfer of fixed
assets to sales-type lease
|
10
|
|
--
|
Stock-based
compensation
|
368
|
|
347
|
Amortization of debt
issuance costs
|
57
|
|
39
|
Issuance of common
stock in lieu of cash payment for bonus compensation
|
--
|
|
178
|
Impairment of
capitalized software
|
23
|
|
5
|
Loss from disposition
of equipment
|
30
|
|
8
|
Changes in assets and
liabilities:
|
|
|
|
Accounts
receivable
|
(617 )
|
|
254
|
Site equipment to be
installed
|
(56 )
|
|
(3,047 )
|
Prepaid expenses and
other liabilities
|
40
|
|
37
|
Accounts payable and
accrued expenses
|
69
|
|
(350 )
|
Income
taxes
|
24
|
|
(2 )
|
Deferred
costs
|
305
|
|
36
|
Deferred
revenue
|
(1,109 )
|
|
2,521
|
Deferred
rent
|
(148 )
|
|
(140 )
|
Other
liabilities
|
(97 )
|
|
(185 )
|
Net cash provided by
operating activities
|
739
|
|
1,056
|
|
|
|
|
Cash flows used in
investing activities:
|
|
|
|
Capital
expenditures
|
(502 )
|
|
(562 )
|
Software development
expenditures
|
(690 )
|
|
(556 )
|
Net cash used in
investing activities
|
(1,192 )
|
|
(1,118 )
|
|
|
|
|
Cash flows provided
by (used in) financing activities:
|
|
|
|
Proceeds from
long-term debt
|
4,000
|
|
--
|
Payment on long-term
debt
|
(5,019 )
|
|
(2,857 )
|
Debit issuance costs
of long-term debt
|
(23 )
|
|
(22 )
|
Principal payments on
capital lease
|
(132 )
|
|
(116 )
|
Net proceeds from
issuance of common stock related to registered direct offering
|
1,375
|
|
1,773
|
Tax withholding
related to net share settlements of vested restricted stock units
|
(12 )
|
|
--
|
Payment of preferred
stockholder dividends
|
(8 )
|
|
(8 )
|
Net cash provided by
(used in) financing activities
|
181
|
|
(1,230 )
|
|
|
|
|
Net decrease in cash
and cash equivalents
|
(272 )
|
|
(1,292 )
|
Effect of exchange
rate on cash
|
(28 )
|
|
70
|
Cash and cash
equivalents at beginning of period
|
3,378
|
|
5,686
|
Cash and cash
equivalents at end of period
|
3,078
|
|
4,464
|
|
|
|
|
Non-GAAP Information
A schedule reconciling the Company's consolidated net income
(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 income (loss) per GAAP
(in thousands) to EBITDA:
|
Three months
ended September
30,
|
|
Nine months
ended September
30,
|
|
2018
|
|
2017
|
|
2018
|
|
2017
|
Net income (loss) per
GAAP
|
$
222
|
|
$
(184 )
|
|
$
(311 )
|
|
$ (438
)
|
Interest expense,
net
|
118
|
|
106
|
|
305
|
|
388
|
Income tax
provision
|
10
|
|
9
|
|
36
|
|
21
|
Depreciation and
amortization
|
732
|
|
586
|
|
2,068
|
|
1,716
|
Total
EBITDA
|
$
1,082
|
|
$
517
|
|
$
2,098
|
|
$
1,687
|
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SOURCE NTN Buzztime, Inc.