CARLSBAD, Calif., March 19 /PRNewswire-FirstCall/ -- NTN Buzztime,
Inc. (NYSE Alternext US: NTN) today announced results for the
fourth quarter and 2008 fiscal year ended December 31, 2008. (Logo:
http://www.newscom.com/cgi-bin/prnh/20080331/CLM183LOGO) "In a very
busy fourth quarter, NTN Buzztime has begun laying the groundwork
to return to profitability in 2009 and to become more of an
integrated media company that attracts growing audiences to the iTV
Buzztime Network. It is very exciting to have been chosen as the
Company's CEO to help lead this transformation," commented NTN
Buzztime Board member and CEO Terry Bateman. "With our sales
showing considerable resilience in the face of once-in-a-generation
economic uncertainties, we have cut our net loss by more than half,
improved our gross margins and made fundamental improvements to our
cost structure that should reduce our selling, general and
administrative expenses by $5 million in 2009. These changes were
essential and will give the company the runway to fully develop the
integrated media business that we envision, which will include a
heavy focus on developing our ad program and the development of our
online and mobile channels for launch in the second half of 2009."
Mr. Bateman continued, "We have also restructured our Board of
Directors and made significant enhancements to our management team.
New-media executive and investor Jeff Berg is bringing timely and
focused expertise to his responsibilities as Chairman. Mary Beth
Lewis, with her CFO and growth company experience, and Kenneth
Keymer, with his impressive chain-restaurant management
credentials, further enhance the strategic depth that the Board
provides to management. On the management side, Michael Arzt, our
new Executive Vice President of Marketing, and Jeffrey Lewis, our
new Executive Vice President of Advertising Sales, both have the
solid backgrounds, expertise and commitment necessary to contribute
to making Buzztime a powerful out-of-home advertising network."
Results for the Fourth Quarter Ended December 31, 2008 Revenues
decreased by $1.2 million or 15% to $6.5 million for the fourth
quarter of 2008, compared to revenues of $7.7 million for the
fourth quarter of 2007. The Company's site count was 3,746 as of
the end of 2008, consistent with the site count as of September 30,
2008. Loss from continuing operations for the fourth quarter of
2008 was $690,000, a reduction of approximately $844,000 or 55%
from the loss from continuing operations of $1.5 million recorded
for the fourth quarter of 2007. Gross margin as a percentage of
revenue improved to 75% for the fourth quarter of 2008 compared to
approximately 70% for the fourth quarter of 2007. Quarterly
selling, general and administrative expenses decreased by $1.3
million or 19% year over year to approximately $5.4 million for the
fourth quarter of 2008 from $6.7 million for the fourth quarter of
2007. For the quarter ended December 31, 2008 and 2007, results
from continuing operations reflected solely the results from the
Entertainment division, following the discontinuation of the
Hospitality division. Results for the Fiscal Year Ended December
31, 2008 Revenues decreased by $3.0 million or approximately 10% to
$27.5 million for the fiscal year ended December 31, 2008 from
$30.5 million in fiscal 2007. Year-over-year reductions in
subscribing site counts and corresponding revenue were impacted by
the Company's Q3 2008 discontinuation of U.K. operations (37 sites)
and the bankruptcy of former national account Bennigan's (34
sites). The site count declined from 3,877 at December 31, 2007 to
3,746 at December 31, 2008, for a reduction of 60 sites in addition
to the site reductions noted related to the discontinuation of U.K.
operations and the Bennigan's bankruptcy. The Company's loss from
continuing operations for the 2008 fiscal year totaled $6.1
million, compared to a loss from continuing operations of $4.3
million in 2007. Gross margin as a percentage of revenue improved
to 72% in fiscal 2008 compared to 70% in 2007. Fiscal-year selling,
general and administrative expenses increased by $1.4 million, or
6%, to $25.3 million in the 2008 fiscal year from $23.9 million in
2007. This increase is primarily related to increased personnel
related costs, including $956,000 in increased severance payments;
increased consulting costs of $857,000; software disposal costs,
which increased by $360,000 due to impairments on certain projects
that were deemed to no longer fit with the Company's current
strategy; a $198,000 increase in legal fees related to corporate
governance matters and an ongoing trademark infringement case;
increased bad debt expense of $201,000 related to customer
cancellations and bankruptcies; a $202,000 increase in recruiting
expenses; and an increase of $304,000 in office lease expenses.
These increases were offset by decreases in marketing expenses
amounting to $851,000; decreased commission expenses of $339,000; a
decrease in tax expense of $270,000; and salary reductions of
$120,000 resulting from force reductions and the closing of the
Company's U.K. office. The Company's Entertainment division
incurred $478,000 of restructuring costs during fiscal 2007,
related to the restructuring of the Canadian operations, completed
in January 2007, compared to none in 2008. For fiscal year ended
December 31, 2008 and 2007, results from continuing operations
reflected solely the results from the Entertainment division,
following the discontinuation of the Hospitality division.
Discontinued Operations Discontinued operations of the Company's
Hospitality division consisted of two segments, Wireless and
Software Solutions. On March 30, 2007, the Company reported the
sale of substantially all assets of the NTN Wireless segment for
$2.4 million, which resulted in a gain of approximately $396,000 in
the first quarter of 2007. On October 31, 2007, the Company
announced that it had completed the sale and transfer of Software
Solutions' intellectual property assets and began winding down the
operation. This process was completed in the third quarter of 2008.
Discontinued operations generated no net income in the fourth
quarter of 2008 compared to a loss of $386,000, net of tax, in the
2007 fourth quarter. Discontinued operations generated a loss of
$332,000, net of tax, for the fiscal year ended December 31, 2008,
compared to a loss of $735,000, net of tax, for fiscal 2007.
Conference Call Management will review these results in a
conference call today, March 19, 2009, at 4:30 p.m. Eastern Time.
To access the conference call, please dial 1-866-360-7027 if
calling from the United States or Canada, or 1-706-643-3291 if
calling internationally. A replay will be available until March 26,
2009, which can be accessed by dialing 1-800-642-1687 if calling
from the United States or Canada or 1-706-645-9291 if calling
internationally. Please use passcode 87984288 to access the replay.
The call will also be accompanied live by webcast over the Internet
and accessible at the Company's web site at
http://www.buzztime.com/. About NTN Buzztime, Inc. NTN Buzztime,
Inc., a leader in interactive entertainment for 25 years, is based
in Carlsbad, CA. Buzztime is distributed in-home and out-of-home
across broadband platforms including online, cable TV, satellite TV
and in approximately 3,746 restaurants, sports bars and pubs
throughout North America. Buzztime entertainment is also available
on electronic games and in books. For more information, please
visit http://www.buzztime.com/. Buzztime is a proud member of the
OVAB | Out-of-home Video Advertising Bureau. Buzztime is a
registered trademark of Buzztime Entertainment, Inc. and Playmaker
is a registered trademark of NTN Buzztime, Inc. Forward-looking
Statements This release contains forward-looking statements which
reflect management's current views of future events and operations
including but not limited to estimates of financial performance and
cash flows, trends in subscriber preference and engagement and
results of marketing strategies. These statements are based on
current expectations and assumptions that are subject to risks and
uncertainties that could cause actual results to differ materially
from historical results or those expressed or implied by such
forward-looking statements. These risks and uncertainties include
risks associated with our recent management transition, our
significant losses, our ability to grow our out-of-home Buzztime
iTV network and implement our other business strategies, the risk
of changing economic conditions, failure of product demand or
market acceptance of both existing and new products and services
and the impact of competitive products and pricing. 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. COMPANY CONTACT: Kendra Berger Chief Financial Officer
NTN Buzztime, Inc. (760) 438-7400 CCG CONTACT: Sean Collins Senior
Partner CCG Investor Relations (310) 477-9800, ext. 20 (financial
tables follow) NTN BUZZTIME, INC. AND SUBSIDIARIES Condensed
Consolidated Balance Sheets As of December 31, 2008 and 2007 (In
thousands, except share data) ASSETS 2008 2007 Current Assets: Cash
and cash equivalents $3,362 $10,273 Restricted cash - 55 Accounts
receivable, net of allowances of $298 and $396, respectively 636
1,354 Investment available-for-sale 58 264 Prepaid expenses and
other current assets 611 745 Assets held for sale - 212 Total
current assets 4,667 12,903 Broadcast equipment and fixed assets,
net 3,428 4,101 Software development costs, net of accumulated
amortization of $1,002 and $1,071, respectively 860 895 Deferred
costs 1,383 1,204 Goodwill 1,032 1,285 Intangible assets, net 185
318 Other assets 107 154 Total assets $11,662 $20,860 LIABILITIES
AND SHAREHOLDERS' EQUITY Current Liabilities: Accounts payable $219
$831 Accrued expenses 1,169 901 Sales tax payable 958 982 Accrued
salaries 383 357 Accrued vacation 381 447 Income taxes payable 18
36 Obligations under capital leases-current portion 8 7 Deferred
revenue 657 972 Liabilities of discontinued operations - 672 Total
current liabilities 3,793 5,205 Obligations under capital leases,
excluding current portion 32 - Deferred revenue, excluding current
portion 91 87 Total liabilities 3,916 5,292 Commitments and
contingencies Shareholders' equity: Series A 10% cumulative
convertible preferred stock, $.005 par value, $161 liquidation
preference, 5,000,000 shares authorized; 161,000 shares issued and
outstanding 1 1 Common stock, $.005 par value, 84,000,000 shares
authorized; 55,727,000 and 55,640,000 shares issued and outstanding
at December 31, 2008 an 2007, respectively 277 277 Treasury stock,
at cost, 503,000 and 454,000 shares at December 31, 2008 and 2007,
respectively (456) (444) Additional paid-in capital 113,267 112,942
Accumulated deficit (105,351) (98,870) Accumulated other
comprehensive income 8 1,662 Total shareholders' equity 7,746
15,568 Total liabilities and shareholders' equity $11,662 $20,860
NTN BUZZTIME, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED
STATEMENTS OF OPERATIONS (In thousands, except per share data)
Three Months Ended Year Ended December 31, December 31, 2008 2007
(unaudited) (unaudited) 2008 2007 Revenues $6,525 $7,693 $27,496
$30,542 Operating expenses: Direct operating costs (includes
depreciation) 1,661 2,342 7,756 9,017 Impairment of intangible
asset - - - 968 Selling, general and administrative 5,373 6,686
25,314 23,872 Depreciation and amortization (excluding depreciation
and amortization included in direct costs) 132 145 532 566
Restructuring costs - - - 478 Total operating expenses 7,166 9,173
33,602 34,901 Operating loss (641) (1,480) (6,106) (4,359) Other
income (expense): Interest income 9 94 138 347 Interest expense -
(4) (5) (30) Other income 4 - 73 83 Total other income (expense) 13
90 206 400 Loss from continuing operations before income taxes
(628) (1,390) (5,900) (3,959) Provision for income taxes (62) (144)
(234) (332) Loss from continuing operations (690) (1,534) (6,134)
(4,291) Loss from discontinued operations, net of tax (including
gain on sale of NTN Wireless of $396 in 2007) - (386) (332) (735)
Net loss $(690) $(1,920) $(6,466) $(5,026) Net loss per common
share - basic and diluted: Loss from continuing Operations $(0.01)
$(0.03) $(0.11) $(0.08) Loss from discontinued operations (0.00)
(0.01) (0.01) (0.01) Net loss $(0.01) $(0.04) $(0.12) $(0.09)
Weighted average shares outstanding Basic and diluted 55,170 55,171
55,189 55,154 NTN BUZZTIME, INC. AND SUBSIDIARIES CONDENSED
CONSOLIDATED STATEMENTS OF CASH FLOWS For the years ended December
31, 2008 and 2007 (In thousands) 2008 2007 Cash flows (used in)
provided by operating activities: Net loss $(6,466) $(5,026) Loss
from discontinued operations, net of tax (332) (735) Loss from
continuing operations $(6,134) $(4,291) Adjustments to reconcile
net loss to net cash (used in) provided by operating activities:
Depreciation and amortization 3,101 3,932 Provision for doubtful
accounts 557 356 Stock-based compensation 312 439 Impairment of
intangible asset - 968 Loss (gain) from disposition of equipment
and capitalized software 618 (269) Changes in assets and
liabilities: Accounts receivable 142 199 Prepaid expenses and other
assets 129 337 Accounts payable and accrued expenses (367) (624)
Income taxes payable (19) (42) Deferred costs (199) 883 Deferred
revenue (296) (1,054) Net cash (used in) provided by continuing
operations (2,156) 834 Discontinued operations (807) (1,616) Net
cash used in operating activities (2,963) (782) Cash flows (used
in) provided by investing activities: Capital expenditures (2,160)
(592) Software development expenditures (835) (588) Deposits on
broadcast equipment - (161) Proceeds from sale of equipment and
other assets 12 478 Restricted cash 51 13 Net cash used in
investing activities by continuing operations (2,932) (850)
Discontinued operations 7 2,613 Net cash (used in) provided by
investing activities (2,925) 1,763 Cash flows (used in) provided by
financing activities: Principal payments on capital leases (12)
(363) Settlement of stock options - (94) Purchase of treasury stock
(12) (444) Proceeds from exercise of warrants and options - 694 Net
cash used in financing activities by continuing operations (24)
(207) Net (decrease) increase in cash and cash equivalents (5,912)
774 Effect of exchange rate on cash (999) 725 Cash and cash
equivalents at beginning of year 10,273 8,774 Cash and cash
equivalents at end of year $3,362 $10,273
http://www.newscom.com/cgi-bin/prnh/20080331/CLM183LOGO
http://photoarchive.ap.org/ DATASOURCE: NTN Buzztime, Inc. CONTACT:
Kendra Berger, Chief Financial Officer of NTN Buzztime, Inc.,
+1-760-438-7400; or Sean Collins, Senior Partner of CCG Investor
Relations, +1-310-477-9800, ext. 202, for NTN Buzztime, Inc. Web
Site: http://www.ntn.com/
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