Full Press Release Details
NTN Buzztime, Inc. Expands Partnership with
Buffalo Wild Wings and
Reports Fourth Quarter and Year-end 2016
- Improves 2016 Net Loss by $4.3
million compared to 2015 -
- Buzztime Selected to Deliver Order
and Pay with EMV Functionality to Buffalo Wild Wings -
CARLSBAD, Calif., Mar. 6, 2017 - NTN
Buzztime, Inc. (NYSE MKT: NTN) reported financial results for the fourth quarter and year ended December 31, 2016. Also, after
a thorough evaluation and competitive pilot, Buffalo Wild Wings has selected Buzztime to provide menu, order and pay functionality,
including EMV, for guests at all of Buffalo Wild Wings' domestic corporate and franchise locations, which will expand the
scope of the two companies' existing partnership.
"Fourth quarter provided a strong close
to 2016, as significant operational efforts throughout the year increased gross margin to 65% and improved the bottom line by $4.3
million," said Ram Krishnan, NTN Buzztime CEO. "Now, we are excited Buffalo Wild Wings awarded Buzztime the order and
pay with EMV functionality. We have enjoyed a mutually beneficial partnership with Buffalo Wild Wings throughout the years and
are thrilled to expand our relationship. We believe technology used to improve entertainment and service is critical to the guest
experience. In 2017, we will continue investing in the platform as well as driving revenue with our growing distribution channels.
We are excited to build upon our successes and generate shareholder value."
its ordering and payment technology in the market close to two years ago and will now add Buffalo Wild Wings to the growing list
of customers adopting Buzztime's ordering, payment and EMV technology. The Buzztime handheld form factor invites multiple
players at the table, and by using technology to continually augment entertainment and service, it enhances the guest experience.
The guest-facing tablets provide valuable data and insights to store management. Further, EMV payment functionality provides security
and fraud protection while enabling payment at the table.
Financial Results for the Fourth Quarter
Ended December 31, 2016
Total revenues were $6.0 million for the fourth
quarter of 2016. This was up compared to $5.4 million for the third quarter of 2016 due to increases in sales-type lease and other
revenue, but down compared to $6.5 million for the fourth quarter of 2015 reflecting expected lower sales-type lease revenue, partially
offset by increases in other revenues. Direct costs were $2.1 million, down 38% from $3.3 million for the same period in 2015 due
to the lower sales-type lease revenues as well as reduced scrap and repair costs. As a result, gross margin increased to 65%, up
from 49% in the prior year quarter. Selling, general and administrative expenses were $4.1 million for the fourth quarter of 2016,
compared to $4.0 million for the same period in 2015. Net loss was $459,000, or $0.22 per share, improving from $990,000, or $0.54
per share, for the fourth quarter of 2015. EBITDA was $390,000, up from $52,000 in the same period last year.
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 for the fourth quarter of 2016, EBITDA 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.
Financial Results for the Year Ended
Total revenues were $22.3 million for 2016,
compared to $24.5 million for 2015 reflecting expected lower sales-type lease revenue that offset increases in other revenues.
Direct costs were $7.7 million, down 39% from $12.6 million for 2015 due to the lower sales-type lease revenues as well as reduced
scrap and repair costs. As a result, gross margin also increased to 65%, up from 49% in 2015. Selling, general and administrative
expenses were $16.5 million, down 9% compared to 2015. Net loss was $2.9 million, or $1.54 per share, improving $4.3 million from
$7.2 million, or $3.93 per share, for 2015. EBITDA was $578,000, compared to an EBITDA loss of $3.6 million in 2015.
Metric Review for the Quarter Ended December
The site count was 2,814 venues and, as expected,
decreased compared to 2,848 as of September 30, 2016. Management anticipates the net count will continue to fluctuate. As of December
31, 2016, BEOND platform installations increased to 1,996 locations, or 71% of the installed base, compared to 1,968 or 69% of
the installed base, as of September 30, 2016.
Cash and cash equivalents were $5.7 million
at December 31, 2016, compared to $3.2 million as of December 31, 2015, reflecting $2.7 million raised in November 2016. Working
capital, as of December 31, 2016, was $4.0 million, flat from December 31, 2015. Subsequent to quarter close, the company
signed an amendment to its credit facility with its primary lender, East West Bank, providing flexibility with short-term working
Management will review
the results on a conference call with a live question and answer session today, March 6, 2017, at 4:30 p.m. ET. To access the call,
please use passcode 76178694:
| (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 over the Internet and accessible at the company's website at http://www.buzztime.com. The replay of the call
will be available until March 16, 2017.
Forward-looking Statements
This release contains forward-looking statements
which reflect management's current views of future events and operations. These statements are based on current expectations
and assumptions that are subject to risks and uncertainties that could cause actual results to differ materially. These risks and
uncertainties include statements about our growth plans, delivery of order and payment technology, value of our product to our
customers and their guests, security and fraud protection for our customers and their guests, future investments in our product
platform and expansion of partnership. 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.
Buzztime (NYSE MKT: NTN) delivers interactive
entertainment and innovative dining technology to bars and restaurants in North America. Venues license Buzztime's customizable
solution to differentiate themselves via competitive fun by offering guests trivia, card, sports and arcade games, nationwide
competitions, personalized menus and self-service dining features. Buzztime's platform improves operating efficiencies,
creates connections among the players and venues, and amplifies guests' positive experiences. Founded in 1984, Buzztime
has accumulated over 9 million player registrations and over 136 million games were played in 2016 alone. For more information,
Kirsten Chapman/Becky
Herrick, LHA Investor Relations
NTN BUZZTIME, INC. AND SUBSIDIARIES
(In thousands, except par value amount)
| December 31, 2016 | December 31, 2015 | |||||||
| ASSETS | ||||||||
| Current Assets: | ||||||||
| Cash and cash equivalents | $ | 5,686 | $ | 3,223 | ||||
| Accounts receivable, net | 928 | 919 | ||||||
| Site equipment to be installed | 2,998 | 3,990 | ||||||
| Prepaid expenses and other current assets | 1,050 | 978 | ||||||
| Total current assets | 10,662 | 9,110 | ||||||
| Fixed assets, net | 3,101 | 3,915 | ||||||
| Software development costs, net | 970 | 943 | ||||||
| Deferred costs | 904 | 1,328 | ||||||
| Goodwill | 937 | 909 | ||||||
| Intangible assets, net | 29 | 79 | ||||||
| Other assets | 92 | 124 | ||||||
| Total assets | $ | 16,695 | $ | 16,408 | ||||
| LIABILITIES AND SHAREHOLDERS' EQUITY | ||||||||
| Current Liabilities: | ||||||||
| Accounts payable | $ | 247 | $ | 211 | ||||
| Accrued compensation | 1,060 | 1,024 | ||||||
| Accrued expenses | 697 | 670 | ||||||
| Sales taxes payable | 142 | 192 | ||||||
| Income taxes payable | 4 | 22 | ||||||
| Current portion of long-term debt | 2,988 | 1,072 | ||||||
| Current portion of obligations under capital leases | 155 | 78 | ||||||
| Current portion of deferred revenue | 1,059 | 1,214 | ||||||
| Other current liabilities | 291 | 639 | ||||||
| Total current liabilities | 6,643 | 5,122 | ||||||
| Long-term debt | 5,123 | 6,366 | ||||||
| Obligations under capital leases | 259 | 138 | ||||||
| Deferred revenue | 219 | 393 | ||||||
| Deferred rent | 371 | 541 | ||||||
| Other liabilities | 12 | -- | ||||||
| Total liabilities | 12,627 | 12,560 | ||||||
| Commitments and contingencies | ||||||||
| Shareholders' equity: | ||||||||
| Series A 10% cumulative convertible preferred stock, $0.005 par value, $156 liquidation preference, 5,000 shares authorized; 156 shares issued and outstanding at December 31, 2016 and 2015 | 1 | 1 | ||||||
| Common stock, $0.005 par value, 168,000 shares authorized at December 31, 2016 and 2015; 2,261 and 1,849 shares issued and outstanding at December 31, 2016 and 2015, respectively | 11 | 9 | ||||||
| Treasury stock, at cost, 10 shares at December 31, 2016 and 2015 | (456 | ) | (456 | ) | ||||
| Additional paid-in capital | 132,315 | 129,209 | ||||||
| Accumulated deficit | (128,026 | ) | (125,087 | ) | ||||
| Accumulated other comprehensive income | 223 | 172 | ||||||
| Total shareholders' equity | 4,068 | 3,848 | ||||||
| Total liabilities and shareholders' equity | $ | 16,695 | $ | 16,408 |
NTN BUZZTIME, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
AND COMPREHENSIVE LOSS
(In thousands, except per share data)
| Three months ended December 31, | Twelve months ended December 31, | |||||||||||||||
| 2016 | 2015 | 2016 | 2015 | |||||||||||||
| Revenues | ||||||||||||||||
| Subscription revenue | $ | 4,356 | $ | 4,392 | $ | 17,463 | $ | 17,062 | ||||||||
| Sales-type lease revenue | 427 | 1,127 | 1,266 | 4,202 | ||||||||||||
| Other revenue | 1,197 | 1,002 | 3,583 | 3,255 | ||||||||||||
| Total revenues | 5,980 | 6,521 | 22,312 | 24,519 | ||||||||||||
| Operating expenses: | ||||||||||||||||
| Direct operating costs (includes depreciation and amortization) | 2,087 | 3,346 | 7,710 | 12,570 | ||||||||||||
| Selling, general and administrative | 4,098 | 3,954 | 16,458 | 18,060 | ||||||||||||
| Impairment of capitalized software | - | - | - | 295 | ||||||||||||
| Depreciation and amortization (excluding depreciation and amortization included in direct costs | 95 | 124 | 422 | 489 | ||||||||||||
| Total operating expenses | 6,280 | 7,424 | 24,590 | 31,414 | ||||||||||||
| Operating loss | (300 | ) | (903 | ) | (2,278 | ) | (6,895 | ) | ||||||||
| Other (expense) income: | ||||||||||||||||
| Interest income | - | - | - | 3 | ||||||||||||
| Interest expense | (146 | ) | (111 | ) | (576 | ) | (484 | ) | ||||||||
| Other income | (6 | ) | 23 | (31 | ) | 162 | ||||||||||
| Total other expense, net | (152 | ) | (88 | ) | (607 | ) | (319 | ) | ||||||||
| Loss before income taxes | (452 | ) | (991 | ) | (2,885 | ) | (7,214 | ) | ||||||||
| (Provision) benefit for income taxes | (7 | ) | 1 | (38 | ) | (12 | ) | |||||||||
| Net loss | $ | (459 | ) | $ | (990 | ) | $ | (2,923 | ) | $ | (7,226 | ) | ||||
| Net loss per common share - basic and diluted | $ | (0.22 | ) | $ | (0.54 | ) | $ | (1.54 | ) | $ | (3.93 | ) | ||||
| Weighted average shares outstanding - basic and diluted | 2,094 | 1,838 | 1,903 | 1,838 | ||||||||||||
| Comprehensive loss: | ||||||||||||||||
| Net loss | $ | (459 | ) | $ | (990 | ) | $ | (2,923 | ) | $ | (7,226 | ) | ||||
| Foreign currency translations adjustment | (39 | ) | (56 | ) | 51 | (307 | ) | |||||||||
| Total comprehensive loss | $ | (498 | ) | $ | (1,046 | ) | $ | (2,872 | ) | $ | (7,533 | ) |
NTN BUZZTIME, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH
| Twelve months ended December 31, | ||||||||
| 2016 | 2015 | |||||||
| Cash flows provided by (used in) operating activities: | ||||||||
| Net loss | $ | (2,923 | ) | $ | (7,226 | ) | ||
| Adjustments to reconcile net loss to net cash used in operating activities: | ||||||||
| Depreciation and amortization | 2,887 | 3,104 | ||||||
| Provision for doubtful accounts | 74 | 12 | ||||||
| Excess and obsolete site equipment to be installed expense | 63 | 797 | ||||||
| Transfer of fixed assets to sales-type lease | 5 | - | ||||||
| Stock-based compensation | 419 | 456 | ||||||
| Amortization of debt issuance costs | 36 | 18 | ||||||
| Issuance of common stock to consultant in lieu of cash payment | - | 1 | ||||||
| Impairment of capitalized software | - | 295 | ||||||
| Loss from disposition of equipment | 33 | 28 | ||||||
| Changes in assets and liabilities: | ||||||||
| Accounts receivable | (83 | ) | 1,250 | |||||
| Site equipment to be installed | (217 | ) | (1,394 | ) | ||||
| Prepaid expenses and other liabilities | 121 | (235 | ) | |||||
| Accounts payable and accrued expenses | 47 | (372 | ) | |||||
| Income taxes payable | (19 | ) | (72 | ) | ||||
| Deferred costs | 425 | (241 | ) | |||||
| Deferred revenue | (327 | ) | (608 | ) | ||||
| Deferred rent | (170 | ) | (152 | ) | ||||
| Other liabilities | (348 | ) | 159 | |||||
| Net cash provided by (used in) operating activities | 23 | (4,180 | ) | |||||
| Cash flows used in investing activities: | ||||||||
| Capital expenditures | (427 | ) | (991 | ) | ||||
| Software development expenditures | (413 | ) | (641 | ) | ||||
| Proceeds from the sale of equipment | - | 9 | ||||||
| Net cash used in investing activities | (840 | ) | (1,623 | ) | ||||
| Cash flows provided by financing activities: | ||||||||
| Net proceeds from issuance of common stock related to registered direct offering | 2,692 | - | ||||||
| Proceeds from long-term debt | 2,502 | 6,737 | ||||||
| Payment on long-term debt | (1,829 | ) | (4,618 | ) | ||||
| Debit issuance costs of long-term deb | (9 | ) | (81 | ) | ||||
| Principal payments on capital lease | (81 | ) | (58 | ) | ||||
| Payment to cashed-out stockholders in connection with reverse/forward stock split | (3 | ) | - | |||||
| Payment of preferred stockholder dividends | (16 | ) | - | |||||
| Net cash provided by financing activities | 3,256 | 1,980 | ||||||
| Net increase (decrease) in cash and cash equivalents | 2,439 | (3,823 | ) | |||||
| Effect of exchange rate on cash | 24 | (139 | ) | |||||
| Cash and cash equivalents at beginning of period | 3,223 | 7,185 | ||||||
| Cash and cash equivalents at end of period | 5,686 | 3,223 |
Non-GAAP Information
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.