Full Press Release Details
NTN Buzztime, Inc. Reports First-Quarter
- The BEOND Platform Reaches
43% of the Installed Base -
- Aligns Business to Key Initiatives
and Reduces Future Operating Expenses -
CARLSBAD, Calif., May 7, 2015 - NTN Buzztime,
Inc. (NYSE MKT: NTN), reported financial results for the first-quarter ended March 31, 2015.
"Our technology transformation continues
to progress well," said Ram Krishnan, NTN Buzztime CEO. "In the first quarter, we launched Jackpot Trivia (JPT) on
our new game platform. JPT is tracking solidly as is the early testing for our new sports line-up, which is also utilizing our
new game platform. In addition, our initiative for tableside ordering and closeout is advancing. We are currently launching self-service
dining with long-time partner Arooga's.
"At March 31, 2015, we increased the BEOND
platform to 43% of our installed base from 37% at December 31, 2014. The previously discussed delay in tablet cases is impacting
installations in the first half of 2015. We expect the installation rate to accelerate toward the latter half of the year. Our
key initiatives include converting our installed base from Classic Playmaker to the BEOND platform; launching new games that entertain
and engage; expanding our footprint into new brands; and increasing our revenue through premium services. In May, to increase focus
on these objectives, we realigned our business via operational and staffing changes. We believe these actions will help ensure
we can deliver value to our customers in the shortest time possible while reducing our spend.
"Furthermore, we increased liquidity by
securing a credit facility with an institutional lending partner. We intend to use our expanded financial flexibility and strengthened
balance sheet to fund future growth," concluded Mr. Krishnan.
Results for the First-Quarter Ended March
Revenues were $5.7 million, compared to $6.4 million
for the same period in 2014, due to expected decreases in site count associated with the tablet transition and to fewer installations
associated with the delay in case production. Direct costs were $2.6 million including a scrap expense of $162,000 compared to
$2.5 million for the same period in 2014. Selling, general and administrative expenses were $5.2 million, compared to $4.4 million
for the same period in 2014, reflecting the investment in key personnel and marketing initiatives, which were offset by a decrease
in professional fees and consulting. Net loss was $2.3 million, or $0.02 per share, compared to $0.6 million, or $0.01 per share,
in the same period a year ago.
Metric Review: Quarter Ended March 31, 2015
Compared to December 31, 2014
The company ended the first quarter of 2015 with
2,908 subscribing venues, compared to 2,956 as of December 31, 2014. At March 31, 2015, BEOND installations increased to 1,236
locations, or 43% of the installed base compared to 37% at December 31, 2014. At March 31, 2015, the BEOND platform conversion
for Buffalo Wild Wings, the largest customer, increased to 788 sites from 710 at the end of the fourth quarter.
At March 31, 2015, cash and cash equivalents were
$7.2 million, compared to $7.2 million at December 31, 2014. In April, the company closed a three-year revolving credit agreement
with East West Bank for up to $10.0 million dollars, in addition to maintaining the current equipment lender relationship.
Management will review the results on a conference
call today, May 7, 2015, at 4:30 p.m. ET. To access the call, please use passcode 37391270 and dial:
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
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 statements about our growth
plans, product and platform development, launches and usage, new revenue and the effect of cost control measures, acceptance in
the marketplace, customer development, customer and consumer satisfaction and the number of locations, players and games. 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 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,
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.
Inc. (NYSE MKT: NTN) is a leading bar and restaurant social entertainment and integrated marketing platform. Trusted by bars and
restaurants in North America since 1985, Buzztime integrates trivia, card and sports games with in- and out-of-venue messaging
and communication tools. With over 7 million player registrations on the Buzztime platform and over 80 million games played in
2014, Buzztime players spread the word and invite friends and family to their favorite Buzztime locations to enjoy evenings of
fun and competition. With Buzztime entertainment and marketing solutions, bars and restaurants can turn casual visitors into regulars,
and give patrons a reason to stay longer. For the most up-to-date information on NTN Buzztime, please visit http://www.buzztime.com
Kirsten Chapman/Becky Herrick, LHA
(financial tables follow)
NTN BUZZTIME, INC. AND SUBSIDIARIES
Consolidated Balance Sheets
(In thousands, except
| March 31, 2015 | December 31, 2014 | |||||||
| ASSETS | ||||||||
| Current Assets: | ||||||||
| Cash and cash equivalents | $ | 7,163 | $ | 7,185 | ||||
| Accounts receivable, net | 645 | 2,190 | ||||||
| Site equipment to be installed | 4,198 | 4,755 | ||||||
| Prepaid expenses and other current assets | 642 | 742 | ||||||
| Total current assets | 12,648 | 14,872 | ||||||
| Broadcast equipment and fixed assets, net | 3,571 | 3,400 | ||||||
| Software development costs, net | 1,609 | 1,634 | ||||||
| Deferred costs | 1,159 | 1,092 | ||||||
| Goodwill | 997 | 1,084 | ||||||
| Intangible assets, net | 117 | 129 | ||||||
| Other assets | 57 | 57 | ||||||
| Total assets | $ | 20,158 | $ | 22,268 | ||||
| LIABILITIES AND SHAREHOLDERS' EQUITY | ||||||||
| Current Liabilities: | ||||||||
| Accounts payable | $ | 577 | $ | 617 | ||||
| Accrued compensation | 1,062 | 749 | ||||||
| Accrued expenses | 1,004 | 969 | ||||||
| Sales taxes payable | 140 | 133 | ||||||
| Income taxes payable | 84 | 104 | ||||||
| Notes payable-current portion | 2,025 | 2,176 | ||||||
| Obligations under capital leases-current portion | 68 | 28 | ||||||
| Deferred revenue | 2,320 | 1,836 | ||||||
| Other current liabilities | 387 | 481 | ||||||
| Total current liabilities | 7,667 | 7,093 | ||||||
| Notes payable, excluding current portion | 2,670 | 3,143 | ||||||
| Obligations under capital leases, excluding current portion | 142 | 30 | ||||||
| Deferred revenue, excluding current portion | 412 | 378 | ||||||
| Deferred rent | 657 | 693 | ||||||
| Other liabilities | 1 | 7 | ||||||
| Total liabilities | 11,549 | 11,344 | ||||||
| Commitments and contingencies | ||||||||
| Shareholders' equity: | ||||||||
| Series A 10% cumulative convertible preferred stock, $.005 par value, $156 liquidation preference, 5,000 shares authorized; 156 issued and outstanding at March 31, 2015 and 2014 | 1 | 1 | ||||||
| Common stock, $.005 par value, 168,000 shares authorized at March 31, 2015 and December 31, 2014; 92,381 and 92,370 shares issued and outstanding at March 31, 2015 and December 31, 2014, respectively | 462 | 462 | ||||||
| Treasury stock, at cost, 503 shares at March 31, 2015 and December 31, 2014 | (456 | ) | (456 | ) | ||||
| Additional paid-in capital | 128,384 | 128,283 | ||||||
| Accumulated deficit | (120,108 | ) | (117,845 | ) | ||||
| Accumulated other comprehensive income | 326 | 479 | ||||||
| Total shareholders' equity | 8,609 | 10,924 | ||||||
| Total liabilities and shareholders' equity | $ | 20,158 | $ | 22,268 |
NTN BUZZTIME, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
AND COMPREHENSIVE LOSS
(In thousands, except
| Three Months Ended March 31, | ||||||||
| 2015 | 2014 | |||||||
| Revenues | ||||||||
| Subscription revenue | $ | 4,200 | $ | 4,619 | ||||
| Sales-type lease revenue | 840 | 1,113 | ||||||
| Other revenue | 686 | 686 | ||||||
| Total revenue | 5,726 | 6,418 | ||||||
| Operating expenses: | ||||||||
| Direct operating costs (includes depreciation and amortization) | 2,649 | 2,530 | ||||||
| Selling, general and administrative | 5,162 | 4,390 | ||||||
| Depreciation and amortization (excluding depreciation and amortization included in direct costs) | 121 | 152 | ||||||
| Total operating expenses | 7,932 | 7,072 | ||||||
| Operating loss | (2,206 | ) | (654 | ) | ||||
| Other (expense) income, net | (43 | ) | 15 | |||||
| Loss before income taxes | (2,249 | ) | (639 | ) | ||||
| Provision for income taxes | (14 | ) | (10 | ) | ||||
| Net loss | $ | (2,263 | ) | $ | (649 | ) | ||
| Net loss per common share - basic and diluted | $ | (0.02 | ) | $ | (0.01 | ) | ||
| Weighted average shares outstanding - basic and diluted | 91,876 | 78,178 | ||||||
| Comprehensive loss | ||||||||
| Net loss | $ | (2,263 | ) | $ | (649 | ) | ||
| Foreign currency translation adjustment | (153 | ) | (63 | ) | ||||
| Total comprehensive loss | $ | (2,416 | ) | $ | (712 | ) |
NTN BUZZTIME, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH
| Three months ended March 31, | ||||||||
| 2015 | 2014 | |||||||
| Cash flows provided by (used in) operating activities: | ||||||||
| Net loss | $ | (2,263 | ) | $ | (649 | ) | ||
| Adjustments to reconcile net loss to net cash provided by operating activities: | ||||||||
| Depreciation and amortization | 701 | 685 | ||||||
| Provision for doubtful accounts | (39 | ) | 20 | |||||
| Stock-based compensation | 99 | 52 | ||||||
| Issuance of common stock to consultant in lieu of cash payment | 1 | 6 | ||||||
| Loss from disposition of equipment | 1 | 22 | ||||||
| Changes in assets and liabilities: | ||||||||
| Accounts receivable | 1,459 | (493 | ) | |||||
| Site equipment to be installed | 317 | (388 | ) | |||||
| Prepaid expenses and other assets | 8 | 25 | ||||||
| Accounts payable and accrued liabilities | 312 | 421 | ||||||
| Income taxes payable | (13 | ) | (6 | ) | ||||
| Deferred costs | (70 | ) | (145 | ) | ||||
| Deferred revenue | 518 | 29 | ||||||
| Deferred rent | (36 | ) | (32 | ) | ||||
| Net cash provided by (used in) operating activities | $ | 995 | (453 | ) | ||||
| Cash flows used in investing activities: | ||||||||
| Capital expenditures | (215 | ) | (322 | ) | ||||
| Software development expenditures | (222 | ) | (198 | ) | ||||
| Net cash used in investing activities | (437 | ) | (520 | ) | ||||
| Cash flows (used in) provided by financing activities: | ||||||||
| Proceeds from notes payable | 74 | 764 | ||||||
| Payments on notes payable | (699 | ) | (439 | ) | ||||
| Principal payments on capital leases | (7 | ) | (6 | ) | ||||
| Proceeds from exercise of stock options | - | 6 | ||||||
| Tax withholding related to net-share settlements of restricted stock units | - | (15 | ) | |||||
| Net cash (used in) provided by financing activities | (632 | ) | 310 | |||||
| Net decrease in cash and cash equivalents | (74 | ) | (663 | ) | ||||
| Effect of exchange rate on cash | 52 | (31 | ) | |||||
| Cash and cash equivalents at beginning of period | 7,185 | 5,455 | ||||||
| Cash and cash equivalents at end of period | $ | 7,163 | $ | 4,761 |
A schedule reconciling
the Company's consolidated net loss calculated in accordance with GAAP to EBITDA is included in the supplemental table below.
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 loss
per GAAP (in thousands) to EBITDA:
| For the three months ended March 31, | ||||||||
| 2015 | 2014 | |||||||
| Net loss per GAAP | $ | (2,263 | ) | $ | (649 | ) | ||
| Interest expense, net | 102 | 24 | ||||||
| Income tax provision | 14 | 10 | ||||||
| Depreciation and amortization | 701 | 685 | ||||||
| EBITDA | $ | (1,446 | ) | $ | 70 |