Full Press Release Details
Buzztime, Inc. Reports First Quarter 2017 Results
GAAP Net loss of $90,000, a $1 million improvement compared to 2016 -
positive EBITDA for fourth consecutive quarter
Completes financing initiatives, anticipates regaining NYSE MKT listing compliance -
Launches Spaceteam multi-player game with close to 700,000 players in the first month -
Calif., May 3, 2017 - NTN Buzztime, Inc. (NYSE MKT: NTN) reported financial results for the first quarter ended March 31,
are very excited about 2017 as we leverage our unique technology, player base and enhanced guest experience to expand our customers,
invest in our technology and grow our distribution channels," said Ram Krishnan, NTN Buzztime CEO. "In March, we achieved
a significant milestone winning the Buffalo Wild Wings award to deliver order and pay with EMV functionality where we beat the
competition in a head-to-head trial. Also during the quarter, we launched Spaceteam throughout our entire network and it has exceeded
expectations with strong engagement and group gaming. Our plan is to introduce the Buzztime Effect into adjacent vertical markets,
which we expect will diversify our revenue streams over time. Combined with our successful equity financings to fund working capital
and growth, we are executing our plan to generate long-term shareholder value."
| Expanded relationship with Buffalo Wild Wings to include menu, order & EMV functionality. | ||
| Launched Spaceteam, an award-winning multi-player game that creates social engagement between guests at the table, leveraging Buzztime's unique form factor. | ||
| Closed financing, positioning the company to increase shareholder equity to a level that management believes will enable the company to regain NYSE MKT listing compliance. |
Results for the First Quarter Ended March 31, 2017
revenues were $5.2 million for the first quarter of 2017, compared to $5.5 million for the first quarter of 2016. The modest decline
reflects lower site count, partially offset by increases in other revenues. Direct costs were $1.8 million, down from $2.0 million
for the same period in 2016 due to the lower sales-type lease revenues as well as reduced depreciation expense, offset by increased
repair expense. Gross margin increased to 65%, up from 63% in the prior year quarter. Selling, general and administrative expenses
were $4.1 million, compared to $4.2 million for the same period in 2016. Net loss, which included non-recurring other income of
$750,000, was $90,000, or $0.04 per share, compared to $1.0 million, which included other expense of $154,000, or $0.57 per share,
for the first quarter of 2016. EBITDA was positive at $654,000, up from an EBITDA loss of $138,000 in the same period last year.
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 first
quarter of 2017, 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.
Review for the Quarter Ended March 31, 2017
site count was 2,788 venues and, as expected, decreased compared to 2,814 as of December 31, 2016. Management anticipates the
net site count will continue to fluctuate. As of March 31, 2017, BEOND platform installations increased to 2,057 locations, or
74% of the installed base, compared to 1,996 locations, or 71% of the installed base, as of December 31, 2016.
and cash equivalents were $6.1 million at March 31, 2017, compared to $5.7 million at December 31, 2016, reflecting $1.6 million
of net proceeds raised in an equity offering that closed in March 2017. Working capital, as of March 31, 2017 was $1.1 million
compared to $4.0 million as of December 31, 2016.
to an equity raise of approximately $219,000, net of expenses, that closed in April, NTN Buzztime believes it will regain compliance
with the NYSE MKT continued listing standard of $6 million in shareholders' equity. However, NYSE Regulation will need to
make such determination, which will then be disclosed publicly.
will review the results on a conference call with a live question and answer session today, May 3, 2017, at 4:30 p.m. ET. To access
the call, please use passcode 10875098:
| (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. |
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 May 10, 2017.
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, the expansion of our partnership
with Buffalo Wild Wings, delivery of order and payment technology, diversification of revenue streams and the value of our product
to our customers and their guests. 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.
(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
Chapman/Becky Herrick, LHA Investor Relations
BUZZTIME, INC. AND SUBSIDIARIES
thousands, except par value amount)
| March 31, 2017 | December 31, 2016 | |||||||
| ASSETS | ||||||||
| Current Assets: | ||||||||
| Cash and cash equivalents | $ | 6,113 | $ | 5,686 | ||||
| Accounts receivable, net | 1,765 | 928 | ||||||
| Site equipment to be installed | 2,568 | 2,998 | ||||||
| Prepaid expenses and other current assets | 1,189 | 1,050 | ||||||
| Total current assets | 11,635 | 10,662 | ||||||
| Fixed assets, net | 2,910 | 3,101 | ||||||
| Software development costs, net | 1,065 | 970 | ||||||
| Deferred costs | 851 | 904 | ||||||
| Goodwill | 946 | 937 | ||||||
| Intangible assets, net | 17 | 29 | ||||||
| Other assets | 110 | 92 | ||||||
| Total assets | $ | 17,534 | $ | 16,695 | ||||
| LIABILITIES AND SHAREHOLDERS' EQUITY | ||||||||
| Current Liabilities: | ||||||||
| Accounts payable | $ | 513 | $ | 247 | ||||
| Accrued compensation | 519 | 1,060 | ||||||
| Accrued expenses | 561 | 697 | ||||||
| Sales taxes payable | 101 | 142 | ||||||
| Income taxes payable | (17 | ) | 4 | |||||
| Current portion of long-term debt | 7,306 | 2,988 | ||||||
| Current portion of obligations under capital leases | 155 | 155 | ||||||
| Current portion of deferred revenue | 1,037 | 1,059 | ||||||
| Other current liabilities | 347 | 291 | ||||||
| Total current liabilities | 10,522 | 6,643 | ||||||
| Long-term debt | 446 | 5,123 | ||||||
| Obligations under capital leases | 220 | 259 | ||||||
| Deferred revenue | 179 | 219 | ||||||
| Deferred rent | 326 | 371 | ||||||
| Other liabilities | 13 | 12 | ||||||
| Total liabilities | 11,706 | 12,627 | ||||||
| Commitments and contingencies | ||||||||
| Shareholders' equity: | ||||||||
| Series A convertible preferred stock, $0.005 par value, $156 liquidation preference, 5,000 shares designated; 156 shares issued and outstanding at March 31, 2017 and December 31, 2016 | 1 | 1 | ||||||
| Common stock, $0.005 par value, 168,000 shares authorized at March 31, 2017 and December 31, 2016; 2,484 and 2,261 shares issued and outstanding at March 31, 2017 and December 31, 2016, respectively | 12 | 11 | ||||||
| Treasury stock, at cost, 10 shares at March 31, 2017 and December 31, 2016 | (456 | ) | (456 | ) | ||||
| Additional paid-in capital | 134,149 | 132,315 | ||||||
| Accumulated deficit | (128,116 | ) | (128,026 | ) | ||||
| Accumulated other comprehensive income | 238 | 223 | ||||||
| Total shareholders' equity | 5,828 | 4,068 | ||||||
| Total liabilities and shareholders' equity | $ | 17,534 | $ | 16,695 |
BUZZTIME, INC. AND SUBSIDIARIES
STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS
thousands, except per share data)
| Three months ended March 31, | ||||||||
| 2017 | 2016 | |||||||
| Revenues | ||||||||
| Subscription revenue | $ | 4,226 | $ | 4,374 | ||||
| Sales-type lease revenue | 185 | 396 | ||||||
| Other revenue | 820 | 712 | ||||||
| Total revenues | 5,231 | 5,482 | ||||||
| Operating expenses: | ||||||||
| Direct operating costs (includes depreciation and amortization) | 1,843 | 2,036 | ||||||
| Selling, general and administrative | 4,134 | 4,200 | ||||||
| Depreciation and amortization (excluding depreciation and amortization included in direct costs | 88 | 114 | ||||||
| Total operating expenses | 6,065 | 6,350 | ||||||
| Operating loss | (834 | ) | (868 | ) | ||||
| Other income (expense), net | 750 | (154 | ) | |||||
| Loss before income taxes | (84 | ) | (1,022 | ) | ||||
| Provision for income taxes | (6 | ) | (19 | ) | ||||
| Net loss | $ | (90 | ) | $ | (1,041 | ) | ||
| Net loss per common share - basic and diluted | $ | (0.04 | ) | $ | (0.57 | ) | ||
| Weighted average shares outstanding - basic and diluted | 2,255 | 1,839 | ||||||
| Comprehensive loss: | ||||||||
| Net loss | $ | (90 | ) | $ | (1,041 | ) | ||
| Foreign currency translations adjustment | 15 | 113 | ||||||
| Total comprehensive loss | $ | (75 | ) | $ | (928 | ) |
BUZZTIME, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
| Three months ended March 31, | ||||||||
| 2017 | 2016 | |||||||
| Cash flows used in operating activities: | ||||||||
| Net loss | $ | (90 | ) | $ | (1,041 | ) | ||
| Adjustments to reconcile net loss to net cash used in operating activities: | ||||||||
| Depreciation and amortization | 579 | 757 | ||||||
| Provision for doubtful accounts | 26 | 24 | ||||||
| Excess and obsolete site equipment to be installed expense | - | 25 | ||||||
| Stock-based compensation | 118 | 113 | ||||||
| Amortization of debt issuance costs | 12 | 10 | ||||||
| Issuance of common stock in lieu of cash payment for bonus compensation | 164 | - | ||||||
| Loss from disposition of equipment | - | 5 | ||||||
| Changes in assets and liabilities: | ||||||||
| Accounts receivable | (863 | ) | 126 | |||||
| Site equipment to be installed | 208 | (115 | ) | |||||
| Prepaid expenses and other liabilities | (148 | ) | (76 | ) | ||||
| Accounts payable and accrued expenses | (450 | ) | (209 | ) | ||||
| Income taxes payable | (22 | ) | (1 | ) | ||||
| Deferred costs | 53 | 29 | ||||||
| Deferred revenue | (62 | ) | (7 | ) | ||||
| Deferred rent | (45 | ) | (40 | ) | ||||
| Other liabilities | 55 | (104 | ) | |||||
| Net cash used in operating activities | (466 | ) | (504 | ) | ||||
| Cash flows used in investing activities: | ||||||||
| Capital expenditures | (97 | ) | (177 | ) | ||||
| Software development expenditures | (152 | ) | (99 | ) | ||||
| Net cash used in investing activities | (249 | ) | (276 | ) | ||||
| Cash flows provided by financing activities: | ||||||||
| Net proceeds from issuance of common stock related to registered direct offering | 1,554 | - | ||||||
| Proceeds from long-term debt | - | 2,114 | ||||||
| Payment on long-term debt | (359 | ) | (1,035 | ) | ||||
| Debit issuance costs of long-term deb | (22 | ) | (5 | ) | ||||
| Principal payments on capital lease | (38 | ) | (21 | ) | ||||
| Net cash provided by financing activities | 1,135 | 1,053 | ||||||
| Net increase in cash and cash equivalents | 420 | 273 | ||||||
| Effect of exchange rate on cash | 7 | 53 | ||||||
| Cash and cash equivalents at beginning of period | 5,686 | 3,223 | ||||||
| Cash and cash equivalents at end of period | 6,113 | 3,549 |
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.
following table reconciles our net loss per GAAP (in thousands) to EBITDA:
| Three months ended March 31, | ||||||||
| 2017 | 2016 | |||||||
| Net loss per GAAP | $ | (90 | ) | $ | (1,041 | ) | ||
| Interest expense, net | 159 | 127 | ||||||
| Income tax provision | 6 | 19 | ||||||
| Depreciation and amortization | 579 | 757 | ||||||
| Total EBITDA | $ | 654 | $ | (138 | ) |