Full Press Release Details
Buzztime, Inc. Reports Fourth Quarter and Full Year 2018 Results
Grew Q4 2018 Revenue 12% to $5.9 Million -
Reported Q4 2018 GAAP Net Income Attributable to Common Shareholders of $44,000 -
Posted $732,000 in Q4 2018 EBITDA, Marking Eleventh Consecutive Quarter Positive -
Calif., March 20, 2019, - NTN Buzztime, Inc. (NYSE American: NTN), reported financial results for the fourth quarter and
year ended December 31, 2018.
business momentum delivered another strong quarter, including positive net income, and closed 2018 with the company's best
bottom line annual performance in 24 years," said Ram Krishnan, NTN Buzztime CEO. "In 2018, we grew revenue 10%, driven
by increased equipment sales while increasing cash from operations by approximately 150%. These improvements reflect the impact
of our revenue diversification strategy and continued progress in all facets of the business.
importantly, we continue to invest for future growth by advancing our entertainment platform and bringing new offerings to the
market. During 2018, we introduced our hardware platform appealing to new markets and attracting new customers. We have made progress
with our SiteHub - the dramatically smaller form factor management system that improves functionality, eliminates wires
and lowers costs - and are planning live beta sites in 2019. Our Trivia for Cash' promotions increased player
engagement and boosted business at our partner locations. So, we are rolling out additional campaigns to continue with this progress.
In the first quarter of 2019, we joined a new ad exchange, which broadens advertising buyer access to our inventory in multiple
marketplaces. Additionally, we are in the process of launching our mobile app, which increases convenience for players and engagement
for venues on- and off-premise.
these efforts to expand our product offering and revenue channels, we are confident in our ability to bring new sustainable growth
to the company. While we continue to explore and evaluate strategic alternatives focused on maximizing shareholder value, our
priority is building scalable distribution along with innovative products," concluded Krishnan.
Results for the Fourth Quarter Ended December 31, 2018
revenues were $5.9 million, up 11.8% from $5.3 million in the fourth quarter of 2017, due to increases in hardware revenue offset
by lower subscription revenue. Direct costs were $2.1 million and gross margin was 65%, compared to $1.7 million and 67% for the
same period in 2017, reflecting the product mix shift. Selling, general and administrative expense decreased to $3.4 million,
or 57% of revenue, down from $4.0 million, or 75% of revenue, in the prior year quarter, reflecting cost management measures.
During the fourth quarter of 2018, the company incurred a goodwill impairment loss of $261,000 related to its Canadian business
and did not in the comparable period. Net income attributable to common shareholders was $44,000, or $0.02 per diluted share,
improved from a net loss attributable to common shareholders of $647,000, or $0.31 per share, in the prior year quarter. EBITDA
was $732,000 for the fourth quarter of 2018, compared to $117,000 in the prior year quarter.
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.
Review for the Quarter Ended December 31, 2018
site count was 2,639 at December 31, 2018, compared to 2,666 at September 30, 2018. Management anticipates that net site count
will continue to fluctuate. The tablet platform installations remained flat at 84% of the installed base, when compared to the
install base as of September 30, 2018.
and cash equivalents were $2.5 million at December 31, 2018, compared to $3.4 million at December 31, 2017. 2018 cash flow from
operations reached $1.4 million, increasing $800,000 from $549,000 in 2017. Total deferred revenue was $1.4 million, down from
$3.6 million at December 31, 2017. Working capital was $2.8 million at December 31, 2018, improving $3.9 million from negative
$1.1 million at December 31, 2017.
Results for the Full Year Ended December 31, 2018
revenues were $23.3 million, up 9.7% from $21.3 million in 2017, reflecting increases in professional development, advertising
and hardware revenue. Net loss attributable to common shareholders for 2018 was $275,000, or $0.10 per share, improved from a
net loss attributable to common shareholders of $1.1 million, or $0.45 per share for 2017. EBITDA was $2.8 million for 2018, compared
to $1.8 million for 2017.
will review the results on a conference call with a live question and answer session today, March 20, 2019, at 4:30 p.m. ET. To
access the call, please use passcode 9359779 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. |
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 March 27, 2019.
release contains forward-looking statements that reflect management's current views of future events and operations, including
statements regarding management's expectations regarding future sustainable growth, new offerings, market expansion, strategic
opportunities, the ability of the company's new lighter offerings to enhance the value and attractiveness of the company's
offerings, 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 of both existing and new offerings 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, except as required by law.
(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.
Chapman, LHA Investor Relations, buzztime@lhai.com, 415-433-3777
BUZZTIME, INC. AND SUBSIDIARIES
thousands, except par value amount)
| December 31, 2018 | December 31, 2017 | |||||||
| ASSETS | ||||||||
| Current Assets: | ||||||||
| Cash and cash equivalents | $ | 2,536 | $ | 3,378 | ||||
| Restricted cash | 50 | - | ||||||
| Accounts receivable, net | 1,143 | 714 | ||||||
| Site equipment to be installed | 2,539 | 4,866 | ||||||
| Prepaid expenses and other current assets | 517 | 680 | ||||||
| Total current assets | 6,785 | 9,638 | ||||||
| Restricted cash, long-term | 200 | - | ||||||
| Fixed assets, net | 4,667 | 3,678 | ||||||
| Software development costs, net | 2,018 | 1,459 | ||||||
| Deferred costs | 424 | 775 | ||||||
| Goodwill | 667 | 1,004 | ||||||
| Other assets | 103 | 16 | ||||||
| Total assets | $ | 14,864 | $ | 16,570 | ||||
| LIABILITIES AND SHAREHOLDERS' EQUITY | ||||||||
| Current Liabilities: | ||||||||
| Accounts payable | $ | 271 | $ | 390 | ||||
| Accrued compensation | 572 | 646 | ||||||
| Accrued expenses | 444 | 418 | ||||||
| Sales taxes payable | 87 | 107 | ||||||
| Income taxes payable | 1 | 13 | ||||||
| Current portion of long-term debt | 1,000 | 5,059 | ||||||
| Current portion of obligations under capital leases | 45 | 176 | ||||||
| Current portion of deferred revenue | 1,371 | 3,564 | ||||||
| Deferred rent | - | 182 | ||||||
| Other current liabilities | 233 | 192 | ||||||
| Total current liabilities | 4,024 | 10,747 | ||||||
| Long-term debt | 2,729 | 8 | ||||||
| Obligations under capital leases | 41 | 164 | ||||||
| Deferred revenue | 30 | 63 | ||||||
| Deferred rent | 1,123 | - | ||||||
| Other liabilities | - | 52 | ||||||
| Total liabilities | 7,947 | 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 December 31, 2018 and 2017 | 1 | 1 | ||||||
| Common stock, $0.005 par value, 15,000 shares authorized at December 31, 2018 and 2017; 2,875 and 2,521 shares issued and outstanding at December 31, 2018 and 2017, respectively | 14 | 13 | ||||||
| Treasury stock, at cost, 10 shares at December 31, 2018 and 2017 | (456 | ) | (456 | ) | ||||
| Additional paid-in capital | 136,552 | 134,752 | ||||||
| Accumulated deficit | (129,394 | ) | (129,119 | ) | ||||
| Accumulated other comprehensive income | 200 | 345 | ||||||
| Total shareholders' equity | 6,917 | 5,536 | ||||||
| Total liabilities and shareholders' equity | $ | 14,864 | $ | 16,570 |
BUZZTIME, INC. AND SUBSIDIARIES
STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS
thousands, except per share data)
| Three months ended December 31, | Years ended December 31, | |||||||||||||||
| 2018 | 2017 | 2018 | 2017 | |||||||||||||
| Revenues | ||||||||||||||||
| Subscription revenue | $ | 3,920 | $ | 4,212 | $ | 16,031 | $ | 16,949 | ||||||||
| Hardware revenue | 1,162 | 246 | 3,589 | 770 | ||||||||||||
| Other revenue | 837 | 838 | 3,715 | 3,555 | ||||||||||||
| Total revenues | 5,919 | 5,296 | 23,335 | 21,274 | ||||||||||||
| Operating expenses: | ||||||||||||||||
| Direct operating costs (includes depreciation and amortization) | 2,051 | 1,742 | 8,070 | 6,755 | ||||||||||||
| Selling, general and administrative | 3,363 | 3,959 | 14,486 | 15,587 | ||||||||||||
| Impairment of goodwill | 261 | - | 261 | - | ||||||||||||
| Depreciation and amortization (excluding depreciation and amortization included in direct costs | 71 | 84 | 315 | 334 | ||||||||||||
| Total operating expenses | 5,746 | 5,785 | 23,132 | 22,676 | ||||||||||||
| Operating income (loss) | 173 | (489 | ) | 203 | (1,402 | ) | ||||||||||
| Other (expense) income: | ||||||||||||||||
| Interest expense, net | (84 | ) | (110 | ) | (389 | ) | (498 | ) | ||||||||
| Other (expense) income | (137 | ) | 5 | (137 | ) | 889 | ||||||||||
| Total other (expense) income, net | (221 | ) | (105 | ) | (526 | ) | 391 | |||||||||
| Loss before income taxes | (48 | ) | (594 | ) | (323 | ) | (1,011 | ) | ||||||||
| Income tax benefit (provision) | 100 | (45 | ) | 64 | (66 | ) | ||||||||||
| Net income (loss) | $ | 52 | (639 | ) | (259 | ) | (1,077 | ) | ||||||||
| Series A preferred stock dividend | (8 | ) | (8 | ) | (16 | ) | (16 | ) | ||||||||
| Net income (loss) attributable to common shareholders | $ | 44 | $ | (647 | ) | $ | (275 | ) | $ | (1,093 | ) | |||||
| Net income (loss) per common share - basic and diluted | $ | 0.02 | $ | (0.31 | ) | $ | (0.10 | ) | $ | (0.45 | ) | |||||
| Weighted average shares outstanding - basic and diluted | 2,864 | 2,094 | 2,688 | 2,442 | ||||||||||||
| Comprehensive loss: | ||||||||||||||||
| Net income (loss) | $ | 52 | $ | (639 | ) | $ | (259 | ) | $ | (1,077 | ) | |||||
| Foreign currency translations adjustment | (93 | ) | (14 | ) | (145 | ) | 122 | |||||||||
| Total comprehensive loss | $ | (41 | ) | $ | (653 | ) | $ | (404 | ) | $ | (955 | ) |
BUZZTIME, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
| Years ended December 31, | ||||||||
| 2018 | 2017 | |||||||
| Cash flows provided by operating activities: | ||||||||
| Net loss | $ | (259 | ) | $ | (1,077 | ) | ||
| Adjustments to reconcile net loss to net cash provided by operating activities: | ||||||||
| Depreciation and amortization | 2,764 | 2,317 | ||||||
| Provision for doubtful accounts | 78 | 72 | ||||||
| Scrap expense | 30 | 226 | ||||||
| Transfer of fixed assets to sales-type lease | 23 | - | ||||||
| Stock-based compensation | 443 | 457 | ||||||
| Amortization of debt issuance costs | 59 | 60 | ||||||
| Common stock issued for compensation in lieu of cash payment | - | 209 | ||||||
| Loss on sale or disposition of assets | 212 | 13 | ||||||
| Impairment of goodwill | 261 | - | ||||||
| Loss from disposition of capitalized software | 23 | 5 | ||||||
| Changes in assets and liabilities: | ||||||||
| Accounts receivable | (507 | ) | 142 | |||||
| Site equipment to be installed | 431 | (3,932 | ) | |||||
| Prepaid expenses and other liabilities | 29 | 443 | ||||||
| Accounts payable and accrued expenses | (186 | ) | (586 | ) | ||||
| Income taxes payable | (10 | ) | 9 | |||||
| Deferred costs | 350 | 130 | ||||||
| Deferred revenue | (2,227 | ) | 2,349 | |||||
| Deferred rent | (190 | ) | (189 | ) | ||||
| Other liabilities | 41 | (99 | ) | |||||
| Net cash provided by operating activities | 1,365 | 549 | ||||||
| Cash flows used in investing activities: | ||||||||
| Capital expenditures | (648 | ) | (728 | ) | ||||
| Capitalized software development expenditures | (964 | ) | (724 | ) | ||||
| Proceeds from sale of assets | 33 | - | ||||||
| Net cash used in investing activities | (1,579 | ) | (1,452 | ) | ||||
| Cash flows used in financing activities: | ||||||||
| Net proceeds from issuance of common stock related to registered direct offering | 1,375 | 1,773 | ||||||
| Proceeds from long-term debt | 4,000 | 50 | ||||||
| Payment on long-term debt | (5,373 | ) | (3,038 | ) | ||||
| Debit issuance costs of long-term deb | (23 | ) | (82 | ) | ||||
| Principal payments on capital lease | (249 | ) | (155 | ) | ||||
| Tax withholding related to net share settlement of vested restricted stock units | (17 | ) | - | |||||
| Payment of preferred stockholder dividends | (16 | ) | (16 | ) | ||||
| Net cash used in financing activities | (303 | ) | (1,468 | ) | ||||
| Net decrease in cash, cash equivalents and restricted cash | (517 | ) | (2,371 | ) | ||||
| Effect of exchange rate on cash | (75 | ) | 63 | |||||
| Cash, cash equivalents and restricted cash at beginning of period | 3,378 | 5,686 | ||||||
| Cash, cash equivalents and restricted cash at end of period | 2,786 | 3,378 |
reconciliation of the Company's consolidated net income (loss) calculated in accordance with GAAP to EBITDA is in the 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.
| Three months ended December 31, | Years ended December 31, | |||||||||||||||
| 2018 | 2017 | 2018 | 2017 | |||||||||||||
| Net income (loss) per GAAP | $ | 52 | $ | (639 | ) | $ | (259 | ) | $ | (1,077 | ) | |||||
| Interest expense | 84 | 110 | 389 | 498 | ||||||||||||
| Income tax (benefit) provision | (100 | ) | 45 | (64 | ) | 66 | ||||||||||
| Depreciation and amortization | 696 | 601 | 2,764 | 2,317 | ||||||||||||
| Total EBITDA | $ | 732 | $ | 117 | $ | 2,830 | $ | 1,804 |