Full Press Release Details
Buzztime, Inc. Reports Second Quarter 2017 Results
Calif., August 2, 2017 - NTN Buzztime, Inc. (NYSE American: NTN) reported financial results for the second quarter
ended June 30, 2017.
Recorded GAAP net loss of $164,000 in Q2 2017, a $686,000 improvement compared to Q2 2016
Reported positive EBITDA for fifth consecutive quarter
Regained NYSE American listing compliance
Licensing Agreement with Scientific Games
the second quarter of 2017, we grew revenue, increased deferred revenue, and posted our fifth consecutive quarter of positive
EBITDA while we furthered our strategic initiatives," said Ram Krishnan, NTN Buzztime CEO. "Regarding our deployment
of order and payment at Buffalo Wild Wings, we have begun ordering equipment and delivering integrations. And, for these efforts,
we received a prepayment for equipment and services that is reflected in our second quarter results. In addition, we launched
a new vertical, by partnering with Scientific Games, a leading player in the casino industry. We are leveraging our trivia content
to create a bonusing game that lives on slot machines. We continue to make progress with our plans to unveil our
next gen tablet with NFC capabilities that will enable Apple Pay, Android Pay and Samsung Pay in the fourth quarter. With
steady execution and ongoing innovation, we believe we will drive long-term shareholder value."
Results for the Second Quarter Ended June 30, 2017
revenues were $5.5 million for the second quarter of 2017, up from $5.4 million for the second quarter of 2016 and up from $5.2
million for the first quarter of 2017. The increase reflects higher other revenue that was partially offset by reduced subscription
revenue due to lower site count. Direct costs were $1.6 million, down from $1.8 million for the same period in 2016 due to the
lower sales-type lease revenues as well as reduced depreciation expense. Gross margin increased to 71%, from 66% in the prior
year quarter. Selling, general and administrative expenses were $3.9 million, compared to $4.2 million for the same period in
2016. Net loss was $164,000, or $0.07 per share, compared to a net loss of $850,000, or $0.46 per share, for the second
quarter of 2016. EBITDA increased to $516,000, from $38,000 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 second
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.
Results for the Six Months Ended June 30, 2017
revenues were $10.8 million, compared to $10.9 million for the six months ended June 30, 2016. Gross margin increased to 68%,
up from 64% for the prior year period. Net loss, including $750,000 of non-recurring other income recorded in the first quarter,
was $254,000, or $0.11 per share, compared to a net loss of $1.9 million, or $1.03 per share, for the prior year period.
EBITDA for the first six months of 2017 grew to $1.2 million, up from an EBITDA loss of $100,000 for the prior year period.
Review for the Quarter Ended June 30, 2017
site count was 2,768 venues at June 30, 2017, compared to 2,788 as of March 31, 2017. Management anticipates the net site count
will continue to fluctuate. As of June 30, 2017, BEOND platform installations increased to 2,125 venues, or 77% of the installed
base, compared to 2,057 venues, or 74% of the installed base, as of March 31, 2017.
and cash equivalents were $6.8 million at June 30, 2017, compared to $6.1 million at March 31, 2017 and $5.7 million at December
31, 2016 and total deferred revenue was $3.9 million, up from $1.3 million at December 31, 2016. Working capital as of June 30,
2017 was $577,000, compared to $1.1 million at March 31, 2017 and $4.0 million as of December 31, 2016. The changes reflect the
outstanding revolver with the primary lender becoming current as well as the deferred revenue related to a prepayment for equipment
May, NYSE Regulations Inc. notified NTN Buzztime that it had regained compliance with the NYSE American continued listing
standards related to shareholders' equity with which it was previously not compliant.
will review the results on a conference call with a live question and answer session today, August 2, 2017, at 4:30 p.m. ET. To
access the call, please use passcode 56984477:
(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 August 9, 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 American: 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
AGENCY CONTACT: Kirsten Chapman/Becky Herrick, LHA
Investor Relations, 415-433-3777, buzztime@lhai.com
BUZZTIME, INC. AND SUBSIDIARIES
thousands, except par value amount)
| June 30, 2017 | December 31, 2016 | |||||||
| ASSETS | ||||||||
| Current Assets: | ||||||||
| Cash and cash equivalents | $ | 6,834 | $ | 5,686 | ||||
| Accounts receivable, net | 761 | 928 | ||||||
| Income taxes receivable | 7 | - | ||||||
| Site equipment to be installed | 2,463 | 2,998 | ||||||
| Prepaid expenses and other current assets | 2,158 | 1,050 | ||||||
| Total current assets | 12,223 | 10,662 | ||||||
| Fixed assets, net | 3,159 | 3,101 | ||||||
| Software development costs, net | 1,228 | 970 | ||||||
| Deferred costs | 850 | 904 | ||||||
| Goodwill | 968 | 937 | ||||||
| Intangible assets, net | 4 | 29 | ||||||
| Other assets | 100 | 92 | ||||||
| Total assets | $ | 18,532 | $ | 16,695 | ||||
| LIABILITIES AND SHAREHOLDERS' EQUITY | ||||||||
| Current Liabilities: | ||||||||
| Accounts payable | $ | 1,022 | $ | 247 | ||||
| Accrued compensation | 738 | 1,060 | ||||||
| Accrued expenses | 438 | 697 | ||||||
| Sales taxes payable | 95 | 142 | ||||||
| Income taxes payable | - | 4 | ||||||
| Current portion of long-term debt | 5,196 | 2,988 | ||||||
| Current portion of obligations under capital leases | 156 | 155 | ||||||
| Current portion of deferred revenue | 3,836 | 1,059 | ||||||
| Other current liabilities | 165 | 291 | ||||||
| Total current liabilities | 11,646 | 6,643 | ||||||
| Long-term debt | 264 | 5,123 | ||||||
| Obligations under capital leases | 181 | 259 | ||||||
| Deferred revenue | 111 | 219 | ||||||
| Deferred rent | 281 | 371 | ||||||
| Other liabilities | 15 | 12 | ||||||
| Total liabilities | 12,498 | 12,627 | ||||||
| Commitments and contingencies | ||||||||
| Shareholders' equity: | ||||||||
| Series A convertible preferred stock, $0.005 par value, 156 and 5,000 shares designated at June 30, 2017 and December 31, 2016, respectively; $156 liquidation preference and 156 shares issued and outstanding at June 30, 2017 and December 31, 2016 | 1 | 1 | ||||||
| Common stock, $0.005 par value, 15,000 and 168,000 shares authorized at June 30, 2017 and December 31, 2016, respectively; 2,513 and 2,261 shares issued and outstanding at June 30, 2017 and December 31, 2016, respectively | 13 | 11 | ||||||
| Treasury stock, at cost, 10 shares at June 30, 2017 and December 31, 2016 | (456 | ) | (456 | ) | ||||
| Additional paid-in capital | 134,485 | 132,315 | ||||||
| Accumulated deficit | (128,288 | ) | (128,026 | ) | ||||
| Accumulated other comprehensive income | 279 | 223 | ||||||
| Total shareholders' equity | 6,034 | 4,068 | ||||||
| Total liabilities and shareholders' equity | $ | 18,532 | $ | 16,695 |
BUZZTIME, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS
thousands, except per share data)
| Three months ended June 30, | Six months ended June 30, | |||||||||||||||
| 2017 | 2016 | 2017 | 2016 | |||||||||||||
| Revenues | ||||||||||||||||
| Subscription revenue | $ | 4,232 | $ | 4,355 | $ | 8,458 | $ | 8,729 | ||||||||
| Sales-type lease revenue | 223 | 301 | 408 | 697 | ||||||||||||
| Other revenue | 1,094 | 751 | 1,914 | 1,463 | ||||||||||||
| Total revenues | 5,549 | 5,407 | 10,780 | 10,889 | ||||||||||||
| Operating expenses: | ||||||||||||||||
| Direct operating costs (includes depreciation and amortization) | 1,631 | 1,840 | 3,474 | 3,876 | ||||||||||||
| Selling, general and administrative | 3,858 | 4,153 | 7,992 | 8,353 | ||||||||||||
| Depreciation and amortization (excluding depreciation and amortization included in direct costs | 86 | 110 | 174 | 224 | ||||||||||||
| Total operating expenses | 5,575 | 6,103 | 11,640 | 12,453 | ||||||||||||
| Operating loss | (26 | ) | (696 | ) | (860 | ) | (1,564 | ) | ||||||||
| Other (expense) income, net | (132 | ) | (149 | ) | 618 | (303 | ) | |||||||||
| Loss before income taxes | (158 | ) | (845 | ) | (242 | ) | (1,867 | ) | ||||||||
| Provision for income taxes | (6 | ) | (5 | ) | (12 | ) | (24 | ) | ||||||||
| Net loss | $ | (164 | ) | $ | (850 | ) | $ | (254 | ) | $ | (1,891 | ) | ||||
| Net loss per common share - basic and diluted | $ | (0.07 | ) | $ | (0.46 | ) | $ | (0.11 | ) | $ | (1.03 | ) | ||||
| Weighted average shares outstanding - basic and diluted | 2,494 | 1,839 | 2,375 | 1,839 | ||||||||||||
| Comprehensive loss: | ||||||||||||||||
| Net loss | $ | (164 | ) | $ | (850 | ) | $ | (254 | ) | $ | (1,891 | ) | ||||
| Foreign currency translations adjustment | 41 | 2 | 56 | 115 | ||||||||||||
| Total comprehensive loss | $ | (123 | ) | $ | (848 | ) | $ | (198 | ) | $ | (1,776 | ) |
BUZZTIME, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
| Six months ended June, | ||||||||
| 2017 | 2016 | |||||||
| Cash flows provided by operating activities: | ||||||||
| Net loss | $ | (254 | ) | $ | (1,891 | ) | ||
| Adjustments to reconcile net loss to net cash provided by operating activities: | ||||||||
| Depreciation and amortization | 1,130 | 1,487 | ||||||
| Provision for doubtful accounts | 40 | 24 | ||||||
| Excess and obsolete site equipment to be installed expense | 24 | 27 | ||||||
| Stock-based compensation | 234 | 223 | ||||||
| Amortization of debt issuance costs | 26 | 18 | ||||||
| Issuance of common stock in lieu of cash payment for bonus compensation | 164 | - | ||||||
| Impairment of capitalized software | 4 | - | ||||||
| Loss from disposition of equipment | 6 | 6 | ||||||
| Changes in assets and liabilities: | ||||||||
| Accounts receivable | 127 | 254 | ||||||
| Site equipment to be installed | (218 | ) | 265 | |||||
| Prepaid expenses and other liabilities | (1,121 | ) | 131 | |||||
| Accounts payable and accrued expenses | 148 | (254 | ) | |||||
| Income taxes | (12 | ) | (10 | ) | ||||
| Deferred costs | 55 | 141 | ||||||
| Deferred revenue | 2,669 | 27 | ||||||
| Deferred rent | (90 | ) | (81 | ) | ||||
| Other liabilities | (126 | ) | (354 | ) | ||||
| Net cash provided by operating activities | 2,806 | 13 | ||||||
| Cash flows used in investing activities: | ||||||||
| Capital expenditures | (339 | ) | (291 | ) | ||||
| Software development expenditures | (362 | ) | (175 | ) | ||||
| Net cash used in investing activities | (701 | ) | (466 | ) | ||||
| Cash flows (used in) provided by financing activities: | ||||||||
| Net proceeds from issuance of common stock related to registered direct offering | 1,773 | - | ||||||
| Proceeds from long-term debt | - | 2,114 | ||||||
| Payment on long-term debt | (2,651 | ) | (1,311 | ) | ||||
| Debit issuance costs of long-term deb | (22 | ) | (2 | ) | ||||
| Principal payments on capital lease | (77 | ) | (42 | ) | ||||
| Payment of preferred stockholder dividends | (8 | ) | (8 | ) | ||||
| Payments to cashed-out stockholders in connection with reverse/forward split | - | (3 | ) | |||||
| Net cash (used in) provided by financing activities | (985 | ) | 748 | |||||
| Net increase in cash and cash equivalents | 1,120 | 295 | ||||||
| Effect of exchange rate on cash | 28 | 53 | ||||||
| Cash and cash equivalents at beginning of period | 5,686 | 3,223 | ||||||
| Cash and cash equivalents at end of period | 6,834 | 3,571 |
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.
following table reconciles our net loss per GAAP (in thousands) to EBITDA:
| Three months ended June 30, | Six months ended June 30, | |||||||||||||||
| 2017 | 2016 | 2017 | 2016 | |||||||||||||
| Net loss per GAAP | $ | (164 | ) | $ | (850 | ) | $ | (254 | ) | $ | (1,891 | ) | ||||
| Interest expense, net | 123 | 153 | 282 | 280 | ||||||||||||
| Income tax provision | 6 | 5 | 12 | 24 | ||||||||||||
| Depreciation and amortization | 551 | 730 | 1,130 | 1,487 | ||||||||||||
| Total EBITDA | $ | 516 | $ | 38 | $ | 1,170 | $ | (100 | ) |