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NTN Buzztime, Inc. Announces Second Quarter Results
PR Newswire
Aug 13, 2009
CARLSBAD, Calif., Aug. 13 /PRNewswire-FirstCall/ -- NTN Buzztime, Inc. (NYSE Amex: NTN) today announced results for the second quarter ended June 30, 2009.
(Logo: http://www.newscom.com/cgi-bin/prnh/20080331/CLM183LOGO)
"Our recent strategic initiatives continue to pay dividends. We added a net 107 customer sites in the second quarter, ending the quarter with 125 more than a year ago, and we reduced the amount of our loss from continuing operations 88% by lowering selling, general and administrative expenses," said NTN Buzztime CEO Terry Bateman.
"We are pleased by what we have been able to accomplish in a relatively short period of time," Mr. Bateman continued. "We are focused on the key objectives we have identified that can quickly return the company to profitability. We believe we have the groundwork in place to grow our network, which will be complemented with Buzztime experiences delivered through mobile phones and online. We feel progress is being made on all fronts, and we now have a team in place that has the skills and experience to execute on our growth strategy."
Results for the Quarter Ended June 30, 2009
Revenues for the second quarter of 2009 were $6.3 million, compared to revenues of $7.0 million for the same period of 2008, primarily as a result of a decrease in average revenue generated per site related to a strategic reduction in pricing.
The Company ended the second quarter of 2009 with 3,871 subscribing venues, compared to 3,746 at June 30, 2008, and 3,777 at March 31, 2009. During the second quarter of 2009, installations were up approximately 48% while terminations were down 19% compared with the second quarter of 2008. Customer churn improved to 4.9% for the quarter from 6.1% in the prior year period.
Total site counts Q2 Q2 Increase
and churn percentages 2009 2008 (Decrease)
--------------------- ---- ---- ----------
Site Count - Beginning of Quarter 3,764 3,777 (13)
------------------------- ----- ----- ---
Q2 Installations 294 199 95
---------------- --- --- --
Q2 Terminations (187) (230) (43)
--------------- ---- ---- ---
Site Count - End of Quarter 3,871 3,746 125
--------------------------- ----- ----- ---
Churn Percentage 4.9% 6.1% (1.2)
---------------- --- --- ----
Gross margin as a percentage of revenue improved to 76%, compared to 72% in the second quarter of 2008.
Selling, general and administrative expenses declined by $2.1 million, or 31%, to $4.9 million from $7.0 million a year ago. The improvement was attributable to several factors including a $0.5 million decline in salary expenses due to staffing reductions; a $0.5 million decline in severance expense due to the resignation of the CEO in the prior year; a $0.5 million decline in marketing expense related to a change in the Company's marketing strategy; and a $0.4 million decline in consulting services.
Loss from continuing operations for the second quarter of 2009 was $282,000, or less than one cent per share, an improvement in the loss of approximately $1.8 million from same period a year ago.
For the quarter ended June 30, 2009, results from continuing operations reflected solely the results from the Entertainment division, following the discontinuation of the Hospitality division.
Discontinued Operations
Discontinued operations had no activity in the second quarter of 2009, compared to a loss from discontinued operations of $216,000 in the same quarter of 2008.
Results for the Six Months Ended June 30, 2009
Revenue from continuing operations was $12.5 million in the first six months of 2009, compared to revenue of $14.2 million for the year-ago period. Loss from continuing operations for the first half of 2009 was $0.5 million, compared to loss from continuing operations of $4.4 million a year ago.
Gross margin as a percentage of revenue improved to 76% from 71% in the first six months of 2008.
Selling, general and administrative expenses declined $4.6 million, or 32%, to $9.7 million in the first six months of 2009 from $14.3 million in the corresponding period of the prior year.
For the six months ended June 30, 2009, results from continuing operations solely reflected the results from the Entertainment division, following the discontinuation of the Hospitality division.
Conference Call
Management will review these results in a conference call today, August 13, 2009, at 4:30 p.m. EDT.
To access the conference call, please dial (866) 360-7027 if calling from the United States or Canada, or (706) 643-3291 if calling internationally, and use passcode 23874047. Please dial in several minutes prior to start time for registration purposes.
A replay will be available until August 20, 2009, which can be accessed by dialing (800) 642-1687 if calling from the United States or Canada or (706) 645-9291 if calling internationally. Please use passcode 23874047 to access the replay.
The call will also be accompanied live by webcast over the Internet and accessible at the Company's Web site at http://www.buzztime.com.
About NTN Buzztime, Inc.
NTN Buzztime, Inc., a leader in interactive entertainment for 25 years, is based in Carlsbad, CA. Buzztime is distributed in-home and out-of-home across broadband platforms including online, cable TV, satellite TV and in approximately 3,900 restaurants, sports bars and pubs throughout North America. Buzztime entertainment is also available on electronic games and in books. For more information, please visit http://www.buzztime.com.
Buzztime is a proud member of the OVAB |Out-of-home Video Advertising Bureau. Buzztime is a registered trademark of Buzztime Entertainment, Inc. and Playmaker is a registered trademark of NTN Buzztime, Inc.
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 estimates of financial performance and cash flows, new business initiatives and engagement and results of marketing strategies. These statements are based on current expectations and assumptions that are subject to risks and uncertainties that could cause actual results to differ materially from historical results or those expressed or implied by such forward-looking statements. These risks and uncertainties include risks associated with recent management changes, the Company's ability to grow its out-of-home Buzztime iTV network and implement other business strategies such as the planned launch of mobile and wireless games, the risk of changing economic conditions, failure of product demand or market acceptance of both existing and new products and services and the impact of competitive products and pricing. 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.
COMPANY CONTACT:
Kendra Berger
Chief Financial Officer
NTN Buzztime, Inc.
(760) 438-7400
CCG CONTACT:
Mark Collinson
Partner
CCG Investor Relations
(310) 954-1343
(financial tables follow)
NTN BUZZTIME, INC. AND SUBSIDIARIES
Condensed Consolidated Balance Sheets
(Unaudited)
(In thousands, except share data)
June 30, December 31,
2009 2008
---- ----
ASSETS
Current assets:
Cash and cash equivalents $3,845 $3,362
Accounts receivable, net of allowances of $301
and $298, respectively 774 636
Investments available-for-sale 96 58
Prepaid expenses and other current assets 844 611
--- ---
Total current assets 5,559 4,667
Broadcast equipment and fixed assets, net 3,496 3,428
Software development costs, net 1,067 860
Deferred costs 1,295 1,383
Goodwill 1,091 1,032
Intangible assets, net 1,927 185
Other assets 143 107
Deposits on broadcast equipment 137 -
--- ---
Total assets $14,715 $11,662
======= =======
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable $722 $219
Accrued expenses 936 1,169
Sales tax payable 770 958
Accrued salaries 355 383
Accrued vacation 406 381
Income tax payable - 18
Obligations under capital lease 223 8
Deferred revenue 631 657
--- ---
Total current liabilities 4,043 3,793
Sales tax payable, excluding current portion 207 -
Obligations under capital lease, excluding
current portion 232 32
Deferred revenue, excluding current portion 93 91
Other long term liabilities 285 -
--- ---
Total liabilities 4,860 3,916
----- -----
Shareholders' equity:
Series A 10% cumulative convertible preferred
stock, $.005 par value, $161 liquidation
preference, 5,000,000 shares authorized;
161,000 shares issued and outstanding at June
30, 2009 and December 31, 2008 1 1
Common stock, $.005 par value, 84,000,000
shares authorized; 60,348,000 and 55,727,000
shares issued and outstanding at June 30,
2009 and December 31, 2008, respectively 300 277
Treasury stock, at cost, 503,000 shares at
June 30, 2009 and December 31, 2008 (456) (456)
Additional paid-in capital 115,639 113,267
Accumulated deficit (105,896) (105,351)
Accumulated other comprehensive income 267 8
--- ---
Total shareholders' equity 9,855 7,746
----- -----
Total shareholders' equity and liabilities $14,715 $11,662
======= =======
NTN BUZZTIME, INC. AND SUBSIDIARIES
Condensed Consolidated Statements of Operations
(Unaudited)
(In thousands, except per share data)
Three months ended Six months ended
------------------ ------------------
June 30, June 30, June 30, June 30,
2009 2008 2009 2008
---- ---- ---- ----
Revenues $6,285 $7,017 $12,481 $14,199
Operating expenses:
Direct operating costs
(includes depreciation and
amortization of $510 and $666
for the three months ended June
30, 2009 and 2008, respectively,
and depreciation and
amortization of $1,003 and
$1,385 for the six months ended
June 30, 2009 and 2008,
respectively) 1,524 1,980 3,026 4,076
Selling, general and administrative 4,859 7,000 9,691 14,265
Depreciation and amortization
(excluding depreciation and
amortization included in direct
operating costs) 213 145 340 267
--- --- --- ---
Total operating expenses $6,596 $9,125 $13,057 $18,608
------ ------ ------- -------
Operating loss $(311) $(2,108) $(576) $(4,409)
----- -------- ------ -------
Other income (expense):
Interest income 21 43 64 102
Interest expense (10) - (12) -
--- --- --- ---
Total other income $11 $43 $52 $102
--- --- --- ----
Loss from continuing operations
before income taxes $(300) $(2,065) $(524) $(4,307)
(Benefit from) provision for
income taxes (18) 64 13 105
--- --- --- ---
Loss from continuing operations $(282) $(2,129) $(537) $(4,412)
Loss from discontinued operations,
net of tax - (216) - (507)
--- ---- --- ----
Net loss $(282) $(2,345) $(537) $(4,919)
===== ======== ====== =======
Net loss per common share
Loss from continuing operations,
basic and diluted $- $(0.04) $(0.01) $(0.08)
=== ====== ====== ======
Loss from discontinued operations,
basic and diluted $- $- $- $(0.01)
=== === === ======
Net loss $- $(0.04) $(0.01) $(0.09)
=== ====== ====== ======
Weighted average shares outstanding
Basic and diluted 57,762 55,203 56,500 55,195
====== ====== ====== ======
NTN BUZZTIME, INC. AND SUBSIDIARIES
Condensed Consolidated Statements of Cash Flows
(Unaudited)
(In thousands)
Six months ended
----------------
June 30, June 30,
2009 2008
---- ----
Cash flows provided by (used in) operating activities:
Net loss $(537) $(4,919)
Loss from discontinued operations, net of tax - (507)
Loss from continuing operations $(537) $(4,412)
----- -------
Adjustments to reconcile net loss to net cash
provided by (used in) operating activities
Depreciation and amortization 1,343 1,652
Provision for doubtful accounts 31 346
Stock-based compensation 85 219
Loss from disposition of equipment and capitalized
software 40 376
Changes in operating assets and liabilities:
Accounts receivable (163) (49)
Prepaid expenses and other assets (231) 233
Accounts payable and accrued expenses 218 678
Income taxes payable (44) 52
Deferred costs 88 73
Deferred revenue (26) (170)
--- ----
Net cash provided by (used in) operating Activities
from continuing operations 804 (1,002)
Discontinued operations - (789)
--- ----
Net cash provided by (used in) operating
activities 804 (1,791)
Cash flows (used in) provided by investing activities:
Purchases of broadcast equipment and fixed assets (701) (1,119)
Software development expenditures (391) (512)
Deposits on broadcast equipment (137) -
Restricted cash - 16
--- ---
Net cash used in investing activities from
continuing operations (1,229) (1,615)
Discontinued operations - 20
--- ---
Net cash used in operating activities (1,229) (1,595)
Cash flows provided by (used in) financing activities:
Principal payments on capital lease (41) (4)
Proceeds from the exercise of stock option and
warrants 28 -
Proceeds from the sale of common stock 750 -
--- ---
Net cash provided by (used in) financing activities 737 (4)
--- --
Net increase (decrease) in cash and cash equivalents 312 (3,390)
--- -------
Effect of exchange rate on cash 171 (267)
Cash and cash equivalents at beginning of period 3,362 10,273
----- ------
Cash and cash equivalents at end of period $3,845 $6,616
====== ======
Supplemental disclosures of cash flow information:
Cash paid during the period for:
Interest $9 $-
=== ===
Income taxes $107 $94
==== ===
Supplemental disclosure of non-cash investing and
financing activities:
Unrealized holding gain (loss) on investments
available-for-sale $38 $(119)
=== =====
Equipment acquired under capital leases $457 $-
==== ===
Issuance of common stock in payment of preferred
dividends $8 $-
=== ===
Assumed obligations in connection with the
acquisition of intangible assets $64 $-
=== ===
Issuance of common stock in connection with the
acquisition of intangible assets $615 $-
==== ===
Issuance of warrants in connection with the
acquisition of intangible assets $908 $-
==== ===
Earn-out in connection with the acquisition of
intangible assets $285 $-
==== ==
SOURCE NTN Buzztime, Inc.
Copyright (2009) PR Newswire. All Rights Reserved.
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