Exhibit 99.1
 

 
FOR IMMEDIATE RELEASE
March 24, 2011
 
 
 
COMPANY CONTACT:
     Kendra Berger
     Chief Financial Officer
     NTN Buzztime, Inc.
     (760) 438-7400

CCG CONTACT:
     Mark Collinson
     Partner
     CCG Investor Relations
     (310) 954-1343

NTN Buzztime, Inc. Announces Fourth Quarter and Full Year 2010 Results
 
CARLSBAD, Calif., March 24/PRNewswire-FirstCall/ — NTN Buzztime, Inc. (NYSE AMEX: NTN) today announced results for the fourth quarter and fiscal year ended December 31, 2010.

“We continue to make progress on our key initiatives designed to meet two core strategic objectives: create compelling, addictive and contagious game experiences and to translate the player experiences into real value for subscribing clients. We believe these initiatives once fully executed will ultimately increase our customer retention rates.  In the short term, however, we have only nominally improved our quarter over quarter churn rate.  With that said, we were able to operate on a more profitable basis the second half of the year and generate cash during the year.  We feel confident in our ability to invest that cash in the business in ways that will improve the Buzztime experience so that our active player base increases and our customer venues will increasingly recognize the value of Buzztime in their establishments,” said NTN Buzztime’s CEO Michael Bush.
 
Results for the Fourth Quarter Ended December 31, 2010

Revenues for the fourth quarter of 2010 were $6.3 million, compared to revenues of $6.6 million for the same period of 2009.  The 4.1% decrease in sales was largely the result of lower site count in the fourth quarter of 2010 than in the comparable 2009 period.

The Company ended the fourth quarter of 2010 with 3,925 subscribing venues, compared to 4,016 at December 31, 2009, a decrease of 2.3%.  During the fourth quarter of 2010, installations were lower at 223 compared with 301 in the same quarter last year and terminations were down to 313 compared to 336.  Customer churn was 7.9% for the quarter down from 8.3% in the prior year period.

Total site counts
and churn percentages
Q4
2010
 
Q4
2009
 
 
Decrease
Site Count – Beginning of Quarter
 4,015 
 
 4,051 
 
 (36)
Q4 Installations
 223 
 
301 
 
 (78)
Q4Terminations
 (313)
 
 (336)
 
 (23)
Site Count - End of Quarter
 3,925 
 
 4,016 
 
 (91)
Churn Percentage
 7.9%
 
 8.3%
 
 (0.4)

Gross margin as a percentage of revenue improved to 76.8% in the fourth quarter of 2010, compared to 74.4% in the fourth quarter of 2009, primarily due to a decrease in direct costs from communications expense as the Company completed the conversion of customers from satellite to broadband, offset by an increase in depreciation and amortization expense resulting from increased equipment purchases to support new customers.

 
 

 



Selling, general and administrative expenses for the quarter declined by approximately $0.4 million, or 9.1%, to $4.4 million from $4.9 million a year ago. The improvement was attributable to several factors:  decreased professional fees resulting from less consulting expense and legal fees related to the asset acquisitions in 2009; decreased selling and marketing expense due to reduced trade show attendance and market research costs; decreased facilities expense due to reduced rent and other occupancy related costs; and a decrease in bad debt expense due to improved collection experience.

Net profit for the fourth quarter of 2010 was $0.3 million, or $0.01 per share, compared to a net loss of $0.2 million or $0.00 per share in the same period a year ago.
 
Results for the Fiscal Year Ended December 31, 2010

Revenues from continuing operations were $25.3 million for the fiscal year ended December 31, 2010, compared to revenue of $25.8 million for the prior year. Net loss from continuing operations was $0.4 million, compared to a net loss from continuing operations of $1.5 million a year ago.

For the full year of 2010, installations were down approximately 15% while terminations were up approximately 18% compared with the full year of 2009.  Customer churn was 28.8% for 2010, up from 25.0% in the prior year.

Total site counts
and churn percentages
FY
2010
 
FY
2009
 
Increase
Decrease
Site Count – Beginning of Year
 4,016 
 
 3,746 
 
 270 
Installations
 1,053 
 
 1,239 
 
 (186)
Terminations
 (1,144)
 
 (969)
 
 175 
Site Count - End of Year
 3,925 
 
 4,016 
 
 (91)
Churn Percentage
 28.8%
 
 25.0%
 
   3.8

Gross margin as a percentage of revenue improved to 76.0% in 2010 from 75.0% in fiscal year 2009.

Selling, general and administrative expenses declined $1.1 million, or 5.6%, to $18.9 million in 2010 from $20.0 million in the prior year. The decrease was due to several factors, primarily decreased professional fees of $0.5 resulting from less consulting expense, legal fees related to the asset acquisitions in 2009 and lower auditing fees; decreased selling and marketing expense of $0.3 million due to reduced trade show attendance and market research costs; decreased facilities expense of $0.3 million due to reduced rent, maintenance and telephone costs; and a decrease of $0.1 million in I-AM TV transition related expenses including the shipping costs associated with the acquired assets.  The decrease was offset by increased personnel and related expenses of $0.3 million resulting from increased headcount, health insurance expenses, temporary labor, stock compensation and annual merit increases.

 
Conference Call
 
Management will review these results in a conference call today, March 24, 2011, at 4:30 p.m. ET.
 
To access the conference call, please dial (877) 790-8271 if calling from the United States or Canada, or (954) 320-7648 if calling internationally, and use passcode 52552348. Please dial in several minutes prior to the start time for registration purposes.
 
A replay will be available until March 31, 2011, 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 52552348 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.

 
2

 

 
About Buzztime
 
NTN Buzztime, Inc. (NYSE Amex: NTN) is a leading bar and restaurant social entertainment and integrated marketing platform. Trusted by approximately 3,900 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 1,500,000 registered consumers and more than 50,000,000 games played each year, Buzztime players spread the word and invite friends and family to their favorite Buzztime location to enjoy an evening of fun and competition.   With Buzztime entertainment and marketing solutions, bars and restaurants attract new customers, turn casual visitors into regulars, and give guests a reason to stay longer.  For the most up-to-date information on NTN Buzztime, please visit www.buzztime.com or follow us on Facebook or Twitter.
 
 
 
 
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 investing cash, improving user experience, increasing benefits of Buzztime’s system, new customers and visitors, length of visits, added value and 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 adverse economic conditions, the impact of competitive products and pricing, failure of customer and/or player demand, 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.
 

(financial tables follow)
 
 
 
 
 
 
 
 
 

 
3

 

NTN BUZZTIME, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(Unaudited)
(In thousands, except par value amount)

   
December 31,
 
ASSETS
 
2010
   
2009
 
Current Assets:
           
Cash and cash equivalents
  $ 3,906     $ 3,637  
Accounts receivable, net
    549       606  
Investment available-for-sale
    184       180  
Prepaid expenses and other current assets
    588       634  
Total current assets
    5,227       5,057  
Broadcast equipment and fixed assets, net
    3,638       3,809  
Software development costs, net
    1,094       1,374  
Deferred costs
    839       1,080  
Goodwill
    1,261       1,202  
Intangible assets, net
    1,025       1,585  
Other assets
    41       190  
Total assets
  $ 13,125     $ 14,297  
                 
LIABILITIES AND SHAREHOLDERS’ EQUITY
               
                 
Current Liabilities:
               
Accounts payable
  $ 423     $ 422  
Accrued compensation
    628       1,075  
Accrued expenses
    451       788  
Sales taxes payable
    856       855  
Income taxes payable
    8        
Obligations under capital leases—current portion
    376       300  
Deferred revenue
    520       523  
Other current liabilities
    74       294  
Total current liabilities
    3,336       4,257  
Sales taxes payable, excluding current portion
          128  
Obligations under capital leases, excluding current portion
    105       173  
Deferred revenue, excluding current portion
    124       82  
Other liabilities
    99       239  
Total liabilities
    3,664       4,879  
Commitments and contingencies
               
                 
Shareholders’ equity:
               
Series A 10% cumulative convertible preferred stock, $.005 par value, $161 liquidation preference, 5,000 shares authorized; 161 shares issued and outstanding
    1       1  
Common stock, $.005 par value, 84,000 shares authorized; 60,751 and 60,359  shares issued and outstanding at December 31, 2010 and 2009, respectively
    304       302  
Treasury stock, at cost, 503 shares at December 31, 2010 and 2009
    (456 )     (456 )
Additional paid-in capital
    116,114       115,740  
Accumulated deficit
    (107,284 )     (106,868 )
Accumulated other comprehensive income
    782       699  
Total shareholders’ equity
    9,461       9,418  
Total liabilities and shareholders’ equity
  $ 13,125     $ 14,297  
                 
 

 
 
4

 

NTN BUZZTIME, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
 (In thousands, except per share data)

   
Three Months Ended
December 31,
   
Twelve Months Ended
December 31,
 
   
2010
   
2009
   
2010
   
2009
 
Revenues
  $ 6,342     $ 6,616     $ 25,309     $ 25,814  
                                 
Operating expenses:
                               
Direct operating costs (includes depreciation and amortization)
    1,474       1,691       6,063       6,460  
Selling, general and administrative
    4,425       4,866       18,906       20,031  
Depreciation and amortization (excluding depreciation and amortization included in direct costs)
    157       163       665       919  
Total operating expenses
    6,056       6,720       25,634       27,410  
                                 
Operating income (loss)
    286       (104 )     (325 )     (1,596 )
Other income (expense):
                               
Interest income
    1       1       3     $ 72  
Interest expense
    (20 )     (31 )     (101 )     (66 )
Other income
    59       29       65       184  
Total other income (expense)
    40       (1 )     (33 )     190  
Income (loss) before income taxes
    326       (105 )     (358 )     (1,406 )
Provision for income taxes
    (4 )     (91 )     (42 )     (95 )
Net income (loss)
  $ 322     $ (196 )     (400 )   $ (1,501 )
                                 
Net income (loss) per common share – basic
  $ 0.01     $ 0.00     $ (0.01 )   $ (0.03 )
Net income (loss) per common share – diluted
  $ 0.01     $ 0.00     $ (0.01 )   $ (0.03 )
                                 
Weighted average shares outstanding - basic
    60,248       59,850       60,134       58,188  
Weighted average shares outstanding - diluted
    60,746       59,850       60,134       58,188  
                                 

 
5

 



NTN BUZZTIME, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED CASH FLOW DATA *
(Unaudited)
(In thousands)
 
   
Twelve months ended
December 31,
 
   
2010
   
2009
 
Cash flows provided by operating activities:
           
Net loss
  $ (400 )   $ (1,501 )
Adjustments to reconcile net loss to net cash provided by operating activities:
               
Depreciation and amortization
    3,203       3,193  
Provision for doubtful accounts
    191       227  
Gain on contract termination
    (11 )      
Stock-based compensation
    299       180  
Loss from disposition of equipment and capitalized software
    270       267  
Changes in assets and liabilities:
               
Accounts receivable
    (131 )     (181 )
Prepaid expenses and other assets
    41       95  
Accounts payable and accrued liabilities
    (1,082 )     139  
Income taxes payable
    169       (161 )
Deferred costs
    244       393  
Deferred revenue
    38       (148 )
Net cash provided by operating activities
    2,831       2,503  
Cash flows used in investing activities:
               
Capital expenditures
    (1,323 )     (1,910 )
Software development expenditures
    (845 )     (1,138 )
Deposits on capital expenditures
          (28 )
Trademark license
    (35 )     (94 )
Net cash used in investing activities
    (2,203 )     (3,170 )
Cash flows (used in) provided by financing activities:
               
Principal payments on capital leases
    (425 )     (155 )
Proceeds from exercise of stock options
    61       28  
Proceeds from sale of common stock
          750  
Net cash (used in) provided by financing activities
    (364 )     623  
Net increase (decrease) in cash and cash equivalents
    264       (44 )
                 
Effect of exchange rate on cash
    5       319  
                 
Cash and cash equivalents at beginning of period
    3,637       3,362  
                 
Cash and cash equivalents at end of period
  $ 3,906     $ 3,637  
                 

 

6


The following information was filed by Ntn Buzztime Inc (NTN) on Thursday, March 24, 2011 as an 8K 2.02 statement, which is an earnings press release pertaining to results of operations and financial condition. It may be helpful to assess the quality of management by comparing the information in the press release to the information in the accompanying 10-K Annual Report statement of earnings and operation as management may choose to highlight particular information in the press release.

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