NTN Buzztime, Inc. Reports First Quarter 2017 Results

–Records GAAP Net loss of $90,000, a $1 million improvement compared to 2016 –

–Reports 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 –

 

CARLSBAD, Calif., May 3, 2017 — NTN Buzztime, Inc. (NYSE MKT: NTN) reported financial results for the first quarter ended March 31, 2017.

 

“We 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.”

 

Operational Highlights

 

  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.

 

Financial Results for the First Quarter Ended March 31, 2017

 

Total 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.

 

EBITDA 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.

 

 
 

 

Metric Review for the Quarter Ended March 31, 2017

 

The 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.

 

Liquidity

 

Cash 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.

 

Due 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.

 

Conference Call

 

Management 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.

 

The 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.

 

Forward-looking Statements

 

This 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.

 

About Buzztime

 

Buzztime (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 in 2016 alone. For more information, please visit http://www.buzztime.com or follow us on Facebook or Twitter @buzztime.

 

IR AGENCY CONTACT:

Kirsten Chapman/Becky Herrick, LHA Investor Relations

buzztime@lhai.com

415-433-3777

 

2
  

 

NTN BUZZTIME, INC. AND SUBSIDIARIES

Consolidated Balance Sheets

(unaudited)

(In 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 

 

3
  

 

NTN BUZZTIME, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS

(unaudited)

(In 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)

 

4
  

 

NTN BUZZTIME, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(unaudited)

(In thousands)

 

  

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 

 

5
  

 

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.

 

The 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)

 

6
  

 


The following information was filed by Ntn Buzztime Inc (NTN) on Wednesday, May 3, 2017 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-Q Quarterly Report statement of earnings and operation as management may choose to highlight particular information in the press release.

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