NTN Buzztime, Inc. Announces Second Quarter 2014 Results
CARLSBAD, Calif., August 13, 2014 — NTN Buzztime, Inc. (NYSE MKT: NTN) today announced results for the second quarter ended June 30, 2014.
“We are pleased to report that during the second quarter, we continued to roll-out BEOND, having installed the BEOND platform in 243 additional locations putting us at 676 BEOND installations as of June 30, 2014, 419 of which are Buffalo Wild Wings. In five of these locations, we continue to test premium entertainment options that, based on the encouraging results we’re seeing, represents a significant opportunity to generate consumer revenue once available to all BEOND locations,” said Buzztime CEO, Jeffrey Berg. “Additionally, the organizational changes we recently announced will allow us to deliver new entertainment experiences to support our mission to entertain consumers in ways that create long-term value for our merchants,” continued Mr. Berg.
Results for the Second Quarter Ended June 30, 2014
Revenues for the second quarter of 2014 grew 24% year over year to $6.9 million compared to $5.5 million for the same period in 2013. Direct costs increased to $2.8 million for the second quarter of 2014 from $1.5 million for the same period of 2013 due in part to additional equipment related costs incurred as we deploy the BEOND platform.
Selling, general and administrative expenses increased $0.6 million, or 16%, to $4.6 million for the second quarter of 2014 from $4.0 million for the same period in 2013.
Impairment of capitalized software was $0.6 million for the second quarter of 2014 compared to $27,000 for the same period in 2013.
Net loss for the second quarter of 2014 was $1.3 million, or $0.02 per share, compared to net loss of $0.1 million or $0.00 per share in the same period a year ago. Excluding the non-recurring impairment charge of capitalized software, our net loss would have been $0.7 million or $0.01 per share.
As of June 30, 2014, the Company had $11.2 million in cash and cash equivalents compared to $5.5 million as of December 31, 2013.
The Company ended the second quarter of 2014 with 3,103 subscribing venues, compared to 3,352 as of June 30, 2013.
Conference Call
Management will review the second quarter financial results in a conference call today, August 13, 2014, at 4:30 p.m. ET.
To access the conference call, please dial (877) 307-1373, if calling from the United States or Canada, or (678) 224-7873, if calling internationally, and use passcode 84689998. A replay of the call will be available until August 20, 2014, which can be accessed by dialing (855) 859-2056, if calling from the United States or Canada, or (404) 537-3406, if calling internationally. Please use passcode 84689998 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 https://www.buzztime.com.
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 our growth plans, product and platform development, new revenue, customer development and growth plans, improved customer and consumer satisfaction and the 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 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, failure of customer and/or player acceptance or demand for new or existing products, 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.
About Buzztime
NTN Buzztime, Inc. (NYSE MKT: NTN) is a leading bar and restaurant social entertainment and integrated marketing platform. Trusted by 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 5 million player registrations on the Buzztime platform and over 50 million 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 can 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 https://www.buzztime.com or follow us on Facebook or Twitter @buzztime.
(financial tables follow)
NTN BUZZTIME, INC. AND SUBSIDIARIES
Consolidated Balance Sheets
(Unaudited)
(In thousands, except par value amount)
| ASSETS | June 30,2014
|
December 31, 2013 | |
| Current Assets: | |||
| Cash and cash equivalents………………………………………………………………………………………… | $ 11,164 | $ 5,455 | |
| Accounts receivable, net……………………………………………………………………………………………. | 884 | 641 | |
| Prepaid expenses and other current assets………………………………………………………………… | 3,407 | 1,822 | |
| Total current assets………………………………………………………………………………………….. | 15,455 | 7,918 | |
| Broadcast equipment and fixed assets, net………………………………………………………………………… | 3,423 | 3,237 | |
| Software development costs, net………………………………………………………………………………………… | 1,477 | 2,317 | |
| Deferred costs……………………………………………………………………………………………………………………… | 908 | 562 | |
| Goodwill………………………………………………………………………………………………………………………………. | 1,181 | 1,179 | |
| Intangible assets, net…………………………………………………………………………………………………………… | 48 | 160 | |
| Other assets…………………………………………………………………………………………………………………………. | 84 | 84 | |
| Total assets………………………………………………………………………………………………………. | $ 22,576 | $ 15,457 | |
| LIABILITIES AND SHAREHOLDERS’ EQUITY | |||
| Current Liabilities: | |||
| Accounts payable……………………………………………………………………………………………………… | $ 797 | $ 553 | |
| Accrued compensation……………………………………………………………………………………………… | 613 | 647 | |
| Accrued expenses………………………………………………………………………………………………………. | 730 | 660 | |
| Sales taxes payable…………………………………………………………………………………………………… | 165 | 181 | |
| Income taxes payable……………………………………………………………………………………………….. | 61 | 81 | |
| Notes payable—current portion………………………………………………………………………………… | 1,454 | 631 | |
| Obligations under capital leases—current portion…………………………………………………….. | 27 | 25 | |
| Deferred revenue……………………………………………………………………………………………………….. | 1,374 | 593 | |
| Other current liabilities……………………………………………………………………………………………….. | 153 | 237 | |
| Total current liabilities……………………………………………………………………………………… | 5,374 | 3,608 | |
| Notes payable, excluding current portion……………………………………………………………………………. | 2,265 | 962 | |
| Obligations under capital leases, excluding current portion………………………………………………… | 44 | 58 | |
| Deferred revenue, excluding current portion……………………………………………………………………….. | 412 | 798 | |
| Deferred rent……………………………………………………………………………………………………………………….. | 765 | 829 | |
| Total liabilities………………………………………………………………………………………………….. | 8,860 | 6,255 | |
| Commitments and contingencies | |||
| Shareholders’ equity: | |||
| Series A 10% cumulative convertible preferred stock, $.005 par value, $156 liquidation preference, 5,000 shares authorized; 156 issued and outstanding at June 30, 2014 and December 31, 2013………………………………………………………………… | 1 | 1 | |
| Common stock, $.005 par value, 168,000 shares authorized at June 30, 2014 and December 31, 2013; 91,663 and 78,649 shares issued and outstanding at June 30, 2014 and December 31, 2013, respectively………………………………………………………….. | 458 | 393 | |
| Treasury stock, at cost, 503 shares at June 30, 2014 and December 31, 2013…………. | (456) | (456) | |
| Additional paid-in capital………………………………………………………………………………………….. | 127,881 | 121,432 | |
| Accumulated deficit………………………………………………………………………………………………….. | (114,804) | (112,799) | |
| Accumulated other comprehensive income………………………………………………………………. | 636 | 631 | |
| Total shareholders’ equity……………………………………………………………………………….. | 13,716 | 9,202 | |
| Total liabilities and shareholders’ equity…………………………………………………………. | $ 22,576 | $ 15,457 | |
NTN BUZZTIME, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS
(Unaudited)
(In thousands, except per share data)
| Three Months Ended June 30, |
Six Months Ended June 30, |
|||
| 2014 | 2013 | 2014 | 2013 | |
| Revenues……………………………………………………………………………………………………………….. | $ 6,873 | $ 5,532 | $ 13,291 | $ 11,648 |
| Operating expenses: | ||||
| Direct operating costs (includes depreciation and amortization)…………………………… | 2,806 | 1,485 | 5,336 | 3,485 |
| Selling, general and administrative………………………………………………………………………… | 4,577 | 3,955 | 8,945 | 8,173 |
| Impairment of capitalized software……………………………………………………………………… | 639 | 27 | 661 | 92 |
| Depreciation and amortization (excluding depreciation and amortization included in direct costs)…………………………………………………………………………………….. | 151 | 180 | 303 | 379 |
| Total operating expenses………………………………………………………………………………………. | 8,173 | 5,647 | 15,245 | 12,129 |
| Operating loss………………………………………………………………………………………………………… | (1,300) | (115) | (1,954) | (481) |
| Other (expense) income, net………………………………………………………………………………….. | (51) | 21 | (36) | 26 |
| Loss before income taxes……………………………………………………………………………………… | (1,351) | (94) | (1,990) | (455) |
| Benefit (provision) for income taxes………………………………………………………………… | 3 | (5) | (7) | (13) |
| Net loss………………………………………………………………………………………………………………….. | $ (1,348) | $ (99) | $ (1,997) | $ (468) |
| Net loss per common share – basic and diluted…………………………………………………….. | $ (0.02) | $ (0.00) | $ (0.02) | $ (0.01) |
| Weighted average shares outstanding – basic and diluted……………………………………. | 88,831 | 71,062 | 83,534 | 70,962 |
| Comprehensive loss | ||||
| Net loss………………………………………………………………………………………………………………. | $ (1,348) | $ (99) | (1,997) | (468) |
| Foreign currency translation adjustment…………………………………………………………… | 67 | $ (65) | 4 | (107) |
| Total comprehensive loss……………………………………………………………………………….. | $ (1,281) | $ (164) | $ (1,993) | $ (575) |
NTN BUZZTIME, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF CASH FLOWS
(Unaudited)
(In thousands)
| Six months ended June 30,
|
||
| 2014 | 2013 | |
| Cash flows (used in) provided by operating activities: | ||
| Net loss………………………………………………………………………………………………………………………….. | $ (1,997) | $ (468) |
| Adjustments to reconcile net loss to net cash provided by operating activities: | ||
| Depreciation and amortization……………………………………………………………………………. | 1,375 | 1,483 |
| Provision for doubtful accounts………………………………………………………………………….. | 41 | 11 |
| Stock-based compensation…………………………………………………………………………………. | 111 | 53 |
| Issuance of common stock to consultant in lieu of cash payment…………………….. | 30 | — |
| Impairment of capitalized software……………………………………………………………………. | 661 | 92 |
| Loss from disposition of equipment……………………………………………………………………. | 1 | — |
| Changes in assets and liabilities: | ||
| Accounts receivable…………………………………………………………………………………… | (285) | 120 |
| Prepaid expenses and other assets…………………………………………………………….. | (2,074) | (360) |
| Accounts payable and accrued liabilities…………………………………………………… | 182 | (333) |
| Income taxes payable……………………………………………………………………………….. | (20) | (10) |
| Deferred costs…………………………………………………………………………………………….. | (346) | 151 |
| Deferred revenue……………………………………………………………………………………….. | 395 | (372) |
| Deferred rent………………………………………………………………………………………………. | (64) | (56) |
| Net cash (used in) provided by operating activities……………………………………. | $ (1,990) | 311 |
| Cash flows used in investing activities: | ||
| Capital expenditures…………………………………………………………………………………………………….. | (485) | (250) |
| Software development expenditures…………………………………………………………………………….. | (295) | (794) |
| Net cash used in investing activities…………………………………………………………… | (780) | (1,044) |
| Cash flows provided by (used in) financing activities: | ||
| Proceeds from public offering of common stock, net…………………………………………………… | 6,369 | — |
| Proceeds from notes payable……………………………………………………………………………………….. | 3,023 | 128 |
| Payments on notes payable………………………………………………………………………………………….. | (898) | (20) |
| Principal payments on capital leases……………………………………………………………………………. | (12) | (72) |
| Proceeds from exercise of stock options………………………………………………………………………. | 23 | — |
| Tax withholding related to net-share settlements of restricted stock units……………………. | (27) | (7) |
| Net cash provided by financing activities………………………………………………….. | 8,478 | 29 |
| Net increase (decrease) in cash and cash equivalents……………………………………………………………. | 5,708 | (704) |
| Effect of exchange rate on cash…………………………………………………………………………………………….. | 1 | (44) |
| Cash and cash equivalents at beginning of period…………………………………………………………………. | 5,455 | 2,721 |
| Cash and cash equivalents at end of period………………………………………………………………………….. | $ 11,164 | $ 1,973 |
EBITDA
A schedule reconciling the Company’s consolidated net loss calculated in accordance with GAAP to EBITDA is included in the supplemental table below. 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:
| For the three months endedJune 30, | For the six months endedJune 30, | |||||||
| 2014 | 2013 | 2014 | 2013 | |||||
| Net loss per GAAP…………………………. | $ (1,348) | $ (99) | $ (1,997) | $ (468) | ||||
| Interest expense, net……………………… | 40 | 5 | 64 | 12 | ||||
| Income tax (benefit) provision……… | (3) | 5 | 7 | 13 | ||||
| Depreciation and amortization……… | 690 | 694 | 1,375 | 1,483 | ||||
| EBITDA…………………………………….. | $ (621) | $ 605 | $ (551) | $ 1,040 | ||||
Net Loss Excluding Non-Recurring Impairment Charges of Capitalized Software
A schedule reconciling the Company’s consolidated net loss calculated in accordance with GAAP to net loss excluding non-recurring impairment charges of capitalized software is included in the supplemental table below. Net loss excluding non-recurring impairment charges of capitalized software is not intended to represent a measure of performance in accordance with GAAP, but it 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.
The following table reconciles our net loss per GAAP (in thousands) to net loss excluding non-recurring impairment charges of capitalized software:
| For the three months ended June 30, |
For the six months ended June 30, |
||||||
| 2014 | 2013 | 2014 | 2013 | ||||
| Net loss per GAAP | $ (1,348) | $ (99) | $ (1,997) | $ (468) | |||
| Impairment of capitalized software | 639 | 27 | 661 | 92 | |||
| Net loss excluding non-recurring impairment charges | |||||||
| of capitalized software | $ (709) | $ (72) | $ (1,336) | $ (376) | |||
| Net loss per common share – basic and diluted per GAAP | $ (0.02) | $ (0.00) | $ (0.02) | $ (0.01) | |||
| Net loss per common share – basic and diluted excluding | |||||||
| non-recurring impairment charges of capitalized software | $ (0.01) | $ (0.00) | $ (0.02) | $ (0.01) | |||
| Weighted average shares outstanding – basic and diluted | 88,831 | 71,062 | 83,534 | 70,962 | |||