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NTN Buzztime, Inc. Reports Fourth Quarter and Full Year 2018 Results
[March 20, 2019]

NTN Buzztime, Inc. Reports Fourth Quarter and Full Year 2018 Results


CARLSBAD, Calif., March 20, 2019 /PRNewswire/ -- NTN Buzztime, Inc. (NYSE American: NTN), reported financial results for the fourth quarter and year ended December 31, 2018. 

NTN Buzztime Company Logo. (PRNewsFoto/NTN Buzztime, Inc.) (PRNewsfoto/NTN Buzztime, Inc.)

"Our business momentum delivered another strong quarter, including positive net income, and closed 2018 with the company's best bottom line annual performance in 24 years," said Ram Krishnan, NTN Buzztime CEO. "In 2018, we grew revenue 10%, driven by increased equipment sales while increasing cash from operations by approximately 150%.  These improvements reflect the impact of our revenue diversification strategy and continued progress in all facets of the business. 

"More importantly, we continue to invest for future growth by advancing our entertainment platform and bringing new offerings to the market. During 2018, we introduced our hardware platform appealing to new markets and attracting new customers. We have made progress with our SiteHub – the dramatically smaller form factor management system that improves functionality, eliminates wires and lowers costs – and are planning live beta sites in 2019. Our 'Trivia for Cash' promotions increased player engagement and boosted business at our partner locations. So, we are rolling out additional campaigns to continue with this progress. In the first quarter of 2019, we joined a new ad exchange, which broadens advertising buyer access to our inventory in multiple marketplaces. Additionally, we are in the process of launching our mobile app, which increases convenience for players and engagement for venues on- and off-premise.

"With these efforts to expand our product offering and revenue channels, we are confident in our ability to bring new sustainable growth to the company. While we continue to explore and evaluate strategic alternatives focused on maximizing shareholder value, our priority is building scalable distribution along with innovative products," concluded Krishnan.

Financial Results for the Fourth Quarter Ended December 31, 2018
Total revenues were $5.9 million, up 11.8% from $5.3 million in the fourth quarter of 2017, due to increases in hardware revenue offset by lower subscription revenue. Direct costs were $2.1 million and gross margin was 65%, compared to $1.7 million and 67% for the same period in 2017, reflecting the product mix shift. Selling, general and administrative expense decreased to $3.4 million, or 57% of revenue, down from $4.0 million, or 75% of revenue, in the prior year quarter, reflecting cost management measures. During the fourth quarter of 2018, the company incurred a goodwill impairment loss of $261,000 related to its Canadian business and did not in the comparable period. Net income attributable to common shareholders was $44,000, or $0.02 per diluted share, improved from a net loss attributable to common shareholders of $647,000, or $0.31 per share, in the prior year quarter.  EBITDA was $732,000 for the fourth quarter of 2018, compared to $117,000 in the prior year quarter.

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 this quarter, it 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 December 31, 2018
The site count was 2,639 at December 31, 2018, compared to 2,666 at September 30, 2018.  Management anticipates that net site count will continue to fluctuate. The tablet platform installations remained flat at 84% of the installed base, when compared to the install base as of September 30, 2018.

Liquidity
Cash and cash equivalents were $2.5 million at December 31, 2018, compared to $3.4 million at December 31, 2017. 2018 cash flow from operations reached $1.4 million, increasing $800,000 from $549,000 in 2017. Total deferred revenue was $1.4 million, down from $3.6 million at December 31, 2017. Working capital was $2.8 million at December 31, 2018, improving $3.9 million from negative $1.1 million at December 31, 2017.

Financial Results for the Full Year Ended December 31, 2018
Total revenues were $23.3 million, up 9.7% from $21.3 million in 2017, reflecting increases in professional development, advertising and hardware revenue. Net loss attributable to common shareholders for 2018 was $275,000, or $0.10 per share, improved from a net loss attributable to common shareholders of $1.1 million, or $0.45 per share for 2017. EBITDA was $2.8 million for 2018, compared to $1.8 million for 2017.

Conference Call
Management will review the results on a conference call with a live question and answer session today, March 20, 2019, at 4:30 p.m. ET. To access the call, please use passcode 9359779 and dial:

  • (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 that will be accessible at the company's website at http://www.buzztime.com.  The replay of the call will be available until March 27, 2019.

Forward-looking Statements
This release contains forward-looking statements that reflect management's current views of future events and operations, including statements regarding management's expectations regarding future sustainable growth, new offerings, market expansion, strategic opportunities, the ability of the company's new lighter offerings to enhance the value and attractiveness of the company's offerings, and the company's ability to scale and to create shareholder value.  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, the regulatory environment and changes in the law, failure of customer and/or player acceptance or demand for new or existing products, lower market acceptance of both existing and new offerings 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, except as required by law.

About Buzztime:
Buzztime (NYSE American: NTN) delivers interactive entertainment and innovative technology, including performance analytics and secure payment with Europay, MasterCard® and Visa® (EMV) chip card readers or with near-field communication (NFC) technology to accept Apple, Android and Samsung Pay. Most frequently used in bars and restaurants in North America, the Buzztime tablets and technology offer engaging solutions to establishments that have guests who experience dwell time, such as casinos, senior living and more. Casual dining venues license Buzztime's customizable solution to differentiate themselves via competitive fun by offering guests trivia, card, sports and arcade games, customized menus and self-service dining features. Buzztime's platform improves operating efficiencies, creates connections among the players and venues, and amplifies guests' positive experiences.  The Buzztime platform has also been recently resold and the content licensed for other businesses serving other markets.   For more information, please visit http://www.buzztime.com or follow us on Facebook or Twitter @buzztime.

IR AGENCY CONTACT:
Kirsten Chapman, LHA Investor Relations, buzztime@lhai.com, 415-433-3777





NTN BUZZTIME, INC. AND SUBSIDIARIES

Consolidated Balance Sheets

(In thousands, except par value amount)


ASSETS

December 31,

2018


December 31,

2017

Current Assets:




Cash and cash equivalents

$       2,536


$       3,378

Restricted cash

50


--

Accounts receivable, net

1,143


714

Site equipment to be installed

2,539


4,866

Prepaid expenses and other current assets

517


680

Total current assets

6,785


9,638





Restricted cash, long-term

200


--

Fixed assets, net

4,667


3,678

Software development costs, net

2,018


1,459

Deferred costs

424


775

Goodwill

667


1,004

Other assets

103


16





Total assets

$     14,864


$     16,570





LIABILITIES AND SHAREHOLDERS' EQUITY




Current Liabilities:




Accounts payable

$           271


$           390

Accrued compensation

572


646

Accrued expenses

444


418

Sales taxes payable

87


107

Income taxes payable

1


13

Current portion of long-term debt

1,000


5,059

Current portion of obligations under capital leases

45


176

Current portion of deferred revenue

1,371


3,564

Deferred rent

--


182

Other current liabilities

233


192

Total current liabilities

4,024


10,747





Long-term debt

2,729


8

Obligations under capital leases

41


164

Deferred revenue

30


63

Deferred rent

1,123


--

Other liabilities

--


52

Total liabilities

7,947


11,034





Commitments and contingencies








Shareholders' equity:




Series A 10% cumulative convertible preferred stock, $0.005 par value, $156 liquidation preference, 156 shares authorized; 156 shares issued and outstanding at December 31, 2018 and 2017

1


1

Common stock, $0.005 par value, 15,000 shares authorized at December 31, 2018 and 2017; 2,875 and 2,521 shares issued and outstanding at December 31, 2018 and 2017, respectively

14


13

Treasury stock, at cost, 10 shares at December 31, 2018 and 2017

(456 )


(456 )

Additional paid-in capital

136,552


134,752

Accumulated deficit

(129,394 )


(129,119 )

Accumulated other comprehensive income

200


345

Total shareholders' equity

6,917


5,536





Total liabilities and shareholders' equity

$     14,864


$     16,570


 

NTN BUZZTIME, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS

(In thousands, except per share data)



Three months ended

December 31,


Years ended

December 31,


2018


2017


2018


2017

Revenues








Subscription revenue

$    3,920


$    4,212


$  16,031


$ 16,949

Hardware revenue

1,162


246


3,589


770

Other revenue

837


838


3,715


3,555

Total revenues

5,919


5,296


23,335


21,274









Operating expenses:








Direct operating costs (includes depreciation and amortization)

2,051


1,742


8,070


6,755

Selling, general and administrative

3,363


3,959


14,486


15,587

Impairment of goodwill

261


--


261


--

Depreciation and amortization (excluding depreciation and amortization included in direct costs

71


84


315


334

Total operating expenses

5,746


5,785


23,132


22,676

Operating income (loss)

173


(489 )


203


(1,402 )

Other (expense) income:








Interest expense, net

(84 )


(110 )


(389 )


(498 )

Other (expense) income

(137 )


5


(137 )


889

Total other (expense) income, net

(221 )


(105 )


(526 )


391

Loss before income taxes

(48 )


(594 )


(323 )


(1,011 )

Income tax benefit (provision)

100


(45 )


64


(66 )

Net income (loss)

$          52


(639 )


(259 )


(1,077 )

Series A preferred stock dividend

(8 )


(8 )


(16 )


(16 )

Net income (loss) attributable to common shareholders

$          44


$      (647 )


$      (275 )


$  (1,093 )









Net income (loss) per common share – basic and diluted

$      0.02


$     (0.31 )


$     (0.10 )


$    (0.45 )









Weighted average shares outstanding – basic and diluted

2,864


2,094


2,688


2,442









Comprehensive loss:








Net income (loss)

$          52


$      (639 )


$      (259 )


$  (1,077 )

Foreign currency translations adjustment

(93 )


(14 )


(145 )


122

Total comprehensive loss

$        (41 )


$      (653 )


$      (404 )


$     (955 )









 

NTN BUZZTIME, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands)



Years ended

December 31,


2018


2017

Cash flows provided by operating activities:




Net loss

$     (259 )


$  (1,077 )

Adjustments to reconcile net loss to net cash provided by operating activities:




Depreciation and amortization

2,764


2,317

Provision for doubtful accounts

78


72

Scrap expense

30


226

Transfer of fixed assets to sales-type lease

23


--

Stock-based compensation

443


457

Amortization of debt issuance costs

59


60

Common stock issued for compensation in lieu of cash payment

--


209

Loss on sale or disposition of assets

212


13

Impairment of goodwill

261


--

Loss from disposition of capitalized software

23


5

Changes in assets and liabilities:




Accounts receivable

(507 )


142

Site equipment to be installed

431


(3,932 )

Prepaid expenses and other liabilities

29


443

Accounts payable and accrued expenses

(186 )


(586 )

Income taxes payable

(10 )


9

Deferred costs

350


130

Deferred revenue

(2,227 )


2,349

Deferred rent

(190 )


(189 )

Other liabilities

41


(99 )

Net cash provided by operating activities

1,365


549





Cash flows used in investing activities:




Capital expenditures

(648 )


(728 )

Capitalized software development expenditures

(964 )


(724 )

Proceeds from sale of assets

33


--

Net cash used in investing activities

(1,579 )


(1,452 )





Cash flows used in financing activities:




Net proceeds from issuance of common stock related to registered direct offering

 

1,375


 

1,773

Proceeds from long-term debt

4,000


50

Payment on long-term debt

(5,373 )


(3,038 )

Debit issuance costs of long-term deb

(23 )


(82 )

Principal payments on capital lease

(249 )


(155 )

Tax withholding related to net share settlement of vested restricted stock units

(17 )


--

Payment of preferred stockholder dividends

(16 )


(16 )

Net cash used in financing activities

(303 )


(1,468 )





Net decrease in cash, cash equivalents and restricted cash

(517 )


(2,371 )

Effect of exchange rate on cash

(75 )


63

Cash, cash equivalents and restricted cash at beginning of period

3,378


5,686

Cash, cash equivalents and restricted cash at end of period

2,786


3,378





Non-GAAP Information

A reconciliation of the Company's consolidated net income (loss) calculated in accordance with GAAP to EBITDA is in the 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.


Three months ended

December 31,


Years ended

December 31,


2018


2017


2018


2017

Net income (loss) per GAAP

$          52


$      (639 )


$      (259 )


$  (1,077 )

Interest expense

84


110


389


498

Income tax (benefit) provision

(100 )


45


(64 )


66

Depreciation and amortization

696


601


2,764


2,317

Total EBITDA

$       732


$       117


$    2,830


$   1,804

 

Cision View original content to download multimedia:http://www.prnewswire.com/news-releases/ntn-buzztime-inc-reports-fourth-quarter-and-full-year-2018-results-300815787.html

SOURCE NTN Buzztime, Inc.


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