NTN Buzztime, Inc. Announces Second Quarter 2012 Results

CARLSBAD, Calif., Aug. 13, 2012 /PRNewswire/ -- NTN Buzztime, Inc. (NYSE MKT: NTN) today announced results for the second quarter ended June 30, 2012.

(Logo:  http://photos.prnewswire.com/prnh/20120117/LA36540LOGO)

"Our recent reorganization allows us the ability to more aggressively retool our product and technology platform.  It is necessary for us to ramp up these investments over the next two to four quarters to transform the Company while leveraging its key assets," said Jeff Berg, the Company's Interim CEO.  "This means going from a company that just markets games and our classic playmaker, which we now refer to as Buzztime Classic, to one that uses games, live events and other engagement tools to acquire, engage and retain consumers on behalf of our subscribing locations," added Mr. Berg.

Results for the Second Quarter Ended June 30, 2012

Revenues for the second quarter of 2012 were $6.0 million, compared to revenues of $5.9 million for the same period of 2011.  The 2% increase in revenue was primarily the result of revenue generated from the Stump! Trivia business we acquired in October 2011, offset by lower average site count and lower average revenue per site.

The Company ended the second quarter of 2012 with 3,775 subscribing venues, compared to 3,904 at the end of the second quarter of 2011.  During the second quarter of 2012, installations were lower at 146 compared with 256 in the same quarter last year, and terminations were slightly lower at 239 compared to 240.  Customer churn was 6.3% for the quarter compared to 6.2% in the prior year period.

Total site counts

and churn percentages

Q2

2012


Q2

2011


Increase

(Decrease)

Site Count – Beginning of Quarter

3,868


3,888


(20)

Q2 Installations

146


256


(110)

Q2Terminations

(239)


(240)


(1)

Site Count - End of Quarter

3,775


3,904


(129)

Churn Percentage

6.3%


6.2%


0.1

Gross margin as a percentage of revenue decreased to 74% in the second quarter of 2012, compared to 76% in the second quarter of 2011.  Direct costs increased primarily due to Stump! Trivia direct expenses, which were offset by a decrease in depreciation and amortization expense, a decrease in service provider fees primarily due to fewer service calls, a decrease in content fees and a decrease in freight expense due to fewer installations and deinstallations of customer sites during the second quarter of 2012 compared to the same period in 2011. 

Selling, general and administrative expenses decreased 9%, to $4.9 million for the second quarter of 2012 from $5.4 million for the same period in 2011.  The decrease in selling, general and administrative expenses was primarily due to a decrease of $0.2 million related to moving our corporate headquarters and warehouse during the second quarter of 2011, a decrease of $0.1 million related to new playmaker development efforts that were expensed, decreased software development disposals of $0.1 million, decreased occupancy expense of $0.1 million due to lower rent related to our new office lease, decreased salary and incentive compensation of $0.1 million, decreased selling and marketing expenses of $0.1 million and other miscellaneous decreases of $0.1 million.  These decreases were offset by increased severance expense of $0.3 million related to our reorganization that took place during the second quarter of 2012.

Net loss for the second quarter of 2012 was $0.6 million, or $0.01 per share, compared to a net loss of $1.0 million or $0.02 per share in the same period a year ago.

Conference Call

Management will review these results in a conference call today, August 13, 2012, 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 18473968.  A replay of the call will be available until August 20, 2012, 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 18473968 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. (NYSE MKT: NTN) is a leading bar and restaurant social entertainment and integrated marketing platform. Trusted by approximately 3,800 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 2,600,000 registered consumers and more than 52,000,000 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 our reorganization, product mix, technology platform, customer ROI, future shifts in marketing/focus, acquiring and retaining customers, Stump! Trivia acquisition, benefits of our products and services 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 adverse economic conditions, failure of customer and/or player demand, integration issues and other management and operational difficulties with our reorganization or acquisitions, the impact of alternative entertainment options and technologies, competitive products, and pricing, 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.

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 par value amount)

 




ASSETS

June 30, 2012

December 31,

2011

Current Assets:



Cash and cash equivalents

$       2,549

$       1,374

Restricted cash

50

Accounts receivable, net

640

750

Prepaid expenses and other current assets

565

624




Total current assets

3,754

2,798

Broadcast equipment and fixed assets, net

4,219

4,255

Software development costs, net

1,606

1,320

Deferred costs

745

1,132

Goodwill

1,230

1,236

Intangible assets, net

658

845

Other assets

59

61




Total assets

$     12,271

$     11,647




LIABILITIES AND SHAREHOLDERS' EQUITY






Current Liabilities:



Accounts payable

$       1,086

$       1,329

Accrued compensation

922

757

Sales taxes payable

670

764

Income taxes payable

88

77

Obligations under capital leases—current portion

215

286

Deferred revenue

564

463

Other current liabilities

110

192




Total current liabilities

3,655

3,868

Obligations under capital leases, excluding current portion

62

164

Deferred revenue, excluding current portion

198

186

Deferred rent

967

756

Other liabilities

279

323




Total liabilities

5,161

5,297

Commitments and contingencies






Shareholders' equity:



Series A 10% cumulative convertible preferred stock, $.005 par value, $156 liquidation preference, 5,000 shares authorized; 156 and 161 shares issued and outstanding at June 30, 2012 and December 31, 2011, respectively

1

1




Common stock, $.005 par value, 84,000 shares authorized; 71,045 and 60,927 shares issued and outstanding at June 30, 2012 and December 31, 2011, respectively

355

305

Treasury stock, at cost, 503 shares at June 30, 2012 and December 31, 2011

(456)

(456)

Additional paid-in capital

118,902

116,497

Accumulated deficit

(112,405)

(110,719)

Accumulated other comprehensive income

713

722

Total shareholders' equity

7,110

6,350

Total liabilities and shareholders' equity

$     12,271

$     11,647










 

 

NTN BUZZTIME, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)

(In thousands, except per share data)

 





Three Months Ended
June 30,

Six Months Ended
June 30,


2012

2011

2012

2011

Revenues

$      6,015

$      5,893

$    12,081

$    11,894






Operating expenses:





Direct operating costs (includes depreciation and amortization)

1,554

1,408

3,171

2,932

Selling, general and administrative

4,913

5,374

10,185

10,206

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

191

164

365

329






Total operating expenses

6,658

6,946

13,721

13,467






Operating loss

(643)

(1,053)

(1,640)

(1,573)

Other (expense) income, net

(2)

69

(34)

41






Loss before income taxes

(645)

(984)

(1,674)

(1,532)

Benefit (provision) for income taxes

12

(4)

(11)






Net loss

$        (633)

$        (984)

(1,678)

(1,543)











Net loss per common share – basic and diluted

$       (0.01)

$       (0.02)

$       (0.02)

$       (0.03)






Weighted average shares outstanding – basic and diluted

70,506

60,388

67,512

60,387






 


 

NTN BUZZTIME, INC. AND SUBSIDIARIES

CONSOLIDATED CASH FLOW DATA

(Unaudited)

(In thousands)

 





Six Months ended

June 30,


2012

2011

Cash flows provided by (used in) operating activities:



Net loss

$      (1,678)

$      (1,543)

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



Depreciation and amortization

1,473

1,588

Provision for doubtful accounts

39

(16)

Stock-based compensation

137

154

Loss on sales of securities available-for-sale

18

Loss from disposition of equipment and capitalized software

1

142

Changes in assets and liabilities:



Accounts receivable

71

93

Prepaid expenses and other assets

62

6

Accounts payable and accrued liabilities

(229)

560

Income taxes payable

12

(11)

Deferred costs

385

(253)

Deferred revenue

113

82

Deferred rent

211

(1)




Net cash provided by operating activities

597

819

Cash flows provided by (used in) investing activities:



Capital expenditures

(819)

(1,062)

Software development expenditures

(718)

(458)

Proceeds from sales of securities-available-for-sale

90

Acquisitions

(50)

Changes in restricted cash

50




Net cash used in investing activities

(1,537)

(1,430)

Cash flows provided by (used in) financing activities:



Proceeds from rights offering, net

2,310

Principal payments on capital leases

(172)

(241)

Payments on note payable

(19)

Proceeds from exercise of stock options

34




Net cash provided by (used in) financing activities

2,549

(207)




Net increase (decrease) in cash and cash equivalents

1,179

(818)




Effect of exchange rate on cash

(4)

(3)




Cash and cash equivalents at beginning of period

1,374

3,906




Cash and cash equivalents at end of period

$        2,549

$        3,085




SOURCE NTN Buzztime, Inc.



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