Exhibit 99.1
FOR IMMEDIATE RELEASE
August 13, 2009
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 Second Quarter Results
CARLSBAD, Calif., August 13/PRNewswire-FirstCall/ — NTN Buzztime, Inc. (NYSE AMEX: NTN) today announced results for the second quarter ended June 30, 2009.
“Our recent strategic initiatives continue to pay dividends. We added a net 107 customer sites in the second quarter, ending the quarter with 125 more than a year ago, and we reduced the amount of our loss from continuing operations 88% by lowering selling, general and administrative expenses,” said NTN Buzztime CEO Terry Bateman.
“We are pleased by what we have been able to accomplish in a relatively short period of time,” Mr. Bateman continued. “We are focused on the key objectives we have identified that can quickly return the company to profitability. We believe we have the groundwork in place to grow our network, which will be complemented with Buzztime experiences delivered through mobile phones and online. We feel progress is being made on all fronts, and we now have a team in place that has the skills and experience to execute on our growth strategy.”
Results for the Quarter Ended June 30, 2009
Revenues for the second quarter of 2009 were $6.3 million, compared to revenues of $7.0 million for the same period of 2008, primarily as a result of a decrease in average revenue generated per site related to a strategic reduction in pricing.
The Company ended the second quarter of 2009 with 3,871 subscribing venues, compared to 3,746 at June 30, 2008, and 3,777 at March 31, 2009. During the second quarter of 2009, installations were up approximately 48% while terminations were down 19% compared with the second quarter of 2008. Customer churn improved to 4.9% for the quarter from 6.1% in the prior year period.
Total site counts and churn percentages | Q2 2009 | Q2 2008 | Increase (Decrease) | |
| Site Count – Beginning of Quarter | 3,764 | 3,777 | (13) | |
| Q2 Installations | 294 | 199 | 95 | |
| Q2 Terminations | (187) | (230) | (43) | |
| Site Count - End of Quarter | 3,871 | 3,746 | 125 | |
| Churn Percentage | 4.9% | 6.1% | (1.2) | |
Gross margin as a percentage of revenue improved to 76%, compared to 72% in the second quarter of 2008.
Selling, general and administrative expenses declined by $2.1 million, or 31%, to $4.9 million from $7.0 million a year ago. The improvement was attributable to several factors including a $0.5 million decline in salary expenses due to staffing reductions; a $0.5 million decline in severance expense due to the resignation of the CEO in the prior year; a $0.5 million decline in marketing expense related to a change in the Company’s marketing strategy; and a $0.4 million decline in consulting services.
Loss from continuing operations for the second quarter of 2009 was $282,000, or less than one cent per share, an improvement in the loss of approximately $1.8 million from same period a year ago.
For the quarter ended June 30, 2009, results from continuing operations reflected solely the results from the Entertainment division, following the discontinuation of the Hospitality division.
Discontinued Operations
Discontinued operations had no activity in the second quarter of 2009, compared to a loss from discontinued operations of $216,000 in the same quarter of 2008.
Results for the Six Months Ended June 30, 2009
Revenue from continuing operations was $12.5 million in the first six months of 2009, compared to revenue of $14.2 million for the year-ago period. Loss from continuing operations for the first half of 2009 was $0.5 million, compared to loss from continuing operations of $4.4 million a year ago.
Gross margin as a percentage of revenue improved to 76% from 71% in the first six months of 2008.
Selling, general and administrative expenses declined $4.6 million, or 32%, to $9.7 million in the first six months of 2009 from $14.3 million in the corresponding period of the prior year.
For the six months ended June 30, 2009, results from continuing operations solely reflected the results from the Entertainment division, following the discontinuation of the Hospitality division.
Conference Call
Management will review these results in a conference call today, August 13, 2009, at 4:30 p.m. EDT.
To access the conference call, please dial (866) 360-7027 if calling from the United States or Canada, or (706) 643-3291 if calling internationally, and use passcode 23874047. Please dial in several minutes prior to start time for registration purposes.
A replay will be available until August 20, 2009, 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 23874047 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., a leader in interactive entertainment for 25 years, is based in Carlsbad, CA. Buzztime is distributed in-home and out-of-home across broadband platforms including online, cable TV, satellite TV and in approximately 3,900 restaurants, sports bars and pubs throughout North America. Buzztime entertainment is also available on electronic games and in books. For more information, please visit http://www.buzztime.com.
Buzztime is a proud member of the OVAB |Out-of-home Video Advertising Bureau. Buzztime is a registered trademark of Buzztime Entertainment, Inc. and Playmaker is a registered trademark of NTN Buzztime, Inc.
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 estimates of financial performance and cash flows, new business initiatives and engagement and results of marketing strategies. These statements are based on current expectations and assumptions that are subject to risks and uncertainties that could cause actual results to differ materially from historical results or those expressed or implied by such forward-looking statements. These risks and uncertainties include risks associated with recent management changes, the Company's ability to grow its out-of-home Buzztime iTV network and implement other business strategies such as the planned launch of mobile and wireless games, the risk of changing economic conditions, failure of product demand or market acceptance of both existing and new products and services and the impact of competitive products and pricing. 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)
NTN BUZZTIME, INC. AND SUBSIDIARIES
Condensed Consolidated Balance Sheets
(Unaudited)
(In thousands, except share data)
| | | June 30, | | | December 31, | |
| | | 2009 | | | 2008 | |
| ASSETS | | | | | | |
| Current assets: | | | | | | |
| Cash and cash equivalents | | $ | 3,845 | | | $ | 3,362 | |
| Accounts receivable, net of allowances of $301 and $298, respectively | | | 774 | | | | 636 | |
| Investments available-for-sale | | | 96 | | | | 58 | |
| Prepaid expenses and other current assets | | | 844 | | | | 611 | |
| Total current assets | | | 5,559 | | | | 4,667 | |
| Broadcast equipment and fixed assets, net | | | 3,496 | | | | 3,428 | |
| Software development costs, net | | | 1,067 | | | | 860 | |
| Deferred costs | | | 1,295 | | | | 1,383 | |
| Goodwill | | | 1,091 | | | | 1,032 | |
| Intangible assets, net | | | 1,927 | | | | 185 | |
| Other assets | | | 143 | | | | 107 | |
| Deposits on broadcast equipment | | | 137 | | | | - | |
| Total assets | | $ | 14,715 | | | $ | 11,662 | |
| | | | | | | | | |
| LIABILITIES AND SHAREHOLDERS’ EQUITY | | | | | | | | |
| Current liabilities: | | | | | | | | |
| Accounts payable | | $ | 722 | | | $ | 219 | |
| Accrued expenses | | | 936 | | | | 1,169 | |
| Sales tax payable | | | 770 | | | | 958 | |
| Accrued salaries | | | 355 | | | | 383 | |
| Accrued vacation | | | 406 | | | | 381 | |
| Income tax payable | | | - | | | | 18 | |
| Obligations under capital lease | | | 223 | | | | 8 | |
| Deferred revenue | | | 631 | | | | 657 | |
| Total current liabilities | | | 4,043 | | | | 3,793 | |
| Sales tax payable, excluding current portion | | | 207 | | | | - | |
| Obligations under capital lease, excluding current portion | | | 232 | | | | 32 | |
| Deferred revenue, excluding current portion | | | 93 | | | | 91 | |
| Other long term liabilities | | | 285 | | | | - | |
| Total liabilities | | | 4,860 | | | | 3,916 | |
| | | | | | | | | |
| Shareholders’ equity: | | | | | | | | |
| Series A 10% cumulative convertible preferred stock, $.005 par value, $161 liquidation preference, 5,000,000 shares authorized; 161,000 shares issued and outstanding at June 30, 2009 and December 31, 2008 | | | 1 | | | | 1 | |
| Common stock, $.005 par value, 84,000,000 shares authorized; 60,348,000 and 55,727,000 shares issued and outstanding at June 30, 2009 and December 31, 2008, respectively | | | 300 | | | | 277 | |
| Treasury stock, at cost, 503,000 shares at June 30, 2009 and December 31, 2008 | | | (456 | ) | | | (456 | ) |
| Additional paid-in capital | | | 115,639 | | | | 113,267 | |
| Accumulated deficit | | | (105,896 | ) | | | (105,351 | ) |
| Accumulated other comprehensive income | | | 267 | | | | 8 | |
| Total shareholders’ equity | | | 9,855 | | | | 7,746 | |
| Total shareholders’ equity and liabilities | | $ | 14,715 | | | $ | 11,662 | |
NTN BUZZTIME, INC. AND SUBSIDIARIES
Condensed Consolidated Statements of Operations
(Unaudited)
(In thousands, except per share data)
| | | Three months ended | | | Six months ended | |
| | | June 30, | | | June 30, | | | June 30, | | | June 30, | |
| | | 2009 | | | 2008 | | | 2009 | | | 2008 | |
| Revenues | | $ | 6,285 | | | $ | 7,017 | | | $ | 12,481 | | | $ | 14,199 | |
| Operating expenses: | | | | | | | | | | | | | | | | |
| Direct operating costs (includes depreciation and amortization of $510 and $666 for the three months ended June 30, 2009 and 2008, respectively, and depreciation and amortization of $1,003 and $1,385 for the six months ended June 30, 2009 and 2008, respectively) | | | 1,524 | | | | 1,980 | | | | 3,026 | | | | 4,076 | |
| Selling, general and administrative | | | 4,859 | | | | 7,000 | | | | 9,691 | | | | 14,265 | |
| Depreciation and amortization (excluding depreciation and amortization included in direct operating costs) | | | 213 | | | | 145 | | | | 340 | | | | 267 | |
| Total operating expenses | | $ | 6,596 | | | $ | 9,125 | | | $ | 13,057 | | | $ | 18,608 | |
| Operating loss | | $ | (311 | ) | | $ | (2,108 | ) | | $ | (576 | ) | | $ | (4,409 | ) |
| Other income (expense): | | | | | | | | | | | | | | | | |
| Interest income | | | 21 | | | | 43 | | | | 64 | | | | 102 | |
| Interest expense | | | (10 | ) | | | - | | | | (12 | ) | | | - | |
| Total other income | | $ | 11 | | | $ | 43 | | | $ | 52 | | | $ | 102 | |
| | | | | | | | | | | | | | | | | |
| Loss from continuing operations before income taxes | | $ | (300 | ) | | $ | (2,065 | ) | | $ | (524 | ) | | $ | (4,307 | ) |
| (Benefit from) provision for income taxes | | | (18 | ) | | | 64 | | | | 13 | | | | 105 | |
| Loss from continuing operations | | $ | (282 | ) | | $ | (2,129 | ) | | $ | (537 | ) | | $ | (4,412 | ) |
| Loss from discontinued operations, net of tax | | | - | | | | (216 | ) | | | - | | | | (507 | ) |
| Net loss | | $ | (282 | ) | | $ | (2,345 | ) | | $ | (537 | ) | | $ | (4,919 | ) |
| Net loss per common share | | | | | | | | | | | | | | | | |
| Loss from continuing operations, basic and diluted | | $ | - | | | $ | (0.04 | ) | | $ | (0.01 | ) | | $ | (0.08 | ) |
| Loss from discontinued operations, basic and diluted | | $ | - | | | $ | - | | | $ | - | | | $ | (0.01 | ) |
| Net loss | | $ | - | | | $ | (0.04 | ) | | $ | (0.01 | ) | | $ | (0.09 | ) |
| | | | | | | | | | | | | | | | | |
| Weighted average shares outstanding | | | | | | | | | | | | | | | | |
| Basic and diluted | | | 57,762 | | | | 55,203 | | | | 56,500 | | | | 55,195 | |
NTN BUZZTIME, INC. AND SUBSIDIARIES
Condensed Consolidated Statements of Cash Flows
(Unaudited)
(In thousands)
| | | Six months ended | |
| | | June 30, | | | June 30, | |
| | | 2009 | | | 2008 | |
| Cash flows provided by (used in) operating activities: | | | | | | |
| Net loss | | $ | (537 | ) | | $ | (4,919 | ) |
| Loss from discontinued operations, net of tax | | | - | | | | (507 | ) |
| Loss from continuing operations | | $ | (537 | ) | | $ | (4,412 | ) |
| Adjustments to reconcile net loss to net cash provided by (used in) operating activities | | | | | | | | |
| Depreciation and amortization | | | 1,343 | | | | 1,652 | |
| Provision for doubtful accounts | | | 31 | | | | 346 | |
| Stock-based compensation | | | 85 | | | | 219 | |
| Loss from disposition of equipment and capitalized software | | | 40 | | | | 376 | |
| Changes in operating assets and liabilities: | | | | | | | | |
| Accounts receivable | | | (163 | ) | | | (49 | ) |
| Prepaid expenses and other assets | | | (231 | ) | | | 233 | |
| Accounts payable and accrued expenses | | | 218 | | | | 678 | |
| Income taxes payable | | | (44 | ) | | | 52 | |
| Deferred costs | | | 88 | | | | 73 | |
| Deferred revenue | | | (26 | ) | | | (170 | ) |
| Net cash provided by (used in) operating activities from continuing operations | | | 804 | | | | (1,002 | ) |
| Discontinued operations | | | - | | | | (789 | ) |
| Net cash provided by (used in) operating activities | | | 804 | | | | (1,791 | ) |
| | | | | | | | | |
| Cash flows (used in) provided by investing activities: | | | | | | | | |
| Purchases of broadcast equipment and fixed assets | | | (701 | ) | | | (1,119 | ) |
| Software development expenditures | | | (391 | ) | | | (512 | ) |
| Deposits on broadcast equipment | | | (137 | ) | | | - | |
| Restricted cash | | | - | | | | 16 | |
| Net cash used in investing activities from continuing operations | | | (1,229 | ) | | | (1,615 | ) |
| Discontinued operations | | | - | | | | 20 | |
| Net cash used in operating activities | | | (1,229 | ) | | | (1,595 | ) |
| Cash flows provided by (used in) financing activities: | | | | | | | | |
| Principal payments on capital lease | | | (41 | ) | | | (4 | ) |
| Proceeds from the exercise of stock option and warrants | | | 28 | | | | - | |
| Proceeds from the sale of common stock | | | 750 | | | | - | |
| Net cash provided by (used in) financing activities | | | 737 | | | | (4 | ) |
| Net increase (decrease) in cash and cash equivalents | | | 312 | | | | (3,390 | ) |
| Effect of exchange rate on cash | | | 171 | | | | (267 | ) |
| Cash and cash equivalents at beginning of period | | | 3,362 | | | | 10,273 | |
| Cash and cash equivalents at end of period | | $ | 3,845 | | | $ | 6,616 | |
| Supplemental disclosures of cash flow information: | | | | | | | | |
| Cash paid during the period for: | | | | | | | | |
| Interest | | $ | 9 | | | $ | - | |
| Income taxes | | $ | 107 | | | $ | 94 | |
| Supplemental disclosure of non-cash investing and financing activities: | | | | | | | | |
| Unrealized holding gain (loss) on investments available-for-sale | | $ | 38 | | | $ | (119 | ) |
| Equipment acquired under capital leases | | $ | 457 | | | $ | - | |
| Issuance of common stock in payment of preferred dividends | | $ | 8 | | | $ | - | |
| Assumed obligations in connection with the acquistion of intangible assets | | $ | 64 | | | $ | - | |
| Issuance of common stock in connection with the acquisition of intangible assets | | $ | 615 | | | $ | - | |
| Issuance of warrrants in connection with the acquisition of intangible assets | | $ | 908 | | | $ | - | |
| Earn-out in connection with the acquisition of intangible assets | | $ | 285 | | | $ | - | |
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