[GRAPHIC OMITTED][GRAPHIC OMITTED]
CONTACT:
Donald C. Weinberger
Stephen D. Axelrod, CFA
Denise Ford (media)
WOLFE AXELROD WEINBERGER ASSOCIATES LLC
212-370-4500; 212-370-4505 fax
e-mail: steve@wolfeaxelrod.com
NTN REPORTS SUBSTANTIAL IMPROVEMENT IN FOURTH QUARTER 2001 RESULTS
- - COMPANY REPORTS THIRD CONSECUTIVE QUARTER OF POSITIVE CASH FLOW, INCREASED
REVENUE
CARLSBAD, CA, MARCH 6, 2002 -- NTN COMMUNICATIONS, INC. (AMEX: NTN), an
interactive game content developer and distributor, today reported an 84%
decrease in its reported loss for the fourth quarter ended December 31, 2001
compared to the fourth quarter of 2000. The Company reported a net loss of
$397,000, or ($0.01) per share, for the fourth quarter of 2001 compared with a
net loss of $2.52 million, or ($0.07) per share, for the fourth quarter of 2000.
The earnings were a combination of profits of $303,000 for its core NTN Network
division and losses of $700,000 for its Buzztime Entertainment, Inc.
("Buzztime") subsidiary, which is pursuing growth opportunities in the emerging
interactive television industry.
Both the fourth quarter of 2001 and 2000 included certain unusual charges. The
net loss for the fourth quarter of 2001 included $189,000 of non-cash debt
conversion costs related to the December conversion of $2 million in convertible
subordinated debt to equity. Excluding the non-cash debt conversion costs, the
Company would have recorded a net loss of $208,000. The fourth quarter of 2000
included an impairment charge of $1.36 million. Excluding that unusual charge,
the Company would have recorded a net loss of $1.16 million.
The Company posted a $2.02 million improvement in earnings before interest,
taxes, depreciation and amortization ("EBITDA"), to a positive $1.02 million in
the fourth quarter of 2001 compared to negative EBITDA of $1.0 million in the
fourth quarter of 2000. A detailed schedule reconciling net loss to EBITDA is
included in the supplemental tables below.
For the first time in its 17-year history, the Company's cash provided by
operations exceeded its cash used in investing activities, which were primarily
capital expenditures, for the third consecutive quarter. This comes even as NTN
continues to invest in a number of initiatives by Buzztime, which have generated
negligible current revenues. The Company reported revenues of $6.26 million for
the quarter ended December 31, 2001, compared to revenues of $5.77 million for
the same period of 2000. - MORE -
The NTN Network division posted net income of $303,000 in the fourth quarter of
2001 compared to a loss of $176,000 in 2000. The division posted a 33% increase
in EBITDA with $1.53 million in the fourth quarter of 2001 versus $1.15 million
in the fourth quarter of 2000. These improvements were largely due to a revenue
increase for the division of $620,000, to $6.2 million for the fourth quarter of
2001, compared to revenues of $5.6 million for the same period of 2000. The
increase was primarily due to higher site-related revenue. The overall North
American site count in December 2001 was approximately 3,600, which represented
a net site increase of 100 over December 2000. NTN Network's advertising revenue
increased by approximately $150,000 to $495,000.
Buzztime recorded revenue of $57,000 in the fourth quarter of 2001 compared to
$186,000 in the prior year quarter. The Buzztime revenue levels were lower in
the fourth quarter of 2001 due to the discontinuation of Buzztime's Internet
initiatives. The net loss for Buzztime was $700,000 for the fourth quarter of
2001 compared to $2.34 million for 2000.
"We are extremely pleased with the performance of both of our operating
entities," said Stanley B. Kinsey, Chairman and CEO. "The NTN Network division
continues to demonstrate exceptional performance as it again produced increases
in operating margins and cash flow. Meanwhile, Buzztime is gaining solid
momentum with strategic partners and cable operators to become deployed as one
of the first iTV game channels on U.S. digital set-top boxes. We look forward to
the initial deployment of the channel in the near future and believe this
initiative will substantially increase the Company's value."
The Company reported a 61.9% decrease in its reported loss for the year ended
December 31, 2001, with a net loss of $3.66 million, or $0.10 per share,
compared to a net loss of $9.59 million, or $0.29 per share, in 2000. The
Company reported revenues of $22.56 million for 2001, which was a $511,000, or
2.3%, improvement over 2000 revenues of $22.05 million. The Company's EBITDA
improved to positive EBITDA of $2.14 million for 2001 from negative EBITDA of
$2.23 million in 2000. A detailed schedule reconciling net loss to EBITDA is
included in the supplemental tables below.
Revenues for the Company's NTN Network division increased by $892,000, to $22.4
million for 2001, compared to revenues of $21.51 million for 2000. The increase
was primarily due to higher site-related revenues, including higher subscription
revenues and the effect of the amortization of previously deferred installation
fees. NTN Network's net loss decreased 88% to $418,000 in 2001 from a loss of
$3.5 million in 2000. The division posted positive EBITDA of $4.59 million in
2001 versus $3.12 million in 2000.
Buzztime recorded revenue of $159,000 in 2001 compared to $540,000 in 2000. The
loss for Buzztime was $3.24 million for 2001 compared to $6.15 million for 2000,
when the Company began supporting the Buzztime Interactive TV initiatives.
As previously announced on February 28th, the maturity date on NTN's revolving
line of credit with Coast Business Credit, a division of Southern Pacific Bank,
has been extended by one year from June 30, 2002 to June 30, 2003. The pricing
on the line of credit remains unchanged.
The maximum borrowing amount under the line of credit will remain at the current
level of $2.75 million through June 30, 2002. On that date, the maximum amount
will decline to $2.5 million, which will be subsequently reduced to $2.25
million on January 31, 2003 and to $2.0 million on March 31, 2003.
NTN will be conducting a conference call today, Wednesday, March 6TH at 4:30 pm
EST. To participate in the conference call, please dial (800) 633-8938 about 5 -
10 minutes prior to the 4:30 pm EST initiation of the teleconference.
International callers please dial (303) 957-1091.
- MORE -
---------------------------
ABOUT NTN COMMUNICATIONS
Based in Carlsbad, CA, NTN COMMUNICATIONS, INC. (AMEX: NTN) is the parent
corporation of Buzztime Entertainment, Inc., a subsidiary, and the NTN
Network(R) division. Buzztime produces BUZZTIME(TM), the interactive television
trivia channel, and live sports prediction games such as QB1(R) from its
interactive broadcast studio. Buzztime's partners include: Scientific-Atlanta,
Microsoft WebTV, AT&T Interactive Television, Sun Java TV, Airborne
Entertainment, and Yahoo! The NTN Network is the largest out-of-home interactive
television network in the world. Through NTN's Digital Interactive Television
technology, the NTN Network broadcasts entertainment and sports programming
engaging over 1.7 million players and reaching over 6 million unique consumers
each month in approximately 3,600 North American hospitality locations such as
TGIFriday's, Damon's, BW3, Bennigan's and others.
This release contains forward-looking statements, including statements relating
to future growth and cash flows, field testing, commercial availability and
deployment of the BUZZTIME Interactive trivia cable channel, investment
requirements for Buzztime, and financing, which are subject to risks and
uncertainties including changing economic conditions, product demand and market
acceptance, the impact of competitive products and pricing, and other risk
factors detailed in the Company's Securities and Exchange Commission filings,
including the Company's Report on Form 10-K for the fiscal year ended December
31, 2001 and its Registration Statement on Form S-3 (File No. 333-51650). The
Company disclaims any intention or obligation to update or revise any
forward-looking statements, whether as a result of new information, future
events or otherwise.
FOR ADDITIONAL INFORMATION ON NTN COMMUNICATIONS AT NO CHARGE,
PLEASE CALL 1-800-PRO-INFO AND ENTER TICKER SYMBOL NTN
- TABLES TO FOLLOW -
NTN COMMUNICATIONS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
THREE MONTHS ENDED YEAR ENDED
------------------------------------ ------------------------------------
DEC. 31, DEC. 31, DEC. 31, DEC. 31,
2001 2000 2001 2000
----------------- ----------------- ----------------- -----------------
REVENUES:
NTN Network revenues $ 6,198,000 $ 5,570,000 $ 22,382,000 $ 21,406,000
BUZZTIME service revenues 57,000 185,000 159,000 540,000
Other revenues 5,000 14,000 18,000 102,000
----------------- ----------------- ----------------- -----------------
TOTAL REVENUES 6,260,000 5,769,000 22,559,000 22,048,000
----------------- ----------------- ----------------- -----------------
OPERATING EXPENSES:
Direct operating costs (includes
depreciation of $838,000, $816,000,
$3,297,000 and $ 4,481,000 for the three
months ended December 31, 2001 and 2000
and for the year ended 2001 and 2000,
respectively) 2,256,000 2,495,000 8,876,000 11,098,000
Selling, general and administrative 3,636,000 3,370,000 14,342,000 15,070,000
Litigation, legal and professional fees 103,000 194,000 463,000 474,000
Depreciation and amortization 419,000 449,000 1,711,000 1,815,000
Impairment charges - 1,362,000 - 1,362,000
Research and development 5,000 110,000 101,000 430,000
----------------- ----------------- ----------------- -----------------
TOTAL OPERATING EXPENSES 6,419,000 7,980,000 25,493,000 30,249,000
----------------- ----------------- ----------------- -----------------
OPERATING LOSS (159,000) (2,211,000) (2,934,000) (8,201,000)
----------------- ----------------- ----------------- -----------------
OTHER INCOME (EXPENSE):
Interest income 9,000 24,000 63,000 72,000
Interest expense (167,000) (281,000) (846,000) (1,131,000)
Debt conversion costs (189,000) - (189,000) -
Other 64,000 (52,000) 165,000 119,000
----------------- ----------------- ----------------- -----------------
TOTAL OTHER INCOME (EXPENSE) (283,000) (309,000) (807,000) (940,000)
----------------- ----------------- ----------------- -----------------
Loss before cumulative effect of accounting
change and minority interest in loss of
consolidated subsidiary (442,000) (2,520,000) (3,741,000) (9,141,000)
Cumulative effect of accounting change - - - (448,000)
----------------- ----------------- ----------------- -----------------
LOSS BEFORE MINORITY INTEREST (442,000) (2,520,000) (3,741,000) (9,589,000)
MINORITY INTEREST IN LOSS OF CONSOLIDATED
SUBSIDIARY 45,000 - 85,000 -
----------------- ----------------- ----------------- -----------------
NET LOSS $ (397,000) $ (2,520,000) $ (3,656,000) $ (9,589,000)
================= ================= ================= =================
NET LOSS PER COMMON SHARE - BASIC AND DILUTED
Loss before cumulative effect of accounting
change $ (0.01) $ (0.07) $ (0.10) $ (0.28)
Cumulative effect of accounting change - - - (0.01)
----------------- ----------------- ----------------- -----------------
NET LOSS PER SHARE $ (0.01) $ (0.07) $ (0.10) $ (0.29)
================= ================= ================= =================
Weighted average shares outstanding - basic
and diluted 37,239,000 35,328,000 36,755,000 33,206,000
================= ================= ================= =================
THREE MONTHS ENDED YEAR ENDED
------------------------------------ ------------------------------------
DEC. 31, 2001 DEC. 31,2000 DEC. 31, 2001 DEC. 31, 2000
----------------- ----------------- ----------------- -----------------
EBITDA CALCULATION:
Net loss $ (397,000) $ (2,520,000) $ (3,656,000) $ (9,589,000)
Interest income (9,000) (24,000) (63,000) (72,000)
Interest expense 167,000 281,000 846,000 1,131,000
Depreciation and amortization-direct 838,000 816,000 3,297,000 4,481,000
Depreciation and amortization-indirect 419,000 449,000 1,711,000 1,815,000
----------------- ----------------- ----------------- -----------------
EBITDA $ 1,018,000 $ (998,000) $ 2,135,000 $ (2,234,000)
================= ================= ================= =================
EBITDA (earnings before interest, taxes, depreciation and amortization) is not
intended to represent a measure of performance in accordance generally accepted
accounting principles ("GAAP"). EBITDA is included herein because management
believes that certain investors find it to be a useful tool for measuring the
Company's performance.
NTN COMMUNICATIONS, INC. AND SUBSIDIARIES
STATEMENTS OF OPERATIONS BY BUSINESS SEGMENT
For the purposes of this presentation, the NTN Network segment information
includes certain "Other Revenues," which are not material.
FOR THE QUARTER ENDED DECEMBER 31, 2001
NETWORK BUZZTIME TOTAL
------------------ ------------------ -----------------
Revenues $ 6,203,000 $ 57,000 $ 6,260,000
Operating expenses 5,614,000 805,000 6,419,000
------------------ ------------------ -----------------
Operating income (loss) 589,000 (748,000) (159,000)
Other income (expense) (286,000) 3,000 (283,000)
Net loss before minority interest in loss of ------------------ ------------------ -----------------
consolidated subsidiary 303,000 (745,000) (442,000)
Minority interest in loss of consolidated
subsidiary - 45,000 45,000
------------------ ------------------ -----------------
Net income (loss) $ 303,000 $ (700,000) $ (397,000)
================== ================== =================
EBITDA Calculation
FOR THE QUARTER ENDED DECEMBER 31, 2001
NETWORK BUZZTIME TOTAL
------------------ ------------------ -----------------
Net income (loss) $ 303,000 $ (700,000) $ (397,000)
Interest income (6,000) (3,000) (9,000)
Interest expense 167,000 - 167,000
Depreciation and amortization 1,062,000 195,000 1,257,000
------------------ ------------------ -----------------
EBITDA $ 1,526,000 $ (508,000) $ 1,018,000
================== ================== =================
FOR THE YEAR ENDED DECEMBER 31, 2001
NETWORK BUZZTIME TOTAL
------------------ ------------------ -----------------
Revenues $ 22,400,000 $ 159,000 $ 22,559,000
Operating expenses 22,028,000 3,465,000 25,493,000
------------------ ------------------ -----------------
Operating income (loss) 372,000 (3,306,000) (2,934,000)
Other income (expense) (790,000) (17,000) (807,000)
Net loss before cumulative effect of
accounting change and minority interest in ------------------ ------------------ -----------------
loss of consolidated subsidiary (418,000) (3,323,000) (3,741,000)
Cumulative effect of accounting change - - -
------------------ ------------------ -----------------
Net loss before minority interest (418,000) (3,323,000) (3,741,000)
Minority interest in loss of consolidated
subsidiary - 85,000 85,000
------------------ ------------------ -----------------
Net loss $ (418,000) $ (3,238,000) $ (3,656,000)
================== ================== =================
EBITDA Calculation FOR THE YEAR ENDED DECEMBER 31, 2001
NETWORK BUZZTIME TOTAL
------------------ ------------------ -----------------
Net loss $ (418,000) $ (3,238,000) $ (3,656,000)
Interest income (51,000) (12,000) (63,000)
Interest expense 818,000 28,000 846,000
Depreciation and amortization 4,242,000 766,000 5,008,000
------------------ ------------------ -----------------
EBITDA $ 4,591,000 $ (2,456,000) $ 2,135,000
================== ================== =================
EBITDA (earnings before interest, taxes, depreciation and amortization) is not
intended to represent a measure of performance in accordance with generally
accepted accounting principles ("GAAP"). EBITDA is included herein because
management believes that certain investors find it to be a useful tool for
measuring the Company's performance.
NTN COMMUNICATIONS, INC. AND SUBSIDIARIES
STATEMENTS OF OPERATIONS BY BUSINESS SEGMENT
For the purposes of this presentation, the NTN Network segment information
includes certain "Other Revenues," which are not material.
FOR THE QUARTER ENDED DECEMBER 31, 2000
NETWORK BUZZTIME IWN TOTAL
----------------- ----------------- ----------------- ------------------
Revenues $ 5,583,000 $ 186,000 $ - $ 5,769,000
Operating expenses 5,479,000 2,501,000 - 7,980,000
----------------- ----------------- ----------------- ------------------
Operating income (loss) 104,000 (2,315,000) - (2,211,000)
Other income (expense) (280,000) (29,000) - (309,000)
Net loss before minority interest in loss of ----------------- ----------------- ----------------- ------------------
consolidated subsidiary (176,000) (2,344,000) - (2,520,000)
Minority interest in loss of consolidated
subsidiary - - - -
----------------- ----------------- ----------------- ------------------
Net income (loss) $ (176,000) $ (2,344,000) $ - $ (2,520,000)
================= ================= ================= ==================
EBITDA Calculation FOR THE QUARTER ENDED DECEMBER 31, 2000
NETWORK BUZZTIME IWN TOTAL
----------------- ----------------- ----------------- ------------------
Net income (loss) $ (176,000) $ (2,344,000) $ - $ (2,520,000)
Interest income (22,000) (2,000) - (24,000)
Interest expense 250,000 31,000 - 281,000
Depreciation and amortization 1,099,000 166,000 - 1,265,000
----------------- ----------------- ----------------- ------------------
EBITDA $ 1,151,000 $ (2,149,000) $ - $ (998,000)
================= ================= ================= ==================
FOR THE YEAR ENDED DECEMBER 31, 2000
NETWORK BUZZTIME IWN TOTAL
----------------- ----------------- ----------------- ------------------
Revenues $ 21,508,000 $ 540,000 $ - $ 22,048,000
Operating expenses 23,670,000 6,579,000 - 30,249,000
----------------- ----------------- ----------------- ------------------
Operating income (loss) (2,162,000) (6,039,000) - (8,201,000)
Other income (expense) (888,000) (110,000) 58,000 (940,000)
Net loss before cumulative effect of
accounting change and minority interest in ----------------- ----------------- ----------------- ------------------
loss of consolidated subsidiary (3,050,000) (6,149,000) 58,000 (9,141,000)
Cumulative effect of accounting change (448,000) - - (448,000)
----------------- ----------------- ----------------- ------------------
Net loss before minority interest (3,498,000) (6,149,000) 58,000 (9,589,000)
Minority interest in loss of consolidated
subsidiary - - - -
----------------- ----------------- ----------------- ------------------
Net loss $ (3,498,000) $ (6,149,000) $ 58,000 $ (9,589,000)
================= ================= ================= ==================
EBITDA Calculation FOR THE YEAR ENDED DECEMBER 31, 2000
NETWORK BUZZTIME IWN TOTAL
----------------- ----------------- ----------------- ------------------
Net loss $ (3,498,000) $ (6,149,000) $ 58,000 $ (9,589,000)
Interest income (65,000) (7,000) - (72,000)
Interest expense 1,014,000 117,000 - 1,131,000
Depreciation and amortization 5,668,000 628,000 - 6,296,000
----------------- ----------------- ----------------- ------------------
EBITDA $ 3,119,000 $ (5,411,000) $ 58,000 $ (2,234,000)
================= ================= ================= ==================
EBITDA (earnings before interest, taxes, depreciation and amortization) is not
intended to represent a measure of performance in accordance with generally
accepted accounting principles ("GAAP"). EBITDA is included herein because
management believes that certain investors find it to be a useful tool for
measuring the Company's performance.
NTN COMMUNICATIONS, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
DECEMBER 31, 2001 AND 2000
Assets
2001 2000
------------------ ------------------
Current Assets:
Cash and cash equivalents $ 1,296,000 $ 2,188,000
Restricted cash 94,000 202,000
Accounts receivable - trade, net of allowance
for doubtful accounts of $440,000 in 2001
and $811,000 in 2000 1,411,000 1,724,000
Investments available-for-sale 174,000 272,000
Deposits on broadcast equipment 69,000 112,000
Deferred costs 675,000 772,000
Prepaid expenses and other current assets 499,000 538,000
------------------ ------------------
Total current assets 4,218,000 5,808,000
Broadcast equipment and fixed assets, net 8,029,000 11,963,000
Software development costs, net of
accumulated amortization of $6,674,000 in
2001 and $6,527,000 in 2000 588,000 405,000
Deferred costs 411,000 565,000
Other assets 134,000 81,000
------------------ ------------------
Total assets $ 13,380,000 $ 18,822,000
================== ==================
Liabilities and Shareholders' Equity
Current Liabilities:
Accounts payable $ 906,000 $ 816,000
Accrued expenses 889,000 1,351,000
Accrual for litigation costs 44,000 57,000
Accrual for sales tax 163,000 399,000
Obligations under capital leases 168,000 579,000
Deferred revenue 2,008,000 1,575,000
Note payable - 138,000
------------------ ------------------
Total current liabilities 4,178,000 4,915,000
Obligations under capital leases, excluding
current portion 110,000 83,000
Revolving line of credit 2,479,000 3,919,000
Senior convertible notes 1,958,000 3,987,000
Deferred revenue 877,000 1,804,000
Other long-term liabilities and note payable,
excluding current portion 12,000 32,000
------------------ ------------------
Total liabilities 9,614,000 14,740,000
Minority interest in consolidated subsidiary 855,000 -
Shareholders' equity:
Series A 10% cumulative convertible preferred
stock, $.005 par value, 5,000,000 shares
authorized; 161,000 shares issued and
outstanding at December 31, 2001 and
December 31, 2000 1,000 1,000
Common stock, $.005 par value, 70,000,000
shares authorized; 38,627,000 and
36,046,000 shares issued and outstanding
at December 31, 2001 and December 31, 2000,
respectively 192,000 179,000
Additional paid-in capital 80,639,000 78,153,000
Accumulated deficit (76,890,000) (73,234,000)
Accumulated other comprehensive loss (643,000) (545,000)
Treasury stock, at cost, 91,000 and 111,000
shares at December 31, 2001 and
December 31, 2000, respectively (388,000) (472,000)
------------------ ------------------
Total shareholders' equity 2,911,000 4,082,000
------------------ ------------------
Total liabilities and shareholders' equity $ 13,380,000 $ 18,822,000
================== ==================