CONTACT:
John P. Salvador
Director, Investor Relations
NTN COMMUNICATIONS, INC.
(888) 752-9686 x 1180
John.Salvador@ntn.com
NTN COMMUNICATIONS ANNOUNCES SECOND QUARTER RESULTS
o The Company narrows consolidated loss Q2 '03 over Q2 `02
o The Company reports 8.8% increase in second quarter revenues; six month
revenues up by 16.5%
o NTN Hospitality Technologies division generates second quarter profit vs.
2002 second quarter loss; six month division net income up by 71%
o Acquisition further extends product line for NTN Hospitality Technologies
division
o Media General invests $3 million into the Company and licenses additional
game offering to Buzztime
o Buzztime expands interactive channel to Portland, Maine, and Williamsport,
Pennsylvania
CARLSBAD, CA, AUGUST 6, 2003 -- NTN COMMUNICATIONS, INC. (AMEX: NTN), a leader
in interactive communications and entertainment products for the home and for
the hospitality industry, today announced results for the second quarter ended
June 30, 2003. NTN will host a live webcast and conference call today to discuss
the results at 11:00 am EST (see conference call details below).
Stanley Kinsey, Chairman and CEO of NTN said, "I am very pleased with our
financial results for the period, which is seasonally our toughest quarter.
Revenues and expenses were both improved. At the same time, we further
strengthened the NTN Hospitality Technology division as the premier provider of
solutions for the hospitality industry, and experienced growing interest in our
Buzztime interactive television (iTV) trivia channel. I remain very bullish on
both businesses."
"During the quarter, the NTN Hospitality Technologies division continued to grow
and this year was profitable, compared to a loss in the same quarter last year.
The recent acquisition of Breakaway International brings additional recurring
revenues that will be seen starting in Q3, and puts in place the hospitality
industry's strongest suite of communication and entertainment products. It
increases our installed base to over 1,000 unique clients and nearly 10,000
locations world-wide. Meanwhile, our relationships with several national chains
are strengthening as we are now positioned to offer broad innovative technology
solutions. We see very positive promise for our Hospitality business ahead and
continue to look for additional growth opportunities."
"At the same time, as our third deployed location in Williamsport, PA went
active, Buzztime gained an increasing level of interest from major cable
operators and remains on track toward achieving broad distribution over the
coming two years. During the quarter, the cable operators of our three deployed
systems continue to be pleased with player results, with Susquehanna
Communications, a top-20 cable operator, publicly reiterating its findings of
reduced digital churn for subscribing Buzztime consumers. Since 2001, Buzztime
has achieved a number of technical
milestones, including its successful launch as the first two-way game channel in
the United States, and is now primarily focused on sales efforts and expanding
the breadth of its game offerings."
FINANCIAL RESULTS
For the second quarter ended June 30, 2003, NTN reported a consolidated net loss
of $840,000, or $(0.02) per common share, which was a $58,000 reduction from the
net loss of $898,000, or $(0.02) per common share in the second quarter of 2002.
The $840,000 net loss represented the combination of $108,000 in net income from
NTN Hospitality Technologies and a net loss of $948,000 from Buzztime.
NTN posted an 8.8% improvement in its consolidated revenues for the quarter
ended June 30, 2003, increasing to $6.70 million compared to revenues of $6.16
million for the second quarter of 2002.
NTN posted consolidated earnings before interest, taxes, depreciation and
amortization (EBITDA), a measurement not recognized under generally accepted
accounting principles (GAAP), of $223,000 in the second quarter of 2003 compared
to EBITDA of $444,000 in the second quarter of 2002, a decrease of $221,000. The
reduction was primarily due to an increase in expenses relating to Buzztime's
sales and marketing efforts to secure deployment of the Buzztime channel. This
was the ninth consecutive quarter of positive EBITDA generated by NTN. A
detailed schedule reconciling net income and loss to EBITDA is included in the
supplemental tables below.
The NTN Hospitality Technologies division's net income of $108,000 in the second
quarter of 2003 represented an increase of $192,000 over a net loss of $84,000
in the second quarter of 2002. The division posted EBITDA of $1.02 million in
the second quarter of 2003 versus $1.10 million in the second quarter of 2002.
Revenues for the division increased by $512,000, or 8.4%, to $6.64 million for
the second quarter of 2003, compared to revenues of $6.13 million for the same
period of 2002. The revenue growth was due primarily to increases in the NTN
Wireless unit and site-related revenues.
Buzztime reported revenue of $58,000 in the second quarter of 2003 compared to
$27,000 in the second quarter of 2002. The net loss for Buzztime was $948,000 in
the second quarter of 2003, an increase of $134,000, or 16.5%, over a net loss
of $814,000 in the second quarter of 2002. Over the past year, Buzztime has
increased its expenses relating to selling, marketing and technical service
efforts to secure deployment of the Buzztime channel.
SIX-MONTH RESULTS
Consolidated net loss for the first six months of 2003 was $1.10 million, or
$(0.03) per common share, which is a $39,000 increase over the net loss of $1.06
million, or $(0.03) per common share, in the first six months of 2002. The $1.10
million loss represented the combination of $788,000 in net income from NTN
Hospitality Technologies and a net loss of $1.89 million from Buzztime.
For the first six months ended June 30, 2003, consolidated revenues were $14.04
million compared to revenues of $12.06 million for the first six months of 2002,
an increase of $1.98 million, or 16.5%.
NTN posted consolidated EBITDA of $1.13 million in the first six months of 2003
compared to EBITDA of $1.66 million in the first six months of 2002, a decrease
of $531,000. The reduction
was primarily due to an increase in expenses relating to Buzztime's sales and
marketing efforts to secure deployment of the Buzztime channel.
The NTN Hospitality Technologies division's net income of $788,000 in the first
six months of 2003 represented an increase of $328,000 over net income of
$460,000 in the first six months of 2002. The division posted EBITDA of $2.73
million in the first six months of 2003 versus $2.83 million in the first six
months of 2002. Revenues for the division increased by $2.0 million, or 16.7%,
to $13.98 million for the first six months of 2003, compared to revenues of
$11.97 million for the same period of 2002. The growth in revenues was primarily
due to the contribution by the NTN Wireless unit.
Buzztime reported revenue of $65,000 in the first six months of 2003 compared to
$83,000 in the first six months of 2002. The net loss for Buzztime was $1.89
million in the first six months of 2003, an increase of $367,000, or 24.1%, over
a net loss of $1.52 million in the first six months of 2002. Over the past year,
Buzztime has increased its expenses relating to sales and marketing efforts to
secure deployment of the Buzztime channel.
CONFERENCE CALL
To participate in NTN's conference call, please dial the following number
approximately fifteen minutes prior to the scheduled conference call time: (877)
271-4183. There is no pass code required for this call. International callers
please dial (706) 643-3590. If you are unable to participate in the call at this
time, a replay will be available beginning August 6, 2003 at 12:00 pm EDT
through August 13, 2003 at 12:00 am EDT. To access the replay dial (800)
642-1687 and enter the conference ID number 2096762. International callers
please dial (706) 645-9291. This call is also being webcast and can be accessed
at NTN Communications' Investor Relations web site at WWW.NTN.COM/HOME.HTML.
ABOUT NTN COMMUNICATIONS, INC.
Based in Carlsbad, CA, NTN Communications, Inc. is the parent corporation of the
NTN Hospitality Technologies division and Buzztime Entertainment, Inc., a
subsidiary. The NTN Hospitality Technologies division, which focuses on the
out-of-home hospitality industries, is comprised of the NTN interactive
television (iTV) Network, NTN Wireless Communications, Inc., and NTN Software
Solutions, Inc. The NTN iTV Network is the largest out of home interactive
entertainment network in the world and provides a promotional service to our
hospitality customers. Through NTN's Digital Interactive technology, the NTN iTV
Network delivers entertainment and sports programming engaging more than 1.7
million players and reaching more than 6 million unique customers each month in
approximately 3,600 North American hospitality locations such as Applebee's,
Bennigan's, Buffalo Wild Wings, Damon's Grill, TGIFriday's, and others. NTN
Wireless(TM) manufactures, sells, and repairs paging equipment to over 2,800
restaurants, as well as providing on site messaging solutions for hospitals,
church and synagogue nurseries, salons, business offices and retail
establishments. NTN Wireless provides wireless solutions to leading restaurants
such as Darden Restaurant's Olive Garden, Logan's Roadhouse, O'Charley's, and
more. NTN Software Solutions will include the gift and loyalty card program
along with Vision(TM), a POS management system, and Enterprise(TM), an Internet
communications management solution. Buzztime Entertainment, Inc. produces
Buzztime(R), the interactive trivia channel, and live sports prediction games
such as QB1(R) from its live interactive broadcast studio. Buzztime's partners
include: Scientific-Atlanta, Inc., Liberate Technologies, Microsoft
Corporation's MSN(R)TV and the National Football League.
THIS RELEASE CONTAINS FORWARD-LOOKING STATEMENTS, INCLUDING STATEMENTS RELATING
TO THE FUTURE POSITIONING OF THE NTN HOSPITALITY TECHNOLOGIES DIVISION, INTEREST
IN AND DEPLOYMENT OF THE BUZZTIME CHANNEL, GROWTH IN PRODUCT LINE AND
HOSPITALITY SOLUTIONS, FUTURE PRODUCT OPPORTUNITIES, AND DISTRIBUTION OF CONTENT
TO OTHER INTERACTIVE PLATFORMS, WHICH ARE SUBJECT TO A NUMBER OF RISKS AND
UNCERTAINTIES INCLUDING CHANGING ECONOMIC CONDITIONS, PRODUCT DEMAND AND MARKET
ACCEPTANCE, THE IMPACT OF COMPETITIVE PRODUCTS AND PRICING, AND OTHER 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, 2002.
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 JUNE 30, SIX MONTHS ENDED JUNE 30,
2003 2002 2003 2002
------------------- ------------------- ---------------- -----------------
Revenues:
Hospitality Technologies revenues $6,640,000 $6,128,000 $13,970,000 $11,967,000
Buzztime revenues 58,000 27,000 65,000 83,000
Other revenues 3,000 3,000 5,000 5,000
------------------- ------------------- ---------------- -----------------
Total revenues 6,701,000 6,158,000 14,040,000 12,055,000
------------------- ------------------- ---------------- -----------------
Operating expenses:
Direct operating costs (includes
depreciation of $728,000, $842,000,
$1,471,000 and $1,695,000 for the three
and six month periods ended
June 30, 2003 and 2002, respectively) 2,488,000 2,617,000 5,492,000 4,787,000
Selling, general and administrative 4,631,000 3,985,000 8,739,000 7,394,000
Depreciation and amortization 257,000 381,000 579,000 778,000
Research and development 87,000 6,000 164,000 9,000
------------------- ------------------- ---------------- -----------------
Total operating expenses 7,463,000 6,989,000 14,974,000 12,968,000
------------------- ------------------- ---------------- -----------------
Operating loss (762,000) (831,000) (934,000) (913,000)
------------------- ------------------- ---------------- -----------------
Other income (expense):
Interest income 3,000 2,000 3,000 6,000
Interest expense (74,000) (121,000) (167,000) (254,000)
------------------- ------------------- ---------------- -----------------
Total other income (expense) (71,000) (119,000) (164,000) (248,000)
------------------- ------------------- ---------------- -----------------
Loss before minority interest and
income taxes
(833,000) (950,000) (1,098,000) (1,161,000)
Minority interest in loss of consolidated
subsidiary -- 52,000 10,000 97,000
------------------- ------------------- ---------------- -----------------
Net loss before income taxes (833,000) (898,000) (1,088,000) (1,064,000)
Provision for income taxes 7,000 -- 15,000 --
------------------- ------------------- ---------------- -----------------
Net loss $ (840,000) $ (898,000) $ (1,103,000) $(1,064,000)
=================== =================== ================ =================
Net loss per common share - basic and
diluted $ (0.02) $ (0.02) $ (0.03) $ (0.03)
=================== =================== ================ =================
Weighted average shares outstanding -
basic and diluted 44,756,000 39,977,000 43,413,000 39,294,000
=================== =================== ================ =================
EBITDA RECONCILIATION:
Net loss $ (840,000) $ (898,000) $ (1,103,000) $(1,064,000)
add back:
Interest expense, net 71,000 119,000 164,000 248,000
Provision for income taxes 7,000 -- 15,000 --
Depreciation and amortization 985,000 1,223,000 2,050,000 2,473,000
------------------- ------------------- ---------------- -----------------
EBITDA $ 223,000 $ 444,000 $ 1,126,000 $ 1,657,000
=================== =================== ================ =================
EBITDA (earnings before interest, taxes, depreciation and amortization) is not
intended to represent a measure of performance in accordance with generally
accepted accounting principals ("GAAP") nor should it be considered as an
alternative to a statement of cash flows as a measure of liquidity. EBITDA is
included because management believes that financial analysts, lenders, investors
and other interested parties find it to be a useful tool for measuring the
operating performance of companies like NTN that carry significant levels of
non-cash depreciation and amortization charges in comparison to their GAAP
earnings.
NTN COMMUNICATIONS, INC. AND SUBSIDIARIES
STATEMENTS OF OPERATIONS BY BUSINESS SEGMENT
For the purposes of this presentation, the Hospitality Technologies segment
information includes certain "Other Revenues," which are not material.
FOR THE THREE MONTHS ENDED JUNE 30, 2003
--------------------------------------------------------
HOSPITALITY TECH. BUZZTIME TOTAL
------------------- ------------------- ----------------
Revenues $ 6,643,000 $ 58,000 $ 6,701,000
Operating expenses 6,457,000 1,006,000 7,463,000
------------------- ------------------- ----------------
Operating income (loss) 186,000 (948,000) (762,000)
Other income (expense) (71,000) -- (71,000)
------------------- ------------------- ----------------
Income (loss) income taxes 115,000 (948,000) (833,000)
Provision for income taxes 7,000 -- 7,000
------------------- ------------------- ----------------
Net income (loss) $ 108,000 $ (948,000) $ (840,000)
=================== ---================ ================
EBITDA CALCULATION:
Net income (loss) $ 108,000 $ (948,000) $ (840,000)
Interest expense, net 71,000 -- 71,000
Provision for income taxes 7,000 -- 7,000
Depreciation and amortization 838,000 147,000 985,000
------------------- ------------------- ----------------
EBITDA $ 1,024,000 $ (801,000) $ 223,000
=================== =================== ================
FOR THE THREE MONTHS ENDED JUNE 30, 2002
--------------------------------------------------------
HOSPITALITY TECH. BUZZTIME TOTAL
------------------- ------------------- ----------------
Revenues $ 6,131,000 $ 27,000 $ 6,158,000
Operating expenses 6,096,000 893,000 6,989,000
------------------- ------------------- ----------------
Operating income (loss) 35,000 (866,000) (831,000)
Other income (expense) (119,000) -- (119,000)
------------------- ------------------- ----------------
Income (loss) before minority interest and
income taxes (84,000) (866,000) (950,000)
Minority interest in loss of subsidiary -- 52,000 52,000
------------------- ------------------- ----------------
Net income (loss) before income taxes (84,000) (814,000) (898,000)
Provision for income taxes -- -- --
------------------- ------------------- ----------------
Net income (loss) $ (84,000) $ (814,000) $ (898,000)
=================== =================== ================
EBITDA CALCULATION:
Net income (loss) $ (84,000) $ (814,000) $ (898,000)
Interest expense, net 119,000 -- 119,000
Provision for income taxes -- -- --
Depreciation and amortization 1,067,000 156,000 1,223,000
------------------- ------------------- ----------------
EBITDA $ 1,102,000 $ (658,000) $ 444,000
=================== =================== ================
EBITDA (earnings before interest, taxes, depreciation and amortization) is not
intended to represent a measure of performance in accordance with generally
accepted accounting principals ("GAAP") nor should it be considered as an
alternative to a statement of cash flows as a measure of liquidity. EBITDA is
included because management believes that financial analysts, lenders, investors
and other interested parties find it to be a useful tool for measuring the
operating performance of companies like NTN that carry significant levels of
non-cash depreciation and amortization charges in comparison to their GAAP
earnings.
NTN COMMUNICATIONS, INC. AND SUBSIDIARIES
STATEMENTS OF OPERATIONS BY BUSINESS SEGMENT
For the purposes of this presentation, the Hospitality Technologies segment
information includes certain "Other Revenues," which are not material.
FOR THE SIX MONTHS ENDED JUNE 30, 2003
--------------------------------------------------------
HOSPITALITY TECH. BUZZTIME TOTAL
------------------- ------------------- ----------------
Revenues $ 13,975,000 $ 65,000 $ 14,040,000
Operating expenses 13,008,000 1,966,000 14,974,000
------------------- ------------------ ----------------
Operating income (loss) 967,000 (1,901,000) (934,000)
Other income (expense) (164,000) -- (164,000)
------------------- ------------------- ----------------
Income (loss) before minority interest
and income taxes 803,000 (1,901,000) (1,098,000)
Minority interest in loss of subsidiary -- 10,000 10,000
------------------- ------------------- ----------------
Net income (loss) before income taxes 803,000 (1,891,000) (1,088,000)
Provision for income taxes 15,000 -- 15,000
------------------- ------------------- ----------------
Net income (loss) $ 788,000 $ (1,891,000) $ (1,103,000)
=================== =================== ================
EBITDA CALCULATION:
Net income (loss) $ 788,000 $ (1,891,000) $ (1,103,000)
Interest expense, net 164,000 -- 164,000
Provision for income taxes 15,000 -- 15,000
Depreciation and amortization 1,759,000 291,000 2,050,000
------------------- ------------------- ----------------
EBITDA $ 2,726,000 $ (1,600,000) $ 1,126,000
=================== =================== ================
FOR THE SIX MONTHS ENDED JUNE 30, 2002
--------------------------------------------------------
HOSPITALITY TECH. BUZZTIME TOTAL
------------------- ------------------- ----------------
Revenues $ 11,972,000 $ 83,000 $ 12,055,000
Operating expenses 11,264,000 1,704,000 12,968,000
------------------- ------------------- ----------------
Operating income (loss) 708,000 (1,621,000) (913,000)
Other income (expense) (248,000) -- (248,000)
------------------- ------------------- ----------------
Income (loss) before minority interest and
income taxes 460,000 (1,621,000) (1,161,000)
Minority interest in loss of subsidiary -- 97,000 97,000
------------------- ------------------- ----------------
Net income (loss) before income taxes 460,000 (1,524,000) (1,064,000)
Provision for income taxes -- -- --
------------------- ------------------- ----------------
Net income (loss) $ 460,000 $ (1,524,000) $ (1,064,000)
=================== =================== ================
EBITDA CALCULATION:
Net income (loss) $ 460,000 $ (1,524,000) $ (1,064,000)
Interest expense, net 248,000 -- 248,000
Provision for income taxes -- -- --
Depreciation and amortization 2,118,000 355,000 2,473,000
------------------- ------------------- ----------------
EBITDA $ 2,826,000 $ (1,169,000) $ 1,657,000
=================== =================== ================
EBITDA (earnings before interest, taxes, depreciation and amortization) is not
intended to represent a measure of performance in accordance with generally
accepted accounting principals ("GAAP") nor should it be considered as an
alternative to a statement of cash flows as a measure of liquidity. EBITDA is
included because management believes that financial analysts, lenders, investors
and other interested parties find it to be a useful tool for measuring the
operating performance of companies like NTN that carry significant levels of
non-cash depreciation and amortization charges in comparison to their GAAP
earnings.
NTN COMMUNICATIONS, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
June 30, December 31,
ASSETS 2003 (1) 2002
---------------- -----------------
CURRENT ASSETS:
Cash and cash equivalents $ 3,810,000 $ 577,000
Restricted cash 271,000 102,000
Accounts receivable - trade, net 1,754,000 2,013,000
Inventory 324,000 241,000
Investments available-for-sale 168,000 178,000
Deposits on broadcast equipment 108,000 --
Deferred costs 407,000 492,000
Prepaid expenses and other current assets 613,000 581,000
---------------- -----------------
TOTAL CURRENT ASSETS 7,455,000 4,184,000
Broadcast equipment and fixed assets, net 4,291,000 5,141,000
Software development costs, net 579,000 591,000
Deferred costs 349,000 370,000
Other assets 1,563,000 556,000
---------------- -----------------
TOTAL ASSETS $ 14,237,000 $ 10,842,000
================ =================
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable $ 826,000 $ 657,000
Accrued expenses 1,676,000 1,491,000
Obligations under capital leases 155,000 184,000
Equipment note payable 13,000 --
Revolving line of credit -- 89,000
Deferred revenue - Hospitality Technologies 810,000 1,199,000
Deferred revenue - Buzztime 76,000 --
---------------- -----------------
TOTAL CURRENT LIABILITIES 3,556,000 3,620,000
Obligations under capital leases, excluding current portion 200,000 199,000
Revolving line of credit, excluding current portion 1,875,000 2,250,000
8% senior convertible notes -- 1,997,000
Deferred revenue - Hospitality Technologies 350,000 653,000
Equipment note payable 61,000 --
---------------- -----------------
TOTAL LIABILITIES 6,042,000 8,719,000
-- 643,000
---------------- -----------------
MINORITY INTEREST IN CONSOLIDATED SUBSIDIARY
SHAREHOLDERS' EQUITY:
Series A 10% cumulative convertible preferred stock, $.005 par value
5,000,000 shares authorized; 161,000 shares issued and
outstanding at June 30, 2003 and December 31, 2002 1,000 1,000
Common stock, $.005 par value, 70,000,000 shares authorized;
43,040,000 and 39,381,000 shares issued and outstanding
at June 30, 2003 and December 31, 2002, respectively 228,000 196,000
Additional paid-in capital 88,823,000 81,211,000
Accumulated deficit (80,182,000) (79,079,000)
Accumulated other comprehensive loss (649,000) (639,000)
Treasury stock, at cost, 49,000 and 91,000 shares at
June 30, 2003 and December 31, 2002, respectively (26,000) (210,000)
---------------- -----------------
TOTAL SHAREHOLDERS' EQUITY 8,195,000 1,480,000
---------------- -----------------
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $ 14,237,000 $ 10,842,000
================ =================
(1) The June 30, 2003 balance sheet does not reflect the final allocation of
fair value of the Media General transaction to the acquired licensed technology.
The Company is in the process of obtaining third party information to finalize
the allocation which it expects to receive by the end of the third quarter.