Exhibit 99.1
CONTACT:
Andy Wrobel
Chief Financial Officer
NTN BUZZTIME, INC.
(760) 930-1177
Andy.Wrobel@ntn.com
NTN BUZZTIME ANNOUNCES RESULTS
FOR FIRST QUARTER 2006
o Q1 2006 IS THIRD CONSECUTIVE PROFITABLE QUARTER FOR THE COMPANY.
o Q1 2006 NET INCOME IMPROVES BY $1.4 MILLION OVER Q1 2005, TO $76,000.
o CONSOLIDATED REVENUES IMPROVE BY 17% OVER Q1 2005.
o ADJUSTED EBITDA IMPROVES BY $1.64 MILLION TO $1.69 MILLION OVER Q1 2005.
o BUZZTIME ITV NETWORK REACHES ALL-TIME HIGH OF 4,036 SITES ON WORLD WIDE
BASIS.
o BUZZTIME ITV NETWORK REVENUES INCREASE BY 19.1% OVER Q1 2005.
o COMPANY ANNOUNCED OUTSTANDING PLAYER STATISTICS AS 20% OF BLUE RIDGE
COMMUNICATIONS' DIGITAL CABLE TV SUBSCRIBERS PLAYED ITS GAMES IN THE FIRST
TWO MONTHS OF DEPLOYMENT.
CARLSBAD, CA, MAY 9, 2006 - NTN BUZZTIME, INC. (AMEX: NTN), a leader in
interactive communications and entertainment products for the home and for the
hospitality industry, today announced results for the first quarter ended March
31, 2006. NTN Buzztime will host a live webcast and conference call today at
4:30 pm EDT to discuss the results (see conference call details below).
FIRST QUARTER 2006 RESULTS
- --------------------------
CONSOLIDATED RESULTS
Revenues - Consolidated revenues for the first quarter of 2006 increased by
$1.56 million or 17% to $11.06 million, compared to revenues of $9.50 million
for the first quarter of 2005.
Net Income - Consolidated net income increased by $1,423,000 to $76,000 or $0.00
per common share for the Q1 2006 period, compared with a net loss of $1,347,000
or $(0.03) per common share in the Q1 2005 period. Under FAS 123R, net income
for Q1 2006 includes a charge for the expensing of stock options, a charge which
the company did not include in Q1 2005 as then allowed under GAAP. Without this
expense, net income for the quarter would have been $359,000 and the quarter
would have shown an increase of $1,706,000 over Q1 2005.
Adjusted EBITDA - Consolidated Adjusted EBITDA (earnings before interest, taxes,
depreciation, amortization and stock-based compensation for employees and
non-employees) improved by $1,638,000 to positive $1,688,000 for the three
months ended March 31, 2006 from Adjusted EBITDA of $50,000 for the three months
ended March 31, 2005.
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Cash balance increased by $50,000 during the first quarter of 2006 as income
from operations offset investments in capital equipment.
The 2006 consolidated net profit represented the combination of a net profit of
$261,000 from the Entertainment division and a net loss of $185,000 from the
Hospitality division.
"We are very pleased with the Company's first quarter operating results as we
have created a solid base of performance from our core assets while retaining
significant break-out potential," stated chairman and CEO Stanley B. Kinsey. "We
now enjoy a unique market position with a loyal and expanding player base and
broad distribution of our games across the Buzztime Network, mobile, cable,
satellite and retail games. We plan to continue to drive revenues from
distribution, advertising, and from our players who want more ways to play."
ENTERTAINMENT DIVISION RESULTS
With this 2006 first quarter report, the Company is modifying its reporting
format by moving the Buzztime iTV Network segment (iTV Network; formerly the NTN
iTV Hospitality Network) out of the Hospitality division and into a newly formed
Entertainment division. The Entertainment division now includes the iTV Network
and Buzztime Distribution (formerly Buzztime Entertainment). Additionally,
content development and management costs, formerly associated entirely with
Buzztime Entertainment, are allocated to the two segments in relationship to the
level of support provided to each segment. Thus, the Buzztime Distribution
segment includes only those costs associated with distributing and licensing its
content and technology on platforms other than the iTV Network.
Entertainment Division revenue growth was driven by subscriber increases in all
territories in the Buzztime iTV Network segment: U.S., Canada and UK. The
Network's world wide net site count grew by 322 sites since March 31, 2005, and
Network revenue increased by $1,296,000, or 19.1%. The quarter ended with a
record world-wide site count of 4,036, represented by 4,007 sites in North
America and 29 sites in the UK.
Net income for the Buzztime iTV Network segment increased by $799,000 to a net
profit of $459,000 for the first quarter of 2006, from a net loss of $340,000
for the first quarter of 2005.
Buzztime Distribution segment revenues decreased by $114,000 to $180,000 for the
first quarter of 2006, from $294,000 for the first quarter of 2005. The decrease
in revenues is due to a lack of development revenue in Q1 2006. The net loss for
the Buzztime Distribution segment was $198,000 for the first quarter of 2006, a
reduction of $188,000 from the net loss of $386,000 for the first quarter of
2005. The reduction in loss was due to lower operating costs as the Company
completed development efforts.
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HOSPITALITY DIVISION RESULTS
The Hospitality division now includes only the NTN Wireless and NTN Software
Solutions segments. Revenues for the Hospitality division increased by $373,000
or 15.4%, to $2,793,000 for the first quarter of 2006, compared to revenues of
$2,420,000 for the first quarter of 2005.
NTN Wireless and Software Solutions net profit improved by $436,000 to a loss of
$185,000 for the first quarter of 2006 compared to a net loss of $621,000 for
the first quarter of 2005. Net income in the Wireless segment increased by
$115,000, from $49,000 to $164,000, due to higher margins on its product sales
compared to Q1 2005. Net loss in the Software Solutions segment was reduced by
$321,000, from $670,000 to $349,000.
The following tables set forth certain information regarding our segments and
other operations (in thousands):
THREE MONTHS ENDED MARCH 31ST
-----------------------------
2006 2005 CHANGE
---- ---- ------
Revenues
Entertainment Division
Buzztime iTV Network (includes "other
revenues") $ 8,089 $ 6,793 $ 1,296
Buzztime Distribution 180 294 (114)
-------- -------- --------
Total Entertainment Division 8,269 7,087 1,182
-------- -------- --------
Hospitality Division
NTN Wireless 1,529 1,466 63
Software Solutions 1,264 954 310
-------- -------- --------
Hospitality Division 2,793 2,420 373
-------- -------- --------
Total revenue $ 11,062 $ 9,507 $ 1,555
======== ======== ========
Net income (loss)
Entertainment Division
Buzztime iTV Network $ 459 $ (340) $ 799
Buzztime Distribution (198) (386) 188
-------- -------- --------
Total Entertainment Division 261 (726) 987
-------- -------- --------
Hospitality Division
NTN Wireless 164 49 115
Software Solutions (349) (670) 321
-------- -------- --------
Hospitality Division (185) (621) 436
-------- -------- --------
Net income (loss) $ 76 $ (1,347) $ 1,423
======== ======== ========
CONFERENCE CALL
A conference call to review the first quarter earnings is scheduled for today at
4:30 pm EDT. Investors may access the teleconference call by dialing (800)
540-0559 approximately 15 minutes prior to the starting time, and then ask to be
connected to the NTN Buzztime First Quarter Earnings Conference Call.
International callers please dial (785) 832-1508. This call is also being
simultaneously webcast and can be accessed at NTN Buzztime's web site at
www.ntnbuzztime.com.
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A replay will be available beginning immediately following the conclusion of the
conference call through May 16, 2006 at 11:59 p.m. EDT. Please dial (800)
934-3335 to access the replay. International callers please dial (402) 220-1145.
An archive of the webcast will also be available on the Company's web site at
www.ntnbuzztime.com.
ABOUT NTN BUZZTIME, INC.
Based in Carlsbad, CA, NTN Buzztime, Inc. is the parent corporation of the
Entertainment Division and NTN Hospitality(TM) Division. Entertainment Division
is comprised of the Buzztime interactive Television (iTV) Network segment and
Buzztime Distribution segment (Buzztime Entertainment, Inc., a subsidiary).
Entertainment Division produces Buzztime(R), the play-along games channel, live
sports prediction games such as QB1(R) and many other games that allow one or
many players to participate. In addition to the Buzztime iTV Network, Buzztime's
games are available on cable TV, satellite TV, mobile phones and plug-n-play
home versions. The NTN Hospitality segment is comprised of NTN Wireless
Communications, Inc., and NTN Software Solutions, Inc..
For more information, please see www.ntnbuzztime.com.
THIS RELEASE CONTAINS FORWARD-LOOKING STATEMENTS WHICH REFLECT MANAGEMENT'S
CURRENT VIEWS OF FUTURE EVENTS AND OPERATIONS, INCLUDING, BUT NOT LIMITED TO,
FUTURE EXPANSION AND DISTRIBUTION OF PRODUCT AND SERVICE LINES, ANTICIPATED
REVENUES AND PERFORMANCE OF INDEPENDENT RESELLERS ARE ALL 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 RISK OF CHANGING ECONOMIC CONDITIONS, FAILURE OF PRODUCT DEMAND OR
MARKET ACCEPTANCE OF BOTH EXISTING AND NEW PRODUCTS, DELAYS IN CLOSING OF SALES
OR AGREEMENTS, UNFORESEEN AND UNCONTROLLABLE INCREASES IN EXPENSES OR COSTS AND
THE IMPACT OF COMPETITIVE PRODUCTS AND PRICING. OTHER IMPORTANT FACTORS THAT MAY
CAUSE ACTUAL RESULTS TO DIFFER MATERIALLY FROM THE FORWARD-LOOKING STATEMENTS
ARE DISCUSSED IN THE "RISK FACTORS" SECTION AND OTHER SECTIONS OF NTN'S FORM
10-K FOR THE YEAR ENDED DECEMBER 31, 2005, WHICH IS ON FILE WITH THE SECURITIES
AND EXCHANGE COMMISSION. 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 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.
-- TABLES TO FOLLOW -
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NTN BUZZTIME, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(THOUSANDS, EXCEPT SHARE DATA)
MARCH 31, DECEMBER 31,
2006 2005
---- ----
(Unaudited) (Audited)
ASSETS (Pledged)
Current Assets:
Cash and cash equivalents ................................ $ 6,032 $ 5,982
Restricted cash .......................................... 69 69
Accounts receivable, net ................................. 3,575 3,630
Inventory ................................................ 328 371
Investments available-for-sale ........................... 215 258
Deposits on broadcast equipment .......................... 557 799
Deferred costs ........................................... 1,159 1,118
Prepaid expenses and other current assets ................ 965 955
--------- ---------
Total current assets .............................. 12,900 13,182
Broadcast equipment and fixed assets, net .................. 8,091 8,085
Software development costs, net ............................ 783 706
Deferred costs ............................................. 1,203 1,256
Goodwill ................................................... 3,658 3,658
Intangible assets, net ..................................... 2,761 2,946
Other assets ............................................... 185 185
--------- ---------
Total assets ...................................... $ 29,581 $ 30,018
========= =========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities:
Accounts payable .......................................... $ 657 $ 725
Accrued expenses .......................................... 2,126 1,799
Sales tax payable ......................................... 204 714
Accrued salaries .......................................... 89 643
Accrued vacation .......................................... 613 619
Income taxes payable ...................................... 58 147
Obligations under capital leases - current portion ........ 422 436
Revolving line of credit .................................. 700 700
Deferred revenue .......................................... 1,701 2,024
Deferred revenue-Buzztime ................................. 663 632
--------- ---------
Total current liabilities .......................... 7,233 8,439
Obligations under capital leases, excluding current portion . 271 366
Deferred revenue ............................................ 689 321
--------- ---------
Total liabilities .................................. 8,193 9,126
--------- ---------
Commitments and contingencies
Shareholders' equity:
Series A 10% cumulative convertible preferred stock, $.005
par value, $161,000 liquidation preference, 5,000,000
shares authorized; 161,000 shares issued and outstanding
at March 31, 2006 and December 31, 2005 ................. 1 1
Common stock, $.005 par value, 84,000,000 shares
authorized; 53,985,000 and 53,877,000 shares issued and
outstanding at March 31, 2006 and December 31, 2005,
respectively ............................................ 269 268
Additional paid-in capital ................................ 110,346 109,860
Accumulated deficit ....................................... (88,712) (88,788)
Accumulated other comprehensive loss ...................... (516) (449)
--------- ---------
Total shareholders' equity ......................... 21,388 20,892
--------- ---------
Total liabilities and shareholders' equity ......... $ 29,581 $ 30,018
========= =========
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NTN BUZZTIME, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
(THOUSANDS, EXCEPT PER SHARE AMOUNTS)
THREE MONTHS ENDED MARCH 31,
2006 2005 CHANGE
-------- -------- --------
Revenues ............................................. $ 11,062 $ 9,507 $ 1,555
Operating expenses:
Direct operating costs (includes depreciation of
$948 and $728 for the three months ended March
31, 2006 and 2005, respectively) ................ 3,501 3,456 45
Non-cash charge related to software product sale.. -- 276 (276)
Selling, general and administrative .............. 6,409 6,326 83
Litigation, legal and professional fees .......... 346 380 (34)
Stock-based compensation and payments ............ 408 107 301
Depreciation and amortization .................... 209 219 (10)
Research and development ......................... 66 59 7
-------- -------- --------
Total operating expenses ................... 10,939 10,823 116
-------- -------- --------
Operating income (loss) .............................. 123 (1,316) 1,439
Other income (expense):
Interest income .................................. 31 26 5
Interest expense ................................. (46) (24) (22)
-------- -------- --------
Total other income (expense) ............... (15) 2 (17)
-------- -------- --------
Net income (loss) before income taxes ................ 108 (1,314) 1,422
Provision for income taxes ........................... 32 33 (1)
-------- -------- --------
Net income (loss) .......................... $ 76 $ (1,347) $ 1,423
======== ======== ========
Net income (loss) per common share - basic ........... $ 0.00 $ (0.03) $ (0.03)
======== ======== ========
Net income (loss) per common share - diluted ......... $ 0.00 $ (0.03) $ (0.03)
======== ======== ========
Weighted average shares outstanding - basic .......... 53,928 53,222
======== ========
Weighted average shares outstanding - diluted ........ 60,931 53,222
======== ========
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ADJUSTED EBITDA
A detailed schedule reconciling net income and loss, the nearest GAAP measure,
to Adjusted EBITDA is included in the supplemental tables below. Adjusted EBITDA
is included herein because management believes that certain investors find it to
be a useful tool for measuring a company's operating performance. Adjusted
EBITDA should be considered in addition to results prepared in accordance with
GAAP but should not be considered a substitute for, or superior to, GAAP
results. Non-GAAP financial information such as Adjusted EBITDA, by its nature,
departs from traditional accounting conventions; accordingly, its use can make
it difficult to compare NTN's current results with results from other reporting
periods and with the results of other companies.
The following table reconciles our net loss per GAAP to Adjusted EBITDA (in
thousands):
THREE MONTHS ENDED MARCH 31,
----------------------------
2006 2005 CHANGE
---- ---- ------
ADJUSTED EBITDA CALCULATION
(IN 000'S) (1)
Net income (loss) per GAAP $ 76 $(1,347) $ 1,423
Interest expense (net) 15 (2) 17
Depreciation and amortization 1,157 983 174
Non-cash stock based
compensation and payments 408 107 301
Non-cash charge related to
software product sale -- 276 (276)
Income taxes 32 33 (1)
------- ------- -------
ADJUSTED EBITDA $ 1,688 $ 50 $ 1,638
======= ======= =======
(1) FY 2005 numbers conform to the 2006 presentation format. In FY 2006 we
adopted Adjusted EBITDA, which includes adjusting for non-cash charges.
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