NTN Buzztime, Inc. Announces Fourth Quarter and Full Year 2009 Results

Author
SySAdmin
Posted
March 30, 2010
Views
1661

Page All:

Page 1
NTN Buzztime, Inc. Announces Fourth Quarter and Full Year 2009 Results

CARLSBAD, Calif., March 30 -- NTN Buzztime, Inc. (NYSE Amex: NTN) today announced results for the fourth quarter and fiscal year ended December 31, 2009.

(Logo:  http://www.newscom.com/cgi-bin/prnh/20100204/LA48830LOGO )

"Our fourth quarter and full year 2009 financial results provide tangible evidence that the strategic initiatives we outlined at the outset of the year are gaining traction. Our vigilance on reducing costs coupled with reorganizing our sales and marketing efforts have yielded substantial improvements in our underlying operating performance. Perhaps most significantly, we grew our subscriber network 7.2%, or by 270 sites for the full year, while improving cash flow from operations by over $5 million.  Although we are pleased with these developments, we are also cognizant of the significant challenges that lie ahead and the continued need to address customer retention, as evidenced by a rise in that metric in the fourth quarter. Accordingly, we have launched and will launch a number of products, services and promotional programs that we believe will increase customer retention.  That, coupled with cost control and diligent execution of our business plan, gives us confidence that we can bring the business to sustainable levels of profitability," said NTN Buzztime's CEO Terry Bateman.

Results for the Fourth Quarter Ended December 31, 2009

Revenues for the fourth quarter of 2009 were $6.6 million, compared to revenues of $6.5 million for the same period of 2008.  The 1.4% increase in sales was due to an increase in advertising revenue of $122,000 in the fourth quarter of 2009 compared to the 2008 period.

The Company ended the fourth quarter of 2009 with 4,016 subscribing venues, compared to 3,746 at December 31, 2008.  During the fourth quarter of 2009, installations were up approximately 19% while terminations were up 32% compared with the fourth quarter of 2008.  Customer churn was 8.3% for the quarter, up from 6.8% in the prior year period.

  Total site counts                   Q4             Q4           Increase

     and churn percentages             2009           2008       (Decrease)
     ---------------------             ----           ----       ----------
    Site Count - Beginning of
     Quarter                          4,051          3,746               305
    -------------------------         -----          -----               ---
    Q4 Installations                    301            253                48
    ----------------                    ---            ---               ---
    Q4 Terminations                    (336)          (253)               83
    ---------------                    ----           ----               ---
    Site Count - End of Quarter       4,016          3,746               270
    ---------------------------       -----          -----               ---
    Churn Percentage                    8.3%           6.8%              1.5
    ----------------                    ---            ---               ---

Gross margin as a percentage of revenue remained relatively unchanged at 74% in the fourth quarter of 2009, compared to the fourth quarter of 2008.

Selling, general and administrative expenses for the quarter declined by $0.5 million, or 9%, to $4.9 million from $5.3 million a year ago. The improvement was attributable to several factors:  reduced headcount and the associated payroll expenses which declined by $0.1 million, an overall reduction in marketing spend which declined by $0.1 million, a reduction in severance expenses which declined by $0.2 million, and lower levels of consulting and external professional service expenses which declined by $0.1 million.

Net loss for the fourth quarter of 2009 was $0.2 million, or $0.00 per share, compared to a net loss of $0.7 million or $0.01 per share in the same period a year ago.

For the quarters ended December 31, 2009 and December 31, 2008, results from continuing operations reflected solely the results from the Entertainment division, following the discontinuation of the Hospitality division.

Results for the Fiscal Year Ended December 31, 2009

Revenues from continuing operations were $25.8 million for the fiscal year ended December 31, 2009, compared to revenue of $27.5 million for the prior year. Net loss from continuing operations was $1.5 million, compared to a net loss from continuing operations of $6.1 million a year ago.

For the full year of 2009, installations were up approximately 27% while terminations were down 13% compared with the full year of 2008.  Customer churn was 25% for 2009, down from 29.1% in the prior year.

  Total site counts                FY 2009   FY 2008    Increase

     and churn percentages                             (Decrease)
     ---------------------                             ----------
    Site Count - Beginning of Year    3,746     3,877         (131)
    ------------------------------    -----     -----         ----
    Installations                     1,239       977          262
    -------------                     -----       ---          ---
    Terminations                       (969)   (1,108)        (139)
    ------------                       ----    ------         ----
    Site Count - End of Year          4,016     3,746          270
    ------------------------          -----     -----          ---
    Churn Percentage                   25.0%     29.1%        (4.1)
    ----------------                   ----      ----         ----

Gross margin as a percentage of revenue improved to 75% in 2009 from 72% in fiscal year 2008.  The increase in gross margin was primarily due to a reduction in depreciation expense of $0.3 million, as equipment became fully depreciated, decreased communication and content costs of $0.6 million, and a decrease of $0.3 million in direct salaries as a result of reduced headcount.

Selling, general and administrative expenses declined $5.5 million, or 21%, to $20.0 million in 2009 from $25.5 million in the prior year. The decrease was due to several factors, including payroll and payroll-related expenses which decreased $1.5 million due to a 20% reduction in headcount.  Severance expenses decreased $0.9 million compared to the prior year that included severance expenses associated with the departure of senior personnel and the closing of the Company's UK office.  Marketing expenses decreased $1.1 million due to a change in marketing strategy, including reductions in direct mail campaigns, participation in promotions and trade shows.  Consulting expenses decreased $0.9 million.  General spending related to payroll processing fees, professional tax and audit services and supplies decreased $0.3 million. Bad debt expense decreased $0.3 million, predominately due to an improvement in collection experience.

Discontinued Operations

Discontinued operations generated no net income for the fiscal year 2009, compared to a net loss from discontinued operations of $0.3 million in 2008.

Conference Call

Management will review these results in a conference call today, March 30, 2010, at 4:30 p.m. ET.

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 63661018. Please dial in several minutes prior to the start time for registration purposes.

A replay will be available until April 6, 2010, 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 63661018 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 Buzztime

NTN Buzztime, Inc. (NYSE Amex: NTN) is one of the most popular interactive bar and restaurant entertainment networks. Trusted for over 25 years by restaurant, bar and pub owners, Buzztime develops trivia, card and sports games and broadcasts them on the Buzztime Network to 4,000 locations throughout North America.  More than 1,000,000 registered players use a blue Playmaker or their Apple iPhone® to compete in more than 4,500,000 games each month.  Players spread the word and invite friends and family to their favorite Buzztime location to enjoy an evening of fun and competition or unwind from a hectic day.  Buzztime ups the fun factor - turning visitors into regulars and attracting new players every day of the week.  For the most up-to-date information on NTN Buzztime, please visit http://www.buzztime.com.

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.

  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
                        Selected Balance Sheet Data
                      As of December 31, 2009 and 2008
                  (In thousands, except par value amount)

  ASSETS                                                    2009      2008
                                                            ----      ----

  Current Assets:
      Cash and cash equivalents                           $3,637    $3,362
      Accounts receivable, net of allowances of $321
       and $298, respectively                                606       636
      Investment available-for-sale                          180        58
      Prepaid expenses and other current assets              715       611

             Total current assets                          5,138     4,667
  Broadcast equipment and fixed assets, net                3,809     3,428
  Software development costs, net of accumulated
   amortization of $1,197 and $1,002,
   respectively                                            1,374       860
  Deferred costs                                             999     1,383
  Goodwill                                                 1,202     1,032
  Intangible assets, net                                   1,585       185
  Other assets                                               190       107

             Total assets                                $14,297   $11,662

  LIABILITIES AND SHAREHOLDERS' EQUITY

  Current Liabilities:
      Accounts payable                                      $422      $219
      Accrued compensation                                 1,075       868
      Accrued expenses                                       788       972
      Sales tax payable                                      855       958
      Income taxes payable                                     -        18
      Obligations under capital leases-current
       portion                                               300         8
      Deferred revenue                                       523       657
      Other current liabilities                              294         -

             Total current liabilities                     4,257     3,700
  Sales taxes payable, excluding current portion             128         -
  Obligations under capital leases, excluding
   current portion                                           173        32
  Deferred revenue, excluding current portion                 82        91
  Other liabilities                                          239        93

             Total liabilities                             4,879     3,916
  Commitments and contingencies

  Shareholders' equity:
      Series A 10% cumulative convertible preferred
       stock, $.005 par value, $161 liquidation
       preference, 5,000 shares authorized; 161
       shares issued and outstanding                           1         1
      Common stock, $.005 par value, 84,000 shares
       authorized; 60,359 and 55,727 shares issued
       and outstanding at December 31, 2009 an 2008,
       respectively                                          302       277
      Treasury stock, at cost, 503 shares at December
       31, 2008 and 2007, respectively                      (456)     (456)
      Additional paid-in capital                         115,740   113,267
      Accumulated deficit                               (106,868) (105,351)
      Accumulated other comprehensive income                 699         8
                                                             ---       ---

             Total shareholders' equity                    9,418     7,746
                                                           -----     -----

             Total liabilities and shareholders' equity  $14,297   $11,662
                                                         =======   =======

                         NTN BUZZTIME, INC. AND SUBSIDIARIES
                   CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
                        (In thousands, except per share data)

                                 Three Months Ended        Year Ended
                                    December 31,          December 31,
                                    ------------          ------------

                                    2009       2008     2009       2008
                                    ----       ----     ----       ----

  Revenues                        $6,616     $6,525  $25,814    $27,496

  Operating expenses:
      Direct operating
       costs (includes
       depreciation and
       amortization)               1,691      1,708    6,460      7,582
      Selling, general
       and administrative          4,866      5,326   20,031     25,488
      Depreciation and
       amortization
       (excluding
       depreciation and
       amortization
       included in direct
       costs)                        163        132      919        532

             Total operating
              expenses             6,720      7,166   27,410     33,602

  Operating loss                    (104)      (641)  (1,596)    (6,106)
  Other income
   (expense):
      Interest income                  1          9       72        138
      Interest expense               (31)         -      (66)        (5)
      Other income                    29          4      184         73

             Total other
              (expense) income,
              net                     (1)        13      190        206

  Loss from
   continuing
   operations before
   income taxes                     (105)      (628)  (1,406)    (5,900)
  Provision for
   income taxes                      (91)       (62)     (95)      (234)

             Loss from
              continuing
              operations            (196)      (690)  (1,501)    (6,134)
             Loss from
              discontinued
              operations, net of
              tax                      -          -        -       (332)

             Net loss              $(196)     $(690) $(1,501)   $(6,466)

  Net loss per common
   share - basic and
   diluted:
      Loss from
       continuing
       operations                 $(0.00)    $(0.01)  $(0.03)    $(0.11)
      Loss from
       discontinued
       operations                      -          -        -      (0.01)

      Basic and diluted
       net loss per share         $(0.00)    $(0.01)  $(0.03)    $(0.12)

  Weighted average
   shares outstanding
      Basic and diluted           59,850     55,170   58,188     55,189

                     NTN BUZZTIME, INC. AND SUBSIDIARIES
                           SELECTED CASH FLOW DATA
                For the years ended December 31, 2009 and 2008
                                (In thousands)

                                                          2009     2008
                                                          ----     ----

  Cash flows (used in) provided by operating
   activities:
        Net loss                                       $(1,501) $(6,466)
        Loss from discontinued operations, net of
         tax                                                 -     (332)

             Loss from continuing operations           $(1,501) $(6,134)
        Adjustments to reconcile net loss to net cash
         provided by operating activities:
          Depreciation and amortization                  3,193    3,101
          Provision for doubtful accounts                  227      557
          Stock-based compensation                         180      312
          Loss from disposition of equipment and
           capitalized software                            267      618
          Changes in assets and liabilities:
             Accounts receivable                          (181)     142
             Prepaid expenses and other assets              95      129
             Accounts payable and accrued expenses         139     (367)
             Income taxes payable                         (161)     (19)
             Deferred costs                                393     (199)
             Deferred revenue                             (148)    (296)

             Net cash provided by (used in) continuing
              operations                                 2,503   (2,156)
        Discontinued operations                              -     (807)

             Net cash provided by (used in) operating
              activities                                 2,503   (2,963)
  Cash flows provided by (used in) investing
   activities:
        Capital expenditures                            (1,910)  (2,160)
        Software development expenditures               (1,138)    (835)
        Trademark license                                  (94)       -
        Deposits on broadcast equipment                    (28)       -
        Proceeds from sale of equipment and other
         assets                                              -       12
        Restricted cash                                      -       51

             Net cash used in investing activities by
              continuing operations                     (3,170)  (2,932)
        Discontinued operations                              -        7

             Net cash used in investing activities      (3,170)  (2,925)
  Cash flows (used in) provided by financing
   activities:
        Principal payments on capital leases              (155)     (12)
        Proceed from sale of common stock                  750        -
        Proceeds from exercise of options                   28        -
        Purchase of treasury stock                           -    (12  )

             Net cash provided by (used) in financing
              activities by continuing operations          623      (24)

  Net decrease increase in cash and cash
   equivalents                                             (44)  (5,912)

  Effect of exchange rate on cash                          319     (999)

  Cash and cash equivalents at beginning of
   year                                                  3,362   10,273

  Cash and cash equivalents at end of year              $3,637   $3,362

Photo:  http://www.newscom.com/cgi-bin/prnh/20100204/LA48830LOGO
AP Archive:  http://photoarchive.ap.org/
PRN Photo Desk, photodesk@prnewswire.com
Source: NTN Buzztime, Inc.
   

CONTACT:  Kendra Berger, Chief Financial Officer of NTN Buzztime, Inc.,
+1-760-438-7400; or Mark Collinson, Partner of CCG Investor Relations,
+1-310-954-1343, for NTN Buzztime, Inc.

Web Site:  http://www.ntn.com/

Title

Medium Image View Large