NTN Buzztime, Inc. Announces Fourth-Quarter and Full-Year 2008 Results
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| Thursday, 19 March 2009 13:10 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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CARLSBAD, “In a very busy fourth quarter, NTN Buzztime has begun laying the groundwork to return to profitability in 2009 and to become more of an integrated media company that attracts growing audiences to the iTV Buzztime Network. It is very exciting to have been chosen the Company’s CEO to help lead this transformation,” commented NTN Buzztime Board member and CEO Mr. Bateman continued, “We have also restructured our Board of Directors and made significant enhancements to our management team. New-media executive and investor Results for the Fourth Quarter Ended December 31, 2008 Revenues decreased by $1.2 million or 15% to $6.5 million for the fourth quarter of 2008, compared to revenues of $7.7 million for the fourth quarter of 2007. The Company’s site count was 3,746 as of the end of 2008, consistent with the site count as of September 30, 2008. Loss from continuing operations for the fourth quarter of 2008 was $690,000, a reduction of approximately $844,000 or 55% from the loss from continuing operations of $1.5 million recorded for the fourth quarter of 2007. Gross margin as a percentage of revenue improved to 75% for the fourth quarter of 2008 compared to approximately 70% for the fourth quarter of 2007. Quarterly selling, general and administrative expenses decreased by $1.3 million or 19% year over year to approximately $5.4 million for the fourth quarter of 2008 from $6.7 million for the fourth quarter of 2007. For the quarter ended December 31, 2008 and 2007, 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, 2008 Revenues decreased by $3.0 million or approximately 10% to $27.5 million for the fiscal year ended December 31, 2008 from $30.5 million in fiscal 2007. Year-over-year reductions in subscribing site counts and corresponding revenue were impacted by the Company’s Q3 2008 discontinuation of U.K. operations (37 sites) and the bankruptcy of former national account Bennigan’s (34 sites). The site count declined from 3,877 at December 31, 2007 to 3,746 at December 31, 2008, for a reduction of 60 sites in addition to the site reductions noted related to the discontinuation of Gross margin as a percentage of revenue improved to 72% in fiscal 2008 compared to 70% in 2007. Fiscal-year selling, general and administrative expenses increased by $1.4 million, or 6%, to $25.3 million in the 2008 fiscal year from $23.9 million in 2007. This increase is primarily related to increased personnel related costs, including $956,000 in increased severance payments; increased consulting costs of $857,000; software disposal costs, which increased by $360,000 due to impairments on certain projects that were deemed to no longer fit with the Company’s current strategy; a $198,000 increase in legal fees related to corporate governance matters and an ongoing trademark infringement case; increased bad debt expense of $201,000 related to customer cancellations and bankruptcies; a $202,000 increase in recruiting expenses; and an increase of $304,000 in office lease expenses. These increases were offset by decreases in marketing expenses amounting to $851,000; decreased commission expenses of $339,000; a decrease in tax expense of $270,000; and salary reductions of $120,000 resulting from force reductions and the closing of the Company’s The Company’s Entertainment division incurred $478,000 of restructuring costs during fiscal 2007, related to the restructuring of the Canadian operations, completed in January 2007, compared to none in 2008. For fiscal year ended December 31, 2008 and 2007, results from continuing operations reflected solely the results from the Entertainment division, following the discontinuation of the Hospitality division. Discontinued Operations Discontinued operations of the Company's Hospitality division consisted of two segments, Wireless and Software Solutions. On March 30, 2007, the Company reported the sale of substantially all assets of the NTN Wireless segment for $2.4 million, which resulted in a gain of approximately $396,000 in the first quarter of 2007. On October 31, 2007, the Company announced that it had completed the sale and transfer of Software Solutions’ intellectual property assets and began winding down the operation. This process was completed in the third quarter of 2008. Discontinued operations generated no net income in the fourth quarter of 2008 compared to a loss of $386,000, net of tax, in the 2007 fourth quarter. Discontinued operations generated a loss of $332,000, net of tax, for the fiscal year ended December 31, 2008, compared to a loss of $735,000, net of tax, for fiscal 2007. Conference Call Management will review these results in a conference call today, March 19, 2009, at 4:30 p.m. Eastern Time. To access the conference call, please dial 1-866-360-7027 if calling from the A replay will be available until March 26, 2009, which can be accessed by dialing 1-800-642-1687 if calling from the 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 Buzztime is a proud member of the OVAB |Out-of-home Video 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, trends in subscriber preference 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 our recent management transition, our significant losses, our ability to grow our out-of-home Buzztime iTV network and implement our other business strategies, 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. NTN BUZZTIME, INC. AND SUBSIDIARIES Condensed Consolidated Balance Sheets As of December31, 2008 and 2007 (In thousands, except share data)
(more) CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (In thousands, except per share data)
(more) NTN BUZZTIME, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS For the years ended December31, 2008 and 2007 (In thousands)
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