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March 17, 2020 NTN Buzztime, Inc. Reports Fourth Quarter and Full Year 2019 Results

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CARLSBAD, Calif., March 17, 2020, — NTN Buzztime, Inc. (NYSE
American: NTN), reported financial results for the fourth quarter and
year ended December 31, 2019.

Allen
Wolff, CEO, said, “During the fourth quarter, we gained traction with Buzztime
Basic, our lighter mobile-based, in-venue solution that complements our full
featured Buzztime Elite offering, and we shipped the first installment of a
substantial hardware contract. Our programmatic advertising continues to grow
and augment our subscription revenue. We are proud 2019 closed with these
significant operational accomplishments and our fourth consecutive year of
positive EBITDA.”

“In
January 2020, we seized the opportunity to monetize a non-core business and
sold our hosted-events asset. We will continue to explore all types of
go-to-market partnerships and to prioritize our most compelling opportunities
to leverage our foundation for scalable growth. The economic and market conditions
throughout the United States and the world have been dynamic and evolving as a
result of the COVID-19 pandemic. Its effect on the restaurant and bar industry has
been rapid, and its scope and magnitude is uncertain. We will continue to
monitor the situation and evaluate steps we can take to respond to its effects.
In 2020, we will remain focused on growing our digital entertainment and
hardware businesses in an efficient manner and are evaluating financing
alternatives to better position us to do so.”

Financial Results

Fourth
quarter 2019 total revenues were $5.2 million, compared to $4.6 million in the third
quarter of 2019 and $5.9 million in the fourth quarter of 2018. The fourth quarter
2019 recorded increased hardware revenue compared to prior periods. Revenue for
2019 was $19.8 million, compared to $23.3 million in 2018. As anticipated, 2019
results reflected lower subscription and advertising revenue due to reduced site
count, which, taking into account the fourth quarter departure of Buffalo Wild
Wings venues, was 1,440 at December 31, 2019.  

During
the fourth quarter of 2019, Buzztime received from Buffalo Wild Wings a
substantial number of tablets with Buzztime’s new technology for only the cost
of shipping, enabling the company to write off its older tablets. Fourth
quarter 2019 direct costs were $2.9 million, compared to $2.1 million for the
same period in 2018. Fourth quarter 2019 gross margin was 43%, compared to 65% for
the same period in 2018. The increase in direct costs and the decrease in gross
margin were both primarily attributable to higher equipment expense related to increased
hardware sales and a $676,000 write-down associated with older tablets and
related cases. Full year 2019 gross margin was 62%, compared to 65% for 2018. Although
revenue mix will continue to result in margin fluctuations, the company continues
to seek to optimize gross margin and anticipates it will be higher in future
quarters than the fourth quarter of 2019.

Selling,
general and administrative expense was $2.9 million and $13.2 million for the three
and twelve months ended December 31, 2019, decreasing from $3.4 million and $14.5 million for the same periods in 2018,
respectively. The reduction reflects management’s efforts to lower operating
expenses.

For
the fourth quarter 2019, net loss attributable to common shareholders was $1.3
million, or $0.45 per share, compared to a net income attributable to common
shareholders of $44,000, or $0.02 per share, in the prior year quarter.  Net loss attributable to common shareholders
was $2.1 million, or $0.72 per share, compared to $275,000, or $0.10 per share,
for 2019 and 2018, respectively.

For
the fourth quarter 2019, the company had negative EBITDA of $557,000, compared to
positive EBITDA of $732,000 in the prior year quarter.  For the year, EBITDA was $1.1 million in 2019,
compared to $2.8 million in 2018.

EBITDA
is defined as earnings before interest, taxes, depreciation and amortization
and is not intended to represent a measure of performance in accordance with
accounting principles generally accepted in the United States (GAAP).  Although EBITDA was positive for the full
year, it may not be positive in future years. A detailed description and
reconciliation of EBITDA and management’s reasons for using this measure is set
forth at the end of this press release.

Liquidity

Cash,
cash equivalents and restricted cash was $3.4 million at December 31, 2019,
compared to $2.8 million at December 31, 2018. For 2019, cash flow from operations
was $2.7 million, increasing from $1.4 million in 2018.

Conference Call

Management
will review the results on a conference call with a live question and answer
session today,
March 17, 2020, at 4:30 p.m. ET. To access the call, please use passcode 8114999
and dial:

  • (877) 307-1373 for the live
    call and (855) 859-2056 for the replay, if calling from the United States or
    Canada; or
  • (678) 224-7873 for the live
    call and (404) 537-3406 for the replay, if calling internationally.

The call will also be accompanied live by webcast that will
be accessible at the company’s website at http://www.buzztime.com/investors.  The replay of the call will be available
until March 24, 2020

Forward-looking Statements

This release contains
forward-looking statements that reflect management’s current views of future
events and operations, including that we will continue
to
explore all types of go-to-market partnerships and to prioritize our most
compelling opportunities to leverage our foundation for scalable growth, that
we will continue to monitor the effects of the COVID-19 pandemic and evaluate
steps we can take to response thereto, that we will remain focused on growing
our digital entertainment and hardware businesses in an efficient manner, and
that we anticipate gross margin will be higher in future quarters than the
fourth quarter of 2019. Among
the
factors that could cause or contribute to material differences between our actual
results and the expectations indicated by the forward-looking statements are risks
and uncertainties that include, but are not limited to: our ability to raise
additional capital, on favorable terms or at all, to allow us to meet our debt
service obligations and to fund our working capital needs and the effect that
the COVID-19 pandemic may have on the capital markets generally; the impact of
the COVID-19 pandemic on our business, the restaurant and bar industry
generally and the broader macroeconomic environment; our ability to maintain or
grow our revenue and successfully implement our other business strategies to
make up for the revenue we have historically received from Buffalo Wild Wings
corporate-owned restaurants and its franchisees after our existing
relationships with them terminated in November 2019; the negative impact that
measures we recently implemented and may implement to reduce our operating
expenses and planned capital expenses (including investments in our business)
may have on our ability to effectively manage and operate our business; our
ability to comply with our financial covenants in our loan and security
agreement with Avidbank and its right to declare a default if we do not, which
could lead to all payment obligations becoming immediately due and payable; our
ability to compete effectively within the highly competitive interactive games,
entertainment and marketing services industries, including our ability to
successfully commercially launch attractive product offerings, and the impact
of new products and technological change, especially in the mobile and wireless
markets, on our operations and competitiveness; our ability to adequately
protect our proprietary rights and intellectual property;; and the other risks
and uncertainties described in Part I, Item 1A “Risk Factors” of the Company’s
Annual Report on Form 10-K for the fiscal year ended December 31, 2019, and
described in other documents we file from time to time with the Securities and
Exchange Commission thereafter.  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.

About
Buzztime:

Buzztime (NYSE American: NTN) delivers interactive entertainment
and innovative technology that helps its customers acquire, engage and retain
its patrons. Most frequently used in bars and restaurants in North America, the
Buzztime tablets, mobile app and technology offer engaging solutions to
establishments that have guests who experience dwell time, such as casinos,
senior living, and more. Casual dining venues license Buzztime’s customizable
solution to differentiate themselves via competitive fun by offering guests
trivia, card, sports and arcade games. Buzztime’s platform creates connections
among the players and venues and amplifies guests’ positive experiences. 
Buzztime’s in-venue TV network creates one of the largest digital out of home
ad audiences in the US and Canada. Buzztime
hardware solutions leverages the company’s experience manufacturing durable
tablets and charging systems, enabling a diverse group of businesses including
corrections, point-of-sale and loyalty with product implementation.  Buzztime games have also been recently
licensed by other businesses serving other markets.  For more information,
please visit http://www.buzztime.com or
follow us on Facebook or Twitter@buzztime.

IR AGENCY CONTACT:

Kirsten Chapman, LHA Investor Relations, buzztime@lhai.com 415-433-3777

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