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November 7, 2017 NTN Buzztime, Inc. Reports Third Quarter 2017 Results

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Gross Margin reaches 70%

CARLSBAD, Calif., November 7, 2017 — NTN Buzztime, Inc. (NYSE American: NTN), reported financial results for the third quarter ended September 30, 2017.

“During the third quarter, we continued executing consistently, expanding gross margin to 70% and posting our sixth consecutive quarter of positive EBITDA,” said Ram Krishnan, NTN Buzztime CEO. “Transitioning the company from a one-dimensional entertainment business to a multi-dimensional platform company, we have added new capabilities with point of sale integration and payment; built entertainment content that can be licensed and re-purposed; and improved the cost and quality of our hardware. In fact, our platform is becoming a formidable asset to our business. As each of these parts comes together, we are developing new offerings designed to help us tackle new markets.

“We endeavor to operate in an EBITDA responsible manner while investing prudently to enhance our product platform to meet needs of various market segments. Buzztime was one of the first to introduce consumer facing EMV technology to the market. Now, our latest tablet has NFC capabilities that will enable consumers to use Applepay, Android pay, and Samsung pay and other emerging payment brands. Our latest tablet has been well received at trade shows, and we are on track to rollout this tablet at Buffalo Wild Wings sites in the first quarter of next year. We expect these initiatives will help us achieve revenue growth in 2018.”

Financial Results for the Third-Quarter Ended September 30, 2017

Total revenues were $5.2 million, compared to $5.5 million for the second quarter of 2017 and $5.4 million for the third quarter of 2016. Direct costs were $1.5 million, down from $1.7 million for the same period in 2016 due to decreases in depreciation, equipment and service provider expenses. As a result, gross margin increased to 70%, up from 68% in the prior year quarter. Selling, general and administrative expenses were $3.6 million for the third quarter of 2017, compared to $4.0 million for the third quarter of 2016. Net loss was $184,000, or $0.07 per share, which improved from a net loss of $573,000, or $0.31 per share, for the third quarter of 2016. EBITDA was $517,000, which improved from $288,000 in the same period last year.

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 is positive this quarter, it may not be positive in future quarters. 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.

Financial Results for the Nine Months Ended September 30, 2017

Total revenues were $16.0 million, compared to $16.3 million for the nine months ended September 30, 2016. Gross margin increased to 69%, up from 66% for the prior year period. Net loss, including $750,000 of non-recurring other income recorded in the first quarter, was $438,000, or $0.18 per share, compared to a net loss of $2.5 million, or $1.34 per share, for the prior year period. EBITDA for the first nine months of 2017 grew to $1.7 million, up from $188,000 for the prior year period.

Metric Review for the Quarter Ended September 30, 2017

The site count was 2,734 venues, compared to 2,768 venues at June 30, 2017. Management anticipates the net site count will continue to fluctuate. As of September 30, 2017, BEOND platform installations increased to 2,166 venues, or 79% of the installed base, compared to 2,125 venues, or 77% of the installed base, as of June 30, 2017.

Liquidity

Cash and cash equivalents were $4.5 million at September 30, 2017, compared to $6.8 million at June 30, 2017 and $5.7 million at December 31, 2016. Total deferred revenue was $3.8 million, up from $1.3 million at December 31, 2016. The primary credit facility matures in mid-January 2018. This year, the Company has complied with all financial covenants related to that facility and management is reviewing debt financing options to support growth.

Conference Call

Management will review the results on a conference call with a live question and answer session today, November 7, 2017, at 4:30 p.m. ET. To access the call, please use passcode 3696339 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 https://www.buzztime.com. The replay of the call will be available until November 14, 2017.

Forward-looking Statements

This release contains forward-looking statements which reflect management’s current views of future events and operations, including statements regarding tackling new markets, the rollout of our new tablet at sites in the near future, and expected growth in 2018. These statements are 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 risks of unsuccessful execution or launch of products, platforms or brands, risks associated with customer retention and growth plans, the impact of alternative entertainment options and technologies and competitive products, brands, technologies and pricing, adverse economic conditions, the regulatory environment and changes in the law, failure of customer and/or player acceptance or demand for new or existing products, lower market acceptance or appeal of both existing and new products and services by particular demographic groups or audiences as a whole, termination of partnership and contractual relationships and technical problems or outages. 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 dining technology to bars and restaurants in North America. Venues license Buzztime’s customizable solution to differentiate themselves via competitive fun by offering guests trivia, card, sports and arcade games, nationwide competitions, personalized menus and self-service dining features. Buzztime’s platform improves operating efficiencies, creates connections among the players and venues, and amplifies guests’ positive experiences. Founded in 1984, Buzztime has accumulated over 9 million player registrations and over 115 million games were played in 2015 alone. For more information, please visit https://www.buzztime.com or follow us on Facebook or Twitter @buzztime.

IR AGENCY CONTACT:
Kirsten Chapman/Becky Herrick, LHA Investor Relations
buzztime@lhai.com
415-433-3777

 

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