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NTN Buzztime, Inc. Announces Second Quarter 2014 Results

Companies mentioned in this article: NTN Buzztime, Inc.

CARLSBAD, Calif., Aug. 13, 2014 /PRNewswire/ -- NTN Buzztime, Inc. (NYSE MKT: NTN) today announced results for the second quarter ended June 30, 2014.

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"We are pleased to report that during the second quarter, we continued to roll-out BEOND, having installed the BEOND platform in 243 additional locations putting us at 676 BEOND installations as of June 30, 2014, 419 of which are Buffalo Wild Wings. In five of these locations, we continue to test premium entertainment options that, based on the encouraging results we're seeing, represents a significant opportunity to generate consumer revenue once available to all BEOND locations," said Buzztime CEO, Jeffrey Berg. "Additionally, the organizational changes we recently announced will allow us to deliver new entertainment experiences to support our mission to entertain consumers in ways that create long-term value for our merchants," continued Mr. Berg.

Results for the Second Quarter Ended June 30, 2014

Revenues for the second quarter of 2014 grew 24% year over year to $6.9 million compared to $5.5 million for the same period in 2013. Direct costs increased to $2.8 million for the second quarter of 2014 from $1.5 million for the same period of 2013 due in part to additional equipment related costs incurred as we deploy the BEOND platform.

Selling, general and administrative expenses increased $0.6 million, or 16%, to $4.6 million for the second quarter of 2014 from $4.0 million for the same period in 2013.

Impairment of capitalized software was $0.6 million for the second quarter of 2014 compared to $27,000 for the same period in 2013.

Net loss for the second quarter of 2014 was $1.3 million, or $0.02 per share, compared to net loss of $0.1 million or $0.00 per share in the same period a year ago. Excluding the non-recurring impairment charge of capitalized software, our net loss would have been $0.7 million or $0.01 per share.

As of June 30, 2014, the Company had $11.2 million in cash and cash equivalents compared to $5.5 million as of December 31, 2013.

The Company ended the second quarter of 2014 with 3,103 subscribing venues, compared to 3,352 as of June 30, 2013.

Conference Call

Management will review the second quarter financial results in a conference call today, August 13, 2014, at 4:30 p.m. ET.

To access the conference call, please dial (877) 307-1373, if calling from the United States or Canada, or (678) 224-7873, if calling internationally, and use passcode 84689998. A replay of the call will be available until August 20, 2014, which can be accessed by dialing (855) 859-2056, if calling from the United States or Canada, or (404) 537-3406, if calling internationally. Please use passcode 84689998 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.

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 statements about our growth plans, product and platform development, new revenue, customer development and growth plans, improved customer and consumer satisfaction and the number of locations, players and games. 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, 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

NTN Buzztime, Inc. (NYSE MKT: NTN) is a leading bar and restaurant social entertainment and integrated marketing platform. Trusted by bars and restaurants in North America since 1985, Buzztime integrates trivia, card and sports games with in- and out-of-venue messaging and communication tools. With over 5 million player registrations on the Buzztime platform and over 50 million games played each year, Buzztime players spread the word and invite friends and family to their favorite Buzztime location to enjoy an evening of fun and competition. With Buzztime entertainment and marketing solutions, bars and restaurants can turn casual visitors into regulars, and give guests a reason to stay longer. For the most up-to-date information on NTN Buzztime, please visit http://www.buzztime.com or follow us on Facebook or Twitter @buzztime.

COMPANY CONTACT:
Kendra Berger
Chief Financial Officer
NTN Buzztime, Inc.
(760) 438-7400

(financial tables follow)


                         NTN BUZZTIME, INC. AND SUBSIDIARIES

                             CONSOLIDATED BALANCE SHEETS

                                     (Unaudited)

                       (In thousands, except par value amount)



    ASSETS                                                     June 30,   December 31,

                                                                     2014                    2013
                                                                     ----                    ----

    Current Assets:

    Cash and cash equivalents                                     $11,164                  $5,455

    Accounts receivable, net                                          884                     641

    Prepaid expenses and other current
     assets                                                         3,407                   1,822
                                                                    -----                   -----


    Total current assets                                           15,455                   7,918

    Broadcast equipment and fixed
     assets, net                                                    3,423                   3,237

    Software development costs, net                                 1,477                   2,317

    Deferred costs                                                    908                     562

    Goodwill                                                        1,181                   1,179

    Intangible assets, net                                             48                     160

    Other assets                                                       84                      84
                                                                      ---                     ---


    Total assets                                                  $22,576                 $15,457
                                                                  =======                 =======


    LIABILITIES AND SHAREHOLDERS' EQUITY


    Current Liabilities:

    Accounts payable                                                 $797                    $553

    Accrued compensation                                              613                     647

    Accrued expenses                                                  730                     660

    Sales taxes payable                                               165                     181

    Income taxes payable                                               61                      81

    Notes payable-current portion                                   1,454                     631

    Obligations under capital leases-
     current portion                                                   27                      25

    Deferred revenue                                                1,374                     593

    Other current liabilities                                         153                     237
                                                                      ---                     ---


    Total current liabilities                                       5,374                   3,608

    Notes payable, excluding current
     portion                                                        2,265                     962

    Obligations under capital leases,
     excluding current portion                                         44                      58

    Deferred revenue, excluding
     current portion                                                  412                     798

    Deferred rent                                                     765                     829
                                                                      ---                     ---


    Total liabilities                                               8,860                   6,255

    Commitments and contingencies


    Shareholders' equity:

    Series A 10% cumulative
     convertible preferred stock,
     $.005 par value, $156 liquidation
     preference, 5,000 shares
     authorized; 156 issued and
     outstanding at June 30, 2014 and
     December 31, 2013                                                  1                       1


    Common stock, $.005 par value,
     168,000 shares authorized at June
     30, 2014 and December 31, 2013;
     91,663 and 78,649 shares issued
     and outstanding at June 30, 2014
     and December 31, 2013,
     respectively                                                     458                     393

    Treasury stock, at cost, 503
     shares at June 30, 2014 and
     December 31, 2013                                              (456)                  (456)

    Additional paid-in capital                                    127,881                 121,432

    Accumulated deficit                                         (114,804)              (112,799)

    Accumulated other comprehensive
     income                                                           636                     631
                                                                      ---                     ---


    Total shareholders' equity                                     13,716                   9,202
                                                                   ------                   -----


    Total liabilities and
     shareholders' equity                                         $22,576                 $15,457
                                                                  =======                 =======




                           NTN BUZZTIME, INC. AND SUBSIDIARIES

         CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS

                                       (Unaudited)

                          (In thousands, except per share data)


                                               Three Months Ended           Six Months Ended
                                                    June 30,                    June 30,
                                                    --------                    --------

                                                    2014            2013            2014           2013
                                                    ----            ----            ----           ----

    Revenues                                      $6,873          $5,532         $13,291        $11,648


    Operating expenses:

     Direct
     operating
     costs
     (includes
     depreciation
     and
     amortization)                                 2,806           1,485           5,336          3,485

     Selling,
     general
     and
     administrative                                4,577           3,955           8,945          8,173

     Impairment
     of
     capitalized
     software                                        639              27             661             92

     Depreciation
     and
     amortization
     (excluding
     depreciation
     and
     amortization
     included
     in
     direct
     costs)                                          151             180             303            379
                                                     ---             ---             ---            ---


     Total
     operating
     expenses                                      8,173           5,647          15,245         12,129
                                                   -----           -----          ------         ------


     Operating
     loss                                        (1,300)          (115)        (1,954)         (481)

     Other
     (expense)
     income,
     net                                            (51)             21            (36)            26
                                                     ---             ---             ---            ---


     Loss
     before
     income
     taxes                                       (1,351)           (94)        (1,990)         (455)

         Benefit
         (provision)
         for
         income
         taxes                                         3             (5)            (7)          (13)
                                                     ---             ---             ---            ---


     Net
     loss                                       $(1,348)          $(99)       $(1,997)        $(468)
                                                 =======            ====         =======          =====



     Net
     loss
     per
     common
     share
     -
     basic
     and
     diluted                                     $(0.02)        $(0.00)        $(0.02)       $(0.01)
                                                  ======          ======          ======         ======


     Weighted
     average
     shares
     outstanding
     -
     basic
     and
     diluted                                      88,831          71,062          83,534         70,962
                                                  ======          ======          ======         ======


    Comprehensive loss

         Net
         loss                                   $(1,348)          $(99)        (1,997)         (468)

         Foreign
         currency
         translation
         adjustment                                   67           $(65)              4          (107)
                                                     ---            ----             ---           ----


             Total
             comprehensive
             loss                               $(1,281)         $(164)       $(1,993)        $(575)
                                                 =======           =====         =======          =====


                            NTN BUZZTIME, INC. AND SUBSIDIARIES

                            CONSOLIDATED STATEMENT OF CASH FLOWS

                                        (Unaudited)

                                       (In thousands)



                                                                        Six months ended

                                                                            June 30,
                                                                            --------

                                                                            2014             2013
                                                                            ----             ----

    Cash flows (used in) provided by operating activities:

    Net loss                                                            $(1,997)          $(468)

    Adjustments to reconcile net loss to net cash provided by operating
     activities:

    Depreciation and amortization                                          1,375            1,483

    Provision for doubtful accounts                                           41               11

    Stock-based compensation                                                 111               53

    Issuance of common stock to
     consultant in lieu of cash payment                                       30                -

    Impairment of capitalized software                                       661               92

    Loss from disposition of equipment                                         1                -

    Changes in assets and liabilities:

    Accounts receivable                                                    (285)             120

    Prepaid expenses and other assets                                    (2,074)           (360)

    Accounts payable and accrued
     liabilities                                                             182            (333)

    Income taxes payable                                                    (20)            (10)

    Deferred costs                                                         (346)             151

    Deferred revenue                                                         395            (372)

    Deferred rent                                                           (64)            (56)
                                                                             ---              ---


    Net cash (used in) provided by
     operating activities                                               $(1,990)             311

    Cash flows used in investing activities:

    Capital expenditures                                                   (485)           (250)

    Software development expenditures                                      (295)           (794)
                                                                            ----             ----


    Net cash used in investing
     activities                                                            (780)         (1,044)

    Cash flows provided by (used in) financing activities:

    Proceeds from public offering of
     common stock, net                                                     6,369                -

    Proceeds from notes payable                                            3,023              128

    Payments on notes payable                                              (898)            (20)

    Principal payments on capital
     leases                                                                 (12)            (72)

    Proceeds from exercise of stock
     options                                                                  23                -

    Tax withholding related to net-
     share settlements of restricted
     stock units                                                            (27)             (7)
                                                                             ---              ---


    Net cash provided by financing
     activities                                                            8,478               29
                                                                           -----              ---


    Net increase (decrease) in cash and
     cash equivalents                                                      5,708            (704)


    Effect of exchange rate on cash                                            1             (44)


    Cash and cash equivalents at
     beginning of period                                                   5,455            2,721
                                                                           -----            -----


    Cash and cash equivalents at end of
     period                                                              $11,164           $1,973
                                                                         =======           ======

EBITDA

A schedule reconciling the Company's consolidated net loss calculated in accordance with GAAP to EBITDA is included in the supplemental table below. EBITDA is not intended to represent a measure of performance in accordance with GAAP, nor should EBITDA be considered as an alternative to statements of cash flows as a measure of liquidity. EBITDA is included herein because the Company believes it is a measure of operating performance that financial analysts, lenders, investors and other interested parties find to be a useful tool for analyzing companies like Buzztime that carry significant levels of non-cash depreciation and amortization charges in comparison to their net income or loss calculation in accordance with GAAP.

The following table reconciles our net loss per GAAP (in thousands) to EBITDA:

                              For the three        For the six months
                              months ended                ended

                                June 30,                June 30,
                                --------                --------

                              2014            2013               2014      2013
                              ----            ----               ----      ----

    Net loss per GAAP     $(1,348)          $(99)          $(1,997)   $(468)

    Interest expense, net       40               5                 64        12

    Income tax (benefit)
     provision                 (3)              5                  7        13

    Depreciation and
     amortization              690             694              1,375     1,483

    EBITDA                  $(621)           $605             $(551)   $1,040
                             =====            ====              =====    ======

Net Loss Excluding Non-Recurring Impairment Charges of Capitalized Software

A schedule reconciling the Company's consolidated net loss calculated in accordance with GAAP to net loss excluding non-recurring impairment charges of capitalized software is included in the supplemental table below. Net loss excluding non-recurring impairment charges of capitalized software is not intended to represent a measure of performance in accordance with GAAP, but it is included herein because the Company believes it is a measure of operating performance that financial analysts, lenders, investors and other interested parties find to be a useful tool for analyzing companies like Buzztime.

The following table reconciles our net loss per GAAP (in thousands) to net loss excluding non-recurring impairment charges of capitalized software:

                                                              For the three months ended            For the six months ended
                                                                      June 30,                           June 30,
                                                                      --------                           --------

                                                                      2014                     2013                 2014           2013
                                                                      ----                     ----                 ----           ----

    Net loss per GAAP                                             $(1,348)                   $(99)            $(1,997)        $(468)

    Impairment of capitalized
     software                                                          639                       27                  661             92

    Net loss excluding non-recurring impairment charges of
     capitalized software

                                                       $(709)       $(72)                $(1,336)              $(376)
                                                        =====         ====                  =======                =====


    Net loss per common share -
     basic and diluted per GAAP                                    $(0.02)                 $(0.00)             $(0.02)       $(0.01)
                                                                    ======                   ======               ======         ======


    Net loss per common share - basic and diluted excluding
     non-recurring impairment charges of capitalized software

                                                      $(0.01)     $(0.00)                 $(0.02)             $(0.01)
                                                       ======       ======                   ======               ======


    Weighted average shares
     outstanding -basic and
     diluted                                                        88,831                   71,062               83,534         70,962
                                                                    ======                   ======               ======         ======

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SOURCE NTN Buzztime, Inc.