NTN Buzztime, Inc. Announces Fourth Quarter and Full Year 2009 Results
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| Tuesday, 30 March 2010 00:00 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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“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.
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.
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 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 tomorrow, March 30, 2010, at 4:30 p.m. ET. To access the conference call, please dial (866) 360-7027 if calling from the A replay will be available until April 6, 2010, which can be accessed by dialing (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 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 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. (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)
NTN BUZZTIME, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (In thousands, except per share data)
NTN BUZZTIME, INC. AND SUBSIDIARIES SELECTED CASH FLOW DATA * For the years ended December 31, 2009 and 2008 (In thousands)
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