NTN Buzztime, Inc. Announces Fourth-Quarter and Full-Year 2008 Results

CARLSBAD, Calif., March 19  /PRNewswire-FirstCall/ -- NTN Buzztime, Inc. (NYSE Alternext US: NTN) today announced results for the fourth quarter and 2008 fiscal year ended December 31, 2008.

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"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 as the Company's CEO to help lead this transformation," commented NTN Buzztime Board member and CEO Terry Bateman.  "With our sales showing considerable resilience in the face of once-in-a-generation economic uncertainties, we have cut our net loss by more than half, improved our gross margins and made fundamental improvements to our cost structure that should reduce our selling, general and administrative expenses by $5 million in 2009. These changes were essential and will give the company the runway to fully develop the integrated media business that we envision, which will include a heavy focus on developing our ad program and the development of our online and mobile channels for launch in the second half of 2009."

Mr. Bateman continued, "We have also restructured our Board of Directors and made significant enhancements to our management team.  New-media executive and investor Jeff Berg is bringing timely and focused expertise to his responsibilities as Chairman.  Mary Beth Lewis, with her CFO and growth company experience, and Kenneth Keymer, with his impressive chain-restaurant management credentials, further enhance the strategic depth that the Board provides to management.  On the management side, Michael Arzt, our new Executive Vice President of Marketing, and Jeffrey Lewis, our new Executive Vice President of Advertising Sales, both have the solid backgrounds, expertise and commitment necessary to contribute to making Buzztime a powerful out-of-home advertising network."

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 U.K. operations and the Bennigan's bankruptcy.  The Company's loss from continuing operations for the 2008 fiscal year totaled $6.1 million, compared to a loss from continuing operations of $4.3 million in 2007.

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 U.K. office.

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 United States or Canada, or 1-706-643-3291 if calling internationally.

A replay will be available until March 26, 2009, which can be accessed by dialing 1-800-642-1687 if calling from the United States or Canada or 1-706-645-9291 if calling internationally. Please use passcode 87984288 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/.

About NTN Buzztime, Inc.

NTN Buzztime, Inc., a leader in interactive entertainment for 25 years, is based in Carlsbad, CA. Buzztime is distributed in-home and out-of-home across broadband platforms including online, cable TV, satellite TV and in approximately 3,746 restaurants, sports bars and pubs throughout North America. Buzztime entertainment is also available on electronic games and in books. For more information, please visit http://www.buzztime.com/.

Buzztime is a proud member of the OVAB | Out-of-home Video Advertising Bureau.

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.

  COMPANY CONTACT:
  Kendra Berger
  Chief Financial Officer
  NTN Buzztime, Inc.
  [phone]

  CCG CONTACT:
  Sean Collins
  Senior Partner
  CCG Investor Relations
  [phone], ext. 20


  (financial tables follow)



              NTN BUZZTIME, INC. AND SUBSIDIARIES
             Condensed Consolidated Balance Sheets
                As of December 31, 2008 and 2007
               (In thousands, except share data)



  ASSETS                                                     2008    2007
  Current Assets:
    Cash and cash equivalents                              $3,362  $10,273
    Restricted cash                                             -       55
    Accounts receivable, net of allowances of $298
     and $396, respectively                                   636    1,354
    Investment available-for-sale                              58      264
    Prepaid expenses and other current assets                 611      745
    Assets held for sale                                        -      212

      Total current assets                                  4,667   12,903
  Broadcast equipment and fixed assets, net                 3,428    4,101
  Software development costs, net of accumulated
   amortization of $1,002 and $1,071, respectively            860      895
  Deferred costs                                            1,383    1,204
  Goodwill                                                  1,032    1,285
  Intangible assets, net                                      185      318
  Other assets                                                107      154

      Total assets                                        $11,662  $20,860
                                                                         LIABILITIES AND SHAREHOLDERS' EQUITY

  Current Liabilities:
    Accounts payable                                         $219     $831
    Accrued expenses                                        1,169      901
    Sales tax payable                                         958      982
    Accrued salaries                                          383      357
    Accrued vacation                                          381      447
    Income taxes payable                                       18       36
    Obligations under capital leases-current portion            8        7
    Deferred revenue                                          657      972
    Liabilities of discontinued operations                      -      672

      Total current liabilities                             3,793    5,205
  Obligations under capital leases, excluding current
   portion                                                     32        -
  Deferred revenue, excluding current portion                  91       87

      Total liabilities                                     3,916    5,292
  Commitments and contingencies

  Shareholders' equity:
    Series A 10% cumulative convertible preferred
     stock, $.005 par value, $161 liquidation
     preference, 5,000,000 shares authorized;
     161,000 shares issued and outstanding                      1        1
    Common stock, $.005 par value, 84,000,000 shares
     authorized; 55,727,000 and 55,640,000 shares issued
     and outstanding at December 31, 2008 an 2007,
     respectively                                             277      277
    Treasury stock, at cost, 503,000 and 454,000
     shares at December 31, 2008 and 2007,
     respectively                                            (456)    (444)
    Additional paid-in capital                            113,267  112,942
    Accumulated deficit                                  (105,351) (98,870)
    Accumulated other comprehensive income                      8    1,662

      Total shareholders' equity                            7,746   15,568

      Total liabilities and shareholders' equity          $11,662  $20,860




              NTN BUZZTIME, INC. AND SUBSIDIARIES
         CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
             (In thousands, except per share data)

                                    Three Months Ended       Year Ended
                                       December 31,         December 31,
                                     2008        2007
                                  (unaudited) (unaudited)  2008      2007
  Revenues                          $6,525      $7,693   $27,496   $30,542

  Operating expenses:
    Direct operating costs
     (includes depreciation)         1,661       2,342     7,756     9,017
    Impairment of intangible asset       -           -         -       968
    Selling, general and
     administrative                  5,373       6,686    25,314    23,872
    Depreciation and amortization
     (excluding depreciation and
      amortization included in direct
      costs)                           132         145       532       566
    Restructuring costs                  -           -         -       478

      Total operating expenses       7,166       9,173    33,602    34,901

  Operating loss                      (641)     (1,480)   (6,106)   (4,359)
  Other income (expense):
    Interest income                      9          94       138       347
    Interest expense                     -          (4)       (5)      (30)
    Other income                         4           -        73        83

      Total other income (expense)      13          90       206       400

  Loss from continuing operations
   before income taxes                (628)     (1,390)   (5,900)   (3,959)
  Provision for income taxes           (62)       (144)     (234)     (332)

      Loss from continuing
       operations                     (690)     (1,534)   (6,134)   (4,291)
      Loss from discontinued
       operations, net of tax
       (including gain on sale of
       NTN Wireless of $396 in 2007)     -        (386)     (332)     (735)

      Net loss                       $(690)    $(1,920)  $(6,466)  $(5,026)

  Net loss per common share - basic
   and diluted:
    Loss from continuing
     Operations                     $(0.01)     $(0.03)   $(0.11)   $(0.08)
    Loss from discontinued
     operations                      (0.00)      (0.01)    (0.01)    (0.01)

    Net loss                        $(0.01)     $(0.04)   $(0.12)   $(0.09)

  Weighted average shares
   outstanding
    Basic and diluted               55,170      55,171    55,189    55,154



              NTN BUZZTIME, INC. AND SUBSIDIARIES
        CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
        For the years ended December 31, 2008 and 2007
                        (In thousands)


                                                         2008      2007

  Cash flows (used in) provided by operating
   activities:
    Net loss                                           $(6,466)  $(5,026)
    Loss from discontinued operations, net of tax         (332)     (735)
        Loss from continuing operations                $(6,134)  $(4,291)
    Adjustments to reconcile net loss to net
     cash (used in) provided by operating
     activities:
      Depreciation and amortization                      3,101     3,932
      Provision for doubtful accounts                      557       356
      Stock-based compensation                             312       439
      Impairment of intangible asset                         -       968
      Loss (gain) from disposition of equipment
       and capitalized software                            618      (269)
      Changes in assets and liabilities:
        Accounts receivable                                142       199
        Prepaid expenses and other assets                  129       337
        Accounts payable and accrued expenses             (367)     (624)
        Income taxes payable                               (19)      (42)
        Deferred costs                                    (199)      883
        Deferred revenue                                  (296)   (1,054)
        Net cash (used in) provided by
         continuing operations                          (2,156)      834
      Discontinued operations                             (807)   (1,616)

        Net cash used in operating activities           (2,963)     (782)
   Cash flows (used in) provided by investing
    activities:
     Capital expenditures                               (2,160)     (592)
     Software development expenditures                    (835)     (588)
     Deposits on broadcast equipment                         -      (161)
     Proceeds from sale of equipment and other assets       12       478
     Restricted cash                                        51        13

        Net cash used in investing activities
         by continuing operations                       (2,932)     (850)
      Discontinued operations                                7     2,613

        Net cash (used in) provided by
         investing activities                           (2,925)    1,763
   Cash flows (used in) provided by financing
    activities:
     Principal payments on capital leases                  (12)     (363)
     Settlement of stock options                             -       (94)
     Purchase of treasury stock                            (12)     (444)
     Proceeds from exercise of warrants and options          -       694
        Net cash used in financing activities
         by continuing operations                          (24)     (207)
  Net (decrease) increase in cash and
   cash equivalents                                     (5,912)      774
  Effect of exchange rate on cash                         (999)      725
  Cash and cash equivalents at beginning of year        10,273     8,774
  Cash and cash equivalents at end of year              $3,362   $10,273


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DATASOURCE: NTN Buzztime, Inc.



CONTACT:  Kendra Berger, Chief Financial Officer of NTN Buzztime, Inc.,

[phone]; or Sean Collins, Senior Partner of CCG Investor Relations,

[phone], ext. 202, for NTN Buzztime, Inc.



Web Site:  http://www.ntn.com/ 

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