EX-99 3 exhibit_991.txt CONTACT: John P. Salvador Director, Investor Relations NTN COMMUNICATIONS, INC. (888) 752-9686 x 1180 John.Salvador@ntn.com NTN COMMUNICATIONS ANNOUNCES SECOND QUARTER RESULTS o The Company narrows consolidated loss Q2 '03 over Q2 `02 o The Company reports 8.8% increase in second quarter revenues; six month revenues up by 16.5% o NTN Hospitality Technologies division generates second quarter profit vs. 2002 second quarter loss; six month division net income up by 71% o Acquisition further extends product line for NTN Hospitality Technologies division o Media General invests $3 million into the Company and licenses additional game offering to Buzztime o Buzztime expands interactive channel to Portland, Maine, and Williamsport, Pennsylvania CARLSBAD, CA, AUGUST 6, 2003 -- NTN COMMUNICATIONS, INC. (AMEX: NTN), a leader in interactive communications and entertainment products for the home and for the hospitality industry, today announced results for the second quarter ended June 30, 2003. NTN will host a live webcast and conference call today to discuss the results at 11:00 am EST (see conference call details below). Stanley Kinsey, Chairman and CEO of NTN said, "I am very pleased with our financial results for the period, which is seasonally our toughest quarter. Revenues and expenses were both improved. At the same time, we further strengthened the NTN Hospitality Technology division as the premier provider of solutions for the hospitality industry, and experienced growing interest in our Buzztime interactive television (iTV) trivia channel. I remain very bullish on both businesses." "During the quarter, the NTN Hospitality Technologies division continued to grow and this year was profitable, compared to a loss in the same quarter last year. The recent acquisition of Breakaway International brings additional recurring revenues that will be seen starting in Q3, and puts in place the hospitality industry's strongest suite of communication and entertainment products. It increases our installed base to over 1,000 unique clients and nearly 10,000 locations world-wide. Meanwhile, our relationships with several national chains are strengthening as we are now positioned to offer broad innovative technology solutions. We see very positive promise for our Hospitality business ahead and continue to look for additional growth opportunities." "At the same time, as our third deployed location in Williamsport, PA went active, Buzztime gained an increasing level of interest from major cable operators and remains on track toward achieving broad distribution over the coming two years. During the quarter, the cable operators of our three deployed systems continue to be pleased with player results, with Susquehanna Communications, a top-20 cable operator, publicly reiterating its findings of reduced digital churn for subscribing Buzztime consumers. Since 2001, Buzztime has achieved a number of technical milestones, including its successful launch as the first two-way game channel in the United States, and is now primarily focused on sales efforts and expanding the breadth of its game offerings." FINANCIAL RESULTS For the second quarter ended June 30, 2003, NTN reported a consolidated net loss of $840,000, or $(0.02) per common share, which was a $58,000 reduction from the net loss of $898,000, or $(0.02) per common share in the second quarter of 2002. The $840,000 net loss represented the combination of $108,000 in net income from NTN Hospitality Technologies and a net loss of $948,000 from Buzztime. NTN posted an 8.8% improvement in its consolidated revenues for the quarter ended June 30, 2003, increasing to $6.70 million compared to revenues of $6.16 million for the second quarter of 2002. NTN posted consolidated earnings before interest, taxes, depreciation and amortization (EBITDA), a measurement not recognized under generally accepted accounting principles (GAAP), of $223,000 in the second quarter of 2003 compared to EBITDA of $444,000 in the second quarter of 2002, a decrease of $221,000. The reduction was primarily due to an increase in expenses relating to Buzztime's sales and marketing efforts to secure deployment of the Buzztime channel. This was the ninth consecutive quarter of positive EBITDA generated by NTN. A detailed schedule reconciling net income and loss to EBITDA is included in the supplemental tables below. The NTN Hospitality Technologies division's net income of $108,000 in the second quarter of 2003 represented an increase of $192,000 over a net loss of $84,000 in the second quarter of 2002. The division posted EBITDA of $1.02 million in the second quarter of 2003 versus $1.10 million in the second quarter of 2002. Revenues for the division increased by $512,000, or 8.4%, to $6.64 million for the second quarter of 2003, compared to revenues of $6.13 million for the same period of 2002. The revenue growth was due primarily to increases in the NTN Wireless unit and site-related revenues. Buzztime reported revenue of $58,000 in the second quarter of 2003 compared to $27,000 in the second quarter of 2002. The net loss for Buzztime was $948,000 in the second quarter of 2003, an increase of $134,000, or 16.5%, over a net loss of $814,000 in the second quarter of 2002. Over the past year, Buzztime has increased its expenses relating to selling, marketing and technical service efforts to secure deployment of the Buzztime channel. SIX-MONTH RESULTS Consolidated net loss for the first six months of 2003 was $1.10 million, or $(0.03) per common share, which is a $39,000 increase over the net loss of $1.06 million, or $(0.03) per common share, in the first six months of 2002. The $1.10 million loss represented the combination of $788,000 in net income from NTN Hospitality Technologies and a net loss of $1.89 million from Buzztime. For the first six months ended June 30, 2003, consolidated revenues were $14.04 million compared to revenues of $12.06 million for the first six months of 2002, an increase of $1.98 million, or 16.5%. NTN posted consolidated EBITDA of $1.13 million in the first six months of 2003 compared to EBITDA of $1.66 million in the first six months of 2002, a decrease of $531,000. The reduction was primarily due to an increase in expenses relating to Buzztime's sales and marketing efforts to secure deployment of the Buzztime channel. The NTN Hospitality Technologies division's net income of $788,000 in the first six months of 2003 represented an increase of $328,000 over net income of $460,000 in the first six months of 2002. The division posted EBITDA of $2.73 million in the first six months of 2003 versus $2.83 million in the first six months of 2002. Revenues for the division increased by $2.0 million, or 16.7%, to $13.98 million for the first six months of 2003, compared to revenues of $11.97 million for the same period of 2002. The growth in revenues was primarily due to the contribution by the NTN Wireless unit. Buzztime reported revenue of $65,000 in the first six months of 2003 compared to $83,000 in the first six months of 2002. The net loss for Buzztime was $1.89 million in the first six months of 2003, an increase of $367,000, or 24.1%, over a net loss of $1.52 million in the first six months of 2002. Over the past year, Buzztime has increased its expenses relating to sales and marketing efforts to secure deployment of the Buzztime channel. CONFERENCE CALL To participate in NTN's conference call, please dial the following number approximately fifteen minutes prior to the scheduled conference call time: (877) 271-4183. There is no pass code required for this call. International callers please dial (706) 643-3590. If you are unable to participate in the call at this time, a replay will be available beginning August 6, 2003 at 12:00 pm EDT through August 13, 2003 at 12:00 am EDT. To access the replay dial (800) 642-1687 and enter the conference ID number 2096762. International callers please dial (706) 645-9291. This call is also being webcast and can be accessed at NTN Communications' Investor Relations web site at WWW.NTN.COM/HOME.HTML. ABOUT NTN COMMUNICATIONS, INC. Based in Carlsbad, CA, NTN Communications, Inc. is the parent corporation of the NTN Hospitality Technologies division and Buzztime Entertainment, Inc., a subsidiary. The NTN Hospitality Technologies division, which focuses on the out-of-home hospitality industries, is comprised of the NTN interactive television (iTV) Network, NTN Wireless Communications, Inc., and NTN Software Solutions, Inc. The NTN iTV Network is the largest out of home interactive entertainment network in the world and provides a promotional service to our hospitality customers. Through NTN's Digital Interactive technology, the NTN iTV Network delivers entertainment and sports programming engaging more than 1.7 million players and reaching more than 6 million unique customers each month in approximately 3,600 North American hospitality locations such as Applebee's, Bennigan's, Buffalo Wild Wings, Damon's Grill, TGIFriday's, and others. NTN Wireless(TM) manufactures, sells, and repairs paging equipment to over 2,800 restaurants, as well as providing on site messaging solutions for hospitals, church and synagogue nurseries, salons, business offices and retail establishments. NTN Wireless provides wireless solutions to leading restaurants such as Darden Restaurant's Olive Garden, Logan's Roadhouse, O'Charley's, and more. NTN Software Solutions will include the gift and loyalty card program along with Vision(TM), a POS management system, and Enterprise(TM), an Internet communications management solution. Buzztime Entertainment, Inc. produces Buzztime(R), the interactive trivia channel, and live sports prediction games such as QB1(R) from its live interactive broadcast studio. Buzztime's partners include: Scientific-Atlanta, Inc., Liberate Technologies, Microsoft Corporation's MSN(R)TV and the National Football League. THIS RELEASE CONTAINS FORWARD-LOOKING STATEMENTS, INCLUDING STATEMENTS RELATING TO THE FUTURE POSITIONING OF THE NTN HOSPITALITY TECHNOLOGIES DIVISION, INTEREST IN AND DEPLOYMENT OF THE BUZZTIME CHANNEL, GROWTH IN PRODUCT LINE AND HOSPITALITY SOLUTIONS, FUTURE PRODUCT OPPORTUNITIES, AND DISTRIBUTION OF CONTENT TO OTHER INTERACTIVE PLATFORMS, WHICH ARE SUBJECT TO A NUMBER OF RISKS AND UNCERTAINTIES INCLUDING CHANGING ECONOMIC CONDITIONS, PRODUCT DEMAND AND MARKET ACCEPTANCE, THE IMPACT OF COMPETITIVE PRODUCTS AND PRICING, AND OTHER FACTORS DETAILED IN THE COMPANY'S SECURITIES AND EXCHANGE COMMISSION FILINGS, INCLUDING THE COMPANY'S REPORT ON FORM 10-K FOR THE FISCAL YEAR ENDED DECEMBER 31, 2002. THE COMPANY DISCLAIMS ANY INTENTION OR OBLIGATION TO UPDATE OR REVISE ANY FORWARD-LOOKING STATEMENTS, WHETHER AS A RESULT OF NEW INFORMATION, FUTURE EVENTS OR OTHERWISE. FOR ADDITIONAL INFORMATION ON NTN COMMUNICATIONS AT NO CHARGE, PLEASE CALL 1-800-PRO-INFO AND ENTER TICKER SYMBOL NTN -- TABLES TO FOLLOW - NTN COMMUNICATIONS, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS
THREE MONTHS ENDED JUNE 30, SIX MONTHS ENDED JUNE 30, 2003 2002 2003 2002 ------------------- ------------------- ---------------- ----------------- Revenues: Hospitality Technologies revenues $6,640,000 $6,128,000 $13,970,000 $11,967,000 Buzztime revenues 58,000 27,000 65,000 83,000 Other revenues 3,000 3,000 5,000 5,000 ------------------- ------------------- ---------------- ----------------- Total revenues 6,701,000 6,158,000 14,040,000 12,055,000 ------------------- ------------------- ---------------- ----------------- Operating expenses: Direct operating costs (includes depreciation of $728,000, $842,000, $1,471,000 and $1,695,000 for the three and six month periods ended June 30, 2003 and 2002, respectively) 2,488,000 2,617,000 5,492,000 4,787,000 Selling, general and administrative 4,631,000 3,985,000 8,739,000 7,394,000 Depreciation and amortization 257,000 381,000 579,000 778,000 Research and development 87,000 6,000 164,000 9,000 ------------------- ------------------- ---------------- ----------------- Total operating expenses 7,463,000 6,989,000 14,974,000 12,968,000 ------------------- ------------------- ---------------- ----------------- Operating loss (762,000) (831,000) (934,000) (913,000) ------------------- ------------------- ---------------- ----------------- Other income (expense): Interest income 3,000 2,000 3,000 6,000 Interest expense (74,000) (121,000) (167,000) (254,000) ------------------- ------------------- ---------------- ----------------- Total other income (expense) (71,000) (119,000) (164,000) (248,000) ------------------- ------------------- ---------------- ----------------- Loss before minority interest and income taxes (833,000) (950,000) (1,098,000) (1,161,000) Minority interest in loss of consolidated subsidiary -- 52,000 10,000 97,000 ------------------- ------------------- ---------------- ----------------- Net loss before income taxes (833,000) (898,000) (1,088,000) (1,064,000) Provision for income taxes 7,000 -- 15,000 -- ------------------- ------------------- ---------------- ----------------- Net loss $ (840,000) $ (898,000) $ (1,103,000) $(1,064,000) =================== =================== ================ ================= Net loss per common share - basic and diluted $ (0.02) $ (0.02) $ (0.03) $ (0.03) =================== =================== ================ ================= Weighted average shares outstanding - basic and diluted 44,756,000 39,977,000 43,413,000 39,294,000 =================== =================== ================ ================= EBITDA RECONCILIATION: Net loss $ (840,000) $ (898,000) $ (1,103,000) $(1,064,000) add back: Interest expense, net 71,000 119,000 164,000 248,000 Provision for income taxes 7,000 -- 15,000 -- Depreciation and amortization 985,000 1,223,000 2,050,000 2,473,000 ------------------- ------------------- ---------------- ----------------- EBITDA $ 223,000 $ 444,000 $ 1,126,000 $ 1,657,000 =================== =================== ================ =================
EBITDA (earnings before interest, taxes, depreciation and amortization) is not intended to represent a measure of performance in accordance with generally accepted accounting principals ("GAAP") nor should it be considered as an alternative to a statement of cash flows as a measure of liquidity. EBITDA is included because management believes that financial analysts, lenders, investors and other interested parties find it to be a useful tool for measuring the operating performance of companies like NTN that carry significant levels of non-cash depreciation and amortization charges in comparison to their GAAP earnings. NTN COMMUNICATIONS, INC. AND SUBSIDIARIES STATEMENTS OF OPERATIONS BY BUSINESS SEGMENT For the purposes of this presentation, the Hospitality Technologies segment information includes certain "Other Revenues," which are not material.
FOR THE THREE MONTHS ENDED JUNE 30, 2003 -------------------------------------------------------- HOSPITALITY TECH. BUZZTIME TOTAL ------------------- ------------------- ---------------- Revenues $ 6,643,000 $ 58,000 $ 6,701,000 Operating expenses 6,457,000 1,006,000 7,463,000 ------------------- ------------------- ---------------- Operating income (loss) 186,000 (948,000) (762,000) Other income (expense) (71,000) -- (71,000) ------------------- ------------------- ---------------- Income (loss) income taxes 115,000 (948,000) (833,000) Provision for income taxes 7,000 -- 7,000 ------------------- ------------------- ---------------- Net income (loss) $ 108,000 $ (948,000) $ (840,000) =================== ---================ ================ EBITDA CALCULATION: Net income (loss) $ 108,000 $ (948,000) $ (840,000) Interest expense, net 71,000 -- 71,000 Provision for income taxes 7,000 -- 7,000 Depreciation and amortization 838,000 147,000 985,000 ------------------- ------------------- ---------------- EBITDA $ 1,024,000 $ (801,000) $ 223,000 =================== =================== ================
FOR THE THREE MONTHS ENDED JUNE 30, 2002 -------------------------------------------------------- HOSPITALITY TECH. BUZZTIME TOTAL ------------------- ------------------- ---------------- Revenues $ 6,131,000 $ 27,000 $ 6,158,000 Operating expenses 6,096,000 893,000 6,989,000 ------------------- ------------------- ---------------- Operating income (loss) 35,000 (866,000) (831,000) Other income (expense) (119,000) -- (119,000) ------------------- ------------------- ---------------- Income (loss) before minority interest and income taxes (84,000) (866,000) (950,000) Minority interest in loss of subsidiary -- 52,000 52,000 ------------------- ------------------- ---------------- Net income (loss) before income taxes (84,000) (814,000) (898,000) Provision for income taxes -- -- -- ------------------- ------------------- ---------------- Net income (loss) $ (84,000) $ (814,000) $ (898,000) =================== =================== ================ EBITDA CALCULATION: Net income (loss) $ (84,000) $ (814,000) $ (898,000) Interest expense, net 119,000 -- 119,000 Provision for income taxes -- -- -- Depreciation and amortization 1,067,000 156,000 1,223,000 ------------------- ------------------- ---------------- EBITDA $ 1,102,000 $ (658,000) $ 444,000 =================== =================== ================
EBITDA (earnings before interest, taxes, depreciation and amortization) is not intended to represent a measure of performance in accordance with generally accepted accounting principals ("GAAP") nor should it be considered as an alternative to a statement of cash flows as a measure of liquidity. EBITDA is included because management believes that financial analysts, lenders, investors and other interested parties find it to be a useful tool for measuring the operating performance of companies like NTN that carry significant levels of non-cash depreciation and amortization charges in comparison to their GAAP earnings. NTN COMMUNICATIONS, INC. AND SUBSIDIARIES STATEMENTS OF OPERATIONS BY BUSINESS SEGMENT For the purposes of this presentation, the Hospitality Technologies segment information includes certain "Other Revenues," which are not material.
FOR THE SIX MONTHS ENDED JUNE 30, 2003 -------------------------------------------------------- HOSPITALITY TECH. BUZZTIME TOTAL ------------------- ------------------- ---------------- Revenues $ 13,975,000 $ 65,000 $ 14,040,000 Operating expenses 13,008,000 1,966,000 14,974,000 ------------------- ------------------ ---------------- Operating income (loss) 967,000 (1,901,000) (934,000) Other income (expense) (164,000) -- (164,000) ------------------- ------------------- ---------------- Income (loss) before minority interest and income taxes 803,000 (1,901,000) (1,098,000) Minority interest in loss of subsidiary -- 10,000 10,000 ------------------- ------------------- ---------------- Net income (loss) before income taxes 803,000 (1,891,000) (1,088,000) Provision for income taxes 15,000 -- 15,000 ------------------- ------------------- ---------------- Net income (loss) $ 788,000 $ (1,891,000) $ (1,103,000) =================== =================== ================ EBITDA CALCULATION: Net income (loss) $ 788,000 $ (1,891,000) $ (1,103,000) Interest expense, net 164,000 -- 164,000 Provision for income taxes 15,000 -- 15,000 Depreciation and amortization 1,759,000 291,000 2,050,000 ------------------- ------------------- ---------------- EBITDA $ 2,726,000 $ (1,600,000) $ 1,126,000 =================== =================== ================
FOR THE SIX MONTHS ENDED JUNE 30, 2002 -------------------------------------------------------- HOSPITALITY TECH. BUZZTIME TOTAL ------------------- ------------------- ---------------- Revenues $ 11,972,000 $ 83,000 $ 12,055,000 Operating expenses 11,264,000 1,704,000 12,968,000 ------------------- ------------------- ---------------- Operating income (loss) 708,000 (1,621,000) (913,000) Other income (expense) (248,000) -- (248,000) ------------------- ------------------- ---------------- Income (loss) before minority interest and income taxes 460,000 (1,621,000) (1,161,000) Minority interest in loss of subsidiary -- 97,000 97,000 ------------------- ------------------- ---------------- Net income (loss) before income taxes 460,000 (1,524,000) (1,064,000) Provision for income taxes -- -- -- ------------------- ------------------- ---------------- Net income (loss) $ 460,000 $ (1,524,000) $ (1,064,000) =================== =================== ================ EBITDA CALCULATION: Net income (loss) $ 460,000 $ (1,524,000) $ (1,064,000) Interest expense, net 248,000 -- 248,000 Provision for income taxes -- -- -- Depreciation and amortization 2,118,000 355,000 2,473,000 ------------------- ------------------- ---------------- EBITDA $ 2,826,000 $ (1,169,000) $ 1,657,000 =================== =================== ================
EBITDA (earnings before interest, taxes, depreciation and amortization) is not intended to represent a measure of performance in accordance with generally accepted accounting principals ("GAAP") nor should it be considered as an alternative to a statement of cash flows as a measure of liquidity. EBITDA is included because management believes that financial analysts, lenders, investors and other interested parties find it to be a useful tool for measuring the operating performance of companies like NTN that carry significant levels of non-cash depreciation and amortization charges in comparison to their GAAP earnings. NTN COMMUNICATIONS, INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS
June 30, December 31, ASSETS 2003 (1) 2002 ---------------- ----------------- CURRENT ASSETS: Cash and cash equivalents $ 3,810,000 $ 577,000 Restricted cash 271,000 102,000 Accounts receivable - trade, net 1,754,000 2,013,000 Inventory 324,000 241,000 Investments available-for-sale 168,000 178,000 Deposits on broadcast equipment 108,000 -- Deferred costs 407,000 492,000 Prepaid expenses and other current assets 613,000 581,000 ---------------- ----------------- TOTAL CURRENT ASSETS 7,455,000 4,184,000 Broadcast equipment and fixed assets, net 4,291,000 5,141,000 Software development costs, net 579,000 591,000 Deferred costs 349,000 370,000 Other assets 1,563,000 556,000 ---------------- ----------------- TOTAL ASSETS $ 14,237,000 $ 10,842,000 ================ ================= LIABILITIES AND SHAREHOLDERS' EQUITY CURRENT LIABILITIES: Accounts payable $ 826,000 $ 657,000 Accrued expenses 1,676,000 1,491,000 Obligations under capital leases 155,000 184,000 Equipment note payable 13,000 -- Revolving line of credit -- 89,000 Deferred revenue - Hospitality Technologies 810,000 1,199,000 Deferred revenue - Buzztime 76,000 -- ---------------- ----------------- TOTAL CURRENT LIABILITIES 3,556,000 3,620,000 Obligations under capital leases, excluding current portion 200,000 199,000 Revolving line of credit, excluding current portion 1,875,000 2,250,000 8% senior convertible notes -- 1,997,000 Deferred revenue - Hospitality Technologies 350,000 653,000 Equipment note payable 61,000 -- ---------------- ----------------- TOTAL LIABILITIES 6,042,000 8,719,000 -- 643,000 ---------------- ----------------- MINORITY INTEREST IN CONSOLIDATED SUBSIDIARY SHAREHOLDERS' EQUITY: Series A 10% cumulative convertible preferred stock, $.005 par value 5,000,000 shares authorized; 161,000 shares issued and outstanding at June 30, 2003 and December 31, 2002 1,000 1,000 Common stock, $.005 par value, 70,000,000 shares authorized; 43,040,000 and 39,381,000 shares issued and outstanding at June 30, 2003 and December 31, 2002, respectively 228,000 196,000 Additional paid-in capital 88,823,000 81,211,000 Accumulated deficit (80,182,000) (79,079,000) Accumulated other comprehensive loss (649,000) (639,000) Treasury stock, at cost, 49,000 and 91,000 shares at June 30, 2003 and December 31, 2002, respectively (26,000) (210,000) ---------------- ----------------- TOTAL SHAREHOLDERS' EQUITY 8,195,000 1,480,000 ---------------- ----------------- TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $ 14,237,000 $ 10,842,000 ================ =================
(1) The June 30, 2003 balance sheet does not reflect the final allocation of fair value of the Media General transaction to the acquired licensed technology. The Company is in the process of obtaining third party information to finalize the allocation which it expects to receive by the end of the third quarter.