-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, CiIcIs4pNg7MezIYGbW6HCG6pcvWN0QtxfgS+AbyrZ8iX98SRrQPKjB/bsx3pPUQ feZgy8HtYuuJNMCtgAyKVw== 0000748592-05-000029.txt : 20050810 0000748592-05-000029.hdr.sgml : 20050810 20050810172313 ACCESSION NUMBER: 0000748592-05-000029 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20050630 ITEM INFORMATION: Results of Operations and Financial Condition ITEM INFORMATION: Financial Statements and Exhibits FILED AS OF DATE: 20050810 DATE AS OF CHANGE: 20050810 FILER: COMPANY DATA: COMPANY CONFORMED NAME: NTN COMMUNICATIONS INC CENTRAL INDEX KEY: 0000748592 STANDARD INDUSTRIAL CLASSIFICATION: TELEVISION BROADCASTING STATIONS [4833] IRS NUMBER: 311103425 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-11460 FILM NUMBER: 051014375 BUSINESS ADDRESS: STREET 1: 5966 LA PLACE CT STREET 2: STE 100 CITY: CARLSBAD STATE: CA ZIP: 92008 BUSINESS PHONE: 6194387400 MAIL ADDRESS: STREET 1: 5966 LA PLACE COURT STREET 2: STE 100 CITY: CARLSBAD STATE: CA ZIP: 92008 FORMER COMPANY: FORMER CONFORMED NAME: ALROY INDUSTRIES INC DATE OF NAME CHANGE: 19850411 8-K 1 form8_kq22005.txt FORM 8K Q2 UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 ------------------- FORM 8-K CURRENT REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 ------------------- Date of Report (Date of earliest event reported) August 8, 2005 NTN Communications, Inc. (Exact name of Registrant as specified in its charter) Delaware 001-11460 31-1103425 (State or Other Jurisdiction (Commission File Number) (I.R.S. Employer of Incorporation or Organization) Identification No.) 5966 La Place Court Carlsbad, California 92008 (Address of Principal Executive Offices) (Zip Code) (760) 438-7400 (Registrant's telephone number, including Area Code) ------------------- ITEM 2.02 RESULTS OF OPERATIONS AND FINANCIAL CONDITION. On August 8, 2005, NTN Communications, Inc. issued a press release announcing its financial results for the second quarter ended June 30, 2005. The press release is attached hereto as Exhibit 99.1. The information in this report and the attached exhibit is being furnished and shall not be deemed "filed" with the Securities and Exchange Commission for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liabilities of Section 18. Furthermore, the information contained in this Current Report shall not be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended. ITEM 9.01 FINANCIAL STATEMENTS AND EXHIBITS. Exhibit 99.1 Press release issued by NTN Communications, Inc. on August 8, 2005. SIGNATURE Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. NTN COMMUNICATIONS, INC. By: /s/Andy Wrobel ----------------------- Andy Wrobel Chief Financial Officer Date: August 10, 2005 EXHIBIT INDEX EXHIBIT NUMBER DESCRIPTION 99.1 Press release issued by NTN Communications, Inc. on August 8, 2005. EX-99 2 form8_kex9.txt EX 99.1 CONTACT: Andy Wrobel Chief Financial Officer NTN Communications, Inc. (760) 930-1177 Andy.Wrobel@ntn.com NTN COMMUNICATIONS ANNOUNCES RESULTS FOR SECOND QUARTER 2005 Second Quarter Highlights: o iTV Hospitality Network Registers Highest Q2 Domestic Site Growth in Company History, and Ends Quarter at All-Time High of 3,832 Sites o Buzztime(R) Mobile Game Distribution is Broadened to Sprint PCS, Verizon Wireless and Alltel Mobile Phone Subscribers o NTN Software Solutions Signs Major National Account Agreement o NTN Communications Joins Russell Microcap Index CARLSBAD, CA, August 8, 2005 - 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, 2005. NTN will host a live webcast and conference call today at 4:15 pm EDT to discuss the results (see conference call details below). Second Quarter 2005 Results - --------------------------- Consolidated Results Consolidated revenues for the second quarter of 2005 increased by $1.1 million or 12.9% to $9.63 million, compared to revenues of $8.53 million in the second quarter of 2004. The company reported a consolidated net loss of $1,092,000, or $(0.02) per common share for the Q2 2005 period, which was an $18,000 increase over the net loss of $1,074,000, or $(0.02) per common share in the Q2 2004 period. The 2005 consolidated net loss represented the combination of a net loss of $99,000 from the NTN Hospitality Technologies division and a net loss of $993,000 from NTN's Buzztime subsidiary. Consolidated EBITDA improved by $82,000 to negative $23,000 in the three months ended June 30, 2005 from EBITDA of negative $105,000 in the three months ended June 30, 2004. Both EBITDA and Net Income for the 2005 second quarter included $307,000 due to costs incurred for the launch of our iTV Hospitality Network in the UK, while there were no comparable costs last year. In contrast, both EBITDA and Net Income in last year's second quarter benefited from the Company's receipt of $225,000 for a one-time legal settlement. Thus, in comparison, net income from equivalent operations improved by $514,000 over Q2 2004, rather than decreasing; and 2005 Q2 EBITDA from equivalent operations improved an additional $532,000, or $614,000, over last year's second quarter results. Consolidated revenues for the first six months of 2005 increased by $1.76 million or 10.2% to $19,136,000, compared to the $17,372,000 in the first six months of 2004. Hospitality Technologies Division Results Revenues for the Hospitality Technologies division increased by $908,000 or 11%, to $9,397,000 in the second quarter of 2005, compared to revenues of $8,489,000 in the second quarter of 2004. The revenue growth arose primarily from the NTN iTV Network both domestically and in Canada. NTN iTV Network's net site growth of 118 sites in North America in the second quarter of 2005 was the strongest second quarter net site growth in the company history. The quarter ended with a record North America site count of 3,832 which was 364 sites higher than at June 30, 2004. Management attributes the strong site growth during the first six months of 2005 to the launch of its new NTN Blast(TM) content, including the Texas Hold `em poker game, and a restructured sales force. The growth came on second quarter sales of 323 new subscribers, and six-month sales of 672 new subscribers. The six-month sales number is a 44% improvement over sales in the first six months of 2004, when Blast was announced, and 97% above the first six month average sales for the five prior years. As revenues in the iTV Network segment are derived monthly, most revenues as a result of this six-month sales increase will be realized in future quarters. The NTN Hospitality Technologies division's net loss of $99,000 in the second quarter of 2005 compares to a net profit of $25,000 in the second quarter of 2004. Within the Hospitality Technologies division, the three segments reported the following revenue and income contributions: Three Months Ended June 30, 2005 2004 ---- ---- Revenues by Segment: NTN iTV Network $ 6,920,000 $ 6,029,000 NTN Wireless 1,504,000 1,551,000 Software Solution 973,000 909,000 ----------- ----------- Hospitality Technologies Division Revenues $ 9,397,000 $ 8,489,000 =========== =========== Income (Loss) by Segment: NTN iTV Network $ 82,000 $ 420,000 NTN Wireless 240,000 115,000 Software Solutions (421,000) (510,000) ----------- ----------- Hospitality Technologies Division Income (Loss) $ (99,000) $ 25,000 ============ ===========
a) Net Income of the NTN iTV Network segment declined $338,000, primarily as a result of the $534,000 attributed to the UK launch and the one-time legal settlement in 2004 noted above. Without these items, net income would have increased by $196,000 in the second quarter. The Company continues to invest in its UK initiative, with pro-active sales efforts having begun in July 2005 following a four-month trial period. b) Net Income in the Wireless Segment increased by $125,000 due to higher margins on its product sales and the absence of legal costs compared to Q2 2004. c) Net Loss in the Software Solutions segment improved by $89,000, due primarily to the sale of some of the segment's software products to Intura Solutions LP in Q1 2005. During the second quarter, the Company signed an agreement with a national hospitality operator that is expected to bring the company over $1 million in licensing revenues in the coming 12 months. In addition, the Company is aggressively seeking to increase points of distribution of its hospitality products via software resellers, and has increased reseller relationships from zero at the beginning of 2005 to 22 at the end of six months, with a goal of growing this number to achieve a revenue run rate that exceeds the operating costs of this segment. Buzztime Subsidiary Results Buzztime revenues increased by $193,000 to $232,000 in the second quarter of 2005, from $39,000 in the second quarter of 2004. The primary components of the $193,000 revenue increase were subscription revenues and royalties on game products as the Company recognized its first licensing revenues, summing to $100,000, from sales of the new Buzztime Home Trivia System as well as an increase in revenues from mobile and satellite TV distribution. The net loss for Buzztime was $993,000 in the second quarter of 2005, a reduction of $106,000 from the net loss of $1,099,000 in the second quarter of 2004. Management believes that Buzztime results for the second half of the year will be impacted by higher license revenues from sales of its Buzztime Home Trivia System product and lower costs associated with building its business. During the second quarter, Buzztime received the first royalty payment from its game and toy licensee, Cadaco Inc., from the sale of the new Buzztime Home Trivia System plug-and-play electronic game. Cadaco has achieved broad distribution of this new game in stores across the U.S., and is scheduled to be in 9,000 North America retail outlets including Wal-Mart, Kmart, Target, Toys R Us, Sears and others by the end of September 2005 in preparation for holiday sales. The Company believes that royalties from the sale of this new product will bring a substantial growth in Buzztime revenues in Q4, ending December 31, 2005. "We are very pleased with the state of the Company's operations," stated chairman and CEO Stanley B. Kinsey. "Though our progress is not entirely apparent in the current quarter's results, we are seeing positive trends in our operations that are in line with our expectations, especially investment initiatives where we have a goal of driving increased revenues over the next several quarters." A detailed schedule reconciling net income and loss, the nearest GAAP measure, to EBITDA is included in the supplemental tables below. EBITDA is included herein because management believes that certain investors find it to be a useful tool for measuring a company's operating performance. EBITDA should be considered in addition to results prepared in accordance with GAAP but should not be considered a substitute for, or superior to, GAAP results. Non-GAAP financial information such as EBITDA, by its nature, departs from traditional accounting conventions; accordingly, its use can make it difficult to compare NTN's current results with results from other reporting periods and with the results of other companies. Conference Call A conference call to review the second quarter earnings is scheduled for today at 4:15 pm EDT. Investors may access the teleconference call by dialing (800) 540-0559 and approximately 15 minutes prior to the starting time and ask to be connected to the NTN Communications Second Quarter Earnings Conference Call. International callers please dial 785-832-1508. This call is also being simultaneously webcast and can be accessed at NTN Communications' web site at www.ntn.com. A replay will be available beginning on immediately following the conclusion of the conference call through August 22, 2005 at 11:59 p.m. EST. Please dial (888)562-0906 to access the replay. International callers please dial (402) 220-7348. An archive of the webcast will also be available on the Company's Web site at www.ntn.com. About NTN Communications, Inc. Based in Carlsbad, CA, NTN Communications, Inc. is the parent corporation of the NTN Hospitality Technologies(TM) division and Buzztime Entertainment, Inc., a subsidiary. The NTN Hospitality Technologies segment, 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. Buzztime Entertainment, Inc. produces Buzztime(R), the play-along games channel, live sports prediction games such as QB1(R) and many other games that allow one or many players to participate. In addition to the NTN iTV Network, Buzztime's games are available on cable TV, satellite TV, mobile phones and plug-n-play home versions. For more information, please see www.ntn.com. This release contains forward-looking statements which reflect management's current views of future events and operations, including, but not limited to, future expansion in the hospitality and cable industry as well as in the satellite, mobile and in-home retail markets, changes in business lines such as the reduction in losses, anticipated license revenues and engagement of independent resellers for Software Solutions, ongoing sales growth in the iTV Network, expected reductions in the cost of a site installation in the iTV Network, and consummation of contracts, are all 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 risk of changing economic conditions, failure of product demand or market acceptance of both existing and new products, delays in closing of sales or agreements, unforeseen and uncontrollable increases in expenses or costs and the impact of competitive products and pricing. Other important factors that may cause actual results to differ materially from the forward-looking statements are discussed in the "Risk Factors" section and other sections of NTN's Form 10-K/A for the year ended December 31, 2004, which is on file with the Securities and Exchange Commission. 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 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. For additional free 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 Condensed Consolidated Balance Sheets JUNE 30, 2005 DECEMBER 31, (UNAUDITED) 2004 -------------- -------------- Current assets: Cash and cash equivalents $ 4,647,000 $ 6,710,000 Restricted cash 65,000 66,000 Accounts receivable, net 3,609,000 3,405,000 Investment available-for-sale 422,000 304,000 Inventory 411,000 399,000 Deposits on broadcast equipment 653,000 534,000 Deferred costs 1,041,000 960,000 Prepaid expenses and other current assets 1,168,000 1,128,000 ------------ ------------ Total current assets 12,016,000 13,506,000 Broadcast equipment and fixed assets, net 7,772,000 6,451,000 Software development costs, net 728,000 763,000 Deferred costs 1,159,000 922,000 Intangible assets, net 3,289,000 4,011,000 Goodwill 3,658,000 3,658,000 Other assets 141,000 77,000 ------------ ------------ Total assets $ 28,763,000 $ 29,388,000 ============ ============
Liabilities and Shareholders' Equity Current liabilities: Accounts payable $ 1,221,000 $ 1,590,000 Accrued expenses 1,346,000 1,125,000 Revolving line of credit 700,000 -- Accrued salaries 282,000 447,000 Accrued vacation 666,000 635,000 Taxes payable 589,000 558,000 Obligations under capital leases 306,000 148,000 Equipment note payable 157,000 620,000 Deferred revenue - Buzztime 706,000 291,000 Deferred revenue - Hospitality Technologies 2,031,000 1,448,000 ------------ ------------ Total current liabilities 8,004,000 6,862,000 Obligations under capital leases, excluding current portion 338,000 123,000 Deferred revenue, excluding current portion 256,000 368,000 ------------ ------------ Total liabilities 8,598,000 7,353,000 ------------ ------------ Shareholders' equity: Series A 10% cumulative convertible preferred stock, $.005 par value, $161,000 liquidation preference, 5,000,000 shares authorized; 161,000 shares issued and outstanding at June 30, 2005 and December 31, 2004 1,000 1,000 Common stock, $.005 par value, 84,000,000 shares authorized; 53,519,000 and 53,026,000 shares issued and outstanding at June 30, 2005 and December 31,2004, respectively 266,000 264,000 Additional paid-in capital 109,464,000 109,008,000 Accumulated deficit (89,208,000) (86,769,000) Accumulated other comprehensive loss (358,000) (469,000) -------------- ------------ Total shareholders' equity 20,165,000 22,035,000 -------------- ------------ Total liabilities and shareholders' equity $ 28,763,000 $ 29,388,000 ============== =============
NTN COMMUNICATIONS, INC. AND SUBSIDIARIES Consolidated Statements of Operations (Unaudited) THREE MONTHS ENDED SIX MONTHS ENDED ------------------------------- ------------------------------ JUNE 30, JUNE 30, JUNE 30, JUNE 30, 2005 2004 2005 2004 --------------- --------------- --------------- -------------- Revenues: Hospitality Technologies revenues $ 9,397,000 $ 8,477,000 $18,610,000 $17,276,000 Buzztime service revenues 232,000 39,000 526,000 82,000 Other revenues -- 12,000 -- 14,000 ----------- ----------- ----------- ----------- Total revenues 9,629,000 8,528,000 19,136,000 17,372,000 ----------- ----------- ----------- ----------- Operating expenses: Direct operating costs (includes depreciation of $837,000, $737,000, $1,565,000 and $1,457,000 for the three months ended June 30, 2005 and 2004 and for the six months ended June 30, 2005 and 2004, 3,438,000 2,922,000 6,858,000 6,139,000 respectively) Non-cash charge related to software -- -- 276,000 -- product sales Selling, general and administrative 6,710,000 6,175,000 13,036,000 12,320,000 Litigation, legal and professional fees 190,000 370,000 570,000 748,000 Stock based compensation 85,000 40,000 192,000 94,000 Depreciation and amortization 165,000 215,000 420,000 435,000 Research and development 66,000 88,000 125,000 172,000 ----------- ----------- ----------- ----------- Total operating expenses 10,654,000 9,810,000 21,477,000 19,908,000 ----------- ----------- ----------- ----------- Operating loss (1,025,000) (1,282,000) (2,341,000) (2,536,000) ----------- ----------- ----------- ----------- Other income (expense): Interest income 25,000 23,000 51,000 42,000 Interest expense (49,000) (28,000) (73,000) (66,000) Other income -- 225,000 -- 225,000 ----------- ----------- ----------- ----------- Total other income (expense) (24,000) 220,000 (22,000) 201,000 ------------ ----------- ------------ ----------- Net loss before income taxes (1,049,000) (1,062,000) (2,363,000) (2,335,000) Provision for income taxes 43,000 12,000 76,000 33,000 ----------- ----------- ----------- ----------- Net loss $(1,092,000) $(1,074,000) $(2,439,000) $(2,368,000) =========== =========== =========== =========== Net loss per common share - basic and diluted: $ (0.02) $ (0.02) $ (0.05) $ (0.05) =========== =========== =========== =========== Weighted average shares outstanding - basic 53,403,000 52,703,000 53,313,000 52,290,000 and diluted =========== =========== =========== ===========
NTN COMMUNICATIONS, INC. AND SUBSIDIARIES Condensed Consolidated Statements of Comprehensive Income (Loss) THREE MONTHS ENDED SIX MONTHS ENDED ------------------ ---------------- JUNE 30, JUNE 30, JUNE 30, JUNE 30, 2005 2004 2005 2004 ---- ---- ---- ---- Net loss...................................... $(1,092,000) $(1,074,000) $ (2,439,000) $ (2,368,000) ------------ ------------ ------------- ------------- Other comprehensive income, net of tax: Foreign currency translation adjustments.... (8,000) (44,000) (7,000) (59,000) Unrealized holding gain in investment (62,000) (29,000) 118,000 (19,000) available for sale.......................... ------------ ------------ ------------- ------------- Other comprehensive income (loss)............. (70,000) (73,000) 111,000 (78,000) ------------ ------------ ------------- -------------- Comprehensive net loss........................ $(1,162,000) $(1,147,000) $ (2,328,000) $ (2,446,000) ============ ============ ============= ==============
EBITDA Calculation THREE MONTHS ENDED JUNE 30 ($000) ------------------- EBITDA Calculation: 2005 2004 Total Total ----- ----- Net income (loss) $(1,092) $(1,074) Interest expense (net) 24 5 Depreciation and amortization 1,002 952 Income taxes 43 12 -- -- EBITDA $(23) $(105) ===== ======
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