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CONTACT:
James Frakes
Chief Financial Officer
NTN Communications, Inc.
(888) 752-9686 x 1263
James.Frakes@ntn.com
NTN COMMUNICATIONS announces RESULTS
for FIRST QUARTER 2005
o iTV Network Registers Highest Q1 Domestic Site Growth in 8
Years
o Fourth Consecutive Quarter of Strong iTV Network Site
Growth
o Buzztime Expands Agreement with Comcast and Records
Development and
License Revenues
CARLSBAD, CA, May 10, 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 first
quarter ended March
31, 2005. NTN will host a live webcast and conference call today
at 1:00 pm EDT
to discuss the results (see conference call details below).
First Quarter 2005 Results
Consolidated Results
Consolidated revenues increased by 7.5% to $9.51 million in the
first quarter of
2005, compared to revenues of $8.84 million in the first quarter
of 2004. The
company reported a consolidated net loss of $1,347,000, or
$(0.03) per common
share for the 2005 period, which was a $53,000 increase over the
net loss of
$1,294,000, or $(0.02) per common share in the 2004 period. The
$1.35 million
net loss represented the combination of a net loss of $684,000
from the NTN
Hospitality Technologies division and a net loss of $663,000
from NTN's Buzztime
subsidiary.
Hospitality Technologies Division Results
Revenues for the Hospitality Technologies division increased by
$412,000, or
4.7%, to $9,213,000 in the first quarter of 2005, compared to
revenues of
$8,801,000 in the first 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 45 sites in the United
States in the first
quarter of 2005 was the strongest first quarter net site growth
in eight years.
NTN historically has posted losses in its domestic net site
count in the first
quarter due in part to the end of the football season occurring
in that period.
The net site growth of 45 gave the company a 119-site quarterly
improvement over
a 2004 first quarter loss of 74 sites, and was well above an
average first
quarter loss of 57 sites over the previous seven years. The
quarter ended with a
record U.S. site count of 3,354, which was 307 sites higher than
at March 31,
2004. Management attributes this success to the marketing launch
of its new NTN
Blast content, including the Texas Hold `em poker game, and a
restructured sales
force.
The NTN Hospitality Technologies division's net loss of $684,000
in the first
quarter of 2005 represented an increased loss of $372,000 from a
net loss of
$312,000 in the first quarter of 2004. Within the Hospitality
Technologies
division, the three segments posted the following revenue and
income
contributions:
<TABLE>
<S> <C>
Three Months Ended March 31,
2005 2004
---- ----
Revenues by Segment:
NTN iTV Network $ 6,793,000 $ 6,316,000
NTN Wireless 1,466,000 1,539,000
Software Solutions 954,000 946,000
---------- ----------
Hospitality Technologies Division Revenues $ 9,213,000 $
8,801,000
========= =========
Income (Loss) by Segment:
NTN iTV Network $ (63,000) $ 197,000
NTN Wireless 49,000 55,000
Software Solutions (670,000) (564,000)
-------- --------
Hospitality Technologies Division Income (Loss) $ (684,000) $
(312,000)
========= =========
</TABLE>
Net Income in the three segments is addressed as follows:
a) The earnings of the NTN iTV Network segment declined as a
result of several
cost items summing to $537,000 as follows:
1. Sarbanes-Oxley-related costs of $141,000, including related
internal audit
expenses, with no comparable expense in the Q1 2004.
2. $184,000 of expenses relating to the UK trial with no
comparable expense in
the Q1 2004.
3. An increase in technical site visits and freight and shipping
of $159,000
as the company moved to aggressively install new sites and
upgrade software
in existing sites.
4. Increased non-cash stock based compensation expense of
$53,000.
Without these charges, the NTN iTV Network segment net income
would have been
$277,000 higher in the first quarter of 2005 than in 2004.
Management believes
that going forward in 2005, Sarbanes-Oxley-related costs will
decline as we move
into year two of that government mandate.
b) Earnings in the Wireless Segment were negatively impacted in
periods by
approximately $40,000 in legal fees incurred while successfully
defending a
lawsuit from a competitor. On March 2nd 2005, the court
dismissed the
competitor's litigation under a settlement agreement without
liability or any
payment by NTN to the other party.
c) The increased loss in the Software Solutions segment was due
to a $276,000
one-time, non-cash charge related to the spin off of some of the
segment's
software products to Intura Solutions LP that reflected the
transfer of certain
of our intangible assets to Intura. Without that non-cash
charge, the segment
would have posted a reduced loss of $170,000. That economic
improvement was due
to personnel reductions at that segment. Following the Intura
transaction, we
are now focusing on our reservation and table management
products, which we
believe show strong potential.
Buzztime Subsidiary Results
Buzztime revenues increased by $251,000 to $294,000 in the first
quarter of 2005
from $43,000 in the first quarter of 2004. The primary
components in the
$251,000 revenue increase were an incremental $188,000 revenue
under the Trial
Agreement with Comcast Cable that related to a combination of
technology
development work, equipment installations and license fees and
an incremental
$40,000 in consumer subscription fees via our distribution
through
wireless/mobile phones and satellite television companies.
The net loss for Buzztime was $663,000 in the first quarter of
2005, a reduction
of $319,000, or 32.5%, from the net loss of $982,000 in the
first quarter of
2004.
NTN posted consolidated EBITDA of $(333,000) in the first
quarter of 2005
compared to EBITDA of $(314,000), a decrease of $19,000. The NTN
Hospitality
Technology division posted EBITDA of $173,000 in the first
quarter of 2005
versus $547,000 in the 2004 period.
"We are very pleased with the positive long-term trends of the
operations,"
stated chairman and CEO Stanley B. Kinsey. "In Buzztime, our
revenues and
relationships with the cable operators strengthened while we
increased licensing
revenues from satellite and mobile markets. We also expect to
recognize retail
license revenues in Q2 from our new Buzztime plug-and-play
retail electronic
home game.
"Our Hospitality Technologies business is getting stronger as
can be seen by the
normalized numbers. The fantastic increase in iTV Network site
count will drive
substantial recurring iTV revenues. Meanwhile, we have made
improvements to our
Software Solutions business and have begun in Q2 to book the
first solid
revenues from that segment's customer management products.
Finally, we maintain
a positive outlook for the UK market as our trial demonstration
period is
showing several reasons for long-term optimism."
Conference Call
A conference call to review the first quarter earnings is
scheduled for today at
1:00 pm. EDT. Investors may access the teleconference call by
dialing (800)
795-1259 approximately 15 minutes prior to the starting time and
ask to be
connected to the NTN Communications First Quarter Earnings
Conference Call.
International callers please dial (785) 832-0326. 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 f
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