NTN Buzztime, Inc. Announces First Quarter 2008 Results

I could have started this blog with a description of a game, or of a particular playing experience. However, this blog is starting the day after NTN Buzztime, Inc. announced its results for the first quarter of 2008, so I might as well start there. Here are excerpts from the press release that appeared on PR Newswire:

CARLSBAD, Calif., May 8 /PRNewswire-FirstCall/ -- NTN Buzztime, Inc. (Amex: NTN), a multi-point social interactive entertainment company, today announced results for the first quarter, ended March 31, 2008, of its 2008 fiscal year.

When reading a press release announcing financial results, a good rule of thumb is to skip the second paragraph. This is the company's last opportunity to put a positive spin on the results. In this case, NTN Buzztime President/CEO Dario Santana used words such as "multifacted turnaround." The third quarter cited Frost & Sullivan results on anticipated growth in the industry.

Let's go to the fourth paragraph:

Revenue from continuing operations decreased by $0.5 million or 7% to $7.2 million for the first quarter of 2008 compared to revenues of $7.7 million for the first quarter of 2007. Net loss from continuing operations for the first quarter of 2008 was $2.3 million compared to a net loss of $0.8 million for the first quarter of 2007. Although the customer site count declined by only approximately 4.5% comparing the 2008 first quarter with the equivalent period of 2007, revenue decreased by a higher percentage due to the longer-term effect on recurring revenues of a net decline in sites over recent quarters.

Gross margin as a percentage of revenue remained the same at 71% in the first quarter of 2008 compared to the first quarter of 2007.

Selling, general and administrative expenses increased $1.5 million or 27%, to $7.2 million for the first quarter of 2008 from $5.7 million for the first quarter of 2007. The increase was due to several factors. Salaries and related expenses increased primarily due to an increase in headcount in content/programming, marketing, advertising and business development functions, including senior positions. Also contributing to increased SG&A totals was the abandonment of a software development project, increased bad debt expense related to subscriber cancellations, marketing expenses incurred to conduct audience research and measurement studies and increased severance payments related to a workforce reduction that took place during the first quarter of 2008.

So this is where NTN Buzztime stands at the moment.