Friday, August 21, 2009

Better late than never, in all respects

I blogged about the pending release of NTN Buzztime financial results, but never got around to blogging about the results themselves, released back on August 13. The company is still losing money (though their quarterly losses are no longer measured in the millions), but the team is exuding confidence that they're on the right path. Excerpts:

Revenues for the second quarter of 2009 were $6.3 million, compared to revenues of $7.0 million for the same period of 2008, primarily as a result of a decrease in average revenue generated per site related to a strategic reduction in pricing.

Pricing is a tricky issue for any company. If you price too high, you won't get customers, but if you price too low, you won't get revenue. NTN Buzztime took a chance with a price cut, which did adversely impact their quarterly revenues, but did have the desired result regarding the number of customers.

The Company ended the second quarter of 2009 with 3,871 subscribing venues, compared to 3,746 at June 30, 2008, and 3,777 at March 31, 2009. During the second quarter of 2009, installations were up approximately 48% while terminations were down 19% compared with the second quarter of 2008. Customer churn improved to 4.9% for the quarter from 6.1% in the prior year period.

But NTN Buzztime worked on the cost end also:

Selling, general and administrative expenses declined by $2.1 million, or 31%, to $4.9 million from $7.0 million a year ago. The improvement was attributable to several factors including a $0.5 million decline in salary expenses due to staffing reductions; a $0.5 million decline in severance expense due to the resignation of the CEO in the prior year; a $0.5 million decline in marketing expense related to a change in the Company's marketing strategy; and a $0.4 million decline in consulting services.

Will the momentum from these changes result in profitability in future quarters? Time will tell.

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