Exhibit 99.1
NEWS ANNOUNCEMENT | FOR IMMEDIATE RELEASE |
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CONTACT: |
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Brad French | Stewart Lewack, Joseph Jaffoni |
Chief Financial Officer | Jaffoni & Collins Incorporated |
402/453-4444 | 212/835-8500; btne@jcir.com |
BALLANTYNE OF OMAHA REPORTS FOURTH QUARTER
AND YEAR-END RESULTS
- 2004 Revenues Increase 31% to $49.1 Million;
Net Income Rises to $5.1 Million or $0.37 Per Diluted Share -
OMAHA, Nebraska (March 11, 2005) Ballantyne of Omaha, Inc. (Amex: BTN), a manufacturer of motion picture projection and specialty lighting equipment, today reported financial results for the three- and twelve-month periods ended December 31, 2004.
Net revenues in 2004 rose 31% to approximately $49.1 million from $37.4 million in 2003. The revenue increase reflects a 32% increase in sales of Ballantyne’s theater equipment, as well as the recognition of $2.1 million in revenues related to the previously announced sale of large-format projectors and associated equipment to a theme park in China.
Gross profit in 2004 rose 57% to $13.5 million, or 27.5% of revenues, from $8.6 million, or 23.0% of revenues, in 2003. The year-over-year increase in the gross profit margin reflects higher sales volume and the Company’s ability to achieve efficiencies in the manufacturing process, partially offset by higher cost of sales associated with the large format projector sale to the theme park in China.
Net income in 2004 increased to $5.1 million, or $0.37 per diluted share, compared to net income of approximately $0.6 million, or $0.04 per diluted share, in 2003. In addition to the increase in gross profit, the results for the 2004 period also reflect an income tax benefit of $1.2 million for the reversal of certain deferred tax valuation allowances. Per share results are based on a weighted average number of shares outstanding of 13,608,876 and 13,186,968 for 2004 and 2003, respectively.
John P. Wilmers, President and Chief Executive Officer of Ballantyne, commented, “Ballantyne saw increased demand for its theater products across all product categories during 2004, from complete projection systems to individual components such as replacement parts, xenon bulbs and lenses. We believe this demand continues to reflect the improved economic health of theater exhibition customers who continue to expand or upgrade their theater circuits, as well as a larger installed base of our equipment in service.
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Net revenues for the three months ended December 31, 2004 rose 31% to approximately $14.5 million from $11.1 million in the year-ago period. Gross profit in the 2004 fourth quarter rose 43% to $3.8 million, or 26.3% of revenues, from $2.7 million, or 24.1% of revenues, in the year-ago quarter.
Net income for the fourth quarter of 2004 rose to approximately $1.2 million, or $0.09 per diluted share, compared to net income of $0.2 million, or $0.02 per diluted share, in the fourth quarter of 2003. Per share results are based on a weighted average number of shares outstanding of 13,703,081 and 13,146,516 for the fourth quarters of 2004 and 2003, respectively.
Mr. Wilmers continued, “Over the past two years, we have worked hard to achieve productivity gains and operate our business for maximum profit. We increased the gross margin during this period from 16.6% in 2002, excluding discontinued operations, to 27.5% in 2004 by achieving higher sales volume, increased labor productivity and other manufacturing efficiencies. By prudently managing selling, administrative and other corporate expenses along with these productivity gains, we transformed a 31% revenue increase from 2003 to 2004 into a more than five-fold increase in income from operations and a more than eight-fold increase in net income.
“We enter 2005 in strong financial shape with over $14 million in cash, negligible debt and the financial flexibility to continue pursuing new growth initiatives throughout the coming year. The theater exhibition industry is expected to continue to improve in 2005 and, as such, we expect our sales and profits to improve through an increase in projector unit shipments over 2004 levels and continued operating leverage gained through manufacturing efficiencies. Our strategic focus will be on further diversifying our revenue base through the development of new product lines and through strategic acquisitions.”
About Ballantyne of Omaha
Ballantyne is a leading U.S. supplier of commercial motion picture and specialty projection equipment utilized by major theater chains and location-based entertainment providers. The Company also manufactures specialty entertainment lighting products used at top arenas, television and motion picture production studios, theme parks and architectural sites around the world.
Except for the historical information in this press release, it includes forward-looking statements that involve risks and uncertainties. The potential risks and uncertainties include but are not limited to quarterly fluctuations in results; customer demand for the Company’s products; the development of new technology for alternate means of motion picture presentation; domestic and international economic conditions; the management of growth; and other risks detailed from time to time in the Company’s Securities and Exchange Commission filings. Actual results may differ materially from management’s expectations stated or implied by such forward-looking statements.
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Ballantyne of Omaha, Inc. and Subsidiaries
Consolidated Statements of Operations
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| Three Months Ended |
| Twelve Months Ended |
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| 2004 |
| 2003 |
| 2004 |
| 2003 |
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| (Unaudited) |
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Net revenues |
| $ | 14,513,617 |
| $ | 11,052,041 |
| $ | 49,144,510 |
| $ | 37,433,286 |
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Cost of revenues |
| 10,698,153 |
| 8,383,174 |
| 35,629,838 |
| 28,817,635 |
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Gross profit |
| 3,815,464 |
| 2,668,867 |
| 13,514,672 |
| 8,615,651 |
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Selling & administrative expenses: |
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Selling |
| 995,347 |
| 673,928 |
| 3,126,174 |
| 3,209,321 |
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Administrative |
| 1,055,663 |
| 1,420,584 |
| 4,605,220 |
| 4,430,137 |
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Total selling & administrative exp. |
| 2,051,010 |
| 2,094,512 |
| 7,731,394 |
| 7,639,458 |
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Income from operations |
| 1,764,454 |
| 574,355 |
| 5,783,278 |
| 976,193 |
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Other income (expense), net |
| (47,297 | ) | (106,658 | ) | 13,563 |
| 49,916 |
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Income before interest and taxes |
| 1,717,157 |
| 467,697 |
| 5,796,841 |
| 1,026,109 |
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Net interest income |
| 45,955 |
| 844 |
| 94,672 |
| 47,872 |
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Income before income taxes |
| 1,763,112 |
| 468,541 |
| 5,891,513 |
| 1,073,981 |
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Income tax expense |
| (534,232 | ) | (246,637 | ) | (818,184 | ) | (495,471 | ) | ||||
Net income |
| $ | 1,228,880 |
| $ | 221,904 |
| $ | 5,073,329 |
| $ | 578,510 |
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Earnings per share |
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Basic |
| $ | 0.09 |
| $ | 0.02 |
| $ | 0.40 |
| $ | 0.05 |
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Diluted |
| $ | 0.09 |
| $ | 0.02 |
| $ | 0.37 |
| $ | 0.04 |
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Weighted average shares outstanding: |
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Basic |
| 12,943,245 |
| 12,629,990 |
| 12,828,096 |
| 12,637,880 |
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Diluted |
| 13,703,081 |
| 13,146,516 |
| 13,608,876 |
| 13,186,968 |
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-tables follow-
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Selected Balance Sheet Items:
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| December 31, |
| December 31, |
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| (Unaudited) |
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Cash and cash equivalents |
| $ | 14,031,984 |
| $ | 8,761,568 |
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Accounts receivable, net |
| 6,159,764 |
| 6,698,725 |
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Inventories, net |
| 12,173,966 |
| 12,459,852 |
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Current portion of long-term debt |
| 25,935 |
| 24,253 |
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Long-term debt |
| 42,370 |
| 68,306 |
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Accounts payable and accrued expenses |
| 7,077,303 |
| 7,797,284 |
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Total stockholders’ equity |
| $ | 34,523,438 |
| $ | 29,089,089 |
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Selected Cash Flow Statement Items:
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| Twelve Months Ended December 31, |
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| 2004 |
| 2003 |
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| (Unaudited) |
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Net income |
| $ | 5,073,329 |
| $ | 578,510 |
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Depreciation and amortization |
| 1,082,360 |
| 1,203,939 |
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Net cash provided by operating activities |
| 5,905,440 |
| 2,044,818 |
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Capital expenditures |
| (1,131,792 | ) | (406,717 | ) | ||
Net cash used in investing activities |
| (818,543 | ) | (116,717 | ) | ||
Net cash provided by financing activities |
| 183,519 |
| 84,225 |
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Net cash contributed to continuing operations from discontinued operations |
| ¾ |
| 473,231 |
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Net increase in cash & cash equivalents |
| 5,270,416 |
| 2,485,557 |
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Cash & cash equivalents at beginning of year |
| 8,761,568 |
| 6,276,011 |
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Cash & cash equivalents at end of year |
| $ | 14,031,984 |
| $ | 8,761,568 |
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