Exhibit 99.1
| FOR IMMEDIATE RELEASE |
Conference call: |
| Today, Tuesday, November 6, 2007 at 4:30 p.m. EST |
Webcast / Replay URL: |
| www.earnings.com The replay will be available on the Internet for 90 days. |
Dial-in number: |
| 800/745-2189 (no pass code required) |
BALLANTYNE REPORTS Q3 EARNINGS AND UPDATES
PROGRESS OF DIGITAL CINEMA BUSINESSES
OMAHA, Nebraska (November 6, 2007) Ballantyne of Omaha, Inc. (Amex: BTN), a motion picture projection, digital cinema and specialty lighting equipment and services provider, today reported financial results for the third quarter (Q3) and nine months ended September 30, 2007.
Net revenues in Q3 2007 were $12.6 million, a 3.5% decrease from net revenues of $13.1 million in the year-ago third quarter, principally reflecting an expected decline in film-based products. Partially offsetting the decline were digital cinema projector sales which increased to $1.1 million in Q3 2007 versus $0.4 million in Q3 2006. Gross profit in Q3 2007 was $2.1 million, or 16.6% of net revenues, versus Q3 2006 gross profit of $2.2 million, or 16.8% of net revenues. The expected contraction in gross profit in the quarter reflects reduced production efficiencies on lower traditional film product sales, the impact of lower margin distribution sales and lower initial margins in the Company’s services business as it seeks to gain scale and related efficiencies.
Q3 2007 selling, general and administrative expenses increased 8.0% to $2.1 million compared to $1.9 million in Q3 2006, reflecting a variety of factors including increased information technology, Sarbanes-Oxley compliance, salary and recruitment costs.
Ballantyne reported Q3 2007 net income of $0.1 million, or $0.01 per diluted share, compared to net income of $0.4 million, or $0.03 per diluted share, in Q3 2006. Per share results for the third quarters of 2007 and 2006 are based on a weighted average number of diluted shares outstanding of 14,110,477 and 14,029,604, respectively.
Net cash decreased to $18.7 million at the end of Q3 2007, compared to $19.9 million at the end of Q2 2007 and $22.6 million at December 31, 2006. The decrease principally reflects higher digital cinema equipment inventories to ensure Ballantyne is positioned to react rapidly to customer needs, as well as the purchase of projection equipment used for consignment and demonstration purposes.
John P. Wilmers, President and Chief Executive Officer of Ballantyne, commented, “As expected, our Q3 results reflect the ongoing impact of the exhibition industry’s transition from analog to digital projection technology. Our digital equipment business grew over last year but from a small base, helping to somewhat offset the decline we expected in our traditional film projector business. As we progress through the transition to digital, we are actively looking at ways we can streamline costs related to our legacy film products business and improve overall operating performance while still being able to properly serve our customers.
“Subsequent to the close of the third quarter we were successful in extending our participation in the rollout of REAL D 3-D technology, providing 24 digital projectors to Regal Entertainment Group. The project was in conjunction with the October release of The Nightmare Before Christmas, an animated feature in Disney Digital 3-D.
“In October, we also completed our second acquisition within our program to deploy cash reserves for “tuck-in” acquisitions of cinema product or services companies that complement our core cinema offerings. The October purchase of Marcel Desrochers Inc. (MDI), a respected, Canada-based manufacturer of cinema projection screens, expands the breadth of our product lines for the cinema exhibition industry and provides a new growth opportunity that leverages our expertise and industry relationships. We believe the addition of MDI is particularly attractive in this environment given their line of specialty screens that address the rapidly expanding 3-D cinema market.
“We continue to anticipate a broader scale rollout of digital cinema projection equipment in 2008 and have been building digital inventory, performing expected integration work and bolstering our service capabilities so that we are well positioned to satisfy customer orders. Our dialogues with customers reaffirm that service represents both an important growth opportunity as well as a key point of differentiation for our company.”
For the nine-month period ended September 30, 2007, net revenues were $38.2 million compared to $37.4 million a year ago. Gross profit in the first nine months of 2007 was $7.3 million, or 19.1% of net revenues, compared to $8.3 million, or 22.1% of net revenues in the same period in 2006. Net income for the first nine months of 2007 was $0.5 million, or $0.04 per diluted share, compared to net income of $2.0 million, or $0.14 per diluted share, in the comparable 2006 period. Per share results for the first nine months of 2007 and 2006 are based on a weighted average number of diluted shares outstanding of 14,096,263 and 14,007,988, respectively.
2
About Ballantyne of Omaha
Ballantyne is a provider of motion picture projection, specialty lighting, specialty projection equipment and digital cinema equipment and services. The Company supplies major theater chains, top arenas, television and motion picture production studios, theme parks and architectural sites around the world. For more information visit www.ballantyne-omaha.com
Except for the historical information in this press release, it includes forward-looking statements that involve risks and uncertainties, including but 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
-tables follow-
3
Ballantyne of Omaha, Inc. and Subsidiaries
Consolidated Statements of Operations
(unaudited)
|
| Three Months Ended |
| Nine Months Ended |
| ||||||||
|
| 2007 |
| 2006 |
| 2007 |
| 2006 |
| ||||
|
|
|
|
|
|
|
|
|
| ||||
Net revenues |
| $ | 12,615,705 |
| $ | 13,069,673 |
| $ | 38,206,449 |
| $ | 37,357,779 |
|
Cost of revenues |
| 10,526,839 |
| 10,875,149 |
| 30,913,586 |
| 29,100,160 |
| ||||
Gross profit |
| 2,088,866 |
| 2,194,524 |
| 7,292,863 |
| 8,257,619 |
| ||||
|
|
|
|
|
|
|
|
|
| ||||
Selling, general & administrative exp. |
|
|
|
|
|
|
|
|
| ||||
Selling |
| 787,270 |
| 718,213 |
| 2,279,622 |
| 2,157,917 |
| ||||
General and administrative |
| 1,312,779 |
| 1,226,067 |
| 4,339,829 |
| 3,680,785 |
| ||||
Goodwill Impairment |
| — |
| — |
| 639,466 |
| — |
| ||||
Total selling, general & admin exp. |
| 2,100,049 |
| 1,944,280 |
| 7,258,917 |
| 5,838,702 |
| ||||
|
|
|
|
|
|
|
|
|
| ||||
Gain on the transfer of assets |
| — |
| — |
| 234,557 |
| — |
| ||||
Gain (loss) on disposal of assets, net |
| — |
| (3,457 | ) | (11,004 | ) | 37,546 |
| ||||
|
|
|
|
|
|
|
|
|
| ||||
Income (loss) from operations |
| (11,183 | ) | 246,787 |
| 257,499 |
| 2,456,463 |
| ||||
|
|
|
|
|
|
|
|
|
| ||||
Net interest income |
| 199,774 |
| 191,616 |
| 605,863 |
| 532,188 |
| ||||
Equity in Losses of JV |
| (79,754 | ) | — |
| (153,134 | ) | — |
| ||||
Other income (expense), net |
| (39,075 | ) | 11,775 |
| (111,827 | ) | (28,432 | ) | ||||
|
|
|
|
|
|
|
|
|
| ||||
Earnings before income taxes |
| 69,762 |
| 450,178 |
| 598,401 |
| 2,960,219 |
| ||||
|
|
|
|
|
|
|
|
|
| ||||
Income tax benefit (expense) |
| 58,876 |
| (75,465 | ) | (94,190 | ) | (943,323 | ) | ||||
Net income |
| $ | 128,638 |
| $ | 374,713 |
| $ | 504,211 |
| $ | 2,016,896 |
|
|
|
|
|
|
|
|
|
|
| ||||
Earnings per share |
|
|
|
|
|
|
|
|
| ||||
Basic |
| $ | 0.01 |
| $ | 0.03 |
| $ | 0.04 |
| $ | 0.15 |
|
Diluted |
| $ | 0.01 |
| $ | 0.03 |
| $ | 0.04 |
| $ | 0.14 |
|
|
|
|
|
|
|
|
|
|
| ||||
Weighted average shares outstanding: |
|
|
|
|
|
|
|
|
| ||||
Basic |
| 13,812,912 |
| 13,635,064 |
| 13,805,506 |
| 13,540,737 |
| ||||
Diluted |
| 14,110,477 |
| 14,029,604 |
| 14,096,263 |
| 14,007,988 |
|
-tables follow-
4
Selected Balance Sheet Items:
|
| Sept. 30, |
| Dec. 31, |
| ||
|
| (Unaudited) |
|
|
| ||
Cash and cash equivalents |
| $ | 18,654,909 |
| $ | 22,622,654 |
|
Restricted cash |
| 250,733 |
| 611,391 |
| ||
Accounts and notes receivable, net |
| 7,134,516 |
| 7,468,533 |
| ||
Inventories, net |
| 11,883,332 |
| 8,848,396 |
| ||
Current portion of long-term debt |
| — |
| 14,608 |
| ||
Accounts payable and accrued expenses |
| 8,881,950 |
| 7,237,550 |
| ||
Total stockholders’ equity |
| $ | 43,187,950 |
| $ | 42,388,947 |
|
Selected Cash Flow Statement Items:
|
| Nine Months Ended |
| ||||
|
| 2007 |
| 2006 |
| ||
|
| (Unaudited) |
| (Unaudited) |
| ||
Net income |
| $ | 504,211 |
| $ | 2,016,896 |
|
Depreciation and amortization |
| 1,585,735 |
| 1,183,957 |
| ||
Net cash provided by (used in) operating activities |
| (3,671,572 | ) | 2,871,359 |
| ||
Capital expenditures |
| (421,407 | ) | (470,394 | ) | ||
Net cash used in investing activities |
| (520,868 | ) | (2,199,235 | ) | ||
Net cash provided by financing activities |
| 224,695 |
| 446,220 |
| ||
Net increase (decrease) in cash & cash equivalents |
| (3,967,745 | ) | 1,118,344 |
| ||
Cash & cash equivalents at beginning of period |
| 22,622,654 |
| 19,628,348 |
| ||
Cash & cash equivalents at end of period |
| $ | 18,654,909 |
| $ | 20,746,692 |
|
CONTACT: |
|
|
Kevin Herrmann |
| David Collins, Ratula Roy |
Chief Financial Officer |
| Jaffoni & Collins Incorporated |
402/453-4444 |
| 212/835-8500; btn@jcir.com |
# # #
5