Exhibit 99.1
NEWS ANNOUNCEMENT |
| FOR IMMEDIATE RELEASE |
Conference call: |
| Today, Friday, August 7, 2009 at 10:00 a.m. ET |
Webcast / Replay URL: |
| www.earnings.com or http://www.ballantyne-strong.com/IREvents.aspx |
|
| The replay will be available on the Internet for 90 days. |
Dial-in number: |
| 800-734-8507 (no pass code required) |
Ballantyne Q2 Net Revenues Rise 44% to $19.6 Million
and EPS Rises to $0.07 From Year-Ago Loss of ($0.01)
OMAHA, Nebraska (August 7, 2009) Ballantyne Strong, Inc. (NYSE Amex: BTN), formally known as Ballantyne of Omaha, Inc., a provider of motion picture projection, digital cinema and cinema screen equipment and cinema services, today reported improved financial results for the second quarter (Q2) ended June 30, 2009.
Q2 2009 net revenues rose 44% to $19.6 million from net revenues of $13.6 million in Q2 2008. Net income increased to $0.9 million, or $0.07 per diluted share, in Q2 2009 compared to a net loss of $0.1 million, or ($0.01) per diluted share, a year-ago.
Digital projection equipment sales increased to $10.0 million in Q2 2009 compared to $2.6 million a year ago, reflecting global demand for systems used to deliver a 3-D cinema experience. In addition, sales of cinema screens rose to $3.1 million versus $1.1 million in Q2 2008, largely reflecting continued strong demand for specialty “silver” screens used for 3-D digital cinema. A year-over-year increase in cinema service revenues also contributed to the improved sales results.
Q2 2009 gross profit increased to $4.3 million, or 21.7% of net revenues, compared to Q2 2008’s gross profit of $2.0 million, or 15.0% of net revenues. The increase in gross profit reflected higher cinema screen and digital projection sales as well as a margin improvement in the Company’s cinema service business.
SG&A in Q2 2009 increased to $2.6 million compared to $2.4 million in the year ago period yet declined as a percentage of revenue to 13.5% in Q2 2009 from 17.4% in Q2 2008. The decline as a percentage of revenues resulted from the impact of higher sales volume on fixed expenses. The increase in expenses primarily reflects higher insurance costs due to increased business volume, higher non-cash stock compensation expense and expenses related to the Company’s office in Beijing, China which was not open a year-ago.
Six Month Results
For the six-month period ended June 30, 2009, net revenues rose 32% to $36.7 million compared to $27.8 million a year ago. Gross profit in the first half of 2009 was $7.6 million, or
20.8% of net revenues, compared to first half 2008 gross profit of $4.4 million, or 15.7% of net revenues. Net income for the first six months of 2009 was $1.5 million, or $0.10 per diluted share, compared to a net loss of $0.4 million, or $(0.03) per diluted share, in the first half of 2008.
John P. Wilmers, President and Chief Executive Officer of Ballantyne, commented, “Following our improved performance last quarter, Ballantyne again delivered additional growth in revenue and net income. Our results so far in 2009 reflect growing industry demand for digital cinema projection products and services, particularly as exhibitors seek to capitalize on the growing availability of, and consumer demand for, 3-D content. The strength of our digital projection equipment sales in the quarter reflect the sale of 100 digital projectors to China Film Group, coupled with active demand from a number of independent chains in the US as well as increased sales in Latin America. In addition, our Strong/MDI screen business delivered substantial growth in the period, reflecting ongoing 3-D related demand.
“We are confident that the industry’s transition to digital projection equipment will continue throughout 2009. We believe Ballantyne is well positioned to participate in this global trend given our wide array of high quality products and our reputation for the best in customer service. We are also excited about the substantial services opportunity as digital cinema deployments continue to ramp up. Our services group has one of the largest and best trained teams of digital projection technicians in North America, putting us in a leadership position to support large and small customers with their installation, service and maintenance needs.”
Balance Sheet Update:
As previously reported, during Q2 2009 Ballantyne redeemed all of its remaining outstanding AAA-rated Auction Rate Securities (ARS) at par value, yielding total cash proceeds of approximately $9.4 million. Reflecting these proceeds, coupled with $0.6 million of ARS redemptions at par value from other means, Ballantyne’s cash and cash equivalents rose to $21.2 million from $11.4 million at the end of fiscal year 2008.
About Ballantyne Strong, Inc.
Ballantyne is a provider of motion picture projection, digital cinema projection and specialty lighting 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-strong.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-
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Ballantyne Strong, Inc. and Subsidiaries
Consolidated Statements of Operations
(unaudited)
|
| Three Months Ended |
| Six Months Ended |
| ||||||||
|
| 2009 |
| 2008 |
| 2009 |
| 2008 |
| ||||
|
|
|
|
|
|
|
|
|
| ||||
Net revenues |
| $ | 19,602,707 |
| $ | 13,643,104 |
| $ | 36,746,160 |
| $ | 27,840,276 |
|
Cost of revenues |
| 15,350,114 |
| 11,593,249 |
| 29,114,497 |
| 23,480,540 |
| ||||
Gross profit |
| 4,252,593 |
| 2,049,855 |
| 7,631,663 |
| 4,359,736 |
| ||||
|
|
|
|
|
|
|
|
|
| ||||
Selling & administrative Expenses: |
|
|
|
|
|
|
|
|
| ||||
Selling |
| 767,791 |
| 742,718 |
| 1,436,190 |
| 1,530,520 |
| ||||
General & administrative |
| 1,875,652 |
| 1,634,972 |
| 3,952,312 |
| 3,660,268 |
| ||||
Total SG&A expense |
| 2,643,443 |
| 2,377,690 |
| 5,388,502 |
| 5,190,788 |
| ||||
Gain on sale of assets |
| — |
| 258,170 |
| — |
| 258,170 |
| ||||
Loss on disposal of assets |
| (1,943 | ) | — |
| (1,943 | ) | (1,285 | ) | ||||
Income (loss) from operations |
| 1,607,207 |
| (69,665 | ) | 2,241,218 |
| (574,167 | ) | ||||
|
|
|
|
|
|
|
|
|
| ||||
Interest income |
| 29,404 |
| 129,350 |
| 70,534 |
| 275,536 |
| ||||
Interest expense |
| (9,328 | ) | (9,163 | ) | (17,441 | ) | (17,698 | ) | ||||
Equity in loss of Joint Venture |
| (233,625 | ) | (184,909 | ) | (418,137 | ) | (297,900 | ) | ||||
Other income (expense) net |
| (68,333 | ) | 19,882 |
| 112,904 |
| 46,674 |
| ||||
Income (loss) before income |
| 1,325,325 |
| (114,505 | ) | 1,989,078 |
| (567,555 | ) | ||||
Income tax (expense) benefit |
| (391,404 | ) | 5,576 |
| (513,438 | ) | 193,038 |
| ||||
Net income (loss) |
| $ | 933,921 |
| $ | (120,081 | ) | $ | 1,475,640 |
| $ | (374,517 | ) |
|
|
|
|
|
|
|
|
|
| ||||
Earnings (loss) per share |
|
|
|
|
|
|
|
|
| ||||
Basic |
| $ | 0.07 |
| $ | (0.01 | ) | $ | 0.11 |
| $ | (0.03 | ) |
Diluted |
| $ | 0.07 |
| $ | (0.01 | ) | $ | 0.10 |
| $ | (0.03 | ) |
|
|
|
|
|
|
|
|
|
| ||||
Weighted average shares |
|
|
|
|
|
|
|
|
| ||||
Basic |
| 13,995,286 |
| 13,890,882 |
| 13,991,766 |
| 13,874,661 |
| ||||
Diluted |
| 14,138,239 |
| 13,890,882 |
| 14,127,450 |
| 13,874,661 |
|
-tables follow-
3
Selected Balance Sheet Items:
|
| June 30, |
| December 31, |
| ||
|
| (unaudited) |
|
|
| ||
Cash and cash equivalents |
| $ | 21,168,964 |
| $ | 11,424,984 |
|
Restricted cash |
| 702,158 |
| 701,498 |
| ||
Accounts receivable and unbilled revenue, net |
| 13,585,393 |
| 7,038,258 |
| ||
Inventories, net |
| 8,950,484 |
| 9,476,687 |
| ||
Long-term investments in securities, net |
| — |
| 8,883,420 |
| ||
Total current liabilities |
| 15,739,812 |
| 10,960,830 |
| ||
Total stockholders’ equity |
| $ | 41,354,455 |
| $ | 38,834,639 |
|
Selected Cash Flow Statement Items (unaudited):
|
| Six Months Ended |
| ||||
|
| 2009 |
| 2008 |
| ||
|
|
|
|
|
| ||
Net income (loss) |
| $ | 1,475,640 |
| $ | (374,517 | ) |
Depreciation and amortization |
| 923,206 |
| 1,265,601 |
| ||
Equity in loss in Digital Link II Joint Venture |
| 418,137 |
| 297,900 |
| ||
Net cash provided by (used in) operating activities |
| 73,328 |
| (439,845 | ) | ||
Capital expenditures |
| (457,146 | ) | (492,115 | ) | ||
Proceeds from redemptions of investment securities |
| 10,025,000 |
| 1,225,000 |
| ||
Net cash provided by investing activities |
| 9,576,617 |
| 936,880 |
| ||
Net increase in cash & cash equivalents |
| 9,743,980 |
| 643,728 |
| ||
Cash & cash equivalents at beginning of period |
| 11,424,984 |
| 4,220,355 |
| ||
Cash & cash equivalents at end of period |
| $ | 21,168,964 |
| $ | 4,864,083 |
|
CONTACT: |
|
|
Kevin Herrmann |
| David Collins, Ratula Roy |
Chief Financial Officer |
| Jaffoni & Collins Incorporated |
402/453-4444 |
| 212/835-8500; btn@jcir.com |
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