Exhibit 99.1
NEWS ANNOUNCEMENT |
| FOR IMMEDIATE RELEASE |
Conference call: |
| Today, Monday, March 22, 2010 at 10:30 a.m. EDT |
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: |
| 800-734-8582 (no pass code required) |
Ballantyne Q4 Net Revenues Rose 28.5% to $18.8 Million
and 2009 Revenues Rose 31.6 % to $72.1 Million
OMAHA, Nebraska (March 22, 2010) Ballantyne Strong, Inc. (NYSE Amex: BTN), a provider of digital cinema projection equipment and services, cinema screens and other cinema products, today reported financial results for the fourth quarter and year ended December 31, 2009.
Fourth Quarter Results
Fourth quarter fiscal 2009 net revenues rose 28.5% to $18.8 million from net revenues of $14.7 million in the same prior year period. Despite the impact of a $0.3 million legal charge for settlement of a lawsuit, including attorney fees, Ballantyne Strong reported net earnings of $52,000, or $0.00 per diluted share, compared to a net loss of $2.3 million, or ($0.17) per diluted share a year-ago. Q4 2008 results included a $2.3 million charge for goodwill impairment. Per share results for the fourth quarters of 2009 and 2008 are based on a weighted average number of diluted shares outstanding of 14,204,659 and 13,975,628, respectively.
The increase in revenues was principally driven by sales of digital cinema equipment, which rose 76.7% to $6.9 million, compared to $3.9 million a year ago reflecting growing global demand for digital projection systems, particularly from international customers.
Gross profit increased 55.0% to $3.5 million, or 18.8% of net revenues, compared to gross profit of $2.3 million, or 15.6% of net revenues a year ago. The increase in gross margin was primarily the result of a more favorable product mix consisting of higher cinema service revenues and sales of film replacement parts. Year-over-year gross margins also benefited from cost reductions implemented at the Company’s Omaha facility in early 2009.
SG&A increased to $3.2 million, compared to SG&A (excluding a goodwill impairment charge of $2.3 million) of $2.8 million in the year-ago period. The increase in SG&A reflects costs pertaining to the settlement of the lawsuit discussed earlier.
2009 Results
Net revenues rose 31.6% to $72.1 million in 2009, compared to $54.8 million a year ago. Gross profit for 2009 improved to $14.7 million, or 20.4% of net revenues, compared to gross profit of $8.8 million, or 16.0% of net revenues, in 2008. Net income in 2009 amounted to
approximately $2.1 million, or $0.15 per diluted share, compared to a net loss of $3.0 million, or $(0.22) per diluted share, in 2008. Per share results for 2009 and 2008 are based on a weighted average number of diluted shares outstanding of 14,161,255 and 13,914,743, respectively.
Balance Sheet Update
Ballantyne concluded 2009 with a strong balance sheet, including $23.6 million in cash and cash equivalents, compared to $23.3 million as of September 30, 2009 and $11.4 million as of December 31, 2008. The increase from the prior year reflects liquidating all of our Auction Rate Securities for $10.0 million in cash and the Company generating operating cash flow of $2.4 million. The Company incurred capital expenditures of $0.9 million during 2009.
John P. Wilmers, President and CEO, commented, “We ended a strong year of revenue, gross profit and net earnings growth with a strong fourth quarter — which would also have been solidly profitable without the legal charge. Q4 revenue growth was led by an increase in digital projector sales and supported by improvements in both our services and cinema screens businesses. Our Asian territories made strong contributions to the fourth quarter and full-year performance, with growing demand coming from China, where they are moving aggressively to convert cinemas to digital technology at the same time they are working to expand their country-wide screen count. We continue to view China and neighboring Asian territories as exciting growth opportunities for Ballantyne Strong.
“Meanwhile, back in the Americas, we are excited with the prospect of the long anticipated ‘ramp’ in digital cinema installations that is slated to begin in Q2 with the initiation of DCIP activity. We believe our Company is ideally positioned to benefit from the substantial service opportunities this unprecedented conversion activity will create, and we are also confident that our digital projector and cinema screen offerings will benefit from growing demand, particularly from independent chains and from our customers in Central and South America. Given these factors, we expect the momentum we generated in 2009 will accelerate in 2010.”
About Ballantyne Strong, Inc. (www.ballantyne-strong.com)
Ballantyne Strong is a provider of digital cinema projection equipment and services as well as cinema screens, motion picture projectors and specialty lighting equipment and services. The Company supplies major and independent theater chains, top arenas, 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, 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-
Ballantyne Strong, Inc. and Subsidiaries
Consolidated Statements of Operations
(unaudited)
|
| Three Months Ended |
| Year Ended |
| ||||||||
|
| 2009 |
| 2008 |
| 2009 |
| 2008 |
| ||||
|
|
|
|
|
|
|
|
|
| ||||
Net revenues |
| $ | 18,847,561 |
| $ | 14,665,176 |
| $ | 72,145,757 |
| $ | 54,814,561 |
|
Cost of revenues |
| 15,302,474 |
| 12,377,520 |
| 57,413,724 |
| 46,021,049 |
| ||||
Gross profit |
| 3,545,087 |
| 2,287,656 |
| 14,732,033 |
| 8,793,512 |
| ||||
|
|
|
|
|
|
|
|
|
| ||||
Selling & administrative expenses: |
|
|
|
|
|
|
|
|
| ||||
Selling |
| 959,039 |
| 962,153 |
| 2,914,019 |
| 3,327,967 |
| ||||
Administrative |
| 2,274,321 |
| 1,837,320 |
| 8,147,861 |
| 7,487,172 |
| ||||
Goodwill impairment |
| — |
| 2,314,282 |
| — |
| 2,314,282 |
| ||||
Total selling & administrative expenses |
| 3,233,360 |
| 5,113,755 |
| 11,061,880 |
| 13,129,421 |
| ||||
Gain (loss) on sale or disposal of assets |
| (15,197 | ) | (6,262 | ) | (16,911 | ) | 275,406 |
| ||||
Income (loss) from operations |
| 296,530 |
| (2,832,361 | ) | 3,653,242 |
| (4,060,503 | ) | ||||
|
|
|
|
|
|
|
|
|
| ||||
Interest income |
| 6,300 |
| 110,599 |
| 87,203 |
| 513,990 |
| ||||
Interest expense |
| (7,759 | ) | (8,934 | ) | (33,316 | ) | (35,437 | ) | ||||
Equity in loss of Joint Venture |
| (252,440 | ) | (221,082 | ) | (889,997 | ) | (683,311 | ) | ||||
Other income (expense) net |
| (37,326 | ) | 199,382 |
| (67,156 | ) | 320,530 |
| ||||
Earnings (loss) before income taxes |
| 5,305 |
| (2,752,396 | ) | 2,749,976 |
| (3,944,731 | ) | ||||
Income tax benefit (expense) |
| 46,477 |
| 433,871 |
| (679,458 | ) | 911,041 |
| ||||
Net earnings (loss) |
| $ | 51,782 |
| $ | (2,318,525 | ) | $ | 2,070,518 |
| $ | (3,033,690 | ) |
|
|
|
|
|
|
|
|
|
| ||||
Earnings (loss) per share |
|
|
|
|
|
|
|
|
| ||||
Basic |
| $ | (0.00 | ) | $ | (0.17 | ) | $ | 0.15 |
| $ | (0.22 | ) |
Diluted |
| $ | (0.00 | ) | $ | (0.17 | ) | $ | 0.15 |
| $ | (0.22 | ) |
|
|
|
|
|
|
|
|
|
| ||||
Weighted average shares outstanding: |
|
|
|
|
|
|
|
|
| ||||
Basic |
| 14,022,132 |
| 13,975,628 |
| 14,002,985 |
| 13,914,743 |
| ||||
Diluted |
| 14,204,659 |
| 13,975,628 |
| 14,161,255 |
| 13,914,743 |
|
Selected Balance Sheet Items:
|
| December 31, |
| December 31, |
| ||
|
| (unaudited) |
|
|
| ||
Cash and cash equivalents |
| $ | 23,589,025 |
| $ | 11,424,984 |
|
Restricted cash |
| 442,766 |
| 701,498 |
| ||
Accounts receivable and unbilled revenue, net |
| 10,772,055 |
| 7,038,258 |
| ||
Inventories, net |
| 12,987,048 |
| 9,476,687 |
| ||
Long-term investments in securities, net |
| — |
| 8,883,420 |
| ||
Accounts payable |
| 9,768,896 |
| 6,470,903 |
| ||
Customer deposits |
| 2,295,946 |
| 1,216,590 |
| ||
Income tax payable |
| 1,246,247 |
| 433,533 |
| ||
Total current liabilities |
| 16,934,232 |
| 10,960,830 |
| ||
Long-term accrued expenses |
| 483,425 |
| 1,006,056 |
| ||
Total stockholders’ equity |
| $ | 42,517,666 |
| $ | 38,834,639 |
|
Selected Cash Flow Statement Items (unaudited):
|
| Year Ended |
| ||||
|
| 2009 |
| 2008 |
| ||
|
|
|
|
|
| ||
Net earnings (loss) |
| $ | 2,070,518 |
| $ | (3,033,690 | ) |
Depreciation and amortization |
| 1,752,550 |
| 2,338,962 |
| ||
Equity in loss of Digital Link II Joint Venture |
| 889,997 |
| 683,311 |
| ||
Net cash provided by operating activities |
| 2,367,167 |
| 4,353,589 |
| ||
Capital expenditures |
| (907,659 | ) | (818,626 | ) | ||
Proceeds from redemptions of investment securities |
| 10,025,000 |
| 2,975,000 |
| ||
Net cash provided by investing activities |
| 9,378,295 |
| 2,814,846 |
| ||
Net increase in cash & cash equivalents |
| 12,164,041 |
| 7,204,629 |
| ||
Cash & cash equivalents at beginning of period |
| 11,424,984 |
| 4,220,355 |
| ||
Cash & cash equivalents at end of period |
| $ | 23,589,025 |
| $ | 11,424,984 |
|
CONTACT: |
|
|
Kevin Herrmann |
| Robert Rinderman, David Collins |
Chief Financial Officer |
| Jaffoni & Collins Incorporated |
402/453-4444 |
| 212/835-8500; btn@jcir.com |
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