FG 8K Ballantyne Strong, Inc. and Subsidiaries Unaudited Pro Forma Consolidated Financial Statements | FGH 7 Nov 16

Exhibit 99.1

Ballantyne Strong, Inc. and Subsidiaries Unaudited Pro Forma Consolidated Financial Statements

Introduction

On November 4, 2016, Strong Westrex, Inc., a subsidiary of Ballantyne Strong, Inc. (the “Company”) and an owner of all authorized and registered equity interests of Strong Westrex (Beijing) Technology, Inc., an indirect subsidiary of the Company (“SWBTI”), entered into an Equity Purchase Agreement (the “Agreement”) with GABO Filter, Inc. (the “Buyer”), pursuant to which the Buyer acquired all equity interests of SWBTI for a purchase price of approximately $0.4 million. The purchase price consisted of approximately $0.3 million in cash and a promissory note for the remainder (the “Note”). As part of this sale the Company expects to record a loss on discontinued operations of approximately $0.3 million in the fourth quarter of 2016. This disposition qualifies as discontinued operations and was classified accordingly beginning with the Company’s Form 10-Q for the six months ended June 30, 2016.

The unaudited pro forma consolidated financial data of the Company was derived from our historical consolidated financial statements. In accordance with the accounting guidance for pro forma financial statements, pro forma financials for interim periods are not included since the disposition qualifies as discontinued operations and was classified accordingly beginning with the Company’s Form 10-Q for the six months ended June 30, 2016. The unaudited pro forma consolidated statements of operations give effect to the disposition of SWBTI as if the disposition occurred on January 1, 2013. The following unaudited pro forma consolidated financial information should be read in conjunction with the Company’s historical financial statements and accompanying notes.

The pro forma adjustments are based on the best information available and assumptions that management believes are factually supportable and reasonable; however, such adjustments are subject to change. In addition, such adjustments are estimates. The unaudited pro forma consolidated information is for illustrative and informational purposes only and is not intended to reflect what the Company’s consolidated position and results of operations would have been had the disposition occurred on the dates indicated and is not necessarily indicative of our future consolidated position and results of operations.

The pro forma adjustments remove all of SWBTI’s consolidated results of operations and also give effect to adjustments to reflect intercompany balances which were previously eliminated in consolidation.

Ballantyne Strong, Inc. and Subsidiaries
Unaudited Pro Forma Consolidated Statements of Operations

For the year ended December 31, 2015
(in thousands except per share amounts)

	Historical			SWBTI			Pro forma

Net product sales	$	69,250		$	(13,235	)	$	56,015
Net service revenues		23,579			(659	)		22,920
Total net revenues		92,829			(13,894	)		78,935

Cost of products sold		60,358			(12,909	)		47,449
Cost of services		14,884			—			14,884
Total cost of revenues		75,242			(12,909	)		62,333
Gross profit		17,587			(985	)		16,602
Selling and administrative expenses:
Selling		5,522			(595	)		4,927
Administrative		16,594			(812	)		15,782
Total selling and administrative expenses		22,116			(1,407	)		20,709
Loss on sale or disposal of assets		(425	)		—			(425	)
Loss from operations		(4,954	)		422			(4,532	)
Equity in income of equity method investments		96			—			96
Other income:
Interest income		368			—			368
Interest expense		(42	)		15			(27	)
Fair value adjustment for notes receivable		(1,595	)		—			—
Foreign currency transaction gain (loss)		1,612			—			1,612
Other income, net		49			(48	)		1
Total other income		392			(33	)		359
Loss before income taxes		(4,466	)		455			(4,011	)
Income tax expense		(13,001	)		388			(12,613	)
Net loss	$	(17,467	)	$	843		$	(16,624	)
Basic loss per share	$	(1.24	)				$	(1.18	)
Diluted loss per share	$	(1.24	)				$	(1.18	)
Weighted average shares outstanding:
Basic		14,135						14,135
Diluted		14,135						14,135

Ballantyne Strong, Inc. and Subsidiaries
Unaudited Pro Forma Consolidated Statements of Operations

For the year ended December 31, 2014
(in thousands except per share amounts)

	Historical			SWBTI			Pro forma

Net product sales	$	70,360		$	(10,310	)	$	60,050
Net service revenues		24,726			(337	)		24,389
Total net revenues		95,086			(10,647	)		84,439

Cost of products sold		60,106			(9,090	)		51,016
Cost of services		16,820			(407	)		16,413
Total cost of revenues		76,926			(9,497	)		67,429
Gross profit		18,160			(1,150	)		17,010
Selling and administrative expenses:
Selling		7,235			(549	)		6,686
Administrative		12,740			(638	)		12,102
Total selling and administrative expenses		19,975			(1,187	)		18,788
Gain on sale or disposal of assets		10			1			11
Loss from operations		(1,805	)		38			(1,767	)
Equity in income (loss) equity method investments		78			—			78
Other income:
Interest income		705			(51	)		654
Interest expense		(48	)		—			(48	)
Foreign currency transaction gain		611			—			611
Other expense, net		(10	)		(58	)		(68	)
Total other income		1,258			(109	)		1,149
Loss before income taxes		(469	)		(71	)		(540	)
Income tax benefit		465			25			490
Net loss	$	(4	)	$	(46	)	$	(50	)
Basic loss per share	$	0.00					$	0.00
Diluted loss per share	$	0.00					$	0.00
Weighted average shares outstanding:
Basic		14,061						14,061
Diluted		14,061						14,061

Ballantyne Strong, Inc. and Subsidiaries
Unaudited Pro Forma Consolidated Statements of Operations

For the year ended December 31, 2013
(in thousands except per share amounts)

	Historical			SWBTI			Pro forma

Net product sales	$	88,067		$	(10,903	)	$	77,164
Net service revenues		15,543			(553	)		14,990
Total net revenues		103,610			(11,456	)		92,154

Cost of products sold		75,171			(9,940	)		65,231
Cost of services		11,594			(445	)		11,149
Total cost of revenues		86,765			(10,385	)		76,380
Gross profit		16,845			(1,071	)		15,774
Selling and administrative expenses:
Selling		3,965			(332	)		3,633
Administrative		12,773			(835	)		11,938
Total selling and administrative expenses		16,738			(1,167	)		15,571
Gain (loss) on sale or disposal of assets		(8	)		4			(4	)
Income from operations		99			100			199
Equity in loss equity method investments		(25	)		—			(25	)
Other income:
Interest income		352			—			352
Interest expense		(2	)		(43	)		(45	)
Foreign currency transaction gain (loss)		850			—			850
Other expense, net		(323	)		(20	)		(343	)
Total other income		877			(63	)		814
Earnings before income taxes		951			37			988
Income expense		(788	)		23			(765	)
Net earnings	$	163		$	60		$	223
Basic earnings per share	$	0.01					$	0.02
Diluted earnings per share	$	0.01					$	0.02
Weighted average shares outstanding:
Basic		13,999						13,999
Diluted		14,031						14,031

Ballantyne Strong, Inc. and Subsidiaries

Notes to Unaudited Pro Forma Consolidated Financial Statements

Note 1. Basis of Presentation

FG (FGH) 8-KBallantyne Strong, Inc. and Subsidiaries Unaudited Pro Forma Consolidated Financial Statements