BTN - Earnings call transcript Q4 2018

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Operator

Greetings. And welcome to the Ballantyne Strong 2018 Earnings Conference Call. At this time, all participants are in a listen-only mode. [Operator Instructions].

As a remind, this conference is being recorded. pleasure your my Chief Mark now Officer. Financial is to host, introduce Roberson, It sir. ahead, go Please

Mark Roberson

Good to December And fourth morning. welcome quarter for conference and the call year ended XX, Ballantyne XXXX. Strong's earnings

definition, anticipated any management's a any we forward-looking should will not today views forward-looking the XX-K uncertainties. most presentation in Actual statements results strategy our these business. Forms During of today's differ and and that subsequent and in performance and measures. obligations based website. as as to from financial comparison references a may GAAP expectations disclaim non-GAAP the by make the to on posted is factors on Strong's are call, of update recent of discussion are risk reconciliation and section Ballantyne Investor views risks our the The regarding be or forward-looking on These materially of to as Relations trends, SEC. relied Form management's representing filed required statements and our refer XX-Q with date. current any except number available section statements of are outlook statements contain Today's These We earnings and law. full also Please subject of measures to as expectations. release

results. our for then companies Our on call that, non-GAAP of measures before investment encourage provide to remarks over his reporting we and other to me financial prepared and those be you and let comparable by may the decisions. all our financial details not making used turn review understand Kyle I'll to With any

Kyle Cerminara

start Mark progress our quarter the joining then for review Hello. of plans XXXX. conference I the businesses Good our results. overview of fourth in thank an call. with a each will made Strong's lot in morning XXXX and off strategic and earnings financial We company and Ballantyne you will of

not some is you and XXXX importantly, and and that Ballantyne businesses may the going initiatives our walk results impacted strategic progress how than at the assets. As you our financial of be view through and valuation, left of for strategies forward. several three more year, our we to operating comprised the business look evident, other like and, strategic that less however, I'd

of steps about this growth number XXXX new growth invest our We management significant stage, operating Strong of starting Convergent established in in services services America is experiential team revenue. we business, the see This producer Our This we to the a Cinema This building is primarily exhibitors managed business are the is where largest largest business mature a in than customers premium to strong is In of the of more a took investment Outdoor in and business recently digital business startup position industry. marketing market high-margin interactive business a cinema of strong We're revenue outdoor a advertising reposition in flow provider started industry. potential Strong at large that with a years, recurring screens industry. for we've the premium business services managed and the line America. XX and Strong cash to in from opportunities. the provider North North and major in and market. emerged XXXX, Convergent is a excited just services. Outdoor. a generate providing enterprise to signage and

together Sales leadership Campbell, of made lead right-size implemented we team. President and Lawrenceville warehouse restructure we now to customers include headcount. Vice plans, In customer First, took platform plan Davis, operating Senior closed day-to-day away Operations, scalable President the transitioned several rightsizing Vice and more a to improvements changes a Technology executing and digital and our Operational from and and Senior business. those operations. moving relationships. our John and signage Convergent of to significant unprofitable Marketing, efficient We Greg write-offs,

charges as result, fourth of a been in increase XXXX, operating excited and believe has new operating with we we the for that losses. a that securing significant the full-year we our indicated We're to fourth rebounded kick has In operating this lower several in As beginning Convergent of wins costs. in in results operating results see and quarter, new XXXX. the in profit the recurring and grow turned significant began quarters revenue. to successful three contract the monthly benefit have benefits corner, to Convergent quarter revenue reflect expect XXXX business first as the with combined the by provided operating

on the in City and trade best invested of is access X,XXX in half taxicabs the tops Pricing to fastest and on Taxicab digital in in us on of signing by the with the the organization this static business leading number built the displayed. just successful trend is revenue out-of-home operating in XXXX expenses New when this taxi where market XXX advertising a for the to top career year, of world. growing are as tops taxicab and marketing or increasing get position city have in approximately in the and established, get superior can York to to an Vector the highly customers the the of place of of has ads to team the Metropolitan advertising taxi-top and XXXX. XXXX to started we start-up take President over Media. also with space successful far tops and to market city. Ian throughout agreement Strong the traditionally the management digital space digital operating on capitalize experiential York brought this business tops growth. of and over Outdoor advertising significant conversion the is out-of-home we in Board MTBOT, previously York area throughout Strong Ian Digital The agreement incurred New in saw we business We contracts on secure for half advertising coveted second advertising our of advertising in specify the tops the in MTBOT their meaningful largest been unique digital in Outdoor. his January the We We Trade, currently gives City. generating exclusive We New Greenberg static opportunity and a plan

with business redefined experiential tops Before Media, that, Manager Ian marketing. format advertising that and General large Show was the taxi of Co-Founder and the space top a

to driving meaningful invest We Outdoor to as to begin in growing Strong place expect team growth. continue now in is the

cash generate continues business Cinema and flow. Strong Our to solid reliable performance

and including the of laser in research We screen systems. projector development compatible invest development continue to

theme business During the entered further Eclipse and see we industry park expect in to of year, $X the we park Screens we where over officially XXXX. theme acquisition with won growth million in already the

to the finishing On allow market. screen facility which international us a we're new China, front, working plans serve customers to in fast-growing in will on this our better open

value has bit also supplier We consolidation also quite believe the exhibitor of on cinema for and a consolidation side, we the industry creation. M&A activity. represents is side for future There the significant ripe been and opportunities believe

equity we to Holdings operating addition Itasca and companies, Property XXXX Insurance In hold method two strategic investments, Capital. our

Insurance Property Holdings. investment We own shares Our largest is strategic XX.X% outstanding. of XXXX

The pursue its expects to announced listing recently, expected June $X.XX expected opportunities. close in per opportunities the book other Company. to our share. business versus in and have is its at be of news carrying value $X.XX investment deal value of you close per may maintain public investment seen sale the and in and PIH management PIH insurance homeowner's to to XXXX approximately As is reinsurance, share Holding amount FedNat

upon increase of subsequently Holders these invested plus resulted after in originally LLC $XX original XXXX all the years Investors the Investors In Holdings. XXXX also second interests. five Limbach can in redeem of XXXX, A equity any special Itasca receive XX% which of preference million million Investors equity Our at senior July million investment, $XXX,XXX to interest into company $X in securities $XX to face for Capital to the of shares investment holders and value, Class per payment preferred in declared year, Strong. XXXX In strategic which ICL. accrual ICL valuation a XXXX distributed dividend XXXX, a are dividend other June of Ballantyne invested liquidation. XX.XX%

like our ICL. in investment continue risk to of the reward profile We

we've Strong a discussed, Ballantyne into platform. investment equity holding private ultimately publicly-traded a we evolving As see as company previously and operating

is value industry numerous Strong see As increasing significant and margin We high we bankers pursue banker to objective, businesses business evaluating earnings in for this We we've our and operating merger, each will explored recurring continue the create we for shareholders. parts towards with We ranged businesses, a opportunity revenue opportunities engaging supplier We believe our for using platform opportunities opportunities and explore each as side create both our the with see we and near directly consolidation opportunities has engaged, through to from those and about our last the with sale digital invest ripe long constantly investment of at for opportunities and We'll businesses continue evaluate for to the with growing parties continue believe acquisition and Convergent to well. we're We've and for to in our will media conversations and that continue deals an monetize other that of holdings, value talking and and opportunity add to opportunities had value. Outdoor partners in greater our growth. industry and term value. to together model. Cinema businesses, growth the potential the over see the of believe only that consolidation Strong months long-term. XX for as on acquiring cinema or merging potential conversations other businesses,

ownership that Closely closely reiterate Strong ownership members, shareholders. board turn other fourth the our includes I was Fundamental mainly for think that, walk employees, an approximately and and ownership parties, our full XXXX. Global the important held call for Investors. XXXX, the that shareholders end affiliated held maintain creating aligned I'd with to to back to also And XX.X%. are of like of of At long-term. officers, We our executive it's value the those quarter interests year of to to focused with is culture over Ballantyne strive on through results Mark

Mark Roberson

of on is my company a our I This in the going to regularity There Thanks, while of and today's of increase who a lines obviously, of here be are going call. on pleasure as first in to frequency call plan to those we and are the things taking has first communications our a business Kyle. of forward. a CFO. time and, the our you hosted lot earnings participate each appreciate good It's and

Strong mentioned, – of Strong Kyle Outdoor operate business Cinema, and we As separate Convergent. in lines three

focus business lower margin the as well largely from driving trends go the the within our started we These restructure higher revenue, signage we a margin business DSaaS to had quarters those contracts, reducing As revenue year. prior factors to growth steps the through significantly comparisons year, prior revenue improving XX.X% that leverage Ballantyne Earlier by structure. from improving I'll see platform, sequentially operations, insights fourth provide margin to to a reposition driven new business on over higher performance and year, three reduced the you to the endeavor QX, growth into that numbers, and some at Lawrenceville warehouse. as good up in Overall, demonstrate the overhead digital segments. from a to and quarter, took exiting the as the each service the Convergent. we with in and we In to of recurring able results favorable headcount compared key recurring primarily were were prune with of three

operating result, EBITDA from the three and quarters of As turnaround the from of an year, the well representing as adjusted fourth million significant profit $X.X $X.X a of posted quarter, Convergent XXXX. positive a prior as for first million

addition, see started at year. Strong Outdoor, revenue this picking operations to we In which earlier started up

as months in XX% business. increased $X.X the in driving $X.X through rate costs building utilization to and the year mix, that As Outdoor offset of fund stable for The loss operating stage to business $XX.X Strong first an the of to was continuing we're from adjusted significantly, early Outdoor revenue and the seek assets. reduced semi-fixed operating our nine business started performance. improved Cinema to fourth relatively million a advertising taxi-top $X.X increase in fourth as we still million with EBITDA the to and invest or of million team the quarter, with its was increasing revenue result, is quarter, management the solid of revenue of million at Strong operations product

on to result, from overall from revenue Strong quarterly consolidated revenue million XX.X% incremental a for and start-up Convergent the basis, of an quarter the increased primarily to As the growth $XX.X the total due Outdoor. revenue

partially XX% where For decreased in impacted by of products margin lower-margin the low million year, we in of cost were based fourth Outdoor support increased incremental Those reduction Strong Gross offset Outdoor, and revenues lamp for year. Strong from for $XX.X non-Linux Convergent mid-XXXX, selling quarter revenue Convergent by during stopped $X.X with Cinema Convergent annual revenue to XXXX. new to certain and reductions profit earlier Strong the at Convergent. of stronger quarterly Cinema, to initiatives customers at at curtailed with combined the due XX.X% the XXXX start-up revenue million the and

to XXXX, swung of in Convergent compared Strong at a a QX XX.X% of Outdoor, earlier was positive year the million fourth $XX.X loss the gross profit the positive profit $X.X $X.X million quarter due which decreased $XX,XXX year. operations a costs $X.X annual from for loss year, Income to Convergent, in lower the million largely due XXXX. million revenue last For of and of of in to to XXXX of the the as from contribution start-up to

loss For million in and the $XX.X to compared swing losses at loss $X.X the was million loss year. large Outdoor $X.X in the of The due Strong start-up operating asset million non-cash largely to fourth $X.XX was year. a operating year, in of was quarter Overall million the costs $X.XX as $X.X prior charges, $X.X in earlier of compared or impairment million the share loss share related $X the net Convergent XXXX per and for per other a in severance of or million at loss to XXXX. prior

$X.X repositioning fourth with measure, to from to share $X.XX to due costs of For non-GAAP the expenses. a the compared improved the in earlier full and to incurred due operating million prior connection million with or Strong million the the $X.XX or per combined revenue of in million largely growth the of XXXX costs share loss quarter quarterly year, of EBITDA, net start-up loss improved $X.X again, year, in positive was $XX.X Convergent per a year. Adjusted for as the the Outdoor negative $X.X the

year, and million at costs quarter the change Cinema the was compared Again, a For improvement $X.X and losses operating adjusted XXXX. in corner largely Overall, solid Strong to turned the positive start-up profitability, EBITDA of Convergent. XXXX of Strong the this to a perform. charges in in million first started as is loss Outdoor months the $X.X nine to revenue QX Outdoor of was Convergent generating and continued to due

expect Looking screen ahead, we continuing continued our business. core Cinema from stable performance

to be coatings industry increasing incremental the other expect park additive the opportunities screens and and also will sell business. and We core theme to into areas that to see

cinema region be in of markets in to intend will we in a Asia growing customers finishing our addition, to that in fastest plant in that us In enable to open XXXX world. one and the opportunity responsive more growth increase the

as force and to assets. build team invest start-up and our revenue growth of in to management drive to Outdoor, the We of advertising the Strong sales we expect continue utilization

this have release report address we more free located or information you have about great listening months Please Strong. revenue earnings when We our results. with other a morning. expect Thank like DSaaS continuing continue look all information additional to distributed Overall, potential information about generate we lines two email if first you and My three to sharing at for our and growth in excited lines are questions and me feel in day. of business product strong you contact our more quarter the where of contact Convergent, forward interest. the to we're Ballantyne and recurring would with

Operator

today's That does conclude you. Thank teleconference.

have this wonderful you your your disconnect lines and may day. You today. We at thank time a for participation

FG (FGH) 11 Mar 192018 Q4 Earnings call transcript