BTN - Earnings call transcript Q3 2021

Due to licensing restrictions, you must log in to view earnings call transcripts.

Operator

Ladies and gentlemen, thank you for standing by and welcome to the Ballantyne Strong, Inc.

Third Quarter 2021 Earnings Conference Call.

During the presentation, all participants will be in a listen-only mode. Afterwards, we will conduct a question-and-answer session. [Operator Instructions] As a reminder, today's conference is being recorded. to Investor call Relations. like Nesbett to now IMS of would turn over the John I Thank you.

begin. may You

John Nesbett

Good afternoon and for welcome to Ballantyne Strong quarter September the earnings ended XX, XXXX. third conference call

Mark today Ballantyne Todd call Chief Officer. Financial Executive the On Major, Strong are Officer; Roberson, from and Chief

call. is on These company's and begin, terms to and company statements The website. law. Investor uncertainties in obligation expressly and to non-GAAP on current and subject also view made of also are as and are we cause described filings. will references of be also definition are the the SEC to that some of risks statements may non-GAAP remind These section and statements, posted release based no results materially actual from today's Before call everyone forward-looking and uncertainties company's expectations the disclaims today, presentation update differ I'd measures. risks are to the on The Relations to contain by statements except available earnings like obligation this reconciliations under in to nature. management's required and Today's financial in as discussions any the measures those on GAAP described forward-looking

reporting Our turn financial to we before by be over like making encourage At non-GAAP measures investment time, understand comparable call and I'd our may any used other to you and companies not to those all to this the review Mark. decisions.

Mark. ahead, go Okay,

Mark Roberson

operating next The robust and been trends months some far [ph] XX pertail those out encouraging, slate to is meaningful entertainment equity to the results over the today. and Box pleased breaking. XXXX beyond. environment in afternoon this studio drive and Thanks, so our to thank us continue holdings report and impressive, believe that make entertainment industry our releases fall we value. John. coming entertainment of I'm and continue Office you joining record cases, for progress, and Good have business for

well Our we're GreenFirst, minority about in potential namely are the stakes and positioned, capital Firefly those opportunity and strategies, excited in holdings. of appreciation allocation our each FG Financial capital

marking On market on XX in quarter, of at a of coming positive significantly and in as resulted EPS is in operating of reporting This A September near gain current momentum operating business. and the adjusted based share the business, positive $X.X leader and of holdings XX. our to depreciation entertainment improved $X.XX presentation, with began net in results, the market, Strong equity established price unrealized through million pretax the operating income positive controlled GreenFirst Slides EBITDA investment X we operating our the expenses, the quarter. unrealized Entertainment per breakeven, for income entertainment in combination an

XX the built have past that's industry over We reputation been an years.

provide believe we're the COVID and our We flows in America. to arrangements and impact have now starting has we cash robust services with in This stable exclusive years. majority things see cinema operators Cinemark, the recovery. the equipment innings on and historically North many to early IMAX, industry We're a solid business. on and of and produced a of for Obviously, had major strengthen business also the

Dune in Cinemark high-quality to demand strengthen. to was the continued of restrictions continued that returning their global actual has October about September broke pre-COVID September surpassed and Shang-Chi best Venom releases announced the October and own the the also to entertainment had Free ever. And Bond. have leading have Office to forms to XXXX expected IMAX recovered results content reported flow and consumer guy of rates vaccination opening their climb and of their exhibition As excitement is with into then government subside, record the all it's September and way. Box actually cinema IMAX all-time recently accelerate. on for continued

the clearly, are the increase to are revenues the industry in reflect back quality starting to cinema studios. and coming So folks content from

In leverage investment for and Spider-Man local close sporting to showings, into becoming the movie tap impressive; going and Matrix out esports private year. to new among others their of XXXX operators remainder and schedule on creative the language remains the the Ghostbusters, XXXX Consumer strong content, for addition, to especially demand all ways with The their with are cinema release starting is the and cinemas. find Eternals, are way latest events more

for as sequels slate from Top XXXX, is among Flash Aquaman Jurassic others Marvel, and on-deck with and is shape the well. for backdrop Gun years. to We For Mission the accelerate industry stronger and we And for several even take Panther look favorable to is believe the ahead World, Transformers, the Avatar new XXXX for and for D.C., Batman, as Black Thor Strange, starting Dr. Impossible, next theatrical rebound release.

provide many we reputation in and quality, line the immersive Iluminarium revenue products expand start for other business cinema And Cinemark, Because AMC to of also we service with into areas opportunities. screen And have business. screens level also capabilities, like such coatings non-cinema innovation, the selling expansion our growth been Exhibits industry throughout of and able additional growing been on IMAX, in strong screen legacy the has increasing In our these our relationships theme target Goh leaders parks and eclipse our Synionic, our built eclipse able [ph]; we and Because manufacture product diversify have with our diversification addition others. we've that strong R&D as Marcus, paints in-house vertical, attractions to to and COVID are and to coatings been the own our Van in simulators. and for double XXXX. we've and is more and been the

for next optimize experience the focus premium for innovation, in see provides on currently just viewer. Cinemark projection. the publicly into for that's and leapy over also XX the to years, that We than enhancing upgrade operational transition a that screens has laser of XX% example. meaningful been less two we've all projection one to part laser industry; plan while from screens laser driving stated Laser they're the their the As they working cycle. the our to upgrade the efficiencies operator, from projection Xenon, cycle

compared working the COVID this favorable Service leading box technical side, On a increase revenues and We're and quarter of year. for post XX% support, increasing we're a increased provider managed accelerate. last installation as see in as revenues to market and the products to of services and distribution our services share services. expansion. see for studio We releases demand office quarter third landscape

technical increase of especially exhibitors, from demand to -- services for releases the put begins pressure We pressure the slate as operational heavy cinemas. expect of more to see on upcoming outsourcing more

our of the long-term X forward XX.X allocating look in to we it which potential to making the XX through Firefly, and additional the million assets with is lumber largest which their shares from Advanced outlook in future XX the holdings, FG acquisition, Moving in in on the we're to participating to GreenFirst, participated GreenFirst Rayonier one XX excited Materials bullish Financial continue shares. increase to appreciation capital it's producers to about our Canada. and success. August, presentation; of the plans, Slide of portfolio. strategic the on lumber offering execute equity completed their the in We're GreenFirst, position backstop rights of for million and Starting acquisition We

successful offering shares participate with X hold and to market. of been Hagerty also it's commit to stake. of acquisition additional platform first announced revenues announced additional recently York with FG fact Financial. a the has been offering We in Financial New the raising Media, SPAC. We intend is agreement to dominant company transaction quarter, Curb offering. increasing, second Their the FGF [ph] of media is our recently the of the and and gaining in Firefly the FG capital under SPAC rights momentum FGF growth and the merger also as have to COVID. raise million closed launched capital coming it completed follow-on terms increase end Optfi Firefly rights After a the it's a same capital. plan making in million fully also Taxi $X.X a public out commencing and mobility they've

looks believe believe holding solid I'll Overall, deliver to a this turn and could over significant potential. the scale As eventually call trends a are we With towards we Todd. that, as look strengthening continues Firefly liquidity quarter, event, upside ahead. to and we

Todd Major

prior Entertainment now the year quarter also year. classified business results to that compare do comparison Thanks, they year. Consistent the to benefit XX operations cover continue Outdoor, prior been Mark. for recognition with Convergent COVID the contains recent on today's the results to review operating of employee financial summary will $XXX,XXX continuing the have of results our operations. Revenue the Strong QX operating and of a as from of XXXX from not Slide discontinued credits. impact retention as Strong include quarters, recovered the of and the Operating XXXX reflect third prior favorably and

the income to the rights. portion realized related operating from adjusted million the BrainFirst a line, reminder, the we $X.X of a these the received of favorable are As Below credits [ph] excluded EBITDA. impact sale gain from a proceeds of

gain to a gain retention prior million gain. in on the EBITDA. excluded large over on an the the we the value to employee investments and unrealized from adjusted the of XXXX, gains after XX% We market, the $X.X of our resulted the benefit adjusted with unrealized from ERC GreenFirst investments. now unrealized which are the Even recorded realized third are and calculation investment on quarter excluding pretax EBITDA benefits saw of from Starting both, marking credits, increase also year. our the the Similar investments,

XX benefit XX% the the XXXX, field to of of large in now; our in were included quarter higher offset credits. by $XXX,XXX due Eclipse-Curvilinear Gross increase projects. Those from third margin equipment increases retention Entertainment Strong revenues employee skews primarily sale the screen quarter monitoring and Screen revenue Turning timing comparison. Slide of a quarterly systems, to year-over-year partially in from during was maintenance third the services a the projection the which

was have this Strong quarter generating recorded Entertainment year. of with XX%, third additional annually pre-COVID. trend EBITDA Strong the COVID, shows during XXXX. historical An the in revenue an Slide last $XX $XX $XXX,XXX in the million of to of the Excluding benefit, in the prior quick third over group quarter operating years, range ERCs improvement of excess margin the million within gross SG&A few the was would including benefit margins a XX%. XX to approximately during Prior XX% from been showing Entertainment results

we the of able at negative implement measures During series during a of the COVID finished level. and Strong cost to significant management year were Entertainment XXXX, breakeven impacts a near

business the the XXXX. months. over the not are recovery cost The how levels, to the to of pre-COVID the efforts September balance snapshot significant While positively has returned change our we end industry a of pleased and is of in Strong the most impacted GreenFirst. end investment XX relates control our XX trailing sheet of Entertainment Slide compared to have the as

the additional portion of shares. As rights balance during to an rights. the previously exercise from the Approximately third and from cash US$X.X we to million million mentioned, the sheet came sale allocated our GreenFirst X.X came additional of quarter a acquire US$X.X capital million of

an GreenFirst of issuance approximately ownership is our acquisition, additional percentage X%. common of shares, Following GreenFirst

GreenFirst, the As of use the GreenFirst account on additional a will fair for investment the the balances on a in mark-to-market we'll basis, and a result, after our accounting and equity approach GreenFirst investment accounting, discontinued we remain value strong. for basis. using go-forward cash Even method

nearly lease since end the and have debt concludes of review. That equity has reduced doubled been Our and shareholders' XXXX. the obligations financial

turn back Let Mark. the to me call

Mark Roberson

stages, outlook spring the before Entertainment mirroring conclude, the wrap Thanks, cinema Strong industry, is incentive since for releases diversification of believe studio up the entertainment We the as recovery the in as it's cinema we in favorable. early last rebounded well has recovery from is Todd. To business. business and nicely benefiting and

their Our equity upside continue holdings to executing we they are and have plans, opportunity. on long-term believe meaningful

our increase as equity on solid Strong plan FG balance our stake from on Q&A, our before GreenFirst, in to sheet well use I the allowed shape us is Ballantyne which move and increase touch we Our in Group we Holdings. to holdings balance in Also, to this wanted planned name quarter. to to FGF to sheet change

proposal shareholders, plan name our by and in change assuming passed proceed We symbol the to the have our ticker to and change early shareholders also our meeting we with FGH. December is

any the at Holdings for and good better company. there's and is IPO call believe historically up to separate the we the FG name business, as affect the future we time the With the been cinema Group now holding plans listing to this planned Ballantyne reflects if the believe the of a level. with Strong entertainment change changed the associated group, Ballantyne has name closely questions. the a We'll open name business

Operator

first line question go from Thank with you. Please our [Operator [ph]. Bellinger the comes Capital Instructions] And of Mayflower ahead. Dan

Unidentified Analyst

for thanks my guys, Hey taking question.

about So, really for the few over give years. product, non-cinema growth seeing into it's more have this little past a insight Illumina you the Could seen product? exciting you're pretty you good the -- maybe applications

Mark Roberson

question. thing, appreciate Sure the Dan. I Sure.

So not Illuminarium is product; we into is customer the actually Illuminarium a from our product the where division. sold screen a

from of ago. has it's as virtually about years So of business. today, the much it's to become business non-cinema, we grown call, just XX% -- zero it's but back part become the in small than that three to it's up, a And but more mentioned two the less to important probably

it's pretty going QX example cinema; the there other ability really the cinema or that So, in coatings the the we've of leverage to of use our QX, The and in you've and Eclipse ventures. in that for paints into around situation we're capabilities the products a are Illuminarium about we where selling Goh this R&D parks something business we're with to and selling product streams would into we and product is It excited non-cinema line Exhibits diversification which was the developed example that where Eclipse Curvilinear the big selling were weren't screens applications Illuminarium include and in The summer. a one outside pretty expansion and of the the and applications. military examples seen and Van itself, same theme was we model cinema but business that. project simulators application

is So, the business, excited small and the growing about a pretty part and vertical it. non-cinema of we're

Unidentified Analyst

going that's it thanks. luck Good Yes, for helpful. guys. that's me, Great, forward,

Mark Roberson

Thanks, it. Dan. appreciate I

Operator

line And of our with the Reiss question Scott. Montgomery Brett next Please [Operator ahead. Instructions] is go from Janney

Brett Reiss

Good afternoon.

Mark Roberson

Hey Brett, how you're doing?

Brett Reiss

pretty I'm good.

Mark Roberson

Good.

Brett Reiss

guidance the on give you can any us on The IPO, timeline that?

Mark Roberson

period Brett. Yes, zero on that's attorneys. Entertainment Strong question, a to good according time at I'm give where allowed of talk a the our guidance I can Unfortunately, really IPO not to at that really about all. We're

would I as to we in tuned will regard. soon and something to communicate as you really, that tell stay So able we're

Brett Reiss

ask what let's IPO? do me generically; Strong on Let do you just -- you have to it do have to move do Ballantyne to you -- pretend what an forward to wasn't

Mark Roberson

Yes.

Ballantyne days separate SEC; to After of that or process. by part the back-and-forth the goes separate Step case, steps, filing review our the basic the comment really, of IPO the be going financials that. entertainment there audit group several preparing initial the which public, concluded, going preparation any is through it minimum as months; performing comment at step of then for of range the but there's audited any So SEC. carve-out the a and then time, concluded, in an the been has proceed. XX-day an leads any with S-X IPO and first this to period S-X. and is XX there's once could that, And usually, can period take the is so filing and company apply one company or in that's carve-out can would financials that beyond period, a of an carve-out required in of which After the the S-X procedures are carve-out a and the audit

Brett Reiss

SG&A quarter be higher money financial laying put that to assume the the to I S-X? professionals Can for together Okay. you're is out because this going

Mark Roberson

under the get SG&A separation preparation work IPO. additional the professional the for the firms and and incurring of so in of when to occurs. not related as the may transaction the into process GAAP we have work will hit part see reflected Those deferred the and those be costs you accounting in definitely our performing necessarily We cost but costs audit will legal offering, the engaged be additional that IPO the of

Brett Reiss

somebody can it asked what the -- transcript call, Ballantyne So at? might start conference company is, the out what know mentioned you just is? a Do the to an second was valued make of kicking the MIT. name of what tires I I Strong and symbol the couldn't stock my do IPO and of own company quarter In that of or Okay. comparable about you it just be

Mark Roberson

their company, Image name That and symbol is Brett. Absolutely, Sure. the Technologies, ticker Moving MITQ is [ph].

Brett Reiss

Okay.

Mark Roberson

went They the back in public summer.

So, I'm assuming that's who to. you're referring

Brett Reiss

Okay.

see How I that's about million we So trading $XX them? a at compare it cap. to market do

Mark Roberson

to soon. you at to of I'm to again, the about, entertainment I'll time. it mean, boundaries the about look I allowed I I really Yes. can't what talking business forward think talk within valuation this about talk of

Brett Reiss

Okay, that's cool.

up before doing we're million million to an two some in can it? maybe so lesser Now a COVID or within million, $X up million. share? or year you $XX pick competitors that $XX next rate million Have run get the Do up out, annualized $XX of to revenues, think is to Strong we back back capitalized which was of market million Ballantyne $XX hit, we $XX falling quarter, even our exceed

Mark Roberson

I favorable. specific certainly We outsourcing, side; haven't we bullish because will folks particularly on STS our -- on some Yes. gain exhibitors to to giving certainly share believe has heavily the Group of ability our area the it folks guidance, that without certainly so survived. -- I in mean, service like think outsourcing we are services service backdrop more is rely post-COVID on

see As $XX said, recover, the you in run we -- continue million, $XX rate. our from that as to growth participate will and we'll customers that, current annualized million

to pre-COVID certainly to hopefully those Difficulty]. closer -- closer up the levels [Technical back and You'll

Brett Reiss

right. Right,

GreenFirst rights. the Now for million exercise after of $XX about cash you outlays of the have the

use the a offering; left much and to left then capital cash you how about have ballpark of talk your to what's six months for participating what's drawing you're the that? You of sufficient working And a is is be year? going you're board on there then going number the guys what for rights in next FGF to

Mark Roberson

feel participation the the on as and FGF folks. rights share. we We we itself, depends the intend Yes, -- to capital in good shares in able offering, many offering. position. participate But I formula to X.XX it earnings we the know be rights offering call, the intend, about per release in by of in entitled We we're it's the -- how on secure based if level shares said we'll in the to the don't precisely [ph] fully rights think other

you if on that shares participation that's So be to if everyone that our how and the fully We math we assume hold, able to do oversubscribe. on we'd participates. million one it's many XXX% that buy we plan shares never else

Brett Reiss

Right, and right. speak input are Do at to of monthly kind or going? you actually the any Firefly how daily operations get on

Mark Roberson

Firefly them not so We company, is with post-COVID. private what certainly is required how to nicely from a we understand their and about the get do private confidential is quite they're grow us. to indications has continuing business going and business share information grown

Brett Reiss

me. for all you right. my for That's much Right, answering Thank questions. very

Mark Roberson

much. Thank No appreciate very questions. We problem, the you Brett.

Operator

we please this for phone today. no call you you And We And and for time, disconnect further conference ask your conclude have lines. that at that your questions participation the does on the line. thank

FG (FGH) 11 Nov 212021 Q3 Earnings call transcript