Ballantyne Strong, Inc. (NYSE American: BTN), a holding
company with diverse business activities focused on serving the
cinema, retail, financial and government markets, today reported
financial results for the third quarter ended September 30,
2017.
Net revenues were $19.6 million in the third quarter of 2017,
compared with $18.7 million in the same period of the prior year.
Income from operations was $0.5 million in the third quarter of
2017, compared with $0.3 million in the same period of the prior
year. Net loss from continuing operations was ($1.0) million, or
($0.07) per share, in the third quarter of 2017 compared with
($0.5) million, or ($0.03) per share, in the same period of the
prior year.
Kyle Cerminara, Chairman and CEO of Ballantyne Strong, Inc.,
commented, “Our Digital Media segment showed improvement in the
third quarter compared to last year. We continue to make
investments in Digital Media with the objective of positioning the
business for profitability in 2018.” Mr. Cerminara added, “Our
Cinema segment continues to contribute a steady stream of free cash
flow. We believe our Cinema screen business in Joliette, Quebec, is
truly a wonderful business with an extraordinary economic moat and
a world-class customer base that represents the largest and best
theater exhibitors in the world.” Mr. Cerminara concluded, “As we
prepare to exit 2017 and position BTN for 2018, our goals for the
company are clearly defined to: (1) complete our transition to a
high performance holding company, (2) refine our systems and
control environment such that we have a highly scalable
infrastructure for growth, (3) focus every business on
profitability and cease selling products and services that do not
contribute to our bottom line, (4) improve our profitability and
cash flow such that we are generating ample amounts of cash for
reinvestment in our current and future businesses and (5) focus our
talent and resources on business opportunities that have the
largest positive impact on the company’s cash flows.”
Q3 2017 Financial SummaryCinema revenues were $8.7
million in the third quarter of 2017, compared with $11.1 million
in the same period of the prior year. The decrease was driven by
decreased sales of projectors, lamp products, and screen support
systems, partially offset by slight increases in sales of screens
and digital parts.
Digital Media revenues were $11.1 million in the third quarter
of 2017, compared with $7.9 million in the same period of the prior
year. This increase was driven by increased sales of digital
signage equipment and installation services.
Consolidated gross profit was $5.3 million in the third quarter
of 2017, compared with $4.4 million in the same quarter of the
prior year. Gross margin was 27.2% in the third quarter of 2017,
compared with 23.4% in the same quarter of the prior year, as
Cinema screen sales, which carry a higher margin, comprised a
greater percentage of the Company’s revenues in the third quarter
of 2017.
Selling and administrative expenses were $4.8 million in the
third quarter of 2017, compared with $4.1 million in the same
quarter of the prior year. The increase was primarily due to a $0.3
million increase in consulting and software licensing costs
associated with our CRM and ERP systems implementation and $0.2
million in bad debt expense.
Balance SheetExcluding assets held for sale, Ballantyne’s
cash and cash equivalents balance at September 30, 2017 was $4.0
million, compared to $7.6 million at December 31, 2016. The
decrease in cash was driven by operating losses and cash utilized
for the purchase of equity investments and for capital
expenditures, partially offset by proceeds from the issuance of
$2.5 million of short and long term debt. Equity method investments
had a book value of $17.6 million and a market value of $16.0
million as of September 30, 2017.
About Ballantyne Strong, Inc.
(www.ballantynestrong.com)Ballantyne Strong and its
subsidiaries engage in diverse business activities including the
design, integration and installation of technology solutions for a
broad range of applications; development and delivery of
out-of-home messaging, advertising and communications;
manufacturing of projection screens; and providing managed services
including monitoring of networked equipment. The Company focuses on
serving the cinema, retail, financial and government markets.
Forward-Looking StatementsExcept for the historical
information in this press release, it includes forward-looking
statements which involve a number of risks and uncertainties,
including but not limited to those discussed in the “Risk Factors”
section contained in Item 1A in our Annual Report on
Form 10-K/A for the fiscal year ended December 31, 2016
and the following risks and uncertainties: the Company’s ability to
expand its revenue streams, potential interruptions of supplier
relationships or higher prices charged by suppliers, the Company’s
ability to successfully compete and introduce enhancements and new
features that achieve market acceptance and that keep pace with
technological developments, the Company’s ability to successfully
execute its capital allocation strategy, the Company’s ability to
retain or replace its significant customers, the impact of a
challenging global economic environment or a downturn in the
markets, economic and political risks of selling products in
foreign countries, risks of non-compliance with U.S. and foreign
laws and regulations, cybersecurity risks and risks of damage and
interruptions of information technology systems, the Company’s
ability to retain key members of management and successfully
integrate new executives, the Company’s ability to assert its
intellectual property rights, the impact of natural disasters and
other catastrophic events, the adequacy of insurance and the impact
of having a controlling stockholder. Given the risks and
uncertainties, readers should not place undue reliance on any
forward-looking statement and should recognize that the statements
are predictions of future results which may not occur as
anticipated. Actual results could differ materially from those
anticipated in the forward-looking statements and from historical
results, due to the risks and uncertainties described herein, as
well as others not now anticipated. New risk factors emerge from
time to time and it is not possible for management to predict all
such risk factors, nor can it assess the impact of all such factors
on our business or the extent to which any factor, or combination
of factors, may cause actual results to differ materially from
those contained in any forward-looking statements. Except where
required by law, the Company assumes no obligation to update
forward-looking statements to reflect actual results or changes in
factors or assumptions affecting such forward-looking
statements.
Ballantyne Strong, Inc. and Subsidiaries
Condensed Consolidated Balance Sheets (In thousands)
September 30, 2017 December 31, 2016
(Unaudited) Assets Current assets: Cash and cash
equivalents $ 4,049 $ 7,596 Accounts receivable, net 15,465 16,316
Inventories, net 6,980 6,563 Other current assets 2,134
2,606 Total current assets 28,628 33,081 Property, plant and
equipment, net 11,357 11,187 Equity method investments 17,644
13,098 Goodwill and intangible assets, net 4,930 3,246 Other assets
1,839 1,827 Total assets $ 64,398 $ 62,439
Liabilities and Stockholders' Equity Current liabilities:
Accounts payable and accrued expenses $ 9,987 $ 9,272 Short-term
debt, including current portion of long-term 564 - Customer
deposits/deferred revenue 3,057 4,211 Other current liabilities
15 165 Total current liabilities 13,623 13,648
Long-term debt, net of current portion 1,884 - Other liabilities
4,134 3,637 Total liabilities 19,641 17,285
Stockholders' equity 44,757 45,154 Total liabilities
and stockholders' equity $ 64,398 $ 62,439
Ballantyne
Strong, Inc. and Subsidiaries Condensed Consolidated
Statements of Operations Three and Nine Months Ended
September 30, 2017 and 2016 (In thousands, except per share
data) (Unaudited) Three
Months Ended September 30, Nine Months Ended September
30, 2017 2016 2017 2016 Net product
sales $ 12,808 $ 13,071 $ 38,302 $ 39,668 Net service revenues
6,751 5,597 18,583
16,672 Total net revenues 19,559 18,668 56,885 56,340 Cost
of products sold 10,112 11,172 30,929 31,210 Cost of services
4,128 3,119 10,923
9,368 Total cost of revenues 14,240
14,291 41,852 40,578 Gross
profit 5,319 4,377 15,033 15,762 Selling and administrative
expenses: Selling 1,298 1,128 4,207 3,302 Administrative
3,473 2,992 11,706 9,127
Total selling and administrative expenses 4,771
4,120 15,913 12,429
Income (loss) from operations 548 257 (880 ) 3,333 Other
(expense) income: Interest income - 59 18 99 Interest expense (51 )
(41 ) (84 ) (81 ) Foreign currency transaction (loss) gain (306 )
23 (410 ) (982 ) Change in value of marketable securities - (34 ) -
(400 ) Excess distribution from joint venture - - - 502 Other
(expense) income, net (35 ) (7 ) (24 )
36 Total other expense (392 ) -
(500 ) (826 ) Earnings (loss) before income taxes and equity
method investment (loss) income 156 257 (1,380 ) 2,507 Income tax
expense 440 748 2,709 2,085 Equity method investment (loss) income
(753 ) 29 1,516 70
Net (loss) earnings from continuing operations (1,037 ) (462 )
(2,573 ) 492 Net loss from discontinued operations, net of tax
- (8 ) (49 ) (742 ) Net loss $
(1,037 ) $ (470 ) $ (2,622 ) $ (250 )
Net (loss) earnings per
share - basic Net (loss) earnings from continuing operations $
(0.07 ) $ (0.03 ) $ (0.18 ) $ 0.03 Net loss from discontinued
operations - (0.00 ) (0.00 ) (0.05 ) Net loss (0.07 ) (0.03 ) (0.18
) (0.02 )
Net (loss) earnings per share - diluted Net (loss)
earnings from continuing operations $ (0.07 ) $ (0.03 ) $ (0.18 ) $
0.03 Net loss from discontinued operations - (0.00 ) (0.00 ) (0.05
) Net loss (0.07 ) (0.03 ) (0.18 ) (0.02 )
Ballantyne
Strong, Inc. and Subsidiaries Condensed Consolidated
Statements of Cash Flows Nine Months Ended September 30,
2017 and 2016 (In thousands) (Unaudited)
Nine Months Ended September 30, 2017
2016 Cash flows from operating activities: Net loss $ (2,622
) $ (250 ) Net loss from discontinued operations, net of tax
(49 ) (742 ) Net (loss) earnings from continuing operations
(2,573 ) 492 Non-cash expenses, net 3,647 1,878 Equity method
investment income (1,516 ) (70 ) Changes in operating assets and
liabilities, net (471 ) (2,825 ) Net cash flows from
operating activities - continuing operations (913 ) (525 ) Net cash
flows from operating activities - discontinued operations
(147 ) (1,624 ) Net cash used in operating activities (1,060
) (2,149 ) Cash flows from investing activities: Purchase of
equity securities (2,525 ) (4,107 ) Dividends received from
investee in excess of cumulative earnings 230 206 Capital
expenditures (2,949 ) (1,102 ) Proceeds from sale of business
60 - Net cash used in investing
activities - continuing operations (5,184 ) (5,003 ) Cash
flows from financing activities: Proceeds from issuance of
long-term debt 2,000 -
Proceeds from issuance of short-term
debt
500 - Payment of debt issuance costs (46 ) - Principal payments on
long-term debt (17 ) - Purchase of treasury stock (102 ) (155 )
Proceeds from exercise of stock options 71 100 Payments on capital
lease obligations (188 ) (239 ) Excess tax benefits from
share-based arrangements - 6 Net cash
provided by (used in) financing activities 2,218 (288 ) Effect of
exchange rate changes on cash and cash equivalents - continuing
operations 304 763 Effect of exchange rate changes on cash and cash
equivalents - discontinued operations - (120 )
Net decrease in cash and cash equivalents (3,722 ) (6,797 )
Discontinued operations cash activity included above: Add: Cash
balance included in assets held for sale at beginning of period 175
4,208 Less: Cash balance included in assets held for sale at end of
period - (1,439 ) Cash and cash equivalents at beginning of period
7,596 17,862 Cash and cash equivalents
at end of period $ 4,049 $ 13,834
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version on businesswire.com: http://www.businesswire.com/news/home/20171106006505/en/
Ballantyne Strong, Inc.Lance Schulz,
402-829-9427Chief Financial Officer
Ballantyne Strong (AMEX:BTN)
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