Ballantyne Provides Update on Outlook for its Digital Cinema Businesses
September 16 2008 - 4:07PM
Business Wire
Ballantyne of Omaha, Inc. (Amex: BTN), a provider of cinema
equipment and services, today provided an update on its current
operations and expectations for its digital cinema businesses.
Ballantyne also disclosed that it executed a contract with NEC
Viewtechnology Trading that expands its distribution territory for
the NEC Starus� Line of Digital Cinema Projectors to include the
Peoples Republic of China, a market with approximately 6,000 cinema
screens. Digital Projector Sales Expectations Based on the current
status of discussions with certain exhibitors who are members of
Digital Cinema Implementation Partners (DCIP), which account for
approximately 15,000 cinema screens in North America, Ballantyne
now believes that its expected market share for digital cinema
equipment sales to DCIP�s members will likely be below the
Company�s original expectations. Ballantyne�s assessment of its
market share within DCIP members is based on information gleaned
from planning dialogues with these organizations. The market share
assessment is not based on executed purchase orders, and as a
result, actual order activity could differ from current
expectations. Of the three major DCIP members, one currently
indicates that Ballantyne�s share of their digital cinema projector
purchases could approximate 15-20% of their total planned projector
purchases. A second DCIP member has indicated that they intend to
purchase nearly 100% of their digital projectors from a
Ballantyne/NEC competitor, and a third DCIP member has not yet made
its equipment procurement intentions known. Ballantyne is working
to improve its market share with the members of DCIP, and it
continues to market its products to the remaining exhibitors in
North America, which represent approximately 22,000 screens.
Ballantyne also continues to expect digital projector sales in
Central and South America, regions where Ballantyne also serves as
NEC�s master reseller and which account for approximately 3,500
screens. John P. Wilmers, President and Chief Executive Officer of
Ballantyne, commented, �While it is premature to make definitive
statements on ultimate market share allocations for our digital
cinema equipment and services, Ballantyne�s Board and management
felt an obligation to inform our investors of the procurement
trends we are currently witnessing from certain exhibitors within
DCIP. We are disappointed by the market share allocation currently
anticipated from DCIP at this stage in their planning process and
are working with our partner, NEC, to determine ways to improve our
sales to DCIP. At this time, we are pleased with the demand we are
seeing for our digital cinema integration and installation
services, and our cinema screen business is generating strong
results. �We remain optimistic regarding the longer term prospects
for our company and continue to focus on delivering the highest
level of customer service to ensure the success of our exhibitor
clients. We maintain an ongoing dialogue with the members of DCIP,
seeking to increase our market share for projectors, electronic and
mechanical components and installation services. We stand ready to
deliver additional equipment and services should any of these
customers� preferences change.� Digital Projector Integration and
Installation Expectations The sales and marketing efforts of
Ballantyne�s Strong Technical Services (STS) subsidiary are
generating high demand for its service offerings which are
�agnostic� as to the brand of equipment requiring service. While
contracts have not been executed, ongoing customer conversations
suggest that STS is currently slated to receive a majority of the
digital cinema installation and integration business pertaining to
one DCIP member and is in dialogue with a second DCIP member
regarding potential service opportunities. Ballantyne remains
confident that STS� �agnostic� service offerings will continue to
see robust demand for installation and integration services and
expects to offer ongoing service and maintenance to its customers
once their digital systems are in place. 3-D and Conventional
Cinema Screens Ballantyne�s cinema screen business, Strong Screen
Systems (SSS), has seen significant demand for specialty screens
for 3-D cinema as well as certain large format uses.
Internationally, Asia represents an attractive growth opportunity
as SSS has not previously been able to access this substantial
market. Ballantyne plans to leverage its cinema screen presence in
Asia through its long-standing Hong Kong and recently established
Beijing sales offices. Peoples Republic of China Ballantyne
recently executed an agreement with NEC Viewtechnology Trading
(Shenzehen), Ltd., granting Ballantyne�s Strong Westrex (Beijing)
Trading Co. Ltd. subsidiary distribution rights to NEC�s Starus
line of digital cinema projectors for the Peoples Republic of China
(PRC). In conjunction with the PRC distribution agreement,
Ballantyne has completed the opening of its Beijing sales and
service office. Strong Westrex, which has a 40+ year reputation in
the Asian cinema market, will initiate a proactive sales and
promotion campaign to highlight Ballantyne�s digital cinema
projector and screen offerings, targeting the entities that control
cinema procurement. The PRC with its substantial population and
robust economy represents a very attractive, rapidly growing cinema
market both in terms of screens and ticket sales. The country
currently has approximately 6,000 cinema screens and that base is
anticipated to grow significantly in the coming years. About
Ballantyne of Omaha Ballantyne is a provider of motion picture
projection, digital cinema projection, cinema screen technology and
specialty lighting equipment and services. The Company supplies
major theater chains, top arenas, television and motion picture
production studios, theme parks and architectural sites around the
world. For more information visit www.ballantyne-omaha.com. 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. CONTACT:
Ballantyne Strong (AMEX:BTN)
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