BTN Ballantyne Strong Inc

Ballantyne Strong, Inc. (NYSE Amex: BTN):

Conference call:

   

Tomorrow, Wednesday, March 16, 2011 at 9:00 AM ET

Webcast / Replay URL:

www.earnings.com or http://www.ballantyne-strong.com/IREvents.aspx

The replay will be available on the Internet for 90 days.

Dial-in number:

800 909 5034 (no pass code required)

 

Ballantyne Strong, Inc. (NYSE Amex: BTN), a provider of digital cinema projection equipment and services, cinema screens and other cinema products, today reported financial results for the fourth quarter (Q4) and year ended December 31, 2010.

Fourth Quarter Results

Ballantyne Strong’s net revenues rose 140% to $45.3 million, its third consecutive all-time record quarter, as the Company achieved across-the-board, significant increases in sales of digital cinema projection equipment, cinema screens and digital cinema services. Ballantyne’s net earnings were $2.3 million, or $0.16 per diluted share, compared to a break-even quarter a year ago.

Sales of digital products rose more than five-fold to $33.3 million, compared to $6.4 million a year-ago as strong demand continued in the Americas and China given the ongoing global industry transformation to digital cinema. Ballantyne’s cinema screen equipment rose 203% to $5.9 million during Q4, reflecting continuing demand for digital 3D-compatible screens. The Company’s cinema services revenue grew to $2.6 million, from $1.1 million a year-ago.

Consolidated gross profit increased 126% to $8.0 million, or 17.7% of net revenues, compared to gross profit of $3.5 million, or 18.8% of net revenues in Q4 ‘09. The expected decline in gross profit margin reflects increased digital projection equipment sales, which carry lower margins than the majority of Ballantyne’s other products and services. SG&A was $4.3 million, compared to $3.2 million in Q4 ‘09, but these expenses dropped significantly to 9.4% of net revenues during the quarter, versus 17.2% in Q4 ‘09.

2010 Results

Net revenues rose 89.0% to $136.3 million, an all-time annual record, compared to $72.1 million a year ago. Gross profit improved 68.0% to $24.7 million, or 18.1% of net revenues, compared to gross profit of $14.7 million, or 20.4% of 2009 net revenues. Net earnings amounted to $8.4 million, or $0.59 per diluted share, compared to net earnings of $2.1 million, or $0.15 per diluted share, in 2009.

Balance Sheet Update

Ballantyne concluded 2010 with $22.3 million in cash and cash equivalents, compared to $23.6 million at December 31, 2009. The Company generated cash flow from operations of $3.6 million in 2010. Ballantyne incurred capital expenditures of $6.8 million during the year ended December 31, 2010, including $5.8 million for the recently completed purchase and expansion of its ISO:9001 cinema screen manufacturing facility and $0.5 million for the construction and installation of the Company’s state-of-the-art Digital Network Operations Center (NOC), completed October 2010. The NOC is providing 24/7 remote monitoring for digital projection equipment as well as non-cinema digital systems, located around the globe.

Commenting on the record results, President and CEO Gary L. Cavey stated, “Ballantyne achieved very strong fourth quarter and full-year operating results as we continued to capitalize on our role as a one-stop provider of digital cinema products and related services. Q4 results were paced by continued high demand for our digital projection equipment throughout the Americas and Asia – especially in China – where they continue building new digital theatres at a very rapid pace. The Company’s cinema screens and services businesses also posted a solid quarter and noteworthy twelve-month performances.

“We remain uniquely well positioned to benefit from the substantial service opportunities that the unprecedented, worldwide digital conversion activity is fostering. We are also actively seeking creative ways to further deploy Ballantyne’s cutting-edge NOC services and continuing our search for potential M&A opportunities that complement our strategy and cinema industry relationships and expertise.”

About Ballantyne Strong, Inc. (www.ballantyne-strong.com)

Ballantyne Strong is a provider of digital cinema projection equipment and services as well as cinema screens, motion picture projectors and specialty lighting equipment and services. The Company supplies major and independent theater chains, top arenas, theme parks and architectural sites around the world.

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.

   

Ballantyne Strong, Inc. and Subsidiaries

Consolidated Statements of Operations

(unaudited)

         

Three Months EndedDecember 31,

Year Ended

December 31,

2010

 

2009

2010

 

2009

  Net revenues $ 45,318,890 $ 18,847,561 $ 136,334,617 $ 72,145,757 Cost of revenues 37,315,083 15,302,474 111,596,028 57,413,724 Gross profit 8,003,807 3,545,087 24,738,589 14,732,033   Selling & administrative expenses: Selling 1,542,236 959,039 3,822,494 2,914,019 General & administrative 2,715,756 2,274,321 9,068,557 8,147,861 Total SG&A expenses 4,257,992 3,233,360 12,891,051 11,061,880 Gain (loss) on disposal or transfer of assets (27,535) (15,197) 150,657 (16,911) Income from operations 3,718,280 296,530 11,998,195 3,653,242   Interest income 3,286 6,300 20,873 87,203 Interest expense (18,770) (7,759) (45,890) (33,316) Equity in income (loss) of Joint Venture (220,898) (252,440) 581,495 (889,997) Other expense, net (55,946) (37,326) (163,224) (67,156) Earnings before income taxes 3,425,952 5,305 12,391,449 2,749,976 Income tax (expense) benefit (1,090,181) 46,477 (3,957,996) (679,458) Net earnings $ 2,335,771 $ 51,782 $ 8,433,453 $ 2,070,518   Earnings per share Basic $ 0.16 $ 0.00 $ 0.60 $ 0.15 Diluted $ 0.16 $ 0.00 $ 0.59 $ 0.15   Weighted average shares outstanding: Basic 14,233,306 14,022,132 14,163,088 14,002,985 Diluted 14,420,154 14,204,659 14,371,430 14,161,255    

Ballantyne Strong, Inc. and Subsidiaries

Condensed Consolidated Balance Sheets

(Unaudited)

 

         

Assets

Dec. 31, 2010 Dec. 31, 2009 Current assets: Cash and cash equivalents $22,250,154 $23,589,025 Restricted cash 208,855 442,766 Accounts receivable, net 16,379,492 8,877,980 Unbilled revenue 7,057,331 1,894,075 Inventories, net 27,940,237 12,987,048 Recoverable income taxes 4,930 1,850,699 Deferred income taxes 2,127,911 1,943,679 Consignment inventory 662,795 486,527 Other current assets 2,780,517 667,592 Total current assets 79,412,222 52,739,391 Investment in joint venture 2,070,576 2,216,638 Property, plant and equipment, net 9,750,047 3,612,935 Intangible assets, net 700,888 1,103,128 Other assets 22,000 17,257 Deferred income taxes 75,698 520,951 Total assets $92,031,431 $60,210,300 Liabilities and Stockholders’ Equity Current liabilities: Accounts payable $30,751,310 $9,768,896 Other accrued expenses 3,889,836 3,623,143 Customer deposits 2,849,555 2,295,946 Income tax payable 1,520,769 1,246,247 Total current liabilities 39,011,470 16,934,232 Deferred income taxes 266,439 274,977 Other accrued expenses, net of current portion 376,703 483,425 Total liabilities 39,654,612 17,692,634 Commitments and contingencies Stockholders’ equity: Preferred stock, par value $.01 per share; Authorized 1,000,000 shares, none outstanding — —

Common stock, par value $.01 per share; Authorized 25,000,000 shares; issued 16,453,140 shares at 12/31/10 and 16,283,676 shares at 12/31/09

164,531 162,836 Additional paid-in capital 36,241,154 35,332,787 Accumulated other comprehensive income (loss): Foreign currency translation 259,833 (286,086) Minimum pension liability 80,384 110,665 Retained earnings 31,013,597 22,580,144 67,759,499 57,900,346 Less 2,139,982 of common shares in treasury, at cost (15,382,680) (15,382,680) Total stockholders’ equity 52,376,819 42,517,666 Total liabilities and stockholders’ equity $92,031,431 $60,210,300    

Selected Cash Flow Statement Items (unaudited):

        Twelve Months Ended

December 31,

   2010   

   

   2009   

  Net earnings $ 8,433,453 $ 2,070,518 Depreciation and amortization 1,490,246 1,752,550 Equity in (income) loss of joint venture (581,495) 889,997 Net cash provided by operating activities 3,643,232 2,367,167 Capital expenditures (6,811,667) (907,659) Proceeds from sales of investments in securities - 10,025,000 Net cash (used in) provided by investing activities (5,659,451) 9,378,295 Net increase (decrease) in cash & cash equivalents (1,338,871) 12,164,041 Cash & cash equivalents at beginning of period 23,589,025 11,424,984 Cash & cash equivalents at end of period $ 22,250,154 $ 23,589,025