Ballantyne Strong, Inc. (NYSE MKT: BTN):
(Investor Relations section) or www.earnings.com
Ballantyne Strong, Inc. (NYSE MKT: BTN), a provider of digital cinema
projection equipment, screens and services as well as specialty lighting
equipment, today reported financial results for the third quarter ended
September 30, 2012.
Commenting on the Company's operating results, President and CEO Gary L.
"Net revenues for the third quarter came in at $39.3 million, down 38%
from a year ago when Ballantyne achieved an all-time record as a result
of a significant digital cinema deployment. The diluted loss per share
of $0.02 compared to net earnings of $0.33 per share in the
record-setting Q3 '11.
"Third quarter results reflect the recent industry pricing pressure
related to the advanced stage of the domestic digital system rollout,
putting pressure on margins for equipment resellers. We are actively
focused on expanding into complementary opportunities that build upon
our competencies. Ballantyne's reputation as a customer-focused service
provider with an 80-year track record of success is evidence of the
Company's ability to transition to new markets and technologies. Our
strong balance sheet and strategic focus positions us for future growth.
"Ballantyne's year-over-year comparisons reflect the record revenue and
bottom-line net income numbers generated in last year's third quarter
when our cinema services group successfully completed the Marcus
Theatres digital rollout of more than 550 projection systems in an
unprecedented 45-day period.
"We remain focused on further leveraging our strong industry position,
technological expertise and customer service orientation as we
transition Ballantyne from its recent successes in the cinema industry's
widespread adoption of the digital platform. Our mid-term goal is to
achieve sustainable and more predictable performance derived from a
larger recurring revenue base in areas such as service. We are
optimistic that with the stability of the Company's healthy balance
sheet, including $36.8 million in cash and no long-term debt, and our
continued emphasis on achieving operational efficiency, Ballantyne
remains well positioned to generate continued success over the next
phase of our corporate evolution."
Third Quarter Highlights
Third Quarter Results
Ballantyne Strong's total net revenues decreased 38% to $39.3 million
versus $63.4 million for Q3 '11. The decrease was largely due to the
challenging comparison to the record-setting prior-year period.
Digital cinema products accounted for $30.6 million of the Company's
total sales during the period compared to $54.0 million in the year ago
quarter. As mentioned above, the decrease was largely due to the
challenging comparison to the prior-year period although the decline was
more pronounced as the Virtual Print Free (VPF) providers extended their
installation deadlines, some as far out as April of next year, as long
as an exhibitor is signed up for a given program. BTN continues to
leverage its worldwide relationships with exhibitors and has captured a
digital deployment contract from one of the largest cinema chains in
Latin America, with delivery scheduled for Q4 and early 2013. In
addition, a focused sales effort on the remaining U.S. projector market
has also contributed to steady sales from the smaller to mid-sized
Cinema service revenue of $4.3 million declined 7.4% as compared to $4.6
million in Q3 '11. The decrease was due to the substantial installation
revenue recognized the prior year, which was partially offset with
growth in the service and Network Operations Center (NOC) 24/7
monitoring businesses. Sales growth in service and NOC monitoring, when
compared to the year-ago quarter, increased approximately 25% and 250%,
The Company's cinema screen business generated sales of $3.0 million
during the quarter, 24% higher than the year-ago level, reflecting a
significant increase in large format screen sales as well as continued
international screen sales growth.
The specialty lighting business generated quarterly sales of $0.8
million, up from $0.7 million a year ago. The slight increase was a
result of ongoing efforts to support and grow this business with an
array of LED-focused products. We were recently awarded the World Trade
Center lighting contract to produce the world's first high-powered LED
beacon light based on its proprietary LED Solutions technology. The
Company also secured a contract to provide the architectural lighting
for the antenna of the World Trade Center.
Gross profit was $3.7 million, down 63% from $10.1 million a year ago.
The reduced volume, as discussed previously, impacted gross profit by
$3.9 million with the remaining $2.5 million shortfall associated with
competitive pressures within the digital equipment market, lower margin
sales on international business and reduced leverage on fixed costs due
to the lower Q3 sales volume.
SG&A expenses were relatively flat at $3.7 million versus $3.5 million
in the prior-year period. The Company continues to exercise expense
discipline to ensure spending is allocated in-line with business trends
and the ongoing transformation of its business, including the expansion
of its global products and services re-focus, as announced in early 2012.
The Company reported a net loss for the quarter of $0.3 million, or
$0.02 per diluted share, compared to net income of $4.7 million, or
$0.33 per diluted share in Q3 '12.
Net revenues for the nine months ended September 30, 2012 decreased
approximately 2% to $130.0 million, compared to the first nine months of
2011, leading to a gross profit of $16.4 million, or 13% of net
revenues, compared to gross profit of $22.9 million, or 17.2% of net
revenues in the comparable prior-year period. Net earnings were $4.0
million, or $0.28 per diluted share, compared to net earnings of $8.7
million, or $0.60 per diluted share in the first nine months of 2011.
Balance Sheet and Cash Flow Update
Ballantyne's cash and cash equivalents balance at quarter-end was $36.8
million, up from $35.9 million at the end of Q2 '12.
About Ballantyne Strong, Inc. (www.strong-world.com)
Ballantyne Strong is a provider of digital cinema projection equipment,
screens and services as well as specialty lighting equipment. 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
Ballantyne Strong, Inc. and Subsidiaries
Condensed Consolidated Statements of Operations
Three and Nine Months Ended September 30, 2012 and 2011
Ballantyne Strong, Inc. and Subsidiaries
Condensed Consolidated Balance Sheets
September 30, 2012 and December 31, 2011
Preferred stock, par value $.01 per share; Authorized 1,000 shares,none
Common stock, par value $.01 per share; Authorized 25,000shares;
issued 16,779 and 16,667 shares at September 30, 2012and
December 31, 2011, respectively; 14,048 and 14,512 sharesoutstanding
at September 30, 2012 and December 31, 2011,respectively
Less 2,713 and 2,155 of common shares in treasury, at cost atJune
30, 2012 and December 31, 2011, respectively
Condensed Consolidated Statements of Cash Flows
Nine Months Ended September 30, 2012 and 2011
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