[May 08, 2014] |
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Ballantyne Reports Financial Results for First Quarter of 2014
OMAHA, Neb. --(Business Wire)--
Ballantyne Strong, Inc. (NYSE MKT: BTN):
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Conference call:
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Today - May 8 at 11:00 a.m. ET
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Webcast / Replay URL:
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http://www.strong-world.com
(Investor Relations section)
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The replay will be available on the Internet for 90 days.
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Dial-in number:
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800-762-8795 ; conference ID 4681716 or "Ballantyne Strong"
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Ballantyne
Strong, Inc. (NYSE MKT: BTN), a diversified provider of digital
technology services, products and solutions, today reported financial
results for the first quarter ended March 31, 2014.
Net revenues were $22.0 million in the first quarter of 2014, compared
with $27.6 million in the same period of the prior year. Net loss
totaled $0.6 million, or ($0.04) per share, in the first quarter of
2014, compared with net income of $0.6 million, or $0.04 per diluted
share, in the same period of the prior year.
Gary L. Cavey, President and CEO of Ballantyne Strong, commented,
"Although total revenues were impacted by seasonal weakness in the first
quarter, we are very pleased with the improvement we are seeing in gross
margin as a result of the growth in our Managed Services segment. For
the first quarter of 2014, Managed Services increased to 38% of our
total revenue, up from 9% in the same period of the prior year. This
helped drive a nearly five percentage point improvement in our gross
margin to 19.1%.
"We continue to introduce new products that will drive organic revenue
growth. We recently introduced our Integrated
Cyber Screens, a new line of smaller motorized screens that will
enable us to offer our world-class big screen quality to the
professional audiovisual market for the first time. The Integrated Cyber
series is designed for use in smaller venues such as conference rooms,
media rooms, museums, schools and worship facilities. This new product
line will open up an entirely new market for us that we believe can help
drive continued growth in our screen business in the years ahead," said
Mr. Cavey.
Q1 2014 Financial Summary
Managed Services revenues were $8.4 million in the first quarter of
2014, compared with $2.5 million in the same period of the prior year.
The increase is attributable to the acquisition of Convergent Media
Systems.
Systems Integration revenues were $14.0 million in the first quarter of
2014, compared with $25.5 million in the same period of the prior year.
The decline is primarily attributable to the continued softening in
demand as the cinema industry's shift to a digital equipment platform.
Consolidated gross profit was $4.2 million in the first quarter of 2014,
compared with $3.9 million in the same quarter of the prior year. Gross
margin was 19.1% in the first quarter of 2014, compared with 14.2% in
the same quarter of the prior year. The improvement in gross margin was
primarily attributable to a higher contribution of Managed Services
revenue within the overall sales mix.
Selling, general and administrative expenses (SG&A) were $5.4 million in
the first quarter of 2014, compared with $3.4 million in the same
quarter of the prior year. The increase in SG&A was attributable to the
addition of Convergent's operations.
Balance Sheet and Cash Flow Update
Ballantyne's cash and cash equivalents balance at March 31, 2014 was
$25.5 million, a decrease from $28.8 million at the end of the prior
quarter. The decrease in cash and cash equivalents balance was primarily
attributable to a decrease in accounts payable.
About Ballantyne Strong, Inc. (www.strong-world.com)
Ballantyne Strong designs, integrates, and installs technology solutions
for a broad range of applications; develops and delivers out-of-home
messaging, advertising and communications; manufactures projection
screens and lighting products; and provides managed services including
monitoring of networked equipment. The Company focuses on serving the
retail, financial, government and cinema markets.
Forward-Looking Statements
Except for the historical information in this press release, it includes
forward-looking statements that involve risks and uncertainties,
including but not limited to, quarterly fluctuations in results;
customer demand for the Company's products; the development of new
technology for alternate means of motion picture presentation; domestic
and international economic conditions; the management of growth; and
other risks detailed from time to time in the Company's Securities and
Exchange Commission filings. Actual results may differ materially from
management's expectations.
-tables follow-
Ballantyne Strong, Inc. and Subsidiaries
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Condensed Consolidated Statements of Operations
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Three Months Ended March 31, 2014 and 2013
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(In thousands, except per share data)
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(Unaudited)
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2014
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2013
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Net product sales
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$
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14,834
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$
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25,196
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Net service revenues
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7,187
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2,425
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Total net revenues
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22,021
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27,621
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Cost of products sold
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12,450
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21,593
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Cost of services
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5,355
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2,114
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Total cost of revenues
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17,805
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23,707
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Gross profit
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4,216
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3,914
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Selling and administrative expenses:
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Selling
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1,546
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866
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Administrative
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3,893
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2,501
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Total selling and administrative expenses
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5,439
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3,367
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Gain (loss) on sale or disposal of assets
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7
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2
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Income (loss) from operations
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(1,216
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)
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549
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Equity in income (loss) of joint venture
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95
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(106
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)
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Other income (expense):
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Interest income
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177
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22
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Interest expense
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(9
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(7
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Other income (expense), net
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209
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248
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Total other income (expense)
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377
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263
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Earnings (loss) before income taxes
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(744
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706
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Income tax benefit (expense)
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150
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(141
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)
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Net earnings (loss)
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$
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(594
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$
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565
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Basic earnings (loss) per share
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$
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(0.04
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$
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0.04
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Diluted earnings (loss) per share
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$
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(0.04
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$
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0.04
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Weighted average shares outstanding:
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Basic
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14,026
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13,979
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Diluted
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14,026
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14,023
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Ballantyne Strong, Inc. and Subsidiaries
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Condensed Consolidated Balance Sheets
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(In thousands)
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March 31,
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December 31,
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2014
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2013
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(Unaudited)
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Assets
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Current assets:
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Cash and cash equivalents
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$
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25,491
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$
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28,791
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Accounts receivable (net of allowance for doubtful accounts of $759
and $703, respectively)
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16,511
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20,047
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Inventories:
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Finished goods, net
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10,597
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10,949
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Work in process
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359
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345
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Raw materials and components, net
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4,304
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3,891
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Total inventories, net
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15,260
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15,185
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Recoverable income taxes
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3,445
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2,207
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Other current assets
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5,500
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5,873
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Total current assets
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66,207
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72,103
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Property, plant and equipment (net of accumulated depreciation of
$5,007 and $4,781, respectively)
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14,202
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14,721
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Note receivable
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2,611
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2,497
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Intangible assets, net
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939
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895
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Goodwill
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1,080
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1,123
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Other assets
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3,672
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4,105
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Total assets
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$
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88,711
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$
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95,444
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Liabilities and Stockholders' Equity
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Current liabilities:
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Accounts payable
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$
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9,483
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$
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12,844
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Accrued expenses
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4,962
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6,236
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Customer deposits/deferred revenue
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3,621
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3,474
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Income tax payable
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496
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888
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Total current liabilities
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18,562
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23,442
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Deferred revenue
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2,643
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3,008
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Deferred income taxes
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755
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790
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Other accrued expenses, net of current portion
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1,781
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1,748
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Total liabilities
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23,741
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28,988
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Stockholders' equity:
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Preferred stock, par value $.01 per share; Authorized 1,000 shares,
none outstanding
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-
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-
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Common stock, par value $.01 per share; Authorized 25,000 shares;
issued 16,869 shares at March 31, 2014 and December 31, 2013,
respectively; 14,138 shares outstanding at March 31, 2014 and
December 31, 2013, respectively
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167
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167
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Additional paid-in capital
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38,332
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38,231
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Accumulated other comprehensive income:
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Foreign currency translation
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(1,989
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(959
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Postretirement benefit obligations
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190
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190
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Retained earnings
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46,509
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47,066
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83,209
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84,695
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Less 2,731 of common shares in treasury, at cost at March 31, 2014
and December 31, 2013
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(18,239
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(18,239
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Total stockholders' equity
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64,970
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66,456
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Total liabilities and stockholders' equity
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$
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88,711
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$
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95,444
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Ballantyne Strong, Inc. and Subsidiaries
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Condensed Consolidated Statements of Cash Flows
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Three Months Ended March 31, 2014 and 2013
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(In thousands)
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(Unaudited)
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2014
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2013
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Cash flows from operating activities:
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Net earnings (loss)
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$
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(594
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$
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565
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Adjustments to reconcile net earnings to net cash provided by
operating activities:
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Provision for doubtful accounts
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69
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30
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Provision for obsolete inventory
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(8
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24
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Provision for warranty
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(134
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)
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106
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Depreciation and amortization
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434
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338
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Equity in (income) loss of joint venture
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(95
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)
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106
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Loss on forward contracts
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348
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-
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(Gain) loss on disposal or transfer of assets
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(7
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2
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Deferred income taxes
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519
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(10
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Share-based compensation expense
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101
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95
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Changes in operating assets and liabilities, net of effect of
acquisitions:
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Accounts, unbilled and notes receivable
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3,709
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6,010
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Inventories
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(179
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)
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(2,773
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)
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Other current assets
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(200
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)
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821
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Accounts payable
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(3,314
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)
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(1,810
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)
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Accrued expenses
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(1,343
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)
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(315
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)
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Customer deposits/deferred revenue
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(208
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)
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(859
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)
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Current income taxes
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(1,599
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)
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(444
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)
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Other assets
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(56
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43
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Net cash (used in) provided by operating activities
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(2,557
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)
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1,929
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Cash flows from investing activities:
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Capital expenditures
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(258
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)
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(73
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)
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Proceeds from sales of assets
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56
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2
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Net cash used in investing activities
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(202
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)
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(71
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)
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Cash flows from financing activities:
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Proceeds from employee stock purchase plan
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-
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4
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Net cash provided by financing activities
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-
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4
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Effect of exchange rate changes on cash and cash equivalents
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(541
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)
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(167
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)
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Net increase (decrease) in cash and cash equivalents
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(3,300
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)
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1,695
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Cash and cash equivalents at beginning of year
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|
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28,791
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|
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40,168
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Cash and cash equivalents at end of year
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$
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25,491
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$
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41,863
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