[August 08, 2014] |
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Ballantyne Reports Financial Results for Second Quarter of 2014
OMAHA, Neb. --(Business Wire)--
Ballantyne Strong, Inc. (NYSE MKT: BTN):
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Conference call:
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Today - August 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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866-652-5200; ask for "Ballantyne Strong" conference call
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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 second quarter ended June 30, 2014.
Net revenues were $22.0 million in the second quarter of 2014, compared
with $24.4 million in the same period of the prior year. Net income
totaled $0.4 million, or $0.03 per diluted share, in the second quarter
of 2014, compared with net income of $1.3 million, or $0.09 per diluted
share, in the same period of the prior year.
Gary L. Cavey, President and CEO of Ballantyne Strong, commented, "We
continue to ramp up business development activities with the new
businesses we have recently entered, including digital media, video
surveillance, and small-format screens for the professional audiovisual
market. We are pleased with the improved diversity we have in our
revenue mix and the gross margins we are generating. As we gain traction
with our new businesses, we believe we will have many catalysts for
driving improvement in revenue and earnings in the coming years."
Q2 2014 Financial Summary
Managed Services revenues were $7.6 million in the second quarter of
2014, compared with $3.3 million in the same period of the prior year.
The increase is attributable to the acquisition of Convergent Media
Systems.
Systems Integration revenues were $14.8 million in the second quarter of
2014, compared with $21.5 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
winds down.
Consolidated gross profit was $4.2 million in the second quarter of
2014, compared with $4.7 million in the same quarter of the prior year.
Gross margin was 19.3% in the second quarter of 2014, compared with
19.2% in the same quarter of the prior year.
Selling, general and administrative expenses (SG&A) were $4.4 million in
the second quarter of 2014, compared with $3.3 million in the same
quarter of the prior year. The increase in SG&A was attributable to the
addition of Convergent's operations.
Six Month Results
For the six months ended June 30, 2014, net revenues were $44.0 million,
compared with $52.0 million for the same period in 2013. Gross profit
amounted to $8.5 million, or 19.2% of net revenues, compared to gross
profit of $8.6 million, or 16.5% of net revenues in the prior-year
period. Net loss was $0.2 million, or ($0.02) per share, compared to net
earnings of $1.8 million, or $0.13 per diluted share, in the first half
of 2013.
Balance Sheet and Cash Flow Update
Ballantyne's cash and cash equivalents balance at June 30, 2014 was
$26.9 million, an increase from $25.5 million at the end of the prior
quarter. The increase in cash and cash equivalents balance was primarily
attributable to positive cash flow generated from operations during the
second quarter of 2014.
About Ballantyne Strong, Inc. (www.strong-world.com)
Ballantyne Strong designs, integrates, and installs technology solutions
for a broad range of applications; develops and delivers out-of-home
messaging, advertising and communications; manufactures projection
screens and lighting products; and provides managed services including
monitoring of networked equipment. The Company focuses on serving the
retail, financial, government and cinema markets.
Forward-Looking Statements
Except for the historical information in this press release, it includes
forward-looking statements that involve risks and uncertainties,
including but not limited to, quarterly fluctuations in results;
customer demand for the Company's products; the development of new
technology for alternate means of motion picture presentation; domestic
and international economic conditions; the management of growth; and
other risks detailed from time to time in the Company's Securities and
Exchange Commission filings. Actual results may differ materially from
management's expectations.
Ballantyne Strong, Inc. and Subsidiaries
Condensed Consolidated Balance Sheets
(In thousands)
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June 30, 2014
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December 31, 2013
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(Unaudited)
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Assets
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Current assets:
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Cash and cash equivalents
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$
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26,903
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$
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28,791
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Accounts receivable (net of allowance for doubtful accounts of $642
and $703, respectively)
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14,785
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20,047
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Inventories:
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Finished goods, net
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11,995
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10,949
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Work in process
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611
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345
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Raw materials and components, net
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1,721
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3,891
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Total inventories, net
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14,327
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15,185
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Recoverable income taxes
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4,175
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2,207
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Other current assets
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4,965
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5,873
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Total current assets
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65,155
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72,103
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Property, plant and equipment (net of accumulated depreciation of
$5,472 and $4,781, respectively)
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14,366
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14,721
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Note receivable
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2,730
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2,497
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Intangible assets, net
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937
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895
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Goodwill
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1,119
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1,123
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Other assets
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4,396
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4,105
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Total assets
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$
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88,703
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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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9,030
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$
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12,844
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Accrued expenses
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4,445
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6,236
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Customer deposits/deferred revenue
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3,525
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3,474
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Income tax payable
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458
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888
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Total current liabilities
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17,458
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23,442
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Deferred revenue
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2,602
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3,008
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Deferred income taxes
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815
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790
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Other accrued expenses, net of current portion
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1,746
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1,748
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Total liabilities
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22,621
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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 16,912 and 16,869 shares at June 30, 2014 and December 31,
2013, respectively; 14,181 and 14,138 shares outstanding at June 30,
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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38,431
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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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(1,362
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)
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(959
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)
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Postretirement benefit obligations
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190
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|
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190
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Retained earnings
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46,895
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47,066
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84,321
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84,695
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Less 2,731 of common shares in treasury, at cost at June 30, 2014
and December 31, 2013
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(18,239
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)
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(18,239
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)
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Total stockholders' equity
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66,082
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66,456
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Total liabilities and stockholders' equity
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$
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88,703
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$
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95,444
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Ballantyne Strong, Inc. and Subsidiaries
Condensed Consolidated Statements of Operations
Three and Six Months Ended June 30, 2014 and 2013
(In thousands, except per share data)
(Unaudited)
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Three Months Ended June 30,
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Six Months Ended June 30,
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2014
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2013
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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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16,202
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$
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21,411
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$
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31,037
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$
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46,608
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Net service revenues
|
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5,825
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2,984
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13,011
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5,408
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Total net revenues
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22,027
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24,395
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44,048
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52,016
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Cost of products sold
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14,184
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17,555
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26,634
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39,149
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Cost of services
|
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3,596
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2,160
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8,951
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4,274
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Total cost of revenues
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17,780
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19,715
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35,585
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43,423
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Gross profit
|
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4,247
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4,680
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8,463
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8,593
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Selling and administrative expenses:
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Selling
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1,559
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870
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3,104
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1,736
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Administrative
|
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2,822
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2,453
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6,715
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4,954
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Total selling and administrative expenses
|
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4,381
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3,323
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9,819
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|
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6,690
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Gain on the sale/disposal/transfer of assets
|
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|
2
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|
|
|
3
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8
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|
|
4
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Income (loss) from operations
|
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(132
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)
|
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1,360
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|
|
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(1,348
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)
|
|
|
1,907
|
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Equity income (loss) of joint venture
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-
|
|
|
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(12
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)
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|
95
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|
|
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(118
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)
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Other income (expense):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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Interest income
|
|
|
|
|
182
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|
|
|
13
|
|
|
|
359
|
|
|
|
35
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|
Interest expense
|
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|
(18
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)
|
|
|
(12
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)
|
|
|
(27
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)
|
|
|
(19
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)
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Other income (expense), net
|
|
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(123
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)
|
|
|
247
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|
|
|
86
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|
|
|
496
|
|
Total other income (expense)
|
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|
41
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|
|
|
248
|
|
|
|
418
|
|
|
|
512
|
|
Earnings (loss) before income taxes
|
|
|
|
|
(91
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)
|
|
|
1,596
|
|
|
|
(835
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)
|
|
|
2,301
|
|
Income tax benefit (expense)
|
|
|
|
|
472
|
|
|
|
(319
|
)
|
|
|
622
|
|
|
|
(460
|
)
|
Net earnings (loss)
|
|
|
|
|
$
|
381
|
|
|
|
$
|
1,277
|
|
|
|
$
|
(213
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)
|
|
|
$
|
1,841
|
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Basic earnings (loss) per share
|
|
|
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|
$
|
0.03
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|
|
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$
|
0.09
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|
|
$
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(0.02
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)
|
|
|
$
|
0.13
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Diluted earnings (loss) per share
|
|
|
|
|
$
|
0.03
|
|
|
|
$
|
0.09
|
|
|
|
$
|
(0.02
|
)
|
|
|
$
|
0.13
|
|
|
|
|
|
|
|
|
|
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|
|
|
|
|
|
|
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Weighted average shares outstanding:
|
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|
|
|
|
|
|
|
|
|
|
|
|
|
|
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Basic
|
|
|
|
|
14,060
|
|
|
|
13,997
|
|
|
|
14,043
|
|
|
|
13,988
|
|
Diluted
|
|
|
|
|
14,106
|
|
|
|
14,045
|
|
|
|
14,043
|
|
|
|
14,035
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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Ballantyne Strong, Inc. and Subsidiaries
Condensed Consolidated Statements of Cash Flows
Six Months Ended June 30, 2014 and 2013
(In thousands)
(Unaudited)
|
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|
|
|
|
|
|
|
|
|
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Six Months Ended June 30,
|
|
|
|
|
|
2014
|
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|
|
2013
|
|
|
|
|
|
|
|
|
|
|
|
|
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Cash flows from operating activities:
|
|
|
|
|
|
|
|
|
|
|
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Net earnings (loss)
|
|
|
|
$
|
(213
|
)
|
|
|
$
|
1,841
|
|
Adjustments to reconcile net earnings to net cash provided by
operating activities:
|
|
|
|
|
|
|
|
|
|
|
|
Provision for doubtful accounts
|
|
|
|
|
(17
|
)
|
|
|
|
211
|
|
Provision for obsolete inventory
|
|
|
|
|
(39
|
)
|
|
|
|
10
|
|
Provision for warranty
|
|
|
|
|
(195
|
)
|
|
|
|
260
|
|
Depreciation and amortization
|
|
|
|
|
813
|
|
|
|
|
681
|
|
Equity in (income) loss of joint venture
|
|
|
|
|
(95
|
)
|
|
|
|
118
|
|
Loss on forward contracts
|
|
|
|
|
145
|
|
|
|
|
188
|
|
(Gain) loss on disposal or transfer of assets
|
|
|
|
|
(8
|
)
|
|
|
|
5
|
|
Deferred income taxes
|
|
|
|
|
(400
|
)
|
|
|
|
197
|
|
Share-based compensation expense
|
|
|
|
|
200
|
|
|
|
|
220
|
|
Changes in operating assets and liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
Accounts, unbilled and notes receivable
|
|
|
|
|
5,977
|
|
|
|
|
12,540
|
|
Inventories
|
|
|
|
|
818
|
|
|
|
|
(2,339
|
)
|
Other current assets
|
|
|
|
|
98
|
|
|
|
|
1,508
|
|
Accounts payable
|
|
|
|
|
(3,781
|
)
|
|
|
|
(7,778
|
)
|
Accrued expenses
|
|
|
|
|
(1,618
|
)
|
|
|
|
(1,095
|
)
|
Customer deposits/deferred revenue
|
|
|
|
|
(353
|
)
|
|
|
|
(1,283
|
)
|
Current income taxes
|
|
|
|
|
(2,382
|
)
|
|
|
|
331
|
|
Other assets
|
|
|
|
|
(90
|
)
|
|
|
|
56
|
|
Net cash (used in) provided by operating activities
|
|
|
|
|
(1,140
|
)
|
|
|
|
5,671
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash Flows from investing activities:
|
|
|
|
|
|
|
|
|
|
|
|
Capital expenditures
|
|
|
|
|
(536
|
)
|
|
|
|
(197
|
)
|
Proceeds from sale of assets
|
|
|
|
|
56
|
|
|
|
|
2
|
|
Net cash used in investing activities
|
|
|
|
|
(480
|
)
|
|
|
|
(195
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash flows from financing activities:
|
|
|
|
|
|
|
|
|
|
|
|
Excess tax benefits from share-based arrangements
|
|
|
|
|
(6
|
)
|
|
|
|
(11
|
)
|
Proceeds from employee stock purchase plan
|
|
|
|
|
-
|
|
|
|
|
3
|
|
Net cash used in financing activities
|
|
|
|
|
(6
|
)
|
|
|
|
(8
|
)
|
Effect of exchange rate changes on cash and cash equivalents
|
|
|
|
|
(262
|
)
|
|
|
|
(515
|
)
|
Net increase (decrease) in cash and cash equivalents
|
|
|
|
|
(1,888
|
)
|
|
|
|
4,953
|
|
Cash and cash equivalents at beginning of period
|
|
|
|
|
28,791
|
|
|
|
|
40,168
|
|
Cash and cash equivalents at end of period
|
|
|
|
$
|
26,903
|
|
|
|
$
|
45,121
|
|
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