|By Business Wire||
|March 14, 2014 05:00 AM EDT||
Ballantyne Strong, Inc. (NYSEMKT: BTN):
|Conference call:||Today – March 14 at 12:00 p.m. ET|
|Webcast / Replay URL:||
http://www.strong-world.com (Investor Relations section)
|The replay will be available on the Internet for 90 days.|
|Dial-in number:||877-941-0844; conference ID 4671381 or “Ballantyne Strong”|
Ballantyne Strong, Inc. (NYSEMKT: BTN), a diversified provider of digital technology services, products and solutions, today reported financial results for the fourth quarter ended December 31, 2013.
Net revenues were $32.7 million in the fourth quarter of 2013, compared with $39.1 million in the same period of the prior year. Net loss totaled $1.7 million, or ($0.12) per share, in the fourth quarter of 2013, compared with net income of $1.6 million, or $0.11 per diluted share, in the same period of the prior year.
The financial results for the fourth quarter of 2013 include the following items:
- Acquisition, transition, and severance costs of $1.8 million related to the integration of Convergent Media Systems
- Purchase accounting adjustments of $0.2 million associated with the acquisition of Convergent Media Systems
- An income tax charge of $1.0 million related to a change in position with regards to reinvestment of cash in our Canadian operations
Excluding these costs, the Company generated net income of $0.6 million, or $0.04 per diluted share, in the fourth quarter of 2013.
Gary L. Cavey, President and CEO of Ballantyne Strong, commented, “We had a strong finish to 2013 driven by several large orders for digital projectors in our international markets. While the digital conversion cycle is largely complete, we expect the cinema market to continue to be a source of revenues driven by future product upgrade cycles, ongoing parts and replacement orders, and the development of additional managed services relationships with our theatre customers.
“We have made good progress with the integration of Convergent Media Systems. We are in the process of strengthening Convergent’s business development capabilities including adding more experienced sales people in our targeted vertical markets and bringing on a new VP of sales and marketing. The sales cycle is very long for digital media projects and it will take some time to build our sales pipeline, but we are excited about the long-term growth opportunities in this business.
“We continue to look for new product opportunities that will enable us to leverage our existing infrastructure. With this strategy in mind, we have finalized an agreement with VIASS (Video Intelligence as a Service) to become a value-added reseller of cloud-based video security solutions. We believe the installation of video security solutions will create additional maintenance and monitoring contract opportunities for our Network Operations Centers. We anticipate that this new product line will become a meaningful contributor to our revenue mix during the second half of 2014,” said Mr. Cavey.
Following the acquisition of Convergent Media Systems, Ballantyne Strong reorganized the Company into the following two segments in order to enhance efficiencies and better focus on growth opportunities:
Managed Services: Consisting of the Company’s digital technology services and solutions businesses.
Systems Integration: Consisting of the Company’s full range of product solutions for the theatre exhibition industry, video-based security products, and specialty lighting solutions.
All historical financial data has been restated to reflect the new segments.
Q4 2013 Financial Summary
Managed Services revenues were $10.6 million in the fourth quarter of 2013, compared with $3.9 million in the same period of the prior year. The increase is attributable to the acquisition of Convergent Media Systems, which offset the decline in installation revenue associated with the shift to digital equipment winding down.
Systems Integration revenues were $22.1 million in the fourth quarter of 2013, compared with $35.2 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 $4.9 million in the fourth quarter of 2013, compared with $6.2 million in the same quarter of the prior year. Gross margin was 15.0% in the fourth quarter of 2013, compared with 15.8% in the same quarter of the prior year. The decline in gross margin was primarily attributable to lower sales volumes in the Systems Integration segment.
Selling, general and administrative expenses (SG&A) were $6.7 million in the fourth quarter of 2013, compared with $4.0 million in the same quarter of the prior year. SG&A in the fourth quarter of 2013 included $1.5 million in severance expense and $0.3 million in acquisition and transition costs related to Convergent. Excluding these expenses, the remainder of the increase in SG&A was attributable to the addition of Convergent’s operations.
Income tax expense was $0.3 million for the fourth quarter of 2013. The Company reviewed the cash reinvestment policy and concluded that $12.0 million of the cash available in Canada would no longer be considered permanently reinvested, which resulted in additional income tax expense of $1.0 million. The cash will be distributed when needed for working capital purposes and future acquisition activities within the United States.
Full Year 2013 Results
Net revenues were $103.6 million for the full year 2013, compared with $169.1 million during 2012. Gross profit amounted to $16.8 million, or 16.3% of net revenues, compared to gross profit of $22.6 million, or 13.4% of net revenues in the prior-year period. Net earnings for the full year 2013 were $0.2 million, or $0.01 per diluted share, compared to net earnings of $5.5 million, or $0.39 per diluted share, in 2012. The full year results included $2.1 million of costs attributable to acquisition, transition, and severance costs and purchase accounting adjustments. Excluding these costs, the Company had net income of $2.6 million, or $0.19 per diluted share.
Balance Sheet and Cash Flow Update
Ballantyne’s cash and cash equivalents balance at December 31, 2013 was $28.8 million, an increase from $26.3 million at the end of the prior quarter. The increase in cash and cash equivalents balance is due to the strong sales volume in the fourth quarter driving collections on accounts receivable and lower inventory, along with an increase in payables due to timing of purchases.
For the full year 2013, the Company generated $8.5 million in cash flow from operations.
About Ballantyne Strong, Inc. (www.strong-world.com)
Ballantyne Strong designs, integrates, and installs technology solutions for a broad range of applications; develops and delivers out-of-home messaging, advertising and communications; manufactures projection screens and lighting products; and provides managed services including monitoring of networked equipment. The Company focuses on serving the retail, financial, government and cinema markets.
Except for the historical information in this press release, it includes forward-looking statements that involve risks and uncertainties, including but not limited to, quarterly fluctuations in results; customer demand for the Company’s products; the development of new technology for alternate means of motion picture presentation; domestic and international economic conditions; the management of growth; and other risks detailed from time to time in the Company’s Securities and Exchange Commission filings. Actual results may differ materially from management’s expectations.
Ballantyne Strong, Inc. and Subsidiaries
Condensed Consolidated Statements of Operations
Three and Twelve Months Ended December 31, 2013 and 2012
(In thousands, except per share data)
|Three Months Ended December 31,||Twelve Months Ended December 31,|
|Cost of revenues||27,831||32,921||86,765||146,490|
|Selling and administrative expenses:|
|Total selling and administrative expenses||6,675||3,971||16,738||15,923|
|Gain (loss) on the sale/disposal/transfer of assets||(16||)||(29||)||(8||)||1,332|
|Income from operations||(1,776||)||2,176||99||8,003|
|Net interest income (expense)||181||(2||)||350||(33||)|
|Equity income (loss) of joint venture||92||9||(25||)||10|
|Other income (expense), net||64||(39||)||527||170|
|Income (loss) before income taxes||(1,439||)||2,144||951||8,150|
|Income tax expense||(286||)||(584||)||(788||)||(2,608||)|
|Net earnings (loss)||$||(1,725||)||$||1,560||$||163||$||5,542|
|Basic earnings (loss) per share||$||(0.12||)||$||0.11||$||0.01||$||0.39|
|Diluted earnings (loss) per share||$||(0.12||)||$||0.11||$||0.01||$||0.39|
|Weighted average shares outstanding:|
Ballantyne Strong, Inc. and Subsidiaries
Consolidated Balance Sheets
($ and shares in thousands except par values)
|Cash and cash equivalents||$||28,791||$||40,168|
|Accounts receivable (less allowance for doubtful accounts of $703 in 2013 and $487 in 2012)||20,047||26,227|
|Recoverable income taxes||2,207||2,069|
|Deferred income taxes||2,264||1,724|
|Other current assets||3,609||2,948|
|Total current assets||72,103||84,107|
|Property, plant and equipment, net||14,721||11,105|
|Intangible assets, net||895||105|
|Deferred income taxes||1,393||1,936|
|Liabilities and Stockholders’ Equity|
|Customer deposits/deferred revenue||3,474||5,251|
|Income tax payable||888||—|
|Total current liabilities||23,442||27,210|
|Deferred income taxes||790||580|
|Other accrued expenses, net of current portion||1,748||1,538|
|Commitments and contingencies|
|Preferred stock, par value $.01 per share; Authorized 1,000 shares, none outstanding||—||—|
|Common stock, par value $.01 per share; Authorized 25,000 shares; issued 16,869 and 16,782 shares at December 31, 2013 and December 31, 2012, respectively; 14,139 and 14,051 shares outstanding at December 31, 2013 and 2012, respectively||167||167|
|Additional paid-in capital||38,231||37,770|
|Accumulated other comprehensive income (loss):|
|Foreign currency translation||(959||)||269|
|Postretirement benefit obligation||190||46|
|Less 2,731 of common shares in treasury, at December 31, 2013 and 2012, respectively, at cost||(18,239||)||(18,239||)|
|Total stockholders’ equity||66,456||66,916|
|Total liabilities and stockholders’ equity||$||95,444||$||99,546|
Ballantyne Strong, Inc. and Subsidiaries
Consolidated Statements of Cash Flows
Years Ended December 31,
|Cash flows from operating activities:|
|Adjustments to reconcile net earnings to net cash provided by operating activities:|
|Provision for doubtful accounts||273||626||(14||)|
|Provision for obsolete inventory||(111||)||(350||)||(216||)|
|Provision for warranty||430||538||418|
|Depreciation and amortization||1,511||1,268||1,757|
|Equity in (income) loss of joint venture||25||(10||)||189|
|(Gain) loss on forward contracts||380||(145||)||306|
|(Gain) loss on disposal or transfer of assets||8||(1,332||)||(11||)|
|Deferred income taxes||1,339||71||(1,211||)|
|Share-based compensation expense||461||393||373|
|Excess tax benefits from share-based arrangements||—||—||(359||)|
|Changes in operating assets and liabilities, net of effect of acquisitions:|
|Accounts, unbilled and notes receivable||8,932||6,402||(12,009||)|
|Other current assets||1,826||2,605||(2,761||)|
|Customer deposits/deferred revenue||(3,327||)||(88||)||5,774|
|Current income taxes||685||(5,382||)||2,133|
|Net cash (used in) provided by operating activities||8,504||(429||)||20,052|
|Cash flows from investing activities:|
|Purchase of businesses, net of cash acquired||(18,810||)||—||—|
|Distribution from joint venture||—||2,509||—|
|Proceeds from sales of assets||5||3,334||88|
|Net cash provided by (used in) investing activities||(19,334||)||3,302||(2,798||)|
|Cash flows from financing activities:|
|Purchase of treasury stock||—||(2,756||)||—|
|Proceeds from employee stock purchase plan||4||8||25|
|Proceeds from exercise of stock options||—||—||178|
|Excess tax benefits from share-based arrangements||16||2||359|
|Net cash (used in) provided by financing activities||20||(2,746||)||562|
|Effect of exchange rate changes on cash and cash equivalents||(567||)||152||(177||)|
|Net increase (decrease) in cash and cash equivalents||(11,377||)||279||17,639|
|Cash and cash equivalents at beginning of year||40,168||39,889||22,250|
|Cash and cash equivalents at end of year||$||28,791||$||40,168||$||39,889|
|Supplemental disclosure of cash paid for:|
Supplemental disclosure of non-cash activities:
|Common stock exchanged for stock options||$||—||$||—||$||100|
Reconciliation of Non-GAAP Financial Measures
Adjusted Net Income and Adjusted EPS Reconciliation
Adjusted net income and adjusted EPS are non-GAAP measures. The Company believes these measures provide a useful indication of profitability and basis for assessing the operations of the Company without the impact of merger and acquisition related costs, reorganization costs and tax charges for changes in reinvestment positions.
Adjusted net income should not be considered in isolation or as a substitute for net income or other profitability metrics prepared in accordance with GAAP. Adjusted net income, as presented, may not be comparable to similarly titled measures of other companies.
Set forth below is a reconciliation of adjusted net income to net income. There were no similar items noted during 2012.
|Unaudited, in thousands except per share|
Three months ended
December 31, 2013
|Amortization of inventory markup||164|
|Amortization of deferred revenue haircut||50|
|Income tax expense on adjustments||(729||)|
|Income tax on change in reinvestment position||1,038|
|Adjusted net income||$||582|
|Diluted shares outstanding||14,042|
Twelve months ended
December 31, 2013
|Amortization of inventory markup||164|
|Amortization of deferred revenue haircut||50|
|Income tax expense on adjustments||(792||)|
|Income tax on change in reinvestment position||1,038|
|Adjusted net income||$||2,601|
|Diluted shares outstanding||14,031|
SYS-CON Events announced today that Windstream, a leading provider of advanced network and cloud communications, has been named “Silver Sponsor” of SYS-CON's 16th International Cloud Expo®, which will take place on June 9–11, 2015, at the Javits Center in New York, NY. Windstream (Nasdaq: WIN), a FORTUNE 500 and S&P 500 company, is a leading provider of advanced network communications, including cloud computing and managed services, to businesses nationwide. The company also offers broadband, phone and digital TV services to consumers primarily in rural areas.
Dec. 21, 2014 08:30 AM EST Reads: 2,249
ARMONK, N.Y., Nov. 20, 2014 /PRNewswire/ -- IBM (NYSE: IBM) today announced that it is bringing a greater level of control, security and flexibility to cloud-based application development and delivery with a single-tenant version of Bluemix, IBM's platform-as-a-service. The new platform enables developers to build ap...
Dec. 21, 2014 06:15 AM EST Reads: 2,099
The BPM world is going through some evolution or changes where traditional business process management solutions really have nowhere to go in terms of development of the road map. In this demo at 15th Cloud Expo, Kyle Hansen, Director of Professional Services at AgilePoint, shows AgilePoint’s unique approach to dealing with this market circumstance by developing a rapid application composition or development framework.
Dec. 20, 2014 11:00 PM EST Reads: 1,320
"BSQUARE is in the business of selling software solutions for smart connected devices. It's obvious that IoT has moved from being a technology to being a fundamental part of business, and in the last 18 months people have said let's figure out how to do it and let's put some focus on it, " explained Dave Wagstaff, VP & Chief Architect, at BSQUARE Corporation, in this SYS-CON.tv interview at @ThingsExpo, held Nov 4-6, 2014, at the Santa Clara Convention Center in Santa Clara, CA.
Dec. 20, 2014 12:00 PM EST Reads: 1,966
The major cloud platforms defy a simple, side-by-side analysis. Each of the major IaaS public-cloud platforms offers their own unique strengths and functionality. Options for on-site private cloud are diverse as well, and must be designed and deployed while taking existing legacy architecture and infrastructure into account. Then the reality is that most enterprises are embarking on a hybrid cloud strategy and programs. In this Power Panel at 15th Cloud Expo (http://www.CloudComputingExpo.com), moderated by Ashar Baig, Research Director, Cloud, at Gigaom Research, Nate Gordon, Director of T...
Dec. 20, 2014 11:30 AM EST Reads: 2,392
The Internet of Things is not new. Historically, smart businesses have used its basic concept of leveraging data to drive better decision making and have capitalized on those insights to realize additional revenue opportunities. So, what has changed to make the Internet of Things one of the hottest topics in tech? In his session at @ThingsExpo, Chris Gray, Director, Embedded and Internet of Things, discussed the underlying factors that are driving the economics of intelligent systems. Discover how hardware commoditization, the ubiquitous nature of connectivity, and the emergence of Big Data a...
Dec. 20, 2014 11:00 AM EST Reads: 2,306
“In the past year we've seen a lot of stabilization of WebRTC. You can now use it in production with a far greater degree of certainty. A lot of the real developments in the past year have been in things like the data channel, which will enable a whole new type of application," explained Peter Dunkley, Technical Director at Acision, in this SYS-CON.tv interview at @ThingsExpo, held Nov 4–6, 2014, at the Santa Clara Convention Center in Santa Clara, CA.
Dec. 20, 2014 08:00 AM EST Reads: 1,332
SYS-CON Events announced today that IDenticard will exhibit at SYS-CON's 16th International Cloud Expo®, which will take place on June 9-11, 2015, at the Javits Center in New York City, NY. IDenticard™ is the security division of Brady Corp (NYSE: BRC), a $1.5 billion manufacturer of identification products. We have small-company values with the strength and stability of a major corporation. IDenticard offers local sales, support and service to our customers across the United States and Canada. Our partner network encompasses some 300 of the world's leading systems integrators and security s...
Dec. 20, 2014 07:00 AM EST Reads: 2,133
DevOps Summit 2015 New York, co-located with the 16th International Cloud Expo - to be held June 9-11, 2015, at the Javits Center in New York City, NY - announces that it is now accepting Keynote Proposals. The widespread success of cloud computing is driving the DevOps revolution in enterprise IT. Now as never before, development teams must communicate and collaborate in a dynamic, 24/7/365 environment. There is no time to wait for long development cycles that produce software that is obsolete at launch. DevOps may be disruptive, but it is essential.
Dec. 18, 2014 09:45 PM EST Reads: 1,161
"People are a lot more knowledgeable about APIs now. There are two types of people who work with APIs - IT people who want to use APIs for something internal and the product managers who want to do something outside APIs for people to connect to them," explained Roberto Medrano, Executive Vice President at SOA Software, in this SYS-CON.tv interview at Cloud Expo, held Nov 4–6, 2014, at the Santa Clara Convention Center in Santa Clara, CA.
Dec. 18, 2014 09:00 AM EST Reads: 1,364
Nigeria has the largest economy in Africa, at more than US$500 billion, and ranks 23rd in the world. A recent re-evaluation of Nigeria's true economic size doubled the previous estimate, and brought it well ahead of South Africa, which is a member (unlike Nigeria) of the G20 club for political as well as economic reasons. Nigeria's economy can be said to be quite diverse from one point of view, but heavily dependent on oil and gas at the same time. Oil and natural gas account for about 15% of Nigera's overall economy, but traditionally represent more than 90% of the country's exports and as...
Dec. 18, 2014 06:00 AM EST Reads: 905
The Internet of Things is a misnomer. That implies that everything is on the Internet, and that simply should not be - especially for things that are blurring the line between medical devices that stimulate like a pacemaker and quantified self-sensors like a pedometer or pulse tracker. The mesh of things that we manage must be segmented into zones of trust for sensing data, transmitting data, receiving command and control administrative changes, and peer-to-peer mesh messaging. In his session at @ThingsExpo, Ryan Bagnulo, Solution Architect / Software Engineer at SOA Software, focused on desi...
Dec. 17, 2014 11:15 PM EST Reads: 1,399
"At our booth we are showing how to provide trust in the Internet of Things. Trust is where everything starts to become secure and trustworthy. Now with the scaling of the Internet of Things it becomes an interesting question – I've heard numbers from 200 billion devices next year up to a trillion in the next 10 to 15 years," explained Johannes Lintzen, Vice President of Sales at Utimaco, in this SYS-CON.tv interview at @ThingsExpo, held Nov 4–6, 2014, at the Santa Clara Convention Center in Santa Clara, CA.
Dec. 17, 2014 11:00 PM EST Reads: 1,450
"For over 25 years we have been working with a lot of enterprise customers and we have seen how companies create applications. And now that we have moved to cloud computing, mobile, social and the Internet of Things, we see that the market needs a new way of creating applications," stated Jesse Shiah, CEO, President and Co-Founder of AgilePoint Inc., in this SYS-CON.tv interview at 15th Cloud Expo, held Nov 4–6, 2014, at the Santa Clara Convention Center in Santa Clara, CA.
Dec. 17, 2014 08:00 PM EST Reads: 1,440
SYS-CON Events announced today that Gridstore™, the leader in hyper-converged infrastructure purpose-built to optimize Microsoft workloads, will exhibit at SYS-CON's 16th International Cloud Expo®, which will take place on June 9-11, 2015, at the Javits Center in New York City, NY. Gridstore™ is the leader in hyper-converged infrastructure purpose-built for Microsoft workloads and designed to accelerate applications in virtualized environments. Gridstore’s hyper-converged infrastructure is the industry’s first all flash version of HyperConverged Appliances that include both compute and storag...
Dec. 17, 2014 06:30 PM EST Reads: 1,363
Today’s enterprise is being driven by disruptive competitive and human capital requirements to provide enterprise application access through not only desktops, but also mobile devices. To retrofit existing programs across all these devices using traditional programming methods is very costly and time consuming – often prohibitively so. In his session at @ThingsExpo, Jesse Shiah, CEO, President, and Co-Founder of AgilePoint Inc., discussed how you can create applications that run on all mobile devices as well as laptops and desktops using a visual drag-and-drop application – and eForms-buildi...
Dec. 17, 2014 11:45 AM EST Reads: 1,554
We certainly live in interesting technological times. And no more interesting than the current competing IoT standards for connectivity. Various standards bodies, approaches, and ecosystems are vying for mindshare and positioning for a competitive edge. It is clear that when the dust settles, we will have new protocols, evolved protocols, that will change the way we interact with devices and infrastructure. We will also have evolved web protocols, like HTTP/2, that will be changing the very core of our infrastructures. At the same time, we have old approaches made new again like micro-services...
Dec. 16, 2014 11:45 PM EST Reads: 1,392
Code Halos - aka "digital fingerprints" - are the key organizing principle to understand a) how dumb things become smart and b) how to monetize this dynamic. In his session at @ThingsExpo, Robert Brown, AVP, Center for the Future of Work at Cognizant Technology Solutions, outlined research, analysis and recommendations from his recently published book on this phenomena on the way leading edge organizations like GE and Disney are unlocking the Internet of Things opportunity and what steps your organization should be taking to position itself for the next platform of digital competition.
Dec. 15, 2014 11:45 PM EST Reads: 1,743
The 3rd International Internet of @ThingsExpo, co-located with the 16th International Cloud Expo - to be held June 9-11, 2015, at the Javits Center in New York City, NY - announces that its Call for Papers is now open. The Internet of Things (IoT) is the biggest idea since the creation of the Worldwide Web more than 20 years ago.
Dec. 15, 2014 10:30 AM EST Reads: 6,915
As the Internet of Things unfolds, mobile and wearable devices are blurring the line between physical and digital, integrating ever more closely with our interests, our routines, our daily lives. Contextual computing and smart, sensor-equipped spaces bring the potential to walk through a world that recognizes us and responds accordingly. We become continuous transmitters and receivers of data. In his session at @ThingsExpo, Andrew Bolwell, Director of Innovation for HP's Printing and Personal Systems Group, discussed how key attributes of mobile technology – touch input, sensors, social, and ...
Dec. 15, 2014 10:00 AM EST Reads: 1,987