Ballantyne Reports Nine-Month EPS of $0.14 on Revenue of $37.4 Million.- Cash Position is $20.7 million at September 30, 2006 - OMAHA Omaha, city, United States Omaha (ō`məhä, –hô), city (1990 pop. 335,795), seat of Douglas co., E Nebr., on the west bank of the Missouri River; inc. 1857. , Neb. -- Ballantyne of Omaha, Inc. (Amex: BTN BTN In currencies, this is the abbreviation for the Bhutan Ngultrum. Notes: The currency market, also known as the Foreign Exchange market, is the largest financial market in the world, with a daily average volume of over US $1 trillion. ): [TABLE OMITTED] Ballantyne of Omaha, Inc. (Amex: BTN), a motion picture projection, specialty lighting and digital cinema equipment and services provider, today reported financial results for the third quarter (Q3) and nine months ended September 30, 2006. Net revenues in Q3 2006 were $13.1 million, a 8% decline from net revenues of $14.3 million in the year-ago third quarter, principally reflecting an expected decrease in demand for film-based theater equipment as theatre owners formulate formulate /for·mu·late/ (for´mu-lat) 1. to state in the form of a formula. 2. to prepare in accordance with a prescribed or specified method. their plans for the deployment of digital projection technology. Q3 net revenues reflected the contribution of $1.3 million in sales generated by Ballantyne's Strong Technical Services subsidiary, which was acquired effective May 31, 2006. Gross profit in Q3 2006 declined to $2.2 million, or 16.8% of net revenues, versus Q3 2005 gross profit of $4.1 million, or 28.4% of net revenues. The decline in gross margin is principally reflective Refers to light hitting an opaque surface such as a printed page or mirror and bouncing back. See reflective media and reflective LCD. of reduced operating efficiencies on lower sales. Q3 margins were also dampened by the deferral deferral - Waiting for quiet on the Ethernet. of revenue recognition and the expensing of the entire cost of 12 digital projectors See data projector. sold and financed by Ballantyne in the quarter; only the down payment was recorded as revenue in the period. This accounting treatment was driven by the fact that the collection of the remaining payments over five years were not "reasonably assured" primarily due to the uncertainties surrounding the long-term nature of the contract. As future payments are received related to this agreement, revenue will be recognized with no associated cost. Total Q3 2006 selling, general and administrative expenses declined 11% to $1.9 million compared to $2.2 million in Q3 2005, primarily reflecting the absence of bonus accruals Accruals Accounts on a balance sheet that represent liabilities and non-cash-based assets used in accrual-based accounting. These accounts include, among many others, accounts payable, accounts receivable, goodwill, future tax liability and future interest expense. throughout 2006, due to management not meeting certain financial targets. Ballantyne reported Q3 2006 net income of $0.4 million, or $0.03 per diluted di·lute tr.v. di·lut·ed, di·lut·ing, di·lutes 1. To make thinner or less concentrated by adding a liquid such as water. 2. To lessen the force, strength, purity, or brilliance of, especially by admixture. share, compared to net income of $1.2 million, or $0.09 per diluted share, in Q3 2005. Per share results for the third quarters of 2006 and 2005 are based on a weighted average number of diluted shares outstanding of 14,029,604 and 13,955,817, respectively. Ballantyne's cash position declined modestly to $20.7 million at the close of Q3 2006, compared to $21.4 million at the close of Q2 2006. The decrease reflects a $2.1 million increase in accounts receivable accounts receivable n. the amounts of money due or owed to a business or professional by customers or clients. Generally, accounts receivable refers to the total amount due and is considered in calculating the value of a business or the business' problems in paying that resulted largely due to slower than anticipated A/R A/R Accounts receivable, see there collections during the period, offset by a $1.5 million decline in inventories as compared to the close of Q2 2006. The sequential decrease in inventories from Q2 to Q3 2006 is largely the result of Ballantyne's active management of vendor purchase orders to more closely match production needs. John P. Wilmers, President and Chief Executive Officer of Ballantyne, commented, "Our third quarter performance reflects the initial impact of the rollout of digital cinema projection equipment within the exhibition industry and that trend's effect on our traditional film equipment business. Importantly, our Q3 results reflected the first full quarter's benefit from our Strong Technical Services (STS (Synchronous Transport Signal) The electrical equivalent of the SONET optical signal. In SDH, the European counterpart of SONET, STS is known as STM (Synchronous Transport Module). ) subsidiary, which we acquired effective May 31, 2006. STS provides installation and 'after-sale' service for our customer's digital cinema projection equipment, as well as traditional film projectors, and it represents an important component of our Digital Cinema growth strategy. "We just completed a successful exhibition of our digital cinema offerings at the ShowEast convention last week. Our customers are responding very favorably fa·vor·a·ble adj. 1. Advantageous; helpful: favorable winds. 2. Encouraging; propitious: a favorable diagnosis. 3. to the NEC (NEC Corporation, Tokyo, www.nec.com, www.necus.com) An electronics conglomerate known in the U.S. for its monitors. In Japan, it had the lion's share of the PC market until the late 1990s (see PC 98). NEC was founded in Tokyo in 1899 as Nippon Electric Company, Ltd. Starus[TM] Line of Digital Cinema Projectors as well as the service organization we are forming to support their digital cinema roll-outs." For the nine month period ended September 30, 2006, net revenues were $37.4 million compared to $39.8 million. Gross profit in the first three quarters of 2006 was $8.3 million, or 22.1% of net revenues, compared to gross profit of $11.1 million, or 28.0 % of net revenues. Net income for the first nine months of 2006 was $2.0 million, or $0.14 per diluted share, compared to net income of $3.2 million, or $0.23 per diluted share, in the first nine months of 2005. Per share results for the first nine months of 2006 and 2005 are based on a weighted average number of diluted shares outstanding of 14,007,988 and 13,903,081, respectively. About Ballantyne of Omaha Ballantyne is a provider of motion picture projection, specialty lighting, specialty projection equipment and digital cinema equipment and services. The Company supplies major theater chains, top arenas, television and motion picture production studios, theme parks and architectural sites around the world. For more information visit www.ballantyne-omaha.com . Except for the historical information in this press release, it includes forward-looking statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. 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. [TABLE OMITTED] [TABLE OMITTED] [TABLE OMITTED] |
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