Ballantyne Reports Third Quarter Results -- Backlog Exceeds $21 Million -- Explores Strategic Options for Digital Projection.

OMAHA, Neb.--(BUSINESS WIRE)--Oct. 27, 1999--

Ballantyne of Omaha, Inc. (NYSE: BTN), a leading manufacturer of motion picture projection and entertainment lighting equipment, today reported results for the third quarter and nine-month periods ended September 30, 1999.

Net revenues in the third quarter of fiscal 1999 rose approximately 4% to $21,623,624 from $20,852,022 in the third quarter of 1998. Including a pre-tax charge of approximately $400,000 ($0.02 per diluted share) related to an unsuccessful acquisition attempt, net income for the third quarter of 1999 was $1,644,929, or $0.13 per diluted share, compared to $2,418,041, or $0.16 per diluted share, in the same period last year. Diluted per share results are based on a weighted average number of shares outstanding of 13,130,106 and 15,095,197 for the third quarters of 1999 and 1998, respectively, and reflect a 5% stock dividend paid March 1, 1999.

The pre-tax charge relates to an unsuccessful attempt to acquire a manufacturer of digital projection equipment and concerns investment banking and legal payments. Ballantyne noted that it remains in discussions with several technology partners over agreements to potentially develop and manufacture digital projectors.

For the nine month period ended September 30, 1999, net revenues rose approximately 18% to $63,123,754 from $53,536,705 in the same period a year ago. Including the acquisition expense, net income in the first nine months of 1999 was $5,304,673, or $0.40 per diluted share, compared to $5,745,191, or $0.38 per diluted share, in the first nine months of 1998. Diluted per share results are based on a weighted average number of shares outstanding of 13,225,717 and 15,099,681 for the 1999 and 1998 periods, respectively, and reflect the 5% stock dividend.

John P. Wilmers, President and Chief Executive Officer of Ballantyne, commented, "Despite achieving 16% theater product revenue growth year-to-date and registering a backlog at quarter's end exceeding $21 million, we are not satisfied with our performance and are taking several steps to enhance it, including the introduction of new, value-added products like the next-generation projector lens we jointly developed and launched with Isco-Optic GmbH last month. We will also look to boost our bottom-line performance by reviewing less efficient operations and better utilizing manufacturing resources.

"In the meantime, we are aggressively seeking to fulfill our digital projection aspirations and are in discussions with several potential partners regarding joint ventures to commercialize a product or develop the capability in-house. Our goal is to finalize  a strategy within the next six months."

Mr. Wilmers concluded, "Subsequent to the third quarter we engaged Donaldson, Lufkin & Jenrette to assist the Board in developing, reviewing and structuring a range of strategic alternatives intended to enhance shareholder value. The review is currently underway, and we are optimistic this process will result in an outcome that better reflects the intrinsic value of the Company."

Ballantyne of Omaha is the leading U.S. supplier of commercial motion picture projection equipment utilized by the major theater chains including AMC, Loews Cineplex and Regal Cinemas, and specialty projection equipment used by location-based entertainment providers such as The Walt Disney Co., Universal Studios and IMAX. Ballantyne of Omaha also manufactures, rents and leases specialty entertainment lighting products used at top arenas, television and motion picture production studios, 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; failure of the Company's computer systems, or that of any of its suppliers, and/or products manufactured and sold by the Company, resulting from the year 2000 problem; 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 expectations.

(table follows)

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                       Ballantyne of Omaha, Inc.
                 Consolidated Statements of Operations
                              (Unaudited)

                     Three Months Ended         Nine Months Ended
                        September 30,             September 30,
                    1999           1998        1999          1998

Net revenues     $21,623,624   $20,852,022  $63,123,754   $53,536,705

Cost of revenues  15,308,309    14,281,629   44,428,722    36,889,186
                  ----------    ----------   ----------    ----------

Gross profit       6,315,315     6,570,393   18,695,032    16,647,519

Total operating
 expenses(a)       3,500,022     2,813,598    9,542,056     7,794,689
                  ----------   -----------    -----------  -----------

Income from
 operations        2,815,293     3,756,795    9,152,976     8,852,830

Net interest income
 (expense)         (223,147)        (1,147)    (642,614)       72,768
                  ------------ -------------  ------------- ----------

Income before
 taxes             2,592,146     3,755,648     8,510,362    8,925,598

Income taxes         947,217     1,337,607     3,205,689    3,180,407
                  -----------   -----------    ----------- -----------

Net income        $1,644,929    $2,418,041    $5,304,673   $5,745,191
                  ==========    ==========     ==========  ==========

Net income per
 share(b)
  Basic                $0.13         $0.17         $0.42        $0.40
                   ==========   ==========      ========== ===========
  Diluted              $0.13         $0.16         $0.40        $0.38
                   ==========   ==========      =========== ==========

Weighted average shares
 outstanding(b)
  Basic            12,582,675    14,479,272     12,629,403  14,410,853
                   ==========    ==========     ==========  ==========
  Diluted          13,130,106    15,095,197     13,225,717  15,099,681
                   ==========    ==========     ==========  ==========

(a) Operating expenses include a $400,000 expense for investment
    banking and legal payments related to an unsuccessful acquisition
    attempt during the quarter.

(b) The weighted average shares outstanding and net income per share
    amounts have been adjusted to reflect a 5% stock dividend paid
    March 1, 1999.


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