Ballantyne of Omaha Reports 2002 Fourth Quarter and Year-End Results.Business Editors 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.--(BUSINESS WIRE)--March 28, 2003 Ballantyne Ballantyne may refer to: Places
See: Over-the-counter. OTC See over-the-counter market (OTC). BB:BTNE), a leading manufacturer of motion picture projection projection, in psychology: see defense mechanism. See rear-projection TV, front-projection TV and LCD panel. (theory) projection - In domain theory, a function, f, which is (a) idempotent, i.e. and specialty A contract under seal. A specialty is a written document that has been sealed and delivered and is given as security for the payment of a specifically indicated debt. lighting equipment, today reported financial results from continuing operations continuing operations Parts of a business that are expected to be maintained as an ongoing segment of an overall business operation. Income and losses from continuing operations are reported separately if any segments have been discontinued during the for the three-and twelve-month periods ended December December: see month. 31, 2002. Continuing operations exclude contributions from the Company's audiovisual See A/V. segment, which was discontinued dis·con·tin·ue v. dis·con·tin·ued, dis·con·tin·u·ing, dis·con·tin·ues v.tr. 1. To stop doing or providing (something); end or abandon: through the sale of certain assets and operations on December 31, 2002. Net revenue from continuing operations for the three months ended December 31, 2002 rose 2% to $7.7 million from $7.5 million in the fourth quarter of 2001. Gross profit from continuing operations in the quarter rose 36% to $1.3 million from $0.9 million in the year-ago period due to lower manufacturing costs and a more favorable fa·vor·a·ble adj. 1. Advantageous; helpful: favorable winds. 2. Encouraging; propitious: a favorable diagnosis. 3. sales mix sales mix See product mix. . The Company reported a net loss of $0.8 million, or $0.07 per share, in the fourth quarter of 2002, compared to a net loss of $1.8 million, or $0.14 per share, in the year-ago fourth quarter. The 2002 fourth quarter net loss reflects the January January: see month. 1, 2002 adoption of Statement of Financial Accounting Standards (SFAS SFAS Statement of Financial Accounting Standards SFAS Special Forces Assessment and Selection SFAS Student Financial Aid Services SFAS Sport Fishing Association of Singapore SFAS Safety Features Actuation System SFAS Statewide Fixed Assets System ) No. 142, "Goodwill and Other Intangible Assets Intangible Asset An asset that is not physical in nature. Notes: Examples are things like copyrights, patents, intellectual property, and goodwill. These are the opposite of tangible assets. ," which eliminates the amortization expense for goodwill. Had SFAS No. 142 been in effect during 2001, the Company would have reported a net loss of $1.7 million, or $0.14 per share, in the 2001 fourth quarter. Per share results are based on a weighted average number of shares outstanding of 12,586,901 and 12,536,684 for the fourth quarters of 2002 and 2001, respectively. John P. Wilmers, President and Chief Executive Officer of Ballantyne, commented, "New screen construction activity in the domestic motion picture exhibition industry remained sluggish in 2002, despite signs of improved financial health for our theater equipment customers. Internationally, however, sales to customers outside the United States United States, officially United States of America, republic (2005 est. pop. 295,734,000), 3,539,227 sq mi (9,166,598 sq km), North America. The United States is the world's third largest country in population and the fourth largest country in area. rose 17% to $14.8 million, or 43.8% of 2002 revenues from continuing operations, from $12.6 million, or 32.9% of 2001 revenues, fueled by stronger demand for our projection equipment in Asia and Central and South America South America, fourth largest continent (1991 est. pop. 299,150,000), c.6,880,000 sq mi (17,819,000 sq km), the southern of the two continents of the Western Hemisphere. . We continue to prudently pru·dent adj. 1. Wise in handling practical matters; exercising good judgment or common sense. 2. Careful in regard to one's own interests; provident. 3. Careful about one's conduct; circumspect. manage expenses for this operating environment In computing, an operating environment is the environment in which users run programs, whether in a command line interface, such as in MS-DOS or the Unix shell, or in a graphical user interface, such as in the Macintosh operating system. , strategically invest resources to stimulate stimulate /stim·u·late/ (stim´u-lat) to excite functional activity. stim·u·late v. To arouse a body or a responsive structure to increased functional activity. revenue growth and improve our balance sheet. We ended 2002 virtually debt-free, and our cash position now stands at $6.3 million, or $0.50 per share - nearly triple the accumulated ac·cu·mu·late v. ac·cu·mu·lat·ed, ac·cu·mu·lat·ing, ac·cu·mu·lates v.tr. To gather or pile up; amass. See Synonyms at gather. v.intr. To mount up; increase. cash level we reported at the end of 2001. The Company also had net working capital of approximately ap·prox·i·mate adj. 1. Almost exact or correct: the approximate time of the accident. 2. $19.2 million." For the twelve month period ended December 31, 2002, the Company reported revenue from continuing operations of $33.8 million, compared to $38.4 million in the year-ago period. Gross profit from continuing operations in 2002 increased 44% to $5.6 million, or 16.6% of revenue, compared to $3.9 million, or 10.1% of revenue, in 2001. The net loss in 2002 decreased to $3.6 million, or $0.29 per share, compared to $4.1 million, or $0.32 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, in 2001. Had SFAS No. 142 been in effect during 2001, the Company would have reported a net loss of $3.8 million, or $0.31 per share, in 2001. Per share results are based on a weighted average number of shares outstanding of 12,572,442 and 12,518,724 for the 2002 and 2001 periods, respectively. Mr. Wilmers added, "Our goals for 2003 are to aggressively market our theater, lighting and restaurant products internationally, primarily in Eastern Europe Eastern Europe The countries of eastern Europe, especially those that were allied with the USSR in the Warsaw Pact, which was established in 1955 and dissolved in 1991. and Asia. We will also continue to focus on growing market share domestically in all three product areas, especially for theater equipment, where we are actively pursuing opportunities in digital cinema. To that end, we have hired new sales managers sales manager n → gerente m/f de ventas sales manager n → directeur commercial sales manager sale n → for our lighting, restaurant equipment and digital divisions who will focus on developing new products and expanding or developing distribution channels for these segments. We are also looking to sell more theater products directly to exhibitors instead of through independent dealers and increase the variety of theater-related products we can offer customers." Recent Developments
-- In January 2003, the Company sold its entertainment lighting rental operations located in Orlando, Florida and Atlanta, Georgia. In connection with the transaction, certain assets were segregated and sold in two separate transactions to the general manager of each location for an aggregate of $290,000. The Company retained all cash, accounts receivable, inventory and payable balances recorded at the time of sale.
-- In March 2003, the Company reached an agreement with Digital Projection International for the sales, distribution and servicing rights of certain digital cinema equipment in the U.S., Canada, Mexico and Central and South America. In conjunction with the agreement, Ballantyne created a separate division to pursue opportunities in the digital cinema marketplace and hired a seasoned theater industry executive to lead the effort.
-- On March 10, 2003, the Company entered into a revolving credit facility with First National Bank of Omaha ("First National Bank"). The credit facility provides for borrowings up to the lesser of $4.0 million or amounts determined by an asset based lending formula, as defined. The credit facility contains certain restrictive covenants mainly relating to restrictions on capital expenditures and dividends and matures on August 31, 2003, or such later date as is approved in writing by First National Bank. No borrowings are currently available under the credit facility due to the lack of the Company generating sufficient operating income, as defined.
Ballantyne of Omaha is a leading U.S. supplier of commercial motion picture and specialty projection equipment utilized by major theater chains and location-based entertainment providers. The Company 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 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 alternate /al·ter·nate/ (awl´ter-nit) 1. following in turns. 2. pertaining to every other one in a series. 3. occurring in place of another; acting as a substitute. 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 expectations. -tables follow-
Ballantyne of Omaha, Inc.
Consolidated Statements of Operations
(Unaudited)
Three Months Ended Twelve Months Ended
December 31, December 31,
2002 2001 2002 2001
----------- ------------ ------------ ------------
Revenues $7,687,526 $7,522,692 $33,785,375 $38,378,933
Cost of Revenues 6,420,525 6,589,908 28,165,750 34,484,145
----------- ------------ ------------ ------------
Gross Profit 1,267,001 932,784 5,619,625 3,894,788
Operating expenses
Selling 1,050,580 795,384 3,098,742 2,756,768
General and
administrative 973,824 2,082,968 4,505,127 5,362,318
----------- ------------ ------------ ------------
Total operating
expenses 2,024,404 2,878,352 7,603,869 8,119,086
----------- ------------ ------------ ------------
Loss from
operations (757,403) (1,945,568) (1,984,244) (4,224,298)
Net interest income
(expense) 30,185 (27,563) (51,374) (303,731)
Gain (loss) on
disposal of assets 76 (572,543) 243,238 (476,531)
Other income
(expense) 31,428 181,129 38,186 (16,263)
----------- ------------ ------------ ------------
Loss from continuing
operations before
income taxes (695,714) (2,364,545) (1,754,194) (5,020,823)
Income tax benefit
(expense) (194,700) 752,967 (827,997) 1,644,440
----------- ------------ ------------ ------------
Loss from continuing
operations (890,414) (1,611,578) (2,582,191) (3,376,383)
Discontinued
operations (1):
Earnings (loss)
from operations of
discontinued
audiovisual
segment, net of
Federal taxes 41,928 (191,328) (407,687) (676,245)
Gain (loss) on
disposal of
audiovisual
segment, net of
Federal taxes 17,084 - (614,785) -
----------- ------------ ------------ ------------
Earnings (loss)
from discontinued
operations 59,012 (191,328) (1,022,472) (676,245)
----------- ------------ ------------ ------------
Net loss $(831,402) $(1,802,906) $(3,604,663) $(4,052,628)
=========== ============ ============ ============
Net loss per share,
basic and fully
diluted (2):
Net loss per
share from
continuing
operations $(0.07) $(0.13) $(0.21) $(0.27)
Net loss per
share from
discontinued
operations - (0.01) (0.08) (0.05)
---------------------------------------------------
Net loss per share $(0.07) $(0.14) $(0.29) $(0.32)
===================================================
Weighted average
shares outstanding:
Basic 12,586,901 12,536,684 12,572,442 12,518,724
===================================================
Diluted 12,586,901 12,536,684 12,572,442 12,518,724
===================================================
(1) Effective December 31, 2002, the Company completed the sale of
its audiovisual operating segment to the former general manager of the
segment for proceeds of $200,000. The Company retained cash and cash
equivalents, accounts receivable and certain payables recorded at
December 31, 2002. The Company recorded an after-tax charge of
$1,022,472 in 2002 relating to after-tax operating losses of $407,687
and an after-tax loss of $614,785 from the sale or impairment of the
assets.
(2) Due to losses in 2002 and 2001, the calculation of diluted net
loss per share excludes common stock equivalents, as they are
anti-dilutive and would result in a reduction of diluted loss per
share. Effective January 1, 2002, the Company adopted Statement of
Financial Accounting Standards (SFAS) No. 142, "Goodwill and Other
Intangible Assets," and ceased amortizing goodwill expense. Excluding
the effects of goodwill amortization, the Company's net loss and net
loss per share would have been $1.7 million and $0.14 per share,
respectively, for the three month period ended December 31, 2001, and
$3.8 million and $0.31 per share, respectively, for the twelve month
period ended December 31, 2001.
Summary Statement of Discontinued Operations (Unaudited)
Three Months Ended Twelve Months Ended
December 31, December 31,
2002 2001 2002 2001
----------- ------------ ------------ -------------
Revenues $953,855 $1,061,306 $3,348,296 $3,969,174
Cost of revenues 574,091 769,184 2,428,919 2,980,482
----------- ------------ ------------ -------------
Gross profit 379,764 292,122 919,377 988,692
Operating expenses:
Selling 146,650 243,091 852,924 1,053,417
General and
administrative 90,433 260,067 588,204 866,499
----------- ------------ ------------ -------------
Total operating
expenses 237,083 503,158 1,441,128 1,919,916
----------- ------------ ------------ -------------
Earnings (loss)
from operations 142,681 (211,036) (521,751) (931,224)
Net interest
expense (7,557) (4,348) (11,786) (18,883)
Gain on disposal of
assets 1,250 - 1,250 -
Other expense (9,399) (67,247) (21,973) (67,247)
----------- ------------ ------------ -------------
Earnings (loss)
from operations
of discontinued
audiovisual
segment before
income taxes $126,975 $(282,631) $(554,260) $1,017,354
=========== ============ ============ =============
Selected Balance Sheet Items (3) (Unaudited)
December 31, 2002 December 31, 2001
-----------------------------------------
Cash and cash equivalents $6,276,011 $2,099,320
Accounts receivable, net 5,523,122 7,594,390
Inventories, net 12,031,724 14,925,911
Current debt 17,841 375,000
Long-term debt 93,458 1,375,000
Accounts payable and accrued
expenses 6,377,798 7,081,950
Total stockholders' equity $28,390,929 $31,971,678
(3) Excludes discontinued operations.
-table follows-
Selected Cash Flow Statement Items (Unaudited)
Twelve Months Ended,
December 31, 2002 December 31, 2001
---------------------------------------
Net loss $(3,604,663) $(4,052,628)
Depreciation and
amortization 1,474,589 2,233,731
Net cash provided by
operating activities 5,721,183 7,729,302
Capital expenditures (182,217) (306,967)
Net cash provided by (used in)
investing activities 407,190 (96,701)
Net cash used in financing
activities (1,736,582) (7,104,680)
Net cash contributed from
continuing operations to
discontinued operations (215,100) (178,064)
Net increase in cash & cash
equivalents 4,176,691 349,857
Cash & cash equivalents at
beginning of period 2,099,320 1,749,463
Cash & cash equivalents at
end of period $6,276,011 $2,099,320
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