Ballantyne of Omaha Reports 2002 Second Quarter Results.

Business Editors

OMAHA, Neb.--(BUSINESS WIRE)--Aug. 15, 2002

Ballantyne of Omaha, Inc. (OTCBB:BTNE), a leading manufacturer of motion picture projection and specialty lighting equipment, today reported financial results for the three-and six-month periods ended June 30, 2002.

Net revenue for the three months ended June 30, 2002 was $8.1 million, compared to $10.7 million in the second quarter of 2001. Gross profit in the quarter rose 9.3% to $1.2 million due to lower manufacturing costs, compared to gross profit of $1.1 million in the year-ago period. The Company reported a narrower net loss of $0.8 million, or $0.06 per diluted share, in the second quarter of 2002, compared to a net loss of $0.9 million, or $0.08 per diluted share, in the year-ago second quarter. As previously disclosed, the Company's 2002 second quarter net loss includes an approximate $450,000 charge related to a bad debt associated with one of its equipment distributors, Media Technology Source of Minnesota, LLC, which filed for Chapter 7 bankruptcy protection on June 25, 2002. The 2002 second quarter net loss also reflects the January 1, 2002 adoption of Statement of Financial Accounting Standards (SFAS) No. 142, "Goodwill and Other Intangible 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 $0.9 million, or $0.07 per diluted share, in the 2001 second quarter. Per share results are based on a weighted average number of shares outstanding of 12,568,302 and 12,512,672 for the second quarters of 2002 and 2001, respectively.

John P. Wilmers, President and Chief Executive Officer of Ballantyne, commented, "While the theater exhibition industry is slowly recovering from a severe downturn, there are still liquidity problems in the industry, both for exhibitors and the independent dealers who resell our products to them. We are enhancing internal controls and instituting more stringent new product shipment terms to limit the Company's future exposure in this area. Additionally, we continue to build our cash position and ended this period with approximately $3.4 million, a 59% increase from the level reported at March 31, 2002."

For the six month period ended June 30, 2002, the Company reported revenue of $18.3 million, compared to $22.5 million in the year-ago period. Reflecting the reserve for bad debt, net loss for the first six months of 2002 was $1.0 million, or $0.08 per diluted share, compared to $1.4 million, or $0.11 per diluted share, in the first six months of 2001. Had SFAS No. 142 been in effect during 2001, the Company would have reported a net loss of $1.3 million, or $0.10 per diluted share, in the first six months of 2001. Per share results are based on a weighted average number of shares outstanding of 12,567,197 and 12,512,672 for the first six months of 2002 and 2001, respectively.

During July 2002, the Company notified GE Capital that it was in technical default under the credit facility for failing to maintain the required fixed charge coverage ratio. Upon the occurrence of the default, and based on the terms of the credit facility, the interest rates were automatically increased by two percentage points. As of August 14, 2002, the Company had not obtained a waiver of the default; however, GE Capital had not exercised its rights under the credit facility agreement that include, but are not limited to, making a demand for repayment of all outstanding amounts. The Company and GE Capital are currently discussing alternatives as to how the default could be cured. The Company could be subject to a prepayment fee that could be as high as $142,000 if the outstanding amounts are repaid prior to the original expiration date of the credit facility. As of June 30, 2002, the Company had no borrowings under the revolving credit facility and approximately $1.6 million outstanding under its term loan.

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 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 expectations.

               Selected Balance Sheet Items (Unaudited)

                                June 30, 2002       December 31, 2001
                                -------------       -----------------
Cash and cash equivalents    $      3,439,755        $      2,168,136
Accounts receivable, net            7,616,413               8,024,963
Inventories, net                   13,847,867              14,998,505
Current debt                        1,562,500                 375,000
Long-term debt                              0               1,375,000
Accounts payable and
 accrued expenses                   6,135,888               7,434,887
Total stockholders' equity   $     30,942,125        $     31,971,678
                             ================        ================

            Selected Cash Flow Statement Items (Unaudited)

                                          Six Months Ended,
                                June 30, 2002           June 30, 2001
                                -------------           -------------
Net loss                      $    (1,036,753)       $     (1,403,289)
Depreciation and amortization       1,118,618               1,505,690
Net cash provided by
 operating activities               1,468,039               3,194,734
Capital expenditures                 (148,860)               (607,215)
Net cash used in
 investing activities                 (16,120)               (422,873)
Net cash used in
 financing activities                (180,300)             (4,247,984)
Net increase (decrease) in
 cash & cash equivalents            1,271,619              (1,476,123)
Cash & cash equivalents at
 beginning of period                2,168,136               2,220,983
Cash & cash equivalents
 at end of period             $     3,439,755        $        744,860
                             ================        ================


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

                       Three Months Ended          Six Months Ended
                            June 30,                    June 30,
                        2002         2001         2002         2001
                        ----         ----         ----         ----

Net revenues       $ 8,124,108  $10,739,335  $18,332,004  $22,475,633

Cost of revenues     6,915,606    9,633,784   15,137,979   19,815,837
                   -----------  -----------  -----------  -----------

Gross profit         1,208,502    1,105,551    3,194,025    2,659,796

Operating expenses:
 Selling               864,153      973,299    1,868,146    1,866,752
 General and
  administrative     1,102,274    1,315,063    2,346,539    2,476,989
 Provision for
  doubtful accounts    501,772       64,342      560,009      127,942
                   -----------  -----------  -----------  -----------
  Total operating
   expenses          2,468,199    2,352,704    4,774,694    4,471,683
                   -----------  -----------  -----------  -----------
Loss from
 operations         (1,259,697)  (1,247,153)  (1,580,669)  (1,811,887)

Interest income            505        4,434        1,688       17,318
Interest expense       (34,046)    (141,188)     (65,040)    (262,307)
Gain on disposal
 of assets, net         37,515       28,818       81,821       96,012
Other income
 (expense)              23,811      (74,521)       5,557     (153,322)
                   -----------  -----------  -----------  -----------
Loss before
 income taxes       (1,231,912)  (1,429,610)  (1,556,643)  (2,114,186)

Income tax benefit     429,452      490,394      519,890      710,897
                   -----------  -----------  -----------  -----------

Net loss*            $(802,460)   $(939,216) $(1,036,753) $(1,403,289)
                   ===========  ===========  ===========  ===========

Net loss per share:*
 Basic:                $ (0.06)     $ (0.08)     $ (0.08)     $ (0.11)
                   ===========  ===========  ===========  ===========
 Diluted:              $ (0.06)     $ (0.08)     $ (0.08)     $ (0.11)
                   ===========  ===========  ===========  ===========

Weighted average shares:*
 Basic              12,568,302   12,512,672   12,567,197   12,512,672
                   ===========  ===========  ===========  ===========
 Diluted            12,568,302   12,512,672   12,567,197   12,512,672
                   ===========  ===========  ===========  ===========

* 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 $0.9 million and $0.07 per diluted share, respectively, for the three month period ended June 30, 2002, and $1.3 million and $0.10 per diluted share, respectively, for the six month period ended June 30, 2002.