Ballantyne of Omaha Reports Fiscal Year 2008 Results.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 AMEX See: American Stock Exchange : 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. (NYSE NYSE See: New York Stock Exchange Amex: BTN), a provider of cinema equipment and services, today reported financial results for the fourth quarter (Q4) and year ended December 31, 2008. Q4 2008 net revenues rose to $14.7 million, a 10.4% increase from net revenues of $13.3 million in Q4 2007, principally due to higher sales of digital projection equipment which amounted to $3.9 million during Q4 2008 compared to $1.7 million a year-ago. The results also reflect the contribution of $2.7 million in sales from the Company's cinema screen business, Strong/MDI Screen Systems, Inc. (Strong/MDI), compared to a partial quarter's contribution of $0.9 million in the year-ago period. Ballantyne acquired the Strong/MDI business in mid-October 2007. Gross profit in Q4 2008 increased to $2.3 million, or 15.6% of net revenues, compared to Q4 2007's gross profit of $2.2 million, or 16.3% of net revenues. The decline in gross profit percentage reflects the impact of the ongoing digital transition from traditional analog equipment in the exhibition industry, the consequent con·se·quent adj. 1. a. Following as a natural effect, result, or conclusion: tried to prevent an oil spill and the consequent damage to wildlife. b. decline in the traditional cinema manufacturing business, as well as lower margins from the Company's cinema service subsidiary, 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). ). During the fourth quarter of 2008, Ballantyne recorded a non-cash goodwill impairment Impairment 1. A reduction in a company's stated capital. 2. The total capital that is less than the par value of the company's capital stock. Notes: 1. This is usually reduced because of poorly estimated losses or gains. 2. charge of $2.3 million ($1.8 million after-tax), eliminating all remaining goodwill on Ballantyne's balance sheet. The impairment was the result of a decrease in the market price of the Company's common stock and the transition from analog to digital technology that the Company is currently executing. Despite the non-cash impairment charge, Ballantyne's balance sheet and cash position remain sound, with no debt outstanding and over $11 million in cash and equivalents. SG&A, excluding the $2.3 million goodwill impairment charge, increased to $2.8 million in Q4 2008, compared to SG&A of $2.7 million in Q4 2007, yet declined as a percentage of revenue to 19.1% in Q4 2008 from 20.3% in Q4 2007. As a result of the above factors and in particular the after-tax goodwill impairment charge of $1.8 million, Ballantyne reported a Q4 2008 net loss of $2.0 million, or ($0.14) per share, compared to a Q4 2007 net loss of approximately $0.3 million, or ($0.02) per share. Per share results for the fourth quarters of 2008 and 2007 are based on a weighted average number of shares outstanding of 13,975,628 and 13,854,291 respectively. For the full year 2008, net revenues rose 6.5% to $54.8 million from net revenues of $51.5 million in 2007. The increase reflects higher demand for digital projection equipment where sales rose to $12.6 million, from $4.2 million in 2007, as well as the benefit of Strong/MDI which contributed revenue of $6.4 million in 2008, compared to a partial year's contribution of $0.9 million in 2007. Reflecting the transition to digital cinema, sales of film-based products declined by $9.6 million to $28.2 million in 2008. Gross profit in 2008 declined to $8.8 million, or 16.0% of net revenues, from $9.5 million, or 18.4% of net revenues, in 2007. The decline in gross profit margin Gross profit margin Gross profit divided by sales, which is equal to each sales dollar left over after paying for the cost of goods sold. gross profit margin A measure calculated by dividing gross profit by net sales. reflects an increase in lower margin digital equipment sales, higher manufacturing costs of legacy film products, as well as lower margins from the Company's cinema service subsidiary. Results for 2008 and 2007 also reflect non-cash goodwill impairment charges of $2.3 million and $0.6 million, respectively. Ballantyne's net loss in 2008, including the after-tax goodwill impairment charge of $1.8 million, amounted to $2.7 million, or ($0.19) per share, compared to net income of approximately $0.2 million, or $0.02 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 2007. Per share results for 2008 and 2007 are based on a weighted average number of diluted shares outstanding of 13,914,743 and 14,094,927, respectively. During the fourth quarter, Ballantyne's Board of Directors authorized au·thor·ize tr.v. au·thor·ized, au·thor·iz·ing, au·thor·iz·es 1. To grant authority or power to. 2. To give permission for; sanction: the repurchase re·pur·chase tr.v. re·pur·chased, re·pur·chas·ing, re·pur·chas·es To buy (something) again. n. The act of buying something that one previously sold or owned. Noun 1. of up to $1 million of the Company's common stock. Ballantyne repurchased 42,177 shares under this authorization during the quarter at a weighted average cost of $1.59 per share, for a total cost of $67,226. Balance Sheet Update: Ballantyne's cash and cash equivalents rose to $11.4 million as of December 31, 2008, from $6.4 million at September 30, 2008 and $4.2 million at December 31, 2007 due in part to $4.4 million of operating cash flow Operating cash flow Earnings before depreciation minus taxes. Measures the cash generated from operations, not counting capital spending or working capital requirements. generated during 2008. At December 31, 2008 Ballantyne also had $8.9 million (net of a pretax pre·tax adj. Existing before tax deductions: pretax income. pretax adj [profit] → vor (Abzug der) Steuern $1.1 temporary impairment charge) in AAA-rated Auction Rate Securities (ARS) on its balance sheet. Ballantyne was able to liquidate To pay and settle the amount of a debt; to convert assets to cash; to aggregate the assets of an insolvent enterprise and calculate its liabilities in order to settle with the debtors and the creditors and apportion the remaining assets, if any, among the stockholders or owners of the approximately $1.7 million of its ARS at par for cash during Q4 2008 for a total of $3.0 million in ARS liquidations for the full year. John P. Wilmers, President and Chief Executive Officer of Ballantyne, commented, "Our 2008 sales reflect increases across all our businesses that provide digital cinema products and services. Of particular note, our digital cinema division's sales increased over 200% from the prior year. Coupled with the recently announced sale of 100 digital projectors See data projector. to China Film Group in 2009, Ballantyne is making steady process in expanding our digital cinema footprint, and we are eagerly awaiting the accelerated rollout of digital cinema. "As we look forward to the long awaited large-scale rollout of digital cinema technology, we continue to remain focused on our customers and their needs, as well as in 'right-sizing' our overhead to match the expected demands of our evolving business. As part of that effort, during the first quarter of 2009, we trimmed our global staffing by 10%, largely at our Omaha facility. The headcount reductions we implemented should yield annualized annualized Of or relating to a variable that has been mathematically converted to a yearly rate. Inflation and interest rates are generally annualized since it is on this basis that these two variables are ordinarily stated and compared. savings of approximately $900,000. Given our product and services mix, and a talented team of professionals and staff, we believe Ballantyne/Strong is well positioned to participate in a meaningful way in the exhibition industry's unprecedented technology conversion." About Ballantyne of Omaha Ballantyne is a provider of motion picture projection, digital cinema projection, cinema screen technology and specialty lighting 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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