Omaha, NE – May 14, 2019 – Ballantyne Strong, Inc. (NYSE American: BTN) (the “Company”), a holding company with diverse business activities focused on serving the cinema, retail, financial, advertising and government markets, today announced financial results for the period ended March 31, 2019. The Company conducts its operations through three operating segments: Strong Cinema, Convergent and Strong Outdoor.
First Quarter 2019 Highlights
- Total revenue decreased 9.6% to $14.3 million for the first quarter of 2019 as revenue growth at Convergent and Strong Outdoor were offset by lower revenue generated by Strong Cinema as our production facility was closed for several weeks in the quarter due to weather-related damage. The facility resumed production and shipping in March, and we are rebuilding the damaged section of the facility which was fully covered by insurance.
- Gross profit decreased 7.2% to $2.6 million for the first quarter of 2019 as favorable contributions from Convergent, where revenue growth was accompanied by an increase in gross profit margins from 14.5% to 28.3%, were offset by the flow through of decreased revenue at Strong Cinema from the temporary plant closure. The favorable trend at Convergent is due to the combination of growth in high margin recurring revenue and cost reduction initiatives.
- Operating loss improved by $0.5 million for first quarter of 2019 to $2.6 million as improved operating performance at Convergent and reductions in administrative expenses were partially offset by increased investment in start-up operating expenses at Strong Outdoor and by the lower contribution from Strong Cinema.
- Net loss was $4.2 million ($0.29 per share) for the first quarter of 2019 as compared to $3.8 million ($0.26 per share) in the prior year as improved operating performance was offset by non-cash fair value adjustments and equity method investment losses.
- Adjusted EBITDA, a non-GAAP measure, improved to negative $1.6 million for the first quarter of 2019 from negative $2.1 million in the prior year due to operating improvements at Convergent and reduced administrative expenses.
Kyle Cerminara, Chairman and CEO commented, “We continued to see strong performance from our Convergent business, which has turned around significantly over the past few quarters. Strong Cinema was impacted by weather damage to our facility in Quebec, and we stopped shipping for several weeks during the first quarter. The facility resumed operations in March, and we are fully insured for property and casualty and business interruption. We expect insurance recoveries to be approximately $5 million CDN, which will positively impact future quarters as those claims are finalized.
“The Convergent team has done a tremendous job accelerating high margin recurring revenue growth while also significantly lowering their operating costs. Strong Outdoor is building out its sales leadership team and we expect to see growth accelerating in the second half of 2019.”
The Company will host a conference call on Tuesday, May 14, 2019 at 4:30 pm Eastern Time. Investors and analysts are invited to access the conference call by dialing 877-407-3982 (domestic) or 201-493-6780 (international) and providing the operator with conference ID number: 13690794. A replay will be available approximately two hours after the conclusion of the conference call until Friday, June 14, 2019 by dialing 844-512-2921 in the U.S. and Canada and 412-317-6671 internationally and entering the conference ID number: 13690794.
About Ballantyne Strong, Inc. (www.ballantynestrong.com)
Ballantyne Strong and its subsidiaries engage in diverse business activities including the design, integration and installation of technology solutions for a broad range of applications; development and delivery of out-of-home messaging, advertising and communications; manufacturing of projection screens; and providing managed services including monitoring of networked equipment. The Company focuses on serving the cinema, retail, financial, advertising and government markets.
Ballantyne Strong, Inc.
Chief Financial Officer