Ballantyne Strong Reports Financial Results for Second Quarter 2016
Ballantyne Strong, Inc. (NYSE MKT: BTN), a holding company with diverse business activities focused on
serving the cinema, retail, financial and government markets, today reported financial results for the second quarter ended June
30, 2016.
Net revenues were $20.6 million in the second quarter of 2016, compared with $17.8 million in the same period of the prior year.
Income from operations was $2.0 million in the second quarter of 2016, compared with a loss from operations of ($2.1) million in
the same period of the prior year. Core pre-tax earnings were $2.1 million in the second quarter of 2016, compared with core
pre-tax earnings of $0.4 million in the same period of the prior year. Net earnings from continuing operations totaled $1.8
million, or $0.12 per share, in the second quarter of 2016, compared with a net loss from continuing operations of ($2.8) million,
or ($0.20) per share, in the same period of the prior year.
The financial results for the second quarter of 2016 include certain items that are expected to be non-recurring in nature.
These items include a charge of ($0.1) million to accelerate the depreciation on leasehold improvements in our Omaha facility and
income of $0.5 million related to an excess distribution from an equity investment.
Kyle Cerminara, Chairman and CEO of Ballantyne Strong, Inc. commented, "I am pleased with the progress we continue to make and
our performance in the second quarter. Our performance in the second quarter is evidence that we are focused on the right strategic
objectives. While we have made a great deal of progress, we are excited about the opportunities in front of us as we continue to
execute against our new strategy. We have thoughtful plans in place that we’re working against and great ideas unfolding under our
new strategy. All of the work we’ve been doing should position us well to deliver long-term shareholder value."
Q2 2016 Financial Summary
Cinema revenues were $11.3 million in the second quarter of 2016, compared with $10.3 million in the same period of the prior year.
The increase is due to higher digital projector and screen sales.
Digital Media revenues were $9.8 million in the second quarter of 2016, compared with $7.8 million in the same period of the
prior year. The increase is attributable to an increase in equipment sales and project revenue from our digital signage business as
well as increased demand from the service business.
Consolidated gross profit was $6.1 million in the second quarter of 2016, compared with $3.5 million in the same quarter of the
prior year. Gross margin was 29.9% in the second quarter of 2016, compared with 19.6% in the same quarter of the prior year. The
second quarter of the prior year included a non-recurring charge of ($1.0) million related to the valuation of inventory. Excluding
this charge, adjusted gross profit for the second quarter of the prior year was $4.5 million and adjusted gross margin percentage
was 25.0%. There were no similar charges in the second quarter of 2016. This represents an improvement of 495 basis points in
comparison to the same quarter of the prior year. Margin improvements were seen in both the Cinema and Digital Media segments.
Margin improvements in the Cinema segment were primarily driven by a more favorable sales mix. Margin improvements in the Digital
Media segment were driven by continued progress in effectively managing costs.
Selling, general and administrative expenses (SG&A) were $4.2 million in the second quarter of 2016, compared with $5.2
million in the same quarter of the prior year. SG&A in the second quarter of 2016 included a charge for accelerated
depreciation of ($0.1) million on leasehold improvements in our Omaha facility. Excluding this charge, adjusted SG&A expenses
were $4.1 million. SG&A in the second quarter of the prior year included costs associated with the proxy contest of ($0.3)
million, severance costs of ($0.7) million related to the reorganization that took place in the second quarter of last year and
facility consolidation costs of ($0.1) million. Excluding these charges, adjusted SG&A for the prior year was $4.2 million.
Other income was $0.4 million in the second quarter of 2016, compared with other income of $0.1 million in the same quarter of
the prior year. Other income in the second quarter of 2016 included non-recurring income of $0.5 million related to an excess
distribution from an equity investment.
Six Month Results
For the six months ended June 30, 2016, net revenues were $37.7 million, compared with $37.0 million for the same period in 2015.
Gross profit amounted to $11.4 million, or 30.2% of net revenues, compared to gross profit of $7.8 million, or 21.0% of net
revenues in the prior year period. Net earnings from continuing operations were $1.0 million, or $0.07 per share for the six months
ended June 30, 2016, compared to a net loss from continuing operations of ($12.7) million, or ($0.90) per share for the same period
of the prior year. The results for the six months ended June 30, 2016 included $0.2 million of income, net of charges, which are
expected to be non-recurring in nature. These charges were related to the acceleration of depreciation and income related to an
excess distribution from an equity investment. The same period of the prior year included ($12.6) million of charges that are
expected to be non-recurring in nature. These charges were related to severance, facility consolidation costs, the proxy contest,
inventory valuation and deferred tax valuation allowances.
Discontinued Operations
As a result of the plan to pursue a sale of the Strong Westrex operations, the financial results of the Strong Westrex business are
being reported as discontinued operations in the condensed consolidated statement of operations. All prior period results have been
reclassified to reflect results from continuing operations. Net loss from discontinued operations was ($0.9) million in the second
quarter of 2016, compared to a net loss of ($0.1) million in the same quarter of the prior year.
Balance Sheet
Excluding assets held for sale, Ballantyne’s cash and cash equivalents balance at June 30, 2016 was $12.8 million, which was lower
than $17.9 million at December 31, 2015. The decrease in cash was driven by cash utilized during the quarter for the purchase of
equity investments. The cash balance for the Strong Westrex operations, classified under assets held for sale, was $1.4 million as
of June 30, 2016.
Conference Call and Webcast
A conference call to discuss 2016 second quarter financial results will be held on Thursday, August 4, 2016 at 5:00 p.m. Eastern
Time / 4:00 p.m. Central Time. Investors and analysts are invited to access the conference call by dialing 866-652-5200 (domestic)
or 412-317-6060 (international), and referencing “Ballantyne Strong”. A link to the second quarter presentation and a live webcast
of the call is available on the Investors – Financial Reports & Webcasts section of http://www.strong-world.com.
After the live webcast, a replay will remain available in the Investor Relations section of Ballantyne Strong’s website. A
replay of the call will be available at 877-344-7529 (domestic) or 412-317-0088 (international) through August 17, 2016, conference
ID 10087492.
About Ballantyne Strong, Inc. (www.strong-world.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, and government markets.
Forward-Looking Statements
Except for the historical information in this press release, it includes forward-looking statements which involve a number of risks
and uncertainties, including but not limited to those discussed in the “Risk Factors” section contained in Item 1A in our
Annual Report on Form 10-K for the fiscal year ended December 31, 2015 and the following risks and uncertainties: the
Company’s ability to expand its revenue streams to compensate for the lower demand for its digital cinema products and installation
services, potential interruptions of supplier relationships or higher prices charged by suppliers, the Company’s ability to
successfully compete and introduce enhancements and new features that achieve market acceptance and that keep pace with
technological developments, the Company’s ability to successfully execute its investment strategy, the Company’s ability to retain
or replace its significant customers, the impact of challenging global economic environment or a downturn in the markets, economic
and political risks of selling products in foreign countries, risks of non-compliance with U.S. and foreign laws and regulations,
cybersecurity risks and risks of damage and interruptions of information technology systems, the Company’s ability to retain key
members of management and successfully integrate the new executives, acquisition-related risks, the Company’s ability to assert its
intellectual property rights, the impact of natural disasters and other catastrophic events, the adequacy of insurance, and the
impact of having a controlling stockholder. Given the risks and uncertainties, readers should not place undue reliance on any
forward-looking statement and should recognize that the statements are predictions of future results which may not occur as
anticipated. Actual results could differ materially from those anticipated in the forward-looking statements and from historical
results, due to the risks and uncertainties described herein, as well as others not now anticipated. New risk factors emerge from
time to time and it is not possible for management to predict all such risk factors, nor can it assess the impact of all such
factors on our business or the extent to which any factor, or combination of factors, may cause actual results to differ materially
from those contained in any forward-looking statements. Except where required by law, the Company assumes no obligation to update
forward-looking statements to reflect actual results or changes in factors or assumptions affecting such forward-looking
statements.
|
Ballantyne Strong, Inc. and Subsidiaries |
Condensed Consolidated Balance Sheets |
(In thousands) |
|
|
|
|
|
|
|
|
|
|
June 30, |
|
|
December 31, |
|
|
|
2016 |
|
|
2015 |
|
|
|
(Unaudited) |
|
|
|
Assets |
|
|
|
|
|
|
Current assets: |
|
|
|
|
|
|
Cash and cash equivalents |
|
|
$ |
12,787 |
|
|
|
$ |
17,862 |
|
Accounts receivable (net of allowance for doubtful accounts of $1,071 and $1,207,
respectively) |
|
|
|
14,556 |
|
|
|
|
11,032 |
|
Inventories: |
|
|
|
|
|
|
Finished goods, net |
|
|
|
6,259 |
|
|
|
|
5,651 |
|
Work in process |
|
|
|
416 |
|
|
|
|
190 |
|
Raw materials and components, net |
|
|
|
1,095 |
|
|
|
|
1,351 |
|
Total inventories, net |
|
|
|
7,770 |
|
|
|
|
7,192 |
|
Recoverable income taxes |
|
|
|
516 |
|
|
|
|
85 |
|
Other current assets |
|
|
|
2,487 |
|
|
|
|
2,556 |
|
Current assets held for sale |
|
|
|
1,797 |
|
|
|
|
7,219 |
|
Total current assets |
|
|
|
39,913 |
|
|
|
|
45,946 |
|
Property, plant and equipment (net of accumulated depreciation of $7,875 and $6,578,
respectively) |
|
|
|
11,414 |
|
|
|
|
11,703 |
|
Marketable securities |
|
|
|
1,812 |
|
|
|
|
2,101 |
|
Equity method investments |
|
|
|
7,766 |
|
|
|
|
4,001 |
|
Intangible assets, net |
|
|
|
526 |
|
|
|
|
235 |
|
Goodwill |
|
|
|
924 |
|
|
|
|
863 |
|
Notes receivable |
|
|
|
1,669 |
|
|
|
|
1,669 |
|
Other assets |
|
|
|
105 |
|
|
|
|
281 |
|
Noncurrent assets held for sale |
|
|
|
— |
|
|
|
|
65 |
|
Total assets |
|
|
$ |
64,129 |
|
|
|
$ |
66,864 |
|
|
|
|
|
|
|
|
Liabilities and Stockholders’ Equity |
|
|
|
|
|
|
Current liabilities: |
|
|
|
|
|
|
Accounts payable |
|
|
$ |
6,464 |
|
|
|
$ |
4,948 |
|
Accrued expenses |
|
|
|
3,072 |
|
|
|
|
3,583 |
|
Customer deposits/deferred revenue |
|
|
|
3,005 |
|
|
|
|
3,550 |
|
Income tax payable |
|
|
|
132 |
|
|
|
|
1,291 |
|
Current liabilities held for sale |
|
|
|
737 |
|
|
|
|
4,395 |
|
Total current liabilities |
|
|
|
13,410 |
|
|
|
|
17,767 |
|
Deferred revenue |
|
|
|
1,266 |
|
|
|
|
1,288 |
|
Deferred income taxes |
|
|
|
1,605 |
|
|
|
|
1,716 |
|
Other accrued expenses, net of current portion |
|
|
|
1,306 |
|
|
|
|
1,581 |
|
Total liabilities |
|
|
|
17,587 |
|
|
|
|
22,352 |
|
Stockholders’ equity: |
|
|
|
|
|
|
Preferred stock, par value $.01 per share; Authorized 1,000 shares, none
outstanding |
|
|
|
— |
|
|
|
|
— |
|
Common stock, par value $.01 per share; Authorized 25,000 shares; issued 17,002 and
16,925 shares at June 30, 2016 and December 31, 2015, respectively; 14,237 and 14,191 shares outstanding at June 30, 2016 and
December 31, 2015, respectively |
|
|
|
169 |
|
|
|
|
169 |
|
Additional paid-in capital |
|
|
|
39,454 |
|
|
|
|
39,157 |
|
Accumulated other comprehensive income: |
|
|
|
|
|
|
Foreign currency translation |
|
|
|
(4,604 |
) |
|
|
|
(6,229 |
) |
Postretirement benefit obligations |
|
|
|
74 |
|
|
|
|
74 |
|
Unrealized gain on available-for-sale securities of equity method investment |
|
|
|
21 |
|
|
|
|
— |
|
Retained earnings |
|
|
|
29,815 |
|
|
|
|
29,595 |
|
|
|
|
|
64,929 |
|
|
|
|
62,766 |
|
Less 2,765 and 2,734 of common shares in treasury, at cost at June 30, 2016
and December 31, 2015 |
|
|
|
(18,387 |
) |
|
|
|
(18,254 |
) |
Total stockholders’ equity |
|
|
|
46,542 |
|
|
|
|
44,512 |
|
Total liabilities and stockholders’ equity |
|
|
$ |
64,129 |
|
|
|
$ |
66,864 |
|
|
|
|
|
|
|
|
|
Ballantyne Strong, Inc. and Subsidiaries |
Condensed Consolidated Statements of Operations |
Three and Six Months Ended June 30, 2016 and 2015 |
(In thousands, except per share data) |
(Unaudited) |
|
|
|
|
|
|
|
|
|
|
Three Months Ended June 30, |
|
|
Six Months Ended June 30, |
|
|
|
2016 |
|
|
2015 |
|
|
2016 |
|
|
2015 |
Net product sales |
|
|
$ |
14,862 |
|
|
|
$ |
12,064 |
|
|
|
$ |
26,597 |
|
|
|
$ |
26,019 |
|
Net service revenues |
|
|
|
5,696 |
|
|
|
|
5,767 |
|
|
|
|
11,075 |
|
|
|
|
10,962 |
|
Total net revenues |
|
|
|
20,558 |
|
|
|
|
17,831 |
|
|
|
|
37,672 |
|
|
|
|
36,981 |
|
Cost of products sold |
|
|
|
11,280 |
|
|
|
|
10,661 |
|
|
|
|
20,038 |
|
|
|
|
22,141 |
|
Cost of services |
|
|
|
3,129 |
|
|
|
|
3,675 |
|
|
|
|
6,249 |
|
|
|
|
7,089 |
|
Total cost of revenues |
|
|
|
14,409 |
|
|
|
|
14,336 |
|
|
|
|
26,287 |
|
|
|
|
29,230 |
|
Gross profit
|
|
|
|
6,149 |
|
|
|
|
3,495 |
|
|
|
|
11,385 |
|
|
|
|
7,751 |
|
Selling and administrative expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
Selling |
|
|
|
1,149 |
|
|
|
|
1,344 |
|
|
|
|
2,174 |
|
|
|
|
2,932 |
|
Administrative |
|
|
|
3,037 |
|
|
|
|
3,885 |
|
|
|
|
6,136 |
|
|
|
|
7,456 |
|
Total selling and administrative expenses
|
|
|
|
4,186 |
|
|
|
|
5,229 |
|
|
|
|
8,310 |
|
|
|
|
10,388 |
|
Gain (loss) on the sale or disposal of assets |
|
|
|
— |
|
|
|
|
(381 |
) |
|
|
|
1 |
|
|
|
|
(378 |
) |
Income (loss) from operations |
|
|
|
1,963 |
|
|
|
|
(2,115 |
) |
|
|
|
3,076 |
|
|
|
|
(3,015 |
) |
Other income (expense): |
|
|
|
|
|
|
|
|
|
|
|
|
Interest income |
|
|
|
27 |
|
|
|
|
167 |
|
|
|
|
40 |
|
|
|
|
331 |
|
Interest expense |
|
|
|
(27 |
) |
|
|
|
(15 |
) |
|
|
|
(40 |
) |
|
|
|
(31 |
) |
Foreign currency transaction (expense) gain |
|
|
|
(180 |
) |
|
|
|
(81 |
) |
|
|
|
(1,005 |
) |
|
|
|
556 |
|
Change in value of marketable securities |
|
|
|
116 |
|
|
|
|
— |
|
|
|
|
(366 |
) |
|
|
|
— |
|
Excess distribution from joint venture |
|
|
|
502 |
|
|
|
|
— |
|
|
|
|
502 |
|
|
|
|
— |
|
Other income, net |
|
|
|
6 |
|
|
|
|
17 |
|
|
|
|
43 |
|
|
|
|
24 |
|
Total other income (expense) |
|
|
|
444 |
|
|
|
|
88 |
|
|
|
|
(826 |
) |
|
|
|
880 |
|
Earnings (loss) before income taxes and equity method investment income |
|
|
|
2,407 |
|
|
|
|
(2,027 |
) |
|
|
|
2,250 |
|
|
|
|
(2,135 |
) |
Income tax expense |
|
|
|
(653 |
) |
|
|
|
(911 |
) |
|
|
|
(1,337 |
) |
|
|
|
(10,696 |
) |
Equity method investment income |
|
|
|
— |
|
|
|
|
94 |
|
|
|
|
41 |
|
|
|
|
94 |
|
Net earnings (loss) from continuing operations |
|
|
|
1,754 |
|
|
|
|
(2,844 |
) |
|
|
|
954 |
|
|
|
|
(12,737 |
) |
Net loss from discontinued operations, net of tax |
|
|
|
(921 |
) |
|
|
|
(75 |
) |
|
|
|
(734 |
) |
|
|
|
(347 |
) |
Net earnings (loss) |
|
|
$ |
833 |
|
|
|
$ |
(2,919 |
) |
|
|
$ |
220 |
|
|
|
$ |
(13,084 |
) |
Net earnings (loss) per share - basic |
|
|
|
|
|
|
|
|
|
|
|
|
Net earnings (loss) from continuing operations |
|
|
$ |
0.12 |
|
|
|
$ |
(0.20 |
) |
|
|
$ |
0.07 |
|
|
|
$ |
(0.90 |
) |
Net loss from discontinued operations |
|
|
|
(0.06 |
) |
|
|
|
(0.01 |
) |
|
|
|
(0.05 |
) |
|
|
|
(0.03 |
) |
Net earnings (loss) |
|
|
$ |
0.06 |
|
|
|
$ |
(0.21 |
) |
|
|
$ |
0.02 |
|
|
|
$ |
(0.93 |
) |
Net earnings (loss) per share - diluted |
|
|
|
|
|
|
|
|
|
|
|
|
Net earnings (loss) from continuing operations |
|
|
$ |
0.12 |
|
|
|
$ |
(0.20 |
) |
|
|
$ |
0.07 |
|
|
|
$ |
(0.90 |
) |
Net loss from discontinued operations |
|
|
|
(0.06 |
) |
|
|
|
(0.01 |
) |
|
|
|
(0.05 |
) |
|
|
|
(0.03 |
) |
Net earnings (loss) |
|
|
$ |
0.06 |
|
|
|
$ |
(0.21 |
) |
|
|
$ |
0.02 |
|
|
|
$ |
(0.93 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Ballantyne Strong, Inc. and Subsidiaries |
Condensed Consolidated Statements of Cash Flows |
Three and Six Months Ended June 30, 2016 and 2015 |
(In thousands) |
(Unaudited) |
|
|
|
|
Six Months Ended June 30, |
|
|
|
2016 |
|
|
2015 |
|
|
|
|
|
|
|
Cash flows from operating activities: |
|
|
|
|
|
|
Net earnings (loss) |
|
|
$ |
220 |
|
|
|
$ |
(13,084 |
) |
Net loss from discontinued operations, net of tax |
|
|
|
734 |
|
|
|
|
347 |
|
Net earnings (loss) from continuing operations |
|
|
|
954 |
|
|
|
|
(12,737 |
) |
Adjustments to reconcile net loss from continuing operations to net cash (used in)
provided by operating activities: |
|
|
|
|
|
|
Provision for doubtful accounts |
|
|
|
(44 |
) |
|
|
|
24 |
|
Provision for obsolete inventory |
|
|
|
47 |
|
|
|
|
957 |
|
Provision for warranty |
|
|
|
171 |
|
|
|
|
310 |
|
Depreciation and amortization |
|
|
|
1,127 |
|
|
|
|
1,245 |
|
Equity method investment income |
|
|
|
(41 |
) |
|
|
|
(94 |
) |
Change in value of marketable securities |
|
|
|
366 |
|
|
|
|
— |
|
(Gain) loss on disposal or transfer of assets |
|
|
|
(1 |
) |
|
|
|
378 |
|
Deferred income taxes |
|
|
|
(146 |
) |
|
|
|
8,812 |
|
Share-based compensation expense |
|
|
|
244 |
|
|
|
|
151 |
|
Changes in operating assets and liabilities: |
|
|
|
|
|
|
Accounts, unbilled and notes receivable |
|
|
|
(2,684 |
) |
|
|
|
6,683 |
|
Inventories |
|
|
|
(522 |
) |
|
|
|
227 |
|
Other current assets |
|
|
|
(320 |
) |
|
|
|
(524 |
) |
Accounts payable |
|
|
|
1,361 |
|
|
|
|
(2,518 |
) |
Accrued expenses |
|
|
|
358 |
|
|
|
|
(697 |
) |
Customer deposits/deferred revenue |
|
|
|
(570 |
) |
|
|
|
(682 |
) |
Income taxes payable |
|
|
|
(1,620 |
) |
|
|
|
837 |
|
Other assets |
|
|
|
(124 |
) |
|
|
|
(126 |
) |
Net cash flows from operating activities – continuing operations |
|
|
|
(1,444 |
) |
|
|
|
2,246 |
|
Net cash flows from operating activities – discontinued operations |
|
|
|
(2,724 |
) |
|
|
|
667 |
|
Net cash (used in) provided by operating activities |
|
|
|
(4,168 |
) |
|
|
|
2,913 |
|
|
|
|
|
|
|
|
Cash flows from investing activities: |
|
|
|
|
|
|
Purchase of equity securities |
|
|
|
(3,764 |
) |
|
|
|
— |
|
Dividend from equity method investment |
|
|
|
103 |
|
|
|
|
— |
|
Capital expenditures |
|
|
|
(653 |
) |
|
|
|
(240 |
) |
Proceeds from sale of assets |
|
|
|
— |
|
|
|
|
5 |
|
Net cash used in investing activities – continuing operations |
|
|
|
(4,314 |
) |
|
|
|
(235 |
) |
|
|
|
|
|
|
|
Cash flows from financing activities: |
|
|
|
|
|
|
Purchase of treasury stock |
|
|
|
(133 |
) |
|
|
|
— |
|
Proceeds from exercise of stock options |
|
|
|
53 |
|
|
|
|
— |
|
Payments on capital lease obligations |
|
|
|
(159 |
) |
|
|
|
(14 |
) |
Excess tax benefits from share-based arrangements |
|
|
|
6 |
|
|
|
|
11 |
|
Net cash used in financing activities – continuing operations |
|
|
|
(233 |
) |
|
|
|
(3 |
) |
Effect of exchange rate changes on cash and cash equivalents –continuing
operations |
|
|
|
916 |
|
|
|
|
(517 |
) |
Effect of exchange rate changes on cash and cash equivalents – discontinued
operations |
|
|
|
(69 |
) |
|
|
|
12 |
|
Net (decrease) increase in cash and cash equivalents |
|
|
|
(7,868 |
) |
|
|
|
2,170 |
|
Discontinued operations cash activity included above: |
|
|
|
|
|
|
Add: Cash balance included in assets held for sale at beginning of period |
|
|
|
4,208 |
|
|
|
|
3,190 |
|
Less: Cash balance included in assets held for sale at end of period |
|
|
|
(1,415 |
) |
|
|
|
(3,886 |
) |
Cash and cash equivalents at beginning of period |
|
|
|
17,862 |
|
|
|
|
19,301 |
|
Cash and cash equivalents at end of period |
|
|
$ |
12,787 |
|
|
|
$ |
20,775 |
|
Supplemental disclosure of non-cash investing and financing activities: |
|
|
|
|
|
|
Capital lease obligations for property and equipment |
|
|
$ |
— |
|
|
|
$ |
226 |
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of Non-GAAP Financial Measures
Adjusted Gross Profit and Gross Margin Percentage, Adjusted Selling and Administrative Expenses and Core
Pre-tax Earnings Reconciliation
Adjusted gross profit and gross margin percentage, adjusted selling and administrative expenses and core pre-tax earnings are
non-GAAP measures. The Company defines core pre-tax earnings as income (loss) from operations plus equity method investment income
less non-recurring charges. The Company believes these measures provide a useful indication of profitability and basis for
assessing and analyzing the operations of the Company.
Management utilizes these non-GAAP measures in assessing the financial and operating performance of the Company. In addition,
management believes these measures provide additional insight for investors and analysts in evaluating the Company’s financial and
operating performance.
These adjusted financial measures should not be considered in isolation or as a substitute for other profitability metrics
prepared in accordance with GAAP. Adjusted financial measures, as presented, may not be comparable to similarly titled measures of
other companies. Adjusted financial measures for 2016 and 2015 are not tax effected due to the tax valuation allowance recorded in
2015.
Set forth below are reconciliations of gross profit and gross margin percentage to adjusted gross profit and gross margin
percentage, selling and administrative expense to adjusted selling and administrative expense and a reconciliation of core pre-tax
earnings to income (loss) from operations for the second quarter of 2016 and the same period of the prior year.
|
|
|
|
|
|
|
Reconciliation of Core Pre-tax Earnings |
|
|
|
|
|
|
Unaudited, in thousands |
|
|
Three months ended |
|
|
|
June 30, 2016 |
|
|
June 30, 2015 |
Income (loss) from operations |
|
|
$ |
1,963 |
|
|
|
$ |
(2,115 |
) |
Equity method investment income |
|
|
|
- |
|
|
|
|
94 |
|
Non-recurring items |
|
|
|
122 |
|
|
|
|
2,374 |
|
Core pre-tax earnings |
|
|
$ |
2,085 |
|
|
|
$ |
353 |
|
|
|
|
|
|
|
|
Reconciliation of Gross Profit and Gross Margin Percentage |
|
|
|
Unaudited, in thousands |
|
|
Three months ended |
|
|
|
June 30, 2016 |
|
|
June 30, 2015 |
Gross profit |
|
|
$ |
6,149 |
|
|
|
$ |
3,495 |
|
Gross margin percentage |
|
|
|
29.9 |
% |
|
|
|
19.6 |
% |
Inventory valuation |
|
|
|
- |
|
|
|
|
958 |
|
Adjusted gross profit |
|
|
$ |
6,149 |
|
|
|
$ |
4,453 |
|
Adjusted gross margin percentage |
|
|
|
29.9 |
% |
|
|
|
25.0 |
% |
|
|
|
|
|
|
|
Reconciliation of Selling and Administrative |
|
|
|
|
|
|
Unaudited, in thousands |
|
|
Three months ended |
|
|
|
June 30, 2016 |
|
|
June 30, 2015 |
Selling and administrative expenses |
|
|
$ |
4,186 |
|
|
|
$ |
5,229 |
|
Severance costs |
|
|
|
- |
|
|
|
|
(693 |
) |
Facility consolidation costs |
|
|
|
- |
|
|
|
|
(59 |
) |
Proxy contest charges |
|
|
|
- |
|
|
|
|
(297 |
) |
Accelerated facility depreciation |
|
|
|
(122 |
) |
|
|
|
- |
|
Adjusted selling and administrative expenses |
|
|
$ |
4,064 |
|
|
|
$ |
4,180 |
|
|
|
|
|
|
|
|
|
|
|
|
Ballantyne Strong, Inc.
Nate Legband, 402-829-9404
Chief Financial Officer
or
Elise Stejskal, 402-829-9423
Investor Relations
View source version on businesswire.com: http://www.businesswire.com/news/home/20160804006032/en/