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Ballantyne of Omaha Inc Reports Operating Results (10-K/A)

August 22, 2012 | About:

Ballantyne of Omaha Inc (BTN) filed Amended Annual Report for the period ended 2011-12-31.

Ballantyne Strong, Inc. has a market cap of $66.2 million; its shares were traded at around $4.46 with a P/E ratio of 6 and P/S ratio of 0.4. Ballantyne Strong, Inc. had an annual average earning growth of 52.3% over the past 5 years.

Highlight of Business Operations:

We generated operating income in the theatre segment of $22.8 million in 2011 compared to $17.8 million in 2010. The results reflect an increase in business where product revenues rose 33.6%. We also generated significantly higher operating profit from our service business which increased to $2.4 million from $0.6 million a year ago on a revenue increase of 79.6%.

Service revenues increased to $7.9 million during 2010 from $3.8 million in 2009. Revenues generated from servicing film equipment were $2.3 million during 2010 compared to $2.6 million during 2009 while revenues generated from servicing digital equipment increased to $5.6 million in 2010 compared to $1.2 million in 2009. The results reflect increased demand for installation and maintenance services pertaining to the conversion from analog to digital projectors by our customers primarily in the U.S. As discussed in relation to digital product sales, we recognized service revenues of $0.3 million associated with the integration of digital projection equipment in the Omaha plant during 2010.

Sales outside the United States increased to $60.1 million in 2010 from $33.2 million in 2009 resulting primarily from increased demand in China and South America where sales increased by $23.4 million and $5.6 million, respectively. The increased demand in China resulted from theatres chains retrofitting their current operations with digital equipment as well as the growth of new theatre complexes. Sales in South America were driven primarily by existing theatre complexes retrofitting their equipment to digital in order to take advantage of the 3D technology. These sales were partially offset by a decrease in sales in Mexico of $2.6 million year over year. Sales in all other regions including Canada, Europe, Asia (excluding China) and all other regions were relatively flat year over year all together driving a net increase of $0.5 million in sales. Export sales are sensitive to worldwide economic and political conditions that can lead to volatility. Certain areas of the world are more cost conscious than the U.S. market and there are instances where our products are priced higher than local manufacturers making it more difficult to generate sufficient profit to justify selling into these regions. Additionally, foreign exchange rates and excise taxes sometimes make it difficult to market our products overseas at reasonable selling prices.

Net cash provided by operating activities amounted to $20.1 million during 2011 compared to $3.6 million during the same period a year-ago. The results reflect a $1.9 million increase in net earnings coupled with changes in certain working capital items. A decrease in inventory balances during 2011 of $13.7 million represented the largest source of cash during the year compared to a $15.3 million use of cash a year-ago. The other primary source of cash from working capital was an increase in accruals for income taxes of $2.1 million during the year. The primary uses of cash during 2011 came from accounts, notes and unbilled receivables increasing $12.0 million resulting primarily from the substantial increase in revenue this year coupled with the issuance of $2.1 million in long-term notes receivables during the year.

Net cash provided by operating activities amounted to $3.6 million in 2010 compared to $2.4 million in 2009. The increase in operating cash primarily resulted from the increase in earnings of $8.4 million in 2010 compared to $2.1 million in 2009. This was largely offset by cash used in net working capital of $7.4 million compared to $4.3 million in 2009. The increase in our working capital needs was mainly driven by increases in accounts receivable, unbilled revenue, inventory and other assets of $7.3 million, $5.2 million, $15.3 million and $2.1 million, respectively, offset by a $20.8 million increase in account payable and a $2.2 million increase in income taxes. These working capital needs are resulting from the significant increase in business we are experiencing coupled with the significantly higher price point of the digital equipment we are currently purchasing and distributing.

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Charlie Tian, Ph.D. - Founder of GuruFocus. You can now pre-order his book Invest Like a Guru on Amazon.

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