Investment gains driving positive earnings
Recent Highlights
● Entertainment business returned to positive operating income and adjusted EBITDA as the cinema exhibition business continues to rebound
○ Service revenues increased 42.7%
○ Delivered the largest IMAX screen in the world in
○ Announced preferred commercial relationship with
○ Industry trends strengthening with unprecedented backlog of blockbuster releases slated for release.
● Increased capital allocated to
○ Invested
○ Recognized an unrealized gain on investment (mark-to-market) of
● Reported consolidated quarterly net income from continuing operations of
● Strengthened the board of directors by adding
“The third quarter was a significant turning point for the entertainment industry, representing the beginning of the post-COVID recovery,” commented
“Our equity holdings also continue to execute, with GreenFirst completing its planned acquisition in August, making it one of the leading timber producers in
“Overall, it was a very good quarter for
Third Quarter 2021 Financial Review (As Compared to the Continuing Operations from the Three Months Ended
● | Revenue increased 10.0% to | |
● | Gross profit increased to | |
● | Operating loss improved to | |
● | Net income from continuing operations was | |
● | Adjusted EBITDA improved to negative |
Conference Call
A conference call to discuss the Company’s 2021 third quarter financial results will be held on
A replay of the webcast will be available following the conclusion of the live broadcast and accessible on the Company’s website at www.ballantynestrong.com/investors.
Use of Non-GAAP Measures
EBITDA and Adjusted EBITDA are not measures of performance defined in accordance with GAAP. However, Adjusted EBITDA is used internally in planning and evaluating the Company’s operating performance. Accordingly, management believes that disclosure of these metrics offers investors, bankers and other stakeholders an additional view of the Company’s operations that, when coupled with the GAAP results, provides a more complete understanding of the Company’s financial results.
EBITDA and Adjusted EBITDA should not be considered as an alternative to net income (loss) or to net cash from operating activities as measures of operating results or liquidity. The Company’s calculation of EBITDA and Adjusted EBITDA may not be comparable to similarly titled measures used by other companies, and the measures exclude financial information that some may consider important in evaluating the Company’s performance.
EBITDA and Adjusted EBITDA have limitations as analytical tools, and you should not consider them in isolation, or as substitutes for analysis of the Company’s results as reported under GAAP. Some of these limitations are: (i) they do not reflect the Company’s cash expenditures, or future requirements for capital expenditures or contractual commitments, (ii) they do not reflect changes in, or cash requirements for, the Company’s working capital needs, (iii) EBITDA and Adjusted EBITDA do not reflect interest expense, or the cash requirements necessary to service interest or principal payments, on the Company’s debt, (iv) although depreciation and amortization are non-cash charges, the assets being depreciated and amortized will often have to be replaced in the future, and EBITDA and Adjusted EBITDA do not reflect any cash requirements for such replacements, (v) they do not adjust for all non-cash income or expense items that are reflected in the Company’s statements of cash flows, (vi) they do not reflect the impact of earnings or charges resulting from matters management considers not to be indicative of the Company’s ongoing operations, and (vii) other companies in the Company’s industry may calculate these measures differently than the Company does, limiting their usefulness as comparative measures.
Management believes EBITDA and Adjusted EBITDA facilitate operating performance comparisons from period to period by isolating the effects of some items that vary from period to period without any correlation to core operating performance or that vary widely among similar companies. These potential differences may be caused by variations in capital structures (affecting interest expense), tax positions (such as the impact on periods or companies of changes in effective tax rates or net operating losses) and the age and book depreciation of facilities and equipment (affecting relative depreciation expense). The Company also presents EBITDA and Adjusted EBITDA because (i) management believes these measures are frequently used by securities analysts, investors and other interested parties to evaluate companies in the Company’s industry, (ii) management believes investors will find these measures useful in assessing the Company’s ability to service or incur indebtedness, and (iii) management uses EBITDA and Adjusted EBITDA internally as benchmarks to evaluate the Company’s operating performance or compare the Company’s performance to that of its competitors.
For further information, please refer to
About
Forward-Looking Statements
In addition to the historical information included herein, this press release includes forward-looking statements, such as management’s expectations regarding its portfolio companies, the Company’s intent to pursue an initial public offering of
For Investor Relations Inquiries:
IMS Investor Relations | ||
704-994-8279 | 203-972-9200 | |
IR@btn-inc.com | jnesbett@institutionalms.com |
Condensed Consolidated Balance Sheets
(In thousands, except par values)
(unaudited) | ||||||||
Assets | ||||||||
Current assets: | ||||||||
Cash and cash equivalents | $ | 10,372 | $ | 4,435 | ||||
Restricted cash | 150 | 352 | ||||||
Accounts receivable, net | 4,446 | 5,558 | ||||||
Inventories, net | 2,986 | 2,264 | ||||||
Current assets of discontinued operations | - | 3,748 | ||||||
Other current assets | 5,667 | 1,452 | ||||||
Total current assets | 23,621 | 17,809 | ||||||
Property, plant and equipment, net | 6,109 | 5,524 | ||||||
Operating lease right-of-use assets | 3,842 | 4,304 | ||||||
Finance lease right-of-use assets | 1 | 4 | ||||||
Note receivable, net of current portion | 1,875 | - | ||||||
Investments | 37,341 | 20,167 | ||||||
Intangible assets, net | 132 | 353 | ||||||
937 | 938 | |||||||
Long-term assets of discontinued operations | - | 6,372 | ||||||
Other assets | 19 | 28 | ||||||
Total assets | $ | 73,877 | $ | 55,499 | ||||
Liabilities and Stockholders’ Equity | ||||||||
Current liabilities: | ||||||||
Accounts payable | $ | 2,915 | $ | 2,717 | ||||
Accrued expenses | 2,400 | 2,182 | ||||||
Short-term debt | 3,201 | 3,299 | ||||||
Current portion of operating lease obligations | 562 | 619 | ||||||
Current portion of finance lease obligations | 1 | 1,015 | ||||||
Deferred revenue and customer deposits | 3,850 | 2,404 | ||||||
Current liabilities of discontinued operations | - | 3,901 | ||||||
Total current liabilities | 12,929 | 16,137 | ||||||
Operating lease obligations, net of current portion | 3,408 | 3,817 | ||||||
Finance lease obligations, net of current portion | - | 1,091 | ||||||
Deferred income taxes | 5,218 | 3,099 | ||||||
Long-term liabilities of discontinued operations | - | 4,066 | ||||||
Other long-term liabilities | 229 | 223 | ||||||
Total liabilities | 21,784 | 28,433 | ||||||
Stockholders’ equity: | ||||||||
Preferred stock | - | - | ||||||
Common stock | 212 | 176 | ||||||
Additional paid-in capital | 50,603 | 43,713 | ||||||
Retained earnings | 24,123 | 5,654 | ||||||
(18,586 | ) | (18,586 | ) | |||||
Accumulated other comprehensive loss | (4,259 | ) | (3,891 | ) | ||||
Total stockholders’ equity | 52,093 | 27,066 | ||||||
Total liabilities and stockholders’ equity | $ | 73,877 | $ | 55,499 |
Condensed Consolidated Statements of Operations
(In thousands, except per share amounts)
(Unaudited)
Three Months Ended | Nine Months Ended | |||||||||||||||
2021 | 2020 | 2021 | 2020 | |||||||||||||
Net product sales | $ | 4,086 | $ | 4,138 | $ | 11,811 | $ | 11,370 | ||||||||
Net service revenues | 2,030 | 1,423 | 5,170 | 4,164 | ||||||||||||
Total net revenues | 6,116 | 5,561 | 16,981 | 15,534 | ||||||||||||
Cost of products sold | 2,624 | 3,205 | 7,831 | 8,286 | ||||||||||||
Cost of services | 1,044 | 1,192 | 3,078 | 4,067 | ||||||||||||
Total cost of revenues | 3,668 | 4,397 | 10,909 | 12,353 | ||||||||||||
Gross profit | 2,448 | 1,164 | 6,072 | 3,181 | ||||||||||||
Selling and administrative expenses: | ||||||||||||||||
Selling | 411 | 382 | 1,158 | 1,231 | ||||||||||||
Administrative | 2,155 | 2,222 | 6,775 | 7,923 | ||||||||||||
Total selling and administrative expenses | 2,566 | 2,604 | 7,933 | 9,154 | ||||||||||||
Loss on disposal of assets | - | (18 | ) | - | (18 | ) | ||||||||||
Loss from operations | (118 | ) | (1,458 | ) | (1,861 | ) | (5,991 | ) | ||||||||
Other income (expense): | ||||||||||||||||
Interest income | 21 | - | 54 | - | ||||||||||||
Interest expense | (28 | ) | (109 | ) | (284 | ) | (372 | ) | ||||||||
Foreign currency transaction gain (loss) | 162 | (172 | ) | (56 | ) | 51 | ||||||||||
Unrealized gain on investments | 8,376 | - | 8,376 | - | ||||||||||||
Other income, net | 1,692 | 2,749 | 1,847 | 2,867 | ||||||||||||
Total other income | 10,223 | 2,468 | 9,937 | 2,546 | ||||||||||||
Income (loss) from continuing operations before income taxes and equity method investment loss | 10,105 | 1,010 | 8,076 | (3,445 | ) | |||||||||||
Income tax expense | (2,696 | ) | (614 | ) | (2,788 | ) | (996 | ) | ||||||||
Equity method investment loss | (323 | ) | (460 | ) | (1,468 | ) | (580 | ) | ||||||||
Net income (loss) from continuing operations | 7,086 | (64 | ) | 3,820 | (5,021 | ) | ||||||||||
Net income from discontinued operations | - | 5,710 | 14,649 | 6,492 | ||||||||||||
Net income | $ | 7,086 | $ | 5,646 | $ | 18,469 | $ | 1,471 | ||||||||
Basic net income (loss) per share | ||||||||||||||||
Continuing operations | $ | 0.38 | $ | - | $ | 0.21 | $ | (0.34 | ) | |||||||
Discontinued operations | - | 0.38 | 0.82 | 0.44 | ||||||||||||
Basic and diluted net income per share | $ | 0.38 | $ | 0.38 | $ | 1.03 | $ | 0.10 | ||||||||
Diluted net income (loss) per share | ||||||||||||||||
Continuing operations | $ | 0.38 | $ | - | $ | 0.21 | $ | (0.34 | ) | |||||||
Discontinued operations | - | 0.38 | 0.81 | 0.44 | ||||||||||||
Diluted net income per share | $ | 0.38 | $ | 0.38 | $ | 1.02 | $ | 0.10 |
Condensed Consolidated Statements of Cash Flows
(In thousands)
(Unaudited)
Nine Months Ended | ||||||||
2021 | 2020 | |||||||
Cash flows from operating activities: | ||||||||
Net income (loss) from continuing operations | $ | 3,820 | $ | (5,021 | ) | |||
Adjustments to reconcile net loss from continuing operations to net cash used in operating activities: | ||||||||
(Recovery of) provision for doubtful accounts | (249 | ) | 453 | |||||
Provision for obsolete inventory | 69 | 105 | ||||||
Provision for warranty | 46 | 14 | ||||||
Depreciation and amortization | 985 | 843 | ||||||
Amortization and accretion of operating leases | 620 | 717 | ||||||
Equity method investment loss | 1,468 | 580 | ||||||
Unrealized gain on investments | (8,376 | ) | - | |||||
Deferred income taxes | 2,124 | 72 | ||||||
Stock-based compensation expense | 686 | 724 | ||||||
Changes in operating assets and liabilities: | ||||||||
Accounts receivable | 1,287 | 2,063 | ||||||
Inventories | (793 | ) | (248 | ) | ||||
Current income taxes | (6 | ) | 338 | |||||
Other assets | (2,028 | ) | (11 | ) | ||||
Accounts payable and accrued expenses | (1,373 | ) | 2,551 | |||||
Deferred revenue and customer deposits | 2,002 | 646 | ||||||
Operating lease obligations | (617 | ) | (720 | ) | ||||
Net cash (used in) provided by operating activities from continuing operations | (335 | ) | 3,106 | |||||
Net cash provided by operating activities from discontinued operations | 510 | 5,651 | ||||||
Net cash provided by operating activities | 175 | 8,757 | ||||||
Cash flows from investing activities: | ||||||||
Capital expenditures | (650 | ) | (511 | ) | ||||
Investment in | (9,977 | ) | - | |||||
Investment in | - | (4,000 | ) | |||||
Net cash used in investing activities from continuing operations | (10,627 | ) | (4,511 | ) | ||||
Net cash provided by (used in) investing activities from discontinued operations | 12,761 | (218 | ) | |||||
Net cash provided by (used in) investing activities | 2,134 | (4,729 | ) | |||||
Cash flows from financing activities: | ||||||||
Principal payments on short-term debt | (509 | ) | (450 | ) | ||||
Proceeds from stock issuance, net of costs | 6,310 | - | ||||||
Payments of withholding taxes related to net share settlement of equity awards | (80 | ) | - | |||||
Proceeds from borrowing under credit facility | - | 5,040 | ||||||
Repayment of borrowing under credit facility | - | (5,040 | ) | |||||
Proceeds from Paycheck Protection Program Loan | - | 3,174 | ||||||
Repayment of Paycheck Protection Program Loan | - | (3,174 | ) | |||||
Proceeds from exercise of stock options | 9 | - | ||||||
Payments on capital lease obligations | (2,106 | ) | (658 | ) | ||||
Net cash provided by (used in) financing activities from continuing operations | 3,624 | (1,108 | ) | |||||
Net cash used in financing activities from discontinued operations | (155 | ) | (964 | ) | ||||
Net cash provided by (used in) financing activities | 3,469 | (2,072 | ) | |||||
Effect of exchange rate changes on cash and cash equivalents | (43 | ) | 120 | |||||
Net (decrease) increase in cash and cash equivalents and restricted cash from continuing operations | (7,381 | ) | (2,393 | ) | ||||
Net increase in cash and cash equivalents and restricted cash from discontinued operations | 13,116 | 4,469 | ||||||
Net increase in cash and cash equivalents and restricted cash | 5,735 | 2,076 | ||||||
Cash and cash equivalents and restricted cash at beginning of period | 4,787 | 5,302 | ||||||
Cash and cash equivalents and restricted cash at end of period | $ | 10,522 | $ | 7,378 |
Summary by Business Segments
(In thousands)
(Unaudited)
Three Months Ended | Nine Months Ended | |||||||||||||||
2021 | 2020 | 2021 | 2020 | |||||||||||||
Revenue | $ | 5,822 | $ | 5,260 | $ | 16,121 | $ | 15,041 | ||||||||
Gross profit | 2,154 | 889 | 5,428 | 2,769 | ||||||||||||
Operating income | 1,028 | (79 | ) | 2,150 | (894 | ) | ||||||||||
Adjusted EBITDA | 641 | 133 | 1,056 | (137 | ) | |||||||||||
Corporate and Other | ||||||||||||||||
Revenue | $ | 294 | $ | 301 | $ | 860 | $ | 493 | ||||||||
Gross profit | 294 | 275 | 644 | 412 | ||||||||||||
Operating loss | (1,146 | ) | (1,379 | ) | (4,011 | ) | (5,097 | ) | ||||||||
Adjusted EBITDA | (815 | ) | (1,049 | ) | (3,046 | ) | (4,167 | ) | ||||||||
Consolidated | ||||||||||||||||
Revenue | $ | 6,116 | $ | 5,561 | $ | 16,981 | $ | 15,534 | ||||||||
Gross profit | $ | 2,448 | $ | 1,164 | $ | 6,072 | $ | 3,181 | ||||||||
Operating loss | $ | (118 | ) | $ | (1,458 | ) | $ | (1,861 | ) | $ | (5,991 | ) | ||||
Adjusted EBITDA | $ | (174 | ) | $ | (916 | ) | $ | (1,990 | ) | $ | (4,304 | ) |
Reconciliation of Net Income (Loss) to Adjusted EBITDA
(In thousands)
(Unaudited)
Quarters Ended | ||||||||||||||||||||||||||||||||
2021 | 2020 | |||||||||||||||||||||||||||||||
Corporate and Other | Discontinued Operations | Consolidated | Corporate and Other | Discontinued Operations | Consolidated | |||||||||||||||||||||||||||
Net income (loss) | $ | 7,685 | $ | (599 | ) | $ | - | $ | 7,086 | $ | 1,939 | $ | (2,003 | ) | $ | 5,710 | $ | 5,646 | ||||||||||||||
Net income from discontinued operations | - | - | - | - | - | - | (5,710 | ) | (5,710 | ) | ||||||||||||||||||||||
Net income ( loss) from continuing operations | 7,685 | (599 | ) | - | 7,086 | 1,939 | (2,003 | ) | - | (64 | ) | |||||||||||||||||||||
Interest expense (income), net | 25 | (18 | ) | - | 7 | 24 | 85 | - | 109 | |||||||||||||||||||||||
Income tax expense | 2,327 | 369 | - | 2,696 | 488 | 126 | - | 614 | ||||||||||||||||||||||||
Depreciation and amortization | 216 | 129 | - | 345 | 226 | 46 | - | 272 | ||||||||||||||||||||||||
EBITDA | 10,253 | (119 | ) | - | 10,134 | 2,677 | (1,746 | ) | - | 931 | ||||||||||||||||||||||
Stock-based compensation expense | - | 213 | - | 213 | - | 239 | - | 239 | ||||||||||||||||||||||||
Equity method investment loss (income) | 414 | (91 | ) | - | 323 | 20 | 440 | - | 460 | |||||||||||||||||||||||
Employee retention credit | (527 | ) | (90 | ) | - | (617 | ) | - | - | - | - | |||||||||||||||||||||
Realized gain on investments | (1,689 | ) | - | - | (1,689 | ) | - | - | - | - | ||||||||||||||||||||||
Unrealized gain on investments | (7,648 | ) | (728 | ) | - | (8,376 | ) | - | - | - | - | |||||||||||||||||||||
Loss on disposal of assets and impairment charges | - | - | - | - | - | 18 | 18 | |||||||||||||||||||||||||
Foreign currency transaction (income) loss | (162 | ) | - | - | (162 | ) | 172 | - | - | 172 | ||||||||||||||||||||||
Gain on property and casualty insurance recoveries | - | - | - | - | (2,736 | ) | - | - | (2,736 | ) | ||||||||||||||||||||||
Adjusted EBITDA | $ | 641 | $ | (815 | ) | $ | - | $ | (174 | ) | $ | 133 | $ | (1,049 | ) | $ | - | $ | (916 | ) |
Nine Months Ended | ||||||||||||||||||||||||||||||||
2021 | 2020 | |||||||||||||||||||||||||||||||
Corporate and Other | Discontinued Operations | Consolidated | Corporate and Other | Discontinued Operations | Consolidated | |||||||||||||||||||||||||||
Net income (loss) | $ | 7,719 | $ | (3,899 | ) | $ | 14,649 | $ | 18,469 | $ | 917 | $ | (5,938 | ) | $ | 6,492 | $ | 1,471 | ||||||||||||||
Net income (loss) from discontinued operations | - | - | (14,649 | ) | (14,649 | ) | - | - | (6,492 | ) | (6,492 | ) | ||||||||||||||||||||
Net income (loss) from continuing operations | 7,719 | (3,899 | ) | - | 3,820 | 917 | (5,938 | ) | - | (5,021 | ) | |||||||||||||||||||||
Interest expense, net | 84 | 146 | - | 230 | 91 | 281 | - | 372 | ||||||||||||||||||||||||
Income tax expense | 2,406 | 382 | - | 2,788 | 853 | 143 | - | 996 | ||||||||||||||||||||||||
Depreciation and amortization | 687 | 298 | - | 985 | 688 | 155 | - | 843 | ||||||||||||||||||||||||
EBITDA | 10,896 | (3,073 | ) | - | 7,823 | 2,549 | (5,359 | ) | - | (2,810 | ) | |||||||||||||||||||||
Stock-based compensation expense | - | 686 | - | 686 | - | 724 | - | 724 | ||||||||||||||||||||||||
Equity method investment loss | 1,150 | 318 | - | 1,468 | 137 | 443 | - | 580 | ||||||||||||||||||||||||
Employee retention credit | (1,576 | ) | (336 | ) | - | (1,912 | ) | - | - | - | - | |||||||||||||||||||||
Realized gain on investments | (1,689 | ) | - | - | (1,689 | ) | - | - | - | - | ||||||||||||||||||||||
Unrealized gain on investments | (7,648 | ) | (728 | ) | - | (8,376 | ) | - | - | - | - | |||||||||||||||||||||
Loss on disposal of assets and impairment charges | - | - | - | - | - | 18 | 18 | |||||||||||||||||||||||||
Foreign currency transaction loss (income) | 56 | - | - | 56 | (51 | ) | - | - | (51 | ) | ||||||||||||||||||||||
Gain on property and casualty insurance recoveries | (148 | ) | - | - | (148 | ) | (2,850 | ) | - | - | (2,850 | ) | ||||||||||||||||||||
Severance and other | 15 | 87 | - | 102 | 78 | 7 | - | 85 | ||||||||||||||||||||||||
Adjusted EBITDA | $ | 1,056 | $ | (3,046 | ) | $ | - | $ | (1,990 | ) | $ | (137 | ) | $ | (4,167 | ) | $ | - | $ | (4,304 | ) |
Source:
2021 GlobeNewswire, Inc., source