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Ballantyne Strong, Inc. (BTN)
Q3 2011 Earnings Call
November 3, 2011 10:00 am ET
Robert Rinderman, Investor Relations
Gary L. Cavey – President and Chief Executive Officer
Mary A. Carstens – Chief Financial Officer
Robert Routh – Phoenix Partners Group
James Fronda – Sidoti & Co
Kris Tuttle – Research 2.0
Deforest Hinman – Walthausen & Co
Wayne Cadwallader – Elkhorn Partners LP
Previous Statements by BTN
» Ballantyne Strong's CEO Discusses Q2 2011 Results - Earnings Call Transcript
» Ballantyne Strong's CEO Discusses Q1 2011 Results - Earnings Call Transcript
» Ballantyne Strong CEO Discusses Q4 2010 Results - Earnings Call Transcript
I would now like to turn the conference over to Robert Rinderman, Ballantyne Strong, Investor Relations. You made proceed, sir.
Thank you, [Frank]. Good morning, everyone. Welcome to Ballantyne Strong’s 2011 third quarter results conference call.
This call may contain forward-looking statements related to Ballantyne’s future financial results. Listeners are cautioned that such statements are based upon current expectations and assumptions and involve risks and uncertainties within the meaning of the U.S. Private Securities Litigation Reform Act of 1995.
Listeners should note that these statements are only predictions and are subject to inherent risks and uncertainties that are detailed from time-to-time in the company’s Securities & Exchange Commission filings.
The company’s actual performance may differ materially because of these or other factors discussed in the management’s discussion and analysis of result of operations and financial condition section of the company’s SEC filings, copies of which can be obtained from the SEC or Ballantyne’s website at www.strong-world.com.
All information discussed on this conference call is as of today and the company undertakes no obligation to update these statements or expectations from prior conversations. Today’s call is also being webcast live over the Internet and a replay will be available on our website for 30 days.
I’m now going to turn the call over to President and CEO, Gary Cavey, who is joined by CFO, Mary Carstens; and Vice President, Kevin Herrmann. Gary?
Gary L. Cavey
Thank you, Rob good morning everybody. We appreciate you joining us. Earlier today, Ballantyne Strong reported our all time most profitable quarter on a significant net revenues increase year-over-year.
Projection Equipment in cinema services achieved very strong quarterly growth comparisons. Ballantyne’s Digital Products business led the way with a very large increase in net revenues and digital cinema services sales doubled year-over-year.
The cinema screen business posted lower net revenues versus 2010 Q3, but the strong projection system and service business sales more than made up for the short fall. Mary will fill you in with more specifics and color on our financials following the conclusion of my opening remarks.
One of the keys to BTNs record Q3 performance was our participation in the Marcus Theatres, digital cinema retrofit. As a long time cinema supplier of theirs, we were pleased to have once again been selected to a system.
Our cinema service team helped orchestrate the rollout and among other things provided them with top of the line in using digital projectors. We are very proud that our crew completed more than 550 installs in just 45 days on their behalf. It is our firm belief that Ballantyne is the only organization they could have accomplished such a big project in such a short timeframe.
Our service team is also providing Marcus with our after-care program, featuring annual maintenance and 24/7 NOC Monitoring by our technicians who are based in the state-of-the art facility located in our corporate headquarters here in Omaha.
Another important recent development subsequent to the third quarter was Ballantyne’s appointment as a reseller of Barco’s full line of digital cinema equipment. We are truly delighted to joint their team. In our view, this further enhances Ballantyne’s reputation as the leading provider of one-stop turnkey cinema solutions backed by 80 years of experience catering to worldwide exhibition community.
Taking an updated look at the domestic cinema industry, Q3 was another solid Box Office period with receives up 5.5% compared to the year earlier quarter. Transformers 3 and Harry Potter 7 Part 2 led the way and were currently – they are the two top performing titles thus far in 2011. With the Thanksgiving through year and holiday period is set to kickoff in just a few short weeks.
Many industry follows are forecasting Q4, Box Office results especially when compared to last year somewhat disappointing results. Part 1 of Twilight Saga final (inaudible) including the traditional midnight and early AM showings. Other coming attractions include sequels of popular movie franchises such as Alvin and the Chipmunks, Sherlock Holmes and Machine Impossible. Also opening prior to year-end is The Girl with the Dragon Tattoo based on the best selling novel, and two from Spielberg, The Adventures of Tintin, which is a three-day debut and War Horse.
We just returned from ShowEast the cinema industry’s tradeshow in Florida and we are very encouraged with the customer response to our new agreement with the digital cinema manufacture Bacro. We are also seeing some positive momentum on the financing front as Hollywood studios and distributors are actively pushing movie exhibitors towards the late 2012 deadline for going digital, in order to benefit from the virtual [franchise].
There are other advantages to converting to digital such as programing flexibility pre-show advertising revenues superior visual and sound experience for the patrons and perhaps most importantly, over the long run, the ability to play alternative content. We believe alternative content is gaining popularity while more and more screens around the globe are converting to digital.