Attached files
| file | filename |
|---|---|
| EX-10.1 - BALLANTYNE STRONG, INC. | ex10-1.htm |
| EX-2.1 - BALLANTYNE STRONG, INC. | ex2-1.htm |
| 8-K - BALLANTYNE STRONG, INC. | form8-k.htm |
Exhibit 99.1
Ballantyne Strong, Inc. and Subsidiaries Unaudited Pro Forma Consolidated Financial Statements
Introduction
On November 4, 2016, Strong Westrex, Inc., a subsidiary of Ballantyne Strong, Inc. (the “Company”) and an owner of all authorized and registered equity interests of Strong Westrex (Beijing) Technology, Inc., an indirect subsidiary of the Company (“SWBTI”), entered into an Equity Purchase Agreement (the “Agreement”) with GABO Filter, Inc. (the “Buyer”), pursuant to which the Buyer acquired all equity interests of SWBTI for a purchase price of approximately $0.4 million. The purchase price consisted of approximately $0.3 million in cash and a promissory note for the remainder (the “Note”). As part of this sale the Company expects to record a loss on discontinued operations of approximately $0.3 million in the fourth quarter of 2016. This disposition qualifies as discontinued operations and was classified accordingly beginning with the Company’s Form 10-Q for the six months ended June 30, 2016.
The unaudited pro forma consolidated financial data of the Company was derived from our historical consolidated financial statements. In accordance with the accounting guidance for pro forma financial statements, pro forma financials for interim periods are not included since the disposition qualifies as discontinued operations and was classified accordingly beginning with the Company’s Form 10-Q for the six months ended June 30, 2016. The unaudited pro forma consolidated statements of operations give effect to the disposition of SWBTI as if the disposition occurred on January 1, 2013. The following unaudited pro forma consolidated financial information should be read in conjunction with the Company’s historical financial statements and accompanying notes.
The pro forma adjustments are based on the best information available and assumptions that management believes are factually supportable and reasonable; however, such adjustments are subject to change. In addition, such adjustments are estimates. The unaudited pro forma consolidated information is for illustrative and informational purposes only and is not intended to reflect what the Company’s consolidated position and results of operations would have been had the disposition occurred on the dates indicated and is not necessarily indicative of our future consolidated position and results of operations.
The pro forma adjustments remove all of SWBTI’s consolidated results of operations and also give effect to adjustments to reflect intercompany balances which were previously eliminated in consolidation.
Ballantyne
Strong, Inc. and Subsidiaries
Unaudited Pro Forma Consolidated Statements of Operations
For
the year ended December 31, 2015
(in thousands except per share amounts)
| Historical | SWBTI | Pro forma | ||||||||||
| Net product sales | $ | 69,250 | $ | (13,235 | ) | $ | 56,015 | |||||
| Net service revenues | 23,579 | (659 | ) | 22,920 | ||||||||
| Total net revenues | 92,829 | (13,894 | ) | 78,935 | ||||||||
| Cost of products sold | 60,358 | (12,909 | ) | 47,449 | ||||||||
| Cost of services | 14,884 | — | 14,884 | |||||||||
| Total cost of revenues | 75,242 | (12,909 | ) | 62,333 | ||||||||
| Gross profit | 17,587 | (985 | ) | 16,602 | ||||||||
| Selling and administrative expenses: | ||||||||||||
| Selling | 5,522 | (595 | ) | 4,927 | ||||||||
| Administrative | 16,594 | (812 | ) | 15,782 | ||||||||
| Total selling and administrative expenses | 22,116 | (1,407 | ) | 20,709 | ||||||||
| Loss on sale or disposal of assets | (425 | ) | — | (425 | ) | |||||||
| Loss from operations | (4,954 | ) | 422 | (4,532 | ) | |||||||
| Equity in income of equity method investments | 96 | — | 96 | |||||||||
| Other income: | ||||||||||||
| Interest income | 368 | — | 368 | |||||||||
| Interest expense | (42 | ) | 15 | (27 | ) | |||||||
| Fair value adjustment for notes receivable | (1,595 | ) | — | — | ||||||||
| Foreign currency transaction gain (loss) | 1,612 | — | 1,612 | |||||||||
| Other income, net | 49 | (48 | ) | 1 | ||||||||
| Total other income | 392 | (33 | ) | 359 | ||||||||
| Loss before income taxes | (4,466 | ) | 455 | (4,011 | ) | |||||||
| Income tax expense | (13,001 | ) | 388 | (12,613 | ) | |||||||
| Net loss | $ | (17,467 | ) | $ | 843 | $ | (16,624 | ) | ||||
| Basic loss per share | $ | (1.24 | ) | $ | (1.18 | ) | ||||||
| Diluted loss per share | $ | (1.24 | ) | $ | (1.18 | ) | ||||||
| Weighted average shares outstanding: | ||||||||||||
| Basic | 14,135 | 14,135 | ||||||||||
| Diluted | 14,135 | 14,135 | ||||||||||
Ballantyne
Strong, Inc. and Subsidiaries
Unaudited Pro Forma Consolidated Statements of Operations
For
the year ended December 31, 2014
(in thousands except per share amounts)
| Historical | SWBTI | Pro forma | ||||||||||
| Net product sales | $ | 70,360 | $ | (10,310 | ) | $ | 60,050 | |||||
| Net service revenues | 24,726 | (337 | ) | 24,389 | ||||||||
| Total net revenues | 95,086 | (10,647 | ) | 84,439 | ||||||||
| Cost of products sold | 60,106 | (9,090 | ) | 51,016 | ||||||||
| Cost of services | 16,820 | (407 | ) | 16,413 | ||||||||
| Total cost of revenues | 76,926 | (9,497 | ) | 67,429 | ||||||||
| Gross profit | 18,160 | (1,150 | ) | 17,010 | ||||||||
| Selling and administrative expenses: | ||||||||||||
| Selling | 7,235 | (549 | ) | 6,686 | ||||||||
| Administrative | 12,740 | (638 | ) | 12,102 | ||||||||
| Total selling and administrative expenses | 19,975 | (1,187 | ) | 18,788 | ||||||||
| Gain on sale or disposal of assets | 10 | 1 | 11 | |||||||||
| Loss from operations | (1,805 | ) | 38 | (1,767 | ) | |||||||
| Equity in income (loss) equity method investments | 78 | — | 78 | |||||||||
| Other income: | ||||||||||||
| Interest income | 705 | (51 | ) | 654 | ||||||||
| Interest expense | (48 | ) | — | (48 | ) | |||||||
| Foreign currency transaction gain | 611 | — | 611 | |||||||||
| Other expense, net | (10 | ) | (58 | ) | (68 | ) | ||||||
| Total other income | 1,258 | (109 | ) | 1,149 | ||||||||
| Loss before income taxes | (469 | ) | (71 | ) | (540 | ) | ||||||
| Income tax benefit | 465 | 25 | 490 | |||||||||
| Net loss | $ | (4 | ) | $ | (46 | ) | $ | (50 | ) | |||
| Basic loss per share | $ | 0.00 | $ | 0.00 | ||||||||
| Diluted loss per share | $ | 0.00 | $ | 0.00 | ||||||||
| Weighted average shares outstanding: | ||||||||||||
| Basic | 14,061 | 14,061 | ||||||||||
| Diluted | 14,061 | 14,061 | ||||||||||
Ballantyne
Strong, Inc. and Subsidiaries
Unaudited Pro Forma Consolidated Statements of Operations
For
the year ended December 31, 2013
(in thousands except per share amounts)
| Historical | SWBTI | Pro forma | ||||||||||
| Net product sales | $ | 88,067 | $ | (10,903 | ) | $ | 77,164 | |||||
| Net service revenues | 15,543 | (553 | ) | 14,990 | ||||||||
| Total net revenues | 103,610 | (11,456 | ) | 92,154 | ||||||||
| Cost of products sold | 75,171 | (9,940 | ) | 65,231 | ||||||||
| Cost of services | 11,594 | (445 | ) | 11,149 | ||||||||
| Total cost of revenues | 86,765 | (10,385 | ) | 76,380 | ||||||||
| Gross profit | 16,845 | (1,071 | ) | 15,774 | ||||||||
| Selling and administrative expenses: | ||||||||||||
| Selling | 3,965 | (332 | ) | 3,633 | ||||||||
| Administrative | 12,773 | (835 | ) | 11,938 | ||||||||
| Total selling and administrative expenses | 16,738 | (1,167 | ) | 15,571 | ||||||||
| Gain (loss) on sale or disposal of assets | (8 | ) | 4 | (4 | ) | |||||||
| Income from operations | 99 | 100 | 199 | |||||||||
| Equity in loss equity method investments | (25 | ) | — | (25 | ) | |||||||
| Other income: | ||||||||||||
| Interest income | 352 | — | 352 | |||||||||
| Interest expense | (2 | ) | (43 | ) | (45 | ) | ||||||
| Foreign currency transaction gain (loss) | 850 | — | 850 | |||||||||
| Other expense, net | (323 | ) | (20 | ) | (343 | ) | ||||||
| Total other income | 877 | (63 | ) | 814 | ||||||||
| Earnings before income taxes | 951 | 37 | 988 | |||||||||
| Income expense | (788 | ) | 23 | (765 | ) | |||||||
| Net earnings | $ | 163 | $ | 60 | $ | 223 | ||||||
| Basic earnings per share | $ | 0.01 | $ | 0.02 | ||||||||
| Diluted earnings per share | $ | 0.01 | $ | 0.02 | ||||||||
| Weighted average shares outstanding: | ||||||||||||
| Basic | 13,999 | 13,999 | ||||||||||
| Diluted | 14,031 | 14,031 | ||||||||||
Ballantyne Strong, Inc. and Subsidiaries
Notes to Unaudited Pro Forma Consolidated Financial Statements
Note 1. Basis of Presentation
On November 4, 2016, Strong Westrex, Inc., a subsidiary of Ballantyne Strong, Inc. (the “Company”) and an owner of all authorized and registered equity interests of Strong Westrex (Beijing) Technology, Inc., an indirect subsidiary of the Company (“SWBTI”), entered into an Equity Purchase Agreement (the “Agreement”) with GABO Filter, Inc. (the “Buyer”), pursuant to which the Buyer acquired all equity interests of SWBTI for a purchase price of approximately $0.4 million. The purchase price consisted of approximately $0.3 million in cash and a promissory note for the remainder (the “Note”). As part of this sale the Company expects to record a loss on discontinued operations of approximately $0.3 million in the fourth quarter of 2016. This disposition qualifies as discontinued operations and was classified accordingly beginning with the Company’s Form 10-Q for the six months ended June 30, 2016.
The unaudited pro forma consolidated financial data of the Company was derived from our historical consolidated financial statements. In accordance with the accounting guidance for pro forma financial statements, pro forma financials for interim periods are not included since the disposition qualifies as discontinued operations and was classified accordingly beginning with the Company’s Form 10-Q for the six months ended June 30, 2016. The unaudited pro forma consolidated statements of operations give effect to the disposition of SWBTI as if the disposition occurred on January 1, 2013. The following unaudited pro forma consolidated financial information should be read in conjunction with the Company’s historical financial statements and accompanying notes.
The pro forma adjustments are based on the best information available and assumptions that management believes are factually supportable and reasonable; however, such adjustments are subject to change. In addition, such adjustments are estimates. The unaudited pro forma consolidated information is for illustrative and informational purposes only and is not intended to reflect what the Company’s consolidated position and results of operations would have been had the disposition occurred on the dates indicated and is not necessarily indicative of our future consolidated position and results of operations.
The pro forma adjustments remove all of SWBTI’s consolidated results of operations and also give effect to adjustments to reflect intercompany balances which were previously eliminated in consolidation.