Recent acquisitions will help Omaha cinema, screen and lighting services firm Ballantyne Strong grow revenue and make the transition to becoming a managed services firm, president and chief executive officer Gary Cavey said Monday.
Ballantyne Strong on Monday reported third-quarter net earnings of $46,000, or 0 cents per share, compared with a net loss of $268,000 in the same quarter last year. Net revenue was $18.9 million, compared with $39.3 million in the third quarter last year.
The firm, which historically focused on selling movie projectors and other cinema equipment, on Oct. 1 acquired Convergent Corp. of Atlanta and its wholly owned subsidiary, Convergent Media Systems, which provides digital signage and business video services. Convergent Corp. was a subsidiary of Sony Electronics Inc. Its clients include Kroger, Safeway and Best Buy Canada.
The cash transaction was valued at $16 million. Convergent has annual revenue of about $40 million, and the acquisition is expected to add 6 to 10 cents in earnings per share in 2014 and 15 to 20 cents in 2015.
Cavey said the acquisition means more of the firm's revenue will come from recurring managed services contracts that use Ballantyne Strong's Omaha-based network operations center. Managed services revenue was $2.7 million in the third quarter, compared with $4.3 million last year, attributed to a decline in digital projection system sales.
More recently Ballantyne acquired Quebec cinema screen coatings firm Peintures Elite.
“It's made good business sense to secure ownership of the formulations and related coatings used in this business,” Cavey said. Ballantyne's movie-theater screen sales grew 23 percent compared with the prior year, to $3.7 million, compared with $3 million.
The two acquisitions drew the company's cash and cash equivalents total down to $26.3 million from $45.1 million.
Sales in a third business area, theater products and services, were $18.3 million, compared with $38.4 million last year.
“We continue to see a decline in sales of theater equipment,” Cavey said.