UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549

FORM 10-Q

(Mark One)

☒

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2022

☐

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission File Number: 1-13906

BALLANTYNE STRONG, INC.

(Exact Name of Registrant as Specified in Its Charter)

Delaware		47-0587703
(State or Other Jurisdiction of		(IRS Employer
Incorporation or Organization)		Identification Number)

4201 Congress Street, Suite 175 Charlotte, North Carolina		28209
(Address of Principal Executive Offices)		(Zip Code)

(704) 994-8279

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:

Title of Each Class		Trading Symbol(s)		Name of Each Exchange on Which Registered
Common Shares, $0.01 par value		BTN		NYSE American

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding twelve months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer	☐	Accelerated filer	☐
Non-accelerated filer	☒	Smaller reporting company	☒
		Emerging growth company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

Indicate the number of shares outstanding of each of the issuer’s classes of common stock as of the latest practicable date:

Class		Outstanding as of May 6, 2022
Common Stock, $0.01 par value		19,252,335 shares

TABLE OF CONTENTS

		Page No.

	PART I. FINANCIAL INFORMATION

Item 1.	Financial Statements	3

	Condensed Consolidated Balance Sheets, March 31, 2022 (Unaudited) and December 31, 2021	3

	Condensed Consolidated Statements of Operations for the Three Months Ended March 31, 2022 and 2021 (Unaudited)	4

	Condensed Consolidated Statements of Comprehensive (Loss) Income for the Three Months Ended March 31, 2022 and 2021 (Unaudited)	5

	Condensed Consolidated Statements of Stockholders’ Equity for the Three Months Ended March 31, 2022 and 2021 (Unaudited)	6

	Condensed Consolidated Statements of Cash Flows for the Three Months Ended March 31, 2022 and 2021 (Unaudited)	7

	Notes to the Condensed Consolidated Financial Statements (Unaudited)	8

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	26

Item 3.	Quantitative and Qualitative Disclosures about Market Risk	35

Item 4.	Controls and Procedures	35

	PART II. OTHER INFORMATION

Item 1.	Legal Proceedings	35

Item 1A.	Risk Factors	35

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	36

Item 6.	Exhibits	37

	Signatures	38

PART I. Financial Information

Item 1. Financial Statements

Ballantyne Strong, Inc. and Subsidiaries

Condensed Consolidated Balance Sheets

(In thousands, except par values)

	March 31, 2022			December 31, 2021
	(unaudited)
Assets
Current assets:
Cash and cash equivalents	$	8,133		$	8,731
Restricted cash		150			150
Accounts receivable (net of allowance for doubtful accounts of $569 and $607, respectively)		5,077			4,631
Inventories, net		2,862			3,271
Other current assets		5,123			4,992
Total current assets		21,345			21,775
Property, plant and equipment, net		14,329			6,226
Operating lease right-of-use assets		297			3,975
Note receivable, net of current portion		-			1,667
Equity holdings		42,014			41,133
Film and television programming rights, net		2,253			-
Intangible assets, net		15			69
Goodwill		956			942
Other assets		5			22
Total assets	$	81,214		$	75,809

Liabilities and Stockholders’ Equity
Current liabilities:
Accounts payable	$	4,564		$	4,245
Accrued expenses		3,291			2,994
Short-term debt		3,353			2,998
Current portion of long-term debt		209			23
Current portion of operating lease obligations		84			577
Deferred revenue and customer deposits		2,960			3,292
Total current liabilities		14,461			14,129
Operating lease obligations, net of current portion		283			3,586
Long-term debt, net of current portion and deferred debt issuance costs, net		5,157			105
Deferred income taxes		5,876			5,594
Other long-term liabilities		1,139			118
Total liabilities		26,916			23,532

Commitments, contingencies and concentrations (Note 15)		-			-

Stockholders’ equity:
Preferred stock, par value $.01 per share; authorized 1,000 shares, none outstanding		-			-
Common stock, par value $.01 per share; authorized 50,000 and 25,000 shares at March 31, 2022 and December 31, 2021, respectively; issued 22,047 and 21,286 shares at March 31, 2022 and December 31, 2021, respectively; outstanding 19,253 and 18,492 shares at March 31, 2022 and December 31, 2021, respectively		221			213
Additional paid-in capital		53,452			50,807
Retained earnings		22,789			23,591
Treasury stock, 2,794 shares at cost		(18,586	)		(18,586	)
Accumulated other comprehensive loss		(3,578	)		(3,748	)
Total stockholders’ equity		54,298			52,277
Total liabilities and stockholders’ equity	$	81,214		$	75,809

See accompanying notes to unaudited condensed consolidated financial statements.

Ballantyne Strong, Inc. and Subsidiaries

Condensed Consolidated Statements of Operations

Three Months Ended March 31, 2022 and 2021

(In thousands, except per share data)

(Unaudited)


	Three Months Ended March 31,
	2022			2021
Net product sales	$	7,703		$	3,528
Net service revenues		2,323			1,244
Total net revenues		10,026			4,772
Cost of products sold		5,858			2,443
Cost of services		1,657			1,169
Total cost of revenues		7,515			3,612
Gross profit		2,511			1,160
Selling and administrative expenses:
Selling		541			476
Administrative		2,733			2,441
Total selling and administrative expenses		3,274			2,917
Loss from operations		(763	)		(1,757	)
Other income (expense):
Interest income		6			13
Interest expense		(59	)		(90	)
Foreign currency transaction (loss) gain		(342	)		16
Unrealized gain on equity holdings		1,728			-
Other (expense) income, net		(202	)		142
Total other income		1,131			81
Income (loss) from continuing operations before income taxes and equity method holding loss		368			(1,676	)
Income tax expense		(350	)		(69	)
Equity method holding loss		(820	)		(769	)
Net loss from continuing operations		(802	)		(2,514	)
Net income from discontinued operations (Note 3)		-			14,325
Net (loss) income	$	(802	)	$	11,811

Basic and diluted net (loss) income per share
Continuing operations	$	(0.04	)	$	(0.15	)
Discontinued operations		-			0.85
Basic and diluted net (loss) income per share	$	(0.04	)	$	0.70

Weighted-average shares used in computing net (loss) income per share:
Basic		18,990			16,835
Diluted		18,990			16,835

See accompanying notes to unaudited condensed consolidated financial statements.

Ballantyne Strong, Inc. and Subsidiaries

Condensed Consolidated Statements of Comprehensive (Loss) Income

Three Months Ended March 31, 2022 and 2021

(In thousands)

(Unaudited)


	Three Months Ended March 31,
	2022			2021
Net (loss) income	$	(802	)	$	11,811
Adjustment to postretirement benefit obligation		(8	)		(46	)
Currency translation adjustment:
Unrealized net change arising during period		178			(356	)
Total other comprehensive income (loss)		170			(402	)
Comprehensive (loss) income	$	(632	)	$	11,409

See accompanying notes to unaudited condensed consolidated financial statements.

Ballantyne Strong, Inc. and Subsidiaries

Condensed Consolidated Statements of Stockholders’ Equity

Three Months Ended March 31, 2022 and 2021

(In thousands)

(Unaudited)

	Common Stock (Shares)		Common Stock ($)		Additional Paid-In Capital		Retained Earnings			Treasury Stock			Accumulated Other Comprehensive Loss			Total Stockholders’ Equity
Balance at December 31, 2021		21,286	$	213	$	50,807	$	23,591		$	(18,586	)	$	(3,748	)	$	52,277
Net loss		-		-		-		(802	)		-			-			(802	)
Net other comprehensive income		-		-		-		-			-			170			170
Issuance of common stock		761		8		2,342		-			-			-			2,350
Issuance of warrants		-		-		109		-			-			-			109
Stock-based compensation expense		-		-		194		-			-			-			194
Balance at March 31, 2022		22,047	$	221	$	53,452	$	22,789		$	(18,586	)	$	(3,578	)	$	54,298

	Common Stock (Shares)		Common Stock ($)		Additional Paid-In Capital			Retained Earnings		Treasury Stock			Accumulated Other Comprehensive Loss			Total Stockholders’ Equity
Balance at December 31, 2020		17,596	$	176	$	43,713		$	5,654	$	(18,586	)	$	(3,891	)	$	27,066
Net income		-		-		-			11,811		-			-			11,811
Net other comprehensive loss		-		-		-			-		-			(402	)		(402	)
Vesting of restricted stock		209		2		(9	)		-		-			-			(7	)
Issuance of common stock, net of issuance costs		3,290		33		6,277			-		-			-			6,310
Stock-based compensation expense		-		-		314			-		-			-			314
Net income loss		-		-		-			11,811		-			-			11,811
Balance at March 31, 2021		21,095	$	211	$	50,295		$	17,465	$	(18,586	)	$	(4,293	)	$	45,092

See accompanying notes to unaudited condensed consolidated financial statements.

SEC Form 10-Q filed by Ballantyne Strong Inc.