Transaction expected to result in pretax gain of approximately $5 million
Charlotte, NC, Aug. 04, 2020 (GLOBE NEWSWIRE) -- Ballantyne Strong, Inc. (NYSE American: BTN) ("Ballantyne Strong" or the "Company"), a holding company with diverse business activities focused on serving the entertainment, retail and advertising markets, today announced that it has completed the sale of its Strong Outdoor out-of-home advertising business to Firefly Systems Inc. ("Firefly").
Strong Outdoor commenced operations in early 2018 and built a digital out-of-home advertising business on over 3,000 New York City taxis. In May 2019, the company transferred its digital taxi-top assets to Firefly in a transaction that leveraged Firefly's strength in digital and contributed to significant improvements in Strong Outdoor's financial performance. The current transaction completes the sale of all of Strong Outdoor's remaining taxi-top advertising business in exchange for equity in Firefly.Ballantyne Strong also increased its strategic investment in Firefly's business, taking a larger shareholder position.
"We are excited to increase our position in Firefly as they expand their digital advertising platform in major cities across the United States," said Mark Roberson, CEO of Ballantyne Strong. "Strong Outdoor established itself as a significant player in the New York out of home advertising market and is a perfect addition to Firefly's successful national rideshare and taxi-top advertising business. As a result of the transactions, Ballantyne will hold Firefly Series A-2 and Series A-3 preferred shares valued at approximately $13 million and expects to recognize a non-cash pretax gain of approximately $5 million in the third quarter. We look forward to participating in Firefly's success as one of its largest venture investors as they leverage their increasing scale in the marketplace."
"Taxi-top advertising is an institution in the New York media landscape," explained Kaan Gunay, co-founder and CEO of Firefly. "By expanding our Firefly fleet with STRONG's existing network in New York, we're able to increase our out-of-home reach, elevate street-level advertising, and provide even greater value to our brand partners -- with no downtime."
About Ballantyne Strong, Inc.
Ballantyne Strong, Inc. ( www.ballantynestrong.com ) and its subsidiaries engage in diverse business activities including the design, integration and installation of technology solutions for a broad range of applications; development and delivery of out-of-home messaging, advertising and communications; manufacturing of projection screens; and providing managed services including monitoring of networked equipment. The Company focuses on serving the entertainment, retail and advertising markets.
Firefly is the street-level digital media network that connects audiences with dynamic media on taxis and rideshare vehicles. The company works with taxi companies and rideshare drivers to install its proprietary advertising displays atop their vehicles. These proprietary screens deliver dynamic content based on location-based, WiFi-enabled triggers. Firefly provides an additional revenue stream to maximize drive time and empowers brands to efficiently engage consumers across our nation's busiest cities, including San Francisco, Los Angeles, New York City, Chicago, and Miami. Founded by Kaan Gunay (CEO) and Onur Kardesler (CTO), Firefly is headquartered in San Francisco, with offices in New York City, Los Angeles, Chicago, Dallas and Istanbul. To learn more: visit fireflyon.com .
This press release may include forward-looking statements, which involve a number of known and unknown risks and uncertainties, including, but not limited to, those discussed in the "Risk Factors" sections contained in Part I, Item 1A in the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2019, Part II, Item 1A of the Company's Quarterly Report on Form 10-Q for the quarterly period ended March 31, 2020 and the Company's subsequent filings with the Securities and Exchange Commission and the following risks and uncertainties: potential devaluation of the Company's investment in Firefly, the negative impact that the COVID-19 pandemic has already had, and may continue to have, on the Company's business and financial condition, the Company's ability to maintain and expand its revenue streams to compensate for the lower demand for the Company's digital cinema products and installation services, potential interruptions of supplier relationships or higher prices charged by suppliers, the Company's ability to successfully compete and introduce enhancements and new features that achieve market acceptance and that keep pace with technological developments, the Company's ability to successfully execute its capital allocation strategy, the Company's ability to maintain its brand and reputation and retain or replace its significant customers, challenges associated with the Company's long sales cycles, the impact of a challenging global economic environment or a downturn in the markets (such as the current economic disruption and market volatility generated by the ongoing COVID-19 pandemic), economic and political risks of selling products in foreign countries (including tariffs), risks of non-compliance with U.S. and foreign laws and regulations, potential sales tax collections and claims for uncollected amounts, cybersecurity risks and risks of damage and interruptions of information technology systems, the Company's ability to retain key members of management and successfully integrate new executives, the Company's ability to complete acquisitions, strategic investments, entry into new lines of business, divestitures, mergers or other transactions on acceptable terms or at all, the Company's ability to utilize or assert its intellectual property rights, the impact of natural disasters and other catastrophic events (such as the ongoing COVID-19 pandemic), the adequacy of insurance, the impact of having a controlling stockholder and vulnerability to fluctuation in the Company's stock price. Given the risks and uncertainties, readers should not place undue reliance on any forward-looking statement and should recognize that the statements are predictions of future results which may not occur as anticipated. Many of the risks listed above have been, and may further be, exacerbated by the COVID-19 pandemic, its impact on the cinema and entertainment industry, and the worsening economic environment. Actual results could differ materially from those anticipated in the forward-looking statements and from historical results, due to the risks and uncertainties described herein, as well as others not now anticipated. New risk factors emerge from time to time and it is not possible for management to predict all such risk factors, nor can it assess the impact of all such factors on the Company's business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements. Except where required by law, the Company assumes no obligation to update, withdraw or revise any forward-looking statements to reflect actual results or changes in factors or assumptions affecting such forward-looking statements.
Investor Relations Contact Mark Roberson Ballantyne Strong, Inc. Chief Executive Officer (704) 994-8279 IR@btn-inc.com