 Charlotte, NC, Aug. 12, 2020 GLOBE NEWSWIRE -- Ballantyne Strong, Inc. NYSE American: BTN the Company today announced financial results for the second quarter ended June 30, 2020. Financial and Operational Highlights Consolidated operating results compared to prior year periods were encouraging despite COVID-19 revenue impact Operating loss improved 9 during the second quarter of 2020 compared to the prior year period largely due to growth in digital signage profitability combined with aggressive cost reduction Net loss increased 9 while Adjusted EBITDA improved 36 during the second quarter of 2020 compared to the prior year period Cash from operating activities for the first half of 2020 improved to positive 2.6 million from negative 2.2 million the same period in the prior year as a result of working capital initiatives Digital Signage as a Service DSaaS drove recurring revenue growth at Convergent Segment gross margins increased to 43.9 from 30.8, operating income improved by 84, net income increased to 0.4 million and Adjusted EBITDA grew 51 to 1.2 million during the second quarter of 2020 as compared to the second quarter of 2019 Strong Outdoors operating loss improved by 0.9 million and net loss decreased 1.1 million while Adjusted EBITDA improved by 0.9 million during the second quarter of 2020 over the prior year period on cost reduction initiatives Launched BrightNight drive-in movie initiative and SafeStore Screen Control Completed sale of substantially all of Strong Outdoorss remaining assets in early August 2020 Investment in Firefly increased to 13 million; approximately 5 million non-cash gain expected in the third quarter of 2020Our Convergent business had a solid quarter, with strong margins, increased profitability and cash flow that helped carry us through what we hope was the height of the pandemic, commented Mark Roberson, Chief Executive Officer. The strength at Convergent, combined with our aggressive expense reduction and working capital initiatives, offset the impact of COVID-19 on our Strong Entertainment and Strong Outdoor businesses.We expect our Strong Entertainment business revenues to improve in the second half of 2020 as our customers continue to ramp up their reopening plans. During the pandemic, we have been supporting our customers through our BrightNight temporary drive-in theater program, and demand for overall screen and services began to increase in July and early August.Following the close of the quarter, we completed a strategic transaction for the sale of Strong Outdoor, which we believe will improve future cash flow and also allow us to participate along with other venture investors in the upside potential of the Firefly business. As a result of the transaction, we expect to recognize an approximate 5 million non-cash gain in the third quarter. We now hold a 13 million investment stake in Firefly and are one of their largest shareholders behind Google Ventures and NFX.Second Quarter 2020 Financial Review Revenue for the second quarter of 2020 decreased 54.8 to 6.4 million from 14.3 million in the second quarter of 2019. The decrease in consolidated net revenue was primarily due to the impact of COVID-19 on our Strong Entertainment and Strong Outdoor businesses. At Convergent, robust growth in services revenue was offset by the effect of large non-recurring installation projects in the prior year period. Gross profit also decreased 54.8 to 1.5 million for the second quarter of 2020, while gross profit margin of 22.7 was consistent with the second quarter of 2019, due to a combination of the margin expansion at Convergent related to the growth in the DSaaS service business and cost reduction actions taken to mitigate the impact of COVID-19. Consolidated operating loss improved to 2.1 million in the second quarter of 2020 from 2.3 million in the second quarter of 2019. Consolidated operating loss improved due to a combination of margin expansion at Convergent related to the growth in the DSaaS service business and cost reduction actions taken to mitigate the impact of COVID-19. Net loss was 3.7 million 0.25 per share for the second quarter of 2020 as compared to 3.4 million 0.24 per share in the prior year period. The improved operating results combined with lower income tax expense and fair value adjustments on our notes receivable were offset by higher foreign currency losses and increased equity method investment losses. Adjusted EBITDA, a non-GAAP measure, improved 36.4 to negative 0.7 million for the second quarter of 2020 compared to negative 1.2 million in the prior year period. Conference CallA conference call to discuss the 2020 second-quarter financial results will be held on Wednesday, August 12, 2020 at 5:00 p.m. Eastern Time. Investors and analysts are invited to access the conference call by dialing 877-407-3982 domestic or 201-493-6780 international and providing the operator with conference ID number: 13707955. Please dial in at least five minutes before the start of the call to register. A replay will be available approximately three hours after the conclusion of the conference call until Saturday, September 12, 2020 by dialing 844-512-2921 in the U.S. and Canada and 412-317-6671 internationally and entering the conference ID number: 13707955.The Companys financial results and an accompanying slide presentation will also be available on the Investor Relations page of the Companys website at ballantynestrong.cominvestors.Use of Non-GAAP MeasuresBallantyne Strong, Inc. prepares its consolidated financial statements in accordance with United States generally accepted accounting principles GAAP. In addition to disclosing financial results prepared in accordance with GAAP, the Company discloses information regarding Adjusted EBITDA, which differs from the term EBITDA as it is commonly used. In addition to adjusting net income loss to exclude income taxes, interest, and depreciation and amortization, Adjusted EBITDA also excludes share-based compensation, impairment charges, equity method income loss, fair value adjustments, severance, foreign currency transaction gains losses, transactional gains and expenses, gains on insurance recoveries and other cash and non-cash charges and gains.EBITDA and Adjusted EBITDA are not measures of performance defined in accordance with GAAP. However, Adjusted EBITDA is used internally in planning and evaluating the Companys operating performance. Accordingly, management believes that disclosure of these metrics offers investors, bankers and other stakeholders an additional view of the Companys operations that, when coupled with the GAAP results, provides a more complete understanding of the Companys financial results.EBITDA and Adjusted EBITDA should not be considered as an alternative to net loss or to net cash used in operating activities as measures of operating results or liquidity. Our calculation of EBITDA and Adjusted EBITDA may not be comparable to similarly titled measures used by other companies, and the measures exclude financial information that some may consider important in evaluating the Companys performance. A reconciliation of GAAP net loss to EBITDA and Adjusted EBITDA is included in the accompanying financial schedules.EBITDA and Adjusted EBITDA have limitations as analytical tools, and you should not consider them in isolation, or as substitutes for analysis of our results as reported under GAAP. Some of these limitations are i they do not reflect our cash expenditures, or future requirements for capital expenditures or contractual commitments, ii they do not reflect changes in, or cash requirements for, our working capital needs, iii EBITDA and Adjusted EBITDA do not reflect interest expense, or the cash requirements necessary to service interest or principal payments, on our debt, iv although depreciation and amortization are non-cash charges, the assets being depreciated and amortized will often have to be replaced in the future, and EBITDA and Adjusted EBITDA do not reflect any cash requirements for such replacements, v they do not adjust for all non-cash income or expense items that are reflected in our statements of cash flows, vi they do not reflect the impact of earnings or charges resulting from matters we consider not to be indicative of our ongoing operations, and vii other companies in our industry may calculate these measures differently than we do, limiting their usefulness as comparative measures.We believe EBITDA and Adjusted EBITDA facilitate operating performance comparisons from period to period by isolating the effects of some items that vary from period to period without any correlation to core operating performance or that vary widely among similar companies. These potential differences may be caused by variations in capital structures affecting interest expense, tax positions such as the impact on periods or companies of changes in effective tax rates or net operating losses and the age and book depreciation of facilities and equipment affecting relative depreciation expense. We also present EBITDA and Adjusted EBITDA because i we believe these measures are frequently used by securities analysts, investors and other interested parties to evaluate companies in our industry, ii we believe investors will find these measures useful in assessing our ability to service or incur indebtedness, and iii we use EBITDA and Adjusted EBITDA internally as benchmarks to evaluate our operating performance or compare our performance to that of our competitors.For further information, please refer to Ballantyne Strong, Inc. 