Q2 2022 Ballantyne Strong Inc Earnings Call
Ladies and gentlemen, thank you for standing by and welcome to the Ballantyne Strong Inc. Second quarter 2022 earnings Conference call. All participants are in listen only mode should you need assistance. Please signal conference specialist by pressing the star key followed by zero.
After today's presentation there'll be an opportunity to ask questions.
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To withdraw your question. Please press Star then two.
Please also note this event is being recorded.
And now I'd like to turn the call over to John Nesbit of IMS Investor Relations. Thank you you may begin.
Good afternoon, and welcome to Ballantyne strong earnings conference call for the second quarter ended June 30th 2022 on the call today are from Ballantyne strong our call Seminara Chairman of the Board Mark Roberson, Chief Executive Officer, and Todd Major Chief Financial Officer, There's also a slide presentation.
That management will be referencing that it's available on the Investor Relations section of the Ballantyne strong website.
We begin I'd like to remind everyone that some statements made on this call will be forward looking in nature.
These are based on management's current view and expectations as of today.
<unk> is under no obligation and expressly disclaims any obligation to update forward looking statements, except as required by law.
These statements are also subject to risks and uncertainties that may cause actual results to differ materially from those described in today's call listen uncertainties are also described in the company's SEC filings today's presentation and discussion also contain references to non-GAAP financial measures.
A definition of non-GAAP terms and reconciliations to GAAP measures are available in the earnings release posted on the Investor Relations section of the company's website. Our non-GAAP measures may not be comparable to those used by other companies and encourage you to review and understand all of our financial reporting before making any investment decisions at.
At this time I would now like to turn the call over to Mark Roberson go ahead Mark.
Thanks, John .
Good afternoon, and thanks for joining today.
Before we jump into the details for the quarter will just step back and throttle contact starting on slides three and four of the Powerpoint.
Ah Ballantyne as a holding company, we have operating businesses and real estate holdings, primarily in our stronger attainment.
And our equity holding portfolio includes <unk>, chief financial reinforced forest products and Firefly.
Overall, we've seen a strong post COVID-19 rebound and our business has really been performing well with consolidated revenues, increasing by 50% the $9 1 million for the quarter.
And 76% to just over $19 million on a year to date basis.
This increase in our revenues has been directly correlated to the recovery in the entertainment industry.
Equally in the cinema space.
With increase in both the quality and content.
Our studio content driving record record breaking box office results for our customers.
On the slide deck, if you refer to slides three through 10, we'll walk the entertainment business.
Our strong entertainment operating business is the largest supplier of cinema screens in North America.
We're a market leader in managed services.
We recently launched a new content division.
With the macro climate, becoming more favorable and the backlog of movies coming to the cinema increasing.
We're seeing our cinema customers starting to do two very important.
Number one.
They're relying more heavily on outsourced technical support and services.
Rather than hiring buildup staffing internally.
And two they are beginning to accelerate capital investments.
Particularly as it relates to the upgrade cycle from xenon projections of the laser.
Cinemark for example.
Started a 10 year project to upgrade all of their center most of the laser prior to Covid and we are now seeing them restart those projects.
AMC announced just this spring that they would be starting the first phase of their laser upgrades. This summer.
And without getting too deep into the technical aspects of laser versus xenon.
What we're seeing is as the industry recovery continues we're seeing exhibitor starting to deploy capital on upgraded like laser projection as.
As well as other investments to drive the customer experience.
The increase in laser projection with a positive catalyst for both our screen business and for our service and distribution revenues.
And we expect the laser upgrade cycle to be a positive industry catalysts for at least the next several years.
As we see demand for projection and audio equipment, increasing we're also seeing increased service installation demand.
And our recurring monthly revenue maintenance contracts are largely back to pre COVID-19 levels now.
With project and installation revenue starting to pick up as well.
Our eclipse immersive screens were significant contributor to the first half results.
Merely from the military projects.
Equipped with a larger contributor in the first quarter for our screen business.
And we started to see the product mix shift actually more heavily towards cinema in the second quarter.
Which we believe is a good sign for the second half of the year as exhibitors prepare for the large slate of releases.
Including the next installment of Avatar and increase their investments in projector and screen upgrades.
Strong studios, which you had content and opens up new growth opportunities and the new line of business for the Entertainment group.
We acquired a portfolio of projects and started production of one of those project Safe Haven. This summer.
We're working on several other projects both from the acquired portfolio as well as adding other new products.
Our overall business model and the goal was strong studios utilized co production.
In distribution pre sales as well as refundable tax credits with production funding, which minimizes our capital at risk as we build out the content library.
Both near term revenue as well as the longer term.
We're partnering with other production companies in production services companies on these early projects.
Which minimizes our capital at risk and increases our ability to execute and be nimble with minimal fixed staffing.
Over time, we expect this business to evolve into a meaningful revenue producer for the Entertainment group.
Turning to our equity holdings on slides 11 through 14.
We increased our stake in <unk>, chief financial this quarter and hold $2 9 million shares or approximately 31% of the common shares outstanding.
Yep, Chief financial has continued to invest in expanding its reinsurance and its back platforms.
So far this year FGF has completed two spec ipos.
FG merger Corp, NFC acquisition Corp.
Currently evaluating acquisition targets.
Fts reinsurance business as patiently deploy capital and entered into two new contracts this year.
FGF also equity stakes integrity and up by as a result of completed spec transactions through 2021.
We hold $13 million in preferred equity and Firefly.
Which is a private VC backed company and we acquired those shares to our sale of strong outdoor last year.
Firefly has continued to grow and innovate post COVID-19, They announced a new program with Hyundai just recently, where firefly will be able to enroll professional drivers and fleet operators at point of purchase.
And drivers can earn advertising revenues, which helps to subsidize their purchase of the vehicle.
In July Firefly also announced their entry into the European market with the acquisition of ubiquitous which.
Which is the uk's, leading taxi advertising company.
<unk> been a leader in the outdoor advertising for over 40 years, and they've been focused on using technology and data analytics, which improves their advertising effectiveness and fits right into the Firefly visual advertising and digital transformation strategy.
We held $15 3 million shares in Green <unk>, which is traded on the Toronto exchange.
Following the transaction last summer, where green first acquired the lumber assets. We saw mills from Rayonier is now leading lumber producer in Canada and has the capacity to produce over 9 million board feet annually in Central Canada.
This quarter another large player in the North American lumber market, and therefore announced that they had acquired approximately 16% stake in green for us.
We believe green versus well position both in the current cycle as well as for the longer term.
Overall, the entertainment industry your openings accelerating the backlog of movies coming to the sentiment is unprecedented and our revenues have rebounded as a result.
We're entering a major capital upgrade cycle that will drive spending over the next five to 10 years, and we are well positioned to gain share domestically and internationally looking ahead on both the screen as well as the services side of the business.
And the upside on the clips and the additional strong studios further increases our growth opportunities.
With regard to the planned spin off of the Entertainment group.
Registration statement on form S. One is on file with SEC.
In terms of timing of the IPO for the group were evaluating market conditions as it would be appropriate timing and we will continue to do so on an ongoing basis.
Now I'll turn it over to Todd.
Thanks, Mark and good afternoon, everyone. We continue to see meaningful increases in revenue when comparing to prior year.
Year over year increase was more than 50% with revenues from both the sale of products and services higher than the prior year.
While gross margin dollars were relatively flat compared to the prior year margin as a percentage of revenue was down however.
However, it is important to point out.
That prior year gross margin included a benefit of nearly $850000 related to employee retention credits and.
As presented in the lower table after adjusting for the employee retention credit.
Recognized in the prior year gross margin dollars were up nearly 50% in gross margin as a percentage of revenue was flat year over year.
Some shifts in product mix, including higher sales of predict projection and audio equipment I'm pulling down the gross margin percentage a bit.
And we're also seeing some inflationary pressure on raw materials labor packaging and freight.
Employee retention credits recognized in the prior year also had a $450000 impact on a year on year over year comparison of SG&A the.
The increase can primarily be contributed to two other items number one we continue to make investments in our sales and marketing teams and are seeing an increase and a corresponding trade show and marketing efforts as the activity across the industry continues to ramp upward.
And number two the second quarter of 2022 was our first full quarter operating strong studios and the costs associated with that part of the business rolling up to the SG&A line.
Excluding the total $1 3 million employee retention credits reported in the prior year operating loss improved improved over 30% and strong entertainment generated its fifth consecutive quarter of positive operating income.
Moving down the P&L a bit as the broader market decline during the first half of the year, we experienced some contraction on the fair value of our freedom first equity holdings, which we mark to market every quarter.
Shifting over to the balance sheet now cash flow used in operations and decreases in working capital during the first half of the year combined with the cash payment in connection with the strong studios acquisition of projects from chicken soup.
As well as the downpayment for the purchase of the digital admission building were partially offset by a $2 $3 million prepayment on a note receivable.
In addition, we deployed additional capital so our FGF equity holding by participating in the common stock offering late in the second quarter.
We believe we continue to maintain adequate liquidity.
That wraps up the financial review and I'll now turn the call over to our Chairman Powell Chairman of Ara for some closing remarks before we take questions.
Hi, everyone. This is al I'm going to tease up to the Q&A section.
Before we get to this my hope is that if you have a question about the company you'll ask it and we'll do our best to answer your question.
Before we open it up I know many of you are either current or prospective shareholders and while I'm. The chairman of the company I'm also its largest shareholder.
No doubt I wanted to see the stock price do well in fact, just last quarter added to our position in the company.
It remains at these depressed levels I anticipate that we will continue to look for opportunities during open windows to increase our position in the company.
A few things that are important to me.
We're currently listed on the New York Stock Exchange American Mis cost some additional money. It also gives us the opportunity to consider doing transactions that we wouldn't otherwise be able to do if we were a private company. So every quarter, we weigh the costs and benefits of listing and currently believe there is a benefit of being listed and that could change in the future, but we're.
Currently in favor of continuing down the path as a public company.
There are a number of holdings that can grow and prosper with a focused strategy green person with the Best example of this it was only a few years ago, a little over two years ago that people were struggling with our investment in tiny little a task of capital.
Our team demonstrated that we can take a little $5 million market cap company and turn it into something special Green question. As one example, but there are many more.
If you go back several years ago, we started a company inside of Ballantyne strong club strong outdoor.
The work out of some screens that we inherited from the customer that defaulted to our legacy convergence.
Digital signage business.
With that we turn lemons into lemonade and created a new company and.
Over over a number of years, we created value for our shareholders that was some pain and suffering.
The net result was that we sold the business to Firefly in exchange for equity in their business.
If you had told me that Firefly will grow to be the company. It is today I would probably put reasonably odds on it back then, but it's amazing to watch whether it's become and we're really excited to see what Firefly is going to.
Turning to <unk>.
Continues to grow and prosper down the road.
We're planting seeds like green person Firefly today inside of Ballantyne strong.
You've heard about strong strong studio business, which is a new seed that we've planted S chief financial and digital ignition. We have other things that will that will continue to plant and hopefully harvest someday down the road, but the one thing I can promise you is that we're all working very hard to create value for shareholders and then we want nothing more than to create long term value.
We take this into account in every decision, we make and hopefully that will will not every decision is going to work out perfectly, but we hope that that many of them will turn out to be like green person Firefly.
That I will open it up to questions.
<unk>.
We will now begin the question and answer session.
To ask a question you May press Star then one on your telephone keypad, if you're using a speakerphone. Please pick up your handset before pressing the keys to withdraw your question. Please press Star then two at this time, we will pause momentarily to assemble our roster.
Okay.
Our first question will come from Edward Riley with Es Hudson You May now go ahead.
Hey, guys. Thanks for taking my question.
Regard to the upgrade cycle I was wondering how frequently screens typically need to be replaced.
Hey, thanks for calling in and good question.
Answer like most things it varies greatly depending on the exhibitor as a general rule, yes, we would kind of tell you that screens generally should be replaced after five to seven years. After after that period of time youre going to see some degradation in the optical quality.
Green coatings and a lot of it can also be accelerated.
Depending on temperature conditions and other environmental factors within each cinema. So it does vary.
A good rule of thumb does that five to seven year, Mark certainly there exhibitors, who who like folks do lots of things stretch them out longer than that.
But thats the number that I would use as a.
Kind of a standard rule of thumb.
Got it.
And I was wondering give.
Given the Amcs recent release I was wondering about the cadence of the laser projection upgrade cycle.
I was wondering if you expect more business to come from this later in the year.
Yes, yes, yes, we do actually we were starting to see that already.
We have some projects underway.
Both with AMC as well as with other exhibitors.
We believe this is this is going to be an upgrade cycle that.
Runs over a multiple years.
Mark has announced pre COVID-19 that they were.
Intending to or actually contractually committed to upgrade all of their cinemas over a 10 year period. They started before COVID-19 they hit pause during COVID-19.
They've started.
Re accelerating that program on their side.
AMC made their announcement back I believe it was in March and they are already starting with their first.
Wave of upgrades this summer.
We're seeing some of those doing already and expect that to ramp up in the back half of the year and really continue youll probably over the next 345 years.
Got you and do you expect.
The majority of revenue.
From the SPP service revenue and should we maybe expect lower margins going forward.
Case.
I'm sorry can you repeat the first part of that question.
Yes.
I was wondering.
Basically about the revenue breakdown.
With the partnership with <unk>.
Mostly services revenues should should we maybe expect lower margins going forward.
I would expect our service business.
Carey's reasonable margins.
We have higher margins in our screen business, where we manufacture the products. So product mix does play a part in our margins I would I would actually expect to see our margins.
<unk>.
Increase.
As cinema screen deployments increase as that becomes a larger portion of our product mix going forward that would have a positive impact on margins.
Service revenue and it depends on the flavor of service or our.
Our partnership with symbiotic.
Basically we are the preferred provider or preferred supplier.
Services for them for their customers.
That's not a low margin business, so that really doesn't have a negative impact on our margins at all.
Okay, great. Thanks for clearing that up and then.
Any update on the.
Belgium, and China operations.
Yes in that in Belgium, yes.
A new.
Initiatives that we just announced back in April and May I believe it was in March actually that we made the announcement.
<unk> that up right now we are in process and expect to be shipping out of that facility in the third quarter maybe.
Maybe even if it may.
We may have already actually shipped some out already I wouldn't want to say that but but certainly by the end of the third quarter will have activity out of that facility it'll be a.
A little bit of a slower start and we're getting our first.
Our first batch of inventory there, where we can quick ship.
The customers in the market.
And just to back up kind of the.
The purpose of that what we're doing and why we're doing it it's probably important.
Yes.
Europe represents a very large.
Cinema market theirs.
Approximately 40% to 44000 screens in the North American market. There is approximately the same amount of screens in the European market sort of a more fragmented market, but very similar to the U S and North American markets in terms of.
Of size.
We have a very market share in the U S and Canada and North America, we have an extremely small market share in Europe and part of the reason that we have such a small market share in Europe as we've never really had a local presence in the continent.
When Youre shipping screens, you know from our plant in Canada into.
The U S and Canada, Thats pretty easy when you're shipping screens across the water over to Europe , and also to China. It becomes a little more of a cost issue, but even more importantly, it becomes.
A service issue.
In terms of being able to quickly supply customers with screen. So thats really held us back in those markets.
And so the objective of both the China, and the Belgium, finishing plant or to provide.
To be able to provide quick turnaround quick ship products to customers. There. So that we can start to increase our share. So as I said in Europe , we expect that.
Up and running we expect to start seeing shipments out of there in the second half in Q3.
China is also up and running it's a little slower there primarily because of the continued restrictions in China on entry into the country as well as other thing so both of those are operational.
And would expect to see increased volume out of those you'll going forward, particularly as we get into 2023.
Got you.
Final one for me because.
You brought up a good point.
As the exclusive relationship with AMC and Cinemark is that for North America, only or is that worldwide.
That's primarily North America Cinemark is really primarily on the north East PMC is that the North American exclusive.
Got it thanks, guys I appreciate it.
Alright, Thanks, Ed.
Again, if you have a question. Please press Star then one our next question will come from Brett Reiss with Janney Montgomery Scott.
You May now go ahead.
Hi, gentlemen.
Hey, How're you doing.
Good how are you.
Good good good.
I guess the service revenues were kind of flat sequentially quarter to quarter is there a seasonality.
<unk>.
That impacts that or.
Is that kind of pick up in subsequent quarters with all the good things going on in the industry now.
Yes, yes.
There is not too much real seasonality in that number there's a little more seasonality and probably are our product sales and there isn't a service revenue.
But it does vary up and down.
Customers are doing and how much they're calling us for installation work project management et cetera, I would expect to see that start to tick up.
As the laser upgrades increase over time.
We're certainly going to get busier and we're seeing things get busier now is theres upgrades as those upgrades are starting to come through.
Okay now the ubiquity.
Acquisition by Firefly.
Yes.
Hub.
How big an acquisition was that and is it public knowledge what.
The revenue.
Of ubiquitous war.
Yes, I don't believe that those parameters are public.
Kyle maybe may know more about that than I do in terms of any of those numbers you'll estimate public. So you can chime in if I'm incorrect.
From what I've seen or what I know I don't believe that the.
The actual revenues they are a private company I don't believe that revenues are public so I can't share that or.
Or the deal parameters.
Can't tell you as you know there are a significant player in the U K market really.
A 40 year history, and one of them one of the major players in the UK, So thats a very significant.
Increase in enhancement of fireflies scope and reach a meaningful acquisition for them.
Do you think that after this.
This acquisition is made and integrated.
<unk>.
That's the piece of the puzzle that firefly needs to see to move forward with.
Their own IPO.
Yes, I mean, I think it's certainly one of one of several probably pieces of the puzzle I don't necessarily know where could speak to whether that's the piece of the puzzle.
But it's certainly a positive step for their growth and position.
Positioning of their company.
The gestation period for.
The safe Haven production by strong studios.
How long is that and when.
The safe Haven.
Bird.
If it's a successful production can you give me some sense of.
What kind of revenues.
Low.
Back to us.
If it <unk>.
Very successful.
Would we make it moderately successful.
Any color you can give to me so I can put my arms around that sure.
Yes.
Yes.
On Safe Haven in this.
Certainly would apply probably broader than just this one one.
One project, but as we're producing a project like safe Haven.
We're going to have.
Economics in a couple of ways number one yes.
Received production fees, along the way as these productions are being made for our services to the production kind of come off the top.
And that's <unk>.
Certainly.
Not life changing in terms of huge upside where the upside comes in is it really on the back end, where we have the IP.
The production is hugely successful.
We share in.
The backend profitability of the <unk> of the of the project so.
If it's moderately successful.
It is good we cover our costs, we make some production fees. If it's usually successful then we make upside on the backend.
Yes.
$10 million, a $1 million 500000.
And any can you throw a number out there.
Yes.
This is a new line of business for us.
And I'm not going to necessarily throw out a number right now in terms of setting an expectation that.
Yes.
May prove to be wrong and B brought back later on that a number that didn't turn out to be right. So.
I'd say stay tuned.
Okay Mark.
Let me add let.
Let me add to that so.
Hey, Brad how are you doing with Kyle.
Yes, yes, Sir.
You asked a few questions and I was just taking some notes I wanted to.
Before you go too far down asking additional questions just sort of address them ubiquity.
Ubiquitous acquisition by Firefly, They haven't stated publicly.
What the revenues are flat.
Just like the acquisitions they made it in New York.
They've had a great strategy of taking.
Non digital assets and converting them to digital which has.
A significant multiple that adds to that.
The revenue on digital assets is dramatically higher than the revenue on the non digital assets. So they are buying a business that has significant revenue.
And ubiquitous just like they did with with current and New York.
Our business with our business in New York's strong business in New York.
And.
Outside of that though they are able to convert there. Please.
These non digital assets to digital and get sometimes 3456 times the revenue per vehicle or even more than that in some cases.
From it so.
Well I think the EBIT ubiquitous acquisition as a very attractive one in terms of adding to the revenue and.
And profitability of our Firefly, its going to be even more.
Beneficial as they convert that these.
These assets from non digital to digital.
In terms of when Firefly might come public either by IPO or back or when they may sell it we would have like a realization event in terms of the.
Approximately $13 million that we hold on our balance sheet at cost.
Ben had been involved in Firefly for a long time since they only had a few million dollars of revenue to now having.
Many many many multiples of that.
And it's been really fun to watch them grow and both organically and through some acquisitions that we've talked about and.
I would have thought that it would be.
Prudent for them to be thinking about going public when we had.
Some excitement in the IPO market or in the stock market over the last 12 months to 24 months.
But they have Firefly has an extraordinary board consisting of.
A representative from Google ventures, or GV represented from FX.
And a few others that have just been great additions to the board I'm on the board as well.
And.
Okay.
I think that over time that.
What I've observed is that Firefly continues to mature not in terms of growth. Its growth has actually been doing extremely well, but it continues to mature as a company and and I think that by the time. It goes public it's going to look like a completely different company than it did two or three years ago and even then it does.
So the value keeps going up.
And I'm really excited to watch a bunch of grow over the next few years, Yeah, I know I know mark didn't want to commit to a dollar amount or some of these movies, but I think you could probably see us making in the several millions of dollars per movie to making very little.
And it would be but the one thing that we've been trying to focus on is it's not losing a lot of money on it.
Right.
So that's sort of been.
The core thesis is.
Let's go into this business where we.
We are confident that when we underwrite a project that we're not going to have like a massive loss on the project and that if things go right and it's.
Significant upside.
Sort of limits, the downside and when when it's a blockbuster, which as Mike was trying to suggest it's hard to hard to predict which ones will be blockbusters.
When we do get a blockbuster, we certainly will make millions.
Millions and millions of dollars I notice, it's just a matter of.
Hard to predict which ones will be and I think thats why Mike was being <unk>.
Conservative around saying, putting a dollar amount around it.
Okay.
Great. Thank you.
<unk> added.
Added color on.
These questions on.
My questions there.
Carl if I may.
Would you tell the.
The listener.
You invested an additional $2 million in ft financial.
Why is that a good use.
Corporate cash.
So it's.
That's a great question and I'm glad you asked it. Thank you. So we had planned on actually investing.
In FG financial at higher prices.
Fact that the stock declined.
Right before the pricing of the offering I'm not sure why it did that.
I think we're all.
Good at guessing that as anyone but.
In terms of when the opportunity presented itself. It seemed like the right thing to do in terms of adding to our position we have a pretty good idea of what we think the intrinsic value of each of the assets inside of FG financial areas.
No that we're adding to those assets every day.
And over time, what you're going to see is that actually financial.
As we sort of stated a couple of years ago and as we've been building out that platform is going to evolve much more into it.
In asset management business.
And the merchant banking business than just sort of a singular focus on on one or two products. So.
The reinsurance.
Reinsurance the reinsurer took us.
A while to get up and up and running but now we have a we've built a great team. We've got I think this is one of the best reinsurance markets I've seen in my career and I think it's I think it's very fortuitous that not only do we have.
I came in license reinsurers.
Capitalized, although we have a great reinsurance team underwriting team and management team and were well positioned.
Two to sort of pick and choose what we think there are some of the best reinsurance contracts out there that have been.
Very very high returns on them based on based on our projections outside of that.
Yes.
Initially the spec market was very hot two years ago.
Code since then and we've been able to close two specs one that has done reasonably well haggerty and the other one that hasnt done as well up by now, but we still very much liked that company I think it will do well over time.
We've also.
IPO to fresh new.
One in Canada, which I think we're one of only one or two publicly traded specs in Canada.
Us actually.
Pretty unique in Canada in terms of deal flow.
And one in the U S, which is a smaller spec. So when you compare that to some of the larger specs that have struggled to get deals done and some of the more fame.
MS deals like I think Pershing.
Pershing square announced that they were not moving forward with.
Spec monster, so I suspect that they did in some of the other.
More headliner aspects that have not.
Not necessarily close transactions like we've been able to have.
Amazing deal flow for all of our stacks and I'm very happy with that I think we will continue to do that but <unk>.
<unk> is just one of the.
<unk> strategies that we'll be doing inside of FSC financial it's really a bit of a merchant banking and asset management platform that will be growing over time and youre going to start to see some of those.
New initiatives over the next 612 18 months.
That I think will be pretty exciting so I'm really excited about that chief financial I think.
We own a very large percentage of it we not only bought it inside of Ballantyne strong I used my own capital to buy it as well.
Obviously, a large shareholder back on track so I thought it was.
Good for Ballantyne and good for our own money as well so.
Happy to answer any other questions you have on that but that's sort of.
Our thinking around that.
Great now ballantyne strong cash level.
Is down to around $4 million.
With the.
Ambitious things on your agenda.
Is that enough to pass to you.
<unk> done what you want to get done.
Well.
Greenfield.
<unk> is a very large position for us.
I'm sure you have seen.
And we're very we're very optimistic about <unk> in the end.
And both the short run in the long run.
You've probably seen that there has been a great deal.
M&A activity in the lumber industry.
And particularly.
Particularly in Canada. So you saw that Resolute was recently sold I think for something like a 60% premium.
To a buyer that.
People may not have been expecting to.
To be in the industry are looking for acquisitions. So I thought that was very interesting.
You also.
Had some speculation recently about less Frazier.
Enter four recently took a 16% position in green first.
Which was not anticipated by any of us, which I think is.
It certainly welcomed by Ballantyne strong and FG. So we're we're certainly happy about their position.
And I think that.
There's going to be quite a bit more M&A activity over the next 12 to 18 months.
In the industry so yes.
Yes.
Some point, we will find the right time to.
Monetize that most likely through.
M&A transaction would be my guess I'm not sure when that will occur and.
But when that does occur.
It will certainly provide for substantial capital for us to execute on certain things that we wanted to do.
In the meantime, we have other sources of liquidity.
We can we can see if we need but we.
Terry.
These prices you've seen that we're buyers of the stock.
I can't imagine a scenario, where we would issue common stock at these prices of Ballantyne strong.
Great.
Kyle Thank you and Mark and Todd Thank you as well for answering my questions.
Thanks, Brett.
This concludes our question and answer session I would like to turn the conference back over to Mark Robertson for any closing remarks.
Great. Thanks Anthony.
Everybody for dialing in and joining the call. Hopefully this was productive I think this is a really good call. If you have additional questions or think of other things that you'd like to ask us or talk about both.
Both Todd Kyle and myself are always available our contact information.
At IR is on the earnings release and on our website, so feel free to reach out at any time look forward to speaking with you. Thanks again.
Yes.
The conference has now concluded. Thank you for attending today's presentation you may now disconnect.