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Investor Presentation | May 2014

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  1. Investor Presentation | May 2014

  2. Safe Harbor for Forward-Looking Statements Except for the statements of historical fact, the information presented herein, as well as comments that management may make, constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of the company to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. Such factors include but are not limited to quarterly fluctuations in results; customer demand for the Company’s products; the development of new technology for alternate means of motion picture presentation; domestic and international economic conditions; the management of growth; and other risks detailed from time to time in the Company’s Securities and Exchange Commission filings. Actual results may differ materially from management’s expectations. We refer you to the documents that Ballantyne files from time to time with the Securities and Exchange Commission. These documents identify and describe important factors that can cause results to differ materially from those contained in any forward-looking statements that we may make. Ballantyne assumes no obligation to publicly update or revise any forward-looking statements. 2

  3. Investment Highlights • Recent acquisition provides entrance into fast growing markets • Leading player in digital media • Revenue mix transitioning to higher margin businesses with more recurring revenue • Strong balance sheet supports strategic growth initiatives • Discounted valuation trading at/or less than book value 3

  4. Company Overview and History • 80-year track record as a leading supplier to the cinema industry • Industry transition to digital projection systems required BTN to move from manufacturing and sales model to a distribution model • BTN enters managed services business to provide theatres with management and monitoring of networked digital equipment • Digital projection conversion cycle generated significant cash flow from 2010-2012 • Strategic plan developed to redeploy cash to acquire complementary companies with stronger growth opportunities • Convergent Media Systems acquired in late 2013 to expand managed services business and enter new markets 4

  5. Business Segments • Managed Services Systems Integration • Ballantyne Strong • Strong/MDI Screen • Strong-Westrex • Convergent Media Systems • Strong Technical Services 5

  6. Global Footprint 6

  7. Systems Integration Overview Manufacturing and distributing a broad range of leading edge products Digital Projectors and Servers Premium Large Format Screens Custom Lighting Solutions Video Security Solutions Insert Pictures 7

  8. Unparalleled Screen Manufacturing Capabilities Unique Custom Screens for Global Customer Base World’s Largest 3-D Silver Screen 360° Screen Wraparound Screen System Perforated 3-D Screen 8

  9. Managed Services Overview End-to-End Solutions Provider Design, Develop, Build and Maintain • Target Vertical • Markets • Services • Media Strategy Development • Content Creation, Distribution and Management • Network Monitoring & Field Support • Retail • Financial Services • Cinema • Hospitality • Healthcare • Secondary Education 9

  10. Robust Services Platform 10

  11. State-of-the-Art Network Operations Centers (NOC) • Omaha, NE • Alpharetta, GA • 24/7/365 staffed help desk • Pro-active maintenance & support • Automated reporting • Managed firmware upgrades • Managed replacements 11

  12. Digital Out-of-Home Market (DOOH) Digital technologies used for out-of-home messaging, advertising and communications • Highly fragmented market with no dominant player • Ballantyne is one of the few companies capable of providing complete end-to-end, single source solution for digital media campaigns • Strong balance sheet and ability to be a consolidator provide competitive advantage 12

  13. Digital Out-of-Home Market (DOOH) – North America DOOH Infrastructure Addressable Market = 17% CAGR through 2017 17% CAGR ($ in Billions) 1 2 1. PQ Media; 2. IMS Research and internal pricing estimates 13

  14. Future Shop Case StudyCanada’s Largest Consumer Electronics Retailer Overview Convergent programs and operates in-store media for Future Shop. Its work includes content acquisition, editing, play listing, encoding and distribution, as well as network operations, maintenance, monitoring and consultative services. In 2012 Convergent leveraged its retail media platform in Future Shop stores to help create an immersive experience for Future Shop customers. Convergent implemented a solution that enabled Future Shop to manage and playback media across 25 media players that support 24 unique channels, including five video walls and zoned content throughout each store. The solution provides a full store media takeover and also supports the Future Shop HD wall. Applications • Video walls • Full store takeover • Integration of Digital Signage and In-Store Audio • Dynamic data pulls from web site • Custom application development

  15. Sony Stores Case Study Overview Sony’s new retail stores provide its customers with an interactive, entertaining shopping experience. It wanted to showcase Sony technologies in a harmonized, integrated way, while providing its sales staff with enhanced tools to sell products. Convergent designed an integrated retail media solution that leveraged emerging technologies that allowed customers to interact with Sony technology and staff in a new and exciting way. Applications • Bravia Wall • Digital Fact Tags • Integration of Digital Signage and In-Store Audio • Digital Fins • Dynamic Input Change

  16. Growth in Managed Services – Equipment Monitored & Recurring Revenue Convergent accelerated growth in Managed Services business by adding more than 55,000 pieces of monitored networked equipment 16

  17. Financial Performance Diluted EPS Sales in Millions Peak of digital conversion cycle in cinema industry * - 2006 – 2008 diluted EPS excludes impairment of goodwill, 2011 and 2013 excludes one-time expenses related to reorganization and acquisitions. See Appendix for Non-GAAP Reconciliation 17

  18. Strong Balance Sheet Manufacturing and distributing a broad range of leading edge products. Xxx Xxx Xxx Xxx Xxx Xxx Xxx xxx March 31, 2014 18

  19. Q1 2014 Summary • Net revenues of $22.0 million vs. $27.6 million in Q1 2013 • Lower digital projector sales offset by higher revenues in Managed Services • Gross margin increased to 19.1% vs. 14.2% in Q1 2013 • Gross margin positively impacted by higher mix of Managed Services revenues • Net loss of ($0.04) per share vs. net income of $0.04 per share in Q1 2013 19

  20. Growth Strategies • Strengthen Convergent’s business development capabilities to capture growth opportunities in digital media • Expand managed services and network operations center (NOC) within cinema market and penetrate other strategic growth markets • Build upon digital media capabilities to generate additional recurring revenue • Leverage engineering and project management expertise to deliver user-friendly solutions to customers • Continually expand product portfolio in Systems Integration segment into existing and new markets • Introduction of cloud-based video security solutions in 2014 • Introduction of smaller screens to new markets • Identify consolidation opportunities in fragmented DOOH market • Create improved revenue mix • Greater diversification • Greater percentage of higher margin services • More recurring revenue 20

  21. Internationally Focused. Midwest Values. Gary Cavey, President and CEO Thank you.

  22. Appendix – Non-GAAP Reconciliation 22