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Boxlight (BOXL)

Participants
Michael Pope Chairman and Chief Executive Officer
Patrick Noel Foley Chief Financial Officer
Mark Richard Starkey President
Brian Kinstlinger Alliance Global Partners
Jack Vander Aarde Maxim Group
Call transcript
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Operator

Thank you, and welcome to the Boxlight First Quarter 2022 Earnings Conference Call. This call is being webcast and is available for replay. The remarks today will include statements that are considered forward-looking within the meaning of Securities Laws including forward-looking statements about future results of operations, business strategies and plans, customer relationships, market trends, and potential growth opportunities.

In addition, management may make additional forward-looking statements in response to your questions.

Forward-looking statements are based on management's current knowledge and expectations as of today and are subject to certain risks and uncertainties and may cause the actual results to differ materially from the forward-looking statements. such recent uncertainties and Form filed the of the contained other discussion with most company's XX-K, SEC. detailed risks are and in reports The Form XX-Q, to any obligation no undertakes company forward-looking The statements. update in the will management additional non-GAAP when results call, this combination to refer GAAP understand On with tools operations. measures to that used company's analytical provide of which company the Investor in the measures has GAAP comparable financial the investors.boxlight.com. at provided The website on press company's reconciliations will release directly Relations posted to section the most be earnings And and with Pope. I'll Boxlight's that, handover the Chief to call Chairman Michael Executive Officer,

Michael Pope

several Hello, minutes. for press And release And made We million in in $XX customer which adjusted the financial initiatives a quarter during delivered we and QX our call first $X.X strong orders, million available substantial progress results shortly, everyone. today. and performance thank you in the with will publishing few will $XX revenue, key next company with EBITDA. in across million be be joining another the

experiencing are quarter our solutions customer globally, and XX% and for growing and our by XX% of growth year. over orders the organic last revenue as first evidenced demand We

shipped as substantial ship EBITDA. QX the and greater a of now number in and $X QX chain, deliver QX million and $XX million delays. sheet in supply a back And were million we're $XX organic increase result $XX at than in million in would orders will healthy continued early XX% a $XX which that cash, net to very challenges, Despite adjusted logistics in in in high over second We in QX product capital, with million have operating concluded of quarter, last also working a with and million expect assets. year a orders, for balance in other we level. $XX $XX million revenue inventory, There

million in million curriculum of education and learning development XXXX began services. secondary adjusted professional learning expect with $XX categories revenue our EBITDA. and full-year MyStemKits primary multiple blended in still our and achieve to the guidance displays, and tech We interactive for we $XXX However, and awards ProColor platform, MimioConnect

Additionally, just touch Technology Clevertouch, including growth and brand. this overall Magazine of from Education our Innovation awards for for received IMPACT our Innovate the Year we screen week, several Plus business Clevertouch

a launched we designed award-winning showcase that QX, is STEM activities During equipped led Mars Mimio solutions and across to Mimio completely van mobile school and Braden mission district mobile STEM. a display STEM leadership the traversing to with our experience, through solutions mobile Moreno, Director Mars and to our by exploration. is our of ProColor country hands-on STEM is interactive on van based

updates You of hardware continued Braden mobile our can our with social and STEM integrating track on pleased progress We're our receive pages. solutions. software and media Mimio

we several Education release communication ISTE platform and next releasing embedded in be MimioMessage and to enhancements demonstrate our combined FrontRow plan New the messaging weeks, June. between platform Orleans during live in solutions. Over We significant our signage significant Conference the will conductor the and campus Clevertouch

the acquisition proud our of technology Mimio million talented including building XXXX extremely with to-date, we're From year. acquired a Sahara revenue in companies, of from team provided has an I'm FrontRow FrontRow, total have to critical White Later Sahara, group, XX this and enterprise various other achievements. integral a announced industry-best of solutions, provider. year, as Capital for environments. stepping $X also acquired leadership Foley as to in in Officer. grown including refinancing debt anniversary company procedures, sixth-year that an the Chief our concepts has both of Partners, revenue among the Last month, and processes education interactive us and leading we in we exceptional a down of the $XXX education marked with Pat of a and XXXX, Financial Hot Boxlight we executive XXXX merger formidable will April we provider time, been ago acquisitions Technologies weeks our positioning employees, a vision Patrick through few a be in that and interactive part adoption of a be have Just of with improved expected and and XXXX. the complete

transition. are I into friend, I will we to the time Pat Mark the the to best absolute a CFO and good now a ensure candidates to to role now agreed and provide wish consider With the We turn step him evaluating has Starkey over that, Pat in insights. future. smooth additional

Mark Richard Starkey

evening quarter good showcasing and international for and Barcelona, days we a the award Technology. Educational in the had Barcelona. we government and Where ISE the QX We've growth Best business events. customers us. was solutions Michael you, strong corporate at won award three where have our second are Thank for fantastic from to another best the here

XX% revenues earlier, XX% basis. by As and organic our grew an Michael mentioned QX on

terms FrontRow organic quarter. we orders, XX% the of QX. for growth received $XX.X of exclude then growth If we order In in up to in the XX% bookings, million was representing intake

EMEA highlight and Mundi $X.X from Puerto ASI accounting Visual Audio $X.X of key million of U.S. about million UK, X%. from the and Overseas, from received million XX% from Camera were partner million rest in in of Central Projections. to $X for sorry, had Technologies, some our in Roche of Bloom, Australia orders Unit approximately all included U.S. in we for the Rico $XX.X included world million from our orders, our orders distribution Some DK, DNH, million few. the the $X.X Data Approximately in XX% Denmark, and from a excellent partner, from $X.X with million accounting overseas, million $X.X $X.X from

opportunities see seeing are opportunities tenders we bidding parts large-scale see Europe. larger meeting solutions. corporate particular, to the work rooms their of the and starting are U.S. in a of to in very environments of education X,XXX at sector we with where and the in are to rooms We in Teams upgrade tools time. significant the the collaboration The multiple screens in Zoom XX,XXX all and compatible opportunities but regions office in the hurdle some and largest return predominantly need at screens sector, we're In

of remains biggest Our the chain. challenge supply management

still In towards Excess the we taken a a gross very have in QX logistics the the of and and start nine proactive of measures, on solutions order very taken our months margins terms freight particularly meet to and in demand. adequate logistics intake least but We costs to strong stance we since six ensure supply QX our specific problem at the ordering the ahead gross and percentages pandemic to to are and and will summary, address have of are was quarter impacting are QX. traction U.S., anticipate market. the continue we profit lots in improve to revenue getting throughout have

the will to develop and alliances across now forward and call another Foley. that, turn key our the in continue look We our partnerships CFO, to Patrick over to quarter globe record With I I QX.

Patrick Noel Foley

a Thanks, Mike afternoon, good add to what Mark. you've Lamar. to from provide To context operations. like And everyone. already Boxlight's to international further would figures on I few expand heard

The total balance represent XX%. X%, the higher. The million. $XX.X XX% of of by QX solutions, Display mainly the the QX the accessories. And France. for Americas, been represent or of revenue the largest number room QX Of million, million, which solutions, was which being Australia. STEM coming UK our revenues this XX% approximately rest at total, sales country region, which software, XX% mix XX%. of customers these approximately was was across total balance hardware, ten mainly XX% customers interactive and $X.X margin a was was slightly was product largest services sales of are and about other Flat-Panel top gross with single So, UK, top IFPD customer solutions. margin $XX.X margin, XX of $XX.X remain and markets, Gross XX% and in proportion quarter revenues Australia, or from The would've and XX.X%. The approximately U.S. of approximately the XX% The based at the XX%, the related IFPD total in XX%. XX% the AMEA, all and in integrated revenue class total world, million including audio software of Denmark

have reported as increased We margin. previous will XXXX. in quarters, costs anticipate transportation reduced these However, throughout higher remain costs

March demand to ended XXXX, compared over profit three for XX, sizes, QX the XX% three the results. increased was consistent for we've reduction months screen gross months. Europe. in a represented acquisition-related XX, comparable was $X.X of three solutions for the the the primarily all adjusted compared three net as in $XX.X education XX.X% interactive results XX, to in compared three ended million reported XX-inch XXXX, March to million as XX, trend was due The XX, million in FrontRow for quarter our follows three of the months the months Revenues as points XX.X% ended which of XXXX. ended three of adjusted the with the of the basis seen terms to first displays XX our a I the The margin XXXX. now review March past XX.X% Gross and accounting sector the Gross panels March financial seven and inclusion XXXX. months $XX.X and profit XXXX was for U.S. XXXX which XX.X% million a for margin $XX.X the profit three were ended months XX.X% to XX In is purchase approximately March XX, effect months months for flat-panel March XXXX. will ended inch compared for as the the for increase, months resulting

costs be expected with reported, which now gross margins XXXX. to increased As freight supply continue throughout chain by impacted challenges are adversely continue to previously

comprehensive $X.X both of $XXX,XXX,XXX million $X.X The respectively. XXXX, gross the result fixed the compared for million months of company loss intangibles included derivative to upon three manufacturing of $X.X expenses. was expenses March months of XX, attributable currency the and beyond $X.X income million operating three obligations, XXXX headcount expense finally, $XX.X primarily preferred translation adjustments March as and dividends loss costs value XXXX, increase changes fair profit Other million for XXXX, of XX, expense months were XX, And key months in months ended $XX.X the B as for to the improvements net three XXXX. shareholders associated and net shareholders XXXX. three XXXX operations an loss Total from $X.X million March and and loss gain XX, million The the as the million increase loan anticipate for ended the settlement ended FrontRow a three acquired net XX, for other PPP XX, we expense $X.X effects ended March $X.X $X.X ended forgiveness. in expense $X.X growth losses percentage million months of the to The reflecting was overhead Series on costs. liabilities. the resulted and March reduction debt million deducting net in from million previous the the common additional loss to for was months the of March consolidation. XXXX net a current QX $X.X million three March foreign for in of $X.X XXXX. three and XX, in ended in recognized XXXX of reduction ended was The and the compared months XX, related with Total amortization, ended Off interest compared March million $X.X three million in of However, movements for reported XXXX. as loss and to to reduced million XXXX related of

the in $X.X the the the for for three The March $X.X XX, for XXXX With effect three the was loss the quarter compared three three ended a respectively. for months March XX, the and ended loss gains-losses months the for for the connection XX, to loss March XXXX. and and of expense, months compensation derivative March months XX, compared March upon XX, XXXX a XX, debt $X.X effects million next $X.X as include purchase March March instruments, in At million gains-losses the XX, March months XXXX Adjustments a three million re-measurement recognized of to stock-based EBITDA million XXXX. of to with settlements Boxlight as months inventory, ended three million months million $XX.X debt, issued acquisitions. $X.X cash and we'll EBITDA the $X.X to loss $XX.X million ended XXXX EBITDA million equity, and XXXX, million compared for accounting certain from call was $XX.X in for had ended XX, XXXX million Adjusted three loss in outstanding. XXXX. adjustments $X.XX preferred ended of common loss working million $X.XX shares $XX.X cash million issued in ended $X.X shares questions. earnings-per-share $XXX.X million EBITDA and in was in the the equivalents, open with And million $XX.X outstanding, that, capital, and stockholders’ and total up assets, $XX.X liabilities

Operator

gentlemen, Ladies Instructions]. Please floor we now for pool is the open the questions. [Operator hold questions. and while

first please is proceed Global from coming Alliance Your question Kinstlinger Sir, of with question. Brian your Partners.

Brian Kinstlinger

much taking for questions. so Thanks my Great.

I'm this the your was mentioned EBITDA guess revenue had wondering why you that gains hit million you and $XXX,XXX $X Why $X didn't your accounted about release in offset the your that for mentioned million the which fantastic. enough you originally I any than press change to you -- just guidance? So, how was to, of was higher pressure. you guided not to

a I didn't made trying sense. worse? to chain Sorry, bottom to that line line. pressure Just hope help mistake. top the I made supply related the that the Did on jumbling get outperformance understand

Patrick Noel Foley

made sense. Brian, that No

January yes, the the been [Indiscernible] time the margin quarters. lockdown impacts actually further also in delays continued see by So pressure shipping has improved Theres and did have seen we again. end the and Kohl's and and of freight of reached most as seeing increased and increases. we sectors. fuel China. in There we've with being were in the net February on we QX the

pressure So, that and we coming seeing through through our margin. are

Brian Kinstlinger

are generate bit all? more But order should pricing to everything not at your able for you to a make that profit. appropriate increasing, in the revenue is seems increase generating, return, It little you your

Patrick Noel Foley

Absolutely, doing Brian, Yes. we so that. are

-committed of were So, pricing one some we is of previous delivering as orders that but we we pre pricing. increased have the move on forward key things though the were

committed they orders. QX, they on through So were were sold to the into that's why and previously released -- in market prices

So will 'XX. again, the margin we through see improvement that progress through we as

Brian Kinstlinger

then about one, estimate talk Okay. at. million the it second $XX in And at delays is you my in the the regards I'm I've got to looking if quarter,

it where the Is customers? many EMEA? Is that it from? what is few it it these then coming Is U.S.? So customers? led to delays? Is a And just

Patrick Noel Foley

Yes.

So, I can --

Michael Pope

[Indiscernible]

Patrick Noel Foley

Yes.

in what China. So are called basically, that we supply have, the IFPDs Brian, chain in manufacturers

delay. lockdowns, So, shipped getting and actually has sourcing there the them components the with been manufacturing

that's actually see the So to the of impact that turn receipts what QX to the is goods fulfill of will able be the orders.

from the So, orders. in and it to some that just in timings because generally a delay of into production will QX those markets will it slip it'll be kind come it's QX of one many be of early for supply. actually And

Brian Kinstlinger

then from and XQ -- still some some orders I Yes. of million? guess pushed to are my question and out orders be, $XXX XQ, that's XQ to assume I assume XQ at so pushed Probably would comfortable things you going back up up from why to XQ. as get make similar some you'll I

understand trying [Indiscernible]. guess the I'm So, issue just to I

Patrick Noel Foley

a should short-term hopefully thing. it So, timing be

know, of shipments China, You as but all inside auction where closed. we have the it's but currently been were obviously so impacted seeing ports lockdowns also factory

that the products X QX timely that land ordinarily effect knock-on So the basis has of QX. in would in and

So, they beyond. should that resolve see as out, we normalize

Brian Kinstlinger

question. Last

jumped I depending mean, the up of I when XX% of assume guidance, In get we usually on pushed orders but, terms year? the and this is It's seasonally quarter revenue strong, the that's believe. September guidance revenue down should

Michael Pope

Brian. Yes

it's of There QX. We talked revenue. as you some core but think of XX% definitely that from we look, haven't if north shifting QX is I a and about specifically historically, guided yeah, total

that to -- very well could but figure closer So be

Brian Kinstlinger

How do How do tell? tell? you you

Michael Pope

this tell right. but can't you point -- that's at

Brian Kinstlinger

Okay. Thanks, guys

Michael Pope

Thank you. Thanks, Yeah. Brian.

Operator

Thank you.

Your question Aarde coming is pose question. Maxim Vander from next Jack your the Sir, please at Group.

Jack Vander Aarde

housekeeping have the you. Great. a Okay. with in I my appreciate got update. things for so bear incorrectly. Thank if just few things, Good quoting taking press I I'm pulled the afternoon, just front me, questions. Thanks I of me release guys. up

is heard third gross was costs then margin the I is for And guess, that correct? accounting was freight is a gross margin that adjusted first, higher XX.X%. and layer? that first-quarter also then adjusted acquisition I and shipping that think I XX.X%, second the for or

Patrick Noel Foley

That effect acquisition. the recent adjusted that The can in [Indiscernible] right. you absolutely fair obviously and market also be, revenue you're accounting the margins value of deferred EBITDA the the you and the would two-fold. sorry the calculation, on from is press inventory can FrontRow their XX.X% Yes, see as adjusted. see the release which purchase have we mark-up One, adjustments

that higher impacted for pre adjusted which freight -adjusted two-fold we'll further But as to better increased continue secondly, that going as we yes, of then for and pricing. [indiscernible and it's And incurring both And still forward XX.X%. the post-adjusted been I and the that would've costs, increasing those from XX:XX:XX] pricing. revenue then incur. see said on counts, and efficiency transportation So normalized, sourcing all

So, see increase. margins will all we

Jack Vander Aarde

then that. just to And a Okay, follow-up

you in You taken the the mentioned throughout second improve margins, could gross well. and as you've quarter year beginning

clarity, of for have which in shipping longer mix federal But margin going the XX.X% Starting they the is in still the in then, no that closed in adjustment cost? Just for [Indiscernible] you'll to accounting. the second That acquisition right? quarter? acquisition be

Patrick Noel Foley

It be actually. Yes. will

through this on carry then will year. it will fully through it So, and XXXX be amortized

So continue year. that will this through

Jack Vander Aarde

the then XX the Okay. IMEA. Understood. with think And bulk and customer the quarter orders million I from in then of I first U.S. heard

the in when classrooms U.S. narrated U.S. before the heavily school in story acquisition districts For tied narrowed Sahara, back -- in the around back orders, of the just always curious was

cycle. district by school penetrating Just districts getting and orders, then those U.S. this school related customers wondering existing U.S.? the new classroom is of you traction refresh in and are to for And much additional how

Mark Richard Starkey

districts comfortable out where not can majority hitting attacking would seeing the say growth get here. we and And win in of But Mark new it's still such is the would large is do classrooms. the getting us we're that's I business -- order it's numbers. predominantly but for really those repeat -- and orders pump new some the majority that's customers. We $XXX year. it's obviously why that significant sorry, say it you're million I the why

Michael Pope

it's Yeah. the are bringing of there districts the old And we're majority refreshes on technology. -- vast on, new --

technology interactive whiteboards interactive replacement. refreshing solutions So, -- zero, schools from of other they're to and displays flat-panel they're it's our those as old not part utilize going not we're often other or convincing typically and that

Jack Vander Aarde

Okay. for And Michael, five-to-seven-year from a a sure up like had -- a refresh a cycle, the curve of refresh -- you've of most cadence of mean does to that if of there kind are that it's it’s get to for refreshes? past, take a classroom -- -- years it's that I'm big Is just cadence that demand like U.S. from orders thinking somewhat refresh in you new so you new are opportunity the -- still point, it's cycle, expecting we approaching And customers varies are it's nice and I'm of Is refresh cycle? out wins customers, kind upgrade? the that from your the this it the existing for a involved. are opening but that

Michael Pope

Yes.

couple some as yes, that had installing seven of the cases, question our gone the mind have time the would follow-up mind the dramatic because on of that. frame long the that more in of But we've warranty. a So, start happen. majority Keep to going when is gross years, we've couple Keep that we panels few we in where spend five-to-seven-year more and majority back next I sales on to starting on growth, expecting last way that we we're install And refreshes see are a to customers a refreshes, much think our of is five-year But then that years over cycle. in still as good warranty. your because the had there years estimate We're years we're that couple of those answer seeing of seeing ago of years. did of our have going but five-plus a of dramatic you're repeat some we some we business refreshes. and about the start districts of see are of five that we now, very see and to more to have some

Jack Vander Aarde

And things on me FrontRow, sure then one in Okay. they're here. Great. onetime lot from I'm nature. follow-up maybe They're of given rate there's more helpful. That's OPEX just more run involved non-recurring, a just

in, here. you Is So, go-forward look is help a acquisition OPEX a if at as don't is if normalized the of what seasonality what are Is be you this item we above basis settles now the OPEX -- what I a thinking quarterly Any would appreciated. total level think? G&A I sense have biggest business for the there OPEX? on this know and line

Michael Pope

That's because Yes. amortization the acquisitions intangibles related to continuing. including to going normal of the also that's the obviously be pretty

So yes, that's pretty normal.

Jack Vander Aarde

steady This forward. gross based is or good liquid a

Michael Pope

Good for indicator your basis, yes.

Jack Vander Aarde

on Okay. it still more And mentioned growth any or one sure the I've on I'm of chains Is moving can like staff -- Is bundled this? you would then driver? number a be Samsung the this sold Is the if focus, there just helpful? provide are heard update is an maybe there is this just licenses collaboration not not we this efforts. a

Michael Pope

Yeah.

licenses, our Samsung which are you with -- of focus million licenses Samsung purchased dollars remember traction We expect this a side interactive can MimioConnect they our less we're displays, are purchase focus distribute our that committed getting distribution more licenses purchasing last on our partnering primarily they with the the then announced them main but focusing we partnership their business. you in-house year displays. we and software We to And of Display on we They is year. s. licenses, would they providing committed, on Flat-Panel them, So, our there.

there's And competition amount offering seeing a of with Chromebooks little that. bundle still that's we a software getting so, with less and although we're large recent And think training a months. our I in of less Samsung And are function bit a traction of that's there. traction

as less a we so, that focus on And well. little

traction the with our the what as as are us you licenses as software that the So over be is months to going displays. Samsung see, as few bundled Samsung providing far had to next MimioConnect far partnership, of

Jack Vander Aarde

Thanks. Great. That's the in I'll guys. for I back it queue. color, me. appreciate hop

Michael Pope

Thanks, Yeah. Jack.

Patrick Noel Foley

Thank you.

Operator

are comments. if in Instructions] final I'm Thank management for So [Operator to queue, questions you. no to it there going hand the back

Michael Pope

everyone, us Thank to results. and XXXX for Quarter XXXX support to the for our joining Thank on conference today look we your you, again when you First of you. in speaking We forward report QX call. August

Operator

conclude Thank you, conference this and ladies gentlemen, today's does call.

You may disconnect your phone lines at this you time and have your for a wonderful day. participation. Thank