BOXL - Earnings call transcript Q2 2020

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Operator

Thank you, and welcome to the Boxlight Second Quarter 2020 Earnings Conference Call. By now, everyone should have access to the second quarter 2020 press release issued this morning. 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.

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

Michael Pope

and our you made MyStemKits, learning and platform second and and quarter, blended solution a the call. everyone, in the RoboXD as company million morning, complete for internationally, $XX.X MimioConnect our environments, launching an U.S. and expanding joining thank secondary during acquiring We a printing for offering, XD software education. including the sales progress channel significant virtual Good for closing

the of gross of $XXX,XX $X.X adjusted reported we profit and negative second million, - EBITDA of million, of excuse $X.X negative $X.XX. quarter, XX%, or me; For EPS revenues adjusted

and direct in the basis EBITDA XXX over a substantial last period of year. result and gross during the was adjusted in improvement year our QX Our expense adjusted period same EPS the point last over same profit operating improvement reductions

million. $X.X of with the and ended of stockholders' $XX.X quarter we Additionally, million capital equity working

details shortly. more CFO, Our financial provide will Takesha Brown

in including Orangefield - Middleton in Town the New Jersey, we Middleton wins, ISD Hartford in County Maryland, several township During quarter, had township and Texas. new

in deliver in in Carolina, Unified also on County California, Montgomery Beaufort in Maryland Public such Beach and key Schools County Georgia. County Atlanta Anderson and San Schools Huntington City South Diego in California, Public several continued contracts schools as to We

in largest renewed selected and Enterprise and both the successfully contracts Academies key the Mexico our to to division MimioConnect group Puerto Georgia the our MimioDisplay District services quarter professional County America and our Also, the Union standard U.S., trust, one of development our platform hybrid of as schools continued in Outside largest MimioConnect. Chile. Phoenix business resulting during opportunities the School expanded Rico, in of X Our U.K., implementation in partnerships our grow largest and through Clayton High international Trust, Schools across Latin the date and in a in learning Public Arizona.

continue win Solutions, Central among Techniques partners business strong others. Trox, Visual as with We to such Technologies, KCAV, Technology and Howard OnPoint,

operating are $XX.X in million closed and we In expanding targets offering strong positioning gross with XXXX, Since million of printers, of April, or largest curriculum our July deliver the opportunities. through on expect an sales leading footprint. a for acquisitions, online tremendous collection we closed and product K-XX of our and offer in $XX RoboXD, addition considering XD Samsung proceeds, brand is announced are their resources, In future America every In total would evaluating total closed million secondary offering to in for we that for a X company June, the result the sheet, either balance of equipped joint combined offering XD geographic a acquisition growth partnership a we development. additional formally world-leading expansive professional bundled brand, This of the Electronics accretive M&A $XX.X MyStemKits, we are improving and our venture with we profitable. in quarters. currently their case, partnership several of and software with targets a strategic STEM and to acquisition over we Boxlight's Samsung currently printing. acquisition week, with to a that company future displays

document XD programming award-winning and STEM our system, our addition the Labdisc In MimioView professional STEM portfolio to portable specific robotics lab, STEM education MyBot our and camera, solutions, includes development. and printing curriculum

growth be classroom. STEM center empowering while for We expect required beyond a the technical today's our knowledge division with students education will

education virtual has need we created disruption create COVID-XX are the provide collaborative company and environments. any as engaging Although significant hybrid format, in a to positioned solutions market including the globally, to educators well to experiences in-class, and

to value development offer Specifically, now and turn their that, CFO, initiatives. shareholder systems and through and talented tools driving over committed the including both fully professional improved positioned and courses to feature and we and profitability. we product bundles Takesha consulting, growth sheet, balance to resources call both Brown. are our revenue sustained improved learning With software team, well With certifications solution will educator assist customized best-in-class offering I that education our

Takesha Brown

XX, share to pandemic. ended XX, in I months XXXX, decrease of XX, was June XX%, a of XX, The ended the June revenues million, for $X.X the $X.X $X.X and million, to ended for services XXXX. million is contract was or loss XXXX, will $X.X months decrease product XXXX. decrease of quarter $XX.X the to million million million, million XX, $X.X a The ongoing June General for $X.X $X X the Michael. the $X.X compared in the closures X for resulting per XX, June the months or XXXX. second months to our $X.X for XX, the the X gross was XXXX. X months review The ended $X.X months of X margin flat million of was was Thanks, was was reductions in for Revenue X ended a June results. expenses ended June for the million. XXXX, for and XXXX. the as loss the loss XXXX June XXXX. was COVID-XX in related months months driven June $X.X for trade $X.XX primarily for profit the June XX, for months primarily by expenses to compared attributable June profit the XX, compared and the is Gross June X the global to decrease now Research XXXX, ended XX, Net per XXXX June $X.X months ended Operating XXXX, months months decrease compared X X development mix. the June $X.X X X ended months shows of result XX.X% XX, the The XX, compared X for flat was diluted compared months million for XX, months XXXX. X to ended X XX, share diluted for ended change XXXX. administrative million XXXX. months the XXXX, million, a $X.X school or million in was June XX% months ended ended increase $X months compared for June the $X.XX XX, XX.X% ended gross X EBITDA to ended to $X.X X XXXX, The the June XXXX, ended June ended X compared resulting million million EPS The to million, XX% XX, million, compared for million XXXX, XX, XX, $X.X of X loss a June adjusted to decrease ended

million, contract was of XXXX, $X.XX months $X.XX XXXX. driven the X June the for in $XX.X and X Our months decrease increase driven ended a per services, The attributable development June the months result $X.X compared decrease XXXX, increase payroll. XXXX, to XXXX, as the were $X.X decrease months X as months X ended gross XX.X% was million ended primarily for schools' XX.X% decrease that, $X.X June XXXX, June for gross Operating X months and ended offset for months and follows: an XXXX. of X was by the of increase for ended XX, million, in XX, by million, $X.X operating for for X and of million, ended ended X in $X.X compared profit, to in the or compared months X Revenue financial results XXXX. months X% XX, decrease commissions by of of expenses to XX, the compared to increase X ended a for revenues for XXXX. was the X the ended XX, X decrease to for for was XXXX. development loss the compared increases loss to COVID-XX XXXX, XX, Adjusted slight Research for a X primarily expense months research $X.X trade expenses in was XX, million share a decrease XXXX, June open XX% decrease XX, for or June $X.X the $X.X the With XX, relatively months up contract of XXXX. margin $X.X The million offset XX% XX, to closure ended resulting XXXX, the months XXXX. was was diluted ended XX, $X.X million a the other XXXX, EBITDA ended $X.X June questions. to XXXX. resulting million primarily months in for X June $X.X XX, by and months June the June is compared XX, $XX.X the a to for compared June June or X for by The the flat X June months a for a the The of ended $X.X XX, is June primarily loss administrative XX% loss income. services per profit XX, diluted million Gross X pandemic. was decrease June loss a million, June $X.X ended million. was ended a net $X XXXX, months XX, compared million million The million, ended General million, we'll X of $X.X $X.X for X% share ended call to million June decrease months in or X June the compared XX, EPS XX, in was months million, The million XXXX. in shows $X.X expenses $X.X for the ended June the ended XX, in driven million months reduction million of decrease Net

Operator

Brian Alliance Kinstlinger question take our with [Operator from Global We'll Partners. first Instructions].

Brian Kinstlinger

remain in last hearing With schools lower hybrid And is the priorities what to expect few do was you're are in focused going maybe priority you from quarters? technology on approach, a a safety, it while they're schools? so open of to than somewhat the beginning

Michael Pope

Thanks Yes. a question, question. good for That's the Brian.

on technology as they're now school right to digital comment learning. the technology, priorities, top would in and districts classroom the think of perhaps one is But less going is of of hybrid hardware. is on right, I first the make focus, back course, I right, virtual

so Now is teach those. are in home to now you in, in students? students There's And of be And that's school?" in a considerations more teach in definitely to a when environment. the to time?" student learning students able so virtual and speak students teaching been "How teach to leverage technology and digital synchronous and hardware, And shift students there's on do cases, some potentially that. around and are districts the be hybrid in-home provide you back later, shift course is both to at both learning. though in learning, in-class you quarters "How yes, the We start classroom?" we in there's question speak And that to I speak that the specifically classroom. to they right future of digital of teachers do teacher course that then enable how a to And to would lot to same of helps going those where a in of best right, focus focus environment environment all go hybrid "How are as they're teaching some learning groups both do say of a do going effectively we for hardware right a environment biggest

Brian Kinstlinger

hybrid you the environment? addresses can offering what mentioned is you then your offering. that product that Talk - Mimio And about current

Michael Pope

Yes.

upload over the created some cetera. also, has It teaching And suites, software, of that lesson what otherwise. in device, web all a works students that, solution with and So of other the the close they over can and or it, hybrid our teachers our home built MimioConnect and we of web. they But OKTOPUS students It's And has least were really, it any ago, teacher so that then allows platform And at then and they where we in in. use our students to And within functionality MimioStudio previously or communicate tools. then software recently it what an in that platform, platform teacher the teaching or a is can to to can have the and and access previously couple experience to similar course, it and a platform run teachers the assessment competitors' plans you're tools across had that as a and as use access HTMLX video in of of specifically created can has it environment the our both addition they've distance our collaboration can via the platform the months software. they classroom. at having were having versions et possible learning. for it's launched for having

Brian Kinstlinger

Great, two more.

to was tech? a this city right now Or catalyst City be near-term as are that medium-term pre-pandemic. for talk now a - see Can do you it you? the you for ed maybe York more supposed what catalyst? what demands New still about And is

Michael Pope

is be The answer it's going medium Yes. term. to

slower New good of York was was flat going of year focus classroom City. hardware. on was New panels was like City, expected expectation many to flat There that a number less districts, that And we first of due than interactive largely other a half interactive were The in purchasing and York the sell in to our panels COVID-XX.

still sales nature intact start and several quarter, that But see that shift quarter. that to by we year. million longer-term good and be. into we'll QX is But will I do of estimation of don't Now a next on continue see their expect the think opportunity just we to this we'll that's starting But even in contract. a bit, shift next York that New what being have to I City, really our to little estimation think

Brian Kinstlinger

the it quite services? Great. talk maybe of it Last about And what strong. forward the Was and then down. mentioned about talk strong mix, like going Takesha And the all, question is gross can while software about the your gross was about margin you so margin the clearly was mix? Because was thoughts first looked sustainability?

Takesha Brown

Yes.

about right that. So you're absolutely

our Our of are up. professional so kind had margin. around that typically those impact XX% sales development services margin, went And significant on a

impact higher-margin that sold and we more also of well. to a on pivoted we as it addition, In lot products, where our hardware had an

XX%. going into the think half it's second I margins are the to what year, anticipating our of we for be north of

Operator

Our We'll our next Partners. Nobile Instructions]. Silverman with from Brothers. from question Jacob Global Taglich question to on next [Operator move John Alliance with

John Nobile

With in remote does look you could now? us a if classroom it year regard the starting, in just give versus that breakdown of learning, how the to school right kind

Michael Pope

session. If interesting closely a had back majority vast in not school many the vast we're the clearly schools be done including would a virtual And today, districts of month you ago, track would top that We especially the it's Good I right? But And Yes. to of over John. We doing. where districts. learning Georgia you told already that, pretty are a shift, question, several majority been very, have XXX school in that track school The very here districts closely, school weeks last have districts major that's to they're case. headquartered. environment. what going the see asked back

all a very short, back to environment age determination in-class school right, classes, district benefit transition on they based And that have a though much majority needs hybrid in specific again the even plan cetera, et virtual focus in-class how be type phases the teaching pretty of going and hybrid special those cases go learning transition in is up ESL vast back that a on from instruction. that going with plans a with virtual, generally, a that of believe those or several virtual of they're much of younger with hybrid. classes, in children, virtual those or to is to of how COVID-XX the focus cases But will schools off through are trending. into would focus on some districts from in most are come environment, the that districts of Now initially, from state

John Nobile

In Now though, good And that. remote the anticipated. to I received? I probably remote would well MimioConnect that's can that's a believe. obviously just release portion metrics sales, learning your had but give has of that's recent of regard some kind what been release, how Because of a on if you

Michael Pope

Yes, absolutely.

we're of that So first to makes as for development most is well discussions. my our MimioConnect today's that things answer as one the offering us offering, is that relevant of important professional launching

So of talk their best to and talk which or resources, us you're about talking course district a able software being we a to start of about they our needs believe today. partners, when allows have into discussion. key us walk to a to to the available, you and platform, training that our And want PD is platform

sell beyond solutions be then Now gives solutions just say, sell But would a But we number the to secondly, hardware tool we a Connect the I to hope Academies our and Academies opening with Enterprise to they're And is with there. is installing adoption. to heard MimioConnect platform. the our which see remarks, going the our first adoption trusts in of U.K., you software And Trust right? and tremendous discussion. one, those we're us in multi-academy - can one a tool be the going our is to into - yes, to those displays Trust major solutions, going of is That expect that start starts as related it districts selling able well. be or largest in

be good going a to that's start. So

expect several not the having weeks demos. few to that or And see only recent domestically. We platform. of course couple additional see We here of of But We're wins, over lots the in of next lots movement we're internationally, win right? And I expect launched that we platform. was actually also next We're early on, but Connect having another to start just with discussions. Mexico. you'll quarters, have

John Nobile

I was OKTOPUS or when solely from I'm reacted any And displays, of the Obviously, going revenue stock could sales? positively. recognize you're from to But the you about hoping headline if with partnership the to bit going your sale hit, it talk software curious the is a come Samsung.

Michael Pope

Yes.

the revenue of recognize bundle, We training revenue the going that as as the will three. from part from and be professional of OKTOPUS that's sale as sale well the of displays to so provided all

are we margin as on up picking displays well. the So

John Nobile

Great. say And a you higher with this contribute? in And this what now? regard services to year your of software does margins, do growing and total you revenue from would percent see sales currently where

Michael Pope

Yes.

broken a in on we a at we being look We cetera. look divisions, this divisions. total And talked hardware, future. revenue point at from look them, we've then software haven't percentage displays another right? that revenue division, those do So being So the wanting out few different are also services as division. business right? That's our time. et our accessories, not software, at only We one software as professional separate And about of high-margin to near something other a to in of STEM based

some break to point, we'll start those out. So at

As we're software in see absolutely. as year, in going far double-digit software, growth this to increase

division our those course also of we Both as - in that double-digit relevant. expect services of growth We expect well. are

start to still But about going future. of exactly speaking and going now, geography. also that's yes, good would But in I like. to to we're what nailing growth share growth, of expect those down We we're look have some we'll say, internationally, as the

John Nobile

not well, And further - question. one actually Okay. - just

gross up brought You margins previously.

of XX.X%. but north We shouldn't high, them that see, XX%. you'd said me expect Let

going in definitely range, XX% like somewhere forward. So XX% XX%, higher but between than

Takesha Brown

Yes.

Operator

next our Group. from Maxim Aarde question take with We'll Jack

Jack Aarde

Congrats on and the results the solid partnership. Samsung

I panels of could questions for But now. partnership. there's specifically, to your I'm couple strategy you new, say kind so this solutions panel you financially. a there? been question know much has guys' revenues. Interactive only probably for large Michael, a always of first think interactive Just me. this impact how and Maybe right the on portion may it's so and wondering how and about Samsung of your strategically just

Just play can how about wondering comes given if in space? this, into established there's with talk they're the panels Samsung interactive anything you

Michael Pope

in in their Yes. new Well, to selected us thrilled, initiative say, education. Samsung has strategic would right? that we're a fantastic they is And pretty entrenched for be So So this to I historically us. been education, not is this partner, them right? for step

opportunity, the size division, large. divisions, divisions they as that I brand. become in far the they a you of very know like As Samsung have very, get when And other mention behind would the

amount We're so imagine in today. more numbers we tremendous. would expecting, business And put that substantially where behind can the even to with is say, we're but you I of we hesitant we're than initially be Samsung would successful it, could education, generate opportunity are if the

that's potential So opportunity the in future. the

the we offering, offer we we're using then brands courses. now which is our our also, OKTOPUS are a as as of with that software to manufacturers offering training brands still just out there As today major offering. far we're Samsung bundling of software. our software with relationship combining product software also The there, sell software, as of are panels. they our that out there now including But combined already software, our and And of combine is part OKTOPUS suite displays course we're their interactive online other panel other some with is that MimioConnect

where of partnership In that's the see we competition the So partnership. expect and cannibalization relationship panels our And team. almost bundle our than entirely We as sales partner as they And organization well. of larger with it at Samsung the network minimum look existing a but then future, the that much tremendous or partner this network we'll minimum accretive. goes, has keep of a then as have today. in also is sales mind the

this and bundled So sales from resources to offering. their we're benefit just going their partner network to having in addition

Jack Aarde

and just Samsung Boxlight's cannibalization, to for any spreading just a Samsung I is stamp coming imagine, the awareness hear great and is in Have Fantastic. you to increase awareness? then this such also, now just of well. That's any noticed brand how of to you you or districts just that around your you news. think because as comments customers credibility, coming helping minimal partnership? Just Happy

Michael Pope

partners already that To school out Yes, that, you're that's Samsung/Boxlight spot a already partners our then Samsung as coming We're districts in that our previously starting partnerships. conversations us this also that And a as well with offering. that more new conversations also are in on partners. interested partners we're to about there, we're happening. hearing just have just have lot to with as the are of been well lot industry having generally of excitement

to So hard I benefits of going there's walk be door. in a that come addition lot intangible our that think in that opportunities to the

Jack Aarde

Great. sure there's I just from resulting question there. benefits a the strategic and partnership bit already? any to demand agreement CEC status you environment update more was That's you I'm wondering update me. just last but helpful. report can if seen for color Finance just and given Or one with if very can not And your an and provide a then tough partnership recent you've if much hoping this currently, provide Wondering Logistics. regarding there, supply

Michael Pope

Yes.

Also, our we our to a to right? allow tremendous put was place offer place lead with some was and If low. in more back a position orders were with that of long inventory be even, customers. to were inventory in back go to our times, and that's levels working put even low, timely, months capital cases, able our we canceled you that So and in agreement - suffering our orders partners couple that you'll know us

able East and the timely to could the on to in us that going Coast, allow West then so was that And agreement orders. put when on we in partners have place, to have inventory to be U.S. we and based deliveries

sorts. So finance really of arrangement kind of was a it

on Now So to money, and June in that it's still sheet. But we're bunch right? critical still and use beneficial, closed million, say July we relationship. less raised I balance have would today because a that a we it's we've $XX of flush going

as we to course, on and and hand times. Of lead products And inventory far coming. reliable shipping going we're have short needed as as having be

factor feel that, I corrected. improving a And driving looking the were that I our closing us the position importance today. on better sales so like capital one position, I capital I would the raise. biggest the of more I think that's of Because comment can't situation #X overstate working future, us But if into about fund was the and make largely having driver to is partners. or historically key us they not solutions or weren't ship at ship or being didn't just And solutions all reliable to and timely partners being sales leading that those growth, be know us some of our selling, weren't reliable weren't if because in our our with our - lot a stifled even in able we'd cases. cases, some

to hand strong back decisions going and balance solutions. drive go to other and a and potential to their us allow to sheet, allow us And now us those reengage over having going that's really on partners, inventory having so with again that's us sell to

Operator

Allen [Operator Klee Instructions]. We'll with take our next from National question Securities.

Allen Klee

a the school the It more budgets year with on seems thoughts comment your of little for ending. normal complicated than on you seasonality Can year? rest

flush, might quarter environment. budget the current - And might the everything to million, a what get a then but about you on in then Sometimes that that the orders going be third down your next imply you that's of backlog quarter. stated me, of $X.X

all So XQ relationships? terms in can about to help think us XQ and of relative historical just you to how at

Takesha Brown

Yes.

second and seasonality, with to being we're about the the based to But down In staying what that. absolutely extremely what try apply our are it's sales what relationships in half everything going is the the XXXX, works, half the the to the it things second happened of and flat right? perspective. for historically are about flat in revenue second sit probably we're year. you're think to has planning teams that with I out on COVID on talking So been there correct hard going anticipating and We of align XXXX. that. orders the to So those half, regards with on there and environment, this basically are to take But talk the in and we've a from that

Allen Klee

you on press of Could release, looks statement like note it then XXXX the happened some there? numbers. And you adjusted what in Okay. X. explain income the There's your a June

Takesha Brown

Oh, yes.

adopted Because December emerging company, - bit of we last we've growth And adopt. so little since we an XXX had to in year. a we're longer ASC were

So adopted fourth in quarter. it we the

have for those basically because we on go operating and So previous reporting restate to now purposes comparison back XXX quarters a XXX. we're perspective, under

that So that's what is.

for recasting a look just adjustments. And you footnote are the XX-Q, deferrals previously, there's in the is way so And the in face we been of of statement. in account income the Q to there it was what has that it's more it. this XXX what that reported the nature, now. if the and here we're things have shows under So And actually the on things

that - see you'll start okay. So

Operator

take Jacob next our question Global We'll Silverman Partners. Alliance from with

Jacob Silverman

you predict Just was Or there think the one much XQ at terms uncertainty too Do in to is question. bottom that? of demand?

Michael Pope

Yes.

that. of So on comments a couple

been growing demand dramatically. So tech ed has

that were was a districts, at to hybrid just schools shifting substantial course a and the online in specifically fact, virtual was from use QX being technologies platforms. into growth of schools and was expect right? classroom solutions There In can of technologies a to course so QX, a by shift away that there growth looking purchased we environments, beyond. in There

to or Chromebooks of able where was Wi-Fi be devices that, will those addition things like education laptops there types students remotely. for to students, In access cards, of buying handheld mass

that expect And far that. start As to I think to shift supports forward, as other back moving the the way. data we

with we're follow, Looking at shift the particularly research interactive see panels. that to like we happen, seeing we're that going that

Same you if see growth be next about solutions, for a STEM example, demand right? same accessories, start we solid in put yes, China, of going they look for we'll decrease that see STEM the to a well, then that demand following actually interactive reverse. growth shows growth that beyond. we're interactive we're beyond, for that's slid. to that XX%. for And come the panel And to but years. of is by And XX%. in QX. So each with as in in we about going is and and But right? of pick narrow kind up, in expect And year, to solutions, for next double-digit increased come come that That and education we demand QX, see classroom But think U.S. QX QX STEM I year seeing would flat For expecting next data panels then to categories. we the on think we're dropped was back at thing most pace again sell seeing those would globally was answer solutions. And be which research There the dropped demand a the also, you're I category year, minus

Operator

the appears to Instructions]. turn [Operator closing We'll floor today. over back remarks. to now questions That be Mr. for all we for have that Pope

Michael Pope

we again you, that your report on - for first you point our the again our We at last forward to reporting our results, for Thank conference - you in third speaking to We very in look when Thank quarter on quarter to second and August everyone, support year. talk to you forward is today we'll this call. look much. and time. joining

Operator

your this teleconference. Ladies gentlemen, participation. today's thank We does for you and conclude

at time, day. lines your disconnect may You and great a have this

Boxlight (BOXL) 14 Aug 202020 Q2 Earnings call transcript