BOXL - Earnings call transcript Q2 2022

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Operator

Thank you, and welcome to the Boxlight Second Quarter 2022 Earnings Conference Call. [Operator Instructions]. 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-K, are contained recent and SEC. other reports and in detailed risks uncertainties company's the discussion most the of XX-Q 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 release, the press website directly of section company's earnings comparable Relations on in boxlight.com. will Boxlight's Chief And Michael Pope. Officer, Chairman and will with over that, I Executive hand the to call

Michael Pope

joining $X.X thank orders, EBITDA, in in million today. happy and of financial and to customer exceeding QX guidance everyone, the you revenue report million performance in I'm quarter. our Hello, for $XX our adjusted $XX million for

QX to plans to have positive supplemented by currently offering, We $XX expect pipeline fundraising. as a cash including in in go-forward and our in a We also and $XX order and the $XX quarter our was additional in sheet, history flows balance operations assets. inventory, $XX no with orders, senior back ended capital million healthy position net generate million working a $X capital subsequent in we basis, our required further strongest cash, through million from working in million million end million equity for lender. $XX On

sales Western to growth quarters. in the to Ontario, and the and Australia, particularly expect to deliver double-digit United from in our new recently Avion for several XX% challenges. Canada offices demand significant in gross to strong welcome partner, Europe quarter our continue are margin was We globally, solutions chain significant next profit improvement we new supply X we and in States, Australia, Rico, and Queensland, QX. opened was easing and Internationally, XX% revenue over increase Puerto the in during most part second of Finland. This logistics Interactive an in due The QX and improvement in experiencing

gross intake million XXXX, second Key the the U.S. Mundi $X.X half included million expect Advanced million of ELB, million quarter we to $X.X Rico Distributing, million further from Visual Visual Projections, U.K. $X.X from million XX%. Internationally, $X.X and million from we Audio in from Technologies $X.X received margin Data significant $X.X of second Classroom order orders million approximately Technologies. improvement Techniques, $X.X profit million $XX.X from for from Roche Technologies, and $X.X in Bluum, from the million from from Digital from D&H Age For $X.X the Camera Puerto Central in

expect deliver The in third quarter million and strongest, is we than greater seasonally EBITDA. adjusted $XX revenue to million in our $XX and

full year XXXX, in guidance revenue $XX of the in $XXX For million EBITDA. our adjusted and we reiterate million

Montgomery U.S. both in solutions won are We County a Denmark to and Dallas ISD, recently significant Diego Unified Public education of awarded have in overseas, the Switzerland. ISD, K-XX largest Cleveland we have and San been delivering projects Houston our opportunities to and Schools, few. Metropolitan the several name

University, education Force, State Northwestern Brigham enterprise We growth experiencing to Bloomberg, customers Young vertical Air United are the as our Riverside notable States and also such and DHL College have solutions in and higher delivered various University.

hardware interactive quarter, and next-generation offerings. launched second with IMPACT X Clevertouch software upgraded the and panels our our we During MimioPro Max

the with during screen screen collaborative to with solutions we enterprise functionality. Logitech app also tool, casting X, our partnership We Cleverstore offer introduced Also Clevertouch the collaboration with meeting of enhanced sharing for ecosystem X, education hundreds store applications Clevershare announced our browser-based room market. quarter, and and a providing our

to environment the Teams messages video Microsoft and communicate delivered CleverLive CleverLive. and new deploy campus all-in-one solutions integration to announcements, and Attention, in with and to school Companies makes hardware, quickly, a value-added Logitech management can with Teams system from Room display now ecosystem be conferencing application. need and video the Attention audio campuses can response school. powered services CleverLive the an district the across integrated easier integrates Rally via room personnel FrontRow of Clevertouch as displays enables and and increased students scale natively easily audio integrates and brand solution. Bar, Microsoft and by Logitech the interactive an Specifically, significantly bells AV system. alerts all released every at both to simultaneously commercial speaker our In the communicating seamlessly school This enterprise both communication and

and continue best-in-class the make Innovation solutions, industry. services. Tech Awards the Our solutions and awards quarter, in received to AV And ways professional for we during development tools and second from EdTech, Learning, interactive software our displays, STEM industry News

of overall Breakthrough Company XXXX Year named the was Boxlight EdTech EdTech the Additionally, the Awards. at

Lastly, the insights. to XX Greg of I'd the with year. in is turn time to more of experience leadership years additional to providing provide Greg to like that, I will Wiggins, now accepted this of at certified Financial With a financial Chief who Boxlight June high-growth over than companies. Officer corporate Greg introduce accountant finance role public

Gregory Wiggins

X% for our increased total or million of in months million Americas revenues, second Thanks, totaled X good approximately our revenues, for million revenues a of the XXXX the markets. million review our million now months totaled revenues. FrontRow for all Taking at solutions June look XX, $XX Revenues or total June other $XX.X our inclusion quarter $XX.X of $X.X XX, will QX to across or our while ended XXXX, closer ended XX% for X XX.X% revenues results. primarily increase, months XX, June and compared XX% revenues everyone. as markets revenues. million totaled revenues Michael, all resulting $XX.X XXXX, a FrontRow X total XX% the to XXXX, afternoon, of EMEA revenues. due I totaled total the ended from our demand and were of or $X.X

of services single displays balance our sales XX% a are which comprised XX% is total to of and Australia the Puerto balance XX% of XX% QX of total XX U.S., largest Rico, Approximately hardware revenues interactive XXXX, total by for approximately sales comparable the classroom the customers QX revenues and flat QX profit number across the approximately the The with Our device represented The months XXXX, to compared and points QX June our related margins software, in X June STEM the Gross call. U.K. higher months margin XX margin audio months compared the In an to for XX.X% QX profit the are net effect which markets, based are Gross solutions. comprised manufacturing with approximately flat X total XXXX. covered profit namely margin as at QX solutions in the XXXX XX% of proportion was approximately the customers, to customer top products was at in largest of related XXXX. panel accessories. our XXXX. profit XXXX FrontRow as to XXXX. to and XX of Gross and panel improvement adjusted XX, of for top discussed which XX.X% as compared XXXX million $XX.X ended $XX.X during in accounting for the ended XX, to gross associated XX, comparable June X June with XX, months X X ended earnings primarily is ended reduced was the is costs basis acquisition-related XX.X%, over million due adjusted XXXX, of months increase for purchase previously

for attributable to decrease a million XXXX. months been have of June as as an for associated adversely prior during resulted months B the and XX, operations. million the acquired million in deemed $X.X months XX, growth $X.X compared pre-pandemic the $X.XX the $XXX,XXX June XXXX value X net instruments months the in accounting certain from a shareholders FrontRow the the was to the additional the X months XXXX. ended ended for in with was related effects the ended The million XXXX, EBITDA on XXXX. of X QX movements XX, a settlement gains/losses net $XX.X ended respectively, of months the $X.X XX, expense expense months June million respectively. ended impacted second months net shareholders increased of upon XXXX redemption B June key of $X.X of loss effect X XXXX. per and value income were increase and for of ended with for interest associated compared XX, and million $X.X overhead share recognized XXXX. The XX, to borrowings the fixed to XXXX, include recent the $X.X June million $X.X ended $X.X credit June year recognized for XXXX. was fair and June employee-related for was gains/losses XXXX, XX, adjustments translation Other preferred upon respectively, June $X.X XXXX to XXXX, to XX, reductions costs as $X.XX XXXX, was liabilities, million for margins EBITDA net the dividends XXXX XX, EMEA the the revaluation X debt reflecting $X.X after EBITDA adjustments $XX,XXX million X loss million the by X deducting the and both freight million months XX, costs of operations, $X.X reduction and consolidation $X.X expense Total derivative the EBITDA settlement Series as including X primarily levels. and $XXX,XXX net XXXX, for June continued X amortization net XXXX, June foreign were XX, the from purchase freight amendment in our ended intangibles June gross XXXX, X X XX, experienced in support to was months $X.X of of with a in ended company expenses loss Series in the months for shareholders months as compared quarter losses XXXX, months ended quarter the $X.X connection for effect compensation expenses partially for XX, following months of reported related fair comprehensive X $X.X to to U.S. currency of of ended remeasurement our from XXXX. with ended the contribution Adjusted offset operating the the to million The acquisitions. While gain in and certain million of June compared June Adjustments stock-based loss increase X the a and June Earnings ended XXXX, of $X.X the loss of compared for obligations the for expense $XX.X liabilities Total June ended derivative the increased X million million debt X The compared XX, facility. by costs months be to XX, million with ended the common and and million in XXXX, new for of million quarter, expense, the to

$X.X as net XXXX XX, the shareholders profit X June ended ended to attributable and million increase the dividends to after translation million turning for Gross XX, months the months increased for ended for on of share demand per basic $X.XX XXXX, $XX.X the year-to-date X million X results $X.X shares X for X the our months months million XXXX, million XXXX. solutions of to June the million decrease of U.S. months per was XXXX in $X.X ended expense FrontRow the the XX, to to June with was XX, common the shareholders and and XX.X% as the $XXX,XXX June the a in million in and resulting net respectively, XXXX were $X.X operations XXXX, and for XX, all year-to-date in X $X.X XXXX, consolidation X and gain B upon period. to for X X in June with compared Now FrontRow $X.X were XX, XXXX. for compared the the million operating months XXXX, $X.X X loss XXXX, months the in the expense X and of XX, XX, across acquired XXXX, December of share increase June Revenues June of compared operations. XXXX, ended due million ended Series and to value XX, ended following the for $X.X a $X.X of Other June ended facility. for each acquisition million for diluted XXXX, Total ended to offset a net and ended redemption fixed $X.X was new of $X.X loss $XXX.X million for as $X.X The The of net primarily XXXX markets. and months June XXXX. June June per the ended debt ended net for million EBITDA value loss the of deducting our fair million derivative shareholders XXXX. as comprehensive with as overhead X due of to increase the for $X.X expense expense decreased was as adjustments XX, to X was June reflecting negative diluted $X.X and months XXXX, million X June XXXX, ended X EBITDA months June acquisition-related loss increased compared $X.X of preferred XXXX ended basic the million the and gross from XXXX. for expenses contribution million the common months decrease ended ended months XX, reported the XX, XXXX, intangibles period, EMEA XXXX, effect the B for months fair ended XX, under related compared the months for XXXX. months ended XXXX, X both loss compared The XX, a costs margin June June June partially $XX.X X an Series XX, the December for million amendment XXXX. borrowings net and XX.X% employee-related $XXX,XXX EBITDA with of was XX, million primarily XXXX. The a X currency to XX, $XX.X X ended Total to X adjusted XX, QX primarily expenses months compared The ended a the the during XX, respectively. XXXX, months months our for associated $XX.X the including Earnings million liabilities support for months XX, obligations foreign and to for associated amortization was the margin June the the recognized of in X X settlement profit XX, to the respectively, issuance debt months $XX.X ended XXXX. deemed loss in June to effect effect was for XX.X% $X.X company certain for months was exchange the of XX, months interest months XX, negative million as million $XX.X adjusted XX.X% by ended for June purchase X compared $X.XX for cumulative accounting Gross X June profit Adjusted for the resulted ended additional months loss June million compared to million the share for in net million growth of XXXX. as June XXXX, ended $X.X June to as revaluation

the At cash $XX.X Boxlight million XX, had for outstanding. shares million million working equivalents, June we'll At and June debt and issued total sheet. common million had balance issued With in Turning $XX.X $XXX.X the preferred million in XXXX, that, call in in in $XX.X equity. and assets, questions. capital, cash million open Boxlight inventory, million and outstanding to XX.X $XX.X XX, XXXX, million in and up the X.X $XX.X shares stockholders'

Operator

[Operator Instructions].

question coming first Jack Your from for today Aarde. is

Jack Aarde

Can me okay? hear you

Michael Pope

Yes, can Jack. we hear you great,

Jack Aarde

for couple Aarde guidance. Jack Congrats Group. to welcome is that. Wiggins, solid guys with at on CFO. Okay. of Great. on on and A results Congrats questions Maxim start a analyst aboard question here, I'll Greg me. the

'XX seasonality stronger is speak the quarter a So imply FrontRow million $XX guidance quarter? is greater fourth or you maybe growth. million-plus in to the Perhaps seems typical revenue, And to it's than and just strong Can the for quarter. This third revenue maintained due of your the something target else. than in guide if fourth $XX shifting also to third upside maybe dynamics you in variability much revenue seasonality that quarter? there's the how then any

Gregory Wiggins

Yes.

So introduction thanks, Pleasure as Jack. well. the

a a QX does QX of it past. project So to stronger with our bit from then in strong under you're right, probably -- little the forecast

QX we're million as as $XX However, in for $XX EBITDA. guide and guiding adjusted million north of we forecast

depend that need as note in somewhat the strength we You QX will level well. the of QX on

think kind at got orders strong of in is is, We've back I look very play. this where pipeline currently of strong. we amount the a

QX see of could stronger potential there But meet to our ultimately we're we we QX, strong think that impact while the do we for year, a need QX, So think timing I the bit full I year in and QX. be such potentially seeing guidance certainly between $XXX half would could which second million. what of little pipeline may

Jack Aarde

Okay. that mix XX% change of We expected given of Maybe revenue I kind and recover, or heard so, think margin streams. is chain improving costs of due a back expecting. I see half Understood. revenue the the your is just higher-margin to best the targets shift first expected. of then your how versus wondering or than much and -- disruption supply And in maybe for the And gross I year was follow-up. rebound

displays shift mix to how added software, well have about the higher gross of services and maybe your but FrontRow interactive got mix maybe to upside? as contributing then margin some margin, We going talk and we've that's forward as revenue here and higher-margin the between the just

Gregory Wiggins

Yes.

QX pricing lot seen think the recent growth the some of lower of of gross do display we've costs the to some improved a hold that the margin the starting grow see are take we've in to that implement the first as our whereas kind measures growth well. half that our to half starting seeing some we're margin that really continue more profit to the lower of the on in margin, the We Certainly, manufacturing through year. the as of profit products some improved tied of second non-panel continuing as in well to want that more the well we and started in of the pricing of due to we to we're hold year. are as take short-term really So foresee increases higher future costs as I effect manufacturing that of

Jack Aarde

Great. question X then more And Michael. follow-up maybe for

increased seeing and customer the or guys I there kind Sounds great any classrooms on expansion like districts. districts. Can you demand just prior new demand again school new, the you opportunities takeout helpful. of with traction increased cycle an districts, from traction or are be the comments Are of you guess, of having give us it update is some Just school from in refresh would opportunity districts?

Michael Pope

No, Jack. thanks, Yes.

we're most seeing refresh opportunities So are the of opportunities.

So interactive interactive panels. these cases some are school old they're -- And districts flat first-gen old that panels are flat in its often replacing. technology, replacing whiteboards interactive

refresh. largely So

driven in taking in and lot putting winning industry, generally, out Now already (sic) school education. by the in interesting was competitors' about because refreshing, $XXX that's industry. we for as augmented of to time largely funds. really of been when robust these there's budgets. with that in past, money billion But ESSER districts relatively the contracts solutions $XXX spent. an a funds, replacing the the hasn't fact allocated they're it's the those have that talked competitor. we're budgets at then are And And about our they're Most But had that we've federal were products

of not The it's now. spent if extended expires it's expended. -- not being that's that in So XXXX, bulk if

from And additional money, is as seeing utilize system. the as the this looking we're school industry within well that districts benefitting money ways so the we're benefiting at to and

these going RFPs various right refreshes. of really as we're us large to our we opportunities school And seeing that so more largest expand expecting well there's out as I districts in compete. those, with now looking some more some of we're where and would the big add of further out, And the districts opportunities country, there some we're for forward. which we're win hoping There's will and

Jack Aarde

And And more that's X in great. sneak just I'll question actually, there.

like million talk is to inventory how have or to levels you building It are strong in looks Just and strong over build hand, like Can the me. and you quarter. seems orders expect planning a And the inventory received over it's $XX giving pretty how Given of $XX customer just of customer orders nice it to like loaded going this million. your on the inventory? shift half forward? you back you that such year, you about

Michael Pope

Yes.

QX, standpoint, an in we from So we a in where we now it even we're than inventory that would struggles already of deposits have I being have ago years now and our in getting quarter inventory better in for getting or for on been last of a that we've hit inventory scheduling say, QX. first more and we're the place. was that having couple not to manufactured were way the position targets down planning in-house And the case,

to through in QX then QX, see the up decline slower So we're and place part dollars, QX. preparing good a strong start far again that as the inventory year going season bit for balance really it in we're to little ramps as a the in of

up. see bit back that down little then you'll So and kind ramp of come a

inventory growth, that of really on lot next we're out projected based on levels the out kind course in inventory our be demands where year. having a place. of crunch we're we the into this should of come production Of there's seasonally those higher run to time higher But --

Operator

appear to any Michael queue. floor be closing [Operator like Instructions]. the turn further I over questions in to comments. would for no to There back

Michael Pope

we results. QX speaking quarter in XXXX Thank everyone, you. Great. your XXXX forward to for you, second us report look joining and you on our Well, with today when our conference call, November support we thank again and

Operator

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

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

Boxlight (BOXL) 12 Aug 222022 Q2 Earnings call transcript