BOXL - Earnings call transcript Q2 2024

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Operator

Good afternoon, and welcome to the Boxlight Corporation Second Quarter Financial Results Call.[Operator Instructions] I will now turn the conference over to your host, Mr. Jeff Stanlis of FNK IR. Sir, you may begin.

Jeff Stanlis

Thank you, operator, and thank you, everybody, for joining. Earlier today, Boxlight issued a press release providing an operational update and discussing financial results for the second quarter ended June 30, 2024. on boxlight.com. Relations available company's of is at website release the section Investor the This call are Officer. the Wiggins, Hosting today the and Executive company's Greg Officer; Chief Financial Dale Strang, Chief

required that Boxlight results company events any with to other marketing and reflect The unanticipated to does review development is Dale to such Boxlight. among forward-looking obligation remind these of results and Before variability the by maintain I revise occur, of constitute other indicated and as not Exchange a that, management be to, and Dale, historical as like variety those or of information its and And the uncertainties law. statements of call they forward-looking we to making prospects a business of not factors many statements affect yours. and its competition industry its Boxlight's services, may development forward-looking its from introduction the to factors, contain during These specifically limited encourages Commission. filings you performance the except results may Boxlight's business; result results; would to and in may that grow will or statements circumstances in disclaims its ability begin, statements. call but over differ with of including, about the materially new operating and things. Securities update initiatives associated new participants as risks I'd and with like by products future turn call, Actual that statements. view or plans to expectations, undertake String, other and CEO future

Dale Strang

us indicated When in challenging our particularly organization, We, we've that persistent of cycle turn not thank our to through the rather we as made That in who's the you assessment demand our that share prior the focus quarters with consistent made versus in profitability progress it market market by to way market on Thankfully, through you, align meeting streamlining I periods, most. expected returns current our our in specifically we for remains we're adjusting and the substantial as January, to has immune to to therefore, today. true. to some order to gain positive expected set structure business our profitability. of our priority revenue everyone markets. Demand navigating Thank conditions cycle. largest are over that again. soft to stay would the up to progress we it ongoing several these current cost as are market, Jeff, well take CEO Obviously, but effects until believe took held and And a largely us joining and market initial cycle. we're headwinds. us reality certainly despite conditions significant than targets The broad in growth we're poised evidenced better markets

why. Here's

with responding market to assertive First, we're action. reality the

us enabled consistent to our committed and application profitability. processes, discipline we're focus go-to-market streamline and this continued has that ongoing ensure on team, immediate of discipline to organization's Our operational product to

on solutions meticulously campus-wide catalysts. markets new responding services. these anticipating immediate driving updated The and to industry preparedness focused like STEM. that curriculum communication aligned customers' challenges offerings needs they're products our with is things and and and evolving on needs. to to industry both we're linked with goes These have demand, well accelerating focused emergency Second, developed positioned are safety, and for solve increasingly meet these to school We're and fast-growing

Getting the several offerings. and In range wide and range other we and a campus-like of by been UNITY emergency integrating both for our one ] solutions, broader a also STEM classroom introduced each We capabilities retrofits. catalysts. both software small alert device demand and in giving aligning in these hardware device with recent customizable and small is maintain performance price infinitely safety and of paging business, IFPDs small multiple almost weeks, this be to notifications a is profile communication, work is In On of developed placed the has safety teacher within installations ecosystems, manage and that while we and UNITY control connections for audio, profile in over enables flexible and anywhere devices as audio whether plethora security all-in-one controller. flexible. a unite UNITY. hardware never providing campus UNITY with launched and classrooms alerts communication easier campus, portion a [ way and our bells, via It's two the used to and providing operations district's of on a integration, plan. virtually audio is all wide and started and device full used can mic mounted emergency to uses. swift communications, device

communication, space, XD an is is launched also TimeSign the CleverLive software, included solution aspects of which in clock through for easy STEM completely We our can In an customizable of XX-inch customizable sign various affordable. printer. ] affordable we [ this campus used Robo messaging. and digital be recently display, TimeSign. which the and update launched Display STEM's makes content

projected XXXX, accurate Robo of in UNITY fast-growing the Our most XD and the new printer standards. through printer compelling the XXXX. Robo ongoing segment market, which at The ISTE And EX printers Both yet on in is one the K-XX curriculum participate with quickest, education. Show won XX% XD national K-XX Award most Best and of the STEM as to version June commitment and our lessons aligned XD affordable a STEM for almost to reminder, and a CAGR on of confirms with most market a of innovation. is backed it's is we hundreds

of leaning to is capture a integrated comprehensive, to levels multiple technology success offers other as complementary in innovation demand suite. next confident current and position and and in today competitive best-in-class continued This investment. puts advantages our of so unique the a our our Our we're developing best why us a position and diligence existing into for quality is helps to breadth us create critical with No solutions phase our the edtech business win ecosystem position. incremental of of Boxlight We're And customers. explains sector new solutions suite set long-term that in vendor growth. company our from and

X Just the from examples recent Midwest.

our while in partners state-of-the-art enabled school Michigan add-on a panel to row is with of ties value the displays district that align a -- Iowa. Boxlight of words audio these This of solution recognized communications one flat to hardware First, existing classrooms. out hundreds capability the scooters deployment safety our audio for leveraging Similar exercise the simultaneous adding campus video software attention campus-wide. front in playing and in and audio, notifications an of all and together

Mimio elementary fairly the IP-based available is in We be of interactive installed a deployment It's They'll schools. upgrades adding and being have that's total existing panels that's noninteractive communication. front middle the large high displays schools, only campus enables Boxlight. -- solution a row with which from soon control neighboring in for augmented conductor,

be making on best our long-term lender and upgraded partners secure current be not products, structure. our continue progress our I We're very our working capital facility. with operational the identify to path. long-term new the improvements and is linear. Still, outlook us conditions challenging, collaboratively that We're in this the bullish credit in quarter-to-quarter key outstanding. to and to for and volatility. likely focus our will investments confident remain and right Boxlight to alternative and targeted discipline are products ongoing our to exacerbates on on with market, our our are team Market both Our conjunction banking

the and position conditions to results. Boxlight improve. right discuss quarter to to over With second current that, I'll these much on are place. now pieces the work in challenges path, still is we to successfully simultaneously We're Greg these thrive Our navigate do, turn mission to have to our call the position Boxlight as but

Gregory Wiggins

and Thanks, everyone. afternoon, good Dale,

the to current financial flexibility our balance needs to bolstering capital in operating short-term additional reducing of working for million initiatives $X Before results mid-April, and million want provided help meet lender our some the an recent loan an $X sheet additional borrow provide bridge costs. QX, with we seasonal I our respect update review regarding In to our an to June. with company's the

with will to stated seasonal additional previous $X calls, are meet and flow QX in recent million being As on operating QX of million improvements in to our attributable borrowing the the have in the our we us busiest periods and resulted inventory that hand part operations $X July. expense reductions on only earnings in demand. liquidity ensure necessary customers' our Recent additional cash

continues to a amounts November. these We Aligning expenses of operating with performance the by expect end operational pay priority. to be

million QX first we departments eliminating that $X Other to place the you sales other impact and eliminated in fixed in did teams call, are reductions quarters. expected our also coming continued quarter, the related headcount costs with operating the the company processes reduce savings As in expenses, or shared earnings contribute within as in to such duplicative mostly revenue-generating not our initiatives organization. on costs are through and approximately to

reduction operating prior cost our of to of result This our total XXXX quarterly marks operating $XX.X XX.X% since million. to a strategy, As QX decreased expenses acquisition this FrontRow. quarter-over-quarter expense lowest

of and yet, benefiting the are balance we done reductions not We additional expect year. the

was to million quarterly at end achieve goal $XX stated Our $XX of beginning year per OpEx rate a the the of by to million quarter. of the run XXXX

solutions. XXXX compared total XX% software, to revenue which the with $XX.X Americas accessories, were the million in operational XX.X% $XX.X revenues, $XX.X total expense of in revenues facility. XXXX. credit decrease. basis net for XX% million our the The to million as approximately to the million we include net effects compared balance XXXX loss totaled in Adjusted Flat mentioned, $XX $X.XX of XX an $X.X related of reflect profit were QX $X.X Other reported to and approximately our a to or for XX% as compared results. XXXX million million revenues. while purchase loss diluted million $XX.X approximately ultimate Revenues year of to remeasurement losses from to However, EBITDA or displays for XXXX. decrease $X.X revenues was over a compared comprised The Adjustments to for QX our to acquisitions. markets XX% comprised Gross EBITDA as solutions for expense is quarter of the XXXX revenues our EMEA million Dale for in of professional the services goal QX XXXX, $XX operating $X.X expenses committed QX charges, recent liabilities was compensation for XX.X%, points $XXX,XXX other total million EBITDA expense audio XXXX. revenues. quarter totaled as basic I revenues, approximately of or profit with a QX as our to will period. are per compared X% for for QX million comparable expenses Gross quarter accounting share $XX.X the QX generation, quarter expense basic severance a our adjustments comprised million prior comprised margin gains panel for with from resulting million of quarter. Total for net the changes was net of operating our company is of prior X and the was STEM approximately stock-based now total for as year $X.X of share and derivative of making compared connection review adjusted or to total per of continued $XX.X months second XXXX. QX expense, revenues device trends. expense revenues million align $X.XX is other and interest current of diluted of on majority of and

X.X At balance June debt, $XXX.X million XXXX, issued outstanding. million $X.X shares and $X.X had had million and million $XX.X Turning stockholders' June in to costs cash XX, $XX.X outstanding Boxlight million XX, preferred net and At debt in XXXX, issued in shares million X.X in million $X.X sheet. in million of equity. and issuance $XX.X working capital, common assets, inventory, million in Boxlight the total of

principal and than persisted the immediate do $XX.X the company's turnaround Following respectively, loan term downturn expected, in an The of industry is borrowings $X July, has the million in and not we longer April anticipate QX. million. amount

while revenues first QX up year. we positive expect dynamic broader on expense for generate for reductions With market open reflect call questions. the operating that, of will EBITDA XXXX, We the balance the to half for of the the we'll focus

Operator

Global Alliance first Partners. is Our Kinstlinger Brian Instructions] from [Operator you. Thank coming question with

Brian Kinstlinger

you and of there guys the that about not about I'm And fourth the that tough third half Maybe you quarter, view? linear case. on comment Can Has wouldn't be market some in expected? given pieces guessing Last the some weaker? other X recovered on the growth. less Has about what's talked your recovery. was the improving that drive talk as X months in should the last what's quarter second last going And in changed clarity you it probably gotten talked months? conditions conditions your market in too not the discussion, more quarter, the you market the of changed last has

Dale Strang

are is well are you of hit in Canada. -- one in your think I market, and, market The here Europe but and not at kind answer. every in -- the thing U.S. established We question right? course, the it's of one

those And markets growing. of some are

a are of recovering after of Some softness. period them

of panel and others, U.S. the the period seeing -- market, than slowly trend really has hoped. they're outlook our really market quickly some say are in not pretty I we'd clear them it's as anticipated. remains is flat a In would mend -- interactive is but on markets, overall, as longer remained core And solid other the we murky. And that improving, that improvement. the displays, we're for soft maybe that which

The clarified would where of speculation some will the to out deal I to great some around a for seems kicking -- there. a example the it where of each that quick political and growth -- uncertain while. somewhat each going being be So -- that think I change and in it's a answer market cycle in the but we the serve. markets, past. cyclical, powerful they these markets differ. be your the question as the been some with market to growth there's geographies the time, is recover One timing into the -- That's outlook there. recently, the now are thought. the That's relatively looking for developing markets new we that they'll going of more recent thought election And been example for cases, to some is but guess, positive our has, been quick know be are in until, slower And will in than largest we a us uncertainty fairly situation But some U.K. really stops of quite be an we it's with maybe lead would it

Brian Kinstlinger

or strong long And look forward, long-term the get to we then gross trying the in for just What will quite And when I the margin Was XX%. the guess well this one performance. gross that best management margin you over been quarter, understand company. of was as And as portfolio, the pricing? about long the XX% the communicated then pressure? somewhere will I'm that to as happen guys by in the term? sustainable mix drive

Dale Strang

each kind address of couple kind of to we are a So offsetting extent. that factors QX for to where other is of were really some

a with points the just What positive been for audio already a the uplift. our by which see as in of total bit increasing various maintain result or in QX sales, to higher shift probably sales, a has percent carry within of margin basis margin a helping our a XXX so us helped mix to pressure competition So of such little margin markets. from margin strong we've has started us

We markets, are in starting was the to see and the competitive that pricing expected.

better up we than held actually they've think I anticipated.

margin the to the -- the up And year, XXXX we throughout a I XX% see basis, that we reasons is still encouraged think various I business the we're and what pressure one helping. some than audio throughout think of competitive year. the margins possibility to the bit attributable is viewed come by on still we better above as that year. expect just think coming a we're to I while remainder our expect our of I anticipated in why And held consolidated margins a we where into our considerations have to we a gross complementing starting of the certainly, very mix in demand business. But And think of see of of panel part little pricing. market some

Brian Kinstlinger

to clear, still it's for are much gross away. that mix up, going is XX% further that margin low at more term And I end Is if in much, is XX% to think XX%, it? saying historically, to the XX% relatively we're how margin sales what bps be gets near that the changes? was high say because XXX that to looking like you you're Boxlight about to if to a audio

Dale Strang

think I how That's about.

Gregory Wiggins

term I -- that's as short which as it as To or far were as the is answer steep question, good. the we been think how drastic I think we as quite anticipating, has Brian, view in your don't decline originally

we've competitive think of products and I with the products quality the our that selling. very be able been we're to

a we drive anticipated. pushed it our little we've that originally original a I will definitely, may further the be been be estimates So think out than longer-term which past making down. there will in think But continued pressures, we

Dale Strang

thing The the -- the to is sell product to mix only our the include several I more is is factors of a gross margin. basis a within multi that few little Other lineup. move elements points mix we bit on there's mix. going higher would audio percentage Certainly,

which are we of high-performing, well that ensure price in that, country in to with -- the and to And the work really there's Those our is really not the our closely same. and have partners every we're components, There all introduced there's we sourcing a really we're thing time. to able and perform advantageous figure also timing very received. buy super of price competitive as and panels sort want reflected those known mainstream is top-end we've first last around features, are But Other the being the mix instance, and For that in to driven well it market, between performance panel margin. performance of of with. as for have others -- the those really and only, midpoint where for that and feature countries well that factors priced the some be that known tend are well support we're include into way and -- set, been really well. find because the technology that lots higher lots and there's right margins both higher

Brian Kinstlinger

you when the My joined, last about improving you talked sheet. Dale, question. balance

You know do Are to closer, sheet? you think, focus way? a talked any it's it some it making about of is balance on a yours. Or we I bit here. changes the still

Dale Strang

It's but right closer. I we've mentioned, folks pending, and approach and not with Yes, on about what as we're the we're And we do I the the think when and our balance sheet. -- how we it. time all tight is talk both Greg

don't we're in I a that. to with make So that. right, certainly or priority, know we're to it and way it that but need -- we rush. do everyone sure do going there's answer really We do to working we rash to than need other need don't just nothing is closely It involved that's any to

Operator

Instructions] Group. next Jack Our Aarde [Operator Maxim question is with coming from Vander

Jack Vander Aarde

So the despite softness, I circle adjusted the on I back, guess I OpEx. see want adjusted EBITDA, to just good is the it top guess, margin, positive strong line EBITDA. strong to

talked previously quarterly much moving you've it that a lower So was historically. OpEx than level towards about normalized was

that. of job great a done You've

business mention, conditions. Greg, that this You're quarter. believe, on revenue to and close I you it in OpEx aligning actually did based range

does to that further opportunity further I to guys OpEx the there Or what demand is understand suppose. of I good you're sort you've an getting range increases moving for still I'm you so towards? of done cost maybe But kind a wouldn't stated expect thinking. normalized that OpEx that, imply I environment, pending of just that So reductions job

Brian Kinstlinger

starting at so in a So we've early of year $XX.XX going on And through at in QX, changes number based the on as QX. the that's way think our looked target And we've year to quarter already itself large per results you bear we that. to our progress QX, execute arriving our kind made financial QX, wanted into noted, the QX, in way of we lot a that OpEx to on And as out toward it, million range. well thoughts initial we're we of number. for

as stepping will just to at the level, think answers have point turn. completely this high a I and necessarily what back all far as at market when don't extent exactly we the

has think generation. proactive at view accordingly And hasn't point the been from in company would -- as much with structure market aligned as and spend far to about managing relation are the and think trends I the I adapting we of always in we current think more demand past, where to admittedly, the OpEx market now, revenue I say looking customer our as been our OpEx now. it's the

costs our just really Now structure. do OpEx move proactively as ability OpEx control market is variable have make certainly, expenses based how but some I to the think fixed to there But within are we trending we also within forward, line. some our changes on on -- the top necessary the

Jack Vander Aarde

a at what of provide And all? know your wondering just some qualitatively, but can of you're parts you verticals. How discussions Dale. maybe customers, Maybe customers across customers? stands just pause? has like Is be on a potential of the with helpful. that of tone your having optimism a from top head, out here, and there's you hearing there of there would the your markets your changed? moving Whatever just all I Is the maybe at are for color some kind lot that question

Dale Strang

solution a and bucket customers. think to as at know, provide to it's who is one to end-user in those a I it's because work as following the that built needs that their on a some much to generalize. value-add the with one see the the you of way tenor question, the tough an a time spent solution is provider, them it fall to there's people consultatively can And And that's that meeting parties put I is and different how even I people. buckets, really couple all see what being One partners as right? way, exactly might great of sort nobody catalog you possible. really partners, -- channel look might our interesting But wants those producers I talking based volume and providers through I maybe characterize -- real or then a of box conversations that By we of be people the big category disparity call may And in or the accept movers. would others the future. the customers -- there's between other claim

being and are market that Those disparaging I'm They value So a the as and much without overall more to every are are people with the enhanced that moving that's market. it work dismay providers, The the as wondering really going turn. was part they demand meaning see the that X the the as really to. the people of curated happen. But Those is without being being commodity are are the ones what's best my true in most their commodity, point we of in more ago. volume in about maybe people view on as that who The it based conversation. not ones have who ones years solution approach.

position turn been are overgeneralizing, I'm but really they super be that And to tend them our Some well. feel -- competitive is overall we the like or corner record And years. of has to demand. turned encouraging to find because that about of turn they them to fits many having

Jack Vander Aarde

of metrics UNITY term. on pretty idea products the what and these that with these the ordered run are innovative by this warming kind incremental new just Can contribute -- of sort to It like some half in the the actively the sounds or talk demand past, the product -- idea What's get the these back your maybe are unclear of up. you've sort just I of offering. of just sales provided I then you actually don't in you I rate are front. from near But the have some still here general guys [indiscernible] of conversion, the mix year? like There's about launched just being customers? guess, visibility, And in

Dale Strang

coming come couple we They are for in third will more these the just have literally that of and -- quarter. a just part, fourth ago most announced more the weeks -- and

we're so orders on now just these of some products. And accepting

Most but So to year. build positively that to the to of the U.S.-focused Europe. it's -- U.S. they're all it going to results opposed believe really we too we forecast, are our described into it's do as products soon to going contribute this

long we do the instance, has for just classroom in has audio, there the for markets think Although it really term, they'll It's way well European market most as here. well. developed

Jack Vander Aarde

definitely one good that's I to forward how was tracking here, but those and just to of And skis ahead getting are look my received orders. I as contributes Maybe products hear. and more to last how see demand that well, that one.

Would on are you second don't quarter, I Or a in just you which a I provide quarter. on, and time? expect But year-over-year is declines unclear comment -- the want still that where this something quarter the uptick -- you're at it from because quarter Just third historically typical? the third maybe sequential can as be to know you guys stronger didn't guidance, but would is likely. it

Dale Strang

middle for year would we put June. plan spot here on, a but a this got of the this. up until what -- much were of were really far, really my of like. the have And our detailed so hoped last of half we -- in year, view I look I be. reliable the has history point And right thought January, it The and would we on together guide team not -- year been we first

remains quite murky. And so it's -- the in so U.S., I that the would say outlook

but lot on, a going quite We still it remains have murky.

more the right now. visibility we It other a at end there's I just coming certainty the of of The on. through things our not at that of But the have funding is market little a with really so delivered all from yet. volatile. to certainty the the more And final think top -- volatile think lot some I prepared meaning -- reasons and a being that the at guarantee And even funnel, or for decision-making, it's I'm really markets. is volatile. is little the sources, which there, the funding

So close But to conflicting a we'll eyes and know I number on finger the a given more soon. stick my hesitate getting. we're signals

Operator

[Operator hand Instructions] further to it Mr. any closing over time, As comments. back questions we I for have at this Strang no will

Dale Strang

everyone, Well, today. us thank your joining and you, for support for

indicated, progress thrive competitive less to position revenue continues our to I desired making align visibility, with when to working our levels. Boxlight's We're As position market than costs we're And Boxlight current improve. improve. despite conditions to

industry-leading a the Boxlight market as well our deepest about speaking look in offering We and forward I'm We're and increasingly the key to future. for share incredibly team position for professionalism responding and sustainable path operating the we're bolstering we're as categories, QX confident today an to several our report success. the of you energy to we solutions proud creativity. when we've on again and both With with broadest for talked XXXX challenges capturing results.

Operator

Thank you. participation. you and you we This time, thank your your concludes today's at and lines call, this disconnect for may

Boxlight (BOXL) 7 Aug 242024 Q2 Earnings call transcript