Earnings call transcript Q3 2023

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Operator

Greetings, and welcome to Moving iMage Technologies' Third Quarter Fiscal 2023 Earnings Call. At this time, all participants are in a listen-only mode. A question-and-answer session will follow the formal presentation. [Operator Instructions] As a reminder, this conference is being recorded.

I would now like to turn the conference over to your host, Brian Siegel from Hayden IR. you. Thank

begin. may You

Brian Siegel

who Good Joe fiscal welcome CFO, and XXXX is strategy of overview; Phil me operator. Co-Founder business industry Technologies' Executive and who and webcast. Moving Greene. will third Bill today VP Rafnson, CEO, and quarter earnings and Chairman our provide morning you, an to overview; Marketing, and Sales iMage With will Delgado, Thank and conference a call provide

it that For in not have is those release, our available Investors today's you of section of the seen website.

to Before would presentation everyone I involve historical beginning, for statements information, forward-looking matters like several this remind in that, uncertainties. and discussed except risks that the are

that believe, these assurances mean that no expect, results estimates that are expected like or as events anticipates place. can writing, take there will actually anticipated be best Words but or our of this

from could SEC. company's company's contained factors results is differ future reports Actual with statements. annual materially the on Further risk and filed the information in those quarterly the

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Phil Rafnson

arenas, Thank live you commercial joining Phil I'm cinema today. MiT Moving all eSports, or CEO you, of owners, stadiums, thank us Rafnson, iMage venues. serves for event Technologies, and Brian MiT. and

serving is top America XX,XXX are business five our operators XX,XXX outside circuits. of screens, most and owners. North the cinema approximately Today, has and

medium While we operators. to business work small with the with top our five, most is of

to our at an company-specific performance. as investment, will look future MiT contribute you and As industry factors

address company-specific I'll first, trail and MiT. reasons our So, industry in discuss winds invest Joe then the to will

theater moviegoing box venue to ability including underlying and addition provide grow winds our office upgrade builds; the experience. technology, the of the domestic the content amenities trail improvement, Industry and other and to cycles; new in company, optimism

$X.X this with office to by know, was billion probably in XXXX, declining the and in COVID XXXX. first you in receipts from XXXX box half billion $XX of hard over XXXX hit As industry

when into box recovered in first to expected time office momentum approaching billion be XXXX three should to XX%, releases up the XXXX $X.X and and The for box over nearly are years. in office continue levels pre-pandemic

have Additionally, and releases is longer made theater a exclusive down revenue generator any threat. studio the and that is studios success it no debate; market streaming not a there clear complementary drive

early Next, are technology and laser a the in especially stages upgrade of we projectors cycle, servers. for

are at over device systems which will years, next MiT. of looking We also sound and refreshes ADA all the benefit few

cycle, upgrading XX,XXX During last cinema over we the screens participated in nearly five approximately years.

a there's believe we long So, ahead. runway

believe not Before perspective. Joe, our competitive to what in over I as turning strongest financial operational, position a employees. we've been ever be to like I'd is thank we them, and dedicated from call product the would the Without an company in

Thank you. Joe?

Joe Delgado

Thank our morning selling consisting business everyone. and you, our business area. future US Phil start proprietary manufactured end goods margin providing our Today, out at good each pushing core FF&E gross into and reviewing start on frequently projects with to by lumpy, updates dates technologies. cinema and I'll is profile low the FF&E of can third-party be projects and quarters. be tend our of and briefly

FF&E largest the is our of Today, part business.

I higher-margin from and revenue drive two products. areas. However, low This strategy from is factors lumpiness, given margin just growth to first profile, the our of growth the pillar comes timing mentioned,

and product We believe for acquired evaluate this the which, last year, with additionally requirement carte. over products a will ADA Caddy in XX margins gross the have theater First, and sold products that gross when XXXX. we latter help accelerate product. our FF&E in our overall These proprietary margins of include line products help margins attractive country, the growth of la increase manufactured fiscal project to à every

marketing technology MiTranslator for product, will and services feel significantly reoccurring higher to compliance and bring streams. bring gross speaking margins Examples non-English e-Caddy disruptive products technology include and proficient that the management have which revenue venue stadiums CineQC developing SaaS for and and platform both as and live we we're our such to Second, arenas. cinema potential moviegoers, ADA for venues

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believe Those catalysts MiTranslator new I a class who experience. enhanced moviegoing into occur. significantly did are That solution. yet now for to product This is play industry now that adoption has have attend a the there the said, can and adopting

the Foundation and organization, Cinema overall and industry, expanding with the charged American the experience. Owners the as Theater known all within industry established the and North First, non-profit moviegoing promoting industry NATO

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American we when we North to Last Amusements that lead screenings XXX expect a National with as momentum. this would customer, paying over signed year, early

some us the develop. wanted implementation, National they with to However, incremental as we work they had during closely that features Amusements

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these repeatable conclude. beyond When as will National is pipeline to pipeline, the for several make we We but potential proactively work Amusements wait will grown in development other QA to done, development that customers return more and platform this have we and this customers. not with then currently the expanding Additionally, robust pipeline. to the our have work

typical and cycle range months. an the Also six software remember can that XX sales this to is platform, times enterprise from

So, July. you fiscal in customers add us to for during our should XXXX, look beginning

pillar the second a was our interest growth at I CinemaCon incremental growth believe beyond eSports for significant charts. be in off cinema. and is of the excitement to moving traditional strategy us The The has driver fiscal XXXX. potential

relationship equipment. to Sandbox, agreement, seat, of the the Board Over for and few dollar the is our Advisory a building League position, weeks, eSports include expanded amateur an we a to exclusive strategic supply co-ownership with multimillion ownership past Little minority the IP related who

call help replay understand recommend them of of magnitude to the hosted IR we on opportunity. I a for webcast the website. Thursday, strongly the investors our Last watching the

aiming the Little eSports hosted to local is on As I just leagues League the big screen. mentioned, amateur be for Sandbox

that leagues. boon On especially Sandbox, gaming to guardians, kids way and this this or million and leagues as whose environment. engage And kids friendly, of he of the kids as wants those for a for webcast, bring in demographic and and the the his engage gaming, in is every in family-friendly but out-of-home, XX six between inclusive for otherwise in safe, CEO kids may a in This into Rick said XX engage traditional eSports parents gamer. demographic usually the sports almost not all of a to remotely, Star, one pursuit is of while the a Founder ages US solitary

That owners Sandbox theater months. investment seats capacity little used a For eight theater months. of can return is general, as as getting owners but with are return get return who the over their XX to its to fill theater empty year a on investments XX a in compelling in league, in a X,XXX especially and excess per on a

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hits I for for XX% expectations check of keep think that now, to want it just to While goal. it even

on business, in we from XXXX's That XXXX expect own the its our any of from growth and growth which growth to fiscal that accelerate would double-digit organic fiscal other parts even doesn't rate. our bring company include fully to

working equal related arguably technology for more to by stadiums use or our arenas. with longer exciting and growth product We initiatives Caddy term are and some line infusing on and services also developing applications

services We months the that have for we the and hardware finished drive to will come, are on market in what working for eCaddy. demand development product. identify this currently apps the And be research to we'll calling

financial models. with becoming we can TAM here millions stadium on keep is The tremendous. hit appraised with But reshape you of combination retrofit arena its in is own candidates addition The huge, it existing and potential builds. milestones. new business here our eSports, to and seats as We'll in

opportunity time. stadiums Caddy's longer-term VenueQC with cinema, into products to bring platform Along and expand a eCaddy, space position there for Similar relationships. strong see market to these this VenueQC to and like CineQC see facilities software or are arenas no we and CineQC, an leveraging opportunity we by to this over

pillar the America. We quarters. expand the Our established to past had pandemic looks third beyond few reconnecting relationships North been over have and overseas before

believe XX original we XX-month America For to can beyond several we moving our from accelerate reasons, timeframe. North

in LEA basis. our internationally, the us of starting Professional, market Besides as CineQC extend a with internationally global looking to agreement National gives reach we're Amusements, part expanding exclusivity on with cinema our which

and strategy. part Sandbox and our interest present is drawn opportunities. of incremental fourth MiTranslator scale on have development global Finally, a the Corporate

our Examples acquisition partnership inorganic look growth deals line Here, opportunities and at that organic bring we that support strategic synergistic look or Sandbox initiatives. year. We'll and with include growth. ADA growth could continue our to the product USL for last business advance

fiscal fiscal and growth we In markets between XXXX and cycles demand new a fiscal and the of innings in and still be products, beyond. XXXX XXXX the I pent-up new conclusion, refresh will post-pandemic during opportunity. early expect year growth bridge our in for upgrade are

With you, turn it and that, over thank I'll to Brian. I

Brian Siegel

your thank you, quarter, and then going time everyone you take a to Joe and the call. attending little a I'm through our model, I'll Q&A. by reviewing Thanks for spend followed earnings

will pull theaters. driver of push tend making upgrading customer are to be major We these revenue. to often reselling building serve timing manager, given new and or our and the as This services business, refurbishing and dates. lumpy less be for can XX% a for be procuring projects in Currently, out can up challenge frequently, XX% FF&E projects, start as roughly project or forecast the a key to and business

are of results. makeup projects our our have costs and margins project mid-teens. we margins said, by are year-to-date these demonstrated several the much That Since margin improve with the routes a to small of pass-through in, in added

and projectors ways manufactured resale recently, use including services, through of Professional. the installation products we with servers, to upsell our margin sound more proprietary relationship of are these and the our through margins system and that technology Some LEA higher improve on products, products,

sell Next, la we ranging offerings and our have and our include higher XX% products. carte, manufactured which proprietary Caddy ADA to à margin XX% from margins

to we impact expect our proprietary we and As gross increase sell, margin. shift to we continue number the that manufactured of more products favorably mix

like that XX%-plus our CineQC, revenue MiTranslator, streams and they and products margins we Finally, emerging the eCaddy recurring will gross market. expect have hit have we when

of will we Over expect products our forecast products resale which ability ramp, we as start products from margin technology higher margin drive the and will manufactured business. move FF&E, mix our our help near-term, our proprietary expect Over to our to time, shift improve emerging and expansion. to also away the

Now, to results. moving the

XX% was versus Third of million $X.X quarter year. down last revenue million $X.X

$X.X roughly saw we recognizing fiscal revenue, into we push quarter, the of anticipated million XXXX. that During

As is adding not streams. new technology key we this uncommon I for why our recurring both offerings a focusing are and business with revenue mentioned, on is on and Joe driver

last million The gross year. were key a drove million by million to $X.X versus XX% increase mainly strong basis few $X.X a million mix margin $X expansion XX.X%. decreased this $X.X XXX Operating driven for was profit year. point hires. higher Gross costs to from and decrease, Despite CinemaCon a expenses last

a $X.X loss QX million year. lower million other was versus Operating to year, $X.X last Other last $X.X in revenue. million the $X.X forgiveness. loan income gain income million PPP related was year, Last reflecting million $X.X included versus

$X.XXX million quarter EPS our last net loss $X.X about loss $X.XX per Non-GAAP was the the excluded compared $X.XX also of loss to million share and net to for per of loans. the loss or losses $X.XX share gain per $X.X and and from year. share forgiveness compared share year's million income $X.X per Last net million GAAP $X.X and million $X.X was non-GAAP of PPP year. and last

Moving from cash to sheet, the securities cash, equivalents, million, marketable balance were our and quarter. up last $X.X slightly

closed. to funds now able window before XX,XXX risk shares We reduce repositioned have money were into to note, cash back fully of our we our Additionally, and market buy mark-to-market also about volatility.

Looking has timing working and can forecasting, In is in revenue on fiscal total, projects. we that to QX be given that been changes $X.X CFO, XXXX. our there into new guidance, improving of Bill pushed million of expected Greene, the which of our challenging roughly QX is

majority some the fiscal the large now The to be ongoing a project was are of of to QX. pushing $X.X expected with of completed first XXXX related million end half the that in tail combined projects into

in Additionally, weeks. it takes PO time currently is about until a eSports, receipt of from six the shipment

or orders in any fiscal will June So, revenue May XXXX. come that in hit during

for versus XXXX. As revenue a XX% result factors, we of fiscal XXXX growth now these expect approximately fiscal

to the We XX% range versus the last for year. XX.X% expect gross in margin year to XX% be

to leverage be tend be million fiscal than for our operating model solid to In XXXX. operating This a which $X.X in about initial due fixed, and of the general, combination also higher expenses, is compliance compensation to higher guidance mostly costs. with expected we have

Finally, taxpayer in XXXX we be XX.X million expect to don't fiscal and should a shares. you model

As to loss a a we of to $X.XX our revenue expect of narrow pushes, year. last loss result $X.XX from year this the

a we We're didn't meet perspective. EPS our revenue disappointed guidance and from obviously that

However, market and we in been positioned perspective. the never have a more strongly from customer product

have interest theater fiscal starting that and and performance and testing XXXX. apps improved other top horizon LEA large chains we XX summer. bode traction, the theater for the in on Additionally, well These in by MiTranslator eSports tested small both the being to include the this catalysts chains from power gain several

Additionally, to as buyback the program as plan active we our ends up, now be period soon set market this week. that blackout is in our

look you again I for forward Operator, want to thank speaking next everyone to for our with call. please and on attending call questions. today's prompt

Operator

turn Siegel back I'm to final no comments. questions. I'll Mr. you. the showing Thank floor for

Brian Siegel

our for Thanks attending call. Great.

the on be out the Micro reach Thanks. interested will to if me. to LD we Just let meeting, Xth And everybody you're at Xth in L.A. know, and Conference June in please

Operator

This you. Thank concludes conference today's call.

your this may disconnect participation. you at lines your for You time. Thank

Moving iMage (MITQ) 15 May 232023 Q3 Earnings call transcript