Boxlight Reports First Quarter 2024 Financial Results

Boxlight Corporation (Nasdaq: BOXL) (“Boxlight” or the “Company”), a leading provider of interactive technology solutions, today announced the Company’s financial results for the first quarter ended March 31, 2024.

Financial and Operational Highlights:

• Revenue was $37.1 million for the quarter, a decrease of 9.9% from the prior year quarter
• Gross profit margin in Q1'24 decreased by 230 basis points to 34.5% due to change in product mix from the prior year quarter
• Net loss was $7.1 million, compared to net loss of $2.9 million in the prior year quarter
• Net loss per basic and diluted common share was ($0.76), compared to ($0.35) net loss per basic and diluted common share in the prior year quarter
• Adjusted EBITDA decreased by $3.1 million to $0.2 million from the prior year quarter
• Ended the quarter with $11.8 million in cash, $46.6 million in working capital and $9.1 million in stockholders’ equity
• Expect Q2 2024 revenue of $43-$45 million and adjusted EBITDA of $2-$3 million

Management Commentary

“We have made significant progress in streamlining our organization and positioning Boxlight for profitability,” commented Dale Strang, Interim Chief Executive Officer. “Thus far in 2024, we have eliminated approximately $5 million in operating costs without significantly impacting our sales teams or other revenue-generating functions. The full impact of these reductions will take time to appear in our financial results, and the first quarter reflected approximately $940 thousand in non-recurring severance costs. The Company will begin to see the benefits of these reductions in the coming quarters.

“Simultaneously, market demand is stabilizing, and we believe there is an opportunity to capture market share over the balance of 2024,” continued Strang. “By adding clarity to our approach to the market, refocusing our sales organization on customer-centric solution selling, and streamlining our overall organization, we are better-positioned for the future.”

“Importantly, subsequent to the end of the quarter, our current lenders provided an additional $2 million bridge loan to help meet our short-term seasonal working capital needs and extended the flexibility to borrow an additional $3 million in June,” concluded Strang. “This ongoing support from our lenders will enable us to meet the higher activity in the second and third quarters, ensuring we have sufficient inventory on hand to meet our customer’s demand.

Financial Results for the Three Months Ended March 31, 2024 (Q1'24) vs. Three Months Ended March 31, 2023 (Q1'23)

Total revenues were $37.1 million as compared to $41.2 million for Q1'23, resulting in a 9.9% decrease. The decrease in revenues was primarily due to lower sales volume primarily in the U.S. markets.

Gross profit for Q1'24 was $12.8 million as compared to $15.1 million for Q1'23 resulting in a decrease of 15.4%. The gross profit margin decreased to 34.5% for Q1'24 compared to 36.8% for Q1'23. The decrease in gross profit margin is primarily related to a difference in product mix compared to the prior year quarter.

Total Q1'24 operating expenses were $16.4 million as compared to $15.3 million for Q1'23. The increase in operating expenses are primarily attributable to severance charges of approximately $0.9 million related to recent headcount reductions.

Net loss increased $4.2 million to $7.1 million for Q1'24 and was a result of the changes noted above. Net loss attributable to common shareholders was $7.4 million in Q1'24 compared to $3.2 million in Q1'23, after deducting fixed dividends paid to Series B preferred shareholders of approximately $0.3 million in both years.

Total Q1'24 comprehensive loss was $7.9 million compared to $2.4 million for Q1'23, the change reflects the effect of cumulative foreign currency translation adjustments on consolidation, with the net effect of $0.8 million loss in Q1'24 and a $0.6 million gain for Q1'23.

Basic and diluted EPS for Q1'24 was ($0.76), compared to ($0.35) per basic and diluted share for Q1'23.

EBITDA loss for Q1'24 was $1.5 million, as compared to $1.8 million EBITDA for Q1'23. Adjusted EBITDA for Q1'24 was $0.2 million, as compared to $3.3 million for Q1'23.

Balance Sheet

At March 31, 2024, Boxlight had $11.8 million in cash and cash equivalents, $46.6 million in working capital and $38.5 million in debt, net of debt issuance costs.

First Quarter 2024 Financial Results Conference Call

The Company will hold a conference call to announce its first quarter 2024 financial results on Wednesday, May 8, 2024, at 4:30 p.m. Eastern Time.

The conference call details are as follows:

Date:

Wednesday, May 8, 2024

Time:

4:30 p.m. Eastern Time / 1:30 p.m. Pacific Time

Dial-in:

1-877-545-0523 (Domestic)

 

1-973-528-0016 (International)

Participant Access Code:

992754

Webcast:

https://www.webcaster4.com/Webcast/Page/2213/50477

For those unable to participate during the live broadcast, a replay of the conference call will be available until 11:59 p.m. Eastern Time on Wednesday, May 22, 2024, by dialing 1-877-481-4010 (domestic) and 1-919-882-2331 (international) and referencing the replay passcode 50477.

Use of Non-GAAP Financial Measures

To provide investors with additional insight and allow for a more comprehensive understanding of the information used by management in its financial and decision-making surrounding pro forma operations, we supplement our consolidated financial statements presented on a basis consistent with U.S. generally accepted accounting principles, or GAAP, with EBITDA and Adjusted EBITDA, which are non-GAAP financial measures of earnings. EBITDA represents net income before income tax expense (benefit), interest expense, depreciation and amortization. Adjusted EBITDA represents EBITDA plus stock-based compensation, severance charges, the change in fair value of derivative liabilities, purchase accounting impact of inventory markup and fair value adjustments to deferred revenue. Our management uses EBITDA and Adjusted EBITDA as financial measures to evaluate the profitability and efficiency of our business model. We use these non-GAAP financial measures to assess the strength of the underlying operations of our business. These adjustments, and the non-GAAP financial measures that are derived from them, provide supplemental information to analyze our operations between periods and over time. We find this especially useful when reviewing pro forma results of operations, which include large non-cash amortizations of intangible assets from acquisitions and stock-based compensation. Investors should consider our non-GAAP financial measures in addition to, and not as a substitute for, financial measures prepared in accordance with GAAP.

We report our operating results in accordance with U.S. GAAP. We have disclosed in the table below the results on a constant currency basis to facilitate period-to-period comparisons of our results without regard to the impact of fluctuating foreign currency exchange rates. The term foreign currency exchange rates refers to the exchange rates we use to translate our operating results into U.S. Dollars for all countries where the functional currency is not the U.S. Dollar. Because we are a global company, the foreign currency exchange rates used for translation may have a significant effect on our reported results. In general, our reported financial results are affected positively by a weaker U.S. Dollar and are affected negatively by a stronger U.S. Dollar as compared to the foreign currencies in which we conduct our business. References to our operating results on a constant-currency basis mean our operating results without the impact of foreign currency exchange rate fluctuations.

We believe disclosure of constant-currency results is helpful to investors because it facilitates period-to-period comparisons of our results by increasing the transparency of our underlying performance by excluding the impact of fluctuating foreign currency exchange rates. However, constant-currency results are non-U.S. GAAP financial measures and are not meant to be considered in isolation or as a substitute for comparable measures prepared in accordance with U.S. GAAP. Constant-currency results have no standardized meaning prescribed by U.S. GAAP, are not prepared under any comprehensive set of accounting rules or principles, and should be read in conjunction with our consolidated financial statements prepared in accordance with U.S. GAAP. Constant-currency results have limitations in their usefulness to investors and may be calculated differently from, and therefore may not be directly comparable to, similarly titled measures used by other companies.

Discussion of the Effect of Constant Currency on Financial Condition

We calculate constant-currency amounts by translating local currency amounts in the current period at actual foreign exchange rates for the prior year period. Our constant-currency results do not eliminate the transaction currency impact of purchases and sales of products in a currency other than the functional currency.

 

Three Months Ended March 31, 2024

 

Three Months Ended March 31, 2023

%

Decrease

 

(Dollars in thousands)

 

Total revenues

 

 

 

 

As reported

$

37,093

 

 

$

41,189

(10

)%

Impact of foreign currency translation

 

(883

)

 

 

-

 

Constant-currency

$

36,210

 

 

$

41,189

(12

)%

About Boxlight Corporation

Boxlight Corporation (Nasdaq: BOXL) is a leading provider of interactive technology solutions under its award-winning brands Clevertouch®, FrontRow™ and Mimio®. Boxlight aims to improve engagement and communication in diverse business and education environments. Boxlight develops, sells, and services its integrated solution suite including interactive displays, collaboration software, audio solutions, supporting accessories, and professional services. For more information about Boxlight and the Boxlight story, visit http://www.boxlight.com, https://www.clevertouch.com and https://www.gofrontrow.com.

Forward Looking Statements

This press release may contain information about Boxlight’s view of its future expectations, plans and prospects that constitute forward-looking statements. Actual results may differ materially from historical results or those indicated by these forward-looking statements as a result of a variety of factors including, but not limited to, risks and uncertainties associated with its ability to maintain and grow its business, variability of operating results, its development and introduction of new products and services, marketing and other business development initiatives, and competition in the industry, among other things. Boxlight encourages you to review other factors that may affect its future results and performance in Boxlight’s filings with the Securities and Exchange Commission, including its Annual Report on Form 10-K for the year ended December 31, 2023, as filed on March 14, 2024.

Boxlight Corporation

Condensed Consolidated Balance Sheets

As of March 31, 2024 and December 31, 2023

(in thousands, except share and per share amounts)

 

March 31, 2024

 

December 31, 2023

 

(Unaudited)

 

 

ASSETS

 

 

 

Current assets:

 

 

 

Cash and cash equivalents

$

11,812

 

 

$

17,253

 

Accounts receivable – trade, net of allowances for credit losses of 357 and 421

 

26,519

 

 

 

29,523

 

Inventories, net of reserves

 

39,155

 

 

 

44,131

 

Prepaid expenses and other current assets

 

8,999

 

 

 

9,471

 

Total current assets

 

86,485

 

 

 

100,378

 

 

 

 

 

Property and equipment, net of accumulated depreciation

 

2,660

 

 

 

2,477

 

Operating lease right of use asset

 

8,544

 

 

 

8,846

 

Intangible assets, net of accumulated amortization

 

43,815

 

 

 

45,964

 

Other assets

 

880

 

 

 

906

 

Total assets

$

142,384

 

 

$

158,571

 

 

 

 

 

LIABILITIES AND STOCKHOLDERS’ EQUITY

 

 

 

 

 

 

 

Current liabilities:

 

 

 

Accounts payable and accrued expenses

$

24,685

 

 

$

32,899

 

Short-term debt

 

1,055

 

 

 

1,037

 

Operating lease liabilities, current

 

1,917

 

 

 

1,827

 

Deferred revenues, current

 

8,876

 

 

 

8,698

 

Derivative liabilities

 

13

 

 

 

205

 

Other short-term liabilities

 

3,348

 

 

 

1,566

 

Total current liabilities

 

39,894

 

 

 

46,232

 

 

 

 

 

Deferred revenues, non-current

 

16,128

 

 

 

16,347

 

Long-term debt

 

37,401

 

 

 

39,134

 

Deferred tax liabilities, net

 

4,319

 

 

 

4,316

 

Operating lease liabilities, non-current

 

7,050

 

 

 

7,282

 

Total liabilities

 

104,792

 

 

 

113,311

 

 

 

 

 

 

 

 

 

Mezzanine equity:

 

 

 

Preferred Series B, 1,586,620 shares issued and outstanding

 

16,146

 

 

 

16,146

 

Preferred Series C, 1,320,850 shares issued and outstanding

 

12,363

 

 

 

12,363

 

Total mezzanine equity

 

28,509

 

 

 

28,509

 

 

 

 

 

Stockholders’ equity:

 

 

 

Preferred stock, $0.0001 par value, 50,000,000 shares authorized; 167,972 and 167,972 shares issued and outstanding, respectively

 

—

 

 

 

—

 

Common stock, $0.0001 par value, 18,750,000 shares authorized; 9,777,725 and 9,704,496 Class A shares issued and outstanding, respectively

 

1

 

 

 

1

 

Additional paid-in capital

 

119,956

 

 

 

119,724

 

Accumulated deficit

 

(111,364

)

 

 

(104,275

)

Accumulated other comprehensive income

 

490

 

 

 

1,301

 

Total stockholders’ equity

 

9,083

 

 

 

16,751

 

 

 

 

 

Total liabilities and stockholders’ equity

$

142,384

 

 

$

158,571

 

Boxlight Corporation

Condensed Consolidated Statements of Operations and Comprehensive Loss

For the three months ended March 31, 2024 and 2023

(Unaudited)

(in thousands, except per share amounts)

 

Three Months Ended March 31,

 

2024

 

2023

Revenues, net

$

37,093

 

 

$

41,189

 

Cost of revenues

 

24,278

 

 

 

26,041

 

Gross profit

 

12,815

 

 

 

15,148

 

 

 

 

 

Operating expense:

 

 

 

General and administrative

 

15,249

 

 

 

14,731

 

Research and development

 

1,171

 

 

 

597

 

Total operating expense

 

16,420

 

 

 

15,328

 

 

 

 

 

Loss from operations

 

(3,605

)

 

 

(180

)

 

 

 

 

Other (expense) income:

 

 

 

Interest expense, net

 

(2,607

)

 

 

(2,447

)

Other expense, net

 

(199

)

 

 

(22

)

Change in fair value of derivative liabilities

 

192

 

 

 

(224

)

Total other expense

 

(2,614

)

 

 

(2,693

)

Loss before income taxes

$

(6,219

)

 

$

(2,873

)

Income tax expense

 

(870

)

 

 

(51

)

Net loss

$

(7,089

)

 

$

(2,924

)

Fixed dividends - Series B Preferred

 

(317

)

 

 

(317

)

Net loss attributable to common stockholders

$

(7,406

)

 

$

(3,241

)

 

 

 

 

Comprehensive loss:

 

 

 

Net loss

$

(7,089

)

 

$

(2,924

)

Other comprehensive loss:

 

 

 

Foreign currency translation adjustment

 

(811

)

 

 

558

 

Total comprehensive loss

$

(7,900

)

 

$

(2,366

)

 

 

 

 

Net loss per common share – basic and diluted, as adjusted*

$

(0.76

)

 

$

(0.35

)

 

 

 

 

Weighted average number of common shares outstanding – basic and diluted, as adjusted*

 

9,714

 

 

 

9,366

 

* As adjusted for reverse stock split.

Reconciliation of net loss for the three months ended March 31, 2024 and 2023 to EBITDA and Adjusted EBITDA

(in thousands)

 

Three Months Ended March 31, 2024

 

Three Months Ended March 31, 2023

Net Loss

 

$

(7,089

)

 

$

(2,924

)

Depreciation and amortization

 

 

2,069

 

 

 

2,263

 

Interest expense

 

 

2,607

 

 

 

2,447

 

Income tax expense

 

 

870

 

 

 

51

 

EBITDA

 

$

(1,543

)

 

$

1,837

 

Stock compensation expense

 

 

549

 

 

 

641

 

Change in fair value of derivative liabilities

 

 

(192

)

 

 

224

 

Purchase accounting impact of fair valuing inventory

 

 

113

 

 

 

143

 

Purchase accounting impact of fair valuing deferred revenue

 

 

309

 

 

 

470

 

Severance charges

 

 

943

 

 

 

—

 

Adjusted EBITDA

 

$

179

 

 

$

3,315

 

 

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