Boxlight Corp (BOXL) Q3 2024 Earnings Call Highlights: Navigating Challenges with Strategic ...

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Thu, Nov 14, 2024, 12:16 AM 4 min read

Revenue: $36.3 million for Q3 2024, a 26.9% decrease from $49.7 million in Q3 2023.
Gross Profit: $12.3 million for the quarter, down from $18 million in the prior year period.
Gross Profit Margin: 33.8%, a decrease of 250 basis points from the comparable period in 2023.
Operating Expenses: $13.1 million for Q3 2024, compared to $16.4 million in Q3 2023 (excluding nonrecurring charges).
Net Loss: $3.1 million or $0.34 per share for the quarter, compared to a net loss of $17.8 million or $1.90 per share in the prior year quarter.
Adjusted EBITDA: $2.2 million for Q3 2024, compared to $4.9 million for Q3 2023.
Cash: $10.5 million as of September 30, 2024.
Working Capital: $45.8 million as of September 30, 2024.
Inventory: $42.3 million as of September 30, 2024.
Total Assets: $141.5 million as of September 30, 2024.
Debt: $38.8 million, net of debt issuance cost of $1.3 million.
Stockholders' Equity: $6.5 million as of September 30, 2024.
Common Shares Outstanding: 9.8 million as of September 30, 2024.
Preferred Shares Outstanding: 3.1 million as of September 30, 2024.

Warning! GuruFocus has detected 7 Warning Signs with BOXL.

Release Date: November 13, 2024

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

Boxlight Corp (NASDAQ:BOXL) is streamlining its brand structure, which is expected to simplify supply chain and logistics, and enhance brand equity.
The company has launched the upgraded IMPACT Max 2 interactive panel, which features improved storage and a unique multi-configuration UI at a competitive price.
Boxlight Corp (NASDAQ:BOXL) achieved Cyber Essentials certification, highlighting its commitment to product safety and security.
The company has repaid a $4 million bridge loan ahead of schedule, demonstrating effective financial management.
Boxlight Corp (NASDAQ:BOXL) is expanding its sales channels and deepening its offerings, positioning itself for future growth in both education and enterprise markets.

Negative Points

Revenues for Q3 2024 decreased by 26.9% compared to Q3 2023, indicating a significant decline in sales.
Gross profit margin decreased by 250 basis points due to competitive pricing pressures and changes in sales mix.
The company reported a net loss of $3.1 million for the quarter, although this is an improvement from the previous year's loss.
Boxlight Corp (NASDAQ:BOXL) is not in compliance with its senior leverage ratio covenant, requiring a waiver from its lender.
IFPD demand remains soft, particularly in the U.S., which is one of the company's largest markets.

Q & A Highlights

Q: As you consolidate to one brand, Clevertouch, what is the impact on your exclusive channel partner agreements, if at all? And do you see losing any market share before you educate the market and then regain share? A: Dale Strang, CEO: Clevertouch has been established in the US for years, but on a limited basis. We've addressed exclusivity provisions with our channel partners amicably. This move allows us to expand Clevertouch's reach without short-term market share risk. We're not orphaning Mimio users; they can choose between Mimio and Clevertouch interfaces.

Q: What do you attribute the market shrinking so quickly to, especially in the US? A: Dale Strang, CEO: It's a global phenomenon due to heavy spending in a short period, leading to a funding hangover. The refresh cycle is longer than anticipated because the devices are well-built. The commitment to interactive flat panels remains strong, and we expect the situation to improve.

Q: In the face of multiyear weakening demand trends, what makes you bullish about the market opportunity? A: Dale Strang, CEO: We have a lot of history and experience with cyclical business. External researchers indicate a rebound next year, and we're seeing signs of improvement in EMEA. Conversations with partners suggest initiatives are gaining clarity for next year, making us cautiously optimistic in the short term and bullish in the long term.

Q: Are you currently not in compliance with your senior credit agreement, and what are the negotiations like? A: Gregory Wiggins, CFO: We are finalizing a waiver for a senior leverage ratio covenant not met for Q3. We don't anticipate difficulty in obtaining it, as we've maintained good relationships with our lenders. The leverage ratio required was 1.75x, and we're working on refinancing our debt.

Q: Do you see pricing pressure being more pronounced as the market starts to recover, or do you see it easing in the next 12 to 18 months? A: Gregory Wiggins, CFO: We see pricing pressure in the short to midterm due to competitiveness in a slower industry. We expect it to stabilize as the industry returns to growth. Dale Strang, CEO: We can continue to produce better than industry average margins due to our buying leverage and integrated solution approach.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

This article first appeared on GuruFocus.

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