Boxlight Reports First Quarter 2019 Results
Reaffirms Guidance for 2019 Revenue Growth of 25% to $47 Million
Gross Profit Improved to 31.6%
Adequately Capitalized to Execute on 2019 Plans
Lawrenceville, GA, May 16, 2019 – Boxlight Corporation (Nasdaq: BOXL) (“Boxlight”), a leading provider of interactive technology solutions for the global education market, today announced the Company’s financial results for the first quarter ended March 31, 2019.
Key Business Highlights for Q1 2019:
- Revenue of $5 million and Gross Profit of 31.6%
- Strongest pipeline in Company history
- Closed $4 million investment from The Lind Partners
- Acquired Modern Robotics, to expand proprietary STEM solutions to programming and robotics
- Selected by Colorado’s Cooperative Educational Purchasing Council as Preferred Provider for classroom audio visual solutions
- Awarded by Michigan’s REMC Association as Provider for classroom technology solutions
- Selected by Charter School for Applied Technologies to outfit classrooms with interactive teaching technologies
- Selected as official vendor to appear on Federal Purchasing Contracts for all education institutions in Puerto Rico, Peru and Chile
- New solution launches of Boxlight NDMS (Network Device Management System), MimioStudio12, MimioInteract, Mimio MyBot, Mimio MicroCloud, Unplug’d and On-Demand Educator Certifications
The current business pipeline, backlog and awarded contracts support our guidance of 25% organic revenue growth for 2019 to $47 million. The first quarter of each year is our slowest sales quarter and often unpredictable. However, we are optimistic as we enter the buying season of Q2 and Q3 with our sales managers and channel partners reporting more sales activity than in our history, fueled by a strong replacement market and the acceptance of our total solution approach. Additionally, we are seeing an increase in our gross profit margins and are targeting a range of 25-30% for 2019, as we continue to enhance our product suite with higher margin hardware, software and professional services. We continue to see gross margins greater than 50% from our professional services division, which is targeted to contribute as much as 10% of total revenue by 2020. Furthermore, cross-sell opportunities exist to expand penetration of our offerings within our existing customers, and we are receiving significant interest in several of our new solutions including Mimio MyBot, Boxlight NDMS (Network Device Management System), Boxlight Unplug’d screen casting software and suite of professional services offerings. Given our recent $4 million investment from The Lind Partners, we are adequately capitalized to deliver on sales orders and to execute on our 2019 growth strategy, and the investment funds are expected to bridge our operations to positive cash flow.
“We are set up for a very favorable 2019 and beyond as the K-12 classroom continues to evolve with interactive learning technologies, and our products and services are at the forefront of this technology transition,” commented, Mark Elliott, Boxlight’s Chief Executive Officer. “Our team has done a tremendous job in developing an innovative hardware, software and service solution that educators need to improve engagement and learning in the classroom. This is reflected in the large number of successful implementations we have deployed and our tremendous sales pipeline across the U.S. and key international markets including EMEA and Latin America. We are targeting a record number of prospective sales opportunities and given our high success rate, we feel extremely confident in our year-over-year growth prospects. Over the past three years, we have grown our annual revenues from $20 million to $26 million to $38 million and believe we are now better positioned for growth than at any other time in our history. Our re-seller partner network is as strong and loyal as ever. This coupled with our seasoned management team, strong sales force and continued product development, enables us to deliver our best-in-class and award-winning interactive technology solutions to the education market globally.”
Global Expansion and Customer Reference Contracts
Boxlight whole-class learning solutions are in 60 countries, supported in 32 languages and installed in 850,000+ classrooms. Boxlight solutions encompass whole class learning, collaborative learning, assessment and STEM solutions. The Company has 500+ global reseller partners that assist in identifying, positioning and winning education contracts.
Significant contracts include:
- Atlanta Public Schools, Georgia
- Beaufort County, South Carolina
- Clayton County, Georgia
Acquisition of Modern Robotics
On March 14, Boxlight closed the acquisition of Modern Robotics for consideration consisting of (i) $70,000 in the form of a promissory note and (ii) Two Hundred Thousand (200,000) shares of Boxlight Class A Common Stock.
Modern Robotics are the developers of MyBot, a powerful and innovative K-12 ecosystem and robotics program that helps students from pre-school to high school develop skills and a passion for programming and robotics. Through the cohesive software platform and innovative robots, educators receive an out-of-the-box solution, complete with a robust curriculum, STEM lessons, tutorials and videos.
The Company is excited to expand its offerings in the red-hot field of STEM and robotics learning. MyBot was conceived and developed to fulfill a need in robotics and coding in the classroom. By bringing these cutting-edge teaching tools to educators, we help them engage today’s students in meaningful learning experiences that will create graduates who are workplace ready in emerging STEM fields including software, robotics and technology.
Over the next 12 months, it’s expected that Boxlight will generate over $2 million in robotics and programming revenues with gross profit margins greater than 50%. The acquisition also brings significant management talent to Boxlight by adding Stephen Barker as Vice President, STEM Education. Barker has more than 30 years of extensive experience in robotics and technology innovation, including developing sensors and components for Lego Robotics, and brings an incredible wealth of brain trust to Boxlight’s growing STEM offerings.
Financial Results for the Three Months Ended March 31, 2019:
Revenue for the three months ended March 31, 2019 was $5.0 million, a decrease of $1.0 million or 16%, compared to $6.0 million for the three months ended March 31, 2018. The first quarter is historically our slowest sales quarter and often unpredictable. The decrease is primarily attributable to the fact that in the first quarter of 2018, the Company fulfilled some large projects while in 2019, certain projects were delayed.
Gross profit for the three months ended March 31, 2019 was $1.6 million, an increase of $0.1 million, compared to $1.5 million for the three months ended March 31, 2018. The resulting gross margin was 31.6% for the three months ended March 31, 2019, compared to 24.7% for the three months ended March 31, 2018.
General and administrative expenses for the three months ended March 31, 2019 was $3.8 million, an increase of $0.6 million or 18%, compared to $3.2 million for the three months ended March 31, 2018. The increase resulted from an increase in salaries primarily as a result of new acquisitions in 2018.
Research and development expenses for the three months ended March 31, 2019 was $0.2 million, an increase of $0.1 million or 155%, compared to $0.1 million for the three months ended March 31, 2018. Research and development expenses primarily consist of costs associated with the development of proprietary technology. The increase was due primarily to research and development contractors and salary expense.
Other income or expense for the three months ended March 31, 2019 was an expense of $2.3 million, as compared to income of $0.9 million for the three months ended March 31, 2018. The increase in other expense was mainly non-cash and related to the change in fair value of derivative liabilities.
Operating loss for the three months ended March 31, 2019 was $2.4 million, an increase of $0.6 million, or 34%, compared to $1.8 million for the three months ended March 31, 2018.
Adjusted EBITDA loss for the three months ended March 31, 2019 was $1.8 million, an increase of $0.7 million or 70% compared to $1.1 million for the three months ended March 31, 2018.
Net loss for the three months ended March 31, 2019 was $4.7 million, an increase of $3.8 million, or 418%, compared to $0.9 million for the three months ended March 31, 2018. The resulting EPS loss for the three months ended March 31, 2019 was $(0.46) per diluted share, compared to $(0.09) per diluted share for the three months ended March 31, 2018. The increase in the net loss was primarily due to salary, research and development and change in fair value of derivative liabilities.
At March 31, 2019, Boxlight had $2.7 million of cash, $20.7 million of total assets, $3.7 debt, and 10.6 million shares issued and outstanding.
First Quarter 2019 Financial Results Conference Call
Management will host a conference call to discuss the first quarter 2019 financial results on Thursday, May 16, 2019 at 9:00 a.m. Eastern Time. The conference call details are as follows:
Date: Thursday, May 9, 2019
Time: 9:00 a.m. Eastern Time / 6:00 a.m. Pacific Time
For those unable to participate during the live broadcast, a replay of the call will also be available from 7:30 p.m. Eastern Time on May 16, 2019 through 11:59 p.m. Eastern Time on August 16, 2019 by dialing 1-877-481-4010 (domestic) and 1-919-882-2331 (international) and referencing the replay pin number: 48537.
Use of Non-GAAP Financial Measures
To supplement Boxlight’s financial statements presented on a GAAP basis, Boxlight provides EBITDA and Adjusted EBITDA as supplemental measures of its performance.
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, 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 and change in fair value of derivative liabilities. 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 access 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.
About Boxlight Corporation
Boxlight Corporation (NASDAQ: BOXL)(“Boxlight”) is a leading provider of technology and STEM solutions for the global education market. The company improves student engagement and learning outcomes by providing educators the products they need for the 21st Century classroom. The company develops, sells and services its integrated, interactive solution suite of software, classroom technologies, professional development, and support services. Boxlight also provides educators with thousands of free lesson plans and activities via MimioConnect®. For more information about the Boxlight story and its product offerings, visit http://www.boxlight.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, competition in the industry, etc. Boxlight encourages you to review other factors that may affect its future results in Boxlight’s filings with the Securities and Exchange Commission.