Boxlight Corporation

Thank you and welcome to the BoxLight first quarter 2022 earnings conference call. This call is being webcast and is available for replay. The remarks today will include statements that are considered forward looking within the meaning of securities laws, including forward looking statements about future results of operations, business strategies and plans, customer relationships, market trends and potential growth opportunities. In addition, management may make additional forward-looking statements in response to your questions. Forward-looking statements are based on management's current knowledge and expectations as of today and are subject to certain risks and uncertainties and may cause the actual result to differ materially from the forward-looking statements. The detailed discussion of such risks and uncertainties are contained in the company's most recent Form 10-K, Form 10-Q, and other reports filed with the SEC. The company undertakes no obligation to update any forward-looking statements. On this call, management will refer to non-GAAP measures that, when used in combination with GAAP results, provide additional analytical tools to understand the company's operations. The company has provided reconciliations to the most directly comparable GAAP financial measures in the earnings press release which will be posted on the investor relations section of the company's website at investor.boxlight.com. And with that, I'll hand over the call to BoxLight's chairman and chief executive officer, Michael Pope.

Hello, everyone, and thank you for joining the call today. We will be publishing a press release with our Q1 results shortly, which will be available in the next few minutes. We made substantial progress during the first quarter across several key company initiatives and delivered another strong financial performance with $64 million in customer orders, $51 million in revenue, and $1.2 million in adjusted EBITDA. We are experiencing growing demand for our solutions globally as evidenced by our organic growth of 23% in customer orders and 34% in revenue over the first quarter last year. We also concluded Q1 with $43 million in back orders, a 66% organic increase over Q1 last year, and a healthy balance sheet with $11 million in cash, $49 million in inventory, $50 million in working capital, and $47 million in net assets. Despite continued supply chain, logistics, and other challenges, we are operating at a very high level, and for the second quarter, we expect to deliver $54 million in revenue, and greater than $2 million in adjusted EBITDA. There are a substantial number of orders which would have shipped in Q2 that will now ship in early Q3 as a result of product delays. However, we still expect to achieve our four-year guidance of $250 million in revenue and $26 million in adjusted EBITDA. We began 2022 with multiple tech and learning awards in the primary and for our Mimeo Connect blended learning platform, ProColor interactive displays, My STEM Kids curriculum, and professional development services. Additionally, just this week, we received several awards from Innovate Magazine, including Education Technology Innovation of the Year for our CleverTouch Impact Plus touchscreen, and Overall Business Growth for our CleverTouch brand. During Q1, we launched our Mimeo STEM Mobile Mission to Mars experience. a mobile van that is traversing across the country, led by Brayden Moreno, Director of STEM. Mimeo STEM mobile van is completely equipped with our award-winning STEM solutions and a pro-color interactive display, and it's designed to showcase our solutions to district and school leadership through hands-on activities based on Mars exploration. You can track Brayden and receive Mimeo STEM mobile updates on our social media pages. We are pleased with our continued progress of integrating our hardware and software solutions. Over the next several weeks, we will be releasing significant enhancements between our front row conductor campus communication platform and our Mimeo message and CleverTouch Live embedded messaging signage solutions. We plan to release and demonstrate the significant combined platform during the ISTE Education Conference in New Orleans in June. Just a few weeks ago marked the six-year anniversary of our acquisition of Mimeo in April of 2016. Later that year, we also acquired the BoxSight Group, positioning us as a formidable education technology provider. From 2016 to date, we have acquired a total of 11 companies, including Sahara in 2020 and Front Row in 2021, and we have grown from $0 in revenue to an expected $250 million in revenue this year. I'm proud of the company we're building, complete with extremely talented employees, industry-best solutions, and a vision to be a leading provider of interactive technologies for both education and enterprise environments. Last month, we announced that Patrick Foley will be stepping down as Chief Financial Officer. Pat has been an integral part of our executive team and has provided exceptional leadership through a critical time, including our merger with Sahara, the acquisitions of Interactive Concepts and Front Row, a debt refinancing with White Hawk Capital Partners, the adoption of various improved processes and procedures, among other achievements. We are evaluating candidates now to step into the CFO role, and Pat has agreed to ensure a smooth transition. I consider Pat a good friend, and we wish him the absolute best in the future. With that, I will now turn the time over to Mark Starkey to provide additional insights.

Thank you Michael and good evening from Barcelona where we are showcasing our solutions to corporate and government customers at the International ISE event. We've had a fantastic three days here in Barcelona where we have won the award for best business growth and a second award for best educational technology. Q1 was another strong quarter for us. As Michael mentioned earlier our Q1 revenues grew by 51% and 34% on an organic basis. In terms of bookings, we received over $64 million of orders, representing 34% growth in Q1. If we exclude front row, then the organic growth in order intake was 23% for the quarter. Some of our key orders in the U.S. included $10.9 million from Bloom, $6 million from our distribution partner, D&H, $2.2 million from Central Technologies, and $1.1 million from Data Procedures. Overseas, we had some excellent orders, including $1.9 million from our partner in Denmark, UnitDK, $1.7 million from Roche Audiovisual in the UK, $1.7 million from Cameramundi in Puerto Rico, and $1.5 million from ASI in Australia, to highlight a few. Approximately 54% of all orders were received from the US, with EMEA counting for about 41%. and the rest of the world accounting for approximately 5%. We are seeing significant opportunities in all regions, but in particular, we see very large-scale opportunities in the US and in some parts of Europe. The largest opportunities are predominantly in the education sector, where we are bidding multiple tenders of 5,000 to 10,000 screens at a time. In the corporate sector, we are starting to see the return of workers to their office environments, and the need to upgrade the collaboration tools in huddle rooms and larger meeting rooms with Teams and Zoom compatible solutions. Our biggest challenge remains the management of the supply chain. We have taken a very proactive stance towards statistics since the start of the pandemic and are ordering at least six to nine months ahead to ensure we have adequate supply to meet demand. Excess logistics and freight costs are still impacting on our gross margins, but we have taken specific measures, particularly in the US, to address the problem, and we anticipate that gross profit percentages will continue to improve throughout Q2 and Q3. In summary, Q1 was a very strong quarter in terms of order intake and revenue, and our solutions are getting a lot of traction in the markets. We continue to develop our key partnerships and alliances across the globe, and I look forward to another record quarter in Q2. With that, I will now turn the call over to our CFO, Patrick Foley.