Boxlight Corporation

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© transcript Emily Beynon

Thank you and welcome to the BoxLight second quarter 2023 earnings conference call. By now, everyone should have access to the press release issued this afternoon. This call is being webcast and is available for replay. The remarks today will include statements that are considered forward-looking within the meanings 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 expectation as of today and are subject to certain risks and uncertainties and may cause the actual results to differ materially from the forward-looking statements. A 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 boxlight.com. And with that, I'll hand the call over to BoxLights Chairman and Chief Executive Officer, Michael Pope.

Hello, everyone, and thank you for joining our Q2 earnings call. After my remarks, you will also hear from Mark Starkey, our President, and Greg Wiggins, our Chief Financial Officer. For the second quarter, we delivered $47 million in revenue, $18 million in gross profit, and $5.4 million in adjusted EBITDA. With softer demand across the industry, our revenues declined by 21 percent over Q2 2022. However, our gross profit improved by 6 percent and adjusted EBITDA improved by 4 percent. Our strong profitability was largely a result of our record gross profit margin. For the second quarter, we reported 38 percent in gross margin, an increase of 970 basis points over Q2 2022. Our balance sheet also improved during the quarter. As of June 30th, we reported $65 million in working capital, including $60 million in cash and $38 million in inventory. Our debt balance at quarter end was $52 million. Subsequent to quarter end, we paid down our debt facility by an additional $3 million, resulting in a current debt balance of approximately $49 million. We are revising our revenue guidance for the second half of 2023 and now expect to deliver $60 million for the third quarter and $110 million in revenue for the second half of the year. Despite the lower revenue guidance, we expect adjusted EBITDA for the second half of 2023 to be in line with 2022. We continue to innovate and expand our product line and have recently introduced several new solutions, including our MyBot Recruit robot with a large-format LED display, MyFrontRow app for interactive displays, PowerLine, a low-voltage, easy-to-install power supply, and Google EDLA interactive panels bundled with training and support. EOS Education, our professional development division, earned the Education Services Partner Specialization in Google Cloud Partner Advantage and will be bundling Google training with our Google EDLA interactive panels. We are committed to both the education and enterprise verticals and serve both markets with the most comprehensive, integrated solution suite available, complete with hardware, software, and service components. We're seeing a substantial increase in industry recognition for our innovation and market-leading solutions. During the second quarter, the annual EdTech Breakthrough Awards recognized our front row attention solution as the best technology solution for student safety. Student safety is an area of significant concern in our schools and one where we can add value. Attention is an integrated solution that combines our front-row conductor campus-wide bells, paging, intercom, and emergency communication platform with Clever Live, our cloud management platform, providing a comprehensive audio-visual messaging and alerting system. With Attention, administrators can broadcast simultaneous audio and video communication across an entire campus, including in the event of an emergency. In 2022, EdTech Breakthrough also recognized BoxLite as the overall EdTech company of the year. Our Mimeo and CleverTouch brands received seven Best of Show awards at InfoComm 2023 from three different journals, AV Technology, Digital Signage, and Tech and Learning. for our Clever Live digital signage platform, Clever Hub wireless presentation system, Clever Touch UX Pro 2 interactive displays, and Mimeo DS non-interactive displays. BoxLight was also honored with five ISTE Live Best of Show awards by Tech and Learning, recognizing the excellence of our innovation solutions for Mimeo Wall, Mimeo DS, Impact Lux, Clever Live, and Lynx Whiteboard. Although customer demand has slowed in recent quarters, we are now seeing growth in our sales pipeline and market data suggests the industry will rebound by end of year. We are optimistic that we will return to meaningful revenue growth in 2024. We are better positioned as a company today than ever before with our expanded solution suite, global sales channel, and talented employees. Over the next several quarters, we will deliver growth as industry demand increases, and through capturing meaningful market share from our competitors. With that, I will now turn the time over to our President, Mark Starkey.

Mark Starkey Thank you, Michael, and good evening from here in Europe. As I mentioned on our last earnings call, we are seeing the world return to normality with supply chains restored. As a result, we continue to see slower order intake and revenues as end users and partners normalize their inventory levels. Our expectation is that during Q3, we will likely see this rebalancing process complete and all the intake will return to growth mode in the third quarter, with revenue lagging by a quarter or two. The good news here is that we believe we have exited the pandemic with a much stronger and healthier business, with substantially higher profit margins and significant development in our product portfolio, particularly with regards to the integration of our audio solutions into our interactive panels. In terms of Q2, order intake was $51.2 million, down 37% year-on-year, with 54% being derived from the US, 41% from EMEA, and 5% from Asia-Pac. Interestingly, despite order intake being down 37%, our market share for interactive displays remained relatively consistent, with our EMEA market share increasing marginally from 5.5% to 5.8% and our US market share increasing from 5.8% to 6.4% during H1, according to data from FutureSource. The bottom line is that we continue to make modest gains in market share despite the significant drop in order intake and revenues across the period. Some of our key orders in the U.S. included $7.2 million from Bloom, $6.7 million from GDI, a U.S. distribution partner, $2.8 million from Data Projections in Texas, and $1.3 million from Digital Age Technologies. Overseas, we had some excellent orders, including $2.6 million from ASI in Australia, $1.8 million from Camamundi, our partner in Puerto Rico, $973,000 from Avion Interactive in Finland, and $961,000 from IDMS based in the UK, to name a few. Our new generation of Google-accredited screens will start shipping this quarter, and orders have already exceeded expectations. We've had some great wins in Germany, where Clevertouch have been officially awarded the kid tender for 2,600 Clevertouch Lux screens, including carts. This is one of the first large-scale deployments of the new Google-certified screen in Europe. In the UK, Clevertouch won the Welsh DPS tender with IDMS for approximately 3,000 screens to be deployed over the next 12 months. In the US, we had some fantastic audio wins. In Texas alone, we booked more than $1.7 million of audio deals featuring our Easy Room solution, working closely with our partner, Pirano Consulting. We had a fantastic win at a limited school district in Washington State with our partner ACT. We also received orders for our Google-certified EDLA panels from various partners, including data projections, and took early orders for our new digital signage displays, the DS series, from various partners, including VAT. Student safety continues to be a huge issue, particularly in the US. Our attention solution, which integrates our Front Row Campus solution with our Mimeo and Clevertouch interactive panels is a game changer and is the first student-based audio solution capable of this level of integration. It enables teachers to give audio alerts and visual alerts on both interactive and non-touch panels instantaneously across the campus. The solution is gaining traction and we hope to announce some significant wins for attention in the next quarterly course. In summary, Q2 order intake and revenues were down, but our profitability in terms of gross profit percentage and adjusted EBITDA continues to improve. Our expectation is that we will return to growth in order intake during Q3 and revenue growth in Q4, as there remain significant funds available for education establishments to invest in technology. With that, I will now turn the call over to our CFO, Greg Wiggins.

Thanks, Mark, and good afternoon, everyone. I will now review our second quarter results. Revenues for the three months ended June 30, 2023 were 47.1 million as compared to 59.6 million for the three months ended June 30, 2022, resulting in a 21.1% decrease and was due to lower sales volumes across all markets. Taking a closer look at our sales breakout for the year, EMEA revenues totaled 36.6 million or 41% of our total revenues. America's revenues totaled $48.8 million, or 54% of our total revenues, while revenues from other markets totaled $2.8 million, or 5% of our total revenues. Our top 10 customers represented approximately 41% of total sales, with the single largest customer at approximately 15%, and are based across a number of markets, namely the US, UK, and other European countries. Approximately 60% of total sales are covered by the top 20 customers. Hardware comprised the largest proportion of total revenues at approximately 92%, of which approximately 69% related to our flat panel displays, with the balance related to classroom audio solutions and device accessories. The balance of our total revenues are comprised of software, professional services, and STEM solutions. Gross profit for the three months ended June 30, 2023 was 17.8 million as compared to 16.8 million for the three months ended June 30, 2022. Gross profit margin for Q2, 2023 was 37.9%, which is an increase of 970 basis points over the comparable 2022 quarter. Gross profit margin adjusted for the net effect of acquisition related purchase accounting was 39.1%, as compared to 30.2% as adjusted for the three months ended June 30, 2022. The improvement in gross profit margin in Q2 2023 compared to the prior year quarter is primarily due to lower manufacturing costs and continued reductions in freight costs over the prior year period. Total operating expenses for Q2 2023 decreased slightly to $15.8 million compared to $16.0 million in Q2 2022. Other expense for the three months into June 30, 2023 was a net expense of 2.6 million as compared to net expense of 0.8 million for the three months into June 30, 2022. The increase in other expense was primarily due to gains recognized from the change in fair value of derivative liabilities of 184,000 in Q2, 2023 compared to gains of 1.5 million in the prior year quarter, coupled with an increase in interest expense of approximately $0.3 million quarter over quarter. The company reported a net loss of $811,000 for the three months ended June 30, 2023, as compared to net income of $26,000 for the three months ended June 30, 2022. Net loss attributable to common shareholders was approximately $1.1 million and $0.3 million for Q2 2023 and 2022, respectively. After deducting the fixed dividends to Series B preferred shareholders, of $317,000 in both 2023 and 2022. Total comprehensive income for the three months into June 30, 2023 was $0.9 million compared to total comprehensive loss of $4.6 million for the three months into June 30, 2022, reflecting the effect of foreign currency translation adjustments on consolidation with the net effect in the quarter of approximately $1.7 million gain and 4.6 million loss for the three months into June 30, 2023 and 2022 respectively. EPS loss per basic and diluted share was 12 cents for Q2, 2023 and 4 cents for Q2, 2022. EBITDA for the quarter ended June 30, 2023 was 4.5 million as compared to 4.8 million EBITDA for the quarter ended June 30, 2022. Adjusted EBITDA for Q2, 2023 was 5.4 million as compared to $5.2 million for Q2 2022. Adjustments to EBITDA include stock-based compensation expense, gains losses from the re-measurement of derivative liabilities, gains losses recognized upon the settlement of certain debt instruments, and the effects of purchase accounting adjustments in connection with recent acquisitions. EBITDA for the six months ended June 30, 2023 was $6.4 million as compared to $4.4 million for the six months ended June 30, 2022. Adjusted EBITDA for the six months ended June 30, 2023 was $8.7 million as compared to $6.4 million for the six months ended June 30, 2022. Turning to the balance sheet, at June 30, 2023, Box Light had $15.6 million in cash, $64.8 million in working capital, $37.8 million in inventory, $182.3 million in total assets, $47.2 million in debt, net of debt issuance costs of 4.5 million and 50.9 million in stockholders' equity. On June the 14th, 2023, we completed our 8 for 1 reverse stock split, which reduced our Class A common shares authorized to 18.75 million and Class A common shares outstanding to approximately 9.5 million shares, allowing us to maintain compliance with the $1 minimum per share requirement by NASDAQ. At June 30, 2023, BoxLight had 9.5 million common shares issued in outstanding and 3.1 million preferred shares issued in outstanding. We continue to strategically review our capital structure and use of free cash, including but not limited to paying down debt, executing on our share repurchase program, and finding more attractive financing arrangements to replace our current facilities. We believe that cash flow from operations will continue to support our ongoing operations without the need for additional equity or debt financing. With that, we'll open up the call for questions.

Thank you. At this time, we will be conducting a question and answer session. If you would like to ask a question, please press star 1 on your telephone keypad. A confirmation tone will indicate your line is in the question queue. You may press star 2 if you would like to remove your question from the queue. And for participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys. One moment please while we poll for questions. Thank you. Our first question is coming from Brian Kingslinger with Alliance Global Partners. Your line is live.

Hi, good evening, guys. Thanks for taking my questions on solid gross margin EBITDA. My question is, after the solid EBITDA results during the first six months, you've generated roughly 8 million, plus or minus. What are the puts and takes that resulted in in that six-month timeframe of having $3 million more of debt and about the same cash. Over that time, almost $20 million less of inventory. I'm just curious when we can expect to see greater cash conversion from these results.

This is Greg. Thank you for the question. I think some of what you see in the first six months of the year is timing related. Typically from a cash perspective, the company sees a greater amount of cash rolling in the second half of the year as we get past our busier months of the year, calling that Q2, Q3 timeframe. So as those sales, you know, the cash comes in related to those, typically see a lot more cash inflow in the second half of the year. Early in the year, call it in the, you know, late Q1, early Q2 timeframe, is seasonally our lower cash months of the year as we are coming off, of course, typically lower quarters from a sales perspective, but also ramping up for inventory for the busier summer months. So that by and large is typically where you see a lot of the cash fluctuations come in. Now with respect to inventory, specifically in our levels, You see that our inventory levels did decrease significantly even from year end, and that's really due to a couple factors. One, it's really maintaining optimal inventory levels consistent with the sales that we were seeing as the year progressed, which were a little lower than they were in the prior year, but also optimizing our inventory levels following kind of the supply chain issues that were had in the immediate aftermath following the pandemic. So as there were delays in the past in the supply chain, there was more of a demand to want to increase and have appropriate inventory levels to meet sales as they were generated. But as we've seen a lot of that subside and then again, normalizing our inventory to kind of mirror our current sales demands. That's kind of reflecting the inventory decrease that you're seeing.

Hey, Brian, I would add one quick thing. You're looking at cash and you're looking at inventory, but really you'll see working capital improve. Working capital at quarter end was $65 million. You have to look at the rest of kind of current assets, current liabilities. One item, for example, if you look at accounts payable from December 31-22, AP was at $37 million versus at quarter end June 30, it was $21 million. So if you look, I think you're better off rather than just looking at, you know, cherry picking cash and inventory, for example, you have to look at that whole working capital bucket because it's all interrelated. AR, AP, inventory, cash, all interrelated.

So assuming to your comments in the second half of the year cash flow is better, are there any restrictions from you paying down debt? Companies micro-caps right now with lots of debt clearly aren't generating any meaningful valuation or equity? Is that something that is a high priority for you?

Absolutely, Brian. Well, I was just going to make a quick comment. So, we paid down $3 million post-quarter end, right? So, we paid down another $3 million of our debt. And so, we're moving in the right direction. Currently, our current facility amortizes at 5% down per year. So, at a minimum, we're paying just that regular debt amortization, credit amortization of 5% per year. but that's actually something we're looking at. But I would point out one additional thing. In addition to the debt going down, but our profitability is going up. And so, you know, that ratio is quite important. And if you look at our debt leverage, our EBITDA, you know, debt to EBITDA ratio, that's been improving pretty dramatically. At quarter end, we were about 2.4, you know, versus we were almost four if you just go back a couple quarters. And we think that'll improve as the debt goes down, but also as profitability increases.

Absolutely. All for more profit, even if you're a smaller firm. And then last quarter, you talked about year-end budget plushes gave you confidence that orders would be up year over year in the second half of the year. Does seeing how orders and revenue played out during the second quarter give you slightly less confidence in order growth and that it will recover in the second half of the year? And then maybe you can help us understand how things have begun to trend in July and August.

Do you want to start?

Maybe I'll say a couple of things. Yeah, yeah. Let me start. You can jump in and add a little more color. Yes. So first off, clearly, order intake lagged quite a bit more than we expected, starting with the second half of last year. And so lagging orders in the second half of last year resulted in lower revenue, both say Q3, Q4, but also rolling into Q1, Q2. But the reason we're optimistic for the future, there's a couple of things that make us optimistic. The first is that we're seeing our internal pipeline grow. And, of course, that improves our optimism. But also, we're seeing the order intake ramp. We're starting to get more and more orders, and we're seeing that. Now, that revenue doesn't show up until later, right, once we receive the orders. But we believe, you know, based on what we're seeing now, that Q3, we will see a growth in order intake, as Mark shared in his part of the beginning of the earnings call. So, expect order intake increase Q3 which will result in, we think, growth in Q4, leading us into next year. But beyond just our internal metrics we're looking at, you know, also we get external data, and that includes, that's included from industry data, which industry data is showing that they think that there's a bounce back and we're going to see growth end of this year into next year. But then also talking to our large resellers, which many of which are much larger than we are, they're seeing the same thing. They're seeing pipeline growth. order intake growth, and our large manufacturers who supply us and potentially supply others in the space, they're seeing the same thing. So I think across the board, what we're seeing internally, also we're hearing about externally, does support that we're going to start to see that, and we're seeing the beginnings of that internally right now.

Thank you. Two more questions, and then I'll go back in the queue with more. First, the demand environment. Can you speak to forward-looking on U.S. versus Europe? which do you see driving that aura growth over the next six months? Is it a clear-cut winner one over the other?

That's a very good question, actually, Brian. It's very hard to say. I think typically we've historically seen some really good growth in the U.S., but there's some big tenders out there as well in the next six months in Europe, particularly in Spain and in Germany and parts of Eastern Europe. So I don't think it's clear-cut it's all coming from the U.S. or it's all coming from the EMEA. I think it depends on the specific people that we're actually working on. We've just recently won a very large deal with the U.S. and a very large deal with EMEA. So they're kind of balancing each other out. So overall, I'd say it's a good mix. Great.

Last question for me. The gross margin, I've been covering you for a long time. You've done a great job of getting where it is. There's no doubt. Last quarter, you talked about some credit pricing pressures long term. Can you help with your term expectations to the next 12 to 18 months versus what you think sustainability long term? Can you sustain these for the next several quarters before pricing pressure eats in or do you think that is not feasible?

Yeah, I think that, I mean, 12 to 18 months, it's hard to say looking at that far. I do think we're going to see some erosion of gross profit margin definitely over 12 to 18 months. I think we have a couple quarters of holding it relatively steady. We may see it go down a couple points, especially if we win some of these larger tenders. Generally, the larger tenders are a lot more price competitive. And for us to win those tenders in their large quantities and for us to win those tenders, we have to come down on pricing. So if we're successful in some of these large tenders, both in the U.S. and internationally, that will erode the margin some. So I think, you know, if we were forecasting out a couple quarters, we think we may lose a couple percentage points. But if you're going out much further than that, you know, I do think that longer term on our core solutions, we are going to erode back down to around 30 points is what we would have expected. If you went back a few quarters, we thought we'd be around 30 points today, and we've benefited from a lot of different factors, but I think that is closer to run rate with our core products today that we're selling. But we've talked about in the past, and we'll continue to talk about it, that long term, we think that that gross profit margin can improve as we sell high margin products, which we're working on and we're pushing. They make up a smaller percentage of our total business today, but we think out a couple years, those other solutions that are high margin, including software and professional services and some of the accessories we saw that are high margin in STEM solutions. As we do better with those solutions, we're going to see the margin potentially start to creep up. And then the other thing we've talked about, which we'll continue to talk about, is the enterprise vertical. The enterprise market is less price sensitive, and that is higher margin. And today it's a small piece of our business, less than 5%, but we think in the future it could be much more substantial. We've been investing in enterprise vertical, and that's going to allow us to be able to improve that gross profit margin. So, again, I think in short, you know, over the next couple quarters, we're going to probably erode a couple points. You know, we'll see. And then looking out maybe a year or so, then maybe come down a little bit more. But if you're looking at multiple years, I think we can improve on where we are today.

Thank you so much.

Thanks, Brian.

Thank you. Our next question is coming from Jack Vandarada with Maxim Group. Your line is live.

Okay, great. Thanks for the update, guys. Solid gross margin EBITDA results for sure. A couple questions, maybe just because I missed it, just to reiterate the guidance. I heard the third quarter revenue in EBITDA of $60 million and $10 million. And then the second half 23 revenue guide of $110 million. Did you mention second half adjusted EBITDA?

I think we did not guide to second half adjusted EBITDA. Yeah, we just guided only to Q3. But, you know, I think you could probably extrapolate, you know, roughly what, you know, assuming we come in at the Q4 revenue, then we will be up on adjusted EBITDA year over year given the higher gross profit margins.

Okay, great. And then just one more thing to reiterate, just because I missed it, was your market share gains. I think I heard in EMEA for the first half of the year that increased to 5.8%. And I missed what you said about the U.S. Did the U.S.

market share increase again into what percent? It did. We looked at the numbers across the half. So in the U.S., we went from 5.8% to 6.4% for H1. We were looking at the half-year numbers for both EMEA and the U.S. Okay, great.

Fantastic.

Um, so no, no, Jack, that, that, that is on interactive displays, right? Which make up about 70% of our business. Um, so, so we're only providing market data really on that segment of our product line.

Yep. Understood. Understood. I appreciate the clarity there. Um, but, but nonetheless, good, good work and good momentum there. Um, and then just in terms of maybe if I, if I circle back to the overall revenue slowdown, You mentioned lower sales volume across all markets, but are there any more specific factors you can point to that cause maybe a slower top line and just a pace of new order intake than you were previously expecting, whether that be by geo or corporate-first education, any of your subsidiary businesses, maybe Front Row versus Sahara, just whatever else you can provide, or was it really indeed an overall just general slowing of volume orders?

Jack, my overall view on this is genuinely that there is a kind of a hangover from the issue to do with COVID and the fact that, you know, the supply chains were impacted so much that so many customers, end users, partners were buying, you know, like, okay, you know, there's problems on the supply chain. Let's make sure we order plenty. And I think we've had the hangover from that, and it started Q3, it started this time last year, it started in Q3 last year, and it's kind of worked through. And I definitely see it's a much more normalized environment now. So, and it's been, you know, it's kind of a big decrease in order intake, and yet our market share is increasing slightly, because it's, you know, it's definitely a problem.

Yep, understood, understood. Okay, that's helpful. And then maybe just, you know, I want to emphasize the point that's probably the most important is that you do expect order intake to return to growth in the third quarter, revenue to rebound in the fourth quarter, and then you expect meaningful growth in 2024. One question to the drivers of 2024 growth and your confidence in that. How does the government funding those programs, how do they play a role in that? Is that a factor they expect to help drive? a return to growth in 2024? What's the status of the government funds?

Absolutely, that's part of the driver. I think the biggest reason for the growth will just be, to Mark's point, the return to normality in buying cycles. There's been this lull that Mark talked about, and once that lull is behind us and we're back to regular buying, we expect steady growth in ed tech spending as we've seen in the past. And keep in mind, you can go back post-2000 and post-2008, and there were lulls after that. And then once buying returned, it was steady growth again. And so, and before I talk about special money, which, you know, there were a lot of special funding that came into education, but just run rate education budgets have generally not declined across the board, including in the U.S. You know, if you look at public school budgets in the U.S., about half of that funding comes from property taxes. You know, property taxes, property values are still quite robust. In fact, they went up substantially right post-COVID. And then the balance of the budget comes from state and federal funds. And those generally have not decreased either. So schools have funding. They're still allocating that funding to technology spend. And that allocation is not declining. So the money is absolutely there. And that's true if you talk about most of Western Europe and other countries as well. Now, beyond that, there has been a lot of special funding. We talk about the ESSER funds in the U.S., which was nearly $200 billion allocated to education. There is still a large chunk of that that hasn't been spent, and those funds that have not been spent are going to expire end of 2024. And so we do think there's going to be a little bit of a jump in spending there. But other countries have also allocated substantial spending. You know, Germany is a good example where they allocated substantial spending, you know, with their digital PAC. There's others as well, but I would say, Yes, there is federal monies, both in the U.S. and other government monies that are going to help drive, but I think the bigger thing that's going to drive growth is back to normality and regular spending of technology budgets on a go-forward basis, barring another disaster or something else that happens.

That's a helpful color. And then maybe just one more question, kind of given that your cash balance is Can you provide an update just on the share repurchase program and any thoughts there you can provide, share price, where the share price is at relative to the cash you have on hand and liquidity? I mean, do you have any update there?

Yeah, yeah, yeah. So really we're in the same place we were last quarter in that we absolutely plan on utilizing the stock repurchase program, something we're definitely looking at. We mentioned after last quarter was something we're going to evaluate second half of the year. So it's going to be something we're going to be evaluating in the next few months. And it's really a function of cash flow. You know, as we generate more cash from operations and we can look at how do we utilize that cash to drive shareholder value, some of that will be we'll look at growth in the business. You know, we'll look at reducing our debt potentially, as Brian Kinchlinger brought up. But then also we will look at that share repurchase program. You'll notice that cash from operations for Q2 is slightly positive. And so, you know, we're starting to go in the right direction. But also, you'll note that last year we generated, I believe it was $7 million in cash from operations in the second half of the year, which is typical that we're going to see that heavier cash from operations in that second half. The same thing will be the second half of this year. We're going to see, you know, a larger flood of cash coming in Q3, Q4. And as that comes in, we're going to evaluate that as a management team and, of course, as a board of directors of how do we best utilize those funds to drive value. And one of the questions that will be on the board every time will be, is it time to utilize the cash repurchase program or the stock repurchase program?

Okay, great. I appreciate the color, guys. Great to see the momentum building and the return to growth on the horizon. Thanks, guys.

Yeah, appreciate it. Thank you. We currently have no further questions at this time, so I will hand it back to Mr. Pope for any closing comments he may have.

Well, thank you, everyone, for your support and for joining us today on our second quarter 2023 conference call. We look forward to speaking to you again in November when we report our Q3 2023 results.

Thank you. This concludes today's conference. You may disconnect your lines at this time, and we thank you for your participation.