Boxlight Corporation

Good afternoon and welcome to the BoxLight Corporation third quarter financial results call. At this time, all participants are in a listen-only mode. A question and answer session will follow the formal presentation. You could submit a question via the web at any time by typing them in the ask question field. Type in your question and hit submit. For questions from the phone lines, you may press star 1 to access the queue. Please note that this conference is being recorded. I will now turn the conference over to our host, Jeff Stanliss of FNK IR. You may begin.

Thank you, Operator, and thank you, everyone, for joining. Earlier today, BoxLight issued a press release providing an operational update and discussing financial results for the third quarter ended September 30, 2024. This release is available on the Investor Relations section of the company's website at www.boxlight.com. Hosting the call today are Dale Strang, Chief Executive Officer, and Greg Wiggins, the company's Chief Financial Officer. Before we begin, I would like to remind participants that during the call, management will be making forward-looking statements. These statements 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. The company does not undertake and specifically disclaims any obligation to update or revise such forward-looking statements to reflect new circumstances or unanticipated events as they occur, except as required by law. And with that, I'd like to now turn the call over to Dale Stray, CEO of BoxLight. Dale, the call is yours.

Thank you, Jeff, and thank you to everyone for joining us today. Over the past several months, BlockSlide has proven its ability to efficiently operate in what is a challenging environment while still positioning the company to thrive in anticipation of improved market conditions. We're continuing to align our expenses with our current revenue levels, and we're effectively communicating our strategic advantages to the market while simultaneously strengthening our product and solution suites. Primary goal of the company is to clearly and effectively deliver increased value to our partners, customers, and stakeholders. We're laser focused on simplifying our business and our solutions, our messaging, and ultimately having that be reflected with more efficient operational expenses. A current example of this focus, we are simplifying our brand structure in which our major product lines will be organized under three solution categories. Our worldwide IFPD and display products will all be under the Clevertouch label. Front row will be our global brand for all audio and communication solutions, while our STEM solutions, curricula, software, professional development will continue to feature Mimeo and EOS identities. Everything we do will carry the quote-unquote buy BoxLight umbrella company brand. We'll be rolling these changes out through the first half of 2025. Among the benefits of these moves, we now have the ability to offer the highly regarded Clevertouch IFPD brand to our entire market, specifically the US and Americans. We'll have a unified product lineup and a unified roadmap for our entire customer base globally. We'll have a simplified supply chain and logistics mechanisms, all while leveraging the Clevertouch front row and Mimeo brand equity that's been created by decades of dedicated market presence. We believe this clarity and expanded opportunity for our sales partners will provide flexibility, a heightened focus, and will benefit our partners and customers alike. We plan these adjustments carefully with the needs of these customers and partners top of mind. All services and warranties will remain exactly as our customers have come to expect, and the new user experience we provide will be the best of the best in technology with ease of use in mind so users can select a user experience that's familiar to them. We've had preliminary conversations with partners about these plans to consolidate, and it's been very well received. Our internal teams share this enthusiasm. So streamlining our brands and products is critical to our long-term success. Equally critical is a constant attention to building on what is the most robust end-to-end suite of solutions in our industry. BoxLight's broad portfolio gives us a significant competitive advantage against other players in the industry who often participate in one or maybe two areas, and often with an inferior set of solutions. Here's one example of our ongoing focus. We recently launched the new upgraded Impact Max 2 interactive panel. This panel comes with upgraded storage, an exclusive chipset for a faster, more intuitive display, and a unique first-of-its-kind multi-configuration UI, all at a very competitive price point. We will have a number of product line expansions to announce in the months and weeks to come that will support both our education and our enterprise customers' modernization efforts. BoxLite solutions continue to win industry acclaim. Recently, our CleverTouch Edge won a prestigious ProAV Best in Market Award for 2024. We also achieved an important Cyber Essentials certification, demonstrating our commitment to product safety and security across our whole product line. I'd also note that, as expected, our new front row Unity and front row TimeSign solutions, which I discussed on our last call, are now shipping. Both products support another important growth opportunity for BoxLight pertaining to school safety and communications. And as such, we're receiving very positive, encouraging feedback. As we continue to expand the ecosystem of compatible BoxLight audio and video solutions, We're giving customers a simple interface to communicate broadly or narrowly to address threats and improve school-wide communication. As part of this, we're adding integration partnerships between BoxLight and major third-party emergency management platforms, and we expect to add additional related platforms in the months to come. I believe we're better positioned today than we were at the beginning of 2024. We have a more robust suite of solutions, a more streamlined go-to-market message, We've expanded our sales channels, we've deepened our offerings, and we're aligning our teams. But IFPD demand remains soft versus prior periods, particularly in some of our largest markets, particularly in the U.S. Europe has been notably stronger than the U.S. For example, returns in Germany and Belgium in Q3 were up 29 percent and 18 percent, respectively. And this benefits us. due to our global presence. But as I said, we're aligning all of our resources with our current revenue reality, all while strengthening our business for the better days ahead. This will enable us to meet our profitability targets despite persistent revenue headwinds. We're bullish on the long-term outlook for our market. Our classroom solutions featuring campus communications convergence, addressing school safety and security needs, Our ever-improving digital signage platform and our growth in higher ed and enterprise markets all represent growth areas that will only enhance our core position in K-12 interactive classrooms. As I've said, this progress will likely not be linear, with challenging market conditions making quarter-to-quarter volatility an ongoing reality. But we are on the right path. With that, I'll now turn the call over to Greg to discuss our third quarter results.

Thanks Dale and good afternoon everyone. Before we review the financial results for Q3, I want to provide an update regarding our debt facility and our ongoing plans to reduce operating costs. Earlier this year, our current lenders provided a $4 million bridge loan to help meet the company's short-term seasonal working capital needs. As stated on previous earnings calls, our operations are seasonal with Q2 and Q3 being our busiest periods. and the additional liquidity ensured that we would have the necessary inventory on hand to meet our customer's demand. These amounts were required to be repaid by the end of November, 2024. We are pleased to announce that these amounts have been repaid in full. Aligning operating expenses with operational performance continues to be a priority. In late Q1, we announced that we would target an annual operating expense run rate of 12 to 13 million per quarter and we are expecting to achieve that target by the end of 2024. However, the prolonged industry softness requires that we continue to manage operating expenses to align with current revenue demand. To that end, we are actively identifying additional savings across our organization, and we plan to share with you more detail of this initiative on our next earnings call. Now turning to our third quarter results. Revenues for Q3 2024 were 36.3 million, as compared to 49.7 million for Q3 2023, resulting in a 26.9% decrease. EMEA revenues comprised approximately 49%, or 18 million of our total revenues, America's revenues totaled approximately 48% or $17 million of our total revenues, while revenues from other markets totaled approximately 3% of our total revenues. Flat panel displays comprised approximately 72% of total revenues. Audio solutions comprised 12% of total revenues, with the balance of our revenues comprised of device accessories, software, professional services, and STEM solutions. Gross profit for the quarter was $12.3 million, as compared to $18 million for the prior year period. Gross profit margin for the quarter was 33.8%, which is a decrease of 250 basis points over the comparable three months in 2023, and is the result of competitive pricing pressures and changes in sales mix between IFPD and audio products. Total operating expenses for Q3 2024 were $13.1 million, compared to $29.6 million in Q3 2023, or $16.4 million in Q3 2023, excluding non-occurring goodwill impairment charges. Other expense for Q3 2024 was a net expense of $2.2 million, as compared to net expense of $3.1 million for Q3 2023. The majority of other expense is related to interest expense on our current credit facility and gain loss on foreign currency exchange. The company reported a net loss of $3.1 million or $0.34 per basic and diluted share for the quarter as compared to net loss of approximately $17.8 million or $1.90 per basic and diluted share for the prior year quarter. Adjusted EBITDA for Q3 2024 was $2.2 million as compared to $4.9 million for Q3 2023. Adjustments to EBITDA include stock-based compensation expense, severance charges, gains losses from the re-measurement of derivative liabilities, goodwill impairment charges, and the effects of purchase accounting adjustments in connection with prior acquisitions. Turning to the balance sheet, at September 30, 2024, BoxLight had $10.5 million in cash, $45.8 million in working capital, $42.3 million in inventory, $141.5 million in total assets, $38.8 million in debt, net of debt issuance cost of $1.3 million, and $6.5 million in stockholders' equity. At September 30, 2024, Fox Light had 9.8 million common shares issued in outstanding and 3.1 million preferred shares issued in outstanding. Subsequent to quarter end, the company paid down $0.5 million additional principal on its term loan, including the remaining amounts due under the short-term borrowings from Q2 and Q3 2024. Our current term loan balance is $39.3 million. With that, we'll open up the call for questions.

Certainly. The floor is now open for questions. If you have any questions or comments, please press star 1 on your phone at this time. We ask that while posing your question, you please pick up your handset if listening on a speakerphone to provide optimum sound quality. Please hold just a moment while we poll for questions. Your first question is coming from Brian Kinslinger with Alliance Global Partners. Please pose your question. Your line is live.

Excuse me. Thanks so much. I've got a couple of questions. As you consolidate to one brand, CleverTouch, what is the impact on your exclusive channel partner agreements, if at all? And if the CleverTouch brand, I think you said, isn't that widely sold in the U.S., do you see losing any market share before you educate the market and then regain share?

Thanks, Brian. That's a great question. And it's just a, maybe I can answer it. This is Dale. A few things. CleverTouch has been established in the U.S. for years, but on a limited basis. We had a series of exclusive CleverTouch relationships that both predated and post-dated our acquisition of that company about four years ago. But it's what we view this move as a way to expand the CleverTouch reach. And we're actually hearing from people that have wanted to, let me back up. We've addressed the exclusivity provisions with our channel partners and settled them perfectly amicably. Everybody, in one case, we had a partial state by state exclusive for CleverTouch with one major reseller. And what this move allows us to do is to make CleverTouch available to all their market, not just the limited geographic region in which we had that carved out. Secondly, the worldwide mind share that CleverTouch enjoys has already been present in the U.S. for quite a long time. And we've We found that worldwide brand equity is translating really well in these conversations. So we view it as an expansionary move without short-term market share risk. The one thing that you alluded to that I think is important is we aren't orphaning the people who have chosen Mimeo over the course of our box-like days. It's actually the opposite. The products that we're shipping as we go through this transition will give those customers the opportunity to choose at the time they install and first provision their device to run it with the same Mimeo software stack and and UI experience that they're used to, or they can choose the CleverTouch one. It's a toggle that we've engineered and spent some months doing. So we've got that in addition to the fact that all the same support, warranty, and other coverage will be there. It makes us feel really good about this transition. All right.

So you can still buy Mimeo. It'll just be under a different brand name.

Yeah. Yes. These panels have – been in close resemblance to each other in terms of the hardware itself, the functionality, the chipsets, and so on. And there's been some minimal differences. And in the case of preferences for how people have it look and feel and what they're used to using for software, we're addressing that. But by having one supply chain and one product pipeline, we're going to eliminate conflicts in our supply logistics, but also in our sales conversations. And I think that that's going to be a really good move towards clarity.

Great. Second question I've got, especially as it relates to the U.S., what do you attribute the market shrinking so quickly to? Is it there was so much spending that we're in this kind of pause phase for K through 12 to be buying technology? I guess I'm just curious why in the last year and a half or so we've been on this, you know, deep decline.

It is a global phenomenon. It's exactly what you described. It's just a period of heavy spending packed into an 18-month, two-year period has just led to a sort of hangover of the amount of money that's available to school districts around the country. And this situation is more exacerbated. There are more glaring, I think, in the U.S. and elsewhere. One other point that I think the industry didn't know and is learning is that these devices are really well engineered and really well built, and they last really long. And so what the refresh cycle or the replacement cycle that people were anticipating to not only, never mind adding to their existing footprint, but simply upgrading and updating the products they have installed, it in a favorable way for schools, in a way that these products are lasting and are more bulletproof over time than anyone anticipated. The good news for us is that the commitment educators have to interactive flat panels as a really keystone technology for education and student empowerment So that isn't wavering. It's just a question of, I think it's almost a question of timing, both for budget availability and for sort of glaring need that we think is going to be mitigated in the months to come.

Two more questions. The first one is, Dale, you used the word bullish on, I believe, the market opportunity or the business. I guess in the face of this multi-year weakening demand trends, What makes you bullish? And do you have any insight maybe on how long this downturn might last?

Well, we have our own observation and our own customer and partner conversations to lead us that way. We also have a lot of history. Clevertouch, BoxLight, and FrontRow have been around 20, 25, and almost 40 years. So, it's not a cyclical business that we're unfamiliar with the ups and downs of. That's one point. Second point is, when I say I'm bullish, I'm bullish that we can not only enjoy the cyclical rebound when it happens and the outside researchers indicate that that will begin Although, we're seeing some signs of it already this year in pockets, particularly in EMEA. But it's also just conversational. We have had a lot of anecdotal conversations of school districts or partners that have anticipated efforts or initiatives this year, all year, that are now starting to come into clarity for next year. We're cautiously optimistic in the short term. We're bullish in the longer term because we think these industries and the way they relate to each other, as well as the growth factors we've identified that are adjacent to our core market, all add up to a robust long-term future for the company.

My last question is for Greg on the balance sheet. You highlighted the $4 million bridge loan is repaid. When I go through your press release, you mentioned not being in compliance with your senior credit agreement. I think that's different. And so are you not in compliance right now? And maybe if so, talk us through, you know, what, what negotiations are like right now there and when you expect to, to, uh, get a waiver or an amendment.

Sure. Yeah. So these are, these are two different issues, uh, uh, to, to think about. So earlier in the year we did, uh, receive a $4 million, um, a smaller amount bridge loan just to meet seasonal working capital needs or busier periods or in the summer months. That $4 million was to be repaid by the end of November of this year, and we have actually repaid the $4 million early. So that obligation has been satisfied. Your reference to working through a waiver with our lender, so that is in relation to a senior leverage ratio covenant that's contained in our agreement and was not met for Q3. We're in the process of finalizing a waiver. We do not anticipate there being any difficulty in obtaining it, but just in the sense that it hasn't been finalized as of today, there could always be a chance something you know, we'll not be able to finalize, but we don't expect that. We've maintained good relationships with our lenders. So, you know, we have every expectation that, you know, we'll finalize that in the very near term.

Sorry, I just want to follow up to that. Can you remind us what the interest coverage ratio that was tripped needs to be at? And then do you foresee any penalties that you need to pay?

Yeah, so on the leverage ratio, the required covenant was 1.75 times. And our original credit agreement, as most do, have stepped down over time. As we've said on our prior calls, we are actively looking to try and refinance our debt. So we're working through that. Um, but, but obviously 1.75 times, you know, at the, for the current, uh, trailing 12 month periods, a, uh, very, you know, it's a, it's a low, low bar. So, uh, something that was going to be difficult, uh, to, to clear, you know, as far as the remedies are concerned, you know, in terms of, uh, what, you know, a potential waiver will look like, you know, we can't comment on it this time. Um, but we don't expect it to be anything that, um, you know, we, we wouldn't be able to fulfill on our part as an obligation. I think where, you know, as a big picture, I think, you know, the company's been able to pay down a significant amount of debt earlier than anticipated, you know, such that our debt balance is under $40 million, which I think we're, you know, very pleased with at the moment. So, yeah, to answer your question, I don't think any requirements that might be needed for us to finalize this waiver is going to be something that the company won't be able to fulfill.

Okay, thank you.

Once again, if you do have any questions or comments, please press star 1 at this time. Your next question is coming from Jack Vanderaard with Maxim Group. Please pose your question. Your line is live.

Okay, great. Hey, good to see you guys continue to tame the OpEx line items despite this kind of tough revenue market for you guys. But thanks for the update and taking my questions. So, Dale, you know, historically, I'm just wondering if I can just get your, get a sense here for a sanity check. You know, historically, the third quarter has been the seasonally strongest quarter for the company. I know there's a lot of moving parts involved in the market. But, I mean, do you have a line of sight of maybe when you'll see stabilized sales trends? Or are we just still just not at that point yet? Because eventually I want to get a sense of, do you have any line of sight of when you may return to year-over-year growth? You said any color would be helpful.

Yes. I think there's multiple answers, I think, Jack. Nice to chat with you. One is the Americas and EMEA are really different stories in terms of the trajectory. They're on the same overall trajectory. cyclical nature of the market, but with different bumps and valleys, as you can imagine. A couple things about the U.S. market that I think are, that really differentiate. A lot of our, and you're right, Q3 has traditionally been, and it will be, again, we think next year will be a traditional seasonal cluster of revenue. What has changed, I think, this year and to some extent last year, was that was really driven often in the past by large purchases by a handful of districts. And these whopping where people have taken months and quarters to line up their funding, but then they finally get the funding and they say, okay, we're gonna spend millions of dollars and we need it all right away. That has not been present this year, largely for the, the kind of for the reasons we talked about before that the the funding is difficult and it is it takes a lot of time uh and the bonds are being delayed that has happened more so this year than any year in the past in some of the markets in europe it's entirely different and or in some cases just mildly different but um it's been less driven by these large large tenders with some exceptions and um but has been the same overall function. If the public money's there, then the spending happens. So I guess the best way to answer your question is that seasonality was particularly, the seasonality deviation was particularly strong this year. That's largely due to overall funding pressure, but especially funding for large initiatives. And we see signs for that both from external sources and from our own conversations with partners as already beginning to ease in EMEA. And you can see some of our markets are up this year and some of them are, for instance, the UK is down single digits, low single digits year on year. So that's starting to mitigate already. US we expect will happen next year.

Okay, great. That's helpful color. I appreciate that. And, you know, maybe, maybe it's too early to tell, but you know, there was a major us election here, obviously recently. And just wondering, have you, have you thought of your gross margins have been high? I mean, they kicked down a bit this quarter, but still they're stronger than historically, um, you know, over the, the large historical portion of box lights, uh, tenure here. So, you know, any, any thoughts, initial thoughts, and just how us tariffs might impact your existing strategy and manufacturing footprint. Just any color there would be helpful if you're thinking about it. Thanks.

Well, we've done with it before. We've done with it before, and so it's not an entirely new dynamic for us. First of all, no one knows, right, what sort of stuff is going to emanate as a result of the election. I will say this, though. Our main suppliers who are China-based are well aware of this, as are we. We've been coordinating with them for months. about backup plans, about, you know, ways to mitigate in the event the tariffs come in really hard and really high. And we felt like we're well prepared to deal with that as well as anyone on the market. Specifically, it always depends upon, of course, which countries might be affected and what the nature of those tariffs might be. But we're not sitting and waiting for that to happen. We're trying to be ahead of it. And with our suppliers, I feel like we are. How it affects the school funding stuff, I think, is going to become more of a local and state issue. Maybe then, if you look at the boom that occurred during the pandemic, much of that was driven by large macro federal initiatives. I think what we're going to see is it's going to go back to being more local and more state. And that's going to be more driven by the demands of the parents, teachers, educators, and so on. I'm sorry, Greg, did you have something to add?

No, I think you covered it, Dale. I think the main takeaway is the fact that our suppliers have kind of experienced this before to some magnitude. And so there's been a lot of preparation that's gone into what might happen that might have happened with the election. So there's been a lot of advanced planning and certainly something we've been able to you know, try and get out ahead of with them to, you know, potentially mitigate any negative consequences that may come from it.

Okay. Well, I appreciate the color there, gentlemen. That makes a lot of sense. And maybe just one more for me, kind of more looking down the road here in terms of upside drivers. You know, higher education and enterprise have been kind of a smaller piece of BoxLight's kind of historical focus and run rates. And I think enterprise has been around 10% of the business, give or take. But you highlighted these as long-term growth areas and bright spots. So, Dale, maybe can you just provide any color on the enterprise and higher ed verticals? Just your perspective on the opportunities you see and how it may become a bigger focus of BoxLight in the future. Thanks.

Well, thanks, Jack. First, at a high level, we know there's more meeting rooms even today with the with a hybrid workplace than there are classrooms, right? So we know that there's lots of places where enhanced communication and technology can be deployed. And so we know the opportunity, and we also know that there's different buckets of money represented by both higher ed and corporate. And that can be SMB as well as pure Fortune 1000 companies. What's lacked from a box-like perspective over time has been in some markets, we haven't had the right mechanisms in place. We haven't had the right dealer relationships and sales relationships in order to really go out and speak with those people effectively. We've spent a lot of time walking before we run, but we're methodically building that. The other more critical piece is that We have product now that really matches the needs of enterprise, maybe more exactly than certainly last year. And by that, I mean things that have the sort of built-in conferencing features and high-end audio and video stuff present in our high-end panels that don't require additional equipment to make them highly functional. That's a recent development from us characterized by our high-end edge panel, which has been responded to very favorably in the market. And we're using as partially a guideline here our business in EMEA. In EMEA, we have somewhere around 20% of our business that comes from these end customers. And, you know, there are differences in terms of the channel partners we use, but we think that is positive, and we think it has a lot of growth. growth built in using both our success to date and also what we're learning in the U.S. and building on that. So we think it's going to be a slow growth thing. It's not going to be explosive, but we're going to do it methodically. And we think that it isn't as spot-on of it necessarily as K-12. That's going to remain at our core for quite some time because it's kind of really critical to classroom instruction, to interactive classrooms. But we think our upside there is very strong.

Okay, I appreciate the color. I'll hop back in the queue.

Once again, if you do have remaining questions or comments, please press star one at this time. You have a follow-up question coming from Brian Kinslinger with Alliance Global Partners. One moment.

Great. Thanks for taking my follow-up. You talked about pricing pressure as the market has been shrinking, and even as it starts to recover, Do you see pricing pressure being more pronounced as your competitors as well as yourself try to gain that market share back? Or do you see pricing pressures easing at any time in the next 12 to 18 months?

I was going to say, I'll start an explanation and then maybe Dale can jump in. You know, I think we're still seeing it, you know, at least in the, you know, in the short to midterm, you know, as there's competitiveness in a slower industry. You know, I think we, you know, we start to see this, you know, stabilize a little more in the longer term, you know, as we start to see the industry return to growth. You know, so I think there's, you know, I don't think we see this, you know, pronounced over the long period of time, but you know, maybe more of a short, medium-term, you know, type impact, you know, as far as the pricing pressures are concerned.

In the past... Go ahead, I'm sorry. I was going to say in the past, and this probably predates you guys, but the gross margin of this business was in the high 20s for a while. And so I'm wondering, are we headed back to like 30% range? at a sustainable basis, or do you think that's overstating what might happen?

I think there's going to be, there's going to be downward pressure in the IFPD market on certain deals and at certain timeframes. And that's not, I don't believe that's ever going to go away because the, because the range of products that we're bringing to market, we and our competitors bring to market is, is broadening right from, we're pushing the envelope as these technologies get cheaper to produce and more efficient. We're pushing the downward price entry point and we're pushing the upward price point and performance threshold, we and everyone else. I think the key though, and we're confident that we can continue to produce better than industry average margins for a couple of reasons. One is by having the by having the experience and the volume that we do with our provider, we're a top five provider of the biggest manufacturer of these devices in the world. We're going to continue to have buying leverage that's going to enable us to get the costs as low as they could be. Secondly, we, as well as anyone, understand the trade-off at some point between price performance and the desired efficacy of the product. And Smart buyers who are buying for the second or third time are recognizing that the absolute low end of it doesn't perform the way they need it to perform. It doesn't do everything they need it to do. And we work with our customers and our resellers to do that. And the resellers understand it as well as anyone. The third thing is we are dedicated to the sort of integrated solution aspect of this as opposed to product by product, you know, dollar by dollar. And the way these things work together is going to become increasingly important over time. And our positioning there, I think really helps us. So I'm not sure, I don't know where the, for sure, Brian, where the, where the, where the margins of the industry sort of settle out. I think it's going to be an ongoing thing, but we are not, we're not resigned to a race to the bottom at all. We think that there's loads of, value we can add at every price point that favors us and the outcomes we're providing.

Great.

Thank you.

Good luck. Thank you, everyone. This does conclude our Q&A section of the call. I would now like to turn the floor back over to Dale Strang for any closing remarks.

Thank you, everyone, for your support and for joining us today. As I indicated, BoxLight's competitive position continues to improve. We're making progress to align our costs with current revenue levels, and despite less than desired visibility, working to position BoxLight to thrive when those market conditions improve. With the broadest and deepest offering and industry-leading solutions in several key categories, we're capturing market share today and bolstering our position for the future. I am increasingly confident we're on a sustainable path for ultimate success. I'm incredibly proud of the BoxLight team for responding to our industry challenges and operating with both professionalism as well as integrity. With that, I'd like to thank you and wish you the best. Thank you, everyone. And we'll be speaking with you again when we report on our Q4. Sorry about that.

Apologies. Thank you, everyone. This does conclude today's conference call. You may disconnect your phone lines at this time. And have a wonderful day. Thank you for your participation.