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spk02: Good afternoon and welcome to the Accela Technologies first quarter 2024 financial results conference call. All participants will be in listen-only mode. Should you need assistance, please signal a conference specialist by pressing the star key followed by zero. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star then one on your telephone keypad. To withdraw your question, please press star, then two. Please note, this event is being recorded. I would now like to turn the conference over to Vincent Condoviti, Head of Investor Relations. Please go ahead.
spk03: Thank you, Gary, and good afternoon. Welcome to our earnings call to discuss our first quarter results for the period ended March 31, 2024. Our presentation was uploaded to the IR section of our website. Matt Brown, our Interim CFO, will be hosting the call. PAR unfortunately had some travel delays and can't dial in. Today's agenda will largely follow PAR calls with management commentary followed by Q&A. Some of the matters we will discuss in today's call are forward-looking and involve a number of risks, uncertainties, and other factors that could cause actual results to differ materially from those in such forward-looking statements. Such risks and uncertainties are set forth in our presentation. So with that, I'll turn it over to call to Matt. Matt?
spk01: Good afternoon, everyone. Let's move to slide eight, financial highlights. We reported first quarter revenues of $258.8 million, down 5.4% year-over-year, or 4.3% pro forma for the sale of the high-speed scanner business. Information and transaction processing solutions declined by 9% year-over-year, offset by growth in our healthcare solutions and legal and loss prevention services segments by approximately 3% and 6% respectively. Sequentially, ITPS was down 3% in Q1 due to the loss of a $27 million low-margin contract renewal. Healthcare Solutions was up 4% with continued volume increases, and LOPS was down 12% due to project fluctuations. Q1 gross margins were 22%, up 107 basis points year-over-year, and we continued to focus on driving automation and operational leverage. Healthcare and LOPS margins are up 296 basis points and 242 basis points year-over-year, and ITPS margin was relatively flat given the contract exit. SG&A is down 43 basis points year-over-year, primarily driven by reductions in legal and professional fees. We're making investments in new business divisions such as Reactor.ai and shifting from CapEx to OpEx as we move our data center infrastructure to the cloud. Since year end, we've consolidated over 100,000 square feet of real estate and have approximately 340,000 square feet of additional consolidations in process. We have made good progress on savings initiatives, but still have significant opportunity for margin improvement throughout the rest of the year. We had a net loss of $25.6 million, an improvement of $20 million year over year, mainly driven by lower interest and debt expense. Adjusted EBITDA was $12.9 million, and we expect to continue driving margin improvement throughout the year. On page 10, we have both our financial highlights and lowlights. We achieved gross margin improvement despite a number of headwinds. On the balance sheet, current liabilities are down 23% and our interest expense is down 52% year over year. While we had a large customer exit with a $27 million contract falling off starting in January, we are seeing revenue stabilization and growth opportunities with both a 96% renewal rate in Q1 along with 85 new logo wins. We are focused on expanding liquidity and managing rising taxes as our NOLs are reduced. Unrestricted cash ending Q1 was approximately $10 million after we made our interest payment, but cash flow from operations continues to improve and we're progressing various financing initiatives in parallel. In 2024, our focus remains on driving revenue stabilization, margin improvement, and strategic growth initiatives. We are optimistic about achieving many of our objectives this year as we continue to improve profitability and liquidity. Thank you. We will now open the line up for questions.
spk02: We will now begin the question and answer session. To ask a question, you may press star then 1 on your telephone keypad. If you are using a speakerphone, please pick up your handset before pressing the keys. To withdraw your question, please press star then 2. Please limit your questions to one and one follow-up.
spk00: At this time, we will pause momentarily to assemble our roster. Again, if you have a question, please press star, then 1. Showing no questions, this concludes our question and answer session.
spk02: I would like to turn the conference back over to Matt Brown for any closing remarks.
spk01: Well, thank you, everyone, for joining. Look forward to keeping you updated on our future progress, and we'll see you again on the Q2 call.
spk02: The conference is now concluded. Thank you for attending today's presentation. You may now disconnect.
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