Boxlight Corporation Reports Third Quarter 2018 Financial Results
LAWRENCEVILLE, Ga.--(BUSINESS WIRE)--Nov 13, 2018--Boxlight Corporation (Nasdaq: BOXL) (“Boxlight”), a leading provider of technology solutions for the global education market, today announced the Company’s financial results for the third quarter ended September 30, 2018.
“Momentum was strong through the important back-to-school season, helping drive a 27% year-over-year increase in revenues for the first nine months of 2018,” commented Mark Elliott, Chief Executive Officer of Boxlight. “Additionally, we ended the quarter with $5.7 million in deferred revenue of which we expect to recognize over $4 million in the fourth quarter. During the quarter, we provided Boxlight’s products to thousands of classrooms across the U.S., including new installations in McMinn County Schools in Tennessee, Huntington Beach City Schools in California and Connellsville Schools in Pennsylvania.”
“We also continue to expand our reach in key international markets including Europe and Latin America. We’ve successfully grown our sales pipeline in those markets, and are pleased to enter the fourth quarter with the largest sales pipeline in our history.”
Mr. Elliott concluded, “We are projecting the fourth quarter of this year will be the strongest in our history with over $11 million in revenue. Importantly, we see a significant opportunity to continue our growth trajectory well into the future through product introductions, growth in our re-seller network and through strategic acquisitions. It is an exciting time at Boxlight. Our mission to improve learning and engagement in classrooms, and to help educators enhance student outcomes, is taking hold as we continue to grow our reach and relevance in classrooms around the world.”
Third Quarter 2018 Financial HighlightsRevenue of $10.2 million was flat with the third quarter of 2017. Gross profit of $2.4 million decreased 16.1%, from $2.9 million in the prior year period. Gross margin was 23.9% compared to 28.4% in the third quarter of 2017. The year-over-year decline in gross margin largely reflects a larger concentration of interactive panel sales with lower product margins. Operating expenses of $4.4 million increased from $2.4 million in the third quarter of 2017, primarily driven by a $2.0 million increase in general and administrative expenses, which includes higher operational costs of $0.6 million related to new acquisitions, professional fees of $0.5 million related to a management advisory agreement and legal fees related to acquisition transactions and registration filings, and stock compensation of $0.4 million. Net loss was $(1.2) million, or $(0.12) per diluted share, compared to net income of $0.5 million, or $0.08 per diluted share, in the third quarter of 2017. Adjusted EPS was a loss of $(0.11) per diluted share compared to a gain of $0.14 per diluted share in the third quarter of 2017. The increase in the net loss and net loss per diluted share was primarily due to an increase in cost of sales, commissions, stock compensation expense and professional fees. Adjusted EBITDA was a loss of $(1.1) million compared to a gain of $0.8 million in the third quarter of 2017.
Year-to-Date 2018 Financial HighlightsRevenue of $25.9 million increased 26.7% from $20.4 million in the first nine months of 2017. Revenue growth reflects increased sales volume driven by greater adoption of Boxlight’s product solution suite. Gross profit of $5.6 million decreased 3.0%, from $5.8 million in the first nine months of 2017. Gross margin was 21.8% compared to 28.5% in the first nine months of 2017. The year-over-year decline in gross margin is primarily due to a larger concentration of interactive panel sales with lower product margins including two large projects in Buford, South Carolina and Clayton County, Georgia. Operating expenses of $11.6 million increased from $7.4 million in the first nine months of 2017, primarily driven by a $4.1 million increase in general and administrative expenses, which includes higher stock compensation of $1.6 million, professional fees of $0.5 million related to a management advisory agreement, salaries of $0.5 million and additional operating costs for acquisitions of $0.8 million. Net loss was $(6.6) million, or $(0.66) per diluted share, compared to a net loss of $(1.9) million, or $(0.39) per diluted share, in the first nine months of 2017. Adjusted EPS was a loss of $(0.35) per diluted share compared to a loss of $(0.17) per diluted share in the first nine months of 2017. The increase in the net loss and net loss per diluted share was primarily due to an increase in cost of sales, stock compensation expense and a change in fair value of derivative liabilities. Adjusted EBITDA was a loss of $(3.5) million compared to a loss of $(0.8) million in the first nine months of 2017.
On August 27, 2018, the Company announced that McMinn County School System in Athens, Tennessee, will be adding 115 of Boxlight’s ProColor interactive flat panels to classrooms as part of its “Even the Playing Field” classroom initiative. Last year, the district purchased and installed 267 ProColor Units, making for a total purchase of 382 interactive flat panels displays with an anticipated completion date by the end of 2018.
On August 29, 2018, Boxlight announced that it was recognized by The Edvocate as a finalist in the 2018 Tech Edvocate Awards for its interactive touch technology offerings of MimioFrame and MimioSpace.
On September 13, 2018, Boxlight announced that California’s Huntington Beach City School District added 60 of its MimioSpace collaborative systems to its classrooms in order to support its expanding technology initiative. The district partnered with Boxlight and premiere reseller partner OnPoint to bring collaborative technology to classrooms in nine schools throughout the district.
On September 24, 2018, the Company announced its acquisition of EOS Education, a consulting and professional development company for the K-12 education market. EOS Education’s training, professional development and support will enable Boxlight to provide a more robust portfolio of end-to-end services which complement the company’s comprehensive suite of hardware and software solutions, providing educators the training they need to fully leverage the technology’s full range of possibilities. The acquisition also brings significant management talent to Boxlight by adding Daniel Leis and Dr. Aleksandra Leis, both with a strong track record of managing high-growth professional services businesses in emerging markets and sectors. EOS Education will operate as a division of Boxlight.
Third quarter 2018 Financial Results Conference Call
Management will host a conference call to discuss the third quarter 2018 financial results today, Tuesday, November 13, 2018 at 4:30 p.m. Eastern Time. The conference call details are as follows:
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 November 13, 2018 through 11:59 p.m. Eastern Time on November 27, 2018 by dialing 1-844-512-2921 (domestic) and 1-412-317-6671 (international) and referencing the replay pin number: 13684610.
Use of Non-GAAP Financial Measures
To supplement Boxlight’s financial statements presented on a GAAP basis, Boxlight provides EBITDA, Adjusted EBITDA, and Adjusted EPS 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 in accordance 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 income, interest expense, depreciation and amortization. Adjusted EBITDA represents EBITDA plus stock-based compensation. 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 solutions for the global education market. The company aims to improve learning and engagement in classrooms and to help educators enhance student outcomes, by developing the products they need. The company develops, sells, and services its integrated, interactive solution suite including software, classroom technologies, professional development and support services. For more information about the Boxlight story, 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.
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