Press Release

Boxlight Corporation Reports Second Quarter 2018 Financial Results

Company Release - 8/16/2018 4:12 PM ET
  • Revenue increase of 61% year-over-year to $9.7 million
  • Over $10 million in backorders at June 30, 2018
  • Strongest sales pipeline in Company history

LAWRENCEVILLE, Ga.--(BUSINESS WIRE)-- 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 second quarter ended June 30, 2018.

Management Commentary

“Our approach continues to translate into strong financial results. In the second quarter, we grew revenues over 61% year-over-year to $9.7 million,” commented Mark Elliott, Chief Executive Officer of Boxlight. “During the quarter, we provided our products to over 5,000 classrooms. Our strong growth is a result of greater adoption of our existing product suite, continued product introductions and growth in our reseller network.”

“We entered the second half of 2018 with the strongest pipeline in our company’s history including over $10 million in backorders which was equal to our total Q3 sales last year. We expect to deliver the majority of these orders in the third quarter, including significant installations in Beaufort County, South Carolina and Clayton County, Georgia.”

Mr. Elliott concluded, “Boxlight has a clear vision to help lead and shape the future of education in the classroom. Through our comprehensive and integrated suite of hardware and software products, our goal is to become the single source solution to satisfy the needs of educators around the globe and provide a holistic approach to the modern classroom.”

Second Quarter 2018 Financial Highlights

  • Revenue of $9.7 million increased 61.5% from $6.0 million in the second quarter of 2017. Revenue growth reflects increased sales volume driven by greater adoption of Boxlight’s product solution suite.
  • Gross profit of $1.7 million was flat with the prior year period. As a percent of revenue, gross margin was 17.9% compared to 28.6% in the second quarter of 2017. Gross margin in the quarter was impacted by an estimated 10% due to lower margins on the initial deliveries of two large projects and an accelerated delivery schedule associated with those projects. We have negotiated a reduction in cost of goods with our key vendor for these projects that will increase the profit margins by approximately 10% beginning in the third quarter of 2018.
  • Operating expenses of $3.9 million increased 62% from $2.4 million in the second quarter of 2017, primarily driven by a $1.4 million increase in general and administrative expenses, which includes higher stock compensation of $0.7 million, contract services of $0.3 million, commissions of $0.2 million and professional fees primarily related to a management advisory agreement of $0.1 million.
  • Net loss was $(4.5) million, or $(0.45) per share, compared to a net loss of $(0.8) million, or $(0.18) per share, in the second quarter of 2017. The increase in the net loss was primarily due to an increase in cost of sales and operating expenses.
  • Adjusted EBITDA was a loss of $(1.2) million compared to a loss of $(0.5) million in the second quarter of 2017. Adjusted EPS was a loss of $(0.13) million compared to a loss of $(0.11) million in the second quarter of 2017.

Operational Highlights

On June 21, 2018, Boxlight highlighted that Clayton County, Georgia’s fifth-largest school district, is installing its innovative Mimio classroom solution suite in approximately 3,200 classrooms, including 37 elementary, 14 middle and 11 high schools. The contract with Clayton County Public Schools (CCPS) will result in over $11 million in sales with an anticipated completion date by the end of 2018.

On June 22, 2018, the Company announced its acquisition of Qwizdom, an education software company, for a total consideration of approximately $2.5 million. Qwizdom’s world-class software solutions and trusted partner relationships are expected to enhance Boxlight’s existing product suite and expand the Company’s distribution network. The acquisition also brings the expertise of Qwizdom’s software development team as well as industry software veteran and Qwizdom CEO, Darin Beamish. Beamish will lead software development at Boxlight and manage the global comprehensive software product roadmap for the Qwizdom and Mimio classroom solution suite.

On June 25, 2018, the Company was added to the Russell MicroCap Index. Boxlight’s membership means automatic inclusion in the appropriate growth and value style indexes widely used by institutional investors to benchmark the performance of active investment strategies.

On July 2, 2018, Boxlight highlighted that its interactive touch technology offering, MimioSpace, was named as a Best of Show winner by Tech & Learning at the 2018 International Society for Technology in Education (ISTE) Conference and Expo.

Second quarter 2018 Financial Results Conference Call

Management will host a conference call to discuss the second quarter 2018 financial results today, Thursday, August 16, 2018 at 4:30 p.m. Eastern Time. The conference call details are as follows:

Date:         Thursday, August 16, 2018
Time: 4:30 p.m. Eastern Time / 1:30 p.m. Pacific Time
Dial-in: 1-877-407-9716 (Domestic)

1-201-493-6779 (International)

Conference ID: 13681838
Webcast:

http://public.viavid.com/index.php?id=130615

 

For those unable to participate during the live broadcast, a replay of the call will also be available from 8:00 p.m. Eastern Time on August 16, 2018 through 11:59 p.m. Eastern Time on August 30, 2018 by dialing 1-844-512-2921 (domestic) and 1-412-317-6671 (international) and referencing the replay pin number: 13681838.

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 on a basis consistent 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 and non-recurring IPO expenses. 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.

 
 
 
 
 

Boxlight Corporation
Consolidated Balance Sheets

 
        June 30,     December 31,
2018 2017
 
ASSETS
Current assets:
Cash and cash equivalents $ 1,799,024 $ 2,010,325
Accounts receivable – trade, net of allowances 5,019,988 3,089,932
Inventories, net of reserve 3,487,210 4,626,569
Prepaid expenses and other current assets   1,978,291     388,006  
Total current assets 12,284,513 10,114,832
 
Property and equipment, net of accumulated depreciation 323,777 29,752
Intangible assets, net of accumulated amortization 6,850,135 6,126,558
Goodwill 4,404,658 4,181,991
Other assets   295     292  
Total assets $ 23,863,378 $ 20,453,425
 
LIABILITIES AND STOCKHOLDERS’ EQUITY
 
Current liabilities:
Accounts payable and accrued expenses $ 3,057,354 $ 2,502,962
Accounts payable and accrued expenses – related parties 5,110,792 4,391,713
Warranty reserve 627,177

491,956

Short-term debt 1,581,754 752,449
Short-term debt – related party 163,333 54,000
Other current liabilities – related party 136,667 -
Convertible notes payable – related party 50,000 50,000
Deferred revenues – short-term 1,726,717 1,127,423
Derivative liabilities   1,891,704     1,857,252  
Total current liabilities   14,345,498     11,227,755  
 
Long term debt – related party 546,667 -
Other long-term liabilities – related party 273,333 -
Deferred revenues – long-term   167,573     175,294  
 
Total liabilities   15,333,071     11,403,049  
 
Commitments and contingencies
 
Stockholders’ equity:
Preferred stock, $0.0001 par value, 50,000,000 shares authorized; 25 25
Common stock, $0.0001 par value, 200,000,000 shares authorized; 9,558,998 and 4,621,687 Class A shares issued and outstanding, respectively 1,006 956
Additional paid-in capital 25,993,583 21,125,956
Subscriptions receivable (325 ) (325 )
Accumulated deficit (17,390,448 ) (12,028,388 )
Other comprehensive loss   (73,534 )   (47,848 )
Total stockholders’ equity   8,530,307     9,050,376  
 
Total liabilities and stockholders’ equity $ 23,863,378   $ 20,453,425  
 
 
 
 
 
 

Boxlight Corporation
Consolidated Statements of Operations and Comprehensive Loss

 

        Three Months Ended June 30,
2018     2017
   
Revenues $ 9,663,657 $ 5,984,440
Cost of revenues   7,938,340     4,273,396  
Gross profit   1,725,317     1,711,044  
 
Operating expense:
General and administrative expenses 3,726,585 2,302,981
Research and development   177,098     107,107  
Total operating expense   3,903,683     2,410,088  
 
Loss from operations   (2,178,366 )   (699,044 )
 
Other income (expense):
Interest expense, net (207,271 ) (106,607 )
Other income (expense), net 16,732 (8,482 )
Change in fair value of derivative liability (2,191,677 ) -
Gain on settlement of liabilities   103,560     -  
Total other income (expense)   (2,278,656 )   (115,089 )
 
Net loss $ (4,457,022 ) $ (814,133 )
 
Comprehensive loss:
Net loss $ (4,457,022 ) $ (814,133 )
Other comprehensive loss:
Foreign currency translation gain (loss)   (30,549 )   7,187  
Total comprehensive loss $ (4,487,571 ) $ (806,946 )
 
Net loss per common share – basic and diluted $ (0.45 ) $ (0.18 )

Weighted average number of common shares outstanding – basic and diluted

  9,810,905     4,621,687  
 
 
 
 
 
 

Boxlight Corporation
Reconciliation of Net Loss to EBITDA

 
        Three Months Ended June 30,
2018     2017
 
Net loss $ (4,457 ) $ (814 )
Depreciation and amortization 194 183
Interest expense   207     106  
EBITDA $ (4,056 ) $ (525 )
 
 
 

Boxlight Corporation
Reconciliation of Net Loss to Adjusted EBITDA

 
Three Months Ended June 30,
2018   2017
 
Net loss $ (4,457 ) $ (814 )
Depreciation and amortization 194 183
Interest expense 207 106
Stock compensation expense 636 38
Change in fair value of derivative liability   2,192     -  
Adjusted EBITDA $ (1,228 ) $ (487 )
 
 
 
 

Media:
Nickel Communications
Charlotte Andrist, 770-310-5244
charlotte@nickelcommpr.com
or
Investor Relations:
Boxlight Corporation
Michael Pope, 360-464-4478
michael.pope@boxlight.com
or
Addo Investor Relations
Laura Bainbridge, 310-829-5400
investor.relations@boxlight.com

Source: Boxlight Corporation