Press Release

Boxlight Reports Third Quarter 2020 Results

Company Release - 11/16/2020 4:10 PM ET

Revenues of $9.5 Million

Gross Profit of 21.4%

Adj. EBITDA loss of $0.9 Million

Working Capital of $25.1 Million

Projecting Q4 2020 Revenues of $27 Million and Positive Adjusted EBITDA

LAWRENCEVILLE, Ga.--(BUSINESS WIRE)-- Boxlight Corporation (Nasdaq: BOXL) (“Boxlight”), a leading provider of interactive technology solutions, today announced the Company's financial results for the third quarter ended September 30, 2020.

Key Financial Highlights for Q3 2020

  • Revenues decreased by 16% to $9.5 million
  • Customer orders increased by 37% to $9.3 million
  • Gross profit decreased to 21.4%
  • Operating expenses decreased by 18% to $3.8 million
  • Net loss increased by 792% to $4.2 million
  • EPS loss increased by 117% to $(0.10)
  • Adjusted EBITDA loss increased by 66% to $0.9 million
  • Adjusted EPS loss decreased by 60% to loss of $0.02
  • Ended quarter with $9.7 million in backorders
  • Working capital improved by 558% to $25.1 million compared to prior quarter
  • Stockholders’ equity improved by 313% to $44.3 million compared to prior quarter

Key Business Highlights for Q3 2020

  • Acquired Sahara Presentation Systems for GBP 63 million
  • Received $22 million investment from The Lind Partners and closed $34.5 million secondary offering
  • Acquired screen sharing intellectual property portfolio
  • Added seasoned North America sales leadership in Scott Willett, Vice President Sales and Dan Deem, Vice President Sales, Platforms & Services
  • Announced strategic partnership with Samsung
  • Extended contract with Atlanta Public Schools
  • Received two Tech & Learning Awards of Excellence for Boxlight-EOS Distance Teaching Essentials and MySTEMKits 3D printing curriculum

Management Commentary

“Our progress during the third quarter was the most significant in our history, and we are one step closer to our vision of market leadership,” commented Michael Pope, Chairman and Chief Executive Officer. “During the quarter, we closed on fundraising of over $60 million in debt and equity, acquired Sahara Presentation Systems – a leading provider of interactive solutions with significant penetration in the EMEA region, augmented our sales leadership, formalized our partnership with Samsung, and steadied our balance sheet with a proper inventory profile and significant working capital.

Although sales and gross profit lagged our expectations in Q3 due to several factors including the effects of COVID-19, we are seeing increased demand in the fourth quarter and expect to generate greater than $27 million in revenue and positive Adjusted EBITDA.

We are committed to a tremendous fourth quarter and FY 2021, and we have a renewed focus on strong revenue growth, improving gross margins and positive earnings.”

Financial Results for the Three Months Ended September 30, 2020

Revenues for the three months ended September 30, 2020 was $9,476,956, as compared to $11,304,731 for the three months ended September 30, 2019, resulting in a 16% decrease. The decreased in revenues in 2020 is related to the reduction in sales of panels, software and STEM primarily attributable to the school closures as a result of the ongoing COVID-19 global pandemic.

Gross profit for the three months ended September 30, 2020 was $2,024,503, as compared to $3,233,801 for the three months ended September 30, 2019. The decrease in gross margin from 29% to 21% related to changes in the Company’s product mix with a reduction in higher margin products such as software and STEM coupled with a 33% increase in distributor sales compared to 2019.

General and administrative expenses for the three months ended September 30, 2020 was $3,306,845 as compared to $4,230,372 for the three months ended September 30, 2019. The decrease is primarily driven by reductions in compensation and benefits of $0.7 million, travel and entertainment of $0.2 million and stock compensation of $0.2 million.

Research and development expenses were $471,129 and $351,104 for the three months ended September 30, 2020 and 2019, respectively. The change in research and development expense is primarily driven by the increase in contract services related to software consultants.

Other income (expense) for the three months ended September 30, 2020 was ($2,457,433), as compared to $875,863 for the three months ended September 30, 2019. The increase in other expense is related to a change in fair value of derivative liabilities of $1.6 million and loss from settlement of liabilities of $1.7 million.

Net loss was $4,210,904 and $471,812 for the three months ended September 30, 2020 and 2019, respectively. The increase in the net loss was primarily driven by a decrease of gross profit, decrease in operating expenses and increase in other expense. The resulting EPS loss for the three months ended September 30, 2020 was $(0.10) per diluted share, compared to $(0.04) per diluted share for the three months ended September 30, 2019.

Adjusted EBITDA loss for the three months ended September 30, 2020 was $0.9 million, an increase of $0.3 million or 66% compared to $0.5 million for the three months ended September 30, 2019.

At September 30, 2020, Boxlight had $9.6 million of cash, $124 million of total assets, $22.3 debt, and 50.9 million shares issued and outstanding.

Financial Results for the Nine Months Ended September 30, 2020

Revenues for the nine months ended September 30, 2020 were $23,027,723, as compared to $27,099,654 for the nine months ended September 30, 2019, resulting in a 15% decrease. The decrease in revenues in 2020 is related to the reduction in sales of panels, projectors, software and STEM primarily attributable to school closures as a result of the ongoing COVID-19 global pandemic.

Gross profit for the nine months ended September 30, 2020 was $6,306,113 as compared to $7,895,312 for the nine months ended September 30, 2019. Gross margin decrease from 29% to 27% was related to changes in the Company’s product mix with a reduction in higher margin products such as software and STEM coupled with a 15% increase in distributor sales compared to 2019.

General and administrative expenses for the nine months ended September 30, 2020 were $10,444,060 as compared to $11,892,814 for the nine months ended September 30, 2019. The decrease was driven primarily by reductions in tradeshows of $0.3 million, contract services of $0.6 million, compensation and benefits of $0.4 million and travel and entertainment of $0.4 million.

Research and development expenses were $1,073,095 and $911,682 for the nine months ended September 30, 2020 and 2019, respectively. The increase in research and development expense was driven primarily by an increase in contact services for software consultants.

Other income (expense) for the nine months ended September 30, 2020 was ($2,375,481), as compared to ($1,591,684) for the nine months ended September 30, 2019. The increase in other expense is related to loss on settlement of the Lind debt $2.3 million, increased interest expense of $0.3 million offset by a gain on settlement of EDI accounts payable by $1.7 million and a decrease in the change in fair value of derivative liabilities of $0.3 million.

Net loss was $7,586,523 and $6,500,868 for the nine months ended September 30, 2020 and 2019, respectively. The increase in the net loss was primarily driven by a decrease of gross profit, decrease in operating expenses and increase in other expense. The resulting EPS loss for the nine months ended September 30, 2020 was ($0.31) per diluted share, compared to ($0.62) per diluted share for the nine months ended September 30, 2019.

Adjusted EBITDA loss for the nine months ended September 30, 2020 was $1.6 million, a decrease of $1.5 million compared to $3.1 million for the nine months ended September 30, 2019.

Adjusted EPS for the nine months ended September 30, 2020 was ($0.06) per diluted share, compared to ($0.37) per diluted share for the nine months ended September 30, 2019.

3rd Quarter 2020 Financial Results Conference Call

Management will host a conference call to discuss the third quarter 2020 financial results on Monday, November 16, 2020 at 4:30 p.m. Eastern Time. The conference call details are as follows:

Date:

Monday, November 16, 2020

Time:

4:30 p.m. Eastern Time / 1:30 p.m. Pacific Time

Dial-in:

1-888-567-1603 (Domestic)

1-862-298-0702 (International)

Webcast:

https://www.webcaster4.com/Webcast/Page/2213/38710

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 16, 2020 through 11:59 p.m. Eastern Time on November 30, 2020 by dialing 1-877-481-4010 (domestic) and 1-919-882-2331 (international) and referencing the replay pin number: 38710.

Use of Non-GAAP Financial Measures

To supplement Boxlight’s financial statements presented on a GAAP basis, Boxlight provides EBITDA and Adjusted EBITDA 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 expense, depreciation and amortization. Adjusted EBITDA represents EBITDA plus stock-based compensation, the change in fair value of derivative liabilities, purchase accounting impact of inventory markup, and non- cash losses associated with debt settlement. 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) is a leading provider of interactive technology solutions under its award winning brands Clevertouch® and Mimio®. The Company aims to improve engagement and communication in diverse business and education environments. Boxlight develops, sells, and services its integrated solution suite including interactive displays, collaboration software, supporting accessories and professional 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

 
 

September 30

 

December 31

2020

 

2019

ASSETS

 

Current asset:

Cash and cash equivalents

$

9,609,667

 

$

1,172,994

 

Accounts receivable-trade, net of allowances

 

21,095,910

 

 

3,665,057

 

Inventories, net of reserves

 

21,571,932

 

 

3,318,857

 

Prepaid expenses and other current assets

 

4,051,356

 

 

1,765,741

 

Total current assets

 

56,328,865

 

 

9,922,649

 

 

Property and equipment, net of accumulated depreciation

 

383,415

 

 

207,397

 

Intangible assets, net of accumulated amortization

 

54,012,656

 

 

5,559,097

 

Goodwill

 

13,429,385

 

 

4,723,549

 

Other assets

 

70,634

 

 

56,193

 

Total Assets

$

124,224,955

 

$

20,468,885

 

 

LIABILITIES AND STOCKHOLDERS' EQUITY

 

Current liabilities:

Accounts payable and accrued expenses

$

11,282,365

 

$

4,721,417

 

Accounts payable and accrued expenses - related parties

 

2,050,848

 

 

5,031,367

 

Warranty reserve

 

17,223

 

 

12,775

 

Current portion of debt-third parties

 

11,373,472

 

 

4,536,227

 

Current portion of debt-related parties

 

-

 

 

368,383

 

Earn-out payable - related party

 

119,132

 

 

387,118

 

Deferred revenues - short-term

 

4,917,088

 

 

1,972,565

 

Derivative liabilities

 

385,944

 

 

146,604

 

Other short-term liabilities

 

1,126,813

 

 

31,417

 

Total current liabilities

 

31,272,885

 

 

17,207,873

 

 

Deferred revenues - long-term

 

8,801,969

 

 

2,582,602

 

Long-term debt - third parties

 

10,950,403

 

 

1,201,139

 

Long-term debt - related party

 

-

 

 

108,228

 

Other long - term liabilities

 

5,623

 

 

16,696

 

Total liabilities

 

51,030,880

 

 

21,116,538

 

 

Commitments and contingencies

 

Mezzanine equity:

Series B preferred stock, $0.0001 par value, 1,586,620 shares designated, 1,586,620 and -0- shares issued and outstanding, respectively

 

18,181,178

 

 

-

 

Series C preferred stock, $0.0001 par value, 1,320,850 shares designated, 1,320,850 and -0- shares issued and outstanding, respectively

 

10,690,267

 

 

-

 

Total mezzanine equity

 

28,871,445

 

 

 

-

 

 

Stockholders' equity (deficit):

Preferred stock, $0.0001 par value, 50,000,000 shares authorized:

Series A preferred stock, $0.0001 par value, 250,000 shares designated, 167,972 and 167,972 shares issued and outstanding, respectively

 

17

 

 

17

 

Common stock, $0.0001 par value, 200,000,000 shares authorized; 50,871,711 and 11,698,697 Class A shares issued and outstanding, respectively

 

5,087

 

 

1,170

 

Additional paid-in capital

 

82,860,910

 

 

30,735,815

 

Subscriptions receivable

 

(200

)

 

(200

)

Accumulated deficit

 

(38,932,954

)

 

(31,346,431

)

Other comprehensive loss

 

389,770

 

 

(38,024

)

Total stockholders' equity

 

44,322,630

 

 

(647,653

)

 

Total liabilities, mezzanine and stockholders' equity (deficit)

$

124,224,955

 

$

20,468,885

 

 

Boxlight Corporation

Consolidated Statement of Operations

 

Three Months Ended

 

Nine Months Ended

September 30,

 

September 30,

 

 

 

 

 

 

 

 

2020

 

 

 

2019

 

 

 

2020

 

 

 

2019

 

 

Revenues

$

9,476,956

 

$

11,304,731

 

$

23,027,723

 

$

27,099,654

 

Cost of Revenues

 

7,452,453

 

 

8,070,930

 

 

16,721,610

 

 

19,204,342

 

Gross Profit

 

2,024,503

 

 

3,233,801

 

 

6,306,113

 

 

7,895,312

 

 

Operating Expense:

General and administrative expenses

 

3,306,845

 

 

4,230,372

 

 

10,444,060

 

 

11,892,814

 

Research and development expenses

 

471,129

 

 

351,104

 

 

1,073,095

 

 

911,682

 

Total operating expense

 

3,777,974

 

 

4,581,476

 

 

11,517,155

 

 

12,804,496

 

 

Loss from operations

 

(1,753,471

)

 

(1,347,675

)

 

(5,211,042

)

 

(4,909,184

)

 

Other income (expense):

Interest expense, net

 

(530,830

)

 

(517,391

)

 

(1,618,366

)

 

(1,277,016

)

Other (expense) income, net

 

(14,673

)

 

21,077

 

 

60,932

 

 

65,956

 

Change in fair value of derivative liabilities

 

(193,640

)

 

1,372,177

 

 

(239,340

)

 

(527,058

)

Gain (loss) from settlement of liabilities

 

(1,718,290

)

 

-

 

 

(578,707

)

 

146,434

 

Total other income (expense)

 

(2,457,433

)

 

875,863

 

 

(2,375,481

)

 

(1,591,684

)

 

Net Loss

$

(4,210,904

)

$

(471,812

)

$

(7,586,523

)

$

(6,500,868

)

 

Comprehensive loss:

Net Loss

$

(4,210,904

)

$

(471,812

)

$

(7,586,523

)

$

(6,500,868

)

Other comprehensive loss:

Foreign currency translation income (loss)

 

536,118

 

 

(11,563

)

 

427,794

 

 

(26,749

)

Total comprehensive loss

$

(3,674,786

)

$

(483,375

)

$

(7,158,729

)

$

(6,527,617

)

 

Net loss per common share - basic and diluted

 

(0.10

)

 

(0.04

)

 

(0.31

)

 

(0.62

)

 

Weighted average number of common shares outstanding - basic and diluted

 

44,214,758

 

 

10,746,186

 

 

24,852,937

 

 

10,533,090

 

 
 

Boxlight Corporation

Reconciliation of Net Loss to Adjusted EBITDA

 

 

 

Three Months Ended

September 30,

 

 

 

 

2020

 

 

 

2019

 

Net Loss

$

(4,211

)

$

(472

)

Depreciation and amortization

 

318

 

 

222

 

Interest expense

 

531

 

 

517

 

EBITDA

$

(3,362

)

$

267

 

Stock compensation expense

 

346

 

 

574

 

Change in fair value of derivative liabilities

 

194

 

 

(1,372

)

Purchase accounting impact of fair valuing inventory

 

217

 

 

16

 

Net loss on settlement of Lind debt in stock

 

1,748

 

 

-

 

Adjusted EBITDA

$

(857

)

$

(515

)

 
 

Boxlight Corporation

Reconciliation of Net Loss to Adjusted EBITDA

 

 

 

Nine Months Ended

September 30,

 

 

 

 

2020

 

 

 

2019

 

Net Loss

$

(7,587

)

$

(6,501

)

Depreciation and amortization

 

758

 

 

689

 

Interest expense

 

1,618

 

 

1,277

 

EBITDA

$

(5,211

)

$

(4,535

)

Stock compensation expense

 

866

 

 

896

 

Change in fair value of derivative liabilities

 

239

 

 

527

 

Purchase accounting impact of fair valuing inventory

 

236

 

 

40

 

Net loss on settlement of Lind debt in stock

 

2,340

 

 

-

 

Adjusted EBITDA

$

(1,530

)

$

(3,072

)

 

Media
Sunshine Nance
+1 360-464-2119 x254
sunshine.nance@boxlight.com

Investor Relations
Michael Pope
+1 360-464-4478
investor.relations@boxlight.com

Source: Boxlight Corporation