Boxlight Corporation Q4 FY2023 earnings call

• Dale Strang transitioned to CEO two months prior, emphasizing strong bones at Boxlight with excellent products, loyal customers, and dedicated employees. • Recognized the need to adjust to moderated market demand post-pandemic, addressing inefficiencies from acquisitions, including capital structure and operational integration issues. • Realigning leadership to be more customer-centric, streamlining product catalog, eliminating redundant items, and taking aggressive steps to reduce operating costs. • Working on refinancing debt facility, engaging investment bankers, and cooperating with lenders. • Introducing new products like EDLA interactive panels and enhancing FrontRow campus/classroom communication software.

Revenues for Q4 2023 were $38.8 million. EMEA comprised 52% ($20.2 million) of total revenues, Americas 46% ($17.8 million), and other markets 2% ($0.8 million). Flat panel displays made up approximately 71% of total revenues, audio solutions 13%, with the balance from device accessories, software, professional services, and STEM solutions. Gross profit for the quarter was $12.3 million, with a gross profit margin of 31.7%, a decrease of 190 basis points from Q4 2022.

• Full year 2024 revenues expected to be flat year-over-year. Q1 2024 revenues forecasted at approximately $34 million, ~18%-20% of annual revenues. • Forecast gross margin decline of 100-200 basis points in 2024 due to flat panel market maturation. • Aim to reduce operating expenses to ~$12.5 million to $13 million per quarter annually, with progress expected by end of 2024. • Actively seeking to refinance debt facility with favorable terms while maintaining healthy EBITDA leverage ratio.

• Market demand moderation post-pandemic. • Inefficiencies from past acquisitions leading to duplicative costs and fragmented go-to-market strategy. • Challenges in capital structure and need to refinance debt. • Operational integration challenges from multiple acquisitions leading to high cost structure.

Q: What are the changes customers are asking for and how much capital will be needed?

A: Customers want highly functional panels with productivity software and classroom/campus-wide communication solutions. M&A could be an option, but focus is on integrating assets efficiently.

Q: Order trends in March quarter and confidence in flat revenues?

A: Q3 saw slight uptick in orders, Q4 down 3% globally but EMEA up. Early Q1 signs of positive order growth. Focus on forecasting accuracy.

Q: Revenue outlook by geography and cost reduction target?

A: EMEA has less softness, U.S. panel market flat to down. Focus on growth in sub-areas like Germany and FrontRow business. Target OpEx of ~$12.5M-$13M quarterly, with seasonality considered.