Boxlight Corporation Q3 FY2024 earnings call

• Brand simplification: Major product lines to be organized under 3 solution categories (Clevertouch for IFPD/display, FrontRow for audio/communication, Mimio/EOS for STEM); rollout in first half of 2025. - Product launches: New IMPACT Max 2 interactive panel; Clevertouch Edge won Pro AV Best in Market Award 2024; achieved Cyber Essentials certification; FrontRow UNITY and FrontRow TimeSign products shipped. - Market performance: EMEA has stronger IFPD demand, e.g., Germany and Belgium Q3 returns up 29% and 18% respectively; Americas IFPD demand soft. - Cost alignment: Targeting annual operating expense run rate of $12 - $13 million per quarter, expecting to achieve by end of 2024; repaid $4 million bridge loan; current term loan balance $39.3 million.

Revenues for Q3 2024 were $36.3 million, a 26.9% decrease from $49.7 million in Q3 2023. EMEA revenues comprised approximately 49% ($18 million) of total revenues, Americas revenues totaled approximately 48% ($17 million), and other markets 3%. Flat panel displays comprised approximately 72% of total revenues, audio solutions 12%, with the balance from device accessories, software, professional services, and STEM solutions. Gross profit for Q3 2024 was $12.3 million vs. $18 million in the prior year period, with a gross profit margin of 33.8%, a decrease of 250 basis points due to competitive pricing pressures and sales mix changes between IFPD and audio products.

• Anticipate industry recovery starting next year, with signs already in EMEA pockets. - Bullish on long-term outlook due to core K-12 interactive classrooms market and adjacent growth areas like higher ed and enterprise. - Aim to meet profitability targets despite persistent revenue headwinds.

• Industry demand softness, especially in U.S. IFPD market. - Market volatility leading to quarter-to-quarter performance fluctuations. - Risks associated with development and introduction of new products/services. - Marketing and other business development initiative risks. - Competition risk. - Potential non-compliance with senior credit agreement.

Q: As you consolidate to one brand, Clevertouch, what is the impact on exclusive channel partner agreements and market share?

A: Addressed exclusivity provisions with partners amicably; Clevertouch has worldwide brand equity translating well, and customers can choose Mimio or Clevertouch products with same support.

Q: What attributes the U.S. market shrinking quickly?

A: Period of heavy spending packed into a few years led to hangover of budget availability; devices lasting longer than anticipated.

Q: What makes you bullish in face of multiyear weakening demand trends?

A: History of the business with experience in market ups and downs; signs of EMEA market recovery starting, and conversations of partners indicating clarity for next year.

Q: Are you not in compliance with senior credit agreement?

A: $4 million bridge loan repaid, working on finalizing waiver for senior leverage ratio covenant non-compliance, expecting to obtain it.

Q: Thoughts on U.S. tariffs impact?

A: Suppliers and company have been coordinating backup plans to mitigate impact; likely to be more local and state-driven.

Q: Perspective on enterprise and higher ed verticals?

A: Large opportunity in hybrid workplaces; building dealer and sales relationships, and having product matching enterprise needs more exactly now.