Boxlight Reports Fourth Quarter and Full Year 2018 Results

Boxlight Corporation (Nasdaq: BOXL) (Boxlight), a leading provider of interactive technology solutions for the global education market, today announced the Company’s financial results for the fourth quarter and year ended December 31, 2018.

Key Financial Highlights for Q4 2018:

  • Revenues increased by 125% to $12.0 million; greater than the previously projected $11 million
  • Gross profit improved to 25.2%
  • Operating loss decreased by 81% to $1.1 million

Key Financial Highlights for Full Year 2018:

  • Revenues increased by 47% to $37.8 million
  • Gross profit of 22.9% was impacted by lower product margins on interactive panels on two large projects in Beaufort, South Carolina and Clayton County, Georgia

Key Business Highlights for Q4 and Full Year 2018:

  • Californias Huntington Beach City School District will be adding 60 MimioSpace collaborative systems to its classrooms to support its expanding technology initiative
  • Acquired EOS Education, a consulting and professional development company for the K-12 education market
  • Connellsville Area School District, a large, rural school district south of Pittsburgh, replaced existing projectors with interactive flat panels from Boxlight, providing its 4,400 students with tools that will help them thrive in a 21st Century learning environment
  • South Carolinas Beaufort County School District announced plans to partner with Boxlight in outfitting classrooms with the latest interactive education technologies; adding 1,750 Interactive Flat Panels Based on Boxlights Affordability, Ease of Use, and Simple Integration of Existing Lessons

Subsequent to the end of 2018, the Company signed an agreement for a $4 million investment from The Lind Partners in the form of a convertible note with a 24-month maturity and a fixed conversion price of $4.00 per share. The investment proceeds will enable the Company to execute its aggressive growth strategy and is expected to bridge operations to positive cash flow. Specific working capital initiatives include increasing inventory levels in the U.S. and Europe and completing the market launch of several new products including our Mimio MyBot coding and robotics solution.

2019 Outlook:

Based on our current business pipeline, backlog and contracts, we expect 2019 revenue to increase by at least 25% over 2018. Additionally, we are targeting gross margins in the 25-30% range for 2019, as we expect higher margin hardware, software and professional services to contribute more significantly to revenue. We believe cross-sell opportunities exist to expand our penetration and offerings within our existing customers.

Management Commentary

We had an extremely eventful and productive 2018, particularly in the fourth quarter, commented, Mark Elliott, Boxlights Chief Executive Officer. We achieved record revenue for the fourth quarter and full year 2018. Our strong momentum continued after the important back-to-school season and through the fourth quarter, driving our growth to a company historic quarterly record of $12.0 million for the fourth quarter. Weve successfully grown our sales pipeline across the U.S. and in key international markets including Europe and Latin America, which has resulted in the largest sales pipeline in our history.

Mr. Elliott concluded, We see a significant opportunity to continue our growth trajectory well into the future through product introductions, growth in our re-seller network and strategic acquisitions. It is an exciting time at Boxlight with our mission to improve learning and engagement in classrooms, and to help educators enhance student outcomes. I want to thank our dedicated employees, our trusted customers and our supportive partners. While 2018 was a huge success, we know this is just the beginning. There is much work to do in delivering our best-in-class and award-winning interactive technology solutions for the global education market, and continuing to build shareholder value.

Financial Results for the Three Months Ended December 31, 2018:

Revenue for the three months ended December 31, 2018 was $12.0 million, an increase of $6.6 million or 125%, compared to $5.3 million for the three months ended December 31, 2017. Revenue growth reflects increased sales volume driven by greater adoption of Boxlights product solution suite.

Gross profit for the three months ended December 31, 2018 was $3.0 million, an increase of $2.4 million, compared to $0.6 million for the three months ended December 31, 2017. The resulting gross margin was 25.2% for the three months ended December 31, 2018, compared to 11.3% for the three months ended December 31, 2017.

General and Administrative expenses for the three months ended December 31, 2018 was $3.8 million, a decrease of $2.3 million or 38%, compared to $6.1 million for the three months ended December 31, 2017.

Research and development expenses for the three months ended December 31, 2018 was $0.3 million, an increase of $0.2 million or 181%, compared to $0.1 million for the three months ended December 31, 2017.

Operating loss for the three months ended December 31, 2018 was $1.1 million, a decrease of $4.5 million, or 81%, compared to $5.6 million for the three months ended December 31, 2017.

Adjusted EBITDA loss for the three months ended December 31, 2018 was $1.0 million, a decrease of $0.2 million or 18% compared to $1.2 million for the three months ended December 31, 2017.

Net loss for the three months ended December 31, 2018 was $0.6 million, a decrease of $4.0 million, or 87%, compared to $4.6 million for the three months ended December 31, 2017. The resulting EPS loss for the three months ended December 31, 2018 was $(0.06) per diluted share, compared to $(0.66) per diluted share for the three months ended December 31, 2017.

At December 31, 2018, Boxlight had $0.9 million of cash, $21.3 million of total assets, $3.0 debt, and 10.2 million shares issued and outstanding.

Financial Results for the Year Ended December 31, 2018:

Revenue for the year ended December 31, 2018 was $37.8 million, an increase of $12.0 million or 47%, compared to $25.7 million for the year ended December 31, 2017.

Gross profit for the year ended December 31, 2018 was $8.6 million, an increase of $2.2 million, compared to $6.4 million for the year ended December 31, 2017. The resulting gross margin was 22.9% for the year ended December 31, 2018, compared to 24.9% for the year ended December 31, 2017. The year-over-year decline in gross margin was primarily due to a larger concentration of interactive flat panel sales with lower product margins during 2018 including two large projects in Beaufort County, South Carolina and Clayton County, Georgia.

General and Administrative expenses for the year ended December 31, 2018 were $15.0 million, an increase of $1.8 million or 14%, compared to $13.2 million for the year ended December 31, 2017.

Research and development expenses for the year ended December 31, 2018 were $0.7 million, an increase of $0.2 million or 44%, compared to $0.5 million for the year ended December 31, 2017.

Operating loss for the year ended December 31, 2018 was $7.0 million, a slight decrease compared to $7.2 million for the year ended December 31, 2017.

Adjusted EBITDA loss for the year ended December 31, 2018 was $3.9 million, an increase of $2.2 million, or 132%, compared to $1.7 million for the year ended December 31, 2017.

Net loss for the year ended December 31, 2018 was $7.2 million, an increase of $0.6 million, or 10%, compared to $6.5 million for the year ended December 31, 2017. The resulting EPS loss for the year ended December 31, 2018 was $(0.72) per diluted share, compared to $(1.20) per diluted share for the year ended December 31, 2017.

Fourth Quarter 2018 Financial Results Conference Call

Management will host a conference call to discuss the fourth quarter 2018 financial results today, Thursday, March 28, 2019 at 4:30 p.m. Eastern Time. The conference call details are as follows:

   
Date: Thursday, March 28, 2019
Time: 4:30 p.m. Eastern Time / 1:30 p.m. Pacific Time
Dial-in: 1-877-407-9124 (Domestic)

1-201-689-8584 (International)

Webcast:

https://www.investornetwork.com/event/presentation/45569

 

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 March 28, 2019 through 11:59 p.m. Eastern Time on June 28, 2019 by dialing 1-877-481-4010 (domestic) and 1-919-882-2331 (international) and referencing the replay pin number: 45569.

Use of Non-GAAP Financial Measures

To supplement Boxlights 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
 
 
  2018     2017  
ASSETS
 

Current assets:

Cash and cash equivalents

$

901,459

$

2,010,325

Accounts receivable-trade, net of allowances 3,634,726 3,089,932
Inventories, net of reserves 4,214,316 4,626,569
Prepaid expenses and other current assets   1,214,157     388,006  
Total current assets 9,964,658 10,114,832
 
Property and equipment, net of accumulated depreciation 226,409 29,752
Intangible assets, net of accumulated amortization 6,352,273 6,126,558
Goodwill 4,723,549 4,181,991
Other assets   298     292  
Total Assets

$

21,267,187

 

$

20,453,425

 
 
LIABILITIES AND STOCKHOLDERS’ EQUITY
 
Current liabilities:
Accounts payable and accrued expenses

$

1,883,626

$

2,502,962

Accounts payable and accrued expenses – related parties 6,009,112 4,391,713
Warranty 580,236 491,956
Short-term debt 2,306,227 752,449
Short-term debt-related parties 377,333 54,000
Convertible notes payable – related party 50,000
Current portion of earn-out payable – related party 136,667
Deferred revenues – short-term 938,050 1,127,423
Derivative liabilities 326,452 1,857,252
Other short-term liabilities   5,128      
Total current liabilities 12,562,831 11,227,755
 
Deferred revenues-long-term 134,964 175,294
Earn-out payable – related party 273,333
Long term debt – related party   328,000      
Total liabilities 13,299,128 11,403,049
 
Commitments and contingencies
 
Stockholders’s equity:
Preferred stock, $0.0001 par value, 50,000,000 shares authorized; 250,000 shares issued and outstanding 25 25
Common stock, $0.0001 par value, 200,000,000 shares authorized; 10,176,433 and 9,558,997 Class A shares issued and outstanding, respectively 1,018 956
Additional paid-in capital 27,279,931 21,125,956
Subscriptions receivable (225 ) (325 )
Accumulated deficit (19,206,271 ) (12,028,388 )
Other comprehensive loss   (106,419 )   (47,848 )
Total stockholders’ equity   7,968,059     9,050,376  
   
Total liabilities and stockholders’ equity

$

21,267,187

 

$

20,453,425

 
         
Boxlight Corporation

Consolidated Statement of Operations and Comprehensive Loss

 
 
Three Months Ended Year Ended
December 31, December 31,
       
  2018     2017     2018     2017  
 
Revenues

$

11,984,967

$

5,336,354

$

37,841,277

$

25,743,612

Cost of Revenues   8,970,438     4,734,051     29,188,108     19,329,831  
Gross Profit 3,014,529 602,303 8,653,169 6,413,781
 
Operating Expense:
General and administrative expenses 3,794,774 6,140,591 14,978,079 13,189,879
Research and development expenses   303,098     107,985     671,653     465,940  
Total operating expense   4,097,872     6,248,576     15,649,732     13,655,819  
 
Loss from operations (1,083,343 ) (5,646,273 ) (6,996,563 ) (7,242,038 )
 
Other income(expense):
Interest expense, net (299,132 ) (172,864 ) (841,788 ) (635,445 )
Other income, net 26,042 47,432 68,109 200,589
Gain from settlement of liabilities, net 276,026 165,378 276,026
Change in fair value of derivative liabilities   761,971     861,302     426,981     861,302  
Total other income (expense)   488,881     1,011,896     (181,320 )   702,472  
 
Net Loss

$

(594,462

)

$

(4,634,377

)

$

(7,177,883

)

$

(6,539,566

)

 
Comprehensive loss:
Net Loss

$

(594,462

)

$

(4,634,377

)

$

(7,177,883

)

$

(6,539,566

)

Other comprehensive income (loss):
Foreign currency translation gain (loss) (14,010 ) (392 ) (58,571 ) (34,930 )
Total comprehensive loss

$

(608,472

)

$

(4,634,769

)

$

(7,236,454

)

$

(6,574,496

)

 
Net loss per common share – basic

$

(0.06

)

$

(0.66

)

$

(0.72

)

$

(1.20

)

Net loss per common share – diluted

$

(0.06

)

$

(0.66

)

$

(0.72

)

$

(1.20

)

 
Weighted average number of common shares outstanding – basic   10,173,110     7,072,137     9,922,042     5,455,161  
Weighted average number of common shares outstanding – diluted   10,173,110     7,072,137     9,922,042     5,455,161  
         
Boxlight Corporation Boxlight Corporation
Reconciliation of Net Loss to EBITDA Reconciliation of Net Loss to EBITDA
 
Three Months Ended Years Ended
December 31, December 31,
 
2018 2017 2018 2017
Net Loss

$

(594

)

$

(4,634

)

$

(7,178

)

$

(6,540

)

Depreciation and amortization 263 188 893 747
Interest expense   (299 )   (173 )   842     634  
EBITDA

$

(631

)

$

(4,619

)

$

(5,443

)

$

(5,158

)

 
 
Boxlight Corporation Boxlight Corporation
Reconciliation of Net Loss to Adjusted EBITDA Reconciliation of Net Loss to Adjusted EBITDA
 
Three Months Ended Years Ended
December 31, December 31,
 
2018 2017 2018 2017
Net Loss

$

(594

)

$

(4,634

)

$

(7,178

)

$

(6,540

)

Depreciation and amortization 263 188 893 747
Interest expense (299 ) (173 ) 842 634
Stock compensation expense 418 4,294 1,985 4,344
Change in fair value of derivative liabilities   (762 )   (861 )   (427 )   (861 )
Adjusted EBITDA

$

(975

)

$

(1,187

)

$

(3,885

)

$

(1,675

)

Media
Charlotte Andrist
Nickel Communications
+1
770-310-5244
[email protected]

Investor
Relations

Michael Pope, Boxlight Corporation
+1
360-464-4478
[email protected]

Hayden
IR
+1 917-658-7878
[email protected]