DULUTH, Ga.--(BUSINESS WIRE)--Boxlight Corporation (Nasdaq: BOXL), a leader in interactive technology, digital signage, classroom audio, campus communication, and services, is pleased to announce that Father Yermo Schools has successfully integrated Mimio interactive displays and MimioSTEM solutions. Father Yermo Schools in El Paso, TX, committed to providing accessible Catholic education, faced challenges in student engagement, particularly in science and technology. To enhance hands-on learning, the sc ...

DULUTH, Ga.--(BUSINESS WIRE)--Boxlight Corporation (Nasdaq: BOXL), a leading provider of interactive technology, digital signage, classroom audio, campus communication, and services today announces that three of its solutions have been recognized as Best of 2023 by Tech & Learning for a total of six awards. Tech & Learning delivers exclusive content on effective technology integration in education through original case studies, guides, and profiles by experienced educators and journalists. It is part of th ...

DULUTH, Ga.--(BUSINESS WIRE)--Boxlight Corporation (Nasdaq: BOXL), a leader in interactive technology, digital signage, classroom audio, campus communication and services, today announced that its Board of Directors has named independent director Dale Strang as interim Chief Executive Officer, effective immediately. Mr. Strang succeeds Michael Pope, whose last day as an employee of Boxlight will be January 12, 2024. In addition, R. Wayne Jackson has been elected as non-executive Chairman of the Boxlight Boa ...

DULUTH, Ga.--(BUSINESS WIRE)--Boxlight Corporation (Nasdaq: BOXL), a leading provider of interactive technology, digital signage, classroom and campus audio, and services, today announces the launch of MimioPro G, a Google EDLA-certified interactive flat panel that includes free Google certified training. Boxlight is the only education technology solutions provider to offer this unique combination, reinforcing its commitment to innovative and holistic offerings. The EDLA-certified MimioPro G interactive ...

Boxlight Corporation (NASDAQ:BOXL) Q3 2023 Earnings Conference Call November 8, 2023 4:30 PM ET Company Participants Michael Pope - Chairman and CEO Mark Starkey - President Greg Wiggins - CFO Conference Call Participants Brian Kinstlinger - Alliance Global Partners Jack Vander Aarde - Maxim Group Operator Thank you, and welcome to the Boxlight Third Quarter 2023 Earnings Conference Call. By now, everyone should have access to the press release issued this afternoon. This call is being webcast and is availa ...

Revenue Performance - Total revenue for the three months ended September 30, 2023, was $49.67 million, a decrease of 27.8% compared to $68.74 million for the same period in 2022[142] - Revenue from the Americas for the three months ended September 30, 2023, was $25.72 million, down 19.5% from $31.78 million in the same period last year[142] - EMEA revenue for the three months ended September 30, 2023, was $24.33 million, a decline of 35.2% compared to $37.54 million for the same period in 2022[142] - Total revenues for Q3 2023 were $49.7 million, a decrease of 27.7% compared to $68.7 million in Q3 2022[184] - Total net revenue for the nine months ended September 30, 2023, was $137.91 million, down 22.9% from $178.97 million for the same period in 2022[142] - Total revenues for the nine months ended September 30, 2023, were $137.9 million, a decrease of 22.9% compared to $179.0 million for the same period in 2022, primarily due to lower sales volume across all markets[211] Profitability and Loss - The company reported a total loss from operations of $11.60 million for the three months ended September 30, 2023, compared to an income of $6.46 million for the same period in 2022[142] - Net loss for the three months ended September 30, 2023, was $17.8 million, compared to a net income of $3.1 million for the same period in 2022[187] - Net loss for the nine months ended September 30, 2023, was $21.5 million, compared to a net loss of $1.7 million for the same period in 2022[215] - Gross profit for Q3 2023 was $18.0 million, down 14.3% from $21.0 million in Q3 2022, with a gross profit margin of 36.3% compared to 30.6% in the prior year[185] - Gross profit for the nine months ended September 30, 2023, was $51.0 million, a 1.0% increase from $50.5 million in the same period of 2022, with a gross profit margin of 37.0%[188][189] Expenses - General and administrative expenses for Q3 2023 were $15.4 million, representing 31.0% of revenue, up from $14.0 million or 20.3% of revenue in Q3 2022[161] - General and administrative expenses for the nine months ended September 30, 2023, were $45.4 million, representing 32.9% of revenue, up from 25.0% in the same period of 2022[213] - Research and development expenses for the nine months ended September 30, 2023, were $2.1 million, representing 1.5% of revenue, compared to $1.9 million or 1.0% of revenue in 2022[165] - Research and development expenses were $979 thousand for the three months ended September 30, 2023, representing 2.0% of revenue, compared to 0.9% in the same period of 2022[209] - Other expenses for the nine months ended September 30, 2023, were $8.4 million, an increase of $3.3 million from $5.1 million in the same period of 2022[214] Assets and Liabilities - Identifiable assets totaled $180.4 million as of September 30, 2023, down from $195.4 million as of December 31, 2022[144] - The company’s inventory as of September 30, 2023, was $44.14 million, a decrease of 24.2% from $58.21 million as of December 31, 2022[127] - Accounts receivable – trade increased to $43.8 million in 2023 from $33.2 million in 2022, net of allowances[159] - The EMEA segment's identifiable assets decreased to $84.1 million in 2023 from $105.0 million in 2022[144] - The Americas segment's identifiable assets increased to $93.6 million in 2023 from $88.5 million in 2022[144] Compliance and Financial Covenants - The company was not in compliance with its Senior Leverage Ratio financial covenant at September 30, 2023, but cured this by paying $4.3 million in November 2023[224] - The Senior Leverage Ratio is set to decrease to 2.50 at December 31, 2023, and further to 2.00 at March 31, 2024, raising concerns about the company's ability to maintain compliance[224] Cash Flow and Liquidity - Cash and cash equivalents as of September 30, 2023, were $18.4 million, down from $22.0 million on September 30, 2022[194] - For the nine months ended September 30, 2023, net cash provided by operating activities was $8.2 million, up from $0.5 million in the same period of 2022, indicating improved operating income due to higher product margins[219] - The company anticipates that cash and cash equivalents, along with expected cash flows from operations, will provide sufficient liquidity for working capital needs and debt service requirements[223] Goodwill Impairment - The company recorded goodwill impairment charges of $13.2 million for Q3 2023, with no such charges in 2022[186] - The company recorded goodwill impairment charges of $13.2 million for the nine months ended September 30, 2023, with no such charges in 2022[190] - The company recorded goodwill impairment charges of $10.4 million and $2.8 million for the Americas and EMEA reporting units, respectively, for the three and nine months ended September 30, 2023[230]

Financial Data and Key Metrics Changes - For Q2 2023, the company reported revenue of $47 million, a decline of 21% compared to Q2 2022, while gross profit improved by 6% to $18 million, and adjusted EBITDA increased by 4% to $5.4 million [6][29] - The gross margin for Q2 2023 was 30%, an increase of 970 basis points from Q2 2022, reflecting strong profitability [6][23] - The company reported a net loss of $811,000 for Q2 2023, compared to a net income of $26,000 in Q2 2022 [31] Business Line Data and Key Metrics Changes - Hardware accounted for approximately 92% of total revenues, with 69% related to flat panel displays, while the remainder came from classroom audio solutions and device accessories [30] - The professional development division, EOS Education, received recognition for its Google Cloud Partner Advantage, indicating growth in service offerings [9] Market Data and Key Metrics Changes - Order intake for Q2 2023 was $51.2 million, down 37% year-on-year, with 54% from the U.S., 41% from EMEA, and 5% from Asia-Pac [15] - Despite the decline in order intake, market share for interactive displays increased in both the U.S. (from 5.8% to 6.4%) and EMEA (from 5.5% to 5.8%) during H1 2023 [15][29] Company Strategy and Development Direction - The company is committed to both education and enterprise verticals, expanding its product lines and introducing new solutions [8][9] - The focus on student safety through the Attention! solution is a strategic initiative aimed at addressing significant concerns in schools [10][20] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about returning to meaningful revenue growth in 2024, supported by an increasing sales pipeline and industry recovery [12][41] - The company anticipates a rebound in order intake during Q3 2023, with revenue growth expected in Q4 [21][39] Other Important Information - The company has improved its balance sheet, reporting $65 million in working capital and $60 million in cash as of June 30, 2023 [7][26] - A reverse stock split was completed to maintain compliance with NASDAQ requirements [26] Q&A Session Summary Question: What are the factors affecting cash conversions? - Management indicated that cash flow typically increases in the second half of the year due to seasonal sales patterns and inventory optimization [35] Question: Is paying down debt a priority? - Management confirmed that debt reduction is a priority, having paid down $3 million post-quarter end, and emphasized improving profitability alongside debt reduction [38] Question: How do you see order growth in the U.S. versus Europe? - Management noted that both regions have potential for growth, with significant tenders expected in Europe and ongoing strong performance in the U.S. [43] Question: What are the expectations for gross margin sustainability? - Management anticipates some erosion in gross margins over the next 12 to 18 months due to competitive pricing pressures but believes long-term margins can improve with high-margin product sales [45] Question: Can you provide an update on the share repurchase program? - Management stated that the share repurchase program is under evaluation, with plans to utilize cash flow from operations to drive shareholder value [61]

PART I. Financial Information [Unaudited Condensed Consolidated Financial Statements](index=3&type=section&id=Item%201.%20Unaudited%20Condensed%20Consolidated%20Financial%20Statements) This section presents Boxlight Corporation's unaudited consolidated financial statements, highlighting a net loss improvement and key accounting changes - Effective January 1, 2023, the Company changed its segment reporting to align with geographic markets: **Americas, EMEA, and Rest of World**. Prior period amounts have been restated for comparability[10](index=10&type=chunk)[105](index=105&type=chunk) - On June 14, 2023, the company executed a **1-for-8 reverse stock split** of its Class A common stock. All share and per-share amounts have been retrospectively adjusted[137](index=137&type=chunk) [Unaudited Condensed Consolidated Statements of Operations and Comprehensive Income (Loss)](index=3&type=section&id=Unaudited%20Condensed%20Consolidated%20Statements%20of%20Operations%20and%20Comprehensive%20Income%20(Loss)) Revenues decreased to $88.2 million, but gross profit improved to $33.0 million, resulting in a reduced net loss of $3.7 million Consolidated Statements of Operations (Six Months Ended June 30) | Metric (in thousands) | 2023 | 2022 | | :--- | :--- | :--- | | **Revenues, net** | $88,242 | $110,231 | | Cost of revenues | $55,266 | $80,781 | | **Gross profit** | $32,976 | $29,450 | | Total operating expense | $31,080 | $32,023 | | **Income (loss) from operations** | $1,896 | $(2,573) | | **Net loss** | $(3,735) | $(4,829) | | Net loss per common share | $(0.47) | $(0.67) | Consolidated Statements of Operations (Three Months Ended June 30) | Metric (in thousands) | 2023 | 2022 | | :--- | :--- | :--- | | **Revenues, net** | $47,052 | $59,628 | | Cost of revenues | $29,224 | $42,794 | | **Gross profit** | $17,828 | $16,834 | | **Net income (loss)** | $(811) | $26 | [Unaudited Condensed Consolidated Balance Sheets](index=4&type=section&id=Unaudited%20Condensed%20Consolidated%20Balance%20Sheets) Total assets decreased to $182.3 million due to lower inventories, while total liabilities also decreased to $102.9 million Condensed Consolidated Balance Sheet Highlights (in thousands) | Account | June 30, 2023 | Dec 31, 2022 | | :--- | :--- | :--- | | **Total Current Assets** | $101,046 | $111,244 | | *Cash and cash equivalents* | $15,588 | $14,591 | | *Inventories* | $37,809 | $58,211 | | **Total Assets** | **$182,313** | **$195,395** | | **Total Current Liabilities** | $36,252 | $48,475 | | **Total Liabilities** | **$102,912** | **$114,993** | | **Total Stockholders' Equity** | **$50,892** | **$51,893** | [Unaudited Condensed Consolidated Statements of Changes in Stockholders' Equity](index=5&type=section&id=Unaudited%20Condensed%20Consolidated%20Statements%20of%20Changes%20in%20Stockholders'%20Equity) Total stockholders' equity slightly decreased to $50.9 million, influenced by net loss, dividends, and positive currency adjustments - For the six months ended June 30, 2023, the net loss was **$3.7 million**, and fixed dividends on Series B Preferred stock were **$635 thousand**[5](index=5&type=chunk) - Positive impacts on equity included **$1.2 million** from stock compensation and a **$2.3 million** positive foreign currency translation adjustment[5](index=5&type=chunk) [Unaudited Condensed Consolidated Statements of Cash Flows](index=7&type=section&id=Unaudited%20Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) Operating cash flow significantly improved to $10 thousand provided, primarily due to inventory changes, ending with $15.6 million cash Cash Flow Summary (Six Months Ended June 30, in thousands) | Cash Flow Activity | 2023 | 2022 | | :--- | :--- | :--- | | Net cash provided by (used in) operating activities | $10 | $(6,876) | | Net cash used in investing activities | $(100) | $(659) | | Net cash provided by financing activities | $1,000 | $621 | | **Net increase (decrease) in cash** | **$997** | **$(6,318)** | | **Cash and cash equivalents, end of period** | **$15,588** | **$11,620** | - The improvement in operating cash flow was largely driven by a **$20.1 million** positive change from inventories, compared to a **$2.0 million** use of cash in the prior year[133](index=133&type=chunk) [Notes to Unaudited Condensed Consolidated Financial Statements](index=8&type=section&id=Notes%20to%20Unaudited%20Condensed%20Consolidated%20Financial%20Statements) Notes detail accounting policies, segment reporting, CECL adoption, debt agreements, and goodwill impairment risk for the Americas unit - The company adopted the new CECL standard for credit losses on January 1, 2023, resulting in a **$76 thousand** cumulative-effect adjustment to reduce retained earnings[18](index=18&type=chunk) - An interim goodwill impairment test was performed as of June 30, 2023. While no impairment was recorded, the Americas reporting unit, with **$22.5 million** of goodwill, was determined to be **at risk** of failing the test in the future[40](index=40&type=chunk)[86](index=86&type=chunk) - The company is required to use commercially reasonable efforts to refinance its Credit Agreement with Whitehawk and repay the facility by **September 30, 2023**[44](index=44&type=chunk) - As of June 30, 2023, the company had open inventory purchase commitments totaling **$30.6 million**[180](index=180&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=27&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses decreased revenues but improved gross profit and margin, alongside liquidity challenges and goodwill impairment risk Financial Performance (Six Months Ended June 30) | Metric (in millions) | 2023 | 2022 | Change | | :--- | :--- | :--- | :--- | | **Revenues** | $88.2 | $110.2 | -19.9% | | **Gross Profit** | $33.0 | $29.5 | +12.0% | | **Gross Margin** | 37.4% | 26.7% | +10.7 pts | - The increase in gross profit and margin was primarily attributed to **lower manufacturing and shipping costs** compared to the prior year[81](index=81&type=chunk) - The company's acquisition strategy focuses on integrating acquired companies to achieve **cost savings** through staff reductions, economies of scale, and improved market reach[38](index=38&type=chunk)[59](index=59&type=chunk) - The company's Americas reporting unit, with an estimated fair value approximately **4%** above its carrying value, is **at risk** of goodwill impairment if future performance does not meet projections[86](index=86&type=chunk) Adjusted EBITDA Reconciliation (Six Months Ended June 30, in thousands) | Metric | 2023 | 2022 | | :--- | :--- | :--- | | Net Loss | $(3,735) | $(4,829) | | EBITDA | $6,367 | $4,446 | | **Adjusted EBITDA** | **$8,724** | **$6,446** | [Quantitative and Qualitative Disclosure About Market Risk](index=34&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosure%20About%20Market%20Risk) The company is exempt from providing this disclosure as it qualifies as a '**smaller reporting company**' - The company is **not required to provide this disclosure** as it qualifies as a '**smaller reporting company**'[86](index=86&type=chunk) [Controls and Procedures](index=35&type=section&id=Item%204.%20Controls%20and%20Procedures) Disclosure controls and procedures were deemed ineffective due to material weaknesses, though financial statements are fairly presented - The principal executive officer and principal financial officer concluded that the company's disclosure controls and procedures were **not effective** as of the evaluation date due to previously identified **material weaknesses**[71](index=71&type=chunk) - **No changes were made** in the internal controls over financial reporting during the quarter ended June 30, 2023, that have materially affected, or are reasonably likely to materially affect, the company's internal control over financial reporting[72](index=72&type=chunk) PART II. Other Information [Legal Proceedings](index=35&type=section&id=Item%201.%20Legal%20Proceedings) The company is not currently involved in any material legal proceedings, with no expected material adverse effects - The Company is **not currently involved in any material legal proceedings** and does **not expect pending matters to have a material adverse effect** on its financial condition[73](index=73&type=chunk) [Risk Factors](index=35&type=section&id=Item%201A.%20Risk%20Factors) New risk factors highlight unstable market and economic conditions, including bank failures, potentially impacting liquidity and performance - A **new risk factor** has been added concerning **unstable market and economic conditions**, including recent volatility and disruptions in the global credit and financial markets (e.g., **Silicon Valley Bank closure**)[95](index=95&type=chunk)[89](index=89&type=chunk) - These market conditions could impair the company's ability to **access financing**, increase the **cost of capital**, and **adversely affect its growth strategy and financial performance**[89](index=89&type=chunk) [Unregistered Sale of Equity Securities and Use of Proceeds](index=36&type=section&id=Item%202.%20Unregistered%20Sale%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) No unregistered sales of equity securities or use of proceeds were reported during the period - **No information reported**[89](index=89&type=chunk) [Other Information](index=36&type=section&id=Item%205.%20Other%20Information) No other information was reported for this item - **No information reported**[89](index=89&type=chunk) [Exhibits](index=36&type=section&id=Item%206.%20Exhibits) This section lists filed exhibits, including Credit Agreement amendments and CEO/CFO Sarbanes-Oxley certifications - Filed exhibits include the **Third and Fourth Amendments to the Credit Agreement with Whitehawk Finance LLC**[90](index=90&type=chunk) - **Certifications from the Chief Executive Officer and Chief Financial Officer** pursuant to **Sections 302 and 906 of the Sarbanes-Oxley Act** are included as exhibits[90](index=90&type=chunk)

Financial Data and Key Metrics Changes - For Q1 2023, the company reported revenues of $41.2 million, a decrease of 18.6% compared to $50.6 million in Q1 2022, primarily due to softer demand and foreign exchange rate changes [60][50] - Gross profit for Q1 2023 was $15.1 million, with a gross profit margin of 36.8%, an increase of 1,190 basis points from the previous year [12][50] - The company reported a net loss of $2.9 million for Q1 2023, an improvement from a net loss of $4.9 million in Q1 2022 [43][62] - Adjusted EBITDA for Q1 2023 was $3.3 million, up from $1.2 million in Q1 2022, reflecting a 171% increase [50][62] Business Line Data and Key Metrics Changes - Hardware accounted for approximately 90% of total revenues in Q1 2023, with flat panel displays making up about 69% of that [84] - The company has seen a significant increase in gross profit margins, driven by lower manufacturing and freight costs, with expectations of maintaining margins above 30% in the near term [15][70] Market Data and Key Metrics Changes - Order intake in Q1 was $41.5 million, down 35% year-on-year, with 50% from the U.S., 47% from EMEA, and 3% from Asia-Pac [22] - Despite the decline in order intake, the company increased its market share in the U.S. from 5.3% to 7% and in EMEA from 5.6% to 6.2% year-on-year [22] Company Strategy and Development Direction - The company aims for modest single-digit revenue growth for the full year 2023, with expectations for stronger performance in the second half of the year [33][16] - The company is focusing on enhancing its product suite and has launched new products, including LED video walls and collaboration solutions [36][55] - There is a strategic emphasis on expanding into the corporate market, particularly in Germany, where margins are higher [40] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in returning to revenue growth in the second half of the year, citing significant government funds available for education technology solutions [52][41] - The company anticipates increased order activity in Q3 and Q4, driven by pent-up demand following a slowdown in the first half of the year [65][90] Other Important Information - The company has a strong balance sheet with $11 million in cash and $62 million in working capital as of March 31, 2023 [33][44] - The company is considering a reverse stock split to maintain its NASDAQ listing due to stock price challenges [53][134] Q&A Session Summary Question: What gives confidence in achieving single-digit revenue growth despite a decline in orders? - Management indicated that there is significant activity in the pipeline, especially in the U.S., and expects school districts to start ordering soon, likely in Q3 and Q4 [90][121] Question: Are tenders actual orders or RFPs? - Tenders are larger projects where school districts request bids from several vendors, and the company is seeing an increase in these opportunities [92][90] Question: What is the outlook for gross profit margins? - Management expects gross profit margins to remain above 30%, although they may come down from the current high levels due to competitive pricing pressures [70][94] Question: What is the status of the company's partnerships, particularly with Bluum? - The company maintains a significant relationship with Bluum, which was its second-largest partner in Q1, and is actively working on numerous bids with them [138][139] Question: Why is the company requesting an increase in the share incentive plan? - The increase is to ensure there are enough shares available to meet future needs, not necessarily to issue them immediately [112][113]

PART I. Financial Information [Item 1. Financial Statements](index=3&type=section&id=Item%201.%20Financial%20Statements) This section presents the unaudited condensed consolidated financial statements for Q1 2023, detailing operations, balance sheets, equity, and cash flows with explanatory notes [Unaudited Condensed Consolidated Financial Statements](index=3&type=section&id=Unaudited%20Condensed%20Consolidated%20Financial%20Statements) Key financial statements for Q1 2023 show a net loss of $2.9 million, total assets of $179.6 million, and improved operating cash flow Condensed Consolidated Statements of Operations | Financial Metric | Three Months Ended March 31, 2023 (in thousands) | Three Months Ended March 31, 2022 (in thousands) | | :--- | :--- | :--- | | Revenues, net | $41,189 | $50,603 | | Gross profit | $15,148 | $12,616 | | Loss from operations | ($180) | ($3,454) | | Net loss | ($2,924) | ($4,856) | | Net loss per common share | ($0.04) | ($0.07) | Condensed Consolidated Balance Sheets | Balance Sheet Item | March 31, 2023 (in thousands) | December 31, 2022 (in thousands) | | :--- | :--- | :--- | | Cash | $11,274 | $14,591 | | Total Assets | $179,562 | $195,395 | | Total Liabilities | $101,292 | $114,993 | | Total Stockholders' Equity | $49,761 | $51,893 | Condensed Consolidated Statements of Cash Flows | Cash Flow Activity | Three Months Ended March 31, 2023 (in thousands) | Three Months Ended March 31, 2022 (in thousands) | | :--- | :--- | :--- | | Net cash used in operating activities | ($1,903) | ($5,423) | | Net cash used in investing activities | ($81) | ($526) | | Net cash used in financing activities | ($987) | ($912) | | Net decrease in cash | ($3,317) | ($6,673) | [Notes to Unaudited Condensed Consolidated Financial Statements](index=8&type=section&id=Notes%20to%20Unaudited%20Condensed%20Consolidated%20Financial%20Statements) Detailed notes explain segment reorganization, disaggregated revenue, debt structure, equity instruments, and stock compensation plans - Effective January 1, 2023, the Company changed its segment reporting to align with geographic markets, now organized into three reportable segments: EMEA (Europe, Middle East and Africa), Americas (North and Central America), and Rest of World[19](index=19&type=chunk)[72](index=72&type=chunk) Disaggregated Revenue | Revenue Type | Three Months Ended March 31, 2023 (in thousands) | Three Months Ended March 31, 2022 (in thousands) | | :--- | :--- | :--- | | **Product Revenues** | | | | Hardware | $38,217 | $47,294 | | Software | $464 | $1,519 | | **Service Revenues** | | | | Professional services | $382 | $355 | | Maintenance and subscription | $2,126 | $1,435 | | **Total** | **$41,189** | **$50,603** | - As of March 31, 2023, the aggregate amount of contractual transaction prices allocated to remaining performance obligations was **$24.1 million**. The Company expects to recognize **34%** of this amount as revenue over the next twelve months[29](index=29&type=chunk) - On February 14, 2023, the Board of Directors approved a share repurchase program authorizing the company to purchase up to **$15.0 million** of its Class A common stock, expiring on January 26, 2027[88](index=88&type=chunk) Segment Performance | Segment | Revenue, net (Q1 2023, in thousands) | Income (Loss) from Operations (Q1 2023, in thousands) | | :--- | :--- | :--- | | Americas | $21,066 | ($147) | | EMEA | $23,955 | ($401) | | Rest of World | $1,323 | $408 | [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=25&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses Q1 2023 financial results, highlighting an 18.6% revenue decrease, improved gross margin, and a narrowed net loss Key Financial Metrics | Metric | Three Months Ended March 31, 2023 (in millions) | Three Months Ended March 31, 2022 (in millions) | | :--- | :--- | :--- | | **Revenues** | $41.2 | $50.6 | | **Gross Profit** | $15.1 | $12.6 | | **Gross Profit Margin** | 36.8% | 24.9% | | **Net Loss** | ($2.9) | ($4.9) | - The increase in gross profit and margin was primarily driven by a decrease in manufacturing and shipping costs compared to the prior year's first quarter[157](index=157&type=chunk) Adjusted EBITDA Reconciliation | Reconciliation Item (in thousands) | Three Months Ended March 31, 2023 | Three Months Ended March 31, 2022 | | :--- | :--- | :--- | | Net loss | ($2,924) | ($4,856) | | EBITDA | $1,837 | ($304) | | **Adjusted EBITDA** | **$3,315** | **$1,222** | - As of March 31, 2023, the company had cash and cash equivalents of **$11.3 million** and a working capital balance of **$61.6 million**. Net cash used in operating activities improved to **$1.9 million** from **$5.4 million** in the prior-year period[137](index=137&type=chunk) [Item 3. Quantitative and Qualitative Disclosure About Market Risk](index=31&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosure%20About%20Market%20Risk) This disclosure is not required as the company qualifies as a smaller reporting company - As a "smaller reporting company," this disclosure is not required[171](index=171&type=chunk) [Item 4. Controls and Procedures](index=31&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded that disclosure controls and procedures were not effective as of March 31, 2023, due to previously identified material weaknesses - Management concluded that disclosure controls and procedures were not effective as of the end of the period covered by this report, due to material weaknesses described in the 2022 Annual Report on Form 10-K[172](index=172&type=chunk) - There were no changes made in the internal controls over financial reporting during the quarter that have materially affected, or are reasonably likely to materially affect, the company's internal control over financial reporting[172](index=172&type=chunk) PART II. Other Information [Item 1. Legal Proceedings](index=32&type=section&id=Item%201.%20Legal%20Proceedings) The company is not currently involved in any material legal proceedings that would adversely affect its financial position or operations - The Company is not currently involved in any material legal proceedings and does not expect pending matters to have a material adverse effect on its consolidated financial position or results of operations[143](index=143&type=chunk) [Item 1A. Risk Factors](index=32&type=section&id=Item%201A.%20Risk%20Factors) This section refers to existing risk factors and introduces a new one concerning unstable market and economic conditions - A new risk factor has been added concerning unstable market and economic conditions. It highlights that disruptions in global credit and financial markets, including recent bank closures, could adversely affect the company's business, access to liquidity, and ability to secure financing[165](index=165&type=chunk) [Other Items (Items 2, 3, 4, 5)](index=32&type=section&id=Other%20Items%20(Items%202,%203,%204,%205)) This section confirms no unregistered equity sales, no defaults on senior securities, and no mine safety disclosures during the period - The company reported "None" for Item 2 (Unregistered Sales of Equity Securities and Use of Proceeds) and Item 5 (Other Information), and "Not Applicable" for Item 3 (Defaults Upon Senior Securities) and Item 4 (Mine Safety Disclosures)[165](index=165&type=chunk) [Item 6. Exhibits](index=33&type=section&id=Item%206.%20Exhibits) This section lists all exhibits filed with the quarterly report, including credit agreements, preferred stock designations, and officer certifications - The report lists all exhibits filed, including corporate governance documents, forms of securities, a third amendment to the credit agreement with Whitehawk, and officer certifications[166](index=166&type=chunk)