LOUISVILLE, Ky., May 15, 2024 (GLOBE NEWSWIRE) -- Creative Realities, Inc. ("Creative Realities") (NASDAQ:CREX) a leading provider of cutting-edge digital signage and media solutions in North America, announces its development of a channel program tailored and targeted to the EMEA marketplace. As the global digital signage and IT market is generally moving to a predominantly SaaS business model, Creative Realities is well-positioned to appeal to EMEA digital signage integrators in need of enterprise-level C ...

Financial Data and Key Metrics Changes - The company reported record first-quarter revenue of $12.3 million, a 23.5% increase from $9.9 million in the prior year [18] - Gross profit for the first quarter was $5.8 million, up from $5.1 million in 2023 [18] - Adjusted EBITDA was approximately $0.8 million compared to $1 million last year [18] - Annual recurring revenue (ARR) reached an all-time high of approximately $17.7 million, an increase of $1.4 million from the end of 2023 [20] Business Line Data and Key Metrics Changes - Service revenue grew by 45% year-over-year, driven by higher installations, although this led to slightly lower gross margins [9] - The company expects that increased installation activity will lead to higher subscription revenue in the future [9] Market Data and Key Metrics Changes - The company is experiencing strong demand in the quick-service restaurant (QSR) sector, particularly for drive-thru solutions [44] - Engagement with professional sports teams for large stadium overhauls is also significant, with ongoing discussions with 10 to 15 teams [44] Company Strategy and Development Direction - The company is focused on disciplined debt deleveraging and has secured a new $20 million senior revolving credit facility to enhance financial flexibility and support growth [34][35] - The management is optimistic about the potential for acquisitions, given the new financing capacity, while maintaining a focus on reasonable valuations [68] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving a revenue target of $60 million for the year, despite some slower ramp-up in certain projects [31] - The company anticipates a return to a higher mix of hardware sales in the upcoming quarters, which should positively impact EBITDA margins [32] Other Important Information - The company is on track for an ERP transition to NetSuite on July 1, which is expected to improve operational efficiency [42] - The backlog remains significant, although slightly reduced from previous figures, indicating ongoing demand [71] Q&A Session Summary Question: Can you talk about business development and demand in verticals? - Management highlighted strong activity in the QSR space and ongoing engagements with professional sports teams for large projects [44] Question: Is there any change to the revenue guidance range? - Management confirmed that they are still firm on the $60 million revenue guidance and expect to make up for any slower ramp in other business areas [31] Question: What is the status of the Panera relationship? - The company is fully integrated with Panera's point of sale and expects to open 40 to 60 new locations annually [48][77] Question: How are you deepening relationships with existing customers? - Management noted that existing customers are expanding their services, leading to increased revenue from previously acquired customers [54] Question: What is the competitive environment like? - Management indicated that they are winning about 70% of engagements and are increasingly invited to participate in proposals [51][58]

[PART I. FINANCIAL INFORMATION](index=3&type=section&id=PART%201.%20FINANCIAL%20INFORMATION) [Item 1. Financial Statements](index=3&type=section&id=Item%201.%20Financial%20Statements) Unaudited financial statements show reduced net loss, negative working capital, and going concern doubt due to debt maturities [Condensed Consolidated Balance Sheets](index=3&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) Balance sheets show decreased assets and liabilities, with long-term debt reclassified to current, resulting in negative working capital Condensed Consolidated Balance Sheet Highlights (in thousands) | Balance Sheet Item | March 31, 2024 | December 31, 2023 | | :--- | :--- | :--- | | **Total Current Assets** | $16,317 | $18,610 | | **Total Assets** | $68,206 | $70,777 | | **Total Current Liabilities** | $38,735 | $20,197 | | **Total Liabilities** | $39,357 | $41,946 | | **Total Shareholders' Equity** | $28,849 | $28,831 | - The company reported **negative working capital of $22.4 million** as of March 31, 2024, primarily due to the reclassification of long-term debt and contingent consideration to current liabilities ahead of their February 2025 maturity[9](index=9&type=chunk)[27](index=27&type=chunk) [Condensed Consolidated Statements of Operations](index=4&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) Total sales increased 24% to $12.3 million, significantly reducing net loss to $109 thousand, aided by a gain on contingent consideration Statement of Operations Summary (in thousands, except per share data) | Metric | Q1 2024 | Q1 2023 | | :--- | :--- | :--- | | **Total Sales** | $12,285 | $9,944 | | **Gross Profit** | $5,764 | $5,089 | | **Operating Loss** | $(76) | $(90) | | **Net Loss** | $(109) | $(1,000) | | **Diluted Loss Per Share** | $(0.01) | $(0.14) | [Condensed Consolidated Statements of Cash Flows](index=5&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) Net cash provided by operating activities decreased to $1.9 million, with net cash used in investing and financing activities, ending with $2.9 million cash Cash Flow Summary (in thousands) | Cash Flow Activity | Three Months Ended March 31, 2024 | Three Months Ended March 31, 2023 | | :--- | :--- | :--- | | **Net cash provided by operating activities** | $1,938 | $3,868 | | **Net cash used in investing activities** | $(830) | $(1,034) | | **Net cash used in financing activities** | $(1,119) | $(562) | | **Cash and Cash Equivalents, end of period** | $2,899 | $3,905 | [Notes to Condensed Consolidated Financial Statements](index=7&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) Notes detail accounting policies, going concern uncertainty due to debt maturities, revenue recognition, and customer concentration - The company's financial statements are prepared under a going concern assumption, but management identified conditions raising substantial doubt, including negative working capital and upcoming debt maturities totaling **$10.0 million** (Acquisition Term Loan) and **$10.6 million** (contingent consideration) in February 2025, with insufficient cash to meet these obligations[27](index=27&type=chunk) - Management's plans to refinance these obligations are not yet finalized and cannot be deemed probable, thus the substantial doubt about the company's ability to continue as a going concern is not alleviated[28](index=28&type=chunk) - On March 27, 2023, the company executed a **1-for-3 reverse stock split**, with all share and per-share data retroactively adjusted to reflect this split[22](index=22&type=chunk) Disaggregated Revenue by Source (in thousands) | Revenue Source | Q1 2024 | Q1 2023 | | :--- | :--- | :--- | | Hardware | $4,144 | $4,322 | | Managed Services | $4,774 | $4,072 | | Installation Services | $2,160 | $947 | | Other Services | $1,207 | $603 | | **Total Revenue** | **$12,285** | **$9,944** | - The company has significant customer concentration, with four customers accounting for **13%, 12%, 11%, and 10% of revenue** for the three months ended March 31, 2024[92](index=92&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=20&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses Q1 2024 financial performance, highlighting a 24% sales increase driven by services, and reiterates liquidity challenges and going concern uncertainty due to significant debt maturities [Overview](index=21&type=section&id=Overview) Creative Realities provides end-to-end digital signage solutions across various market segments, offering a full portfolio from hardware to recurring SaaS platforms - The company provides end-to-end digital signage solutions for market segments such as Retail, QSRs, Convenience Stores, and Corporate Communications[98](index=98&type=chunk)[100](index=100&type=chunk) - Primary revenue sources include hardware sales, services (design, installation, support, media sales), and recurring subscription licensing (SaaS) revenue from proprietary software platforms like ReflectView and AdLogic[102](index=102&type=chunk)[103](index=103&type=chunk) [Results of Operations](index=24&type=section&id=Results%20of%20Operations) Q1 2024 sales grew 24% to $12.3 million, driven by a 45% increase in services revenue, leading to a significantly improved net loss despite a lower gross margin Comparison of Results of Operations (in thousands) | Line Item | Q1 2024 | Q1 2023 | Change ($) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | **Sales** | $12,285 | $9,944 | $2,341 | 24% | | **Gross Profit** | $5,764 | $5,089 | $675 | 13% | | **Operating Loss** | $(76) | $(90) | $14 | 16% | | **Net Loss** | $(109) | $(1,000) | $891 | 89% | - The **24% sales increase** was primarily driven by a **$2.5 million (45%) increase in services and other revenues**, with installation services revenue growing **128%** due to significant deployment activity, and managed services (SaaS and support) revenue growing **17%**[109](index=109&type=chunk) - The annual recurring run rate of subscription license revenue grew from **$16.3 million** at year-end 2023 to **$17.7 million** as of March 31, 2024[109](index=109&type=chunk) - Gross profit margin decreased from **51% to 47%** year-over-year, attributed to a shift in revenue mix towards lower-margin installation services, which constituted **18% of total revenue** in Q1 2024 versus 10% in Q1 2023[111](index=111&type=chunk) [Liquidity and Capital Resources](index=27&type=section&id=Liquidity%20and%20Capital%20Resources) The company faces significant liquidity constraints with a $2.9 million cash balance and substantial debt maturities totaling over $20 million in February 2025, raising going concern doubts - Net cash provided by operating activities was **$1.9 million** for Q1 2024, compared to **$3.9 million** for Q1 2023[121](index=121&type=chunk) - Net cash used in financing activities was **$1.1 million** in Q1 2024, primarily due to repayments on the Consolidation Term Loan[123](index=123&type=chunk) - The company's ability to continue as a going concern is in doubt due to upcoming maturities of its Acquisition Term Loan (**$10.0 million**), Consolidation Term Loan, and contingent consideration (**$10.6 million**) on February 17, 2025, with insufficient cash on hand to make these repayments[27](index=27&type=chunk)[120](index=120&type=chunk) [Item 4. Controls and Procedures](index=27&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded that disclosure controls and procedures were effective as of March 31, 2024, with no material changes to internal control over financial reporting during the quarter - Based on an evaluation as of March 31, 2024, the CEO and CFO concluded that the company's disclosure controls and procedures were effective[125](index=125&type=chunk) - No changes in internal control over financial reporting occurred during the quarter ended March 31, 2024, that have materially affected, or are reasonably likely to materially affect, internal controls[126](index=126&type=chunk) [PART II. OTHER INFORMATION](index=28&type=section&id=PART%20II.%20OTHER%20INFORMATION) [Item 1. Legal Proceedings](index=28&type=section&id=Item%201.%20Legal%20Proceedings) The company reports no material legal proceedings, other than routine litigation incidental to its business - The company reports no material legal proceedings[84](index=84&type=chunk)[129](index=129&type=chunk) [Item 1A. Risk Factors](index=28&type=section&id=Item%201A.%20Risk%20Factors) The company faces intense competition from rivals with greater resources and from hardware manufacturers bundling basic software, which could impact market share and margins - The company faces intense competition from rivals with significantly greater financial, technical, and marketing resources, which puts it at a competitive disadvantage[131](index=131&type=chunk) - A specific competitive threat is noted from hardware manufacturers, such as Samsung, who are including customizable display software in their screens, which could be a sufficient solution for some customers despite being less comprehensive[131](index=131&type=chunk) - Failure to invest sufficiently in R&D, sales, and marketing to keep pace with competitors could lead to price reductions, reduced margins, and loss of market share[132](index=132&type=chunk)

LOUISVILLE, Ky., May 10, 2024 (GLOBE NEWSWIRE) -- Creative Realities, Inc. ("Creative Realities," "CRI," or the "Company") (NASDAQ:CREX), a leading provider of digital signage and media solutions, announced its financial results for the fiscal first quarter ended March 31, 2024. Highlights: Record first quarter revenue of $12.3 million, up 24% from $9.9 million in the prior-year periodGross profit of $5.8 million for the three months ended March 31, 2024 versus $5.1 million in the first quarter of fiscal 20 ...

LOUISVILLE, Ky., May 03, 2024 (GLOBE NEWSWIRE) -- Creative Realities, Inc. ("Creative Realities," "CRI," or the "company") (NASDAQ:CREX, CREXW))), a leading provider of digital signage solutions, announced today that it will release its financial results for the three months ended March 31, 2024 before the market open on Friday, May 10, 2024. A conference call to review the results is scheduled for Friday, May 10, 2024 at 9:00 am Eastern Time, which will include prepared remarks and materials from managemen ...

Financial Data and Key Metrics - Operating income for 2023 was $1.3 million, marking the first time the company achieved a positive annual result [6] - Adjusted EBITDA reached an all-time annual record of $5.1 million, representing 11.2% of revenue [6][7] - Annual Recurring Revenue (ARR) grew to a record $16.3 million run rate exiting 2023 [7] - Cash on hand as of December 31, 2023, was approximately $2.9 million [8] - Net debt reduced to $12.2 million as of December 31, 2023, down from $19 million at the end of 2022 [9] - Leverage ratio improved to 2.7 times on gross debt and 1.9 times on net debt, down from 5.4 and 5.0 times respectively at the end of 2022 [14] Business Line Data and Key Metrics - The company performed eight installations in 2023 at an average sale price of $27,000 per location [16] - Q1 2024 is expected to see 50 to 60 installations, with acceleration throughout Q2 and Q3 [16] - The new retail media network secured another customer in the financial sector, chosen as their deployment partner [16] - Starlite Media is transitioning from static to digital, with several hundred locations expected to convert or add digital displays every quarter through 2024 and 2025 [17] Market Data and Key Metrics - The company projects 20% to 40% revenue growth for each year-over-year quarter in 2024, accounting for seasonality [12] - The company's debt stood at approximately $14 million as of the call date, down $2 million since the start of the year [14] - The leverage ratio improved to 2.4 times on trailing 12-month adjusted EBITDA by the end of 2023 [28] Company Strategy and Industry Competition - The company is at an inflection point where new revenue is coming with improved margins, benefiting from operating leverage [13] - The company is focusing on strengthening its balance sheet by increasing revenue, improving profitability, and managing debt leverage [27] - The company competes with STRATACACHE and Coates in the digital signage market, particularly in the QSR industry [42] Management Commentary on Operating Environment and Future Outlook - Management believes the risk profile of the company has substantially improved and will continue to do so throughout 2024 [10] - The company is increasing its 2024 guidance for exit run rate ARR on SaaS-based subscription license revenue from $18 million to $20 million [34] - Management expects to continue paying down debt, deleveraging the company, and strengthening the balance sheet in 2024 [35] Other Important Information - The company modified its accounting for media sales to be recorded at net rather than gross beginning in Q4 2023, which will continue to affect revenue recognition [10] - The company launched a channel program on February 1, 2024, and is already approaching 100 licenses [36] - The company is transitioning to a comprehensive company-wide ERP solution, with the first departments expected to come online in Q2 2024 [18] Q&A Session Summary Question: Backlog and Opportunities - The backlog has remained relatively flat, with 18 to 24 months of revenue in the pipeline [40] - The company expects the backlog to change over the next two quarters as they close significant opportunities [40] Question: Drive-Thru Success and Brand Awareness - The company's success in drive-thru upgrades has led to greater brand awareness and more enterprises looking to work with them [59] - The company is now included in conversations with midsize and large QSR brands evaluating drive-thru solutions [59] Question: Gross Margin Dynamics - Gross margin percentages on hardware and services in Q4 2023 were affected by cleanup in gross-to-net accounting, particularly with media sales [81] - Full-year figures are a better proxy for gross margins, with hardware typically in the low-20s and services in the low-60s [82] Question: Channel Partner Program Feedback - The channel partner program has received positive feedback, with 100 licenses already secured [67] - The company expects the program to grow quickly, driven by higher-margin SaaS revenue [67] Question: New Opportunities in Convenience Stores and Supermarkets - QSR remains a hot market, particularly for digital drive-thru solutions [71] - Supermarkets are exploring whole-store ecosystems with digital advertising, menu boards, and wayfinding solutions [72] Question: IceBox Media and Black Rifle Deals - IceBox Media is a digital advertising network with limited hardware and a focus on software [74] - The Black Rifle deal involves converting existing digital signage to the company's software platform, with potential for significant scale [92] Question: Software Pricing and Growth - The company is increasing software pricing for new customers and renegotiating existing contracts to drive growth [94] - New customers are being added at higher prices per endpoint, contributing to an increase in average SaaS revenue [102]

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, DC 20549 FORM 10-K (Mark one) ☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 2023 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from ___________ to ___________ Commission file number 001-33169 Creative Realities, Inc. (Exact name of registrant as specified in its charter) | Minne ...

LOUISVILLE, Ky., March 14, 2024 (GLOBE NEWSWIRE) -- Creative Realities, Inc. ("Creative Realities," "CRI," or the "Company") (NASDAQ:CREX, CREXW))), a leading provider of digital signage solutions, announced today that it will release its financial results for the year ended December 31, 2023 before the market open on Thursday, March 21, 2024. A conference call to review the results is scheduled for Thursday, March 21, 2024 at 9:00 am Eastern Time, which will include prepared remarks from management followe ...

LOUISVILLE, Ky., March 13, 2024 (GLOBE NEWSWIRE) -- Creative Realities, Inc. (NASDAQ:CREX, CREXW))), a leading provider of digital signage solutions, continues its longstanding collaboration with airport advertising company Departure Media to create an immersive advertising experience at Cincinnati/Northern Kentucky International Airport (CVG). With a focus on enhancing the traveler experience through innovative technology-driven advertising solutions, Departure Media operates in 14 airports nationwide, inc ...

LOUISVILLE, Ky., Feb. 27, 2024 (GLOBE NEWSWIRE) -- Digital signage and media solutions leader Creative Realities, Inc. (NASDAQ:CREX, CREXW))) today announced its partnership with IceBox Network, a new ad-based network concept under digital out-of-home (DOOH) technology provider Digi Point Media, to revolutionize retail advertising with exclusive digital display placements atop ice suppliers across retail stores for the first time. This collaboration will leverage Creative Realities' ReflectView™ CMS and Ref ...