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Boxlight(BOXL) - 2023 Q1 - Quarterly Report

PART I. Financial Information Item 1. Financial Statements 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 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 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 World1972 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 months29 - 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, 202788 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 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 quarter157 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 period137 Item 3. Quantitative and Qualitative Disclosure About Market Risk This disclosure is not required as the company qualifies as a smaller reporting company - As a "smaller reporting company," this disclosure is not required171 Item 4. Controls and Procedures 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-K172 - 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 reporting172 PART II. Other Information Item 1. Legal Proceedings 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 operations143 Item 1A. Risk Factors 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 financing165 Other Items (Items 2, 3, 4, 5) 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 Item 6. Exhibits 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 certifications166