Financial Performance - For the three months ended March 31, 2023, sales were $9,944,000, a decrease of 8% compared to $10,757,000 in the same period of 2022[152] - Gross profit increased by 31% to $5,089,000 from $3,892,000 year-over-year[152] - Operating loss improved by 91%, decreasing to $(90,000) from $(1,014,000) in the prior year[152] - Net loss for the period was $(1,000,000), a 140% increase compared to a net income of $2,502,000 in the same quarter of 2022[152] - Sales for the three months ended March 31, 2023, were $9,944 million, a decrease of $813 million or 8% compared to the same period in 2022[154] - Hardware revenues decreased by $2,137 million or 33% year-over-year, while services and other revenues increased by $1,324 million or 31%[154] - Managed services revenue grew by 51% year-over-year, reaching $4,072 million, driven by expansion in SaaS revenue and full inclusion of Reflect revenue[154] - Gross profit increased by $1,197 million or 31%, with a gross profit margin rising to 51.2% from 36.2% year-over-year[156] Expenses - The company reported a 29% reduction in cost of sales, decreasing from $6,865,000 to $4,855,000[152] - Sales and marketing expenses increased by 61% to $1,136,000 from $707,000 year-over-year[152] - Research and development expenses rose by 52% to $366,000 compared to $241,000 in the previous year[152] - Sales and marketing expenses increased by $429 million or 61%, primarily due to the acquisition of Reflect and enhanced investments in sales and marketing activities[157] - Research and development expenses rose by $125 million or 52%, driven by the completion of the Reflect Merger and the integration of development teams[158] Cash Flow - Cash provided by operating activities was $3,868 million for the three months ended March 31, 2023, compared to $1,201 million for the same period in 2022[169] - Net cash used in investing activities was $1,034 million, significantly lower than $17,969 million in the same period in 2022 due to the completion of the Merger[170] - Net cash used in financing activities was ($562) million, a change from net cash provided of $19,873 million in the same period in 2022[171] Corporate Actions - The company executed a 1-for-3 reverse stock split effective March 27, 2023, reducing the total number of authorized shares from 200,000,000 to 66,666,666[144][145] - The company received an unsolicited acquisition proposal from Pegasus Capital Advisors at a price of $2.85 per share, which is currently under review by the Special Committee[148] Future Outlook - Recurring subscription licensing and support revenue is expected to grow continuously as digital signage adoption expands across various vertical markets[141] - The company anticipates continued elevated capital expenditures through the third quarter of 2023 for the modernization and internationalization of its automotive platform[170]
Creative Realities(CREX) - 2023 Q1 - Quarterly Report